Document:

exv10w9

Table of Contents

Exhibit 10.9

 

 

 

 

STOCKHOLDERS’ AGREEMENT

by and among

MEDQUIST HOLDINGS INC.

and

S.A.C. PEI CB INVESTMENT, L.P.,

S.A.C. PEI CB INVESTMENT II, LLC and

INTERNATIONAL EQUITIES (S.A.C. ASIA) LIMITED

Dated as of      , 2011

 

 

 

 

Table of Contents

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	Article I.	 	INTRODUCTORY MATTERS	 	 	1	 
	 
	 	1.1	 	Defined Terms	 	 	1	 
	 
	 	1.2	 	Construction	 	 	3	 
	Article II.	 	CORPORATE GOVERNANCE MATTERS	 	 	3	 
	 
	 	2.1	 	Board of Directors	 	 	3	 
	Article III.	 	COVENANTS	 	 	4	 
	 
	 	3.1	 	Books and Records; Access	 	 	4	 
	 
	 	3.2	 	Additional Information	 	 	5	 
	Article IV.	 	MISCELLANEOUS	 	 	5	 
	 
	 	4.1	 	Termination	 	 	5	 
	 
	 	4.2	 	Notices	 	 	5	 
	 
	 	4.3	 	Further Assurances	 	 	6	 
	 
	 	4.4	 	Assignment	 	 	6	 
	 
	 	4.5	 	Amendment; Waiver	 	 	6	 
	 
	 	4.6	 	Third Parties	 	 	6	 
	 
	 	4.7	 	Governing Law	 	 	6	 
	 
	 	4.8	 	Consent to Jurisdiction	 	 	6	 
	 
	 	4.9	 	Waiver of Jury Trial	 	 	7	 
	 
	 	4.10	 	Specific Performance	 	 	7	 
	 
	 	4.11	 	Entire Agreement	 	 	7	 
	 
	 	4.12	 	Titles and Headings	 	 	7	 
	 
	 	4.13	 	Severability	 	 	8	 
	 
	 	4.14	 	Counterparts	 	 	8	 
	 
	 	4.15	 	Effectiveness	 	 	8	 

i

Table of Contents

 

STOCKHOLDERS’ AGREEMENT

          STOCKHOLDERS’ AGREEMENT, dated as of      , 2011 (and effective as set forth in
Section 4.15 of this Agreement), by and among MedQuist Holdings Inc., which shall be a Delaware
corporation at the time of the IPO (the “Company”) and S.A.C. PEI CB Investment, L.P., a
Cayman Islands limited Partnership (“SAC CBI”), S.A.C. PEI CB Investment II, LLC, a
Delaware limited liability company (“SAC CBI II”) and International Equities (S.A.C. Asia)
Limited, a company incorporated under the Companies Act of 2001 of Mauritius (“SAC Asia”
and, together with SAC CBI and SAC CBI II, collectively, the “SAC Entities”).

BACKGROUND:

          WHEREAS, the Company is currently contemplating an underwritten initial public offering
(“IPO”) of shares of its Common Stock (as defined in Section 1.1); and

          WHEREAS, in connection with, and effective upon, the date of completion of the IPO (the
“Closing Date”) of the Company, the Company and the SAC Entities wish to set forth certain
understandings between such parties, including with respect to certain governance matters.

          NOW, THEREFORE, the parties agree as follows:

ARTICLE I. INTRODUCTORY MATTERS

          1.1 Defined Terms

          In addition to the terms defined elsewhere herein, the following terms have the following
meanings when used herein with initial capital letters:

     “Affiliate” has the meaning ascribed thereto in Rule 12b-2 promulgated
under the Exchange Act, as in effect on the date hereof.

     “Agreement” means this Stockholders’ Agreement, as the same may be amended,
supplemented, restated or otherwise modified from time to time in accordance with the terms
hereof.

     “Applicable Law” means, with respect to any Person, any statute, law,
regulation, ordinance, rule, injunction, order, decree, governmental approval, directive,
requirement, or other governmental restriction or any similar form of, decision of, or
determination by, any governmental authority or the Exchange, applicable to such Person or
its Subsidiaries or their respective assets.

     “beneficially own” has the meaning set forth in Rule 13d-3 promulgated under
the Exchange Act.

     “Board” means the board of directors of the Company.

     “Business Day” means a day other than a Saturday, Sunday, federal or New York
State holiday or other day on which commercial banks in New York City are authorized or
required by law to close.

     “Closing Date” has the meaning set forth in the Background.

Table of Contents

2

     “Company” has the meaning set forth in the preamble.

     “Common Stock” means the shares of common stock, par value $0.10 per share, of
the Company, and any other capital stock of the Company into which such stock is
reclassified or reconstituted and any other common stock of the Company.

