SEPARATION AGREEMENT AND GENERAL RELEASE
Exhibit 10.2
Xxxxxxx
Xxxxxxx
SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General Release (the “Agreement”) is entered into by and
between MedQuist Holdings Inc., a Delaware corporation (the “Company”) and Xxxxxxx Xxxxxxx
(“Executive”).
In consideration of the promises set forth in this Agreement, Executive and the Company (the
“Parties”) hereby agree as follows:
1. Entire Agreement.
This Agreement is the entire agreement between the Parties with respect to the subject matter
hereof and contains all agreements, whether written, oral, express or implied, between the Parties
relating thereto and supersedes and extinguishes any other agreement relating thereto, whether
written, oral, express or implied, between the Parties, including, without limitation, the
Employment Agreement by and between the Parties, dated August 8, 2008, as amended as of February
__, 2011 (the “Employment Agreement”); provided, that no rights or obligations
established under any such superseded agreement and specifically preserved by this Agreement are
extinguished. Notwithstanding the foregoing, capitalized terms not otherwise defined herein shall
have the meaning ascribed to them in the Employment Agreement. This Agreement may not be modified
or amended, nor may any rights under it be waived, except in a writing signed and agreed to by the
Parties. Nothing set forth in this Agreement shall be construed or interpreted as restricting,
limiting or otherwise affecting the Executive’s rights or the Company’s obligations under (i) the
Consulting Agreement between Executive and the Company dated Xxxxx 0, 0000, (xx) the Termination of
Management Stockholder’s Agreement between Executive, the Company and S.A.C. PEI CB Investment,
L.P. dated as of July __, 2011 or (iii) the Share Option Agreement between Executive and the
Company, dated as of April 17, 2009, as amended on April 18, 2011.
2. Termination of Employment.
The Parties hereby agree that Executive’s employment and any and all appointments he holds with the
Company and any of its subsidiaries, affiliates and each of their successors and assigns
(collectively, the “Company Group”), whether as officer, director, employee, consultant,
agent or otherwise, ceased as of April 1, 2011 (the “Termination Date”). Effective as of
the Termination Date, Executive shall have no authority to act on behalf of the Company or any
other member of the Company Group, and shall not hold himself out as having such authority or
otherwise act in an executive or other decision making capacity. Under the terms of the Employment
Agreement, the termination of Executive’s employment was a termination “without cause.”
3. Payments and Benefits.
In consideration for Executive entering into this Agreement and fully abiding by its terms, the
Company agrees to provide Executive with:
A. Salary Continuation Payments in the gross amount of $120,000, which constitutes twelve (12)
months of Executive’s base salary, payable over twelve (12) months in installments as per the
Company’s regularly scheduled payroll cycle, less all applicable taxes and withholdings;
B. additional severance pay in the gross amount of $72,000 payable over twelve (12) months in
installments as per the Company’s regularly scheduled payroll cycle, less all applicable taxes and
withholdings;
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 on or before the Termination Date; provided claims for
such reimbursement (accompanied by appropriate supporting documentation) are submitted to the
Company within 90 days following the Termination Date.
Each payment set forth in Sections 3(A) and 3(B) is intended to be treated as a series of separate
payments at all times for purposes of Code Section 409A and Treasury Regulation 1.409A-2(b)(2)(iii)
(or any similar or successor provisions).
Executive shall be entitled to the payments and benefits provided for in this Section 3, subject to
Executive’s compliance at all times prior to, and on each applicable payment date, with the
covenants referenced in Sections 9 and 10 of the Employment Agreement; provided,
however, that no Salary Continuation Payments shall be paid if Executive revokes this
Agreement pursuant to Section 6 below.
In addition, all options granted to Executive under the Company’s 2007 Equity Incentive Plan that
are unvested as of the Termination Date will accelerate, vest in full upon the Termination Date and
be exercisable in accordance with the terms of the underlying option agreement, as it may be
amended from time to time (the “Option Agreement”).
Executive agrees that the payments and benefits provided for in this Section 3 are due solely from
the Company and that Insperity PEO Services, L.P., formerly known as Administaff Companies II, L.P.
(“Insperity”), has no obligation to pay the additional compensation, even though the
payments and benefits provided for in this Section 3 may be processed through Insperity.
4. No Other Compensation or Benefits Owing.
Employee understands and agrees that, except as otherwise provided for in this Agreement Executive
is not and will not be due any other compensation or benefits from the Company.
5. Survival of Employment Agreement Provisions.
Sections 9 through 12 inclusive of the Employment Agreement and all related definitions shall
survive the Termination Date and be effective for such respective periods contemplated by the
Employment Agreement.
