Document:

EXHIBIT 10.21

  
 Exhibit 10.21

  
 QUADRAMED CORPORATION 
 INDUCEMENT STOCK OPTION AGREEMENT 
  
 THIS AGREEMENT, made as of the 9th day of July, 2003, by and between QuadraMed Corporation (“QuadraMed”) and John Wright (“Optionee”). 
  
 RECITALS 
  
 A. The Board has determined to offer employment to Optionee. 
  
 B. As an inducement to accept such employment offer, the Board has determined to offer Optionee an option (the “Option”) to purchase 750,000
shares of Common Stock (“Shares”) under the terms and conditions set forth herein. 
  
 C. All capitalized terms in this Agreement, to the extent not otherwise defined herein, shall have the meaning assigned to them in the attached Appendix. 
  
 NOW, THEREFORE, it is hereby agreed as follows: 
  
 1. Grant of Option. QuadraMed hereby grants to Optionee, as of the Grant Date, an Option to purchase up to
750,000 Shares at the Exercise Price. The Shares shall be purchasable from time to time in accordance with the Vesting Schedule. 
  
 2. Option Term. The Option shall have a maximum term of ten (10) years measured from the Grant Date and shall accordingly expire at the
close of business on the tenth anniversary of the Grant Date, unless sooner terminated in accordance with Paragraph 4 or 5. 
  
 3. Exercisability/Vesting. The right to exercise the Option shall vest in the Optionee and the Option shall become exercisable in accordance
with the Vesting Schedule. The Option shall remain exercisable to the extent vested until the Expiration Date or the sooner termination of the Option term under Paragraph 4 or 5. The right to exercise the Option shall vest in the Optionee as
follows: (i) twenty-five (25%) of the Shares shall vest on the first anniversary of the Grant Date and (ii) the balance of the Shares shall vest in a series of thirty-six (36) equal monthly installments upon Optionee’s completion of each month
of Service after the first anniversary of the Grant Date. Vesting in the Shares may be accelerated pursuant to the provisions of Paragraph 4 or 5. Unless otherwise specifically provided herein, no additional Shares shall vest following
Optionee’s cessation of Service. 
  
 4. Cessation of
Service. 
  
 (a) Should the
Optionee’s Service be terminated for Nonperformance while the Option is outstanding, then this Option shall immediately terminate and cease to be exercisable with respect to the number of Shares for which the right to exercise the Option has
not yet vested under this Agreement, and Optionee shall have a thirty-six (36)-month period (commencing with the date of such cessation of Service) during which to exercise the Option for the remainder of the Shares, but in no event shall the Option
be exercisable at any time after the Expiration Date. 
  

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 (b) Should Optionee die while the Option is outstanding, then the Optionee shall be
credited with an additional twelve (12) months of Service for purposes of vesting and the personal representative of Optionee’s estate or the person or persons to whom the Option is transferred pursuant to Optionee’s will or in accordance
with the laws of inheritance shall have the right to exercise the Option. Such right shall lapse, and the Option shall cease to be outstanding, upon the earlier of (A) the expiration of the thirty-six (36)-month period measured from the date of
Optionee’s death or (B) the Expiration Date. 
  
 (c) Should Optionee cease to remain in Service by reason of Permanent Disability while the Option is outstanding, then the Optionee shall be credited with an additional twelve (12) months of Service for purposes of vesting and the Optionee
shall have a period of thirty-six (36) months (commencing with the date of such cessation of Service) during which to exercise the Option. In no event shall the Option be exercisable at any time after the Expiration Date. 
  
 (d) Should the Optionee’s Service be terminated due to
an Involuntary Termination while this option is outstanding, then the right to exercise this option shall be fully vested and the Optionee shall have a period of thirty-six (36) months (commencing with the date of such cessation of Service) during
which to exercise this option, but in no event shall this option be exercisable at any time after the Expiration Date. 
  
 (e) Should the Optionee terminate Service voluntarily (other than an Involuntary Termination) while this option is outstanding, then the
option shall immediately terminate and cease to be exercisable with respect to the number of Option Shares for which the right to exercise this option has not then vested under this Agreement, and the Optionee shall have a period of thirty-six (36)
months (commencing with the date of such cessation of Service) during which to exercise this option for the remainder of the Option Shares, but in no event shall this Option be exercisable at any time after the Expiration Date. 
  
 (f) During the limited period of post-Service
exercisability, the Option may not be exercised in the aggregate for more than the number of Shares for which the Option is exercisable at the time of Optionee’s cessation of Service according to the Vesting Schedule. Upon the expiration of
such limited exercise period or (if earlier) upon the Expiration Date, the Option shall terminate and cease to be outstanding for any otherwise exercisable Shares for which the Option has not been exercised. To the extent the Option is not
exercisable for one or more Shares at the time of Optionee’s cessation of Service, the Option shall immediately terminate and cease to be outstanding with respect to those Shares. 
  
