Exhibit 10.20
(NIGHTINGALE LOGO) [w51503w5150305.gif]

Nightingale & Associates, LLC
P. O. Box 4347
Stamford, Connecticut 06907-0347
Tel: 203.359.3855
Fax: 203.724.3667
Info@nightingale.biz
www.nightingale.biz
March 14, 2008
Mr. Stephen Rusckowski, Chairman of the Board of Directors
Mr. Gregory M. Sebasky, Chairman of the Compensation Committee
MedQuist Inc.
1000 Bishops Gate Blvd., Suite 300
Mt. Laurel, NJ 08054-4632
Gentlemen:
     In response to various discussions, Nightingale & Associates, LLC
(“Nightingale”) has been asked to submit this proposed Amendment to our
Engagement Letter with MedQuist Inc. (“MedQuist” or the “Company”) dated
July 29, 2004 as amended on December 16, 2004, September 25, 2006, January 8,
2007 and on September 18, 2007 (collectively, the “Amended Engagement Letter”).
This Amendment (i) provides revisions to the cost structure and term associated
with the continued retention of Mr. Howard Hoffmann as the Company’s Interim
President and Chief Executive Officer. All other terms and conditions for the
retention of Nightingale, as detailed in the Amended Engagement Letter,
including but not limited to the Release and Indemnification agreement, will
remain in force and effect. It is our understanding that Howard Hoffmann, on
behalf of Nightingale, will continue to be engaged by MedQuist as the Company’s
Interim President and Chief Executive Officer and will continue to report to the
Company’s Board of Directors.

I.   SCOPE OF WORK:

Effective as of March 1, 2008, Nightingale will extend the term of Howard
Hoffmann’s role as MedQuist’s Interim President and Chief Executive Officer
until August 1, 2008 (the “Extension Period”). Following termination of
Mr. Hoffmann’s role as Interim President and Chief Executive Officer,
Mr. Hoffmann will endeavor to make himself available for ongoing consultancy
work on an as needed basis, subject to negotiation of a mutually agreeable Scope
of Work.
Finding Solutions to
Complex Business Situations
Since 1975

 

--------------------------------------------------------------------------------

 

Messrs. Rusckowski and Sebasky
MedQuist Inc.
March 14, 2008
Page 2
It should be noted that Mr. Hoffmann expects to be working on other client
engagements upon his departure as the full time Interim President and Chief
Executive Officer of MedQuist, and thus his availability for work beyond
August 1, 2008 cannot be guaranteed.

II.   FEE STRUCTURE:

Fixed Monthly Fee:
Effective as of March 1, 2008, Nightingale’s fees for Mr. Hoffmann’s role as
Interim President and Chief Executive Officer will be a fixed rate of $120,000
per month payable in arrears. If Mr. Hoffmann’s role is terminated during the
course of a month, Nightingale’s fees for the final month will be prorated based
on the actual number of calendar days elapsed during the month up to and
including Mr. Hoffmann’s final day of work. Mr. Hoffmann’s fees for consultancy
services following his departure as the Interim President and Chief Executive
Officer of MedQuist will be billed at an hourly rate of $525/hour.
March — July 2008 Performance Bonus
Nightingale may be entitled to an additional performance related bonus payment
of up to $160,000, which will be paid no later than August 31, 2008 (the “March
— July 2008 Performance Bonus”) in connection with Mr. Hoffmann’s continuing
service in 2008 as Interim President and Chief Executive Officer. The amount, if
any, of the March — July 2008 Performance Bonus that Nightingale is to receive
will be based on the achievement of certain operational objectives to be
mutually agreed upon between Nightingale and the Board of Directors of MedQuist.
Strategic Transaction Bonus

  (a)   For purposes of this section, the following terms shall have the
meanings set forth below:

  •   “Acquiree” means any corporation, partnership, limited liability company
or similar entity with which the Company engages in an Acquisition Transaction.
    •   “Acquisition Transaction” means each and every transaction or series of
related transactions whereby, directly or indirectly, control of, or a
significant interest in, any Acquiree or any of its businesses or assets is
transferred to the Company for consideration, including, without limitation, a
sale, acquisition

 

--------------------------------------------------------------------------------

 

Messrs. Rusckowski and Sebasky
MedQuist Inc.
March 14, 2008
Page 3

      or exchange of stock (including shares issuable upon conversion of any
securities convertible into stock) or assets, a lease or license of assets (with
or without a purchase option), or a merger, consolidation or reorganization,
tender offer, leveraged buyout or other extraordinary corporate transaction or
business combination involving the Acquiree with an expected enterprise value in
excess of $50,000,000, as determined by the Board of Directors of the Company in
its reasonable discretion.     •   “Majority Shareholder” means Koninklijke
Philips Electronics N.V.     •   “Sale Transaction” means each and every
transaction or series of related transactions whereby, directly or indirectly,
control of, or a significant interest in, the Company or any of its businesses
or assets is transferred for consideration, including, without limitation, a
sale, acquisition or exchange of stock (including shares issuable upon
conversion of any securities convertible into stock) or assets, a lease or
license of assets (with or without a purchase option), or a merger,
consolidation or reorganization, tender offer, leveraged buyout, “going private”
transaction or other extraordinary corporate transaction or business combination
involving the Company, including any such transaction in which the outstanding
equity securities of the Company not held by the Majority Shareholder and its
affiliates are acquired by a third-party; provided, however, that a secured
interest in the Company or any of its businesses or assets arising solely from a
debt transaction shall not constitute a Sale Transaction.     •   “Strategic
Transaction” means a Sale Transaction or an Acquisition Transaction, other than
a Sale Transaction or Acquisition Transaction with an affiliate of the Company
or an affiliate of any holder of more than 50% of the Company’s capital stock. A
“merger” will be considered to be an Acquisition Transaction if the Company’s
current stockholders own at least a majority of the outstanding common stock of
the resulting company and to be a Sale Transaction if the Company’s current
stockholders own less than a majority of the outstanding common stock of the
resulting company.

