Corporate Offices 1000 Bishops Gate Blvd, Suite 300 Mount Laurel, NJ 08054-4632
EXHIBIT 10.4
|
Corporate Offices 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000 Xxxxx Xxxxxx, XX 00000-0000 |
May 18, 2009
Xx. Xxxxx Xxxxx
c/o MedQuist
0000 Xxxxxxx Xxxx Xxxx.
Xx. Xxxxxx, XX 00000
c/o MedQuist
0000 Xxxxxxx Xxxx Xxxx.
Xx. Xxxxxx, XX 00000
Dear Xxxxx:
On behalf of MedQuist Inc. (the “Company”), this Agreement describes the terms of your
new employment as the Company’s Senior Vice President and Chief Information Officer, which will
commence on May 18, 2009 (the “Employment Commencement Date”). For purposes of this
Agreement, you are referred to as the “Employee.” Other capitalized terms used in this
Agreement have the meanings defined in Section 6, below.
1. Term and Location. The Company shall employ Employee hereunder for a three (3)
year term commencing on the Employment Commencement Date hereof (the “Term”), which Term
will be automatically extended for additional one (1) year periods beginning on the third
anniversary of the Employment Commencement Date and upon each subsequent anniversary thereof unless
either party provides the other party with at least ninety (90) days prior written notice of its
intention not to renew this Agreement unless terminated earlier pursuant to Section 4 of
this Agreement. Employee shall be entitled to work remotely and will be provided with office space
(i) at the Company’s headquarters, currently based in Mt. Laurel, New Jersey and (ii) the Company’s
Atlanta, Georgia area location, currently based in Norcross, Georgia and Marietta, Georgia. The
Company shall reimburse Employee for his reasonable costs of travel and lodging associated with the
performance of his employment responsibilities.
2. Consideration.
a. Compensation. As consideration for all services rendered by Employee to the
Company and for the Covenants contained herein, Employee will be entitled to:
(1) base salary at an annual rate of $280,000;
(2) participate in MedQuist’s Management Incentive Plan for 2009. Your target incentive in
this plan will be 50% of your base salary for 2009 and following years. The target incentive is
the payment amount that the Employee shall be eligible to receive if the Company and Employee both
attain the pre-established incentive plan target objectives. The actual incentive award may be
higher or lower than the target incentive amount based upon achievement of the objectives by
Employee and the Company. Payment of $140,000, which is 100% of the annual target incentive amount
for 2009, is guaranteed. In order to receive the guaranteed annual target incentive amount for
2009, Employee must be employed by the Company on the scheduled date of the payment, which shall be
no later than March 15, 2010. Management Incentive Plan target objectives shall be developed on or before February 28th of each year of the Management Incentive Plan;
(3) participate in the same employee benefit plans available generally to other full-time
employees of the Company, subject to the terms of those plans as the same may be modified, amended
or terminated from time to time (benefits information package enclosed);
(4) if Employee’s employment is terminated by the Company without Cause, the severance pay and
benefits described below in Section 4.
b. Long Term Incentives. The Board will provide a long term incentive to Employee
designed to reward extraordinary performance and/or to encourage Employee’s future efforts on
behalf of the Company. The grant of the long term incentive will be subject to the terms of the
Company’s long term incentive plan, and will be evidenced by a separate award agreement by and
between the Company and Employee.
3. Covenants.
a. Non-Solicitation. While employed by the Company and for the one (1) year period
following the cessation of that employment for any reason (and without regard to whether such
cessation was initiated by Employee or the Company), Employee will not do any of the following
without the prior written consent of the Company:
(1) solicit, entice or induce, either directly or indirectly, any person, firm or corporation
who or which is a client or customer of the Company or any of its subsidiaries to become a client
or customer of any other person, firm or corporation;
(2) influence or attempt to influence, either directly or indirectly, any customer of the
Company or its subsidiaries to terminate or modify any written or oral agreement or course of
dealing with the Company or its subsidiaries (except in Employee’s capacity as an employee of the
Company); or
(3) influence or attempt to influence, either directly or indirectly, any person to terminate
or modify any employment, consulting, agency, distributorship, licensing or other similar
relationship or arrangement with the Company or its subsidiaries (except in Employee’s capacity as
an employee of the Company).
