Exhibit 10.1
INDEMNIFICATION AGREEMENT
     This Indemnification Agreement (“Agreement”), dated February 21, 2008, is
entered into by and between MedQuist Inc. (the “Company”), and Warren Pinckert
(“Indemnitee”).
     WHEREAS, the Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve the Company and its
subsidiaries as directors, officers and in other capacities;
     WHEREAS, the Company and Indemnitee recognize the continued difficulty in
obtaining liability insurance for the directors, officers, employees and other
agents of the Company, the significant increases in the cost of such insurance
and the general reductions and limitations in the coverage of such insurance;
     WHEREAS, the Company and the Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees and other agents serving corporations to expensive litigation risks at
the same time as the availability and coverage of liability insurance has been
severely limited;
     WHEREAS, the Company has adopted bylaws (the “Bylaws”) providing for the
indemnification of directors, officers, employees and other agents of the
Company, including persons serving at the request of the Company in such
capacities with other corporations or enterprises, as authorized by New Jersey
law;
     WHEREAS, the Bylaws and New Jersey law, by their non-exclusive nature,
permit agreements between the Company and its directors, officers, employees and
other agents with respect to indemnification of such persons; and
     WHEREAS, in order to induce Indemnitee to accept a position with the
Company as a director, officer or in another capacity or capacities and/or
continue to provide services to the Company as a director, officer or in another
capacity or capacities, the Company wishes to provide for the indemnification
of, and the advancement of expenses to, Indemnitee to the maximum extent now or
hereafter permitted by law;
     NOW, THEREFORE, the Company and Indemnitee hereby agree as follows.
1. Indemnification.
     (a) Third Party Proceedings. The Company shall indemnify Indemnitee if
Indemnitee is or was a party or is threatened to be made a party to any
threatened, pending or completed action, suit, proceeding or any arbitration or
other alternative dispute resolution mechanism, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Company) by reason of the fact that Indemnitee is or was a director, officer,
employee or agent of the Company, or any subsidiary of the Company, or by reason
of the fact that Indemnitee is or was serving at the request of the Company as a
director, officer, employee

 

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or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys’ fees), judgments, fines and
amounts paid in settlement (if such settlement is approved in advance by the
Company, which approval shall not be unreasonably withheld) actually and
reasonably incurred by Indemnitee in connection with such action, suit or
proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee’s conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that Indemnitee’s conduct was unlawful.
     (b) Proceedings By or in the Right of the Company. The Company shall
indemnify Indemnitee if Indemnitee was or is a party or is threatened to be made
a party to any threatened, pending or completed action or suit by or in the
right of the Company or any subsidiary of the Company to procure a judgment in
its favor by reason of the fact that Indemnitee is or was a director, officer,
employee or agent of the Company, or any subsidiary of the Company, or by reason
of the fact that Indemnitee is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys’ fees)
and, to the fullest extent permitted by law, amounts paid in settlement,
actually and reasonably incurred by Indemnitee in connection with the defense or
settlement of such action or suit if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, except that no indemnification shall be made in
respect of any claim, issue or matter as to which Indemnitee shall have been
adjudged to be liable to the Company unless and only to the extent that the New
Jersey court or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for such expenses which the New Jersey court or such other
court shall deem proper.
     (c) Mandatory Payment of Expenses. To the extent that Indemnitee has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Sections 1(a) or (b) hereof, or in defense of any
claim, issue or matter therein, Indemnitee shall be indemnified against expenses
(including attorneys’ fees) actually and reasonably incurred by Indemnitee in
connection therewith.
2. Advancement of Expenses; Notice; Indemnification Procedure.
     (a) Advancement of Expenses. The Company shall advance all expenses
incurred by Indemnitee in connection with the investigation, defense, settlement
or appeal of any civil or criminal action, suit or proceeding referenced in
Section 1(a) or (b) hereof (but not amounts actually paid in settlement of any
such action, suit or proceeding). Indemnitee hereby undertakes to repay such
amounts advanced only if, and to the extent that, it shall ultimately be
determined that Indemnitee is not entitled to be indemnified by the Company as
authorized hereby.

