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EXHIBIT 10.68
September 18, 2000
Michael H. Lanza, Esq.
52 East Weatogue Street
Post Office Box 705
Simsbury, Connecticut 06070-0705
Dear Mr. Lanza:
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 receive
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 12, 13, 14 and 15 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 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%);
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(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.
"COMPANY" means QuadraMed Corporation, a Delaware corporation.
"EFFECTIVE DATE" shall mean September 18, 2000.
"EMPLOYEE" means Michael H. Lanza.
"EMPLOYEE BENEFIT PLAN" shall have the meaning given the term under Section 3 of
ERISA.
"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 3 of Part Two,
whether or not in connection with a Change in Control; or
(ii) voluntarily or involuntarily, provided such termination occurs in
connection with (a) a change in Employee's position with the Company or
any successor which materially reduces Employee's level of
responsibility or changes Employee's titles from Executive Vice
President and General Counsel, (b) a reduction in Employee's level of
compensation (including base salary, fringe benefits and any
non-discretionary bonuses or other incentive payments earned pursuant to
objective standards or criteria) or (c) a relocation of Employee's
principal place of employment by more than forty-five (45) miles and
such change, 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.
"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;
or (ii) Employee's failure to adhere to any written Company policy or the terms
of this Agreement or Employee's verifiable failure to perform the material
duties of his position following written notice from the Company describing the
failure and a reasonable opportunity to cure such failure; provided, however,
Employee will
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have the right to perform incidental services as are necessary in connection
with (a) his private passive investments, (b) his charitable or community
activities and (c) his participation in trade or professional organizations, but
only to the extent such incidental services do not materially interfere with the
performance of Employee's services hereunder.
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 Executive Vice President. 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
render such services at all reasonable times and places in accordance
with reasonable directives and assignments issued by the Board and the
Company's Chief Executive Officer. 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.
2. AT WILL EMPLOYEE. The Company hereby employs the Employee, and the
Employee hereby accepts employment by the Company, upon the terms and
conditions set forth in this Agreement. Employee shall be an employee
"at will," terminable at any time by the Company for cause or without
cause.
3. TERM; AUTOMATIC EXTENSION; ETC.. The initial term of this Agreement
shall be one (1) year from the effective date hereof. Commencing on the
anniversary of the effective date hereof, and on each succeeding
anniversary of the date hereof, the term of this Agreement shall
automatically be extended for one (1) additional year unless, not less
than one (1) month preceding such anniversary date, either party to this
Agreement shall have given written notice to the other party pursuant to
Section 12 of Part Three that such party will not extend the term of
this Agreement.
4. 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
Two Hundred Ten Thousand Dollars ($210,000). 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 eligible for a discretionary bonus of up to
forty percent (40%) of Employee's base salary (which bonus shall
be prorated for the period commencing from the Effective Date
until December 31, 2000) for each calendar year Employee is
employed by the Company. Employee's discretionary bonus and
timing of its payment will be determined by the Board in its
sole discretion and based upon the recommendation of the
Company's Compensation Committee and such additional factors as
the Board deems appropriate, including Employee's individual
performance and the Company's financial results.
D. Employee shall be paid additional bonus payments equal to
amounts credited to a QuadraMed Corporation phantom stock
account as set forth in this Section 4.D. As of the Effective
Date, the Company shall establish, as an unfunded, unsecured
arrangement, a phantom stock account in the name of the Employee
and the Company shall credit to such account 95,293 shares of
QuadraMed Corporation Common Stock, which shares shall have an
initial value equal to the closing price of the Company's Common
Stock as of the Effective Date. Such account shall be adjusted
as of each relevant measurement date such that each share
credited to the account shall be valued at the closing price of
the Company's Common Stock as of the close of business two (2)
days prior to the relevant measure date. Bonus payments to
Employee pursuant to this Section 4.D. will become due and
payable if Employee continues to be employed by the Company as
follows: (i) on February 25, 2001,
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the Company shall pay to Employee a bonus equal to the value of
43,672 phantom shares credited to Employee's phantom stock
account; (ii) on February 26, 2002, the Company shall pay to
Employee a bonus equal to the value of 29,306 phantom shares
credited to Employee's phantom stock account; and (iii) on
February 23, 2003, the Company shall pay to Employee a bonus
equal to the value of 22,315 phantom shares credited to
Employee's phantom stock account. In the event of a subdivision
of the outstanding shares of the Company's Common Stock, a
declaration of a dividend payable in shares of the Company's
Common Stock into a lesser number of such shares, a
recapitalization, a reclassification or a similar occurrence,
the Company shall make appropriate adjustments in the number of
phantom shares credited to Employee's phantom stock account.
