EMPLOYMENT AGREEMENT (Peter Masanotti)
Exhibit 10.28
EXECUTION VERSION
(Xxxxx Xxxxxxxxx)
EMPLOYMENT AGREEMENT (the “Agreement”) dated September 3, 2008 by and between MedQuist, Inc.
(the “Company”) and Xxxxx Xxxxxxxxx (the “Executive”).
The Company desires to employ Executive and to enter into an agreement embodying the terms of
such employment;
Executive desires to accept such employment and enter into such an agreement;
In consideration of the premises and mutual covenants herein and for other good and valuable
consideration, the parties agree as follows:
1. Term of Employment. Subject to the provisions of Section 8 of this Agreement,
Executive shall be employed by the Company for a period commencing on September __, 2008 (the
“Commencement Date”) and ending on December 31, 2011 (the “Employment Term”) on the terms and
subject to the conditions set forth in this Agreement; provided, however, that commencing with
December 31, 2011 and on each December 31st thereafter (each an “Extension Date”), the Employment
Term shall be automatically extended for an additional one-year period, unless the Company or
Executive provides the other party hereto 60 days prior written notice before the next Extension
Date that the Employment Term shall not be so extended.
2. Position.
a. During the Employment Term, Executive shall serve as the Company’s Chief Executive
Officer (“CEO”). In such position, Executive shall have such duties and authority as are
customarily performed and held by chief executive officers of like-sized companies, together with
such duties and authorities as shall be determined from time to time by the Board of Directors of
the Company (the “Board”). If requested, Executive shall also serve as a member of the Board
without additional compensation. Notwithstanding the foregoing, in the event that during the
Employment Term, the Company materially expands its business or business operations through a
merger, consolidation, business combination, or similar transaction (the Company’s business
thereafter, the “Combined Enterprise”), the Company may reassign Executive to serve as the
President or in another capacity as the most senior executive of a division of such Combined
Enterprise (the “Division”); provided that such Division includes substantially all of the material
business operations of the Company as in effect as of the Commencement Date; and provided further
that following any such transaction, (i) CBaySystems Holdings Limited continues to own a direct or
indirect majority interest in the Company and (ii) SAC PEI CB Investment, L.P. remains obligated to
file a Schedule 13D pursuant to the Securities Exchange Act of 1934, as amended, or any successor
thereto, in respect of its beneficial ownership interest in the Company.
b. During the Employment Term, Executive will devote Executive’s full business time and
best efforts to the performance of Executive’s duties hereunder and will not engage in any other
business, profession or occupation for compensation or otherwise which would conflict or interfere
with the rendition of such services either directly or indirectly, without the prior written
consent of the Board; provided that nothing herein shall preclude Executive from serving on
the board of directors of Advanced Health Media and, subject to the prior approval of the Board,
from accepting appointment to or continuing to serve on any board of directors or trustees of any
business corporation or any charitable organization; provided in each case, and in the
aggregate, that such activities do not conflict or interfere with the performance of Executive’s
duties hereunder or conflict with Section 9.
3. Base Salary. During the Employment Term, the Company shall pay Executive a
base salary at the annual rate of $500,000, payable in regular installments in accordance with the
Company’s usual payment practices. Executive shall be entitled to such increases in Executive’s
base salary, if any, as may be determined from time to time in the sole discretion of the Board.
Executive’s annual base salary, as in effect from time to time, is hereinafter referred to as the
“Base Salary.”
4. Bonuses.
a. Annual Bonus. With respect to each full fiscal year during the Employment Term
commencing with fiscal year 2009, Executive shall be eligible to earn an annual bonus award (an
“Annual Bonus”) of up to one-hundred and forty percent (140%) of Executive’s Base Salary (the
“Target”) based upon the achievement of target performance objectives established by the Board
within the first three months of each fiscal year during the Employment Term. The Annual Bonus, if
any, shall be paid to Executive during the calendar year immediately following the year in which it
is earned, as soon as practicable after the Company receives its audited financial statements with
respect to the year in which the bonus was earned.
b. Sign-on Bonus. Executive shall be entitled to a sign-on bonus in an amount of
$800,000 (the “Sign-on Bonus”), which amount shall be paid by the Company on or prior to February
1, 2009, subject to Executive’s continued employment with the Company through such date.