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     (b) Notice of Indemnification Claim; Cooperation by Indemnitee. Indemnitee
shall, as a condition precedent to his or her right to be indemnified under this
Agreement, give the Company notice in writing as soon as practicable of any
claim made against Indemnitee for which indemnification will or could be sought
under this Agreement. Notice to the Company shall be directed to the General
Counsel of the Company at the address indicated on the signature page of this
Agreement (or such other address as the Company shall designate in writing to
Indemnitee). Notice shall be deemed received as provided in Section 13 hereof.
Indemnitee also shall provide the Company such information and cooperation as
the Company may reasonably require and as shall be within Indemnitee’s power.
     (c) Indemnification Procedure. Any indemnification and/or advances provided
for in Sections 1 and 2 hereof shall be made no later than thirty (30) days
after receipt of the written request of Indemnitee. If a claim under this
Agreement, under any statute, or under any provision of the Company’s
Certificate of Incorporation or Bylaws providing for indemnification, is not
paid in full by the Company within thirty (30) days after a written request for
payment thereof has first been received by the Company, Indemnitee may at any
time thereafter bring an action against the Company to recover the unpaid amount
of the claim. It shall be a defense to any such action brought by Indemnitee
(other than an action brought to enforce a claim for expenses incurred in
connection with any action, suit or proceeding in advance of its final
disposition) that Indemnitee has not met the standards of conduct which make it
permissible under applicable law for the Company to indemnify Indemnitee for the
amount claimed. Notwithstanding the foregoing, Indemnitee shall be entitled to
receive advancements of expenses pursuant to Section 2(a) hereof unless and
until such defense may be finally adjudicated by court order or judgment from
which no further right of appeal exists. It is the intention of the parties that
if the Company contests Indemnitee’s right to indemnification, the question of
Indemnitee’s right to indemnification shall be for the court to decide, and
neither the failure of the Company (including its Board of Directors, any
committee or other subgroup of the Board of Directors, independent legal
counsel, or its stockholders) to have made a determination that indemnification
of Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct required by applicable law, nor an actual
determination by the Company (including it Board of Directors, any committee or
other subgroup of the Board of Directors, independent legal counsel, or its
stockholders) that Indemnitee has not met such applicable standard of conduct,
shall create a presumption that Indemnitee has or has not met the applicable
standard of conduct.
     (d) Notice to Insurers. If, at the time of the receipt of a notice of a
claim pursuant to Section 2(b) hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurer in accordance with the procedures
set forth in the applicable policy. The Company shall thereafter take all action
it deems reasonably necessary or advisable to cause such insurers to pay, on
behalf of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
     (e) Selection of Counsel. In the event the Company shall be obligated under
Section 2(a) hereof to pay the expenses of any proceeding against Indemnitee,
the Company shall be entitled to assume the defense of such proceeding, with
counsel approved by Indemnitee (such

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approval not to be unreasonably withheld), upon the delivery to Indemnitee of
written notice of its election to do so. After delivery of such notice, approval
of such counsel by Indemnitee and the retention of such counsel by the Company,
the Company will not be liable to Indemnitee under this Agreement for any fees
of counsel subsequently incurred by Indemnitee with respect to the same
proceeding, provided that Indemnitee shall have the right to employ his or her
own counsel in any such proceeding at Indemnitee’s own expense, and provided
further that Indemnitee shall have the right to employ his or her own counsel in
any such proceeding at the Company’s expense if (i) employment of counsel by
Indemnitee has been previously authorized by the Company, (ii) Indemnitee shall
have reasonably concluded that there may be a conflict of interest between the
Company and Indemnitee in the conduct of any such defense, or (iii) the Company
shall not, in fact, have employed counsel to assume the defense of such
proceeding.
3. Additional Indemnification Rights; Nonexclusivity.
     (a) Scope of Indemnification Rights. Notwithstanding any other provision of
this Agreement, the Company hereby agrees to indemnify the Indemnitee to the
fullest extent permitted by law, notwithstanding that such indemnification is
not specifically authorized by the other provisions of this Agreement, the
Company’s Certificate of Incorporation, Bylaws or by statute. In the event of
any change, after the date of this Agreement, in any applicable law, statute, or
rule which expands the right of a New Jersey corporation to indemnify a member
of its board of directors or an officer or other agent, such changes shall be
incorporated automatically into Indemnitee’s rights and the Company’s
obligations under this Agreement without further action of the parties. In the
event of any change in any applicable law, statute or rule which narrows the
right of a New Jersey corporation to indemnify a member of its board of
directors or an officer or other agent, such changes, to the extent not
otherwise required by such law, statute or rule to be applied to this Agreement
shall have no effect on this Agreement or the rights and obligations of the
parties hereunder.
     (b) Nonexclusivity. The indemnification provided by this Agreement shall
not be deemed exclusive of any rights to which Indemnitee may be entitled under
the Company’s Certificate of Incorporation, Bylaws, any other agreement, any
vote or approval of Company stockholders or disinterested Directors, New Jersey
law, or otherwise, both as to action in Indemnitee’s official capacity and as to
action in another capacity while holding such office.
     (c) Continuing Right. All agreements and obligations of the Company
included herein shall continue during the period Indemnitee is a director,
officer, employee or other agent of the Company and shall continue thereafter as
long as Indemnitee is subject to any possible claim, action, suit, proceeding or
any arbitration or other alternative dispute resolution mechanism, whether
civil, criminal, administrative or investigative, by reason of the fact that
Indemnitee was serving in the capacity referred to herein. For the avoidance of
doubt, such agreements and obligations shall apply to any period prior to the
date of this Agreement on the same basis as to periods from and after such date.
4. Partial Indemnification. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
expenses, judgments, fines or penalties actually or reasonably incurred by him
or her in the investigation, defense, appeal or