     “Control” (including its correlative meanings, “Controlled by” and
“under common Control with”) means possession, directly or indirectly, of the power
to direct or cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or otherwise) of a
Person.

     “Director” means any member of the Board.

     “Exchange” means The NASDAQ Global Market or such other stock exchange or
securities market on which the Common Stock is listed or quoted.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder, as the same may be amended from time to time.

     “Governmental Authority” means any nation or government, any state or other
political subdivision thereof, and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.

     “IPO” has the meaning set forth in the Background.

     “Law” means any statute, law, regulation, ordinance, rule, injunction, order,
decree, governmental approval, directive, requirement, or other governmental restriction or
any similar form of decision of, or determination by, or any interpretation or
administration of any of the foregoing by, any Governmental Authority.

     “Permitted Assigns” means with respect to the SAC Entities, their respective
Affiliates and successors and, with the express written consent of the SAC Entity
Transferring such shares, any Transferee of shares of Common Stock Transferred by such SAC
Entity, other than pursuant to a widely distributed public sale, that agrees to become party
to, and to be bound to the same extent as its Transferor by the terms of, this Agreement.

     “Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political subdivision
thereof.

     “SAC Asia” has the meaning set forth in the preamble.

     “SAC CBI” has the meaning set forth in the preamble.

     “SAC CBI II” has the meaning set forth in the preamble.

     “SAC Designee” has the meaning set forth in Section 2.1(b).

     “SAC Entities” has the meaning set forth in the preamble.

     “Stockholders” has the meaning set forth in Section 2.1(a).

Table of Contents

3

     “Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, association or other business entity of which: (i) if a
corporation, a majority of the total voting power of shares of stock entitled (without
regard to the occurrence of any contingency) to vote in the election of directors,
representatives or trustees thereof is at the time owned or Controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that Person or a
combination thereof; or (ii) if a limited liability company, partnership, association or
other business entity, a majority ownership interest in the limited liability company,
partnership, association or other business entity is at the time owned or Controlled,
directly or indirectly, by any Person or one or more Subsidiaries of that Person or a
combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a
majority ownership interest in a limited liability company, partnership, association or
other business entity if such Person or Persons shall be allocated a majority of limited
liability company, partnership, association or other business entity gains or losses or
shall be or Control the managing director or general partner of such limited liability
company, partnership, association or other business entity.

     “Transfer” (including its correlative meanings, “Transferor”,
Transferee” and “Transferred”) shall mean, with respect to any security,
directly or indirectly, to sell, contract to sell, give, assign, hypothecate, pledge,
encumber, grant a security interest in, offer, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to purchase,
lend or otherwise transfer or dispose of any economic, voting or other rights in or to such
security. When used as a noun, “Transfer” shall have such correlative meaning as
the context may require.

          1.2 Construction

          The language used in this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rule of strict construction will be applied against any party.
Unless the context otherwise requires: (a) “or” is disjunctive but not exclusive, (b) words
in the singular include the plural, and in the plural include the singular, and (c) the words
“hereof”, “herein”, and “hereunder” and words of similar import when used
in this Agreement refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section references are to this Agreement unless otherwise specified.

ARTICLE II. CORPORATE GOVERNANCE MATTERS

          2.1 Board of Directors

          (a) On the Closing Date, the Board shall consist of no more than nine Directors.
The SAC Entities and their Permitted Assigns (collectively, the “Stockholders”) shall have
the right to nominate three Directors.

          (b) Following the Closing Date, the Stockholders shall have the right, but not the obligation,
to nominate to the Board a number of designees equal to: (i) three Directors, so long as the
Stockholders collectively beneficially own at least 20% or more of the voting power of all shares
of the Company’s capital stock entitled to vote generally in the election of Directors; (ii) two
Directors, so long as the Stockholders collectively beneficially own at least 10% of the voting
power of all shares of the Company’s capital stock entitled to vote generally in the election of
Directors; and (iii) one Director, so long as the Stockholders collectively beneficially own at
least 5% of the voting power of all shares of the Company’s capital stock entitled to vote
generally in the election of Directors; provided, that the Stockholders shall be deemed to
collectively beneficially own the shares of the Company’s capital stock

Table of Contents

4

with regard to which a Stockholder has been granted a proxy to vote such shares, so long as
such proxy remains in effect. If the Stockholders have nominated less than the total number of
designees that the Stockholders are entitled to nominate pursuant to this Section 2.1(b), then the
Stockholders shall have the right, at any time, to nominate such additional designee(s) to which
they are entitled, in which case, the Directors shall take all necessary corporation action to (x)
enable the Stockholders to nominate such additional individual(s), whether by increasing the size
of the Board, subject to the maximum number of Directors set forth in the Certificate of
Incorporation of the Company, or otherwise, (y) designate such additional individual(s) nominated
by the Stockholders as Directors and (z) cause the election of such additional individual(s) to the
Board. Each such person whom the Stockholders shall actually nominate pursuant to this Section
2.1(b) and who thereafter is serving as a Director shall be referred to herein as a “SAC
Designee”).