Notwithstanding the foregoing, in the event that Executive is entitled to receive a bonus payment
in respect of any portion of the 2008 fiscal year from Executive’s prior employer (a “Prior
Employer Bonus”), the Sign-on Bonus shall be reduced (but not below zero) by an amount equal to the
excess (if any) that Executive receives of the Prior Employer Bonus over $200,000. In addition, in
the event that Executive’s employment is terminated by the Company with Cause or by the Executive
without Good Reason (both as hereinafter defined) prior to the third anniversary of the
Commencement Date, Executive shall be required to pay back a pro-rata portion of the Sign-on Bonus
to the Company within 30 days after such termination, which amount will be determined by
multiplying the amount of the Sign-on Bonus received by the Executive (if any) by a fraction, the
numerator which is the number of days from the date of Executive’s termination of employment until
the third anniversary of the Commencement Date and the denominator of which is 1,095.
5. Equity Arrangements. Within fifteen days of the Commencement Date, the Company
will grant to Executive the right and option (the “Option”) to purchase, on the terms
2
and conditions set forth in the MedQuist Inc. 2002 Stock Option Plan (the “Option Plan”) and
the related option award agreement, all or any part of 295,749 common shares (“Company Shares”) of
the Company, subject to adjustment as set forth in the Option Plan.
6. Employee Benefits. During the Employment Term, Executive shall be entitled to
participate in the Company’s employee benefit plans as in effect from time to time (collectively
“Employee Benefits”), on the same basis as those benefits are generally made available to other
senior executives of the Company. During the Employment Term, Executive shall be entitled to
twenty days of paid vacation per calendar year, which number of days shall be pro-rated for any
partial year during the Employment Term.
7. Business Expenses. During the Employment Term, reasonable business expenses
incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the
Company in accordance with Company policies.
8. Termination. The Employment Term and Executive’s employment hereunder may be
terminated by either party at any time and for any reason; provided that Executive will be required
to give the Company at least 60 days advance written notice of any resignation of Executive’s
employment. Notwithstanding any other provision of this Agreement, the provisions of this Section
8 shall exclusively govern Executive’s rights upon termination of employment with the Company and
its affiliates.
a. By the Company For Cause or By Executive Resignation Without Good Reason.
(i) The Employment Term and Executive’s employment hereunder may be terminated by the Company
for Cause (as defined below) and shall terminate automatically upon Executive’s resignation without
Good Reason (as defined in Section 8(c)); provided that Executive will be required to give the
Company at least 60 days advance written notice of a resignation without Good Reason.
(ii) For purposes of this Agreement, “Cause” shall mean (A) Executive’s failure to
substantially perform Executive’s duties hereunder (other than as a result of total or partial
incapacity due to physical or mental illness) for a period of 15 days following written notice by
the Company to Executive of such failure, (B) dishonesty in the performance of Executive’s duties
hereunder, (C) Executive’s conviction of, or plea of nolo contendere to a crime
constituting (x) a felony under the laws of the United States or any state thereof or (y) a
misdemeanor involving moral turpitude, (D) Executive’s willful malfeasance or willful misconduct in
connection with Executive’s duties hereunder or any willful act or omission which is demonstrably
injurious to the financial condition or business reputation of the Company or any of its
subsidiaries or affiliates or (E) Executive’s breach of the provisions of Sections 9 or 10 of this
Agreement.
(iii) If Executive’s employment is terminated by the Company for Cause, or if Executive
resigns without Good Reason, Executive shall be entitled to receive:
(A) the Base Salary through the date of termination;
3
(B) any Annual Bonus earned, but unpaid, as of the date of termination for the
immediately preceding fiscal year, paid in accordance with Section 4 (except to the
extent payment is otherwise deferred pursuant to any applicable deferred compensation
arrangement with the Company);
(C) reimbursement, within 60 days following submission by Executive to the
Company of appropriate supporting documentation) for any unreimbursed business expenses
properly incurred by Executive in accordance with Company policy prior to the date of
Executive’s termination; provided claims for such reimbursement (accompanied by
appropriate supporting documentation) are submitted to the Company within 90 days
following the date of Executive’s termination of employment; and
(D) such Employee Benefits, if any, as to which Executive may be entitled under
the employee benefit plans of the Company (including, but not limited to, any
equity-based plans sponsored by the Company) (the amounts described in clauses (A)
through (D) hereof being referred to as the “Accrued Rights”).
