Document:

exv10w20w5

 

Exhibit 10.20

Nightingale & Associates, LLC

P. O. Box 4347

Stamford, Connecticut 06907-0347

Tel: 203.359.3855

Fax: 203.724.3667

Info@nightingale.biz

www.nightingale.biz

March 14, 2008

Mr. Stephen Rusckowski, Chairman of the Board of Directors

Mr. Gregory M. Sebasky, Chairman of the Compensation Committee

MedQuist Inc.

1000 Bishops Gate Blvd., Suite 300

Mt. Laurel, NJ 08054-4632

Gentlemen:

     In response to various discussions, Nightingale & Associates, LLC (“Nightingale”) has been
asked to submit this proposed Amendment to our Engagement Letter with MedQuist Inc. (“MedQuist” or
the “Company”) dated July 29, 2004 as amended on December 16, 2004, September 25, 2006, January 8,
2007 and on September 18, 2007 (collectively, the “Amended Engagement Letter”). This Amendment (i)
provides revisions to the cost structure and term associated with the continued retention of Mr.
Howard Hoffmann as the Company’s Interim President and Chief Executive Officer. All other terms
and conditions for the retention of Nightingale, as detailed in the Amended Engagement Letter,
including but not limited to the Release and Indemnification agreement, will remain in force and
effect. It is our understanding that Howard Hoffmann, on behalf of Nightingale, will continue to
be engaged by MedQuist as the Company’s Interim President and Chief Executive Officer and will
continue to report to the Company’s Board of Directors.

	I.	 	SCOPE OF WORK:

Effective as of March 1, 2008, Nightingale will extend the term of Howard Hoffmann’s role
as MedQuist’s Interim President and Chief Executive Officer until August 1, 2008 (the
“Extension Period”). Following termination of Mr. Hoffmann’s role as Interim President and
Chief Executive Officer, Mr. Hoffmann will endeavor to make himself available for ongoing
consultancy work on an as needed basis, subject to negotiation of a mutually agreeable
Scope of Work.

Finding Solutions to

Complex Business Situations

Since 1975

 

 

Messrs. Rusckowski and Sebasky

MedQuist Inc.

March 14, 2008

Page 2

It should be noted that Mr. Hoffmann expects to be working on other client engagements upon
his departure as the full time Interim President and Chief Executive Officer of MedQuist,
and thus his availability for work beyond August 1, 2008 cannot be guaranteed.

	II.	 	FEE STRUCTURE:

Fixed Monthly Fee:

Effective as of March 1, 2008, Nightingale’s fees for Mr. Hoffmann’s role as Interim
President and Chief Executive Officer will be a fixed rate of $120,000 per month payable in
arrears. If Mr. Hoffmann’s role is terminated during the course of a month, Nightingale’s
fees for the final month will be prorated based on the actual number of calendar days
elapsed during the month up to and including Mr. Hoffmann’s final day of work. Mr.
Hoffmann’s fees for consultancy services following his departure as the Interim President
and Chief Executive Officer of MedQuist will be billed at an hourly rate of $525/hour.

March —  July 2008 Performance Bonus

Nightingale may be entitled to an additional performance related bonus payment of up to
$160,000, which will be paid no later than August 31, 2008 (the “March — July 2008
Performance Bonus”) in connection with Mr. Hoffmann’s continuing service in 2008 as Interim
President and Chief Executive Officer. The amount, if any, of the March — July 2008
Performance Bonus that Nightingale is to receive will be based on the achievement of
certain operational objectives to be mutually agreed upon between Nightingale and the Board
of Directors of MedQuist.

Strategic Transaction Bonus

	 	(a)	 	For purposes of this section, the following terms shall have
the meanings set forth below:

	 	•	 	“Acquiree” means any corporation, partnership, limited liability
company or similar entity with which the Company engages in an
Acquisition Transaction.
	 
	 	•	 	“Acquisition Transaction” means each and every transaction or
series of related transactions whereby, directly or indirectly,
control of, or a significant interest in, any Acquiree or any of its
businesses or assets is transferred to the Company for consideration, including, without limitation, a sale, acquisition

 

 

Messrs. Rusckowski and Sebasky

MedQuist Inc.