 (g) Should Optionee’s Service be terminated for Cause, then the Option shall terminate immediately and
cease to remain outstanding upon the Optionee’s termination of Service. 
  

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 5. Change in Control. 
  
 (a) In the event of a Change in Control, the following provisions shall govern: 
  
 (i) The Option shall, immediately prior to the specified
effective date of the Change in Control, become fully exercisable with respect to all previously unexercised Shares, except to the extent the Option parachute payment attributable to such accelerated vesting would result in an excess
parachute payment under Section 280G of the Code. To the extent the Option does not accelerate and vest immediately prior to the specified effective date of the Change in Control by reason of the foregoing limitation, the Option shall continue to
become exercisable and vest with respect to the remaining unvested Shares in accordance with the Vesting Schedule set forth in Paragraph 3. 
  
 (ii) To the extent the Option does not accelerate by reason of the foregoing limitation, it shall immediately vest in full pursuant to the
provisions of this Paragraph 5 upon any Involuntary Termination of Optionee’s employment following the Change in Control (other than a termination for Cause). The Option shall then remain exercisable and may be exercised for any or all of the
Shares, including the accelerated Shares, in accordance with the provisions of this Agreement until the earlier of (A) the third anniversary of the date of the Involuntary Termination or (B) the Expiration Date. 
  
 (iii) All determinations concerning the application of the
parachute payment provisions of Section 280G of the Code to the accelerated vesting of the Option pursuant to this Paragraph 5(b) shall be made by QuadraMed’s independent certified public accountant, whose determination shall be binding.

  
 (b) The Option will be appropriately adjusted
to apply to the number and class of securities which would have been issued to Optionee in the consummation of the Change in Control had the Option been exercised immediately prior to such transaction, and appropriate adjustments will be made to the
Option Exercise Price, provided that the aggregate Exercise Price will remain the same. 
  
 6. Adjustment in Shares. Should any change be made to the Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without QuadraMed’s receipt of consideration, appropriate adjustments shall be made to (i) the number and/or class of securities subject
to the Option and (ii) the Exercise Price in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder; provided, however, that the aggregate Exercise Price shall remain the same. 
  
 7. Stockholder Rights. The holder of the Option shall not have
any stockholder rights with respect to the Shares until such person shall have exercised the Option, paid the Exercise Price and become a holder of record of the purchased Shares. 
  

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 8. Manner of Exercising Option. 
  
 (a) In order to exercise the Option for all or any part of
the Shares for which the Option is at the time exercisable, Optionee or, in the case of exercise after Optionee’s death, Optionee’s executor, administrator, heir or legatee, as the case may be, must take the following actions: 

 
 (i) The Secretary of QuadraMed shall be provided with
written notice of the Option exercise (the “Exercise Notice”) in substantially the form of Exhibit I attached hereto, in which there is specified the number of Shares to be purchased under the exercised Option. 
  
 (ii) The Exercise Price for the purchased Shares shall be
paid in one or more of the following alternative forms: 
  

			
	•	 	cash or check made payable to QuadraMed’s order; or
		
	•	 	shares of Common Stock held by Optionee (or any other person or persons exercising the Option) for the requisite period necessary to avoid a charge to QuadraMed’s earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date; or
		
	•	 	if established by QuadraMed and permitted under applicable law, through a “same day sale” commitment from Optionee and a broker-dealer selected by QuadraMed whereby the Optionee
irrevocably elects to exercise the Option and to sell a portion of the shares so purchased sufficient to pay for the total exercise price and whereby the broker-dealer irrevocably commits upon receipt of such shares to forward the total exercise
price directly to QuadraMed plus the applicable Federal, state and local income taxes required to be withheld by QuadraMed by reason of such exercise.

  
 (iii) Appropriate documentation evidencing the right to exercise the Option shall be furnished to QuadraMed if the person or persons exercising the Option is other than Optionee. 
  
 (iv) Appropriate arrangement must be made with QuadraMed for
the satisfaction of all Federal, state and local income tax withholding requirements applicable to the Option exercise. 
  
 (b) Except to the extent the sale and remittance procedure specified above is utilized in connection with the exercise of the Option,
payment of the Exercise Price for the purchased Shares must accompany the Exercise Notice delivered to QuadraMed in connection with the Option exercise. 
  

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 (c) As soon as practicable after the Exercise Date, QuadraMed shall issue to or on behalf
of Optionee (or any other person or persons exercising the Option) a certificate or certificates representing the purchased Shares. 
  