Following such termination of Executive’s employment by the Company for Cause or resignation
by Executive without Good Reason, except as set forth in this Section 8(a)(iii), Executive shall
have no further rights to any compensation or any other benefits under this Agreement.
b. Disability or Death.
(i) The Employment Term and Executive’s employment hereunder shall terminate upon Executive’s
death and may be terminated by the Company if Executive becomes physically or mentally
incapacitated and is therefore unable for a period of six (6) consecutive months or for an
aggregate of nine (9) months in any twenty-four (24) consecutive month period to perform
Executive’s duties (such incapacity is hereinafter referred to as “Disability”). Any question as
to the existence of the Disability of Executive as to which Executive and the Company cannot agree
shall be determined in writing by a qualified independent physician mutually acceptable to
Executive and the Company. If Executive and the Company cannot agree as to a qualified independent
physician, each shall appoint such a physician and those two physicians shall select a third who
shall make such determination in writing. The determination of Disability made in writing to the
Company and Executive shall be final and conclusive for all purposes of the Agreement.
(ii) Upon termination of Executive’s employment hereunder for either Disability or death,
Executive or Executive’s estate (as the case may be) shall be entitled to receive:
(A) the Accrued Rights; and
(B) a pro rata portion of any Annual Bonus, if any, that Executive would have
been entitled to receive pursuant to Section 4 hereof in such year based upon the
percentage of the fiscal year that shall have elapsed through the date of Executive’s
termination of employment, payable when such Annual Bonus would have otherwise
4
been payable to Executive pursuant to Section 4 had Executive’s employment not
terminated (the “Pro-Rata Bonus”).
Following Executive’s termination of employment due to death or Disability, except as set
forth in this Section 8(b)(ii), Executive shall have no further rights to any compensation or any
other benefits under this Agreement.
c. By the Company Without Cause or Resignation by Executive for Good Reason.
(i) The Employment Term and Executive’s employment hereunder may be terminated by the Company
without Cause or by Executive’s resignation for Good Reason.
(ii) For purposes of this Agreement, “Good Reason” shall mean (A) the failure of the Company
to pay or cause to be paid Executive’s Base Salary or Annual Bonus, when due hereunder, (B) any
reduction in Executive’s Base Salary or Annual Bonus opportunity hereunder, (C) any substantial and
sustained diminution in Executive’s authority, title, reporting relationship or responsibilities
from those described in Section 2(a) hereof, or (D) the Company’s material breach of this
Agreement; provided that any of the events described in clauses (A) through (D) of this
Section 8(c)(ii) shall constitute Good Reason only if the Company fails to cure such event within
30 days after receipt from Executive of written notice of the event which constitutes Good Reason;
provided, further, that “Good Reason” shall cease to exist for an event on the
60th day following the later of its occurrence or Executive’s knowledge thereof, unless
Executive has given the Company written notice thereof prior to such date. For purposes of this
Agreement, Good Reason shall not be deemed to have occurred by reason of Executive’s reassignment
to a position as described in the last sentence of Section 2(a) hereof.
(iii) If Executive’s employment is terminated by the Company without Cause (other than by
reason of death or Disability) or if Executive resigns for Good Reason, Executive shall be entitled
to receive (commencing within 60 days following the termination date):
(A) the Accrued Rights;
(B) a Pro-Rata Bonus for the year of termination; and
(C) subject to Executive’s continued compliance with the provisions of Sections
9 and 10 and to Executive’s execution and delivery of a general release of claims in
favor of the Company and its affiliates in a form prescribed by the Company within 45
days following the termination date, continued payment of the Base Salary in accordance
with the Company’s normal payroll practices, as in effect on the date of termination of
Executive’s employment, until twelve months after the date of such termination (the
“Salary Continuation Payments”).