March 14, 2008

Page 3

	 	 	 	or
exchange of stock (including shares issuable upon conversion of any
securities convertible into stock) or assets, a lease or license of
assets (with or without a purchase option), or a merger, consolidation
or reorganization, tender offer, leveraged buyout or other
extraordinary corporate transaction or business combination involving
the Acquiree with an expected enterprise value in excess of
$50,000,000, as determined by the Board of Directors of the Company in
its reasonable discretion.
	 
	 	•	 	“Majority Shareholder” means Koninklijke Philips Electronics N.V.
	 
	 	•	 	“Sale Transaction” means each and every transaction or series of
related transactions whereby, directly or indirectly, control of, or
a significant interest in, the Company or any of its businesses or
assets is transferred for consideration, including, without
limitation, a sale, acquisition or exchange of stock (including shares issuable upon conversion of any securities convertible into
stock) or assets, a lease or license of assets (with or without a
purchase option), or a merger, consolidation or reorganization,
tender offer, leveraged buyout, “going private” transaction or other
extraordinary corporate transaction or business combination involving
the Company, including any such transaction in which the outstanding
equity securities of the Company not held by the Majority Shareholder
and its affiliates are acquired by a third-party; provided, however,
that a secured interest in the Company or any of its businesses or
assets arising solely from a debt transaction shall not constitute a
Sale Transaction.
	 
	 	•	 	“Strategic Transaction” means a Sale Transaction or an Acquisition
Transaction, other than a Sale Transaction or Acquisition Transaction
with an affiliate of the Company or an affiliate of any holder of
more than 50% of the Company’s capital stock. A “merger” will be
considered to be an Acquisition Transaction if the Company’s current
stockholders own at least a majority of the outstanding common stock
of the resulting company and to be a Sale Transaction if the
Company’s current stockholders own less than a majority of the
outstanding common stock of the resulting company.

 

 

Messrs. Rusckowski and Sebasky

MedQuist Inc.

March 14, 2008

Page 4

(b) Success-Based Bonus Amount and Conditions. The Company will pay to Nightingale
a bonus (the “Success-Based Bonus”) in an amount equal to $132,500, if:

	 	(i)	 	a Strategic Transaction is closed; and
	 
	 	(ii)	 	either, (1) Mr. Hoffmann continues to serve
as the Company’s President and Chief Executive Officer for the 90 day
period immediately following the closing of a Strategic Transaction
(the “Post-Closing Period”), or (2) Nightingale’s engagement with the
Company (or any successor to its business), including the retention
of Mr. Hoffmann as the President and Chief Executive Officer of the
Company (or any successor to its business), is terminated, upon the
closing of a Strategic Transaction or at any time during the
Post-Closing Period.

(c) Timing and Form of Payment. Subject to paragraphs (a) and (b) of this
provision, the Company will pay the Success-Based Bonus to Nightingale in a lump
sum within 10 business days following the closing of a Strategic Transaction and
the earliest to occur of: (i) the completion of the Post-Closing Period or (ii) the
termination of Nightingale’s engagement with the Company (or any successor to its
business), including the retention of Mr. Hoffmann as the President and Chief
Executive Officer of the Company (or any successor to its business). For the
avoidance of doubt, only one Success-Based Retention Bonus is payable under this
Agreement.

For purposes of the Success-Based Bonus described above, Nightingale’s engagement with the
Company, including the retention of Mr. Hoffmann as the President and Chief Executive
Officer of the Company, shall not be deemed to have been terminated merely because Mr.
Hoffmann ceases to be the President and Chief Executive Officer of the Company and becomes
the President and Chief Executive Officer of any successor to the Company’s business
following the completion of a Strategic Transaction on terms and conditions acceptable to
such company and Nightingale.

 

 

Additional Nightingale Personnel:

Nightingale will continue to make available the services of Mr. Michael C. Yeager and Ms.
Jeanine Cobonpue to perform selected services in connection with the Company’s billing
matter and operations related activities. Mr. Yeager’s professional time fee services have
been and will continue to be invoiced to MedQuist at an hourly rate of $250/hour capped at
$12,500 per week. Ms. Cobonpue’s professional time fee services have been and will
continue to be invoiced to MedQuist at an hourly rate of $175/hour. Should it become
necessary to utilize the services of additional Nightingale personnel on the project, it is
agreed that Nightingale will invoice professional time fees for such personnel at their
prevailing hourly rates. Nightingale agrees that it will obtain the advance approval of
the Board of Directors of the Company, which shall be conveyed by the Board of Directors of
the Company to Howard Hoffmann, before adding additional personnel to the project team.