 (d) In no event may the Option be exercised for fractional Shares. 
  
 9. No Impairment of Rights. This Agreement shall not in any way affect the right of QuadraMed to adjust,
reclassify, reorganize or otherwise make changes in its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 
  
 10. Compliance with Laws and Regulations. 
  
 (a) The exercise of the Option and the issuance of the
Shares upon such exercise shall be subject to compliance by QuadraMed and Optionee with all applicable requirements of law relating thereto and with all applicable regulations of any stock exchange (or the Nasdaq National Market, if applicable) on
which the Common Stock may be listed for trading at the time of such exercise and issuance. 
  
 (b) The inability of QuadraMed to obtain approval from any regulatory body having authority deemed by QuadraMed to be necessary to the
lawful issuance and sale of any Common Stock pursuant to the Option shall relieve QuadraMed of any liability with respect to the non-issuance or sale of the Common Stock as to which such approval shall not have been obtained. However, QuadraMed
shall use its best efforts to obtain all such applicable approvals. 
  
 11. Successors and Assigns. Except to the extent otherwise provided in Paragraph 4(b) or 5 the provisions of this Agreement shall inure to the benefit of, and be binding upon, QuadraMed and its successors and assigns and
Optionee, Optionee’s assigns and the legal representatives, heirs and legatees of Optionee’s estate. 
  
 12. Governing Law. The interpretation, performance, and enforcement of this Agreement shall be governed by the laws of the Commonwealth of
Virginia without resort to it’s conflict-of-laws rules. 
  
 13. Non-Statutory Stock Options. The Option granted hereunder is not intended to be an incentive stock option within the meaning of Section 422 of the Code. 
  
 14. No Right to Continued Service. Nothing in this Agreement shall confer upon Optionee any right to continue
in the Service of QuadraMed or shall interfere with or restrict in any way the rights of QuadraMed which are hereby expressly reserved, to discharge Optionee at any time for any reason whatsoever, with or without Cause. 
  
 15. Notices. Any notice required to be given or delivered to
QuadraMed under the terms of this Agreement shall be in writing and addressed to QuadraMed at its principal corporate offices. Any notice required to be given or delivered to Optionee shall be in writing and addressed to Optionee at the most recent
address reflected in QuadraMed’s employment records. All notices shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified. 
  

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 16. Administration of Option. The Board shall have full discretion to interpret all
provisions of this Option, and all decisions of the Board regarding the Option shall be binding on all parties. 
  
 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. 
  

			
	QUADRAMED CORPORATION
		
	By:	 	 
	 	 	

	 	 	 Name:

	 	 	 Title:

		
	 	 	 
	 	 	

	 	 	 John Wright

	 	 	 Optionee

  

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 EXHIBIT I 
  

NOTICE OF EXERCISE 
  
 I hereby notify QuadraMed Corporation (“QuadraMed”) that I elect to purchase          shares of
QuadraMed’s Common Stock (the “Purchased Shares”) at the Option exercise price of $         per share (the “Exercise Price”) pursuant to that certain Option (the
“Option”) granted to me pursuant to QuadraMed’s inducement Option grant program. 
  
 Concurrently with the delivery of this Exercise Notice to the Secretary of QuadraMed, I shall hereby pay to QuadraMed the Exercise Price for the Purchased
Shares in accordance with the provisions of my agreement with QuadraMed evidencing the Option and shall deliver whatever additional documents may be required by such agreement as a condition for exercise. Alternatively, I may utilize the special
broker/dealer sale and remittance procedure specified in my agreement to effect payment of the Exercise Price for any Purchased Shares in which I am vested at the time of exercise to the extent established by QuadraMed and permitted by applicable
law. 
  
                                 , 200   
 Date 
  

							
	 	 	 	 	 	 	 
	 	 	 	 	

	 	 	 	 	 Optionee

				
	  	 	 	 	 Address:
	 	  
	 	 	 	 	 	 	

				
	 	 	 	 	 	 	 
	 	 	 	 	

	Print name in exact manner it is to appear on the stock certificate:	 	 	 	 	 	 
	 	 	 	 	

	Address to which certificate is to be sent, if different from address above:	 	 	 	 	 	 
	 	 	 	 	

				
	 	 	 	 	 	 	 
	 	 	 	 	

				
	Social Security Number:	 	 	 	 	 	 
	 	 	 	 	

  

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 APPENDIX 
  

The following definitions shall be in effect under the Agreement: 
  
 A. Agreement shall mean this Inducement Stock Option Agreement. 
  
 B. Board shall mean QuadraMed’s Board of Directors.

  
 C. Cause shall mean (i) one or more acts of
fraud, embezzlement, misappropriation of proprietary information, misappropriation of QuadraMed’s trade secrets or other confidential information, a breach of Optionee’s fiduciary duties to QuadraMed or any other misconduct adversely
affecting the business reputation of QuadraMed in a material manner; or (ii) Optionee’s failure to adhere in any material way to any written QuadraMed policy material to QuadraMed or the terms of any written agreement between QuadraMed and
Optionee or Optionee’s failure to perform his material duties following written notice from QuadraMed describing the failure and a reasonable opportunity to cure such failure, if such failure is susceptible of cure. 
  