          (c) In accordance with the Certificate of Incorporation, and as indicated in Section 2.1(b),
the initial Board shall be divided into three classes designated Class I, Class II and Class III.
Each class shall consist, as nearly as possible, of one-third of the total number of Directors
constituting the entire Board. Class I directors (“Class I Directors”) shall be originally
elected for a term expiring at the succeeding annual meeting of stockholders, Class II directors
(“Class II Directors”) shall be originally elected for a term expiring at the second
succeeding annual meeting of stockholders, and Class III directors (“Class III Directors”)
shall be originally elected for a term expiring at the third succeeding annual meeting of
stockholders, in each case following the Closing Date. The SAC Designees shall at all times be
apportioned among the classes as nearly equal as possible.

          (d) In the event that a vacancy is created at any time by the death, disability, retirement,
resignation or removal of any SAC Designee, the remaining Directors and the Company shall cause the
vacancy created thereby to be filled by a new designee of the Stockholders as soon as possible, and
the Company hereby agrees to take, at any time and from time to time, all actions necessary to
accomplish the same. No SAC Designee may be removed without the written request of the
Stockholders, and any such removal so effected by the written request of the Stockholders shall be
effective upon the Company’s receipt of such written request or, if applicable, such other time set
forth therein.

          (e) The Company agrees to include in the slate of nominees recommended by the Board the
persons designated pursuant to this Section 2.1 and to use its best efforts to cause the election
of each such designee to the Board, including nominating such individuals to be elected as
Directors as provided herein.

ARTICLE III. COVENANTS

          3.1 Books and Records; Access

          The Company shall, and shall cause its Subsidiaries to, keep proper books, records and
accounts, in which full and correct entries shall be made of all financial transactions and the
assets and business of the Company and each of its Subsidiaries in accordance with generally
accepted accounting principles. The Company shall, and shall cause its Subsidiaries to, permit the
Stockholders and their respective designated representatives, at reasonable times and upon
reasonable prior notice to the Company, to review the books and records of the Company or any of
such Subsidiaries and to discuss the affairs, finances and condition of the Company or any of such
Subsidiaries with the officers of the Company or any such Subsidiary; provided, however, that the
Company shall not be required to disclose any privileged information of the Company so long as the
Company has used its best efforts to enter into an arrangement pursuant to which it may provide
such information to the Stockholders without the loss of any such privilege.

Table of Contents

5

          3.2 Additional Information

          The Company will promptly deliver to each Stockholder when available such financial,
operating, capital expenditure and other information as reasonably requested by such Stockholder;
provided, however, that the Company shall not be required to disclose any privileged information of
the Company so long as the Company has used its best efforts to enter into an arrangement pursuant
to which it may provide such information to the Stockholder without the loss of any such privilege.

ARTICLE IV. MISCELLANEOUS

          4.1 Termination

          This Agreement shall terminate on the earlier to occur of: (x) such time as the Stockholders
are no longer entitled to designate a Director pursuant to Section 2.1(b) and (y) with regard to
any particular Stockholder, upon the delivery of a written notice by such Stockholder to the
Company requesting that this Agreement terminate as to such Stockholder (or, if applicable, such
other time set forth therein).

          4.2 Notices

          Any notice, request, instruction or other document to be given hereunder by any party hereto
to another party hereto shall be in writing, shall be and shall be deemed given when (a) delivered
personally, (b) five (5) Business Days after being sent by certified or registered mail, postage
prepaid, return receipt requested, (c) one (1) Business Day after being sent by Federal Express or
other nationally recognized overnight courier, or (d) upon confirmation of receipt, if transmitted
by facsimile, to the parties at the following addresses (or at such other address for a party as
shall be specified by notice from such party):

     if to the Company:

MedQuist Holdings Inc.

9009 Carothers Parkway

Franklin, TN 37067

Attention: Chief Financial Officer

     if to any of the SAC Entities:

c/o S.A.C. Capital Advisors, L.P.

72 Cummings Point Road

Stamford, CT 06902

Attention: General Counsel

Fax: 203-823-4209

     with a required copy to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017-3954

Attention: D. Rhett Brandon

Fax: (212) 455-2502

Table of Contents

6

          4.3 Further Assurances

          The parties hereto will use their best efforts to sign such further documents, cause such
meetings to be held, resolutions passed, exercise their votes and do and perform and cause to be
done such further acts and things as may be necessary in order to give full effect to this
Agreement and every provision hereof.