In addition to professional time fees, out-of-pocket expenses are billed at cost, and
generally range from 10% to 20% of professional time fees, depending on the amount of
travel involved. Out-of-pocket expenses consist primarily of transportation, meals,
lodging, telephone, specifically assignable secretarial and office assistance, and report
production.

	III.	 	ADVANCE DEPOSIT
	 
	 	 	Nightingale requires an Advance Deposit for all assignments of the type described above.
Given this situation, Nightingale will not require an increase of its existing Advance
Deposit of $75,000 that has been paid by the Company. At the completion of the project and
at the direction of the Company, Nightingale will either apply the Advance Deposit to any
outstanding invoices or, if there are no unpaid invoices owing to Nightingale, promptly
return the Deposit to the Company.

vvvvvvvvvvvvvvv

 

 

Messrs. Rusckowski and Sebasky

MedQuist Inc.

March 14, 2008

Page 6

     If this Amendment conforms to your understanding of the terms and conditions of our retention,
please have the appropriate party signify agreement by signing and returning the enclosed extra
copy of this Amendment.

     We look forward to continue working with you and the Company.

	 	 	 	 	 
	 	Sincerely,

/s/ Howard S. Hoffmann

Howard S. Hoffmann,

in the capacity as Principal and

Managing Partner of Nightingale &

Associates, LLC

 	 
	 	 	 
	 	 	 
	 	 	 
	 

READ, UNDERSTOOD AND AGREED TO BY:

MedQuist Inc.

	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Stephen Rusckowski	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Stephen Rusckowski	 	 
	 	 	 	 	Chairman of the Board of Directors of MedQuist Inc.
	 
	 	 	 	 	 	 
	 

	 	Date:	 	March 14, 2008	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Gregory M. Sebasky	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Gregory M. Sebasky	 	 
	 	 	 	 	Chairman of the Compensation Committee of the Board of Directors of MedQuist Inc.
	 
	 	 	 	 	 	 
	 

	 	Date:	 	March 14, 2008Exhibit 10.4 to New Ulm Telecom, Inc. Form 10-K for fiscal year ended December 31, 2007

EXHIBIT 10.4

New Ulm Telecom, Inc.

Management Incentive Plan

(as Amended December 31, 2007)

Plan Summary

SECTION I. PURPOSE 

The purpose of
the Management Incentive Plan (the “Plan”) is to enable New Ulm Telecom, Inc.
(the “Company”) to motivate its executive officers to achieve key financial and
strategic objectives. This Plan is effective beginning with the 2006 fiscal
year and will continue until the Company amends, revises or terminates the
Plan.

SECTION II. ELIGIBILITY CRITERIA 

Plan
participants are selected by the Compensation Committee of the Board of
Directors (the “Committee”). Eligible participants include the following:

	
 

	
 

	
 

	
 

	
•

	
Chief
  Executive Officer

	
 

	
 

	
 

	
 

	
•

	
Vice
  President

	
 

	
 

	
 

	
 

	
•

	
Chief
  Financial Officer

Participants
in the Management Incentive Plan are not eligible for participation in the
Employee Incentive Plan. 

SECTION III. AWARD LEVELS 

Participants
have the opportunity to earn cash payments under the Plan based on the
achievement of pre-established financial and non-financial objectives for the
fiscal year. Awards are determined as described in Section IV, and award
targets are expressed as a percentage of the participant’s base salary. 

The minimum
individual award for any fiscal year is 0%. The target and maximum individual
awards are as follows:

	
 

	
 

	
 

	
 

	
 

	
Position

	
 

	
        Target Award

	
 

	
    Maximum Award

	 

	 

	 

	 

	 

	
Chief
  Executive Officer

	
 

	
20% of base
  salary

	
 

	
40% of base
  salary

	
Vice
  President

	
 

	
15% of base
  salary

	
 

	
30% of base
  salary

	
Chief
  Financial Officer

	
 

	
15% of base
  salary

	
 

	
30% of base
  salary

As listed in
the above table, the maximum individual awards are equal to two times [2x] the
target award. 