b. Non-Disclosure. Employee shall not use for Employee’s personal benefit, or
disclose, communicate or divulge to, or use for the direct or indirect benefit of any person, firm,
association or company other than Company, any “Confidential Information,” which term shall mean
any information regarding the business methods, business policies, policies, procedures,
techniques, research or development projects or results, historical or projected financial
information, budgets, trade secrets, or other knowledge or processes of, or developed by, Company
or any other confidential information relating to or dealing with the business operations of
Company, made known to Employee or learned or acquired by Employee while in the employ of Company,
but Confidential Information shall not include information otherwise lawfully known generally
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by or readily accessible to the general public. The foregoing provisions of this subsection
shall apply during and after the period when the Employee is an employee of the Company and shall
be in addition to (and not a limitation of) any legally applicable protections of Company interest
in confidential information, trade secrets, and the like. At the termination of Employee’s
employment with Company, Employee shall return to the Company all copies of Confidential
Information in any medium, including computer tapes and other forms of data storage.
c. Non-Competition. While employed by the Company and for the one (1) year period
following the cessation of that employment for any reason (and without regard to whether such
cessation was initiated by Employee or the Company), Employee shall not directly or indirectly
engage in (as a principal, shareholder, partner, director, officer, agent, employee, consultant or
otherwise) or be financially interested in any business which is involved in business activities
which are the same as or in direct competition with business activities carried on by the Company,
or being definitively planned by the Company at the time of termination of Employee’s employment.
For purposes of clarification, a hospital shall not be considered a business which is involved in
business activities which are the same as or in direct competition with business activities carried
on by the Company. Nothing contained in this subsection shall prevent Employee from holding for
investment up to three percent (3%) of any class of equity securities of a company whose securities
are publicly traded on a national securities exchange or in a national market system.
d. Intellectual Property & Company Creations.
(1) Ownership. All right, title and interest in and to any and all ideas, inventions,
designs, technologies, formulas, methods, processes, development techniques, discoveries, computer
programs or instructions (whether in source code, object code, or any other form), computer
hardware, algorithms, plans, customer lists, memoranda, tests, research, designs, specifications,
models, data, diagrams, flow charts, techniques (whether reduced to written form or otherwise),
patents, patent applications, formats, test results, marketing and business ideas, trademarks,
trade secrets, service marks, trade dress, logos, trade names, fictitious names, brand names,
corporate names, original works of authorship, copyrights, copyrightable works, mask works,
computer software, all other similar intangible personal property, and all improvements, derivative
works, know-how, data, rights and claims related to the foregoing that have been or are conceived,
developed or created in whole or in part by the Employee (a) at any time and at any place that
relates directly or indirectly to the business of the Company, as then operated, operated in the
past or under consideration or development or (b) as a result of tasks assigned to Employee by the
Company (collectively, “Company Creations”), shall be and become and remain the sole and exclusive
property of the Company and shall be considered “works made for hire” as that term is defined
pursuant to applicable statutes and law.
(2) Assignment. To the extent that any of the Company Creations may not by law be considered
a work made for hire, or to the extent that, notwithstanding the foregoing, Employee retains any
interest in or to the Company
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Creations, Employee hereby irrevocably assigns and transfers to the Company any and all right,
title, or interest that Employee has or may have, either now or in the future, in and to the
Company Creations, and any derivatives thereof, without the necessity of further consideration.
Employee shall promptly and fully disclose all Company Creations to the Company and shall have no
claim for additional compensation for Company Creations. The Company shall be entitled to obtain
and hold in its own name all copyrights, patents, trade secrets, trademarks, and service marks with
respect to such Company Creations.
