Employment Agreement between Lawrence P. English and QuadraMed Corporation (June 12, 2000)

Summary

This agreement outlines the terms of employment for Lawrence P. English with QuadraMed Corporation, effective June 12, 2000. It provides Mr. English with certain assurances regarding his employment, including severance benefits if his employment is terminated under specified circumstances, such as a change in control of the company or involuntary termination. The agreement defines key terms, details the conditions for severance payments, and sets out Mr. English's obligations to the company. The contract aims to ensure Mr. English's continued dedication and minimize distractions related to job security.

EX-10.66 4 ex10-66.txt EMPLOYMENT AGREEMENT/LAWRENCE ENGLISH & QUADRAMED 1 EXHIBIT 10.66 [QUADRAMED LOGO] June 12, 2000 Lawrence P. English 18 Highwood Road Simsbury, Connecticut 06070 Dear Mr. English: We are pleased to inform you that the Board of Directors (the "Board") of QuadraMed Corporation (the "Company") has authorized an employment package for you which will provide certain assurances concerning the terms and conditions of your employment with the Company and will allow you to participate in a program of severance benefit payments should your employment terminate. The purpose of this letter agreement (the "Agreement") is to document the terms of your employment package by providing you with a formal employment contract. The Company considers it essential to the continuing operation of the Company and in the best interests of its stockholders to assure the continuous dedication of key management personnel. It is recognized in the context of public ownership that a termination of an employee's employment without cause may be sought and that such circumstances could prove distracting to key executives and detrimental to the ongoing management and administration of the Company. Such distraction is not in the best interest of the stockholders of the Company. Accordingly, the Board has determined to discourage the inevitable distraction to you in the face of potentially disturbing circumstances inherent in any uncertainty regarding your employment status. This Agreement is intended to secure and encourage your ongoing retention by providing severance benefits in the event that your employment is altered as hereinafter described. In order to induce you to remain in the employ of the Company, and in consideration of your agreement set forth in Sections 13, 14, 15 and 16 of Part Two hereof, the Company agrees to pay the severance payments and benefits set forth in this Agreement, under the circumstances described herein. Part One of this Agreement sets forth certain definitional provisions to be in effect for purposes of determining your benefit entitlements. Part Two specifies the terms and conditions which will apply to your continued employment with the Company, including the severance payments to which you will become entitled in the event your employment should be terminated in certain circumstances. Part Three concludes this 2 Agreement with a series of general terms and conditions applicable to your employment benefits. PART ONE -- DEFINITIONS DEFINITIONS. For purposes of this Agreement, the following definitions will be in effect: "CHANGE IN CONTROL" means: (i) a merger or acquisition in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the State of the Company's incorporation; (ii) a stockholder approved sale, transfer or other disposition of all or substantially all of the assets of the Company; (iii) a transfer of all or substantially all of the Company's assets pursuant to a partnership or joint venture agreement or similar arrangement where the Company's resulting interest is less than fifty percent (50%); (iv) any reverse merger in which the Company is the surviving entity but in which fifty percent (50%) or more of the Company's outstanding voting stock is transferred to holders different from those who held the stock immediately prior to such merger; (v) on or after the date hereof, a change in ownership of the Company through an action or series of transactions, such that any person is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the securities of the combined voting power of the Company's outstanding securities; or (vi) a majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of such appointment or election. "CODE" means the Internal Revenue Code of 1986, as amended from time to time. "EFFECTIVE DATE" shall mean June 12, 2000. "EMPLOYEE" means Lawrence P. English. "EMPLOYEE BENEFIT PLAN" shall have the meaning given the term under Section 3 of ERISA. 3 "EMPLOYMENT PERIOD" means the period of Employee's employment with the Company governed by the terms and provisions of this Agreement. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as in effect from time to time. "INVOLUNTARY TERMINATION" means the termination of Employee's employment with the Company: (i) involuntarily upon Employee's discharge or dismissal or the Company's failure to renew this Agreement pursuant to Section 4 of Part Two, whether or not in connection with a Change in Control; (ii) voluntarily, if not in connection with a Change In Control, provided such termination occurs in connection with (a) a change in Employee's position with the Company which materially reduces Employee's level of responsibility or changes Employee's title from Chief Executive Officer of the Company or, when applicable, Chairman of the Company, (b) failure of Employee to be elected or appointed as the Company's Chairman on December 31, 2000 (or as soon thereafter as legal documentation reflecting such election or appointment reasonably can be perfected), (c) a material reduction in Employee's level of compensation (including base salary, fringe benefits and any non-discretionary bonuses) or (d) a relocation of Employee's principal place of employment from San Rafael, California by more than forty-five (45) miles, and such change, failure, reduction or relocation is effected without Employee's written concurrence; or (iii) voluntarily, if in connection with or after a Change in Control, provided that such termination occurs in connection with a (a) change in Employee's level of responsibilities with respect to the Company's entire business as it exists immediately prior to such Change in Control such that Employee ceases to have the operational, managerial and supervisory power and authority held by Employee immediately prior to such Change in Control (but without regard to his reporting responsibilities or title), (b) a material reduction in Employee's level of compensation (including base salary, fringe benefits and any non-discretionary bonuses) or (c) a relocation of Employee's principal place of employment from San Rafael, California by more than forty-five (45) miles, and such change, failure, reduction or relocation is effected without Employee's written concurrence. "OPTION" means any option or share purchase right granted to Employee under the Stock Option Plan which is outstanding at the time of a Change in Control or Employee's Involuntary Termination. "STOCK OPTION PLAN" means collectively the Company's 1996 Stock Incentive Plan (including the predecessor 1994 Stock Option Plan), as amended through the date hereof and the Company's 1999 Stock Incentive Plan, as amended through the date hereof. 4 Lawrence P. English June 12, 2000 Page 4 "TERM" shall mean the term beginning on the Effective Date and ending on the second anniversary thereof, subject to the provisions of Sections 3 and 4 of Part Two. "TERMINATION FOR CAUSE" will mean an Involuntary Termination of Employee's employment for (i) one or more alleged acts of fraud, embezzlement, misappropriation of proprietary information, misappropriation of the Company's trade secrets or other confidential information, a verifiable breach of Employee's fiduciary duties to the Company or any other verifiable misconduct adversely affecting the business reputation of the Company in a material manner, (ii) failure to comply with any policy or directive of the Board of Directors of the Company after written notice to Employee and Employee is given a reasonable opportunity to comply or (iii) except as permitted by the terms of Section 13 of Part Two, failure to devote his full working time and effort to the performance of his duties. PART TWO -- TERMS AND CONDITIONS OF EMPLOYMENT The following terms and conditions will govern Employee's employment with the Company throughout the Employment Period and will also, to the extent expressly indicated below, remain in effect following Employee's termination date. 1. EMPLOYMENT AND DUTIES. The Company will employ Employee as an executive officer in the position of Chief Executive Officer. Employee agrees to continue in such employment for the duration of the Employment Period and to perform in good faith and to the best of Employee's ability all services which may be required of Employee in his executive position and to be available to render such services at all reasonable times and places in accordance with reasonable directives and assignments issued by the Board. Except as provided in Section 13, during Employee's Employment Period, Employee will devote his full time and effort to the business and affairs of the Company within the scope of his executive office. Employee's principal place of operations will be at the Company's corporate offices in San Rafael, California. 2. SERVICE AS DIRECTOR AND CHAIRMAN. As soon as practicable after the Effective Date, Employee will be elected to serve as a member of the Board. On or before December 31, 2000, Employee will be elected or appointed the Company's Chairman. Employee will fulfill his duties as a director and/or Chairman without additional compensation. 3. TERM OF AGREEMENT. This Agreement shall be effective as of the date hereof. The term of this Agreement shall continue in effect until the expiration of the Term, subject to the provisions of this Part Two, unless sooner terminated by the parties in accordance with the provisions hereof. No termination or expiration of this Agreement shall affect any rights, obligations or liabilities of Employee or the Company that shall have accrued on or prior to the date of termination or expiration. 5 Lawrence P. English June 12, 2000 Page 5 4. AUTOMATIC EXTENSION. Commencing on the second anniversary of the effective date hereof, and on each succeeding anniversary of such date, the term of this Agreement shall be automatically be extended for one (1) additional year unless, not later than three (3) months preceding such anniversary date, either party to this Agreement shall have given written notice to the other party pursuant to Section 13 of Part Three that such party will not extend the term of this Agreement. 