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settlement of any civil or criminal action, suit or proceeding, but not,
however, for the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such expenses, judgments, fines or penalties to
which Indemnitee is entitled.
5. Mutual Acknowledgement. Each of the Company and Indemnitee acknowledges that
in certain instances, Federal law or applicable public policy may prohibit the
Company from providing indemnification under this Agreement or otherwise. In
particular, the Company and Indemnitee acknowledge that the Securities and
Exchange Commission believes that indemnification for liabilities arising under
the Federal securities laws is against public policy and, therefore, is
unenforceable. Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the Securities and
Exchange Commission to submit the question of indemnification to a court in
certain circumstances for a determination regarding the Company’s right, in view
of such public policy considerations, to indemnify Indemnitee.
6. Officer And Director Liability Insurance. The Company may, from time to time,
make a determination whether or not it is practicable for the Company to obtain
and maintain a policy or policies of insurance with insurance companies
providing the directors and officers of the Company with coverage for losses in
connection with acts or omissions by such directors and officers, or to ensure
the Company’s performance of its indemnification obligations under this
Agreement. Among other considerations, the Company may weigh the costs of
obtaining such insurance coverage against the protection afforded by such
coverage. In all policies of director and officer liability insurance,
Indemnitee will be named as an insured in such a manner as to provide Indemnitee
the same rights and benefits as are accorded to the most favorably insured of
the Company’s directors, if Indemnitee is a director; or of the Company’s
officers, if Indemnitee is not a director of the Company but is an officer.
Notwithstanding the foregoing, the Company shall have no obligation to obtain or
maintain such insurance.
7. Severability. Nothing in this Agreement is intended to require or shall be
construed as requiring the Company to do or fail to do any act in violation of
applicable law. The Company’s inability, pursuant to court order, to perform its
obligations under this Agreement shall not constitute a breach of this
Agreement. If this Agreement or any portion hereof shall be invalidated on any
ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.
8. Exceptions. Notwithstanding any other provision herein to the contrary, the
Company shall not be obligated pursuant to the terms of this Agreement:
     (a) Claims Initiated by Indemnitee. To indemnify or advance expenses to
Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
14A:3-5 of the New Jersey Business Corporation Act, but such indemnification or
advancement

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of expenses may be provided by the Company in specific cases if the Board of
Directors has approved the initiation or bringing of such suit; or
     (b) Lack of Good Faith. To indemnify Indemnitee for any expenses incurred
by the Indemnitee with respect to any proceeding instituted by Indemnitee to
enforce or interpret this Agreement, if a court of competent jurisdiction
determines that each of the material assertions made by the Indemnitee in such
proceeding was not made in good faith or was frivolous; or
     (c) Duplication of Payments. To indemnify Indemnitee for expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) which
actually have been paid to Indemnitee under a valid and collectible insurance
policy, a provision of the Company’s Certificate of Incorporation or Bylaws, or
another valid and enforceable indemnity agreement; or
     (d) Claims Under Section 16(b) of 1934 Act. To indemnify Indemnitee for
expenses and an accounting of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any successor statute.
9. Exceptions Under New Jersey Law. Notwithstanding any other provision of this
Agreement, pursuant to the New Jersey Business Corporation Act, no
indemnification shall be made under this Agreement to or on behalf of the
Indemnitee if a judgment or other final adjudication adverse to the Indemnitee
establishes that the Indemnitee’s acts or omissions (a) were in breach of
Indemnitee’s duty of loyalty to the Company or its shareholders (as defined in
14A:2-7(3) of the New Jersey Business Corporation Act), (b) were not in good
faith or involved a knowing violation of law, or (c) resulted in receipt by the
Indemnitee of an improper personal benefit.
10. Construction Of Certain Phrases. For purposes of this Agreement, the
following terms and references shall have the following meanings:
     (a) References to the “Company” shall include, in addition to the resulting
corporation in any consolidation, merger or similar business combination, any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or merger or similar business combination which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that if Indemnitee is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, Indemnitee shall stand in the same position under the
provisions of this Agreement with respect to the resulting or surviving
corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.
     (b) References to “other enterprises” shall include employee benefit plans;

