FORM OF INDEMNIFICATION AGREEMENT
Exhibit 10.20
This Agreement is made as of the day of 2009, by and between Accretive
Health, Inc., a Delaware corporation (the “Corporation”), and (the “Indemnitee”), a
director or officer of the Corporation[, and a of (the “Fund”)].
WHEREAS, it is essential to the Corporation to retain and attract as directors and officers
the most capable persons available, and
WHEREAS, the increase in corporate litigation subjects directors and officers to expensive
litigation risks, and
WHEREAS, it is now and has always been the express policy of the Corporation to indemnify its
directors and officers, and
[WHEREAS, Indemnitee is affiliated with the Fund and has certain rights to indemnification
and/or insurance provided by the Fund and/or the Fund’s affiliates which Indemnitee and the Fund
intend to be secondary to the primary obligation of the Corporation to indemnify Indemnitee as
provided herein, with the Corporation’s acknowledgment and agreement to the foregoing being a
material condition to Indemnitee’s willingness to serve on the Board.]
WHEREAS, the Corporation desires the Indemnitee to serve, or continue to serve, as a director
or officer of the Corporation.
NOW THEREFORE, the Corporation and the Indemnitee do hereby agree as follows:
1. Agreement to Serve. The Indemnitee agrees to serve or continue to serve as a
director or officer of the Corporation for so long as the Indemnitee is duly elected or appointed
or until such time as the Indemnitee tenders a resignation in writing.
2. Definitions. As used in this Agreement:
(a) The term “Proceeding” shall include any threatened, pending or completed action, suit,
arbitration, alternative dispute resolution proceeding, administrative hearing or other proceeding,
whether brought by or in the right of the Corporation or otherwise and whether of a civil,
criminal, administrative or investigative nature, and any appeal therefrom.
(b) The term “Corporate Status” shall mean the status of a person who is or was, or has agreed
to become, a director or officer of the Corporation, or is or was serving, or has agreed to serve,
at the request of the Corporation, as a director, officer, fiduciary, partner, trustee, member,
employee or agent of, or in a similar capacity with, another corporation, partnership, joint
venture, trust, limited liability company or other enterprise.
(c) The term “Expenses” shall include, without limitation, attorneys’ fees, retainers, court
costs, transcript costs, fees and expenses of experts, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service fees and other
disbursements or expenses of the types customarily incurred in connection with investigations,
judicial or administrative proceedings or appeals, but shall not include the amount of judgments,
fines or penalties against Indemnitee or amounts paid in settlement in connection with such
matters.
(d) References to “other enterprise” shall include employee benefit plans; references to
“fines” shall include any excise tax assessed with respect to any employee benefit plan; references
to “serving at the request of the Corporation” shall include any service as a director, officer,
employee or agent of the Corporation which imposes duties on, or involves services by, such
director, officer, employee, or agent with respect to an employee benefit plan, its participants,
or beneficiaries; and a person who acted in good faith and in a manner such person reasonably
believed to be in the interests of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as
referred to in this Agreement.
3. Indemnity of Indemnitee. Subject to Sections 6, 8 and 10, the Corporation shall
indemnify the Indemnitee in connection with any Proceeding as to which the Indemnitee is, was or is
threatened to be made a party (or is otherwise involved) by reason of the Indemnitee’s Corporate
Status, to the fullest extent permitted by law (as such may be amended from time to time). In
furtherance of the foregoing and without limiting the generality thereof:
(a) Indemnification in Third-Party Proceedings. The Corporation shall indemnify the
Indemnitee in accordance with the provisions of this Section 3(a) if the Indemnitee was or is a
party to or threatened to be made a party to or otherwise involved in any Proceeding (other than a
Proceeding by or in the right of the Corporation to procure a judgment in its favor or a Proceeding
referred to in Section 6 below) by reason of the Indemnitee’s Corporate Status or by reason of any
action alleged to have been taken or omitted in connection therewith, against all Expenses,
judgments, fines, penalties and amounts paid in settlement actually and reasonably incurred by or
on behalf of the Indemnitee in connection with such Proceeding, if the Indemnitee acted in good
faith and in a manner which the Indemnitee reasonably believed to be in, or not opposed to, the
best interests of the Corporation (which may be negligent acts) and, with respect to any criminal
Proceeding, had no reasonable cause to believe that his or her conduct was unlawful.