5. COMPENSATION. A. For service in the 2000 calendar year on or after the Effective Date, Employee's base salary will be paid at the annual rate of Four Hundred Thousand Dollars ($400,000). Employee's annual rate of base salary may be subject to adjustment each calendar year by the Board. B. Employee's base salary will be paid at periodic intervals in accordance with the Company's payroll practices for salaried employees. C. Employee shall be entitled to receive a guaranteed bonus of at least One Hundred Thousand Dollars ($100,000) upon completion of his first six (6) months of service after the Effective Date. On or before the expiration of such six (6) month period, Employee and the Board shall meet and consult and in good faith determine subsequent bonus ranges for Employee to be established by the Board and payable upon achievement of performance goals. All bonuses payable to Employee hereunder shall be payable in accordance with the Company's bonus plan implemented in accordance with its prior practice. D. The Company will also pay Employee additional compensation in an amount equal to the net increase in his state income tax attributable to becoming a California resident solely as such resident status relates to Employee's adjusted gross income existing before his employment by the Company and to the extent continuing thereafter. This calculation shall take into account the economic benefit of the federal income tax deductibility of Employee's applicable California state income taxes and shall take into account the economic detriment of additional federal or state income taxes payable or withheld in connection with the additional compensation provided for by this Section 5.D. This additional compensation will be payable solely during such time as the accounting firm employed by Employee reasonably determines that Employee is properly classified as a California resident for income tax purposes. Employee will cooperate in all reasonable respects with the Company's independent certified public accounting firm in providing work papers and other materials necessary to calculate the amount of additional compensation payable pursuant to this Section 5.D. The determination of such accounting firm shall be final and binding on Employee and the Company. Compensation payable pursuant to this Section 5.D. shall be paid to 6 Lawrence P. English June 12, 2000 Page 6 Employee either before or reasonably promptly after he has paid applicable California state income taxes or had such state income taxes withheld from amounts payable to Employee and otherwise in accordance with the Company's payroll practices for salaried employees. E. The Company will deduct and withhold, from the compensation payable to Employee hereunder, any and all applicable federal, state and local income and employment withholding taxes and any other amounts required to be deducted or withheld by the Company under applicable statute or regulation. 6. STOCK OPTIONS. The Company will issue Employee non-qualified stock options to purchase 1,000,000 shares of Common Stock in the Company at an exercise price equal to the closing price of the Company's Common Stock as of the Effective Date. These Options will be subject to vesting over a four (4) year period with 250,000 of such Options vesting upon the expiration of a one (1) year period following the Effective Date and the remaining 750,000 of such options vesting ratably on a monthly basis thereafter and shall otherwise be subject to the standard terms and conditions contained in the Stock Plan and the form Stock Option Agreements approved by the Board in connection therewith. 7. EXPENSE REIMBURSEMENT. Employee will be entitled to reimbursement from the Company for all customary, ordinary and necessary business expenses incurred by Employee in the performance of his duties hereunder, provided Employee furnishes the Company with vouchers, receipts and other substantiation of such expenses in accordance with Company policies. Employee shall also be entitled to reimbursement of reasonable relocation expenses in accordance with Company policy. Employee will also be entitled to reimbursement of $750 per month with respect to the automobile currently leased or owned by him or as otherwise approved by the Board and with respect to fuel purchased in connection with travel on Company business. Employee will own his own automobile, and maintain and insure it at his own expense, for his business use in connection with his employment under this Agreement. The Company will also pay or reimburse Employee for the costs of the preparation of his federal, state and local income tax returns by the Company's independent certified public accounting firm. 8. FRINGE BENEFITS. During the Employment Period, Employee will be eligible to participate in any group life insurance plan, group medical and/or dental insurance plan, accidental death and dismemberment plan, short-term disability program and other employee benefit plans, including profit sharing plans, cafeteria benefit programs and stock purchase and option plans, which are made available to executives and for which Employee qualifies. 7 Lawrence P. English June 12, 2000 Page 7 9. VACATION. Employee will accrue four (4) weeks of paid vacation benefits during each calendar year of the Employment Period in accordance with the Company policy in effect for executive officers. 