June 24, 2010
Exhibit 10.29
June 24, 2010
Xxxxxxx X. Xxxxx
c/o MedQuist Inc.
0000 Xxxxxxx Xxxx Xxxx., Xxxxx 000
Xxxxx Xxxxxx, XX 00000
c/o MedQuist Inc.
0000 Xxxxxxx Xxxx Xxxx., Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Dear Xxxxxxx:
On behalf of MedQuist Inc. (the “Company”), this Agreement describes the terms of the
change in your employment status with the Company, to be the Company’s Co-Chief Operating Officer,
reporting directly the Company’s CEO and commencing on June 24, 2010 (the “Change in
Employment Status Commencement Date”). In Employee’s role as Co-Chief Operating Officer, among
other things, he shall manage the Company’s global medical transcription and medical editing
operations performed by the Company’s employees and authorized subcontractors. 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 Change in Employment Status Commencement Date hereof (the “Term”), which Term will be automatically extended for additional one (1) year periods
beginning on the third anniversary of the Change in Employment Status 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.
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 $270,000, which base salary will be reviewed
for increase from time to time during the Term at the discretion of the Company, but in no
circumstance will be lowered;
(2) participate in MedQuist’s Management Incentive Plan for 2010. Your target
incentive in this plan will be 50% of your base salary for 2010 and following years; provided,
however that your incentive for 2010 shall be prorated based upon your date of hiring by the
Company – April 22, 2010. Your target incentive in the MedQuist’s Management Incentive Plan will be
reviewed for increase from time to time during the Term at the discretion of the Company, but in no
circumstance will be lowered. 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. 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); and
(4) if Employee’s employment is terminated by the Company without Cause or by
Employee for Good Reason (as defined in Section 6 ) , 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 two (2) 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 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.
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 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:
(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 or by
Employee for Good Reason, Employee will be entitled to continued payment of his base salary (at the
rate in effect upon termination) for a period of 12 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. No severance benefits will
be paid to Employee in the event that Employee resigns his employment without Good Reason.
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 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 him, 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 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.
d. “Good Reason” shall mean (i) any substantial and sustained diminution of
Employee’s duties, including but not limited to the removal of Employee’s assigned division of the
Company’s operations or (ii) Employee not being assigned direct responsibility for the management
and oversight of the international transcription and editing operations of the Company and its
affiliates in the event that the Company, by acquisition, merger or otherwise, directly acquires
ownership of its international transcription and editing operations; provided that any of the
events described in clauses (i) and (ii) shall constitute Good Reason only if the Company fails to
cure such event within 15 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 30th day following the later of its occurrence or Employee’s knowledge thereof, unless Employee
has given the Company written notice thereof prior to such date.
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/ Xxxxxxx X. Xxxxx | ||||
| Xxxxxxx X. Xxxxx | ||||
Date Accepted: June 24, 2010