(b) Indemnification in Proceedings by or in the Right of the Corporation. The
Corporation shall indemnify the Indemnitee in accordance with the provisions of this Section 3(b)
if the Indemnitee was or is a party to or threatened to be made a party to or otherwise involved in
any Proceeding by or in the right of the Corporation to procure a judgment in its favor by reason
of the Indemnitee’s Corporate Status or by reason of any action alleged to have been taken or
omitted in connection therewith, against all Expenses and, to the extent permitted by law, amounts
paid in settlement actually and reasonably incurred by or on behalf of the Indemnitee in connection
with such Proceeding, if the Indemnitee acted in good faith and in a manner which the Indemnitee
reasonably believed to be in, or not opposed to, the best interests of the Corporation, except
that, if applicable law so provides, no indemnification shall be made under this Section 3(b) in
respect of any claim, issue, or matter as to which the Indemnitee shall have been adjudged to be
liable to the Corporation, unless, and only to the extent, that the Court
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of Chancery of Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of such liability but in view of all the
circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnity for such
Expenses as the Court of Chancery or such other court shall deem proper.
4. Indemnification of Expenses of Successful Party. Notwithstanding any other
provision of this Agreement, to the extent that the Indemnitee has been successful, on the merits
or otherwise, in defense of any Proceeding or in defense of any claim, issue or matter therein
(other than a Proceeding referred to in Section 6), the Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred by or on behalf of the Indemnitee in connection
therewith. Without limiting the foregoing, if any Proceeding or any claim, issue or matter therein
is disposed of, on the merits or otherwise (including a disposition without prejudice), without (i)
the disposition being adverse to the Indemnitee, (ii) an adjudication that the Indemnitee was
liable to the Corporation, (iii) a plea of guilty or nolo contendere by the Indemnitee, (iv) an
adjudication that the Indemnitee did not act in good faith and in a manner the Indemnitee
reasonably believed to be in or not opposed to the best interests of the Corporation, and (v) with
respect to any criminal proceeding, an adjudication that the Indemnitee had reasonable cause to
believe his or her conduct was unlawful, the Indemnitee shall be considered for the purposes hereof
to have been wholly successful with respect thereto.
5. Indemnification for Expenses of a Witness. To the extent that the Indemnitee is,
by reason of the Indemnitee’s Corporate Status, a witness in any Proceeding to which the Indemnitee
is not a party, the Indemnitee shall be indemnified against all Expenses actually and reasonably
incurred by or on behalf of the Indemnitee in connection therewith.
6. Exceptions to Right of Indemnification. Notwithstanding anything to the contrary
in this Agreement, except as set forth in Section 11, the Corporation shall not indemnify the
Indemnitee in connection with a Proceeding (or part thereof) initiated by the Indemnitee unless the
initiation thereof was approved by the Board of Directors of the Corporation. Notwithstanding
anything to the contrary in this Agreement, the Corporation shall not indemnify the Indemnitee to
the extent the Indemnitee is reimbursed from the proceeds of insurance, and in the event the
Corporation makes any indemnification payments to the Indemnitee and the Indemnitee is subsequently
reimbursed from the proceeds of insurance, the Indemnitee shall promptly refund such
indemnification payments to the Corporation to the extent of such insurance reimbursement.