Following Executive’s termination of employment by the Company without Cause (other than by
reason of Executive’s death or Disability) or by Executive’s resignation for Good Reason, except as
set forth in this Section 8(c)(iii), Executive shall have no further rights to any compensation or
any other benefits under this Agreement or any other severance or termination benefit plan
sponsored or maintained by the Company.
5
d. Expiration of Employment Term.
(i) Election Not to Extend the Employment Term. In the event either party elects not
to extend the Employment Term pursuant to Section 1, unless Executive’s employment is earlier
terminated pursuant to paragraphs (a), (b) or (c) of this Section 8, Executive’s termination of
employment hereunder (whether or not Executive continues as an employee of the Company thereafter)
shall be deemed to occur on the close of business on the day immediately preceding the next
scheduled Extension Date. In the event that the Executive elects not to extend the Employment
Term, Executive shall be entitled to receive the Accrued Rights. In the event that the Company
elects not to extend the Employment Term, Executive shall be entitled to receive the Accrued Rights
and the Salary Continuation Payments.
Following such termination of Executive’s employment hereunder as a result of either party’s
election not to extend the Employment Term, except as set forth in this Section 8(d)(i), Executive
shall have no further rights to any compensation or any other benefits under this Agreement.
(ii) Continued Employment Beyond the Expiration of the Employment Term. Unless the
parties otherwise agree in writing, continuation of Executive’s employment with the Company beyond
the expiration of the Employment Term shall be deemed an employment at-will and shall not be deemed
to extend any of the provisions of this Agreement and Executive’s employment may thereafter be
terminated at will by either Executive or the Company; provided that the provisions of
Sections 9, 10 and 11 of this Agreement shall survive any termination of this Agreement or
Executive’s termination of employment hereunder.
e. Notice of Termination. Any purported termination of employment by the Company
or by Executive (other than due to Executive’s death) shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 12(h) hereof. For purposes of
this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of employment under the
provision so indicated.
f. Board/Committee Resignation. Upon termination of Executive’s employment for
any reason, Executive agrees to resign, as of the date of such termination and to the extent
applicable, from the Board (and any committees thereof) and the Board of Directors (and any
committees thereof) of any of the Company’s affiliates.
9. Non-Competition.
a. Executive acknowledges and recognizes the highly competitive nature of the businesses
of the Company and its affiliates and accordingly agrees as follows:
(1) During the Employment Term and, for a period of one year following the date Executive
ceases to be employed by the Company (the “Restricted Period”), Executive will not, whether on
Executive’s own behalf or on behalf of or in conjunction with any person, firm, partnership, joint
venture, association, corporation or other business organization, entity or enterprise whatsoever
(“Person”), directly or indirectly solicit or assist in soliciting in
6
competition with the Company, the business of any client or prospective client:
| (i) | with whom Executive had personal contact or dealings on behalf of the Company during the one-year period preceding Executive’s termination of employment; | ||
| (ii) | with whom employees reporting to Executive have had personal contact or dealings on behalf of the Company during the one year immediately preceding the Executive’s termination of employment; or | ||
| (iii) | for whom Executive had direct or indirect responsibility during the one year immediately preceding Executive’s termination of employment. |
(2) During the Restricted Period, Executive will not directly or indirectly:
| (i) | engage in any medical transcription processing services and dictation business or other business that competes with the business of the Company or its affiliates (including, without limitation, businesses which the Company or its affiliates have specific plans to conduct in the future and as to which Executive is aware of such planning) in any geographical area where the Company or its affiliates manufactures, produces, sells, leases, rents, licenses or otherwise provides its products or services (a “Competitive Business”); | ||
| (ii) | enter the employ of, or render any services to, any Person (or any division or controlled or controlling affiliate of any Person) who or which engages in a Competitive Business; | ||
| (iii) | acquire a financial interest in, or otherwise become actively involved with, any Competitive Business, directly or indirectly, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant; or | ||
| (iv) | interfere with, or attempt to interfere with, business relationships (whether formed before, on or after the date of this Agreement) between the Company or any of its affiliates, customers, clients, suppliers or investors. |
(3) Notwithstanding anything to the contrary in this Agreement, Executive may, directly or
indirectly own, solely as an investment, securities of any Person engaged in the business of the
Company or its affiliates which are publicly traded on a national or regional stock exchange or on
the over-the-counter market if Executive (i) is not a controlling person of, or a member of a group
which controls, such person and (ii) does not, directly or indirectly, own 2% or more of any class
of securities of such Person.