83

SECTION IV. AWARD
CALCULATION & DETERMINATION 

Awards are
calculated and determined based on the following three Company objectives1.
The award formula is weighted according to each of the percentages listed
below. 

	
 

	
 

	
 

	
 

	
 

	 	
1.

	
Net Income

	
 

	
60% weight

	 	
2.

	
Operating
  Revenue

	
 

	
25% weight

	 	
3.

	
Customer
  Service (up-time, customer survey results, customer retention)

	
 

	
15% weight

	 	
 

	
 

	
 

	 

	 	
 

	
   Total Weighting 

	
 

	
100%

Performance Minimums and Maximums

Performance
results must be at least 80% of goal in order to produce any award. In
addition, no awards will be paid if Net Income performance is less than 80%
of goal. Maximum awards are paid for goal achievement of 120% and above.

Performance & Award Multiple Table

As indicated
in the following table, the percent of goal achievement determines the award
percentage for each of the identified objectives. This table assumes an individual incentive target equal to
15% of base
pay.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
% of Goal

  Achievement

	
 

	
Net Income

  Award

	
+

	
Operating

  Rev Award

	
+

	
Customer 

  Svs Award

	
=

	
Total Award 

  Multiple

	 

	
 

	 

	
 

	 

	
 

	 

	
 

	 

	
   120%+

	
 

	
18.0%

	
 

	
  7.5%

	
 

	
  4.5%

	
 

	
 30.0%

	
110%

	
 

	
13.5%

	
 

	
5.63%

	
 

	
3.38%

	
 

	
22.51%

	
100%

	
 

	
  9.0%

	
 

	
3.75%

	
 

	
2.25%

	
 

	
  15.0%

	
   90%

	
 

	
6.75%

	
 

	
2.79%

	
 

	
1.71%

	
 

	
11.25%

	
  80%

	
 

	
  4.5%

	
 

	
1.88%

	
 

	
1.13%

	
 

	
   7.51%

	
<80%

	
 

	
     0%

	
 

	
    0%

	
 

	
     0%

	
 

	
      0%

Awards are prorated between levels of
performance.

Award Examples

Annual Base Pay: $70,000

Incentive Target: 15% or $10,500

Net Income: 90% of goal

Operating Revenue: 110% of goal

Customer Service: 100% of goal

(90% * 0.60) + (110%
* 0.25) + ( 100% * 0.15) = (6.75%) + (5.63%) + (2.25%) = 14.63%

14.63% × $70,000 = $10,241.00

	
 

	

	
1
  Financial measures generally refer to figures reported in the Company’s
  audited income statement; however, all measures for the Plan are subject to
  the definition and interpretation of the Board of Directors.

84

SECTION V. PLAN ADMINISTRATION 

The Plan is
administered by the Compensation Committee of the Board of Directors. 

Awards are
generally determined as described in Section IV, however, the Committee
reserves the right to modify the calculations at its discretion. Reasons for
modification may include (but are not limited to) acquisitions or sales of
businesses, below target financial performance and/or external economic
factors.

If available,
awards will typically be paid two and one-half months following the end of the
fiscal year. Participants need to be employed through the last day of the
fiscal year in order to receive any award for that year (unless otherwise specified
in the Executive’s employment agreement).

SECTION VI. PROGRESS REPORTS
& INSIDER INFORMATION 

Quarterly
progress reports will be given to all employees upon filing of the Company’s
10Q with the Securities and Exchange Commission. This will take place no more
than 45 days after any given quarter except year-end (see Plan Administration). Any
information given out prior to a public report (such as a 10Q) is considered
inside information. 

All employees
must be aware that forecast information is proprietary in nature and must not
be disclosed. If this information is disclosed, not only could it be a
competitive disadvantage for the Company, but the employee disclosing such
information could be liable for passing insider information.

SECTION VII. PARTICIPANT RIGHTS 

This Plan is
not intended to be a contract of employment. Both the Participant and the
Company have the right to end their employment relationship with or without
cause or notice.

SECTION VIII. AMENDMENT & TERMINATION 

Except as
otherwise stated in this plan, the Company reserves the power to amend or
wholly revise the Plan, prospectively, at any time with or without prior
notice.

The Company
may terminate the Plan at any time and reserves the right to interpret all
provisions of the Plan. The terms of this document shall supersede all terms
and provisions of any and all such prior plan documents.

85

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