Document:

Exhibit 10.1

 

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 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
10,000 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 not occur until after the Company becomes
current in its reporting obligations under the Securities and Exchange Act of
1934; 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

 

(2)           Contingent
upon Employee’s continued attainment of performance objectives, the Company
agrees to deliver a long term incentive value of $60,000 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
eighteen (18) 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

 

3

 

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
eighteen (18) 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

 

4

 

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:

 

5

 

(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 her
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 her 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, 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

 

6.             Miscellaneous.

 

a.             Other
Agreements.  Employee represents and
warrants to the Company that there are no restrictions, agreements or
understandings whatsoever to which she is a party that would prevent or make
unlawful her 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 her duties to
the Company.

 

b.             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.

 

c.             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.

 

d.             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.

 

e.             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.

 

f.              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 her, now or in the future, from directors or officers of the
Company in the event of the Company’s insolvency.

 

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

 

h.             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.

 

7

 

i.              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) her employment duties or to follow
the lawful directives of her superiors; (2) misconduct or gross negligence by
Employee in the course of employment; (3) conduct of Employee involving any
type of disloyalty to the Company or its subsidiaries, including, without
limitation: 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 singed 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:

  	
   

  	
   

  
	
   

  	
   

  	
  Howard Hoffman

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  Accepted and Agreed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Adele T. Barbato

  	
   

  
					

 

8Exhibit
10.1

 

February 8, 2005

 

Mark Cameron

 

318 Lindo Ave

 

Newport Beach, CA 92661

 

Dear Mark:

 

Re:      Employment
with VantageMed as Chief Information Officer.

 

VantageMed is pleased to confirm the offer
extended to you to join our company as Chief Information Officer, reporting
directly to Steven Curd, Chief Executive Officer, beginning February 8,
2005. This letter will confirm your acceptance of our offer. You will be
compensated on a semi-monthly basis at a rate of $6,666.66.

 

Additionally, you will be eligible for a
$50,000 to $150,000 bonus for the 2005 year, with a target bonus of $100,000
based on performance, including the company's financial performance, at the CEO’s
discretion.

 

In addition, we will recommend that the Board
of Directors grant a competitive number of incentive stock options to you to
purchase VantageMed common stock.  The
exercise price of these options will be equal to the closing market price on
the date of grant.  The options will vest
25% one year from the one year anniversary date of your employment with the
remaining 75% vesting monthly for 36 months thereafter.

 

You will be eligible for three (3) weeks paid
vacation, paid time off for sick leave and health, vision, life, dental and
long-term disability insurance, as well as a 401(k) plan and flexible spending
account for unreimbursed medical expenses and dependent care expenses.
Questions relating to these benefits, eligibility or company policies may be
directed to, Shelley Sullivan in Human Resources. A complete Orientation
Package will be provided to you with details and costs.

 

Your employment is “at-will,” voluntarily
entered into and is for no specific period. As a result, you are free to resign
at any time, for any reason or for no reason. Similarly, VantageMed is free to
conclude this at will employment relationship with you at any time, with or
without cause.

 

As a condition of employment, you will be
required to sign a “Proprietary Information and Inventions Agreement.” In
addition, as is required by law, you will be asked to provide documentary
evidence of your identity and eligibility for employment in the United States.
Proof must be provided to your manager within three (3) business days of your
date of hire.

 

To indicate your acceptance of this offer,
please sign below. There are two (2) originals; therefore, please keep a signed
original for yourself and return a signed one to me at VantageMed, 11060 White
Rock Road Suite 210 Rancho Cordova, CA 95670. Please mark your return envelope “Confidential.”

 

This letter, along with our company policies,
set for the terms of your employment with VantageMed and supersedes any prior
representations or agreements, whether written or oral. This letter may only be
modified by a written agreement signed by our CFO.

 

We hope that you agree that you have a great
contribution to make to our industry by way of VantageMed and that you will
find working with us a rewarding experience. Also, we are confident that your
employment with us

 

 

will be both challenging and beneficial. We look
forward to the opportunity of working with you to create a successful company.

 

Sincerely,

 

	
  /s/ Steven Curd

  	
   

  
	
   

  
	
  Steven Curd

  
	
   

  
	
  Chief Executive Officer

  
	
   

  
	
  VantageMed Corporation

  

 

 

Agreed to and Accepted by:

 

 

	
  /s/ Mark Cameron

  	
   

  	
  2/8/2005

  
	
   

  	
   

  	
   

  
	
  Mark Cameron

  	
   

  	
  Date

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