exv10w1






Exhibit 10.1




SEPARATION AGREEMENT AND GENERAL RELEASE




          This Separation Agreement and General Release (“Agreement”) is hereby entered into by R. Scott
Bennett (“BENNETT”) and MedQuist Inc., together with its parents, subsidiaries, divisions,
affiliates, related companies, predecessors and successors (“MEDQUIST”).




          1. Departure Date. BENNETT’s employment with MEDQUIST ended effective October 30,
2008 (the “Departure Date”). As of the Departure Date, BENNETT was relieved of all titles, duties,
responsibilities and authority as an officer of MEDQUIST.




          2. Termination of Employment Agreement/Survival of Certain Provisions. As of the
Departure Date, BENNETT understands and agrees that the October 26, 2005 Employment Agreement
between BENNETT and MEDQUIST (the “Employment Agreement”), was terminated, except as may otherwise
be provided for in the Employment Agreement or as may be required by operation of law. Without
limiting the foregoing, BENNETT understands and agrees that the covenants and enforcement
provisions of Section 4 of the Employment Agreement shall remain in effect in accordance with their
terms. A true and correct copy of the Employment Agreement is attached hereto as Exhibit
A.




          3. No Future MedQuist Employment. BENNETT understands and agrees that: (a) he has no
intention of applying for and will not apply for or otherwise seek reemployment or reinstatement
with MEDQUIST; and (b) MEDQUIST has no obligation to reinstate, rehire, reemploy or hire BENNETT at
any time in the future.




          4. Separation Benefits. In consideration for BENNETT entering into this Agreement and
fully abiding by its terms, and assuming BENNETT has not revoked the Agreement as described in
Paragraph 18 below, MEDQUIST agrees to provide BENNETT with the separation benefits set forth in
Section 5 of the Employment Agreement.




          5. No Other Compensation or Benefits Owing. BENNETT understands and agrees that,
except as otherwise provided for in this Agreement and as may be required by the Employment
Agreement and the Retention and Strategic Transaction Bonus Agreement between MEDQUIST and BENNETT
dated September 19, 2007 (the “Retention Agreement”), BENNETT is not and will not be due any other
compensation or benefits from MEDQUIST. As set forth in the Retention Agreement, BENNETT shall be
entitled to the Success Based Retention Bonus payment described in the Retention Agreement upon
full execution of this Agreement.




          6. Release by BENNETT. In consideration of the compensation, benefits and agreements
provided for pursuant to this Agreement and the Employment Agreement, the sufficiency of which is
hereby acknowledged, BENNETT, for himself and for any person who
may claim by or through him, releases and forever discharges MEDQUIST, and its past, present
and future parents, subsidiaries, divisions, affiliates, related companies, predecessors,
successors, officers, directors, attorneys, agents, and employees (the “Releasees”), from any and
all claims or causes of action that BENNETT had, has or may have, relating to BENNETT’S employment
with and/or termination from MEDQUIST, up until the date of this Agreement, including, but




 









 







not limited to, any claims arising under Title VII of the Civil Rights Act of 1964, as amended, Section
1981 of the Civil Rights Act of 1866, as amended, the Civil Rights Act of 1991, as amended, the
Family and Medical Leave Act, the Age Discrimination in Employment Act, as amended by the Older
Workers Benefit Protection Act of 1990 (“ADEA”), the Americans with Disabilities Act, the Employee
Retirement Income Security Act (“ERISA); claims under any other federal, state or local statute,
regulation or ordinance; claims for discrimination or harassment of any kind, breach of contract or
public policy, wrongful or retaliatory discharge, defamation or other personal or business injury
of any kind; claims for breach of any agreement between BENNETT and MEDQUIST or for any
compensation or benefits provided for pursuant to any such agreement; and any and all other claims
to any form of legal or equitable relief or damages; any other claims for compensation or benefits;
or any claims for attorneys’ fees or costs.