          4.4 Assignment

          Neither the Company nor the Stockholders shall assign all or any part of this Agreement
without the prior written consent of the other party; provided, however, that each of the
Stockholders shall be entitled to assign, in whole or in part, at any time and from time to time,
to any of their respective Permitted Assigns without such prior written consent. Except as
otherwise provided herein, this Agreement will inure to the benefit of and be binding on the
parties hereto and their respective successors and permitted assigns.

          4.5 Amendment; Waiver

          This Agreement may be amended, supplemented or otherwise modified only by a written instrument
executed by the parties hereto. No waiver by any party of any of the provisions hereof will be
effective unless explicitly set forth in writing and executed by the party so waiving. Except as
provided in the preceding sentence, no action taken pursuant to this Agreement, including without
limitation, any investigation by or on behalf of any party, will be deemed to constitute a waiver
by the party taking such action of compliance with any covenants or agreements contained herein.
The waiver by any party hereto of a breach of any provision of this Agreement will not operate or
be construed as a waiver of any subsequent breach.

          4.6 Third Parties

          This Agreement does not create any rights, claims or benefits inuring to any Person that is
not a party hereto nor create or establish any third party beneficiary hereto.

          4.7 Governing Law

          THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE
OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAWS OR SIMILAR RULES OR PRINCIPLES THAT
MIGHT REQUIRE THE APPLICATION TO THIS AGREEMENT OF THE LAWS OF ANOTHER JURISDICTION.

          4.8 Consent to Jurisdiction

          Each party to this Agreement, by its execution hereof, (a) hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in New York, New York for the
purpose of any action, claim, cause of action or suit (in contract, tort or otherwise), inquiry,
proceeding or investigation arising out of or based upon this Agreement or relating to the subject
matter hereof, (b) hereby waives to the extent not prohibited by applicable law, and agrees not to
assert, and agrees not to allow any of its subsidiaries to assert, by way of motion, as a defense
or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction
of the above-named courts, that its property is exempt or immune from attachment or execution, that
any such proceeding brought in one of the above-

Table of Contents

7

named courts is improper, or that this Agreement or the subject matter hereof may not be
enforced in or by such court and (c) hereby agrees not to commence or maintain any action, claim,
cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or investigation
arising out of or based upon this Agreement or relating to the subject matter hereof other than
before one of the above-named courts nor to make any motion or take any other action seeking or
intending to cause the transfer or removal of any such action, claim, cause of action or suit (in
contract, tort or otherwise), inquiry, proceeding or investigation to any court other than one of
the above-named courts whether on the grounds of inconvenient forum or otherwise. Each party
hereto hereby consents to service of process in any such proceeding in any manner permitted by New
York law, and agrees that service of process by registered or certified mail, return receipt
requested, at its address specified pursuant to Section 4.2 hereof is reasonably calculated to give
actual notice. Notwithstanding the foregoing in this Section 4.8, a party may commence any action
in a court other than the above-named courts solely for the purpose of enforcing an order or
judgment issued by one of the above-named courts.

          4.9 Waiver of Jury Trial

          TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY HERETO
HEREBY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE)
ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION
OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF OR
BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT
THIS SECTION 4.9 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY ARE RELYING AND WILL RELY IN
ENTERING INTO THIS AGREEMENT. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION 4.9 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF
ITS RIGHT TO TRIAL BY JURY.

          4.10 Specific Performance

          Each of the parties hereto acknowledges and agrees that in the event of any breach of
this Agreement by any of them, the non-breaching party would be irreparably harmed and could not be
made whole by monetary damages. Each party accordingly agrees to waive the defense in any action
for specific performance that a remedy at law would be adequate and that the parties, in addition
to any other remedy to which they may be entitled at law or in equity, shall be entitled to compel
specific performance of this Agreement.

          4.11 Entire Agreement

          This Agreement sets forth the entire understanding of the parties hereto with respect to the
subject matter hereof. There are no agreements, representations, warranties, covenants or
undertakings with respect to the subject matter hereof other than those expressly set forth herein.
This Agreement supersedes all other prior agreements and understandings between the parties with
respect to such subject matter.

          4.12 Titles and Headings

Table of Contents

8

          The section headings contained in this Agreement are for reference purposes only and will not
affect the meaning or interpretation of this Agreement.

          4.13 Severability

          If one or more of the provisions, paragraphs, words, clauses, phrases or sentences contained
herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable
in any respect for any reason, the validity, legality and enforceability of any such provision,
paragraph, word, clause, phrase or sentence in every other respect and of the remaining provisions,
paragraphs, words, clauses, phrases or sentences hereof shall not be in any way impaired, it being
intended that all rights, powers and privileges of the parties hereto shall be enforceable to the
fullest extent permitted by Law.