(4) During the Restricted Period, Executive will not, whether on Executive’s own behalf or
on behalf of or in conjunction with any Person, directly or indirectly:
| (i) | solicit or encourage any employee of the Company or its affiliates to leave |
7
| the employment of the Company or its affiliates; or | |||
| (ii) | hire any such employee who was employed by the Company or its affiliates as of the date of Executive’s termination of employment with the Company or who left the employment of the Company or its affiliates coincident with, or within one year prior to or after, the termination of Executive’s employment with the Company. |
(5) During the Restricted Period, Executive will not, directly or indirectly, solicit or
encourage to cease to work with the Company or its affiliates any consultant then under contract
with the Company or its affiliates.
b. It is expressly understood and agreed that although Executive and the Company consider
the restrictions contained in this Section 9 to be reasonable, if a final judicial determination is
made by a court of competent jurisdiction that the time or territory or any other restriction
contained in this Agreement is an unenforceable restriction against Executive, the provisions of
this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum
time and territory and to such maximum extent as such court may judicially determine or indicate to
be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction
contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make
it enforceable, such finding shall not affect the enforceability of any of the other restrictions
contained herein.
10. Confidentiality; Intellectual Property.
a. Confidentiality.
(i) Executive will not at any time (whether during or after Executive’s employment with the
Company) (x) retain or use for the benefit, purposes or account of Executive or any other Person;
or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any Person
outside the Company (other than its professional advisers who are bound by confidentiality
obligations), any non-public, proprietary or confidential information —including without
limitation trade secrets, know-how, research and development, software, databases, inventions,
processes, formulae, technology, designs and other intellectual property, information concerning
finances, investments, profits, pricing, costs, products, services, vendors, customers, clients,
partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing,
promotions, government and regulatory activities and approvals — concerning the past, current or
future business, activities and operations of the Company, its subsidiaries or affiliates and/or
any third party that has disclosed or provided any of same to the Company on a confidential basis
(“Confidential Information”) without the prior written authorization of the Board.
(ii) “Confidential Information” shall not include any information that is (a) generally known
to the industry or the public other than as a result of Executive’s breach of this covenant or any
breach of other confidentiality obligations by third parties; (b) made legitimately available to
Executive by a third party without breach of any confidentiality obligation; or (c) required by law
to be disclosed; provided that Executive shall give prompt written notice to the Company of
such requirement, disclose no more information than is so required, and cooperate
8
with any attempts by the Company to obtain a protective order or similar treatment.
(iii) Except as required by law, Executive will not disclose to anyone, other than
Executive’s immediate family and legal or financial advisors, the existence or contents of this
Agreement; provided that Executive may disclose to any prospective future employer the
provisions of Sections 9 and 10 of this Agreement provided they agree to maintain the
confidentiality of such terms.
(iv) Upon termination of Executive’s employment with the Company for any reason, Executive
shall (x) cease and not thereafter commence use of any Confidential Information or intellectual
property (including without limitation, any patent, invention, copyright, trade secret, trademark,
trade name, logo, domain name or other source indicator) owned or used by the Company, its
subsidiaries or affiliates; (y) immediately destroy, delete, or return to the Company, at the
Company’s option, all originals and copies in any form or medium (including memoranda, books,
papers, plans, computer files, letters and other data) in Executive’s possession or control
(including any of the foregoing stored or located in Executive’s office, home, laptop or other
computer, whether or not Company property) that contain Confidential Information or otherwise
relate to the business of the Company, its affiliates and subsidiaries, except that Executive may
retain only those portions of any personal notes, notebooks and diaries that do not contain any
Confidential Information; and (z) notify and fully cooperate with the Company regarding the
delivery or destruction of any other Confidential Information of which Executive is or becomes
aware.
b. Intellectual Property.