7. Contribution in the Event of Joint Liability. If the indemnification provided for
in this Agreement for any reason other than the statutory limitations of applicable law or as
provided for in this Agreement, is held by a court of competent jurisdiction to be unavailable to
an Indemnitee in respect of any losses, claims, damages, expenses or liabilities in which the
Corporation is jointly liable with such Indemnitee, as the case may be (or would be jointly liable
if joined), then the Corporation, in lieu of indemnifying the Indemnitee thereunder, shall
contribute to the amount actually and reasonably incurred and paid or payable by the Indemnitee as
a result of such losses, claims, damages, expenses or liabilities in such proportion as is
appropriate to reflect (a) the relative benefits received by the Corporation and the Indemnitee,
and (b) the relative fault of the Corporation and such Indemnitee in connection with the action or
inaction that resulted in such losses, claims, damages, expenses or liabilities, as well as any
other
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relevant equitable considerations. The relative fault of the Corporation and the Indemnitee
shall be determined by reference to, among other things, (i) whether an untrue or alleged untrue
statement of a material fact or an omission or alleged omission to state a material fact relates to
information supplied by the Corporation or the Indemnitee, (ii) the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent the circumstances resulting
in such losses, claims, damages, expenses or liabilities, (iii) the degree to which the parties’
actions were motivated by intent to gain personal profit or advantage, (iv) the degree to which the
parties’ liability is primary or secondary, and (v) the degree to which the parties’ conduct is
active or passive. The Corporation and the Indemnitee agree that it would not be just and equitable
if contribution pursuant to this Section 7 were determined by pro rata or per capita allocation or
by any other method of allocation which does not take account of the equitable considerations
referred to in this paragraph. No person found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act of 1933, as amended) shall be entitled to
contribution from any person who was not found guilty of such fraudulent misrepresentation.
8. Notification and Defense of Claim. As a condition precedent to the Indemnitee’s
right to be indemnified, the Indemnitee must notify the Corporation in writing as soon as
practicable of any Proceeding for which indemnity will or could be sought; provided that
failure or delay to provide such notice shall not limit the Indemnitee’s right to indemnification
hereunder except to the extent the Corporation is prejudiced by such failure or delay. With
respect to any Proceeding of which the Corporation is so notified, the Corporation will be entitled
to participate therein at its own expense and/or to assume the defense thereof at its own expense,
with legal counsel reasonably acceptable to the Indemnitee. After notice from the Corporation to
the Indemnitee of its election so to assume such defense, the Corporation shall not be liable to
the Indemnitee for any legal or other expenses subsequently incurred by the Indemnitee in
connection with such Proceeding, other than as provided below in this Section 8. The Indemnitee
shall have the right to employ his or her own counsel in connection with such Proceeding, but the
fees and expenses of such counsel incurred after notice from the Corporation of its assumption of
the defense thereof shall be at the expense of the Indemnitee unless (i) the employment of counsel
by the Indemnitee has been authorized by the Corporation, (ii) counsel to the Indemnitee shall have
reasonably concluded that there may be a conflict of interest or position on any significant issue
between the Corporation and the Indemnitee in the conduct of the defense of such Proceeding or
(iii) the Corporation shall not in fact have employed counsel to assume the defense of such
Proceeding, in each of which cases the fees and expenses of counsel for the Indemnitee shall be at
the expense of the Corporation, except as otherwise expressly provided by this Agreement, and
provided that Indemnitee’s counsel shall cooperate reasonably with the Corporation’s
counsel to minimize the cost of defending claims against the Corporation and the Indemnitee. The
Corporation shall not be entitled, without the consent of the Indemnitee, to assume the defense of
any claim brought by or in the right of the Corporation or as to which counsel for the Indemnitee
shall have reasonably made the conclusion provided for in clause (ii) above. The Corporation shall
not be required to indemnify the Indemnitee under this Agreement for any amounts paid in settlement
of any Proceeding effected without its written consent. The Corporation shall not settle any
Proceeding in any manner that would impose any penalty or limitation on the Indemnitee without the
Indemnitee’s written consent. Neither the Corporation nor the Indemnitee will unreasonably
withhold or delay their consent to any proposed settlement.
