Exhibit 10.1
August 2, 2011
Robert Aquilina
c/o MedQuist Holdings Inc.
9009 Carothers Parkway, Suite C-2
Franklin, TN 37067
Dear Bob:
This letter (this “Agreement and Release”), upon your signature, confirms the
entire agreement between MedQuist Holdings Inc. (“Holdings”), CBay Inc. (the
“Company”), MedQuist Inc. (“MedQuist” and, together with Holdings and the
Company and its and their subsidiaries and affiliates, the “Company Group”) and
you regarding the terms of your separation from employment with the Company
Group.

1)   You and the Company Group hereby agree that your employment as Executive
Chairman of Holdings and any and all appointments you hold with the Company
Group as an officer or employee, terminated as of June 30, 2011 (the “Separation
Date”). In addition, you and the Company Group acknowledge that you served as
the non-Executive Chairman of the Board of Directors of Holdings from July 1,
2011 through July 11, 2011. Effective as of the Separation Date, you shall have
no authority to act as an executive officer on behalf of any member of the
Company Group and shall not hold yourself out as having such authority or
otherwise act in an executive capacity. Regardless of whether you sign this
Agreement and Release, the Company will pay you all earned but unpaid salary, if
any, through the Separation Date on the first payroll period to occur following
the Separation Date.   2)   Subject to your execution, delivery and
non-revocation of this Agreement and Release (including with respect to the
general release granted herein) within sixty (60) days following the Separation
Date (such 60-day period, the “Release Period”) and subject to your execution of
the Termination of Management Stockholder’s Agreement (the “Termination
Agreement”), attached hereto, as Exhibit A, the continued effectiveness of this
Agreement and Release and your continued performance of your ongoing obligations
to the Company Group under Sections 7 through 9, and in lieu and full
satisfaction of any payments or benefits to which you may otherwise have been
entitled pursuant to Section 8(c) of the Employment Agreement, dated August 8,
2008, between you, Holdings and the Company, as amended by Amendment No. 1 to
the Employment Agreement, dated February __, 2011, between you, Holdings and the
Company (the “Employment Agreement”):

  a)   The Company will pay you severance pay equal to your annual base salary
of $500,000, which amount will be paid to you over twelve (12) months in
substantially equal installments as per the Company’s regularly scheduled
payroll cycle, less all applicable taxes and withholdings; provided, that the
first installment shall not be paid until the first payroll date to occur after
the expiration of the six-month period

 

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Robert Aquilina
August 2, 2011

      commencing on the Separation Date, but shall include all installments that
otherwise would have been paid during such six-month period.     b)   The
Company will pay you additional severance pay in the gross amount of $475,000,
which amount will be paid to you over twelve (12) months in substantially equal
installments as per the Company’s regularly scheduled payroll cycle, less all
applicable taxes and withholdings; provided, that the first installment shall
not be paid until the first payroll date to occur after the expiration of the
six-month period commencing on the Separation Date, but shall include all
installments that otherwise would have been paid during such six-month period.  
  c)   In the event of your death prior to the receipt of any or all
installments under Sections 2(a) and 2(b) of this Agreement and Release, such
installments (or the balance of any such installments, as applicable) shall be
paid to your estate; provided, that you or your estate, as applicable, have
satisfied the conditions set forth in the first sentence of Section 2 of this
Agreement and Release.     d)   A schedule of all outstanding stock options
granted to you under the CBaySystems Holdings Limited 2007 Equity Incentive Plan
(the “2007 Plan”) and the Share Option Agreement under the 2007 Plan, dated
April 17, 2009 (the “Option Agreement”) is set forth on Schedule A, attached
hereto, which schedule reflects that all options granted to you under the Option
Agreement vested prior to the Separation Date. The Option Agreement is hereby
amended to provide that, notwithstanding anything to the contrary provided
therein, subject to earlier termination in accordance with the Option Agreement,
as amended by this Section 2(d), or Section 8 of this Agreement and Release, all
outstanding options to purchase shares of common stock of Holdings held by you
on June 30, 2011 (as set forth on Schedule A), shall remain exercisable by you
or in the event of your death, your estate, until December 30, 2012 and, on or
after December 31, 2012, such options shall terminate automatically and shall
not be exercisable.