 D. Change in Control shall mean: 
  
 (i) a merger or acquisition in which QuadraMed is not the surviving entity,
except for a transaction the principal purpose of which is to change QuadraMed’s state of incorporation; 
  
 (ii) a sale, transfer or other disposition of all or substantially all of the assets of QuadraMed; 
  
 (iii) a transfer of all or substantially all of QuadraMed’s assets
pursuant to a partnership or joint venture agreement or similar arrangement where QuadraMed’s resulting interest is less than fifty percent (50%); 
  
 (iv) any reverse merger in which QuadraMed is the surviving entity but in which fifty percent (50%) or more of QuadraMed’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 QuadraMed through an action or series of transactions, such that any person is or becomes the
beneficial owner, directly or indirectly, of securities of QuadraMed representing fifty percent (50%) or more of the securities of the combined voting power of QuadraMed’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. 
  

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 E. Code shall mean the Internal Revenue Code of 1986, as amended. 
  
 F. Common Stock shall mean QuadraMed’s common stock.

  
 G. Exercise Date shall mean the date on which
the Option shall have been exercised in accordance with Paragraph 8 of the Agreement. 
  
 H. Exercise Price shall mean $1.82 per share 
  
 I. Expiration Date shall mean the date on which the Option term expires as specified in Paragraph 2. 
  
 J. Fair Market Value per share of Common Stock on any relevant date shall be determined in accordance with the following provisions:

  
 (i) If the Common Stock is at the time traded
on the Nasdaq National Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question, as the price is reported by the National Association of Securities Dealers on the Nasdaq National Market
or any successor system. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. 
  
 (ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the Stock Exchange determined by the Board to be the primary market for the Common Stock, as such price is officially quoted
in the composite tape of transactions on such exchange. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such
quotation exists. 
  
 (iii) If the Common Stock
is not at the time traded on any Stock Exchange and is not reported on the Nasdaq National Market or any successor system, then the Fair Market Value shall be the average between the highest bid and lowest asked prices for the Common Stock on the
relevant date by an established quotation service for over-the-counter securities. 
  
 (iv) If the Common Stock is not at the time traded on any Stock Exchange, is not reported on the Nasdaq National Market or a successor
system, and is not otherwise publicly traded, then the Fair Market Value shall be established by the Board acting in good faith and taking into consideration all factors which it deems appropriate, including, without limitation, recent sale or offer
prices for the Common Stock in private arms-length transactions. 
  

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 K. Grant Date shall mean July 9, 2003, the date of grant of the Option. 
  
 L. Involuntary Termination shall mean the termination of
Optionee’s employment with QuadraMed: 
  
 (i) involuntarily upon Optionee’s discharge or dismissal, other than for Cause or Nonperformance, and other than due to QuadraMed’s failure to renew the Optionee’s employment agreement; or 
  
 (ii) voluntarily or involuntarily, provided such termination
occurs in connection with one of the following events without Optionee’s written concurrence: (a) a change in Optionee’s position with QuadraMed or any successor which materially reduces Optionee’s level of responsibility, (b) a
material reduction in Optionee’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
Optionee’s principal place of employment by more than forty-five (45) miles from Reston, Virginia. 
  
 M. Nonperformance shall mean a determination by the Board, in its reasonable good faith judgment after notice to the Optionee and a hearing
at which the Optionee shall be entitled to present evidence, that (i) the Corporation has failed in a material respect to achieve the financial and other objectives established in the Corporation’s then-applicable operating budget and business
plan, and (ii) such failure is demonstrably the result of the Optionee’s non-performance of his duties and responsibilities. 
  
 N. Optionee shall mean the person to whom the Option is granted as specified in the Agreement. 
  
 O. Permanent Disability shall mean the disability as
characterized pursuant to the terms of the Company’s disability policies or programs applicable to Optionee from time to time, or if no such policy is applicable, if Optionee is unable to perform the essential functions of Optionee’s
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. 
  
 P. Service shall mean Optionee’s service with QuadraMed, whether as an employee, director or consultant, which has not been interrupted
or terminated. Optionee’s Service shall not be deemed to have terminated merely because of a change in the capacity in which Optionee renders service to QuadraMed. 
  
