Exhibit 10.1
INDEMNIFICATION
AGREEMENT
THIS AGREEMENT
dated as of September
, 2008 (the “Agreement”), is
made and entered by and between QuadraMed Corporation, a Delaware
corporation (the “Company”), and
[ ]
(“Indemnitee”).
WITNESSETH THAT:
WHEREAS, Indemnitee performs a valuable service for the
Company as
[ ];
and
WHEREAS, the Board of Directors of the Company has
adopted Bylaws (the “Bylaws”) providing for the
indemnification of the directors and executive officers of the
Company to the maximum extent permitted by Section 145 of the
Delaware General Corporation Law, as amended (the
“DGCL”); and
WHEREAS, the Bylaws and the DGCL, by their nonexclusive
nature, permit contracts between the Company and the directors and
executive officers of the Company with respect to indemnification
of such directors and executive officers; and
WHEREAS, in accordance with the authorization as provided
by the DGCL, the Company may purchase and maintain a policy or
policies of director’s and officer’s liability
insurance (“D & O Insurance”) covering certain
liabilities that may be incurred by its directors and officers in
the performance of their obligations as directors and officers of
the Company; and
WHEREAS, as a result of recent developments affecting the
terms, scope and availability of D & O Insurance
there exists general uncertainty as to the extent of protection
afforded Company directors and officers by such D & O
Insurance and said uncertainty also exists under statutory and
bylaw indemnification provisions; and
WHEREAS, in order to induce Indemnitee to serve as an
officer of the Company, the Company has determined and agreed to
enter into this contract with Indemnitee.
NOW, THEREFORE,
in consideration of
Indemnitee’s continued service as a director/ officer from
and after the date hereof, the parties hereto agree as
follows:
1. Indemnity of
Indemnitee. The
Company hereby agrees to hold harmless and indemnify Indemnitee to
the full extent authorized or permitted by the provisions of the
DGCL, as such may be amended from time to time, and the Bylaws, as
such may be amended. In furtherance of the foregoing
indemnification, and without limiting the generality
thereof:
(a) Proceedings Other Than
Proceedings by or in the Right of the Company. Indemnitee shall
be entitled to the rights of indemnification provided in this
Section 1(a) if, by reason of his Corporate Status (as
hereinafter defined), he is, or is threatened to be made, a party
to or participant in any Proceeding (as hereinafter defined) other
than a Proceeding by or in the right of the Company. Pursuant to
this Section 1(a), Indemnitee shall be indemnified against all
Expenses (as hereinafter defined), judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by him
or on his behalf in connection with such Proceeding or any claim,
issue or matter herein, if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best
interests of the Company and, with respect to any criminal
Proceeding, had no reasonable cause to believe his conduct was
unlawful.
(b) Proceedings by or in the
Right of the Company. Indemnitee shall be entitled to the right
of indemnification provided in this Section 1(b) if, by reason
of his Corporate Status, he is, or is threatened to be made, a
party to or participant in any Proceeding brought by or in the
right of the Company to procure a judgment in its favor. Pursuant
to this Section 1(b), Indemnitee shall be indemnified against
all Expenses actually
1
and reasonably incurred by him or on his behalf
in connection with such Proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best
interests of the Company; provided, however, that, if
applicable law so provides, no indemnification against such
Expenses shall be made in respect of any claim, issue or matter in
such Proceeding as to which Indemnitee shall have been adjudged to
be liable to the Company unless and to the extent that the Court of
Chancery of the State of Delaware, or the court in which such
Proceeding shall have been brought or is pending, shall determine
that such indemnification may be made.
(c) Indemnification for Expenses
of a Party Who is Wholly or Partly Successful. Notwithstanding
any other provision of this Agreement, to the extent that
Indemnitee is, by reason of his Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, he shall
be indemnified to the maximum extent permitted by law against all
Expenses actually and reasonably incurred by him or on his behalf
in connection therewith. If Indemnitee is not wholly successful in
such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by him or on his behalf
in connection with each successfully resolved claim, issue or
matter. For purposes of this Section 1(c) and without
limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed
to be a successful result as to such claim, issue or
matter.
2. Additional
Indemnity.