 

--------------------------------------------------------------------------------

 

Messrs. Rusckowski and Sebasky
MedQuist Inc.
March 14, 2008
Page 4
(b) Success-Based Bonus Amount and Conditions. The Company will pay to
Nightingale a bonus (the “Success-Based Bonus”) in an amount equal to $132,500,
if:

  (i)   a Strategic Transaction is closed; and     (ii)   either,
(1) Mr. Hoffmann continues to serve as the Company’s President and Chief
Executive Officer for the 90 day period immediately following the closing of a
Strategic Transaction (the “Post-Closing Period”), or (2) Nightingale’s
engagement with the Company (or any successor to its business), including the
retention of Mr. Hoffmann as the President and Chief Executive Officer of the
Company (or any successor to its business), is terminated, upon the closing of a
Strategic Transaction or at any time during the Post-Closing Period.

(c) Timing and Form of Payment. Subject to paragraphs (a) and (b) of this
provision, the Company will pay the Success-Based Bonus to Nightingale in a lump
sum within 10 business days following the closing of a Strategic Transaction and
the earliest to occur of: (i) the completion of the Post-Closing Period or
(ii) the termination of Nightingale’s engagement with the Company (or any
successor to its business), including the retention of Mr. Hoffmann as the
President and Chief Executive Officer of the Company (or any successor to its
business). For the avoidance of doubt, only one Success-Based Retention Bonus is
payable under this Agreement.
For purposes of the Success-Based Bonus described above, Nightingale’s
engagement with the Company, including the retention of Mr. Hoffmann as the
President and Chief Executive Officer of the Company, shall not be deemed to
have been terminated merely because Mr. Hoffmann ceases to be the President and
Chief Executive Officer of the Company and becomes the President and Chief
Executive Officer of any successor to the Company’s business following the
completion of a Strategic Transaction on terms and conditions acceptable to such
company and Nightingale.

 

--------------------------------------------------------------------------------

 

Additional Nightingale Personnel:
Nightingale will continue to make available the services of Mr. Michael C.
Yeager and Ms. Jeanine Cobonpue to perform selected services in connection with
the Company’s billing matter and operations related activities. Mr. Yeager’s
professional time fee services have been and will continue to be invoiced to
MedQuist at an hourly rate of $250/hour capped at $12,500 per week.
Ms. Cobonpue’s professional time fee services have been and will continue to be
invoiced to MedQuist at an hourly rate of $175/hour. Should it become necessary
to utilize the services of additional Nightingale personnel on the project, it
is agreed that Nightingale will invoice professional time fees for such
personnel at their prevailing hourly rates. Nightingale agrees that it will
obtain the advance approval of the Board of Directors of the Company, which
shall be conveyed by the Board of Directors of the Company to Howard Hoffmann,
before adding additional personnel to the project team.
In addition to professional time fees, out-of-pocket expenses are billed at
cost, and generally range from 10% to 20% of professional time fees, depending
on the amount of travel involved. Out-of-pocket expenses consist primarily of
transportation, meals, lodging, telephone, specifically assignable secretarial
and office assistance, and report production.

III.   ADVANCE DEPOSIT       Nightingale requires an Advance Deposit for all
assignments of the type described above. Given this situation, Nightingale will
not require an increase of its existing Advance Deposit of $75,000 that has been
paid by the Company. At the completion of the project and at the direction of
the Company, Nightingale will either apply the Advance Deposit to any
outstanding invoices or, if there are no unpaid invoices owing to Nightingale,
promptly return the Deposit to the Company.

vvvvvvvvvvvvvvv

 

--------------------------------------------------------------------------------

 

Messrs. Rusckowski and Sebasky
MedQuist Inc.
March 14, 2008
Page 6
     If this Amendment conforms to your understanding of the terms and
conditions of our retention, please have the appropriate party signify agreement
by signing and returning the enclosed extra copy of this Amendment.
     We look forward to continue working with you and the Company.

            Sincerely,

/s/ Howard S. Hoffmann

Howard S. Hoffmann,
in the capacity as Principal and
Managing Partner of Nightingale &
Associates, LLC
                       

READ, UNDERSTOOD AND AGREED TO BY:
MedQuist Inc.

             
 
  By:   /s/ Stephen Rusckowski    
 
           
 
      Stephen Rusckowski             Chairman of the Board of Directors of
MedQuist Inc.
 
           
 
  Date:   March 14, 2008    
 
           
 
           
 
  By:   /s/ Gregory M. Sebasky    
 
           
 
      Gregory M. Sebasky             Chairman of the Compensation Committee of
the Board of Directors of MedQuist Inc.
 
           
 
  Date:   March 14, 2008