    You agree that the payments and benefits provided for in this Section 2 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
or provide such compensation or benefits, even though the payments and benefits
provided in this Section 2 may be processed or otherwise delivered through
Insperity.   3)   On behalf of yourself, your agents and assigns, in
consideration for the Company’s and Holdings’ obligations under Section 2 of
this Agreement and Release, you hereby waive and release any and all claims,
whether known or unknown, that you have 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 and their respective predecessors, subsidiaries, affiliates and
related entities and their respective officers, directors, shareholders, agents,
attorneys, employees, successors, or assigns (collectively, the “Released
Parties”), arising from or out of your employment with and/or the termination of
your employment with the Company Group. These claims include, but are

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Robert Aquilina
August 2, 2011

    not limited to, claims arising under: Title VII of the Civil Rights Act of
1964, as amended; The Employee Retirement Income Security Act of 1974, as
amended; The Americans with Disabilities Act of 1990, as amended; The Age
Discrimination in Employment Act of 1967, as amended (“ADEA”); The Workers
Adjustment and Retraining Notification Act, as amended; the New Jersey Law
Against Discrimination; the New Jersey Conscientious Employee Protection Act;
the New Jersey Family Leave Act; the New Jersey Civil Rights Act; the New Jersey
Equal Pay Act; and any other federal, state or local discrimination, harassment,
civil or human rights law or any other local, state or federal law, regulation
or ordinance; any public policy, contract, tort, or common law; any Company
Group compensation or benefit plan under which you were eligible, except as
expressly provided herein; any stock options granted to you during your
employment with the Company Group, except as expressly provided herein; and any
claim for costs, fees, or other expenses including attorneys’ fees incurred by
you in connection with such matters. Nothing herein is intended to release any
claim that is unwaivable by law or governmental regulation, any rights you may
have to indemnification provided under any applicable insurance policy or
Holdings’ or the Company’s charter or by-laws, or any obligation of the Company
or Holdings under this Agreement and Release.   4)   You also acknowledge that
there may exist claims or facts in addition to or different from those which are
now known or believed by you to exist and agree that it is your intention to
fully settle and release such claims against any of the Released Parties,
whether known or unknown, that may exist as of the time you sign this Agreement
and Release. You acknowledge that you have read this Agreement and Release and
understand you may later discover facts different from or in addition to those
known or now believed to be true with respect to the matters released or
described in this Agreement and Release. You agree that the release and
agreements contained in this Agreement and Release shall be and will remain
effective in all respects notwithstanding any later discovery of any such
different or additional facts.   5)   You affirm that you have been paid and
have received all leave (paid and unpaid), compensation, salary, wages, bonuses,
commissions and/or benefits to which you may be entitled as an executive officer
of the Company Group and that no other leave (paid or unpaid), compensation,
salary, wages, bonuses, commissions and any benefits are due to you, except as
provided in this Agreement and Release. The Company will reimburse you for
reasonable and customary business expenses incurred prior to the Separation Date
pursuant to the terms of the Company’s Business Expense Policy; provided that
you submit a completed expense reimbursement form and supporting documentation
no later than fifteen (15) days following the Separation Date. You further
affirm that you have no known workplace injuries or occupational diseases, other
than any injuries or diseases that have been previously reported.   6)   You
agree that you will return to the Company Group on or before the Separation Date
all Company Group property within your possession, custody or control, including
any equipment issued to you by Holdings, MedQuist and the Company for your use
during employment with the Company Group and any confidential and proprietary
information (including, without limitation, customer and vendor names and
contact information, customer