(3) Disclosure & Cooperation. Employee shall keep and maintain adequate and current
written records of all Company Creations and their development by Employee (solely or jointly with
others), which records shall be available at all times to and remain the sole property of the
Company. Employee shall communicate promptly and disclose to the Company, in such form as the
Company may reasonably request, all information, details and data pertaining to any Company
Creations. Employee further agrees to execute and deliver to the Company or its designee(s) any
and all formal transfers and assignments and other documents and to provide any further cooperation
or assistance reasonably required by the Company to perfect, maintain or otherwise protect its
rights in the Company Creations. Employee hereby designates and appoints the Company or its
designee as Employee’s agent and attorney-in-fact to execute on Employee’s behalf any assignments
or other documents deemed necessary by the Company to perfect, maintain or otherwise protect the
Company’s rights in any Company Creations.
e. Acknowledgments. Employee acknowledges that the Covenants are reasonable and
necessary to protect the Company’s legitimate business interests, its relationships with its
customers, its trade secrets and other confidential or proprietary information. Employee further
acknowledges that the duration and scope of the Covenants are reasonable given the nature of this
Agreement and the position Employee holds or will hold within the Company. Employee further
acknowledges that the Covenants are included herein to induce the Company to enter into this
Agreement and that the Company would not have entered into this Agreement or otherwise employed or
continued to employ the Employee in the absence of the Covenants. Finally, Employee also
acknowledges that any breach, willful or otherwise, of the Covenants will cause continuing and
irreparable injury to the Company for which monetary damages, alone, will not be an adequate
remedy.
f. Enforcement.
(1) If any court determines that the Covenants, or any part thereof, is unenforceable because
of the duration or scope of such provision, that court will have the power to modify such provision
and, in its modified form, such provision will then be enforceable.
(2) The parties acknowledge that significant damages will be caused by a breach of any of the
Covenants, but that such damages will be difficult to quantify. Therefore, the parties agree that
if Employee breaches any of the Covenants, liquidated damages will be paid by Employee in the
following manner:
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(i) any Company stock options, stock appreciation rights, restricted stock units or similar
equity incentives or other long term incentives then held by Employee, whether or not then vested,
will be immediately and automatically forfeited;
(ii) any shares of restricted stock issued by the Company, then held by Employee or his
permitted transferee and then subject to forfeiture will be immediately and automatically
forfeited;
(iii) any obligation of the Company to provide severance pay or benefits (whether pursuant to
Section 4 or otherwise) will cease; and
(3) In addition to the remedies specified in Section 3(f)(2) and any other relief
awarded by any court, if Employee breaches any of the Covenants:
(i) Employee will be required to account for and pay over to the Company all compensation,
profits, monies, accruals, increments or other benefits derived or received by Employee as a result
of any such breach; and
(ii) the Company will be entitled to injunctive or other equitable relief to prevent further
breaches of the Covenants by Employee.
(4) If Employee breaches Section 3, then the duration of the restriction therein
contained will be extended for a period equal to the period that Employee was in breach of such
restriction.
4. Termination. Employee’s employment by the Company may be terminated at any time.
Upon termination, Employee will be entitled to the payment of accrued and unpaid salary through the
date of such termination. All salary, commissions and benefits will cease at the time of such
termination, subject to the terms of any benefit plans then in force or enforceable under
applicable law and applicable to Employee, and the Company will have no further liability or
obligation hereunder by reason of such termination; provided, however, that subject to Section
3(f)(2), if Employee’s employment is terminated by the Company without Cause, Employee will be
entitled to continued payment of his base salary (at the rate in effect upon termination) for a
period of six (6) months; and notwithstanding the foregoing, no amount will be paid or benefit
provided under this Section 4 unless and until (x) Employee executes and delivers a general
release of claims against the Company and its subsidiaries in a form prescribed by the Company, and
(y) such release becomes irrevocable. Any severance pay or benefits provided under this
Section 4 will be in lieu of, not in addition to, any other severance arrangement
maintained by the Company.