 Q. Shares shall mean the number of shares of Common Stock subject to the Option. 
  
 R. Stock Exchange shall mean the American Stock Exchange or the
New York Stock Exchange. 
  
 S. Vesting Schedule
shall mean the vesting schedule specified in Paragraph 3 of the Agreement, pursuant to which Optionee will vest in the Shares in one or more installments over his or her period of Service, subject to acceleration in accordance with the provisions of
the Agreement. 
  

 10EXHIBIT 10.22

  
 Exhibit 10.22

  
 QUADRAMED CORPORATION 
 RESTRICTED STOCK AGREEMENT 
  
 THIS AGREEMENT is made as of this 9th day of July, 2003, by and between QuadraMed Corporation (“Corporation”), and John Wright (“Executive”). 
  
 A. The Board has determined to offer employment to the Executive. 
  

B. As an inducement to accept such employment, the Board has determined to award 100,000 shares of Common Stock to the Executive under the terms and
conditions set forth herein. 
  
 C. All capitalized terms in this
Agreement shall have the meaning assigned to them in this Agreement or in the attached Appendix. 
  
 NOW, THEREFORE, it is hereby agreed as follows: 
  
 1. AWARD OF SHARES 
  
 a. AWARD. On the terms and subject to the conditions set forth in this Agreement, the Corporation hereby awards to the Executive, and the
Executive accepts from the Corporation, a total of one hundred thousand (100,000) shares of Common Stock (the “Shares”). The transfer of the Shares shall be subject to the restrictions provided in this Agreement and the transfer shall
occur at the offices of the Corporation on the date set forth above or such other place and time as the parties may agree. 
  
 b. STOCKHOLDER RIGHTS. Unless and until the Shares are forfeited as hereinafter provided, the Executive (or any successor in interest)
shall have all the rights of a stockholder (including voting, dividend and liquidation rights) with respect to the Shares, subject, however, to the restrictions provided in this Agreement. 
  
 c. COMPLIANCE WITH LAW. Under no circumstances shall shares
of Common Stock or other assets be issued or delivered to Executive pursuant to the provisions of this Agreement unless, in the opinion of counsel for the Corporation or its successors, there shall have been compliance with all applicable
requirements of Federal and state securities laws, all applicable listing requirements of any stock exchange (or the Nasdaq National Market, if applicable) on which the Common Stock is at the time listed for trading and all other requirements of law
or of any regulatory bodies having jurisdiction over such issuance and delivery. 
  

 2. RESTRICTIONS 
  

a. RESTRICTIONS. Executive hereby accepts the Shares when issued and agrees with respect thereto as follows: 
  
 (i) Forfeiture Restrictions. The Shares may not be
sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of, other than by a Permitted Transfer, to the extent then subject to the Forfeiture Restrictions. In the event of termination of Executive’s
employment with the Corporation for any reason other than Involuntary Termination, Executive shall, for no consideration, forfeit to the Corporation all Shares to the extent then subject to the Forfeiture Restrictions. The prohibition against
transfer and the obligation to forfeit and surrender Shares to the Corporation upon termination of employment are herein referred to as “Forfeiture Restrictions.” The Forfeiture Restrictions shall be binding upon and enforceable against
any transferee of the Shares. 
  
 (ii) Lapse
of Forfeiture Restrictions. The Forfeiture Restrictions shall lapse as to all Shares on July 9, 2006, provided that Executive has been continuously employed by the Corporation from the date of this Agreement through the lapse date. If the
Executive’s employment is terminated for any reason, other than death, Permanent Disability or due to an Involuntary Termination, prior to the lapse date, the Executive shall forfeit all of the Shares. Notwithstanding the foregoing, however (I)
should the Executive’s employment be terminated due to death or Permanent Disability, the Forfeiture Restrictions shall be deemed to have lapsed, and the Executive shall be deemed to have acquired a vested interest in at least 33 1/3% of the Shares, and, in addition, the Executive shall be credited with an additional twelve (12) months of
employment with the Corporation for purposes of vesting and (II) should the Executive’s employment be terminated due to an Involuntary Termination, then upon the occurrence of such event, the Forfeiture Restrictions shall automatically lapse in
their entirety, and the Shares shall vest in full. 
  