10. DEATH OR DISABILITY. A. Upon Employee's death or disability during the Employment Period, the employment relationship created pursuant to this Agreement will immediately terminate, and no further compensation will become payable to Employee pursuant to Part Two, Section 5. In connection with such termination by reason of death, the Company will only be required to pay Employee (or his estate) any unpaid compensation earned under Part Two, Section 5 for services rendered through the date of Employee's death. In connection with such termination by reason of disability, the Company will be required to pay to Employee any unpaid compensation earned under Part Two, Section 5 for services rendered through the date of his disability, together with any income continuation payments provided Employee under any disability income/insurance policies or programs funded by the Company on Employee's behalf. B. Employee will be deemed disabled if he is so characterized pursuant to the terms of the Company's disability insurance policies or programs applicable to Employee from time to time. C. Upon death or disability of Employee, the relevant terms of the Stock Option Plan will apply. 11. SEVERANCE BENEFITS. Employee will be entitled to receive only the severance benefits specified below in the event there should occur a termination of Employee's employment: A. SEVERANCE BENEFIT. If Employee is terminated by reason of an Involuntary Termination of Employee's employment (other than a Termination for Cause), the Company will make a severance payment to Employee, in one lump sum within thirty (30) days of the date of such an Involuntary Termination, in an aggregate amount equal to the sum of two (2) times Employee's then-current rate of base salary. Employee may elect, in his sole discretion, to have the severance benefit payable pursuant to this Section 11.A. in monthly installments over a one year period following the date of his Involuntary Termination. B. OPTION ACCELERATION UPON INVOLUNTARY TERMINATION. Solely in connection with the Involuntary Termination of Employee's employment (other than termination for Cause), and solely in the case where such Involuntary Termination is not in connection with a Change in Control, Employee's Options under the Stock Option Plan will (to the extent not then otherwise exercisable or vested) automatically 8 Lawrence P. English June 12, 2000 Page 8 accelerate and vest so that at least 250,000 of such Options will be immediately exercisable and fully exercisable or vested as of the date of termination. Each accelerated option, together with all of Employee's other vested Options, will remain exercisable following such Involuntary Termination and may be exercised for any or all of the option shares, including the accelerated shares, in accordance with the exercise provisions of the Option Agreement evidencing the grant during the full term of such Option Agreement. C. LEASE PAYMENTS. If Employee voluntarily resigns or is terminated by reason of Involuntary Termination of Employee's employment (other than a Termination for Cause) during the one (1) year period following Effective Date, the Company shall be financially responsible for lease payments for an apartment or condominium inhabited by Employee through and including the first anniversary of the Effective Date if the terms of such lease are reasonably approved by the Company and, in any event, provide the Company with the ability to sublet such premises. D. RELEASE OF COMPANY. Receipt of severance benefits pursuant to this Section 11 shall be in lieu of all other amounts payable by the Company to Employee and in settlement and complete release of all claims Employee may have against the Company other than those arising out of the severance benefits due and payable under Sections 11 and 17 of Part Two of this Agreement and Employee's rights under Part Three of this Agreement. Employee acknowledges and agrees that execution of a general release of claims by Employee in form reasonably acceptable to the Company shall be a condition precedent to the Company's obligation to pay severance benefits hereunder. 12. OPTION/VESTING ACCELERATION UPON CHANGE IN CONTROL. A. To the extent the acquiring company in any Change in Control transaction does not assume or otherwise continue in full force and effect the Employee's outstanding Options under the Stock Option Plan, those Options shall automatically accelerate and vest so that each such Option will, immediately prior to the Change in Control, become fully exercisable for all the option shares and shall terminate immediately after the Change in Control transaction. B. On or after the closing of a transaction involving a Change in Control referred to in subsections (i) through (iv) of the definition thereof, Employee shall have the option, exercisable in his discretion within sixty (60) days of such Change in Control, to voluntarily terminate his employment under this Agreement (the "Termination Election"). Effective upon such Termination Election, one-half of any of Employee's Options which are unvested at the time of such Termination Election shall accelerate and vest in full sixty (60) days after such Change in Control (the "Vesting Date"). Each such Option will become immediately exercisable and fully exercisable 9 Lawrence P. English June 12, 2000 Page 9 and vested as of the Vesting Date. Each such accelerated Option, together with Employee's other vested Options shall remain exercisable and outstanding for the full term of the Option Agreement evidencing such Option that may be exercised for any and all such Option shares, including the accelerated shares, in accordance with the provisions of the applicable Option Agreement. In the event that Employee makes the Termination Election, he shall have no right to receive any severance payments