          4.14 Counterparts

          This Agreement may be executed in any number of counterparts, each of which will be deemed to
be an original and all of which together will be deemed to be one and the same instrument.

          4.15 Effectiveness

          This Agreement shall become effective upon the Closing Date.

Table of Contents

          IN WITNESS WHEREOF, each of the undersigned has executed this Agreement or caused this
Agreement to be executed on its behalf as of the date first written above.

	 	 	 	 	 
	 	MEDQUIST HOLDINGS INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	S.A.C. PEI CB INVESTMENT, L.P.

By: S.A.C. PEI CB Investment GP, Limited, its general partner

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	S.A.C. PEI CB INVESTMENT II, LLC

By: S.A.C. Private Capital Group, LLC, its manager

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	INTERNATIONAL EQUITIES (S.A.C. ASIA) LIMITED

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[Signature Page to IPO Stockholders' Agreement]exv10w10

Exhibit 10.10

AMENDED AND RESTATED MANAGEMENT STOCKHOLDER’S AGREEMENT

          This Amended and Restated Management Stockholder’s Agreement (this “Agreement”) is
entered into as of _____ among CBaySystems Holdings Limited, currently organized under the laws of
the British Virgin Islands, (the “Company”), S.A.C. PEI CB Investment, L.P., an exempted
limited partnership organized under the laws of the Cayman Islands (“SAC CBI”), and the
undersigned person (the “Management Stockholder”) (the Company, SAC CBI and the Management
Stockholder being hereinafter collectively referred to as the “Parties”). All capitalized
terms not immediately defined are hereinafter defined in Section 3 of this Agreement.

          WHEREAS, on April 17, 2009, the Parties entered into the Management Stockholder’s Agreement
(the “Original Agreement”) in connection with the issuance and prospective issuance to the
Management Stockholder of options (the “Existing Options”) to purchase shares of Common
Stock (as defined below) pursuant to (i) the terms of the Original Agreement and the terms of the
Company’s 2007 Equity Incentive Plan (the “2007 Option Plan”) and the Stock Option
Agreement entered into by and between the Company and the Management Stockholder in respect thereof
(the “Original Option Agreement”) and (ii) the terms of a standalone option agreement with
the Company dated June 12, 2007 (together with the Original Option Agreement, the “Existing
Option Agreements”).

          WHEREAS, in connection with the proposed initial Public Offering in the United States of
Common Stock (the “Initial Public Offering”), the Parties desire and wish to amend and
restate the Original Agreement ab initio in its entirety as set forth herein.

          NOW THEREFORE, to implement the foregoing and in consideration of the mutual agreements
contained herein, the Parties agree as follows:

          1. Definitions. Terms used herein as listed below shall be defined as follows:

     “Act” shall mean the Securities Act of 1933, as amended.

     “Affiliate” shall mean, with respect to any individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust, unincorporated association,
joint venture, governmental authority or other entity of whatever nature (each, a
“Person”), any other Person directly or indirectly controlling, controlled by, or under
common control with, such Person where “control” shall have the meaning given such term under Rule
405 of the Act; provided, that, in no event shall the Principal Stockholders be
regarded as “Affiliates” of the Company or any of its subsidiaries for purposes of this Agreement.

     “Agreement” shall have the meaning set forth in the introductory paragraph.

     “Board” shall mean the board of directors of the Company.

     “Common Stock” shall mean shares of common stock, par value $0.10 per share, of the
Company.

     “Company” shall have the meaning set forth in the introductory paragraph.

1

 

     “Exchange Act” shall mean the U.S. Securities Act of 1934, as amended.

     “Existing Options” shall have the meaning set forth in the first “whereas”
paragraph.

     “Existing Option Agreements” shall have the meaning set forth in the first “whereas”
paragraph.

     “Initial Public Offering” shall have the meaning set forth in the second “whereas”
paragraph.

     “Management Stockholder” shall have the meaning set forth in the introductory
paragraph.

     “Option Stock” shall mean any Common Stock issuable or issued upon exercise of
Existing Options.

     “Original Agreement” shall have the meaning set forth in the first “whereas”
paragraph.

     “Parties” shall have the meaning set forth in the introductory paragraph.

     “Principal Stockholders” shall mean SAC CBI and its Affiliates other than the Company
and the Company’s subsidiaries.

     “Public Offering” shall mean the sale of shares of Common Stock to the public pursuant
to a registration statement under the Act which has been declared effective by the SEC (other than
a registration statement on Form S-4, S-8 or any other similar form).

     “Rule 144” shall mean Rule 144 of the SEC promulgated under the Act, or any successor
rule.