(a) Subject only to the exclusions
set forth in Section 2(b) hereof, the Company hereby further
agrees to hold harmless and indemnify Indemnitee against any and
all Expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by Indemnitee in connection with
any Proceeding (including an action by or on behalf of the Company)
to which Indemnitee is, was or at any time becomes a party, or is
threatened to be made a party, by reason of his Corporate Status;
provided, however, that with respect to actions by or on behalf of
the Company, indemnification of Indemnitee against any judgments
shall be made by the Company only as authorized in the specific
case upon a determination that Indemnitee acted in good faith and
in a manner he reasonably believed to be in or not opposed to the
best interests of the Company; and
(b) No indemnity pursuant to this
Section 2 shall be paid by the Company:
(i) In respect to remuneration paid
to Indemnitee if it shall be determined by a final judgment or
other final adjudication that such remuneration was in violation of
law;
(ii) On account of any suit in which
judgment is rendered against Indemnitee for an accounting of
profits made from the purchase or sale by Indemnitee of securities
of the Company pursuant to the provisions of Section 16(b) of
the Securities Exchange Act of 1934 and amendments thereto or
similar provisions of any federal, state or local statutory
law;
(iii) On account of
Indemnitee’s conduct that is finally adjudged to have been
knowingly fraudulent or deliberately dishonest, or to constitute
willful misconduct, or
(iv) If a final decision by a court
having jurisdiction in the matter shall determine that such
indemnification is not lawful.
3.
Contribution. If
the indemnification provided in Sections 1 and 2 is
unavailable and may not be paid to Indemnitee for any reason other
than those set forth in paragraphs (i), (ii), (iii) and
(iv) of Section 2(b), then in respect to any Proceeding
in which the Company is jointly liable with Indemnitee (or would be
if joined in such Proceeding), the Company shall contribute to the
amount of Expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred and paid or payable by Indemnitee
in such proportion as is appropriate to reflect (i) the
relative benefits received by the Company on the one hand and by
Indemnitee on the other hand from the transaction from which such
Proceeding arose, and (ii) the relative fault of the Company
on the one hand and of Indemnitee on the other hand in connection
with the events which resulted in such Expenses, judgments, fines
or settlement amounts, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand
and of Indemnitee on the other hand shall be determined by
reference to, among
2
other things, the parties’ relative
intent, knowledge, access to information and opportunity to correct
or prevent the circumstances resulting in such Expenses, judgments,
fines or settlement amounts. The Company agrees that it would not
be just and equitable if contribution pursuant to this
Section 3 were determined by pro rata allocation or any other
method of allocation which does not take account of the foregoing
equitable considerations.
4. Indemnification for
Expenses of a Witness. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, he shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in
connection therewith.
5. Advancement of
Expenses. The Company
shall advance all reasonable Expenses incurred by or on behalf of
Indemnitee in connection with any Proceeding by reason of
Indemnitee’s Corporate Status within 10 days after the
receipt by the Company of a statement or statements from Indemnitee
requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding. Such
statement or statements shall reasonably evidence the Expenses
incurred by Indemnitee and shall include or be preceded or
accompanied by an undertaking by or on behalf of Indemnitee to
repay any Expenses advanced if it shall ultimately be determined
that Indemnitee is not entitled to be indemnified against such
Expenses. Any advances and undertakings to repay pursuant to this
Section 5 shall be unsecured and interest free.
Notwithstanding the foregoing, the obligation of the Company to
advance Expenses pursuant to Section 5 shall be subject to the
condition that, if, when and to the extent that the Company
determines that Indemnitee would not be permitted to be indemnified
under applicable law or this Agreement, the Company shall be
entitled to be reimbursed, within 30 days of such determination, by
Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings
in a court of competent jurisdiction to secure a determination that
Indemnitee should be indemnified under applicable law, any
determination made by the Company that Indemnitee would not be
permitted to be indemnified under applicable law shall not be
binding and Indemnitee shall not be required to reimburse the
Company for any advance of Expenses until a final judicial
determination is made with respect thereto (as to which all rights
of appeal therefrom have been exhausted or lapsed).
6. Procedure for Determination
of Entitlement to Indemnification.
(a) To obtain indemnification
(including, but not limited to, the advancement of Expenses and
contribution by the Company) under this Agreement, Indemnitee shall
submit to the Company a written request, including therein or
therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of
Directors in writing that Indemnitee has requested
indemnification.