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Robert Aquilina
August 2, 2011

    licensing and support information, sales and forecast information, operating
plan and budget information, employee lists and organizational charts, board
presentations, etc.), whether in hardcopy or electronic form; and keys and
access badges.   7)   To the fullest extent permitted by law, at no time
subsequent to the execution of this Agreement and Release will you pursue, or
cause or knowingly permit the prosecution, in any state, federal or foreign
court, or before any local, state, federal or foreign administrative agency, or
any other tribunal, any charge, claim or action of any kind, nature and
character whatsoever, known or unknown, which you may now have, have ever had,
or may in the future have against any of the Released Parties, which is based in
whole or in part on any claim covered under Section 3 of this Agreement and
Release. Nothing in this Section 7 shall preclude you from (i) enforcing this
Agreement and Release or exercising any rights that you may have that have not
been waived under the terms of this Agreement and Release; (ii) initiating or
causing to be initiated on your behalf any complaint, charge, claim or
proceeding against any of the Released Parties before any local, state or
federal agency, court or other body challenging the validity of the waiver of
your claims under ADEA contained in Section 3 (but no other portion of such
waiver); or (iii) initiating or participating in (but not benefiting from) an
investigation or proceeding conducted by the Equal Employment Opportunity
Commission with respect to ADEA.   8)   You agree to continue to abide by the
terms of Sections 9 (Non-Competition) and 10 (Confidentiality; Intellectual
Property) of the Employment Agreement. In the event that the Board of Directors
of Holdings determines, in its reasonable discretion and acting in good faith
that you have breached the terms of Sections 9 or 10 of the Employment
Agreement, the Company (i) shall immediately cease and have no further
obligation to make any further installments of the severance payments set forth
in Sections 2(a) and 2(b) of this Agreement and Release, and (ii) any
outstanding and unexercised options held by you under the Option Agreement shall
expire immediately.   9)   You hereby agree not to defame or disparage any
member of the Company Group or any executive, manager, director, or officer of
any member of the Company Group in any medium to any person without limitation
in time. The Company Group hereby agrees that members of the Board of Directors
of the Company and Holdings and the executive officers of the Company and
Holdings shall not defame or disparage you in any medium to any person without
limitation in time. Notwithstanding this provision, each of you, Holdings and
the Company may confer in confidence with your or its legal representatives and
make truthful statements as required by law.   10)   Each installment of the
severance payment set forth in Section 2 is intended to be treated as a series
of separate payments at all times for purposes of Section 409A of the Internal
Revenue Code of 1986, as amended, and Treasury
Regulation Section 1.409A-2(b)(2)(iii) (or any similar or successor provisions).
  11)   This Agreement and Release sets forth the entire agreement between the
parties hereto related to the termination of your employment, and fully
supersedes any prior agreements or understandings between the parties hereto
related to the subject matter hereof, except for (i)

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Robert Aquilina
August 2, 2011