 (iii) Certificates. A certificate evidencing the Shares shall be issued by the Corporation in Executive’s name, or at the option of the Corporation, in the name of a nominee of the Corporation, pursuant to
which Executive shall have voting rights and shall be entitled to receive all dividends unless and until the Shares are forfeited pursuant to the provisions of this Agreement. The certificate shall bear a legend evidencing the restricted nature of
the Shares, as more particularly described at Paragraph 2(b), below, and the Corporation may cause the certificate to be delivered upon issuance to the Secretary of the Corporation or to such other depository as may be designated by the Corporation
as a depository for safekeeping until the forfeiture occurs or the Forfeiture Restrictions lapse pursuant to this Agreement. Upon request of the Corporation, Executive shall deliver to the Corporation a stock power, endorsed in blank, relating to
the Shares then subject to the Forfeiture Restrictions. The Corporation shall not be obligated to issue or deliver any shares of the Corporation’s stock if the issuance or delivery thereof shall constitute a violation of any provision of any
law or of any regulation of any governmental authority or any stock exchange (or Nasdaq National Market, if applicable). 
  
 (iv) Adjustments. In the event of a stock dividend, a spin-off, a stock split, an adjustment in conversion ratio, a
recapitalization or similar transaction affecting the Corporation’s outstanding securities, any new, substituted or additional securities or other property which by reason of such transaction are distributed with respect to any Shares or into
which such Shares thereby became convertible shall immediately be subject to the restrictions described in this Paragraph 2. Appropriate adjustments to reflect the distribution of such securities or property shall be made to the number and/or class
of the Shares. 
  

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 b. RESTRICTIVE LEGEND. The stock certificate for the Shares shall be endorsed with the
following restrictive legend: 
  
 “The
shares represented by this certificate are unvested and subject to certain restrictions and accordingly may not be sold, assigned, transferred, encumbered, or in any manner disposed of except in conformity with the terms of a written agreement dated
July 9, 2003 between the Corporation and the registered holder of the shares (or the predecessor in interest to the shares). A copy of such agreement is maintained at the Corporation’s principal corporate offices.” 
  
 c. TRANSFEREE OBLIGATIONS. Each person (other than the
Corporation) to whom the Shares are transferred by means of a Permitted Transfer must, as a condition precedent to the validity of such transfer, acknowledge in writing to the Corporation that such person is bound by the provisions of this Agreement
and that the transferred shares are subject to the Restrictions to the same extent such shares would be so subject if retained by Executive. 
  
 d. RECAPITALIZATION. Any new, substituted or additional securities or other property (including cash paid other than as a regular cash
dividend) which is by reason of any Recapitalization distributed with respect to the Shares shall be immediately subject to the Forfeiture Restrictions, but only to the extent the Shares are at the time covered by such Forfeiture Restrictions.
Appropriate adjustments to reflect such distribution shall be made to the number and/or class of securities subject to this Agreement in order to reflect the effect of any such Recapitalization upon the Corporation’s capital structure.

  
 e. CHANGE IN CONTROL. Notwithstanding the
foregoing, in the event of a Change in Control, the following shall apply: 
  
 (i) The Shares shall, immediately prior to the specified effective date of the Change in Control, become fully vested, except to the extent the parachute payment attributable to such accelerated vesting
would result in an excess parachute payment under Section 280G of the Code. To the extent the vesting does not accelerate immediately prior to the specified effective date of the Change in Control by reason of the foregoing limitation, the unvested
Shares shall continue to vest in accordance with the Vesting Schedule. 
  
 (ii) To the extent the vesting does not accelerate by reason of the foregoing limitation, the unvested Shares shall immediately vest in full pursuant to the provisions of this Paragraph upon any Involuntary
Termination of Executive’s employment following the Change in Control. 
  
 (iii) All determinations concerning the application of the parachute payment provisions of Section 280G of the Code to the accelerated vesting pursuant to this Paragraph shall be made by the Corporation’s
independent certified public accountant, whose determination shall be binding. 
  

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 (iv) Appropriate adjustments shall be made to the number and class of securities subject
to this Agreement following the Change in Control. 
  
 3. SPECIAL
TAX ELECTION 
  
 a. SECTION 83(b) ELECTION. Under
Code Section 83, the excess of the fair market value of the Shares on the date any Forfeiture Restrictions applicable to such shares lapse over the purchase price (if any) paid for such shares will be reportable as ordinary income on the lapse date.
The Executive may elect under Code Section 83(b) to be taxed at the time the Shares are acquired, rather than when and as such Shares cease to be subject to such forfeiture restrictions. Such election must be filed with the Internal Revenue Service
within thirty (30) days after the date of this Agreement. Even if no amount is paid for the Shares awarded hereunder (and thus no tax is payable), the election must be made to avoid adverse tax consequences in the future. THE FORM FOR MAKING THIS
ELECTION IS ATTACHED AS EXHIBIT I HERETO. EXECUTIVE UNDERSTANDS THAT FAILURE TO MAKE THIS FILING WITHIN THE APPLICABLE THIRTY (30)-DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME AS THE FORFEITURE RESTRICTIONS LAPSE. 
  
 b. FILING RESPONSIBILITY. EXECUTIVE ACKNOWLEDGES THAT IT IS
EXECUTIVE’S SOLE RESPONSIBILITY, AND NOT THE CORPORATION’S, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(b), EVEN IF EXECUTIVE REQUESTS THE CORPORATION OR ITS REPRESENTATIVES TO MAKE THIS FILING ON HIS BEHALF. 
  