(i) If Executive has created, invented, designed, developed, contributed to or improved any
works of authorship, inventions, intellectual property, materials, documents or other work product
(including without limitation, research, reports, software, databases, systems, applications,
presentations, textual works, content, or audiovisual materials) (“Works”), either alone or with
third parties, prior to Executive’s employment by the Company, that are relevant to or implicated
by such employment (“Prior Works”), Executive hereby grants the Company a perpetual, non-exclusive,
royalty-free, worldwide, assignable, sublicensable license under all rights and intellectual
property rights (including rights under patent, industrial property, copyright, trademark, trade
secret, unfair competition and related laws) therein for all purposes in connection with the
Company’s current and future business.
(ii) If Executive creates, invents, designs, develops, contributes to or improves any Works,
either alone or with third parties, at any time during Executive’s employment by the Company and
within the scope of such employment and/or with the use of any the Company resources (“Company
Works”), Executive shall promptly and fully disclose same to the Company and hereby irrevocably
assigns, transfers and conveys, to the maximum extent permitted by applicable law, all rights and
intellectual property rights therein (including rights under patent, industrial property,
copyright, trademark, trade secret, unfair competition and related laws) to the Company to the
extent ownership of any such rights does not vest originally in the Company.
(iii) Executive agrees to keep and maintain adequate and current written records (in the form
of notes, sketches, drawings, and any other form or media requested by the
9
Company) of all Company Works. The records will be available to and remain the sole property
and intellectual property of the Company at all times.
(iv) Executive shall take all requested actions and execute all requested documents
(including any licenses or assignments required by a government contract) at the Company’s expense
(but without further remuneration) to assist the Company in validating, maintaining, protecting,
enforcing, perfecting, recording, patenting or registering any of the Company’s rights in the Prior
Works and Company Works. If the Company is unable for any other reason to secure Executive’s
signature on any document for this purpose, then Executive hereby irrevocably designates and
appoints the Company and its duly authorized officers and agents as Executive’s agent and attorney
in fact, to act for and in Executive’s behalf and stead to execute any documents and to do all
other lawfully permitted acts in connection with the foregoing.
(v) Executive shall not improperly use for the benefit of, bring to any premises of, divulge,
disclose, communicate, reveal, transfer or provide access to, or share with the Company any
confidential, proprietary or non-public information or intellectual property relating to a former
employer or other third party without the prior written permission of such third party. Executive
hereby indemnifies, holds harmless and agrees to defend the Company and its officers, directors,
partners, employees, agents and representatives from any breach of the foregoing covenant.
Executive shall comply with all relevant policies and guidelines of the Company, including
regarding the protection of confidential information and intellectual property and potential
conflicts of interest. Executive acknowledges that the Company may amend any such policies and
guidelines from time to time, and that Executive remains at all times bound by their most current
version.
(vi) The provisions of Section 10 shall survive the termination of Executive’s employment for
any reason.
11. Specific Performance. Executive acknowledges and agrees that the Company’s
remedies at law for a breach or threatened breach of any of the provisions of Section 9 or Section
10 would be inadequate and the Company would suffer irreparable damages as a result of such breach
or threatened breach. In recognition of this fact, Executive agrees that, in the event of such a
breach or threatened breach, in addition to any remedies at law, the Company, without posting any
bond, shall be entitled to obtain equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable remedy which may then
be available. In addition, in the event of any breach of Section 9 or Section 10, in addition to
any remedies at law, the Company, without posting any bond, shall be entitled to cease making any
payments or providing any benefit otherwise required by this Agreement (which payments shall be
deemed permanently forfeited if it is established that Executive breached Section 9 or Section 10).
12. Miscellaneous.
a. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New Jersey, without regard to conflicts of laws principles thereof.
10
b. Entire Agreement/Amendments. This Agreement contains the entire understanding
of the parties with respect to the employment of Executive by the Company. There are no
restrictions, agreements, promises, warranties, covenants or undertakings between the parties with
respect to the subject matter herein other than those expressly set forth herein. This Agreement
may not be altered, modified, or amended except by written instrument signed by the parties hereto.
c. No Waiver. The failure of a party to insist upon strict adherence to any term
of this Agreement on any occasion shall not be considered a waiver of such party’s rights or
deprive such party of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement.
d. Severability. In the event that any one or more of the provisions of this
Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions of this Agreement shall not be affected
thereby.