5. Miscellaneous.
a. Other Agreements. Employee represents and warrants to the Company that there are
no restrictions, agreements or understandings whatsoever to which he is a party that would prevent
or make unlawful his execution of this Agreement, that would be inconsistent or in conflict with
this Agreement or Employee’s obligations
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hereunder, or that would otherwise prevent, limit or impair the performance by Employee of his
duties to the Company.
b. Entire Agreement; Amendment. This Agreement contains the entire agreement and
understanding of the parties hereto relating to the subject matter hereof, and merges and
supersedes all prior and contemporaneous discussions, agreements and understandings of every nature
relating to the employment of Employee by the Company. This Agreement may not be changed or
modified, except by an agreement in writing signed by each of the parties hereto.
c. Waiver. Any waiver of any term or condition hereof will not operate as a waiver of
any other term or condition of this Agreement. Any failure to enforce any provision hereof will
not operate as a waiver of such provision or of any other provision of this Agreement.
d. Governing Law. This Agreement shall be governed by, and enforced in accordance
with, the laws of the State of New Jersey without regard to the application of the principles of
conflicts of laws.
e. Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or the effectiveness or validity of any provision in any other
jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as
if such invalid, illegal or unenforceable provision had never been herein contained.
f. Wage Claims. The parties intend that all obligations to pay compensation to
Employee be obligations solely of the Company. Therefore, intending to be bound by this provision,
Employee hereby waives any right to claim payment of amounts owed to her, now or in the future,
from directors or officers of the Company in the event of the Company’s insolvency.
g. Successors and Assigns. This Agreement is binding on the Company’s successors and
assigns.
h. Section Headings. The section headings in this Agreement are for convenience only;
they form no part of this Agreement and will not affect its interpretation.
i. Counterparts. This Agreement may be executed in multiple counterparts, each of
which will be deemed to be an original and all of which together will constitute but one and the
same instrument.
j. Indemnification. Employee shall be indemnified for acts performed in good faith as
an officer, director or employee of the Company in the manner provided in the Company’s charter and
by-laws, and shall be covered by director and officer liability
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insurance coverage for such acts to the same extent that any such coverage is provided to the
Company’s executive officers.
6. Definitions. Capitalized terms used herein will have the meanings below defined:
a. “Business” means electronic transcription services and other health information
management solutions services businesses in which the Company or its subsidiaries are engaged
anywhere within the United States.
b. “Cause” means the occurrence of any of the following: (1) Employee’s refusal,
willful failure or inability to perform (other than due to illness or disability) his employment
duties or to follow the lawful directives of his superiors; (2) misconduct or gross negligence by
Employee in the course of employment; (3) conduct of Employee involving any type of disloyalty to
the Company or its subsidiaries, including, without limitation: fraud, embezzlement, theft or
dishonesty in the course of employment; (4) a conviction of or the entry of a plea of guilty or
nolo contendere to a crime involving moral turpitude or that otherwise could reasonably be expected
to have an adverse effect on the operations, condition or reputation of the Company, (5) a material
breach by Employee of any agreement with or fiduciary duty owed to the Company; or (6) alcohol
abuse or use of controlled drugs other than in accordance with a physician’s prescription.
c. “Covenants” means the covenants set forth in Section 3 of this Agreement.
To acknowledge your agreement to and acceptance of the terms and conditions of this Agreement,
please sign below in the space provided within two (2) days of the date of this Agreement and
return a signed copy to my attention. If the Agreement is not signed and returned within two (2)
days, the terms and conditions of this Agreement will be deemed withdrawn.
| Sincerely, MedQuist Inc. |
||||
| By: | /s/ Xxxxx Xxxxxxxxx | |||
| Xxxxx Xxxxxxxxx | ||||
| President & CEO | ||||
Accepted and Agreed:
| /s/ Xxxxx Xxxxx | |||
| Xxxxx Xxxxx | |||
Date Accepted:5/18/2009
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