          7. Exclusion for Certain Claims. BENNETT and MEDQUIST understand and agree that the
release in Paragraph 6 shall not apply to any claims, including any claims under ADEA, arising
after the effective date of this Agreement, nor shall anything herein prevent any party from
instituting any action to enforce the terms of this Agreement.




          8. Exclusion of Filing EEOC Charges/Waiver of Individual Recovery. BENNETT and
MEDQUIST understand and agree that nothing in this Agreement shall prevent BENNETT from filing a
charge with the Equal Employment Opportunity Commission (“EEOC”), or from participating in any EEOC
investigation or proceeding; provided, however, that BENNETT waives any and all rights to recover
any individual damages or relief in connection with any EEOC investigation or proceeding.




          9. Disclosure of Any Material Information. As of the date BENNETT signs this
Agreement, BENNETT represents and warrants that he has disclosed to MEDQUIST any information in
his possession concerning any conduct involving MEDQUIST that he has any reason to believe may be
unlawful, violates any MEDQUIST policy or would otherwise reflect poorly on MEDQUIST in any
respect.




          10. Duty to Cooperate. BENNETT understands and agrees that he shall cooperate fully
with MEDQUIST regarding any matter, including, but not limited to, any litigation, investigation,
governmental proceeding or internal MEDQUIST review, which relates to any matter in which BENNETT
was involved or concerning which MEDQUIST reasonably determines BENNETT may have responsive or
relevant information. BENNETT further understands and agrees that such cooperation includes, but
is not limited to, full disclosure of all relevant information; truthfully testifying and/or
answering questions; and making himself reasonably available for interviews, depositions or court
appearances in connection with any such litigation, investigation, proceeding or internal MEDQUIST
review. BENNETT understands and agrees that he shall render any such cooperation in a timely
manner and at such times and places as may be mutually agreeable to BENNETT and MEDQUIST. Upon
submission of appropriate documentation, MEDQUIST shall reimburse BENNETT for reasonable
travel, lodging, meals, and telecommunications expenses incurred by BENNETT in connection with his
compliance with this Paragraph. Except as may be prohibited by operation of law, BENNETT
understands and agrees that he shall immediately notify MEDQUIST if he is contacted for an
interview or receives a subpoena or request for information in any matter related




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to or concerning
his employment with MEDQUIST. BENNETT further understands and agrees that he will not initiate any
communication or respond to any inquiry with a member of the press regarding MEDQUIST, and will
refer any such inquiry to MEDQUIST, unless BENNETT is responding to a press release or other
communication issued by MEDQUIST regarding BENNETT’S employment with MEDQUIST.




          11. Return of Property. BENNETT represents and warrants that as of the date he signs
this Agreement he has returned all property of MEDQUIST, regardless of the type or medium (i.e.,
hard or flash drive, computer disk, CD-ROM, DVD-ROM) upon which it is maintained, including, but
not limited to, all customer lists, vendor lists, business plans and strategies, financial data or
reports, memoranda, correspondence, software, contract terms, compensation and commission plans,
and any other documents pertaining to the business of MEDQUIST, or its customers or vendors, as
well as any credit cards, keys, identification cards, and any other documents, writings and
materials that BENNETT came to possess or otherwise acquired as a result of and/or in connection
with BENNETT’s employment with MEDQUIST. Should BENNETT later find any MEDQUIST property in
BENNETT’s possession, BENNETT agrees to immediately return it. BENNETT further agrees not to
maintain any copies of said property or make any copies of said property available to any
third-party.




          12. Non-Disparagement. The parties agree not to engage in any form of conduct or to
make any statements or representations that disparage or otherwise impair the reputation, goodwill
or commercial interests of BENNETT or MEDQUIST.




          13. Remedies for Breach. BENNETT understands and agrees that a breach of this
Agreement or any provision of the Employment Agreement that survives its expiration will result in
immediate and irreparable injury to MEDQUIST. BENNETT, therefore, agrees that, in addition to any
remedy MEDQUIST may have under the Agreement, the Employment Agreement, or applicable law, MEDQUIST
shall be entitled to a forfeiture of any amounts still due and owing to BENNETT under the terms of
this Agreement or the Employment Agreement. Nothing herein shall be construed as prohibiting
MEDQUIST from pursuing any other remedies for any breach.