e. Assignment. This Agreement, and all of Executive’s rights and duties
hereunder, shall not be assignable or delegable by Executive. Any purported assignment or
delegation by Executive in violation of the foregoing shall be null and void ab initio and of no
force and effect. Subject to provisions herein, this Agreement may be assigned by the Company to a
person or entity which is an affiliate or a successor in interest to substantially all of the
business operations of the Company. Upon such assignment, the rights and obligations of the
Company hereunder shall become the rights and obligations of such affiliate or successor person or
entity.
f. Compliance with IRC Section 409A. Notwithstanding anything herein to the
contrary, (i) if at the time of Executive’s termination of employment with the Company Executive is
a “specified employee” as defined in Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”) and the deferral of the commencement of any payments or benefits otherwise payable
hereunder as a result of such termination of employment is necessary in order to prevent any
accelerated or additional tax under Section 409A of the Code, then the Company will defer the
commencement of the payment of any such payments or benefits hereunder (without any reduction in
such payments or benefits ultimately paid or provided to Executive) until the date that is six
months following Executive’s termination of employment with the Company (or the earliest date as is
permitted under Section 409A of the Code) and (ii) if any other payments of money or other benefits
due to Executive hereunder could cause the application of an accelerated or additional tax under
Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make
such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment
or other benefits shall be restructured, to the extent possible, in a manner, determined by the
Board, that does not cause such an accelerated or additional tax. The Company shall consult with
Executive in good faith regarding the implementation of the provisions of this Section 12(f);
provided that neither the Company nor any of its employees or representatives shall have
any liability to Executive with respect to thereto. For purposes of Section 409A of the Code, each
payment made under this Agreement shall be designated as a “separate payment” within the meaning of
the Section 409A of the Code, and references herein to Executive’s “termination of employment”
shall refer to Executive’s separation from service with the Company within the meaning of Section
409A.
11
To the extent any reimbursements or in-kind benefits due to Executive under this Agreement
constitute “deferred compensation” under Section 409A of the Code, any such reimbursements or
in-kind benefits shall be paid to Executive in a manner consistent with Treas. Reg. Section
1.409A-3(i)(1)(iv).
g. Successors; Binding Agreement. This Agreement shall inure to the benefit of
and be binding upon personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees.
h. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be deemed to have been
duly given when delivered by hand or overnight courier or three days after it has been mailed by
United States registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below in this Agreement, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
If to the Company:
MedQuist, Inc.
0000 Xxxxxxx Xxxx Xxxx., Xxxxx 000
Xxxxx Xxxxxx, XX 00000-0000
0000 Xxxxxxx Xxxx Xxxx., Xxxxx 000
Xxxxx Xxxxxx, XX 00000-0000
Attention: General Counsel
If to Executive:
To the most recent address of Executive set forth in the personnel records of the Company.
i. Executive Representation. Executive hereby represents to the Company that the
execution and delivery of this Agreement by Executive and the Company and the performance by
Executive of Executive’s duties hereunder shall not constitute a breach of, or otherwise
contravene, the terms of any employment agreement or other agreement or policy to which Executive
is a party or otherwise bound.
j. Prior Agreements. This Agreement supercedes all prior agreements and
understandings (including verbal agreements) between Executive and the Company and/or its
affiliates regarding the terms and conditions of Executive’s employment with the Company and/or its
affiliates.
k. Cooperation. Executive shall provide Executive’s reasonable cooperation in
connection with any action or proceeding (or any appeal from any action or proceeding) which
relates to events occurring during Executive’s employment hereunder. This provision shall survive
any termination of this Agreement.
l. Withholding Taxes. The Company may withhold from any amounts payable under
this Agreement such Federal, state and local taxes as may be required to
12
be withheld pursuant to any applicable law or regulation.
m. Counterparts. This Agreement may be signed in counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and hereto were upon the
same instrument.
13
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.
MEDQUIST, INC.
|
XXXXX XXXXXXXXX | |||||
/s/ Xxxxxx X. Xxxxxxxx |
/s/ Xxxxx Xxxxxxxxx |
|||||
By: Xxxxxx X. Xxxxxxxx |
||||||
Title: Chairman |
14