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 4. GENERAL PROVISIONS 
  
 a. NO RIGHT TO FUTURE AWARDS; EXTRAORDINARY ITEM OF COMPENSATION. By entering into this Agreement, the
Executive acknowledges: (i) that the award of the Shares is a one-time benefit which does not create any contractual or other right to receive future awards or benefits in lieu of such awards; (ii) that all determinations with respect to any such
future awards, including, but not limited to, the times when awards shall be granted, the number of shares subject to each award, and the terms of each award, will be at the sole discretion of the Board; and (iii) that the award is not part of
normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments. 
  
 b. NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this
Agreement shall confer upon Executive any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining
Executive) or of Executive, which rights are hereby expressly reserved by each, to terminate Executive’s Service at any time for any reason, with or without cause. 
  
 c. NOTICES. Any notice required to be given or delivered to the Corporation under the terms of this
Agreement shall be in writing and addressed to the Corporation at its principal corporate offices. Any notice required to be given or delivered to Executive shall be in writing and addressed to Executive at the most recent address reflected in the
Corporation’s employment records. All notices shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified. 
  
 d. NO WAIVER. The Waiver by the Corporation of a breach of
any provision of this Agreement by Executive shall not operate or be construed as a waiver of any subsequent breach of Executive. 
  
 5. MISCELLANEOUS PROVISIONS 
  
 a. EXECUTIVE UNDERTAKING. Executive hereby agrees to take whatever additional action and execute whatever additional documents the
Corporation may deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on either Executive or the Shares pursuant to the provisions of this Agreement. 
  
 b. AGREEMENT IS ENTIRE CONTRACT. This Agreement constitutes
the entire contract between the parties hereto with regard to the subject matter hereof. It supersedes any other agreements, representations or understandings (whether oral or written and whether express or implied) relating to the subject matter
hereof. 
  
 c. GOVERNING LAW. This Agreement
shall be governed by, and construed in accordance with, the laws of the Commonwealth of Virginia without resort to its conflict-of-laws rules. 
  

 5 

 d. COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the same instrument. 
  
 e. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its
successors and assigns and upon Executive, Executive’s assigns and the legal representatives, heirs and legatees of Executive’s estate, whether or not any such person shall have become a party to this Agreement and have agreed in writing
to join herein and be bound by the terms hereof. 
  
 IN WITNESS
WHEREOF, the parties have executed this Agreement on the day and year first indicated above. 
  

			
	QUADRAMED CORPORATION
		
	By:	 	 
	 	 	

		
	Title:	 	 
	 	 	

			
		
	Address:	 	 
	 	 	

		
	 	 	 
	

		
	 	 	 
	

	John Wright

			
		
	Address:	 	 
	 	 	

		
	 	 	 
	

  

 6 

 EXHIBIT I 
  
 SECTION 83(b) TAX ELECTION 
  
 This statement is being made under Section 83(b) of the Internal Revenue Code, pursuant to Treas. Reg. Section 1.83-2. 
  
 (1) The taxpayer who performed the services is: 
  
 Name: 
 Address: 
 Taxpayer Ident. No.: 
  
 (2) The property with respect to which the election is being made is
                 shares of the common stock of QuadraMed Corporation 
  
 (3) The property was issued on                 , 200  .

  
 (4) The taxable year in which the election is being made is the calendar year
200  . 
  
 (5) The property is subject to a restriction pursuant
to which the taxpayer shall forfeit his interest with property if for any reason taxpayer’s employment with the issuer is terminated. The issuer’s repurchase right lapses at the expiration of a three (3) year period ending on
                , 200  . 
  
 (6) The fair market value at the time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse) is
$                 per share. 
  
 (7) The amount paid for such property is $                 per share. 

 
 (8) A copy of this statement was furnished to QuadraMed Corporation for whom taxpayer
rendered the services underlying the transfer of property. 
  
 (9) This statement
is executed on                 , 200  . 
  

					
			
	  	 	 	 	  
	
	 	 	 	

	 Spouse (if any)
	 	 	 	 Taxpayer

  
 This election must be filed with the
Internal Revenue Service Center with which taxpayer files his or her Federal income tax returns and must be made within thirty (30) days after the execution date of the Restricted Stock Agreement. This filing should be made by registered or
certified mail, return receipt requested. Executive must retain two (2) copies of the completed form for filing with his or her Federal and state tax returns for the current tax year and an additional copy for his or her records. 
  