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.
5. STOCK OPTIONS. The Company will issue Employee non-qualified stock
options to purchase 200,000 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 50,000 of such Options vesting upon the
expiration of a one (1) year period following the Effective Date and the
remaining 150,000 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.
6. EXPENSE REIMBURSEMENT; MOVING EXPENSES. 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. Company shall pay to Employee (or pay such portion(s)
thereof directly to such parties as Employee shall direct as payment for
moving expenses) the aggregate amount of $65,000 to defray Employee's
relocation expenses.
7. 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.
8. 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.
9. 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 4. 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 4
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 4 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,
or if so such policy is applicable, if Employee is unable to
perform the essential functions of his duties for physical or
mental reasons for one hundred twenty (120) consecutive days, or
one hundred eighty (180) days during any twelve (12) month
period.
C. Upon death or disability of Employee, the relevant terms of the
Stock Option Plan will apply.
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10. SEVERANCE BENEFITS. Notwithstanding anything herein to the contrary,
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 one (1) 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
10.A. in monthly installments over a one year period following
the date of his Involuntary Termination.
B. WELFARE BENEFITS. For a period of twelve (12) months, Employee
(and his dependents, as applicable) shall be provided by the
Company with the same life, health and disability plan
participation, benefits and other coverages to which he was
entitled as an employee immediately before the disability or the
Involuntary Termination. In the event that under applicable law
or the terms of the relevant Employee Benefit Plans such
participation, benefits and/or coverage cannot be provided to
Employee following his Involuntary Termination, such coverage
and/or benefits shall be provided directly by the Company
pursuant to this Agreement on a comparable basis. In its sole
discretion, the Company may obtain such coverage and benefits
for Employee through private insurance acquired at the Company's
expense. Amounts paid or payable to or on behalf of Employee
pursuant to any "employee welfare benefit plan," as defined in
ERISA, providing health and/or disability benefits, that is
sponsored by the Company or an affiliate of the Company, shall
be credited against amounts due under this Section 10.B. To the
maximum extent permitted by applicable law, the benefits
provided under this Section 10.B. shall be in discharge of any
obligations of the Company or any rights of Employee under the
benefit continuation provisions under Section 4980A of the Code
and Part VI of Title I of ERISA ("COBRA") or any other
legislation of similar import.
C. PHANTOM SHARE CONVERSION INTO COMMON SHARES UPON INVOLUNTARY
TERMINATION. In connection with the Involuntary Termination of
Employee's employment (other than Termination for Cause),
whether before or after a Change in Control transaction, the
Company shall issue to Employee in Employee's name shares of
Common Stock in the Company equal to the number of shares in
Employee's phantom stock account specified in Section 4.D. of
Part Two of this Agreement as of the Date of Involuntary
Termination. Such Shares shall be free of any repurchase rights
or other vesting restrictions in favor of the Company. Employee
acknowledges that such shares will not be registered under the
Securities Act of 1933, as amended (the "Securities Act") by
reason of a specific exemption there from and that such shares
must be held indefinitely, unless they are subsequent registered
under the Securities Act or Employee obtains an opinion of
counsel, in form and substance satisfactory to the Company and
its counsel, that such registration is not required. Employee
further acknowledges and understands that the Company is under
no obligation to register the shares. Employee agrees that, as a
condition precedent to issuance of the shares, he will make
customary investment representations in favor of the Company and
will agree to reasonable restrictions on transfer of the shares
in light of the requirements of the Securities Act and will, if
requested by the Company, execute a "market stand-off" covenant
providing that he shall not transfer such shares for a period of
one hundred eighty (180) days after the Company's initial public
offering. After issuance of such shares, the Company will have
no further obligation to pay Employee any bonuses pursuant to
Part Two, Section 4.D.