          14. Non-Admission by MedQuist. BENNETT understands and agrees that this Agreement
shall not be deemed or construed as an admission of liability by MEDQUIST for any purpose.
Specifically, but without limiting the foregoing, BENNETT understands and agrees that this
Agreement shall not constitute an admission that any action by MEDQUIST relating to BENNETT was in
any way wrongful or unlawful. BENNETT further agrees that nothing contained in this Agreement can
be used by BENNETT, or any other individual in any way as precedent for future dealings with
MEDQUIST, or any of its officers, directors, attorneys, agents or employees.




          15. General.




               (a) Severability. If any provision of this Agreement is found by a court of competent
jurisdiction to be unenforceable, in whole or in part, then that provision will be eliminated,
modified or restricted in whatever manner is necessary to make the remaining provisions enforceable
to the maximum extent allowable by law.



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               (b) Successors. This Agreement shall be binding upon, enforceable by, and inure to
the benefit of BENNETT, MEDQUIST and each Releasee, and BENNETT’s and MEDQUIST’s personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees,
and to any successor or assign of each Releasee, but neither this Agreement, nor any rights,
payments, or obligations arising hereunder may be assigned, pledged, transferred, or hypothecated
by BENNETT or MEDQUIST.



               (c) Controlling Law and Venue. This Agreement shall be construed and enforced under
the laws of and before the courts of the State of New Jersey. Any action relating to this
Agreement or the Employment Agreement shall be brought in state court in Burlington County, New
Jersey, or in Federal Court for the District of New Jersey.



               (d) Waiver. No claim or right arising out of a breach or default under this Agreement
can be discharged by a waiver of that claim or right unless the waiver is in writing signed by the
party hereto to be bound by such waiver. A waiver by any party hereto of a breach or default by
another party of any provision of this Agreement shall not be deemed a waiver of future compliance
therewith and such provision shall remain in full force and effect.



               (e) Notices. All notices, requests, demands and other communications regarding this
Agreement shall be in writing and delivered in person or sent by Registered or Certified U.S. Mail,
Postage Prepaid, Return Receipt Requested, and properly addressed as follows:



	 	 	 	 	 
	 

	 	To MEDQUIST:
	 	MedQuist Inc.
	 

	 	 	 	1000 Bishops Gate Boulevard
	 

	 	 	 	Suite 300
	 

	 	 	 	Mt. Laurel, NJ 08054-4632
	 

	 	 	 	Attention: General Counsel
	 
	 	 	 	 
	 

	 	To BENNETT:
	 	R. Scott Bennett
	 

	 	 	 	6 Kenwood Court
	 

	 	 	 	Malvern, PA 19355






          16. Entire Agreement/Amendment. The parties hereto agree that this Agreement and
those provisions of the Employment Agreement that survive its expiration constitutes the entire
agreement between BENNETT and MEDQUIST, and that neither may be modified except by written
document, signed by the parties hereto.




          17. Knowing and Voluntary Action. BENNETT acknowledges that he received this
Agreement on October 30, 2008 and has consulted an attorney before signing this Agreement. BENNETT
further represents and warrants that he has read this Agreement; has been given a period of at
least twenty one (21) days to consider the Agreement; understands its
meaning and application; and is signing of his own free will with the intent of being bound by
it. If BENNETT elects to sign this Agreement prior to the expiration of twenty one (21) days, he
has done so voluntarily and knowingly.




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          18. Revocation of Agreement. BENNETT further acknowledges that he may revoke this
Agreement at any time within a period of seven (7) days following the date he signs the
Agreement. Notice of revocation shall be made in writing, sent via Registered or Certified U.S.
Mail, Postage Prepaid, Return Receipt Requested and properly addressed to MEDQUIST in accordance
with Paragraph 15 above. Such revocation must be received by MEDQUIST by the close of business of
the first day following the end of the seven-day revocation period. This Agreement shall not
become effective until after the time period for revocation has expired.




