Document:

Exhibit 10.20

June 2, 2005

Ms. Kathleen Donovan

1250 Taylor Drive

Langhorne, PA 19047

Dear Kathleen:

On behalf of MedQuist Inc. (the “Company”),
this Agreement describes the terms of your new employment as the Company’s
Senior Vice President and Chief Financial Officer, 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 $375,000;

(2)           a
signing bonus of $200,000 with the following payment schedule: $50,000 to be
paid within thirty (30) days of Employment Commencement Date, and $50,000 to be
paid on the 12 month anniversary of the Employment Commencement Date, and
$100,000 to be paid on the 24 month anniversary of the Employment Commencement
Date.  In order to receive the
installments of the signing bonus, you must be employed by the Company on the
scheduled date of the applicable installment payment.  In the event that you voluntarily resign from
the Company within your first 12 months of employment, the initial $100,000
signing bonus installment must be repaid on a pro rata basis and you will not
be entitled to the remaining installments of the signing bonus;

(3)           participate
in MedQuist’s Management Bonus Plan for 2005. 
Your target bonus in this plan will be 45% of your base salary for 2005
and following years; provided, however that your bonus for 2005 shall be
prorated based upon your Employment Commencement Date.  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 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
80,000 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 Option
Plan complies with the requirement of the Securities 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
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 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

 3
 

 

 

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 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.

 4
 

 

 

(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:

(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

 5
 

 

 

(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.             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

 6
 

 

 

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.

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.

j.              Indemnification.  Employee shall be indemnified for acts
performed in good faith as an officer, director or employee of the Company in
the manner provided in the Company’s charter and by-laws, and shall be covered
by director and officer liability insurance coverage for such acts to the same
extent that any such coverage is provided to the Company’s executive officers.

 7
 

 

 

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 signed 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:

  	
  /s/ Frank W.
  Lavelle

  	
   

  
	
   

  	
   

  	
  Frank W. Lavelle

  	
   

  
	
   

  	
   

  	
  President

  	
   

  

 

Accepted and Agreed:

	
  /s/ Kathleen Donovan

  	
   

  
	
  Kathleen Donovan

  

 

 8Exhibit 10.21

October 26, 2005

Via Overnight Mail and
Facsimile

Mr.  R. Scott Bennett

6 Kenwood Court

Malvern, PA 19355

Dear Scott:

On behalf of MedQuist Inc. (the “Company”),
this Agreement describes the terms of your new employment as the Company’s Senior
Vice President - Sales & Marketing, 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:

i.              base
salary at an annual rate of $240,000, subject to review and adjustment annually
during the Term;

ii.             signing
bonus of $150,000 to be paid within thirty (30) days of Employment 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.

iii.            participate
in MedQuist’s Management Bonus Plan, commencing in 2006.  Your target bonus in this plan will be 45% of
your base salary for 2006 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. 
Payment of $54,000, which is equal to half of your annual target bonus
for the year ending December 31, 2006, is guaranteed;

 

 

iv.            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);

v.             receive
relocation support in accordance with the Company Relocation Policy.  This relocation offer will be in effect for the
first twenty-four (24) months of your employment;

vi.            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.

i.              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 Option
Plan complies with the requirement of the Securities 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 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:

(1)           A
change within a twelve-month period in the holders of more than 50% of the
outstanding voting stock of the Company; or

 2
 

 

 

(2)           Any
other event deemed to constitute a “Change of Control” by the Company’s Board
of Directors.

ii.             Contingent
upon Employee’s continued attainment of performance objectives, the Company
agrees to deliver a long term incentive value of $120,000 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
twelve (12) 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:

i.              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;

ii.             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

iii.            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,

 3
 

 

 

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 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
twelve (12) 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.

i.              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.

ii.             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

 4
 

 

 

assigns and transfers to the Company any and all right, title, or
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.

iii.            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.

i.              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.

ii.             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
 

 

 

(1)           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;

(2)           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

(3)           any
obligation of the Company to provide severance pay or benefits (whether
pursuant to Section 5 or otherwise) will cease.

iii.            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:

(1)           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

(2)           the
Company will be entitled to injunctive or other equitable relief to prevent
further breaches of the Covenants by Employee.

iv.            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 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 Company
and its subsidiaries in a form prescribed by the Company, which release shall
not conflict with any of the terms of this Agreement without the mutual written
consent of Employee and 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.             Arbitration.  Except a controversy or claim arising out or
relating to Section 4 of this Agreement, any controversy or claim arising out
of or relating to this Agreement or the breach of any covenant or agreement
contained herein, shall be commenced by filing a notice (the “Notice”) for
arbitration with the American Arbitration Association (“AAA.”), with a copy to
the other party hereto.  Such controversy
or claim shall be decided by arbitration in Philadelphia, Pennsylvania, in
accordance with the Employment Arbitration Rules of the AAA. then
obtaining.  The decision and the award of
damages rendered by the Arbitrator shall be final and binding and judgment may
be entered upon it in any court having jurisdiction thereof.

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

c.             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.

d.             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.

e.             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.

f.              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.

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

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

 7
 

 

 

i.              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.

j.              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) his
employment duties or to follow the lawful directives of his superiors; (2)
misconduct or gross negligence by Employee in the course of employment; (3)
conduct of Employee involving 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 signed 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:

  	
  /s/ Frank W.
  Lavelle

  	
   

  
	
   

  	
   

  	
  Frank W. Lavelle

  	
   

  
	
   

  	
   

  	
  President

  	
   

  

 

Accepted and Agreed:

 

	
  /s/ R. Scott Bennett

  	
   

  
	
  R. Scott Bennett

  

 

 8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}]]