     “SAC CBI” shall have the meaning set forth in the introductory paragraph.

     “SEC” shall mean the U.S. Securities and Exchange Commission.

     “Transfer” shall mean any direct or indirect assignment, gift, offer, conveyance,
pledge, transfer, sale, assignment, hypothecation, encumbrance or other disposition.

     “2007 Option Plan” shall have the meaning set forth in the first “whereas” paragraph.

          2. Management Stockholder’s Representations, Warranties and Agreements.

          (a) The certificate (or certificates) representing the Option Stock shall bear the following
legend:

“THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS
OF THE AMENDED AND RESTATED MANAGEMENT STOCKHOLDER’S AGREEMENT DATED AS OF DECEMBER
[•], 2010 AMONG [CBAY SYSTEMS HOLDINGS

2

 

LIMITED/MEDQUIST HOLDINGS INC.] (THE “COMPANY”), S.A.C. PEI CB INVESTMENT, L.P., AND
THE MANAGEMENT STOCKHOLDER NAMED ON THE FACE HEREOF (A COPY OF WHICH IS ON FILE WITH
THE SECRETARY OF THE COMPANY).”

          (b) The Management Stockholder acknowledges that he has been advised that (i) a restrictive
legend in the form heretofore set forth shall be placed on the certificates representing the Option
Stock and (ii) a notation shall be made in the transfer register of the Company indicating that the
Option Stock is subject to restrictions on transfer and appropriate stop transfer restrictions will
be issued to the Company’s transfer agent with respect to the Option Stock. If the Management
Stockholder is an Affiliate of the Company, the Management Stockholder also acknowledges that (1)
the Option Stock must be held indefinitely and the Management Stockholder must continue to bear the
economic risk of the investment in the Option Stock unless it is subsequently registered under the
Act or an exemption from such registration is available, (2) when and if shares of the Option Stock
may be disposed of without registration in reliance on Rule 144 of the rules and regulations
promulgated under the Act, such disposition can be made only in limited amounts in accordance with
the terms and conditions of such Rule and (3) if the Rule 144 exemption is not available, public
sale without registration will require compliance with some other exemption under the Act.

          (c) If any shares of Common Stock are to be disposed of in accordance with Rule 144 under the
Act or otherwise, the Management Stockholder shall promptly notify the Company of such intended
disposition and shall deliver to the Company at or prior to the time of such disposition such
documentation as the Company may reasonably request in connection with such sale and, in the case
of a disposition pursuant to Rule 144, shall deliver to the Company an executed copy of any notice
on Form 144 required to be filed with the SEC.

          (d) The Management Stockholder agrees that, if requested by the managing underwriter for an
underwritten offering of any shares of Common Stock to the public pursuant to an effective
registration statement under the Act (other than registration of securities issued on Form S-8,
Form S-4 or any successor or similar form), the Management Stockholder will not, directly or
indirectly, sell, offer, contract or grant any option to sell (including, without limitation, any
short sale), pledge, transfer or establish an open “put equivalent position” within the meaning of
Rule 16a-1(h) under the Exchange Act, or otherwise dispose of any Common Stock, options or warrants
to acquire Common Stock, or securities exchangeable or exercisable for or convertible into Common
Stock currently or hereafter owned either of record or beneficially (as defined in Rule 13d-3 under
the Exchange Act) by the Management Stockholder or the spouse or other immediate family member of
the Management Stockholder, not covered by such registration statement from the time of the receipt
of a notice from the Company that the Company has filed or imminently intends to file such
registration statement to, or within 180 days (or such shorter period as may be consented to by the
managing underwriter or underwriters) in the case of the Initial Public Offering and ninety (90)
days (or in an underwritten offering such shorter period as may be consented to by the managing
underwriter or underwriters, if any) in the case of any other Public Offering after, the closing of
such offerings, unless otherwise agreed to in writing by the Company.

          (e) The Management Stockholder represents and warrants that (i) with respect to the Option
Stock, the Management Stockholder has received and reviewed the Existing

3

 

Option Agreements, the 2007 Option Plan and (ii) the Management Stockholder has been given the
opportunity to obtain any additional information or documents and to ask questions and receive
answers about such information, the Company and the business and prospects of the Company which the
Management Stockholder deems necessary to evaluate the merits and risks related to the Management
Stockholder’s investment in the Option Stock and to verify the information contained in the
information received as indicated in this Section 2(e), and the Management Stockholder has relied
solely on such information.

