Document:

Exhibit 10.2

 

	
  

  	
  

  
	
   

  	
   

  
	
   

  	
   

  
	
  

  	
  Nightingale & Associates, LLC

  
	
   

  	
  Soundview Plaza

  
	
   

  	
  1266 East Main Street

  
	
   

  	
  Stamford, Connecticut 06902

  
	
   

  	
   

  
	
   

  	
  Tel: 203.359.3855

  
	
   

  	
  Fax: 203.359.4551

  
	
   

  	
  Email: info@nightingale-

  associates.org

  
	
   

  	
   

  
	
   

  	
  Principals:

  
	
  December 16, 2004

  	
  J. Pierre Benoit

  
	
   

  	
  Michael R. D’Appolonia

  
	
  Mr. Gregory M. Sebasky

  	
  Timothy R. Hassenger

  
	
  President

  	
  Howard S. Hoffmann

  
	
  MedQuist Inc.

  	
  James D. Neidhart

  
			

1000 Bishops Gate Blvd.

Suite 300

Mt. Laurel, NJ  08054-4632

Dear Greg:

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.  This Amendment describes our understanding of
the scope of work of a proposed Phase II assignment as well as provides
revisions to the cost structure for the additional work.  All other terms and conditions for the
retention of Nightingale, as detailed in the July 29, 2004 Engagement Letter,
including but not limited to the Release and Indemnification agreement, will
remain in force and effect.  It is our
continued understanding that Nightingale will be engaged by MedQuist and will
report to the Company’s Board of Directors.

I.              SCOPE OF WORK:

Effective November 1, 2004 Nightingale will extend the term of Howard
Hoffmann’s role as MedQuist’s Interim Chief Executive Officer on a month to month
basis for a period of up to six months.  Ongoing advisory work, if any, following termination
of Mr. Hoffmann’s role as Interim Chief Executive Officer will be subject to negotiation
of a mutually agreeable Scope of Work and Fee Structure.

II.            COST ESTIMATE:

Nightingale will no longer invoice Mr. Hoffmann’s time
on an hourly basis nor will there be a Performance Fee associated with Phase II
work.  Instead, Nightingale’s fees for
Mr. Hoffmann’s role as Interim Chief Executive Officer will be a fixed rate of
$200,000 per month payable in arrears. 
If the 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 

 

Finding Solutions to Complex
Business Situations Since 1975

of calendar days elapsed during the month up to and
including Mr. Hoffmann’s final day of work.

Nightingale will continue to make available the
services of Mr. Eugene A. Reilly to perform selected services in connection
with the Company’s remediation activities. 
Mr. Reilly’s professional time fee services have been and will continue
to be invoiced to MedQuist at his prevailing hourly rate of $350/hour.  Per your request, attached is an analysis of
the Mr. Reilly’s time spent on the project to date as well as a recap of the
tasks performed to date.  Mr. Reilly’s
ongoing responsibilities include completion of the Work Type Cleanup in LINKS
as well as the Account Number Rollup analysis. 
Both of these projects should be completed in January 2005.  Ongoing work beyond that time will be a
function of available, qualified resources within the Company and the nature of
ongoing critical analysis requirements, if any. 
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
confer with the Board of Directors 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.

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 2
 

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

  

 

	
  

  	
   

  
	
  READ, UNDERSTOOD AND AGREED TO BY:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  MedQuist Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Gregory M. Sebasky

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  January 7, 2005

  
					

 

 3Exhibit 10.3

 

	
  

  	
  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Nightingale & Associates, LLC

  
	
   

  	
  Soundview Plaza

  
	
   

  	
  1266 East Main Street

  
	
   

  	
  Stamford, Connecticut 06902

  
	
   

  	
   

  
	
   

  	
  Tel: 203.359.3855

  
	
   

  	
  Fax: 203.359.4551

  
	
   

  	
  Email: info@nightingale-

  associates.org

  
	
   

  	
   

  
	
   

  	
  Principals:

  
	
  September 12, 2006

  	
  Michael R. D’Appolonia

  
	
   

  	
  Timothy R. Hassenger

  
	
  Mr. Jouko Karvinen, Chairman of the Board of
  Directors

  	
  Howard S. Hoffmann

  
	
  Mr. John Underwood, Chairman of the Compensation
  Committee

  	
  James D. Neidhart

  
	
  Mr. Frank Lavelle, President

  	
   

  
	
  MedQuist Inc.

  	
  Senior Principals

  
	
  1000 Bishops Gate Blvd., Suite 300

  	
  Pierre Benoit

  
	
  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 (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 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 Chief Executive Officer and will continue
to report to the Company’s Board of Directors.