          IN WITNESS WHEREOF, the parties have executed and agreed to this Agreement consisting of five
(5) pages.




	 	 	 	 	 	 	 
	 	 	R. SCOTT BENNETT	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ R. Scott Bennett	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Date: November 6, 2008	 	 
	 
	 	 	 	 	 	 
	 	 	MEDQUIST INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Peter Masanotti	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Title: President and CEO	 	 
	 
	 	 	 	 	 	 
	 	 	Date: November 14, 2008	 	 






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Exhibit A




(see attached)




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October 26, 2005




Via Overnight Mail and Facsimile

Mr. R. Scott Bennett

6 Kenwood Court

Malvern, PA 19355




Dear Scott:




          On behalf of MedQuist Inc. (the “Company”), this Agreement describes the terms of your
new employment as the Company’s Senior Vice President — Sales & Marketing, which must commence on a
date mutually agreed to in writing by you and the Company (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 7, below.




          1. Term. 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 Sections 3 or 5 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 $240,000, subject to
review and adjustment annually during the Term;



               (2) signing bonus of $150,000 to be paid within thirty (30)
days of Employment Commencement Date. In the event that you voluntarily resign from the Company
within your first 12 months of employment, this signing bonus must be repaid on a pro rata basis.



               (3) participate in MedQuist’s Management Bonus Plan,
commencing in 2006. Your target bonus in this plan will be 45% of your base salary for 2006 and
following years. The target bonus is the payment amount that the Employee shall be eligible to
receive if the Company and Employee both attain the pre-established bonus plan target objectives.
The actual bonus award may be higher or lower than the target bonus amount based upon achievement
of the objectives by Employee and the Company. Management Bonus Plan target objectives shall be
developed on or before February 28th of each year of the Management Bonus Plan. Payment
of $54,000, which is equal to half of your annual target bonus for the year ending December 31,
2006, is guaranteed;



 









 





               (4) 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);



               (5) receive relocation support in accordance with the Company
Relocation Policy. This relocation offer will be in effect for the first twenty-four (24) months
of your employment;



               (6) if Employee’s employment is terminated by the Company
without Cause, the severance pay and benefits described below in Section 5.



               b. Long Term Incentives. In addition, from time to
time, the Board may review the performance of the Company and Employee and, in its sole discretion,
may grant stock options, shares of restricted stock or other equity-based incentives to Employee to
reward extraordinary performance and/or to encourage Employee’s future efforts on behalf of the
Company. The grant of any such equity incentives will be subject to the terms of the Company’s
equity-based plans and will be evidenced by a separate award agreement by and between the Company
and Employee.



               (1) Upon joining MedQuist, you will become entitled to a
special stock option grant of 60,000 shares of non-qualified stock options (“Special Option Grant”)
to purchase Company common stock, no par value (“Common Stock”), pursuant to the Company’s Stock
Option Plan adopted May 29, 2002 (the “Option Plan”). The grant date of the Special Option Grant
will occur on the later of (i) the date the Company becomes current in its reporting obligations
under the Securities Exchange Act of 1934; or (ii) the first date thereafter when the Form S8
Registration Statement for the Option Plan complies with the requirement of the Securities Exchange
Commission provided that you are still an employee on the grant date. The option price for the
Special Option Grant shall be equal at least to the fair market value of the Company’s Common Stock
as of the grant date. The Special Option Grant will be subject to all of the terms and conditions
of the Option Plan and the Stock Option Agreement that will be issued if and when the grant becomes
effective. Your right to exercise the option will vest in equal 20% installments on each of the
first five (5) anniversaries of the grant date. In the event of a “Change of Control” (as defined
below) of the Company while you are an employee, your Special Option Grant may, from and after the
date which is six months after the Change of Control (but not beyond the expiration date of the
option), be exercised for up to 100% of the total number of shares then subject to the Special
Option Grant minus the number of shares previously purchased upon exercise of such option (as
adjusted for any change in the outstanding shares of the Common Stock of the Company in accordance
with the terms of the Option Plan) and your vesting date will accelerate accordingly. A “Change of
Control” shall be deemed to have occurred upon the happening of any of the following events:



                    (i) A change within a twelve-month period in the holders
of more than 50% of the outstanding voting stock of the Company; or



                    (ii) Any other event deemed to constitute a “Change of
Control” by the Company’s Board of Directors.