          (f) The Management Stockholder further represents and warrants that (i) the Management
Stockholder’s financial condition is such that the Management Stockholder can afford to bear the
economic risk of holding the Option Stock for an indefinite period of time and has adequate means
for providing for the Management Stockholder’s current needs and personal contingencies, (ii) the
Management Stockholder can afford to suffer a complete loss of his investment in the Option Stock,
(iii) the Management Stockholder understands and has taken cognizance of all risk factors related
to the acquisition of the Option Stock and (iv) the Management Stockholder’s knowledge and
experience in financial and business matters are such that the Management Stockholder is capable of
evaluating the merits and risks of the Management Stockholder’s acquisition of the Option Stock as
contemplated by this Agreement.

          3. Transfers to Third Parties.

          (a) The Management Stockholder agrees that in connection with any Transfer of Option Stock,
the Management Stockholder shall, if requested by the Company, deliver to the Company an opinion of
counsel in form and substance reasonably satisfactory to the Company and counsel for the Company,
to the effect that the Transfer is not in violation of this Agreement or the Act. In addition, the
Company shall be satisfied that the Transfer is not in violation of the securities laws of any
state applicable to such Transfer. Any purported Transfer in violation of the provisions of this
Section 3(a) shall be null and void ab initio and shall have no force or effect.

          (b) Notwithstanding the foregoing, nothing in this Section 3 shall prevent the Transfer of any
shares of Common Stock by the Management Stockholder to (i) the Company; or (ii) (A) any member of
the Management Stockholder’s immediate family (the “Permitted Family Members”), (B) trusts
for the benefit of the Permitted Family Members, and (C) upon the Management Stockholder’s death,
the Management Stockholder’s executors, administrators, testamentary trustees, legatees and
beneficiaries; provided that, in the case of subclause (A) and (B), the transferee
agrees in writing that the Management Stockholder retains the sole and exclusive right to vote or
dispose of any shares of Common Stock transferred to the Permitted Family Member (each such person
and entity described in clause (ii) a “Permitted Transferee” and collectively, the
“Permitted Transferees”); provided, further that the Permitted Transferee
agrees in writing to be bound by the terms and conditions of this Agreement pursuant to an
instrument of assumption reasonably satisfactory in form and substance to the Company.

          4. Recapitalizations, etc. The provisions of this Agreement shall apply, to the full
extent set forth herein with respect to the Common Stock or the Existing Options, to any and all
shares of capital stock of the Company or any capital stock, partnership units or any other
security evidencing ownership interests in any successor or assign of the Company (whether by
merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange
for, or substitution of the Common Stock or the Existing Options by

4

 

reason of any stock dividend, split, reverse split, combination, division, recapitalization,
liquidation, reclassification, merger, consolidation, conversion in connection with change of
Company domicile or otherwise.

          5. Management Stockholder’s Employment by the Company. Nothing contained in this
Agreement or in any other agreement entered into by the Company and the Management Stockholder
contemporaneously with the execution of this Agreement (subject to, and except as set forth in, the
applicable provisions of any offer letter, letter of employment provided to the Management
Stockholder by the Company or any employment agreement entered into by and between the Management
Stockholder and the Company or any of its subsidiaries) (i) obligates the Company or any subsidiary
of the Company to employ the Management Stockholder in any capacity whatsoever or (ii) prohibits or
restricts the Company (or any such subsidiary) from terminating the employment of the Management
Stockholder at any time or for any reason whatsoever, and the Management Stockholder hereby
acknowledges and agrees that neither the Company nor any other person has made any representations
or promises whatsoever to the Management Stockholder concerning the Management Stockholder’s
employment or continued employment by the Company or any subsidiary of the Company.

          6. Binding Effect; Assumption. The provisions of this Agreement shall be binding upon
and accrue to the benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns. This Agreement shall be assumed mutatis mutandis by any successor to the
Company in any transaction that does not constitute a Change in Control.

          7. Amendment. This Agreement may be amended by the written agreement of the
Management Stockholder and the Company; provided, however, that no amendment shall be made to the
terms of Section 8, Section 12 or the proviso in Section 13 without the written agreement of SAC
CBI.

          8. Applicable Law; Jurisdiction; Arbitration; Legal Fees.

          (a) The laws of the State of New York applicable to contracts executed and to be performed
entirely in such state shall govern the interpretation, validity and performance of the terms of
this Agreement.

          (b) In the event of any controversy among the parties hereto arising out of, or relating to,
this Agreement which cannot be settled amicably by the parties, such controversy shall be finally,
exclusively and conclusively settled by mandatory arbitration conducted expeditiously in accordance
with the American Arbitration Association rules by a single independent arbitrator. Such
arbitration process shall take place within 100 miles of the New York City metropolitan area. The
decision of the arbitrator shall be final and binding upon all parties hereto and shall be rendered
pursuant to a written decision, which contains a detailed recital of the arbitrator’s reasoning.
Judgment upon the award rendered may be entered in any court having jurisdiction thereof.