I.              SCOPE OF WORK:

Effective as of July 1, 2006 Nightingale will extend the term of Howard
Hoffmann’s role as MedQuist’s Interim Chief Executive Officer until December
31, 2006.  Following termination of Mr.
Hoffmann’s role as Interim Chief Executive Officer, Mr. Hoffmann and MedQuist
agree that Mr. Hoffmann, on a consultancy basis, shall be available to MedQuist
one day a week, based on a ten-hour workday, for the period January 1, 2007 to through
the week ending Friday, March 16, 2007.  Following
March 16, 2007, 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.  It
should be noted that Mr. Hoffmann expects to be working on other engagements upon
his departure as the full time Interim Chief Executive Officer of MedQuist, and
thus his 

Finding Solutions to Complex
Business Situations Since 1975

availability cannot be guaranteed (i) for more than one day a week for
the period from January 1, 2007 through March 16, 2007, and (ii) following
March 16, 2007.

II.            FEE STRUCTURE:

Fixed Monthly Fee:

Effective as of July 1, 2006, Nightingale’s fees for
Mr. Hoffmann’s role as Interim 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
Chief Executive Officer of MedQuist will be billed at his current hourly rate
of $525/hour.

Discretionary
Bonus:

Nightingale
may be entitled to an additional discretionary bonus payment of up to $240,000,
which will be paid no later than March 16, 2007 (the “2006 Discretionary Bonus”)
in connection with Mr. Hoffmann’s service in 2006 as Interim Chief Executive
Officer.  The amount, if any, of the 2006
Discretionary Bonus that Nightingale is to receive will be decided upon by a
special committee of the Board of Directors of MedQuist (the “Committee”), made
up of the Chairman of the Board, the Chairman of the Compensation Committee and
the Chairman of the Audit Committee.  It
is understood by the parties that the determination of whether to pay all or a
portion of the 2006 Discretionary Bonus shall be at the sole discretion of the
Committee and is not a function of the attainment of any particular
objectives.  The Committee will inform
Nightingale of its determination by January 31, 2007.  If the Committee’s decision is that
Nightingale will be paid all or a portion of the 2006 Discretionary Bonus, said
bonus will be paid by wire transfer no later than March 16, 2007; which is the
date the filing of the Company’s Form 10-K for the year ended December 31, 2006
is due.

Performance
Bonus:

If the
Company has become current in its Forms 10-Q and Forms 10-K filing requirements
with the Securities Exchange Commission (“SEC”) by a mutually agreed upon date
with the Company’s Board of Directors, Nightingale will be entitled to a bonus
payment of $240,000 (the “SEC Filing Performance Bonus”).  If earned, the SEC Filing Performance Bonus
will be paid by wire transfer within ten (10) days of the date on which the
Company becomes current in its Forms 10-Q and Forms 10-K filing requirements.

 2
 

Availability Guaranty Fee:

By December 29, 2006, MedQuist will pay a
non-refundable fee to Nightingale in the amount of $57,750 (the “Availability
Guaranty Fee”), guaranteeing the availability of Mr. Hoffmann for one day a
week, based on a ten-hour workday, during the period from January 1, 2007 to March
16, 2007 (the “Guaranteed Availability Period”).  During the Guaranteed Availability Period, Nightingale
will invoice MedQuist in accordance with its normal billing practices for
reimbursement of out of pocket expenses as well as for Professional Time Fees generated
by Mr. Hoffmann for his services to MedQuist to the extent that such
Professional Time Fees exceed the Availability Guaranty Fee and are incurred at
the direction of the Company’s Board of Directors.

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 related
activities.  Mr. Yeager’s professional
time fee services have been and will continue to be invoiced to MedQuist at his
prevailing hourly rate of $350/hour.  Ms.
Cobonpue’s professional time fee services have been and will continue to be
invoiced to MedQuist at her prevailing 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,
which shall be conveyed by the Board of Directors to Frank Lavelle, 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.

v  v
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v  v  v
v

 3
 

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/ Jouko Karvinen

  	
   

  
	
   

  	
   

  	
  Jouko Karvinen

  
	
   

  	
   

  	
  Chairman of the Board of Directors of MedQuist Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
  Date: September 18, 2006

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Underwood

  	
   

  
	
   

  	
   

  	
  John Underwood

  
	
   

  	
   

  	
  Chairman of the Compensation Committee of the Board
  of Directors of MedQuist Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
  Date: September 19, 2006

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank W. Lavelle

  	
   

  
	
   

  	
   

  	
  Frank W. Lavelle, President

  
	
   

  	
   

  	
   

  
	
   

  	
  Date: September 25, 2006

  	
   

  
								

 

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