pursuant to Section 11.A. of this Part Two. Acceleration of Employee's Options pursuant to this Section 12.B. shall be contingent upon Employee's continued service under this Agreement following such Change in Control for a minimum period of sixty (60) days after such Change in Control. Nothing in this Section 12.B. will diminish any rights Employee may have under this Agreement in the event of an Involuntary Termination. C. The following provisions shall govern any Options which are to be assumed or otherwise continued in effect in the Change in Control, and any restricted or unvested shares of Common Stock held by the Employee at the time of the Change in Control. Any Option which does not accelerate, and any restricted or unvested shares of Common Stock which do not vest at the time of the Change in Control shall immediately accelerate and vest in full and any repurchase rights with respect thereto will terminate upon any Involuntary Termination of Employee's employment following the Change in Control (other than a Termination for Cause) so that each such Option or share of restricted or unvested Common Stock will become immediately exercisable and fully exercisable or vested as of the date of such an Involuntary Termination. Each such accelerated Option, together with each of the Employee's other vested Options shall remain exercisable and outstanding for the full term of the Option agreement evidencing such Option and may be exercised for any or all of the Option shares, including the accelerated shares, in accordance with the provisions of the applicable Option agreement. Each Option which is assumed or otherwise continued in effect will be appropriately adjusted to apply to the number and class of securities which would have been issued to Employee in the consummation of the Change in Control transaction had the Option been exercised immediately prior to such transaction, and appropriate adjustments will be made to the Option exercise price payable per share, provided the aggregate exercise price will remain the same. 13. RESTRICTIVE COVENANT. During the Employment Period, Employee will not directly or indirectly, whether for Employee's own account or as an employee, director, consultant or advisor, provide services to any business enterprise other than the Company, unless otherwise authorized by the Company in writing. Notwithstanding the foregoing, the Company acknowledges that Employee is currently serving as a member 10 Lawrence P. English June 12, 2000 Page 10 of the Board of Directors of each of Curative Health Services, Paracelsus Healthcare Corporation and Spacefitters Corporation. Subject to the direction of the Board, Employee may continue service on these outside corporate boards during the Employment Period. If the Board determines in good faith that continued service on one or more such outside corporate boards is not in the best interest of the Company and its stockholders, Employee agrees to resign from each such board as to which such a determination is made. 14. NON-SOLICITATION AND NON-DISPARAGEMENT. During the Employment Period and one (1) year thereafter, Employee will not directly or indirectly (i) solicit any Company employee, independent contractor or consultant to leave the Company's employ or otherwise terminate such person's relationship with the company for any reason or interfere in any other manner with the employment or other relationships at the time existing between the Company and its current employees, independent contractors or consultants, (ii) solicit any of the Company's customers for products or services substantially similar to those offered by the Company, or (iii) disparage the Company or any of its stockholders, directors, officers, employees or agents. 15. CONFIDENTIALITY. A. Employee hereby acknowledges that the Company may, from time to time during the Employment Period, disclose to Employee confidential or proprietary information pertaining to the Company's business and affairs and client base or prospects, including (without limitation) customer lists and accounts, other similar items indicating the source of the Company's income and information pertaining to the salaries, duties and performance levels of the Company's employees. Employee will not, at any time during or after such Employment Period, disclose to any third party or directly or indirectly make use of any such confidential information, including (without limitation) the names, addresses and telephone numbers of the Company's customers, other than in connection with, and in furtherance of, the Company's business and affairs. Nothing contained in this section shall be construed to prevent Employee from disclosing the amount of his salary. B. All documents and data (whether written, printed or otherwise reproduced or recorded) containing or relating to any such confidential or proprietary information of the Company which come into Employee's possession during the Employment Period will be returned by Employee to the Company immediately upon the termination of the Employment Period or upon any earlier request by the Company, and Employee will not retain any copies, notes or excerpts thereof. Notwithstanding the foregoing, Employee shall be entitled to retain his file or Rolodex containing names, addresses and telephone numbers and personal diaries and calendars; provided, however, that Employee shall continue to be bound by the terms of Section 15.A. above to the extent such retained materials constitute confidential information. 