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9. Advancement of Expenses. Subject to the provisions of Section 10, in the event
that the Corporation does not assume the defense pursuant to Section 8 of any Proceeding of which
the Corporation receives notice under this Agreement, any Expenses actually and reasonably incurred
by or on behalf of the Indemnitee in defending such Proceeding shall be paid by the Corporation in
advance of the final disposition of such Proceeding; provided, however, that the payment of
such Expenses incurred by or on behalf of the Indemnitee in advance of the final disposition of
such Proceeding shall be made only upon receipt of an undertaking by or on behalf of the Indemnitee
to repay all amounts so advanced in the event that it shall ultimately be determined that the
Indemnitee is not entitled to be indemnified by the Corporation as authorized in this Agreement.
Such undertaking shall be accepted without reference to the financial ability of the Indemnitee to
make repayment. Any advances and undertakings to repay pursuant to this Section 9 shall be
unsecured and interest-free.
10. Procedures.
(a) In order to obtain indemnification or advancement of Expenses pursuant to this Agreement,
the Indemnitee shall submit to the Corporation a written request, including in such request such
documentation and information as is reasonably available to the Indemnitee and is reasonably
necessary to determine whether and to what extent the Indemnitee is entitled to indemnification or
advancement of Expenses. Any such indemnification or advancement of Expenses shall be made
promptly, and in any event within 30 days after receipt by the Corporation of the written request
of the Indemnitee, unless the Corporation determines within such 30-day period that the Indemnitee
did not meet the applicable standard of conduct. Such determination, and any determination that
advanced Expenses must be repaid to the Corporation, shall be made in each instance (a) by a
majority vote of the directors of the Corporation consisting of persons who are not at that time
parties to the Proceeding (“disinterested directors”), whether or not a quorum, (b) by a committee
of disinterested directors designated by a majority vote of disinterested directors, whether or not
a quorum, (c) if there are no disinterested directors, or if the disinterested directors so direct,
by independent legal counsel (who may, to the extent permitted by applicable law, be regular legal
counsel to the Corporation) in a written opinion, or (d) by the stockholders of the Corporation.
(b) The termination of any Proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the
Indemnitee did not act in good faith and in a manner that the Indemnitee reasonably believed to be
in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal
Proceeding, had reasonable cause to believe that his or her conduct was unlawful.
(c) The Indemnitee shall cooperate with the person, persons or entity making such
determination with respect to the Indemnitee’s entitlement to indemnification, including providing
to 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
the Indemnitee and reasonably necessary to such determination. Any Expenses actually and
reasonably incurred by the Indemnitee in so cooperating shall be borne by the Corporation
(irrespective of the determination as to the Indemnitee’s entitlement to indemnification) and the
Corporation hereby indemnifies the Indemnitee therefrom.
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11. Remedies. The right to indemnification or advancement of Expenses as provided by
this Agreement shall be enforceable by the Indemnitee in any court of competent jurisdiction if the
Corporation denies such request, in whole or in part, or if no disposition thereof is made within
the applicable period referred to in Section 10. Unless otherwise required by law, the burden of
proving that indemnification or advancement of Expenses is not appropriate shall be on the
Corporation. Neither the failure of the Corporation to have made a determination prior to the
commencement of such action that indemnification is proper in the circumstances because the
Indemnitee has met the applicable standard of conduct, nor an actual determination by the
Corporation that the Indemnitee has not met such applicable standard of conduct, shall be a defense
to the action or create a presumption that the Indemnitee has not met the applicable standard of
conduct. The Indemnitee’s Expenses actually and reasonably incurred in connection with
successfully establishing the Indemnitee’s right to indemnification, in whole or in part, in any
such Proceeding shall also be indemnified by the Corporation.