    any benefit plans applicable to COBRA continuation, (ii) the Option
Agreement, as amended pursuant to Section 2(d) of this Agreement and Release,
and (iii) the Termination Agreement. This Agreement and Release shall terminate
and fully extinguish any and all rights that you may have under the Employment
Agreement. You acknowledge that you have not relied on any representations,
promises, or agreements of any kind made to you by the Company, Holdings or
MedQuist in connection with your decision to accept this Agreement and Release,
except for those set forth in this Agreement and Release.   12)   This Agreement
and Release shall be governed and conformed in accordance with the laws of the
State of New York without regard to its conflicts of law provisions.   13)  
This Agreement and Release may not be modified, altered or changed except upon
express written consent of each of the Company, Holdings, MedQuist and you
wherein specific reference is made to this Agreement and Release.   14)   Should
any of the provisions of this Agreement and Release be determined to be invalid
by a court, arbitrator, or government agency of competent jurisdiction, it is
agreed that such determination shall not affect the enforceability of the other
provisions herein. Specifically, should a court, arbitrator, or agency conclude
that a particular claim may not be released or a restrictive covenant may not be
enforced as a matter of law, it is the intention of the parties that the general
release, the waiver of unknown claims, and the covenant not to sue shall
otherwise remain effective to release any and all other claims covered thereby.
  15)   You have up to twenty-one (21) days from the date of your receipt of
this letter to accept the terms of this Agreement and Release, although you may
accept it at any time within those twenty-one (21) days. You are advised to
consult an attorney about whether or not to sign this Agreement and Release.  
16)   To accept this Agreement and Release, please sign and date this letter and
return it to the General Counsel of Holdings no later than the twenty-one
(21) day period referred to in Section 15 above. Once you do so, you will have
an additional seven (7) days in which to revoke your acceptance. To revoke, you
must deliver to the General Counsel of the Holdings a written statement of
revocation no later than seven (7) days after you execute this Agreement and
Release. If you do not submit your revocation, then the eighth (8th) day after
your execution of this Agreement and Release will be the “Effective Date” of
this Agreement and Release. If the last day of the revocation period is a
Saturday, Sunday, or legal holiday in the state in which you were employed at
the time of your last day of employment, then the revocation period shall not
expire until the next following day which is not a Saturday, Sunday, or legal
holiday. If you revoke this Agreement and Release, you will have no right or
entitlement to any of the payments or benefits described in this Agreement and
Release (except as described in Section 1). You will not be entitled to receive
any of the payments or benefits provided in any Section of this Agreement and
Release, other than Section 1, until the occurrence of the Effective Date. You
hereby acknowledge and agree that you have been provided with a copy of this
Agreement and Release on or prior to the Separation Date and understand that
this Agreement and Release must become effective prior to the expiration of

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Robert Aquilina
August 2, 2011

    the Release Period defined in Section 2 in order for you to be entitled to
the severance payments and benefits described in Section 2.   17)   This
Agreement and Release 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 and Release (or
its signature page thereof) shall be deemed to be an executed original thereof.

[Remainder of Page Intentionally Left Blank]

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Robert Aquilina
August 2, 2011
I wish you success in your future and professional efforts.
Sincerely,

                 
MEDQUIST HOLDINGS INC.
      MEDQUIST INC.
 
               
/s/
  Mark R. Sullivan       /s/   Mark R. Sullivan
 
               
By:
  Mark R. Sullivan       By:   Mark R. Sullivan
Its:
  General Counsel & Chief       Its:   General Counsel & Chief
 
  Compliance Officer           Compliance Officer

          CBAY INC.
    /s/ Kashyap Joshi     By: Kashyap Joshi    Its: Vice President Finance     

Acknowledgement and Acceptance:
By signing this Agreement and Release, I acknowledge that I have been advised to
review this Agreement and Release with an attorney before signing it, and have
had the opportunity to review this Agreement and Release with an attorney of my
choice, or have done or voluntarily chosen not to do so; that I have read the
and fully understand the terms of the Agreement and Release; and that I hereby
voluntarily agree to them.

                 
Dated:
  August 2, 2011       Signed:   /s/ Robert Aquilina
 
               
 
              Robert Aquilina

Effective as of the Separation Date, except for any continued services as a
non-employee director of the Board of Directors of Holdings, I hereby
acknowledge and confirm my resignation from all appointments and positions held
by me with any member of the Company Group, whether as an officer, director,
employee, consultant, agent or otherwise.