11 Lawrence P. English June 12, 2000 Page 11 C. Employee's obligations under this Section 15 will continue in effect after the termination of his employment with the Company, whatever the reason or reasons for such termination, and the Company will have the right to communicate with any of Employee's future or prospective employers concerning his continuing obligations under this Section 15. 16. OWNERSHIP RIGHTS. A. All materials, ideas, discoveries and inventions pertaining to the Company's business or clients, including (without limitation) all patents and copyrights, patent applications, patent renewals and extensions, trade secrets, software and the names, addresses and telephone numbers of customers and prospects, will belong solely to the Company. B. All materials, ideas, discoveries and inventions which Employee may devise, conceive, develop or reduce to practice (whether individually or jointly with others) during the Employment Period will be the sole property of the Company and are hereby assigned by Employee to the Company, except for any idea, discovery or invention (i) for which no Company equipment, supplies, facility or trade secret information is used, (ii) which is developed entirely on Employee's own time and (iii) which neither (a) relates at the time of conception or reduction to practice, to the Company's business or any actual or demonstrably-anticipated research or development program of the Company nor (b) results from any work performed by Employee for the Company. The foregoing exception corresponds to the assignment of inventions precluded by California Labor Code Section 2870, attached as Exhibit A. C. Employee will, at all times whether during or after the Employment Period, assist the Company, at the Company's sole expense, in obtaining, maintaining, defending and enforcing all legal rights and remedies of the Company, including, without limitation, patents, copyrights and other proprietary rights of the Company. Such assistance will include (without limitation) the execution of documents and assistance and cooperation in legal proceedings. D. Employee will execute and be bound by all the terms and provisions of the Company's standard Proprietary Information Agreement, which is incorporated in whole herein by this reference. Nothing in this document will be deemed to modify or affect Employee's duties and obligations under those other agreements, which shall be deemed to be obligations under this Agreement. 12 Lawrence P. English June 12, 2000 Page 12 17. TERMINATION OF EMPLOYMENT. A. The Company (or any successor entity resulting from a Change in Control) may terminate Employee's employment under this Agreement at any time for any reason, with or without cause, by providing Employee with at least seven (7) days prior written notice. However, such notice requirement will not apply in the event there is a Termination for Cause under subsection D below. B. In the event there is a termination of Employee's employment by reason of an Involuntary Termination of his employment with the Company (other than Termination for Cause) during the Term, Employee will become entitled to the benefits specified in Part Two, Section 11 in addition to any unpaid compensation earned by Employee under Part Two, Section 5 for services rendered prior to such termination. C. Should Employee's employment with the Company terminate by reason of his death or disability during the Employment Period, no severance benefits will be payable to Employee under Part Two, Section 11, and only the limited death or disability benefits provided under Part Two, Section 10 will be payable. D. The Company may at any time, upon written notice, terminate Employee's employment hereunder for any act qualifying as a Termination for Cause or at any time following the expiration of the Term. Such termination will be effective immediately upon such notice. E. Upon such Termination for Cause or at any time following the expiration of the Term, the Company will only be required to pay Employee any unpaid compensation earned by Employee pursuant to Part Two, Section 5 for services rendered through the date of such termination, and no termination or severance benefits will be payable to Employee under Part Two, Section 11. PART THREE -- MISCELLANEOUS PROVISIONS 1. MITIGATION. Employee shall not be required to mitigate damages or the amount of any payment provided for under this Agreement by seeking other employment or otherwise and no future income earned by Employee from employment or otherwise shall in any way reduce or offset any payments due to Employee hereunder. The provisions of this Agreement, and any payment provided for hereunder, shall not reduce any amounts otherwise payable, or in any way diminish Employee's existing rights which would accrue solely as a result of the passage of time, under any Company Employee Benefit Plan, "Payroll practice" (as defined in ERISA), compensation arrangement, incentive plan, stock option or other stock-related plan. 13 Lawrence P. English June 12, 2000 Page 13 2. INDEMNIFICATION. The indemnification provisions for officers and directors under the Company's Bylaws and any applicable indemnification agreement between Employee and the Company will (to the maximum extent permitted by law) be extended to Employee, during the period following Employee's Involuntary Termination, with respect to any and all matters, events or transactions occurring or effected during Employee's Employment Period. 