12. Partial Indemnification. If the Indemnitee is entitled under any provision of
this Agreement to indemnification by the Corporation for some or a portion of the Expenses,
judgments, fines, penalties or amounts paid in settlement actually and reasonably incurred by or on
behalf of the Indemnitee in connection with any Proceeding but not, however, for the total amount
thereof, the Corporation shall nevertheless indemnify the Indemnitee for the portion of such
Expenses, judgments, fines, penalties or amounts paid in settlement to which the Indemnitee is
entitled.
13. Subrogation. In the event of any payment under this Agreement, the Corporation
shall be subrogated to the extent of such payment to all of the rights of recovery of the
Indemnitee, who shall execute all papers required and take all action necessary to secure such
rights, including execution of such documents as are necessary to enable the Corporation to bring
suit to enforce such rights.
14. Term of Agreement. This Agreement shall be applicable to Proceedings commenced or
continued after execution of this Agreement, whether arising from acts or omissions occurring
before or after such execution, and this Agreement shall continue until and terminate upon the
later of (a) the date when Indemnitee is no longer be subject to any possible Proceeding subject to
indemnification by reason of Indemnitee’s Corporate Status and (b) the final termination of all
Proceedings pending on the date of execution of this Agreement in respect of which the Indemnitee
is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding
commenced by the Indemnitee pursuant to Section 11 of this Agreement relating thereto.
15. Indemnification Hereunder Not Exclusive.
(a) The indemnification and advancement of Expenses provided by this Agreement shall not be
deemed exclusive of any other rights to which the Indemnitee may be entitled under the
Certification of Incorporation, the By-Laws, any other agreement, any vote of stockholders or
disinterested directors, the General Corporation Law of Delaware, any other law (common or
statutory), or otherwise, both as to action in the Indemnitee’s official capacity and as to action
in another capacity while holding office for the Corporation. Nothing contained in this Agreement
shall be deemed to prohibit the Corporation from purchasing and maintaining
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insurance, at its expense, to protect itself or the Indemnitee against any expense, liability
or loss incurred by it or the Indemnitee in any such capacity, or arising out of the Indemnitee’s
status as such, whether or not the Indemnitee would be indemnified against such expense, liability
or loss under this Agreement; provided that the Corporation shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent
that the Indemnitee has otherwise actually received such payment under any insurance policy,
contract, agreement or otherwise.
(b) [The Corporation hereby acknowledges that Indemnitee has certain rights to
indemnification, advancement of expenses and/or insurance provided by the Fund and certain of its
affiliates (the “Fund Indemnitors”). The Corporation hereby agrees (i) that it is the indemnitor of
first resort (i.e., its obligations to Indemnitee are primary and any obligations of the Fund
Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities
incurred by Indemnitee are secondary), (ii) that, to the extent the Corporation is otherwise
required hereunder, the Corporation shall be required to advance the full amount of expenses
incurred by Indemnitee and shall be liable for the full amount of all Expenses, judgments,
penalties, fines and amounts paid in settlement to the extent legally permitted and as required by
the Certificate of Incorporation or Bylaws of the Corporation (or any agreement between the
Corporation and the Indemnitee), without regard to any rights Indemnitee may have against the Fund
Indemnitors, and, (iii) that the Corporation irrevocably waives, relinquishes and releases the Fund
Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or
any other recovery of any kind in respect of amounts paid by the Corporation to the Indemnitee as
required hereunder. The Corporation further agrees that no advancement or payment by the Fund
Indemnitors on behalf of the Indemnitee shall affect the foregoing and the Fund Indemnitors shall
have a right of contribution and/or be subrogated to the extent of such advancement or payment to
all of the rights of recovery of Indemnitee hereunder against the Corporation. The Corporation and
Indemnitee agree that the Fund Indemnitors are express third party beneficiaries of the terms
hereof.]
16. No Special Rights. Nothing herein shall confer upon the Indemnitee any right to
continue to serve as an officer or director of the Corporation for any period of time or at any
particular rate of compensation.