                 
Dated:
  August 2, 2011       Signed:   /s/ Robert Aquilina
 
               
 
              Robert Aquilina

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Schedule A
SCHEDULE OF OUTSTANDING STOCK OPTIONS
     The table below sets forth the outstanding options to purchase common stock
of MedQuist Holdings Inc., (“Holdings”) held by Robert Aquilina as of June 30,
2011 (the “Separation Date”) granted under the CBay Systems Holdings Limited
2007 Equity Incentive Plan (approved by Holdings on June 12, 2007 and amended by
the Board of Directors of Holdings on September 4, 2008).
Schedule of Outstanding Options to Purchase
Shares of Common Stock of
MedQuist Holdings Inc. Held by Robert Aquilina
as of the Separation Date

                                                                      Vested and
            Initial Exercise     Adjusted Exercise     Outstanding as of    
Exercisable as of         Grant Date   Price     Price     the Separation Date  
  the Separation Date     Expiration Date
August 6, 2008
  £3.15 per share   $5.01 per share     484,111       484,111     December 31,
2012
 
  $5.01 per share                                

 

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EXHIBIT A
TERMINATION OF MANAGEMENT STOCKHOLDER’S AGREEMENT
          This Agreement (this “Agreement”) is entered into as of July 28, 2011
among MedQuist Holdings Inc. (formerly known as CBaySystems Holdings Limited), a
Delaware corporation (the “Company”), S.A.C. PEI CB Investment, L.P., an
exempted limited partnership organized under the laws of the Cayman Islands
(“SAC CBI”), and Robert Aquilina (the “Management Stockholder”) (the Company,
SAC CBI and the Management Stockholder being hereinafter collectively referred
to as the “Parties”).
          WHEREAS, on April 17, 2009, the Parties entered into the Management
Stockholder’s Agreement (the “Original Agreement”) in connection with the
issuance and prospective issuance to the Management Stockholder of options (the
“Options”) to purchase shares of common stock (of the Company) pursuant to the
terms of the Original Agreement and the terms of the Company’s 2007 Equity
Incentive Plan (the “2007 Option Plan”) and the Stock Option Agreement entered
into by and between the Company and the Management Stockholder in respect
thereof (the “Option Agreement”); and
          WHEREAS, the Parties desire and wish to terminate the Original
Agreement,
          NOW THEREFORE, to implement the foregoing and in consideration of the
mutual agreements contained herein, the Parties agree as follows:
     1. Termination of Original Agreement. The Parties agree that the Original
Agreement is hereby terminated, subject to the conditions that (a) the shares of
the Company’s common stock issuable to the Management Stockholder under the
Option Agreement shall have been registered under the Securities Act of 1933, as
amended, and (b) the Company and the Management Stockholder shall have entered
into a Separation and General Release Agreement relating to the termination of
the Management Stockholder’s employment with the Company.
     2. Covenant Not to Disparage. The Management Stockholder agrees that he
shall not, at any time, disparage SAC CBI or any of its affiliates (as such term
is defined in Rule 405 under the Securities Act of 1933, as amended), or any of
the current or former directors, officers, agents, representatives, partners,
members or stockholders of any of the foregoing, either orally or in writing.
This provision shall apply in addition to the provisions of the above-mentioned
Separation and General Release Agreement.
     3. Binding Effect; Assumption. The provisions of this Agreement shall be
binding upon and accrue to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns.
     4. Applicable Law. The laws of the State of New York applicable to
contracts executed and to be performed entirely in such state shall govern the
interpretation, validity and performance of the terms of this Agreement.
     5. 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.
[Signatures on next pages.]

 

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          IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.

            MEDQUIST HOLDINGS INC.
      By:             Name:   Mark R. Sullivan        Title:   General Counsel &
Chief Compliance Officer     

[Signature Page to Aquilina — Termination of Management Stockholder’s Agreement]

 

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            S.A.C. PEI CB INVESTMENT, L.P., acting by its
general partner,
S.A.C. PEI CB Investment GP, Limited
      By:           Name:          Title:        

[Signature Page to Aquilina — Termination of Management Stockholder’s Agreement]

 

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            MANAGEMENT STOCKHOLDER:

      Robert Aquilina            ADDRESS:                   

[Signature Page to Aquilina — Termination of Management Stockholder’s Agreement]