(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
6
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