 7 

 APPENDIX 
  
 The following definitions shall be in effect under the Agreement: 
  
 A. AGREEMENT shall mean this Restricted Stock Agreement. 
  
 B. BOARD shall mean the Corporation’s Board of Directors. 
  
 C. CAUSE shall mean (i) one or more acts of fraud, embezzlement,
misappropriation of proprietary information, misappropriation of the Corporation’s trade secrets or other confidential information, a breach of Executive’s fiduciary duties to the Corporation or any other misconduct adversely affecting the
business reputation of the Corporation in a material manner; or (ii) Executive’s failure to adhere in any material way to any written policy material to QuadraMed or the terms of any written agreement between the Corporation and Executive or
Executive’s failure to perform his material duties following written notice from the Corporation describing the failure and a reasonable opportunity to cure such failure, if such failure is susceptible of cure 
  
 C. CHANGE IN CONTROL shall mean: 
  
 (i) a merger or acquisition in which the Corporation is not the surviving
entity, except for a transaction the principal purpose of which is to change the Corporation’s state of incorporation; 
  
 (ii) a sale, transfer or other disposition of all or substantially all of the assets of the Corporation; 
  
 (iii) a transfer of all or substantially all of the Corporation’s
assets pursuant to a partnership or joint venture agreement or similar arrangement where the Corporation’s resulting interest is less than fifty percent (50%); 
  
 (iv) any reverse merger in which the Corporation is the surviving entity but in which fifty percent (50%) or more of the
Corporation’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 Corporation through an action or series of transactions, such that any person is or becomes
the beneficial owner, directly or indirectly, of securities of the Corporation representing fifty percent (50%) or more of the securities of the combined voting power of the Corporation’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. 
  

 8 

 D. CODE shall mean the Internal Revenue Code of 1986, as amended. 
  
 E. COMMON STOCK shall mean the Corporation’s common stock. 

 
 F. CORPORATION shall mean QuadraMed Corporation, a Delaware corporation.

  
 G. FORFEITURE RESTRICTIONS shall have the meaning assigned to
such term in Paragraph 2(a)(ii). 
  
 H. INVOLUNTARY TERMINATION
shall mean the termination of Executive’s employment with QuadraMed: 
  
 (i) involuntarily upon Executive’s discharge or dismissal, other than for Cause or Nonperformance, and other than due to QuadraMed’s failure to renew the Executive’s employment agreement; or 

 
 (ii) voluntarily or involuntarily, provided such
termination occurs in connection with one of the following events without Executive’s written concurrence: (a) a change in Executive’s position with QuadraMed or any successor which materially reduces Executive’s level of
responsibility, (b) a material reduction in Executive’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 Executive’s principal place of employment by more than forty-five (45) miles from Reston, Virginia. 
  
 I. NONPERFORMANCE shall mean a determination by the Board, in its reasonable good faith judgment after notice to the Executive and a hearing at which the
Executive shall be entitled to present evidence, that (i) the Corporation has failed in a material respect to achieve the financial and other objectives established in the Corporation’s then-applicable operating budget and business plan, and
(ii) such failure is demonstrably the result of the Executive’s non-performance of his duties and responsibilities. 
  
 J. OWNER shall mean Executive and all subsequent holders of the Shares who derive their chain of ownership through a Permitted Transfer from Executive.

  
 K. PARENT shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other corporations in such chain. 
  
 L. PERMANENT DISABILITY shall mean the disability as characterized pursuant to the terms of the Company’s disability policies or programs applicable
to Executive from time to time, or if no such policy is applicable, if Executive is unable to perform the essential functions of Executive’s 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. 
  

 9 

 M. PERMITTED TRANSFER shall mean (i) a gratuitous transfer of the Shares, provided and only if Executive
obtains the Corporation’s prior written consent to such transfer, or (ii) a transfer of title to the Shares effected pursuant to Executive’s will or the laws of intestate succession following Executive’s death. 
  
 N. RECAPITALIZATION shall mean any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change affecting the Corporation’s outstanding Common Stock as a class without the Corporation’s receipt of consideration. 
  
 O. SHARES shall have the meaning assigned to such term in Paragraph 1(a).

  
 P. SERVICE shall mean the Executive’s performance of
services for the Corporation (or any Parent or Subsidiary) in the capacity of an employee, subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance, a non-employee
member of the board of directors or a consultant. 
  
 Q.
SUBSIDIARY shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
  

 10

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