(b) Upon written request by
Indemnitee for indemnification pursuant to the first sentence of
Section 6(a) hereof, a determination, if required by
applicable law, with respect to Indemnitee’s entitlement
thereto shall be made in the specific case: (i) if a Change in
Control (as hereinafter defined) shall have occurred, by
Independent Counsel (as hereinafter defined) in a written opinion
to the Board of Directors, a copy of which shall be delivered to
Indemnitee (unless Indemnitee shall request that such determination
be made by the Board of Directors or stockholders, in which case
the determination shall be made in the manner provided in Clause
(ii) below), or (ii) if a Change in Control shall not
have occurred, (A) by the Board of Directors by a majority
vote of a quorum consisting of Disinterested Directors (as
hereinafter defined), or (B) if a quorum of the Board of
Directors consisting of Disinterested Directors is not obtainable
or, even if obtainable, said Disinterested Directors so direct, by
Independent Counsel in a written opinion to the Board of Directors,
a copy of which shall be delivered to Indemnitee, or (C) if so
directed by said Disinterested Directors, by the stockholders of
the Company; and, if it is determined that Indemnitee is entitled
to indemnification, payment to Indemnitee shall be made within 10
days after such determination. Indemnitee shall cooperate with the
person, persons or entity making such determination with respect to
Indemnitee’s entitlement to indemnification, including
providing to
3
such person, persons or entity upon reasonable
advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is
reasonably available to Indemnitee and reasonably necessary to such
determination. Any Independent Counsel, member of the Board of
Directors, or stockholder of the Company shall act reasonably and
in good faith in making a determination under the Agreement of
Indemnitee’s entitlement to indemnification. Any costs or
expenses (including attorneys’ fees and disbursements)
reasonably and actually incurred by Indemnitee in so cooperating
with the person, persons or entity making such determination shall
be borne by the Company (irrespective of the determination as to
Indemnitee’s entitlement to indemnification) and the Company
hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(c) If the determination of
entitlement to indemnification is to be made by Independent Counsel
pursuant to Section 6(b) hereof, the Independent Counsel shall
be selected as provided in this Section 6(c). If a Change in
Control shall not have occurred, the Independent Counsel shall be
selected by the Board of Directors, and the Company shall give
written notice to Indemnitee advising him of the identity of the
Independent Counsel so selected. If a Change of Control shall have
occurred, the Independent Counsel shall be selected by Indemnitee
(unless Indemnitee shall request that such selection be made by the
Board of Directors, in which event the preceding sentence shall
apply), and Indemnitee shall give written notice to the Company
advising it of the identity of the Independent Counsel so selected.
In either event, Indemnitee or the Company, as the case may be,
may, within 10 days after such written notice of selection shall
have been given, deliver to the Company or to Indemnitee, as the
case may be, a written objection to such selection; provided
however, that such objection may be asserted only on the ground
that the Independent Counsel so selected does not meet the
requirements of “Independent Counsel” as defined in
Section 14 of this Agreement, and the objection shall set
forth with particularity the factual basis of such assertion.
Absent a proper and timely objection, the person so selected shall
act as Independent Counsel. If a written objection is made and
substantiated, the Independent Counsel selected may not serve as
Independent Counsel unless and until such objection is withdrawn or
a court has determined that such objection is without merit. If,
within 20 days after submission by Indemnitee of a written request
for indemnification pursuant to Section 6(a) hereof, no
Independent Counsel shall have been selected or, if the selection
of an Independent Counsel has been objected to, either the Company
or Indemnitee may petition the Court of Chancery of the State of
Delaware or other court of competent jurisdiction for
(i) resolution of any objection which shall have been made by
the Company or Indemnitee to the other’s selection of
Independent Counsel and/or (ii) the appointment as Independent
Counsel of a person selected by the court or by such other person
as the court shall designate, and the person with respect to whom
all objections are so resolved or the person so appointed shall act
as Independent Counsel under Section 6(b) hereof. The Company
shall pay any and all reasonable fees and expenses of Independent
Counsel incurred by such Independent Counsel in connection with
acting, pursuant to Section 6(b) hereof, and the Company shall
pay all reasonable fees and expenses incident to the procedures of
this Section 6
