TO TIME) (BENEFITS
INFORMATION PACKAGE ENCLOSED);
(5)
RECEIVE RELOCATION SUPPORT IN ACCORDANCE WITH THE COMPANY
RELOCATION POLICY (TO BE FORWARDED UNDER SEPARATE COVER).
THIS RELOCATION
POLICY WILL BE IN EFFECT FOR THE FIRST 12 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 STOCK OPTION PLAN COMPLIES WITH THE
REQUIREMENT OF THE SECURITIES AND 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 SIXTY DAYS 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
2
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