6. Acknowledgment and Release.
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A. In consideration of the Company’s execution of this Agreement and the obligations as set
forth herein upon the Company, Executive, for and on behalf of himself and his heirs and assigns,
hereby waives and releases any common law, statutory or other complaints, claims, demands,
expenses, damages, liabilities, charges or causes of action arising out of or relating to
Executive’s employment or termination of employment with, or his serving in any capacity in respect
of, or Executive’s status at any time as a holder of any securities of, any member of the Company
Group, both known and unknown, in law or in equity, which Executive may now have or ever had
against Insperity and its parent company, subsidiaries and other affiliated companies as well as
any of its and their insurers, directors, officers, agents, and employees, any member of the
Company Group, including but not limited CBay Inc., or any shareholder, employee, officer,
director, agent, attorney, representative, insurer, trustee, administrator or fiduciary of any
member of the Company Group, including their successors and assigns (collectively, the
“Releasees”) up to and including the date of Executive’s execution of this Agreement,
including, without limitation, any claim for any severance or other benefits which, but for this
Agreement, might have been due Executive under any previous agreement executed by and between any
member of the Company Group and Executive, and any complaint, charge or cause of action arising out
of his employment with the Company Group under, by way of example and not limitation, the Age
Discrimination in Employment Act of 1967 (“ADEA”, a law which prohibits discrimination on
the basis of age against persons age 40 and older), the National Labor Relations Act, the Civil
Rights Act of 1991, the Americans With Disabilities Act of 1990, Title VII of the Civil Rights Act
of 1964, the Employee Retirement Income Security Act of 1974, the Family Medical Leave Act, the
Equal Pay Act, the Rehabilitation Act of 1973, the Worker Adjustment and Retraining Notification
Act, the Securities Act of 1933, the Securities Exchange Act of 1934, and all other federal, state
and local statutes, ordinances, regulations and the common law. By signing this Agreement,
Executive acknowledges that he intends to waive and release any such rights known or unknown he may
have against the Releasees as of the date of Executive’s execution of this Agreement;
provided, that, Executive does not waive or release (i) claims with respect to the
right to enforce this Agreement, (ii) claims with respect to any vested and accrued right Executive
may have under any employee pension plan or welfare benefit plan of the Company, (iii) claims
pursuant to any Option Agreement under which options are outstanding on the date hereof; (iv) any
rights to indemnification provided under the terms of the Employment Agreement, under any
applicable insurance policy or the Company’s charter or by-laws or under any indemnification
agreement between the Parties, or (v) claims that cannot be legally waived.
B. Executive acknowledges that he has not filed any complaint, charge, claim or proceeding
against any of the Releasees before any local, state or federal agency, court or other body
relating to his employment or the termination thereof (each individually a “Proceeding”).
Executive represents that he is not aware of any basis on which such a Proceeding could reasonably
be instituted.
C. Executive acknowledges that he received this Agreement on July 9, 2011. Executive
acknowledges that he has been given twenty-one (21) calendar days from the date of receipt of this
Agreement to consider all of the provisions of this Agreement and he does hereby knowingly and
voluntarily waive some or all of such twenty-one (21) day period. EXECUTIVE FURTHER ACKNOWLEDGES
THAT HE HAS READ THIS AGREEMENT CAREFULLY, HAS BEEN ADVISED BY THE COMPANY TO CONSULT AN
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ATTORNEY AND THAT HE HAS IN FACT BEEN ADVISED BY COUNSEL OF HIS CHOICE AND THAT HE FULLY
UNDERSTANDS THAT BY SIGNING BELOW HE IS GIVING UP CERTAIN RIGHTS WHICH HE MAY HAVE TO XXX OR ASSERT
A CLAIM AGAINST ANY OF THE RELEASEES, AS DESCRIBED IN THIS SECTION 6 AND THE OTHER PROVISIONS
HEREOF. EXECUTIVE ACKNOWLEDGES THAT HE HAS NOT BEEN FORCED OR PRESSURED IN ANY MANNER WHATSOEVER
TO SIGN THIS AGREEMENT AND EXECUTIVE AGREES TO ALL OF ITS TERMS VOLUNTARILY.
D. Executive shall have seven calendar days from the date of his execution of this Agreement
to revoke this Agreement, including the release given under this Section 6 with respect to all
claims referred to herein (including, without limitation, any and all claims arising under ADEA)
(the “Revocation Period”). Such revocation must be in writing and delivered to the
Company’s General Counsel at the address set forth in Section 10A below prior to the expiration of
the Revocation Period. If Executive revokes this Agreement including, without limitation, the
release given under this Section 6, Executive will be deemed not to have accepted the terms of this
Agreement, and neither Executive nor the Company shall be bound by any Section of this Agreement.
E. In consideration of the Executive’s execution of this Agreement and the obligations as set
forth herein upon Executive, the Company, for and on behalf of itself and its assigns, hereby
waives and releases any common law, statutory or other complaints, claims, demands, expenses,
damages, liabilities, charges or causes of action arising out of or relating to Executive’s
employment or termination of employment with, or his serving in any capacity in respect of, or
Executive’s status at any time as a holder of any securities of, any member of the Company Group,
both known and unknown, in law or in equity, which the Company may now have or ever had against
Executive, including his successors and assigns up to and including the date of Executive’s
execution of this Agreement,
7. Availability of Relief.
A. In the event that Executive fails to abide by any of the terms of this Agreement, the
Company may, in addition to any other remedies it may have, immediately cease any benefits or
payments that are subsequently due under this Agreement, without waiving the release granted
herein.