17. Savings Clause. If this Agreement or any portion thereof shall be invalidated on
any ground by any court of competent jurisdiction, then the Corporation shall nevertheless
indemnify the Indemnitee as to Expenses, judgments, fines, penalties and amounts paid in settlement
with respect to any Proceeding to the full extent permitted by any applicable portion of this
Agreement that shall not have been invalidated and to the fullest extent permitted by applicable
law.
18. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall constitute the original.
19. Successors and Assigns. This Agreement shall be binding upon the Corporation and
its successors and assigns and shall inure to the benefit of the estate, heirs, executors,
administrators and personal representatives of the Indemnitee.
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20. Headings. The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.
21. Modification and Waiver. This Agreement may be amended from time to time to
reflect changes in Delaware law or for other reasons. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof nor shall any such waiver constitute a continuing waiver.
22. Notices. All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been given (i) when delivered by hand or (ii) if mailed
by certified or registered mail with postage prepaid, on the third day after the date on which it
is so mailed:
(a) | if to the Indemnitee, to: | ||
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(b) | if to the Corporation, to: | ||
Accretive Health, Inc. 000 Xxxxx Xxxxxxxx Xxxxxx Xxxxx 0000 Xxxxxxx, XX 00000 Attention: General Counsel |
or to such other address as may have been furnished to the Indemnitee by the Corporation or to the
Corporation by the Indemnitee, as the case may be.
23. Applicable Law. This Agreement shall be governed by, and construed and enforced
in accordance with, the laws of the State of Delaware. The Indemnitee may elect to have the right
to indemnification or reimbursement or advancement of Expenses interpreted on the basis of the
applicable law in effect at the time of the occurrence of the event or events giving rise to the
applicable Proceeding, to the extent permitted by law, or on the basis of the applicable law in
effect at the time such indemnification or reimbursement or advancement of Expenses is sought.
Such election shall be made, by a notice in writing to the Corporation, at the time indemnification
or reimbursement or advancement of Expenses is sought; provided, however, that if
no such notice is given, and if the General Corporation Law of Delaware is amended, or other
Delaware law is enacted, to permit further indemnification of the directors and officers, then the
Indemnitee shall be indemnified to the fullest extent permitted under the General Corporation Law,
as so amended, or by such other Delaware law, as so enacted.
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24. Enforcement. The Corporation expressly confirms and agrees that it has entered
into this Agreement in order to induce the Indemnitee to continue to serve as an officer or
director of the Corporation, and acknowledges that the Indemnitee is relying upon this Agreement in
continuing in such capacity.
25. Entire Agreement. This Agreement sets forth the entire agreement of the parties
hereto in respect of the subject matter contained herein and supersedes all prior agreements,
whether oral or written, by any officer, employee or representative of any party hereto in respect
of the subject matter contained herein; and any prior agreement of the parties hereto in respect of
the subject matter contained herein is hereby terminated and cancelled. For avoidance of doubt,
the parties confirm that the foregoing does not apply to or limit the Indemnitee’s rights under
Delaware law or the Corporation’s Certificate of Incorporation or By-Laws.
26. Consent to Suit. In the case of any dispute under or in connection with this
Agreement, the Indemnitee may only bring suit against the Corporation in the Court of Chancery of
the State of Delaware. The Indemnitee hereby consents to the exclusive jurisdiction and venue of
the courts of the State of Delaware, and the Indemnitee hereby waives any claim the Indemnitee may
have at any time as to forum non conveniens with respect to such venue. The Corporation shall have
the right to institute any legal action arising out of or relating to this Agreement in any court
of competent jurisdiction. Any judgment entered against either of the parties in any proceeding
hereunder may be entered and enforced by any court of competent jurisdiction.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the day and year first above written.
Attest: | ACCRETIVE HEALTH, INC. | |||||||||
By:
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By: | |||||||||
Name:
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Name: | |||||||||
Title: | ||||||||||
INDEMNITEE: | ||||||||||
Name: | ||||||||||
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