          (c) Except as provided in Section 12(b), in the event of any arbitration or other disputes
with regard to this Agreement, each Party shall pay its own legal fees and expenses, unless the
arbitrator determines that legal fees and expenses should be allocated to the Parties involved in
such arbitration or dispute on a different basis, taking into account the outcome of the
arbitration of the underlying controversy.

5

 

          9. Miscellaneous.

          (a) In this Agreement the masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.

          (b) If any provision of this Agreement shall be declared illegal, void or unenforceable by any
court of competent jurisdiction, the other provisions shall not be affected, but shall remain in
full force and effect.

          10. Withholding. The Company or its subsidiaries shall have the right to deduct from
any cash payment made under this Agreement to the Management Stockholder any minimum federal, state
or local income or other taxes required by law to be withheld with respect to such payment.

          11. Notices. All notices and other communications provided for herein shall be in
writing. Any notice or other communication hereunder shall be deemed duly given (i) upon
electronic confirmation of facsimile, (ii) one business day following the date sent when sent by
overnight delivery and (iii) five (5) business days following the date mailed when mailed by
registered or certified mail return receipt requested and postage prepaid, in each case as follows:

          (a) If to the Company, to it at the following address:

CBaySystems Holdings Limited

9009 Carothers Parkway

Franklin, TN 37067

Attention: Chairman & Chief Executive Officer

with copies to (which shall not constitute notice):

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017

Facsimile: 212.455.3615

Attention: D. Rhett Brandon, Esq.

          (b) If to SAC CBI, to it at the following address:

c/o S.A.C. Capital Advisors, L.P.

72 Cummings Point Rd

Stamford, Connecticut 06902

Facsimile: 203.823.4209

Attention: General Counsel

          (c) If to the Management Stockholder, to the Management Stockholder at the address set forth
below under the Management Stockholder’s signature;

or at such other address as any party shall have specified by notice in writing to the others.

          12. Covenant Not to Disparage.

6

 

          (a) The Management Stockholder shall not, at any time, disparage the Company, the Principal
Stockholders, any of their respective Affiliates, or any of the products or practices, directors,
officers, agents, representatives, partners, members, stockholders of any of the foregoing, either
orally or in writing.

          (b) In the event that the Management Stockholder breaches any of the covenants sets forth in
this Section 12 (i) while the Management Stockholder is receiving severance payments under any
agreement or plan, the Company may cease making payments thereunder; and (ii) the Management
Stockholder agrees to pay the amount of damages the Company or the Principal Stockholders can
reasonably demonstrate it or they incurred as a result of such breach. The Management Stockholder
shall be liable for the payment of reasonable attorneys’ fees, costs and ancillary expenses
incurred by the Company and the Principal Stockholders in enforcing their respective rights
hereunder in court or other legal proceedings if the Company or the Principal Stockholders prevail
in such proceedings.

          (c) The existence of any claim or cause of action of the Management Stockholder against the
Company whether predicated on this Agreement or otherwise shall not constitute a defense to the
enforcement by the Company of the covenants contained in this Section 12. It is specifically agreed
that the period following the termination of the Management Stockholder’s employment with the
Company during which the agreements and covenants of the Management Stockholder made in this
Section 12 shall be effective, shall be computed by excluding from such computation any time during
which the Management Stockholder is in violation of any provision of this Section 12.

          13. Termination.

          This Agreement shall terminate on April 17, 2017; provided, however,
that (x) the provisions of Section 2 (a), (b), (c), (e) and (f), Section 3 and Section 4
shall terminate at such time as the Option Stock shall have been registered by the Company under
the Act, (y) the provisions of Section 2(d) and Section 5 shall terminate at such time as the
Management Stockholder is no longer an employee or director of the Company, and (z) the provisions
of Sections 6, 7, 8, 9, 10, 11, 12 and 13 shall survive any such termination.

[Signatures on next pages.]

7

 

          IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	CBAYSYSTEMS HOLDINGS LIMITED

 	 
	 	By:  	 	 
	 	 	 	 
	 	Name: 	 	 
	 
	 	Title: 	 	 

8

 

	 	 	 	 	 
	 	S.A.C. PEI CB INVESTMENT, L.P., acting by its

general partner,

S.A.C. PEI CB Investment GP, Limited

 	 
	 	By:  	 	 
	 	 	 	 
	 	Name: 	 	 
	 
	 	Title: 	 	 

9

 

	 	 	 	 	 
	 	MANAGEMENT STOCKHOLDER:

 

	 	Name:  	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	ADDRESS:

 

 

 	 
	 	 	 
	 	 	 
	 

10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00183-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00183-of-00352.parquet"}]]