B. Executive acknowledges and agrees that the remedy at law available to the Company for
breach of his post-termination obligations under Section 6 of this Agreement, as well as the
surviving provisions of the Employment Agreement, would be inadequate and that damages flowing from
such a breach may not readily be susceptible to being measured in monetary terms. Accordingly,
Executive acknowledges, consents and agrees that, in addition to any other rights or remedies which
the Company may have at law, in equity or under this Agreement, upon adequate proof (to the
satisfaction of the arbitrator or court adjudicating such matter) of his violation of any such
provision of this Agreement, the Company shall be entitled to immediate injunctive relief and may
obtain a temporary order restraining any threatened or further breach, without the necessity of
proof of actual damage and without the requirement of posting a bond.
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8. Non-Disparagement.
The parties agree not to engage in any form of conduct or to make any statements or representations
that disparage or otherwise impair the reputation, goodwill or commercial interests of Executive,
the Company or the Company Group.
9. Remedies for Breach.
Executive understands and agrees that a breach of this Agreement or the covenants referenced in
Sections 9 and 10 of the Employment Agreement will result in immediate and irreparable injury to
the Company. Executive, therefore, agrees that, in addition to any remedy Executive may have under
the Agreement, the Employment Agreement, or applicable law, the Company shall be entitled to a
forfeiture of any amounts still due and owing to Executive under the terms of this Agreement or the
Employment Agreement. Nothing herein shall be construed as prohibiting the Company from pursuing
any other remedies for any breach.
10. Miscellaneous.
A. Notices. All notices required or permitted by this Agreement to be given to any
party shall be in writing and shall be delivered personally, or sent by certified mail, return
receipt requested, or by Federal Express or similar overnight service, prepaid recorded delivery,
addressed as follows:
If to Executive:
Xxxxxxx Xxxxxxx
0000 Xxxxxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
0000 Xxxxxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
If to the Company:
MedQuist Holdings Inc.
0000 Xxxxxxxxx Xxxxxxx, Xxxxx X-0
Xxxxxxxx, XX 00000
Attention: General Counsel
0000 Xxxxxxxxx Xxxxxxx, Xxxxx X-0
Xxxxxxxx, XX 00000
Attention: General Counsel
and shall be deemed to have been duly given when so delivered personally or, if mailed or sent by
overnight courier, upon delivery; provided, that, a refusal by a party to accept
delivery shall be deemed to constitute receipt.
B. Successors. This Agreement shall be binding upon and inure to the benefit of the
Parties, their respective heirs, successors and assigns.
C. Taxes. Executive shall be responsible for the payment of any and all required
federal, state, local and foreign taxes incurred, or to be incurred, in connection with any amounts
payable, or benefits provided, to Executive under this Agreement. Notwithstanding any other
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provision of this Agreement, the Company may withhold from amounts payable under this
Agreement all federal, state, local and foreign taxes that are required to be withheld by
applicable laws and regulations with respect to any amounts payable, or benefits provided, to
Executive under this Agreement and report on any applicable federal, state, local or foreign tax
reporting form any income to Executive determined by the Company as resulting from such amounts
payable or benefits provided hereunder.
D. Severability. In the event that any provision of this Agreement is determined to
be invalid or unenforceable, the remaining terms and conditions of this Agreement shall be
unaffected and shall remain in full force and effect. In addition, if any provision is determined
to be invalid or unenforceable due to its duration and/or scope, the duration and/or scope of such
provision, as the case may be, shall be reduced, such reduction shall be to the smallest extent
necessary to comply with applicable law, and such provision shall be enforceable, in its reduced
form, to the fullest extent permitted by applicable law.
E. Non-Admission. Nothing contained in this Agreement shall be deemed or construed as
an admission of wrongdoing or liability on the part of Executive or on the part of the Company or
any Company Releasee.
F. Governing Law; Dispute Resolution. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York, without regard to
principles of conflicts of law which could cause the application of the laws of any jurisdiction
other than the State of New York.
G. Counterparts. This Agreement may be executed by one or more of the Parties hereto
on any number of separate counterparts and all such counterparts shall be deemed to be one and the
same instrument. Each Party hereto confirms that any facsimile or PDF copy of such Party’s
executed counterpart of this Agreement (or its signature page thereof) shall be deemed to be an
executed original thereof.
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IN WITNESS WHEREOF, the parties have executed and agreed to this Agreement as of the dates set
forth below each party’s signature below.
| EXECUTIVE |
||||
| /s/ Xxxxxxx Xxxxxxx | ||||
| Xxxxxxx Xxxxxxx | ||||
| Date: August 2, 2011 | ||||
| MEDQUIST HOLDINGS INC. |
||||
| By: | /s/ Xxxx X. Xxxxxxxx | |||
| Name: | Xxxx X. Xxxxxxxx | |||
| Title: | General Counsel & Chief Compliance Officer | |||
| Date: August 2, 2011 | ||||
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