3. MISCELLANEOUS. The provisions of this Agreement will be construed and interpreted under the laws of the State of California. This Agreement incorporates the entire Agreement between Employee and the Company relating to the terms of his employment and the subject of severance benefits and supersedes all prior agreements and understandings with respect to such subject matter. This Agreement may only be amended by written instrument signed by Employee and an authorized executive officer of the Company. 4. INJUNCTIVE RELIEF AND ADDITIONAL REMEDY. Employee acknowledges that the injury that would be suffered by the Company as a result of a breach of the provisions of Sections 14, 15 and 16 would be irreparable and that an award of monetary damages to the Company for such a breach would be an inadequate remedy. Consequently, the Company will have the right, in addition to any other rights it may have, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provision of this Agreement, and the Company will not be obligated to post bond or other security in seeking such relief. 5. REPRESENTATIONS AND WARRANTIES BY EMPLOYEE. Employee represents and warrants to the Company that the execution and delivery by Employee of this Agreement do not, and the performance by Employee of Employee's obligations hereunder will not, with or without the giving of notice or the passage of time, or both: (a) violate any judgment, writ, injunction, or order of any court, arbitrator, or governmental agency applicable to Employee or (b) conflict with, result in the breach of any provisions of or the termination of, or constitute a default under, any agreement to which Employee is a party or by which Employee is or may be bound. 6. WAIVER. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by either party in exercising any right, power, or privilege under this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party; (b) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (c) no 14 Lawrence P. English June 12, 2000 Page 14 notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement. 7. BINDING EFFECT; DELEGATION OF DUTIES. This Agreement shall be binding upon and inure to the benefit of the Company and any successor of the Company, including, without limitation, any corporation or corporations acquiring directly or indirectly all or substantially all of the stock, business or assets of the Company, whether by merger, consolidation, division, sale or otherwise (and such successor shall thereafter be deemed the "Company" for purposes of this Agreement). The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to Employee, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if such succession had not taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement entitling Employee to the benefits hereunder, as though Employee was subject to Involuntary Termination. This Agreement shall be binding and inure to the benefit of Employee, his successors, assigns, executors, administrators or beneficiaries. The duties and covenants of Employee under this Agreement, being personal, may not be delegated. 8. ENTIRE AGREEMENT; AMENDMENTS. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, between the parties hereto with respect to the subject matter hereof. This Agreement may not be amended orally, but only by an agreement in writing signed by the parties hereto. 9. ARBITRATION. Any controversy which may arise between Employee and the Company with respect to the construction, interpretation or application of any of the terms, provisions, covenants or conditions of this Agreement or any claim arising from or relating to this Agreement will be submitted to final and binding arbitration in San Francisco, California in accordance with the rules of the American Arbitration Association then in effect. 10. SEVERABILITY. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. 11. COUNTERPARTS; FACSIMILE. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this 15 Lawrence P. English June 12, 2000 Page 15 Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. To the maximum extent permitted by applicable law, this Agreement may be executed via facsimile. 12. NOTICES. Any notice required to be given under this Agreement shall be deemed sufficient, if in writing, and sent by certified mail, return receipt requested, via overnight courier, or hand delivered to the Company at 22 Pelican Way, San Rafael, California 94901, and to Employee at his most recent address reflected in the permanent Company records. Copies of each such notice delivered by either the Company or Employee shall be provided to each current member of the Board at each such director's current address as listed in the Company's records. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 16 Lawrence P. English June 12, 2000 Page 16 Please indicate your acceptance of the foregoing provisions of this Agreement by signing the enclosed copy of this Agreement and returning it to the Company. Very truly yours, QUADRAMED CORPORATION By: /s/ James D. Durham ------------------------------ Title: CEO ---------------------------- ACCEPTED BY AND AGREED TO: Lawrence P. English Dated: /s/ Lawrence P. English ------------------------------ 17 EXHIBIT A Section 2870. Employment agreements; assignment of rights. (a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either: (1) Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or (2) Result from any work performed by the employee for the employer. (b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.