Exhibit 10.12
February 9, 2005
Adele T. Barbato
514 Carriage House Lane
Harleysville, PA 19438
Dear Adele:
On behalf of MedQuist Inc. (the "Company"), this Agreement describes the terms
of your new employment as the Company's Senior Vice-President Human Resources,
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 $220,000;
(2)
SIGNING BONUS OF $70,000 TO BE PAID AS FOLLOWS: $45,000 TO BE PAID
WITHIN THIRTY (30) DAYS OF EMPLOYMENT COMMENCEMENT DATE AND THE REMAINING
$25,000 TO BE PAID ON THE TWELVE (12) MONTH ANNIVERSARY OF THE 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 FOR 2005.
YOUR
TARGET BONUS IN THIS PLAN WILL BE 40% OF YOUR BASE SALARY FOR 2005 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;
(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)
IF EMPLOYEE'S EMPLOYMENT IS TERMINATED BY THE COMPANY WITHOUT
CAUSE THE SEVERANCE PAY AND BENEFITS ARE 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