 









 





               (2) Contingent upon Employee’s continued attainment of
performance objectives, the Company agrees to deliver a long term incentive value of $120,000
annually through one of the following, as determined in the Company’s sole discretion: (i) a stock
option grant pursuant to the Option Plan, (ii) a restricted stock grant or (iii) a cash-based long
term incentive program to be developed. The long term incentive value of Company stock will be
calculated based on an industry accepted stock valuation methodology.



          3. Employment-At-Will. Nothing contained in
this Agreement is intended to create an employment relationship whereby Employee will be employed
other than as an “at-will” employee. Employee’s employment by the Company may be terminated by
Employee or the Company at any time; provided, however, that while employed by the Company, the
terms and conditions of Employee’s employment by the Company will be as herein set forth; and
provided further, that Section 4 of this Agreement will survive the termination of
Employee’s employment.




          4. Covenants.




          a. Non-Solicitation. While employed by the
Company and for the twelve (12) month 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 twelve (12) month 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 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; and



                    (iii) any obligation of the Company to provide severance pay
or benefits (whether pursuant to Section 5 or otherwise) will cease.



               (3) In addition to the remedies specified in Section
4(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 4, 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.



          5. 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 4(f)(2)(iii), if Employee’s employment is terminated by the Company
without Cause, Employee will be entitled to (a) continued payment of his base salary (at the rate
in effect upon termination) for a period of 12 months; (b) a payment equal to the average of the
last three bonuses from the MedQuist Management Bonus Plan received by Employee. In the event that
there are not three full years of employment, then the average of the last two years will apply.
If less than two years, the target bonus will be paid; and notwithstanding the foregoing, no amount
will be paid or benefit provided under this Section 5 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, which release shall not conflict with any of the terms of this
Agreement without the mutual written consent of Employee and Company, and (y) such release becomes
irrevocable. Any severance pay or benefits provided under this Section 5 will be in lieu
of, not in addition to, any other severance arrangement maintained by the Company.




          6. Miscellaneous.




          a.
Arbitration. Except a controversy or claim arising out or relating to Section 4 of this
Agreement, any controversy or claim arising out of or relating to this Agreement or the breach of
any covenant or agreement contained herein, shall be commenced by filing a notice (the “Notice”)
for arbitration with the American Arbitration Association (“AAA.”), with a copy to the other party
hereto. Such controversy or claim shall be decided by arbitration in Philadelphia, Pennsylvania,
in accordance with the Employment Arbitration Rules of the AAA. then obtaining. The decision and
the award of damages rendered by the Arbitrator shall be final and binding and judgment may be
entered upon it in any court having jurisdiction thereof.




          b. 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.




          c.
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.




          d.
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.




 









 








          e.
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.




          f.
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.




          g.
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.




          h.
Successors and Assigns. This Agreement is binding on the Company’s successors and assigns.




          i.
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.




          j.
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.




     7. 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 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 4 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 five (5) days of the date of this Agreement and
return a signed copy to my attention. If the Agreement is not signed and returned within (5) days,
the terms and conditions of this Agreement will be deemed withdrawn.




	 	 	 	 	 	 	 	 	 
	 	 	 	 	Sincerely,	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	MEDQUIST INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Frank W. Lavelle
	 	 
	 

	 	 	 	 	 	President	 	 
	 
	 	 	 	 	 	 	 	 
	Accepted and Agreed:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

R. Scott Bennett