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     (c) References to “fines” shall include any excise taxes assessed on
Indemnitee with respect to an employee benefit plan;
     (d) References to “serving at the request of the Company” shall include any
service as a director, officer, employee or agent of the Company which imposes
duties on, or involves services by, such director, officer, employee or agent
with respect to an employee benefit plan, its participants, or beneficiaries;
and
     (e) If Indemnitee acted in good faith and in a manner Indemnitee reasonably
believed to be in the interest of the participants and beneficiaries of an
employee benefit plan, Indemnitee shall be deemed to have acted in a manner “not
opposed to the best interests of the Company” as referred to in this Agreement.
11. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall constitute an original.
12. Successors And Assigns. This Agreement shall be binding upon the Company and
its successors and assigns, and shall inure to the benefit of Indemnitee and
Indemnitee’s estate, heirs, legal representatives and assigns. The Company shall
require and cause any successor (whether direct or indirect, and whether by
purchase, merger, consolidation or otherwise) to agree in writing to assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform if no such succession had taken place.
13. Attorneys’ Fees. In the event that any action is instituted by Indemnitee
under this Agreement to enforce or interpret any of the terms hereof, Indemnitee
shall be entitled to be paid all costs and expenses, including reasonable
attorneys’ fees, incurred by Indemnitee with respect to such action, unless as a
part of such action, the court of competent jurisdiction determines that each of
the material assertions made by Indemnitee as a basis for such action were not
made in good faith or were frivolous. In the event of an action instituted by or
in the name of the Company under this Agreement or to enforce or interpret any
of the terms of this Agreement, Indemnitee shall be entitled to be paid all
costs and expenses, including reasonable attorneys’ fees, incurred by Indemnitee
in defense of such action (including with respect to Indemnitee’s counterclaims
and cross-claims made in such action), unless as a part of such
action the court determines that each of Indemnitee’s material defenses to such
action were made in bad faith or were frivolous.
14. Notice. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed duly given (i) if delivered by
hand and receipted for by the party addressee, on the date of such receipt or
(ii) if mailed by domestic certified or registered mail with postage prepaid, on
the third business day after the date postmarked. Addresses for notice to either
party are as shown on the signature page of this Agreement, or as subsequently
modified by written notice.
15. Consent To Jurisdiction. The Company and Indemnitee each hereby irrevocably
consent to the jurisdiction of the courts of the State of New Jersey for all
purposes in connection with any

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action or proceeding which arises out of or relates to this Agreement and agree
that any action instituted under this Agreement shall be brought only in the
state courts of the State of New Jersey.
16. Choice Of Law. This Agreement shall be governed by and its provisions
construed in accordance with the laws of the State of New Jersey, as applied to
contracts between New Jersey residents entered into and to be performed entirely
within New Jersey without regard to the conflict of law principles thereof.
17. Period Of Limitations. No legal action shall be brought and no cause of
action shall be asserted by or in the right of the Company against Indemnitee,
Indemnitee’s estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two-year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.
18. Subrogation. In the event of payment under this Agreement, the Company shall
be subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all documents required and shall do all acts that
may be necessary to secure such rights and to enable the Company effectively to
bring suit to enforce such rights.
19. Amendment; Termination. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless it is in writing signed
by both the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar), nor shall any such waiver constitute a continuing
waiver.
20. No Construction as Employment Agreement. Nothing contained in this Agreement
shall be construed as giving Indemnitee any right to continue in the employment
of the Company.
21. Entire Agreement. This Agreement sets forth the entire understanding between
the parties hereto and supersedes and merges all previous written and oral
negotiations, commitments, understandings and agreements relating to the subject
matter hereof between the parties hereto.
[signatures on following page]

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[signature page – Indemnification Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
COMPANY:
MEDQUIST INC.

         
By:
  /s/ Howard S. Hoffmann    
 
 
 
Howard S. Hoffmann    
 
  Chief Executive Officer & President    

Address for service:
MedQuist Inc.
Attn: General Counsel
1000 Bishops Gate Blvd., Suite 300
Mt. Laurel, NJ 08054
AGREED TO AND ACCEPTED:
INDEMNITEE:
WARREN PINCKERT

     
/s/ Warren Pinckert
   
 
Signature
   
 
   
Address for service:
   
 
   
 
   
 
   
 
   

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