D. OPTION ACCELERATION UPON INVOLUNTARY TERMINATION. In connection
with the Involuntary Termination of Employee's employment (other
than Termination for Cause), whether before or after a Change in
Control transaction, each of Employee's Options under the Stock
Option Plan and all restricted or unvested Common Stock granted
by the Company will (to the extent not then otherwise
exercisable or vested) automatically accelerate and vest and any
repurchase rights with respect thereto will terminate so that
each such Option or share of restricted or unvested Common Stock
will become immediately and fully exercisable or vested as of
the date of termination. Each such accelerated Option, together
with all of Employee's other vested Options, will remain
exercisable for a period of three (3) years following Employee's
Involuntary Termination and may be exercised for any or all of
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the option shares, including the accelerated shares, in
accordance with the exercise provisions of the Option agreement
evidencing the grant.
E. RELEASE OF COMPANY. Receipt of severance benefits pursuant to
this Section 10 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 10 and 16 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 a form reasonably acceptable to the
Company shall be a condition precedent to the Company's
obligation to pay severance benefits hereunder.
11. 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. 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.
The Options shall accelerate and vest at the time of the Change
in Control so that each Option will become exercisable for all
of the Option shares immediately prior to the Change in Control
transaction, except to the extent the Option parachute payment
attributable to such accelerated vesting would otherwise result
in an excess parachute payment under Code Section 280G. Any
Option which does not accelerate and vest at the time of the
Change in Control by reason of the foregoing limitation shall
continue to become exercisable and vest in accordance with the
vesting schedule applicable to that Option immediately prior to
the Change in Control.
Any restricted or unvested shares of Common Stock held by the
Employee at the time of the Change in Control shall immediately
vest at that time and the Company's repurchase rights with
respect to those shares shall terminate, except to the extent
the parachute payment attributable to such accelerated vesting,
when added to the parachute payment attributable to the
acceleration of the Employee's outstanding Options, would result
in an excess parachute payment under Code Section 280G. The
Company's repurchase rights with respect to any restricted or
unvested shares which do not vest at the time of the Change in
Control by reason of the foregoing limitation shall continue in
effect and shall be assigned to any successor entity in the
Change in Control transaction, and Employee shall continue to
vest in those shares in accordance with the vesting schedule in
effect for the shares immediately prior to 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 by reason of the foregoing limitations
shall immediately vest in full pursuant to the provisions of
Section 11.C. upon any Involuntary Termination of Employee's
employment following the Change in Control (other than a
Termination for Cause). Each such accelerated Option, together
with each of the Employee's other vested Options shall remain
exercisable and outstanding for a period of three (3) years and
may be exercised for any or all of the Option shares, including
the accelerated shares, in accordance with the provisions of the
Option agreement evidencing such Option.
All determinations concerning the application of the parachute
payment provisions of Code Section 280G to the accelerated
vesting of Options and shares pursuant to this Section 11 shall
be made by the Company's independent certified public
accountant, whose determination shall be binding.
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
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transaction, and appropriate adjustments will be made to the
Option exercise price payable per share, provided the aggregate
exercise price will remain the same.
12. 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.
13. NON-SOLICITATION AND NON-DISPARAGEMENT. During any period for which
Employee is receiving compensation payments pursuant to Part Two,
Section 4 and two (2) years 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.
14. 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 14.A. above to the extent such
retained materials constitute confidential information.
C. Employee's obligations under this Section 14 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 14.
15. 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
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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.
16. 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 10 in addition to any unpaid compensation earned by
Employee under Part Two, Section 4.A. 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 10, and only the limited death or disability
benefits provided under Part Two, Section 9 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 4.A. for services rendered through the date of
such termination, and no termination or severance benefits will
be payable to Employee under Part Two, Section 10.
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.
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.
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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 12, 13, 14 and 15 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 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 supersedes 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
10
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 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.
13. LEGAL COSTS. If any legal action or other proceeding is brought by
either party for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with
any of the provisions of this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys fees and other costs incurred
in that action or proceeding. Notwithstanding anything herein above to
the contrary, as between Employee and the Company, the Company shall
bear all legal costs and expenses of defending the validity of this
Agreement against any third party. The Company shall bear all legal
costs and expenses incurred in the event the Company should contest or
dispute the characterization of any amounts paid pursuant to this
Agreement as being nondeductible under Section 280G of the Code or
subject to imposition of an excise tax under Section 4999 of the Code.
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:
--------------------------------------
Lawrence P. English
Chief Executive Officer
ACCEPTED BY AND AGREED TO:
- --------------------------------------
Michael H. Lanza
DATED: SEPTEMBER 18, 2000
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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.