Exhibit 10.9
QUADRAMED CORPORATION
AMENDMENT OF EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement"), dated this 20th day of
September, 2001, is by and between QuadraMed Corporation , a corporation
organized under the laws of the State of Delaware and having its principal
place of business at San Rafael, California (the "Company"), and Xxxxxxx X.
Xxxxxxxx, an individual currently residing in Washington, Utah (the
"Employee"), and
WITNESSETH THAT:
WHEREAS, Employee and the Company have heretofore entered into an
employment agreement, dated as of April 1, 1999 (the "Employment
Agreement");
WHEREAS, Employee and the Company desire to revise the Employment
Agreement to incorporate describe certain additional bonus opportunities
and change of control protections as recommended to the Company by the
Company's Employee compensation consultant, Xxxxxxxx X. Xxxx & Co., Inc.;
NOW, THEREFORE, Employee and the Company hereby agree that from
and after the date of execution of this Agreement the Employment Agreement
shall be and is hereby amended as follows:
1. Part One of the Employment Agreement is hereby amended by
adding a definition of "Board," to read in its entirety as follows:
""Board" means the Board of Directors of the Company."
2. Part One of the Employment Agreement is hereby further amended
by amending the definition of "Stock Option Plan" contained therein to read
in its entirety as follows:
""Stock Option Plan" means any plan, program or policy of
the Company for the granting of options to acquire Company stock
or other equity-based incentives to employees of the Company and
affiliates, including but not limited to 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."
3. Part Two, Section 4C, pertaining to Employee's potential bonus
compensation for services to the Company, is deleted in its entirety and
the following is inserted in lieu thereof:
"C. Employee shall be eligible for a discretionary bonus
of up to fifty (50%) percent of Employee's then-current annual
rate of base salary. 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.
"If the Company exceeds its annual operating cash flow
goal for any of 2001, 2002 and 2003, then, in addition to whatever
other bonuses to which Employee may be entitled under the other
paragraphs of this Section 4C in respect of that year, Employee
will be eligible to receive a cash bonus equal to 50% of his
target annual bonus for the same year (the "Enhanced Bonus"). Any
Enhanced Bonus earned for any year will be paid promptly following
December 31, 2003 or, if earlier, promptly following the date of a
Change in Control if but only if the Employee remains employed by
the Company through such date and otherwise shall be forfeited. If
for any of the specified years the Company does not exceed its
annual operating cash flow goal, Employee will not be eligible for
an Enhanced Bonus for that year; provided, however, that Employee
will be eligible to receive the amount of Enhanced Bonus to which
Employee would have otherwise been eligible for the year, subject
to the vesting and payment provisions previously described, if
over the total three years the Company achieves the aggregate of
its annual operating cash flow goals."
"Employee may also be eligible for additional
discretionary bonuses based on the achievement of certain
specified goals established by the Board. Any award for such a
bonus will be recommended to the Board's Compensation Committee by
the Chief Employee Officer of the Company. All bonuses pursuant to
this paragraph are subject to final approval by the Board's
Compensation Committee."
4. The Employment Agreement and Part Two, Section 9 thereof,
pertaining to Employee's severance benefits on certain terminations of his
employment, is hereby amended by (i) redesignating Sections 9 C through D
as Sections 9 D through E and adjusting appropriately all cross-references
to any of said Sections and (ii) adding a new Section 9 C to read in its
entirety as follows:
"X. Xxxxxxxxx and Welfare Benefits after Change in
Control. If Employee is terminated by reason of an Involuntary
Termination of Employee's employment (other than a Termination for
Cause) in connection with or within twenty-four (24) months
following a Change in Control, he will be entitled to the
severance and welfare benefits described below in this Section.
These benefits are in lieu of any entitlement to severance and
welfare benefit continuation under preceding subsection or
subsections of this Section, but in addition to any entitlements
arising under other provisions of this Agreement (e.g., provisions
providing accelerated vesting of Options). These benefits are as
follows:"
"(1) A severance payment, payable in one lump
sum within thirty days (30) days of the date of such an
Involuntary Termination, in an aggregate amount equal to
the sum of Employee's then-current annual rate of base
salary and his annual target bonus for the year in which
the Change in Control occurs. Employee may elect, in his
sole discretion, to have the severance benefit payable
pursuant to this Section paid in approximately equal
monthly installments over a one year period following the
date of his Involuntary Termination."
"(2) For a period of twelve (12) months Employee
(and his dependents, if otherwise eligible) shall be
provided by the Company with the same life, health and
disability plan participation, benefits and other welfare
benefit coverages to which he was entitled to as an
employee of the Company immediately before his
Involuntary Termination (excluding, however, any
severance plan benefits). In the event that under
applicable law or the terms of any relevant Employee
Benefit Plan such participation, benefits and/or coverage
cannot be provided under an existing Company Employee
Benefit Plan, 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 through
private insurance acquired at the Company's expense. To
the maximum extent permitted by applicable law, any
benefit coverage provided pursuant to this paragraph
shall be in discharge of any obligations of the Company
or any rights of Employee and his dependents 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."
5. The Employment Agreement and Part Two, Section 9E (as
redesignated by Paragraph 4 of this Amendment) is hereby amended by (i)
replacing the reference "Part Two, Section 16" appearing in Part Two,
Section 9E (as so redesignated) with the reference "Part Two, Section 15"
and (ii) relocating Part Two, Section 16 (pertaining to the tax effects of
certain payments) to and redesignating it as Part Three, Section 8.
6. Except as provided in the preceding paragraphs of this
Agreement, the provisions of the Employment Agreement remain in full force
and effect in accordance with their respective terms.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties hereto have caused this Agreement to be duly executed under seal as
of the date first above written.
QUADRAMED CORPORATION
By:____________________________
Xxxxxxx X. Xxxxx
Its Executive Vice President
EMPLOYEE
_______________________________
Xxxxxxx X. Xxxxxxxx
