Document:

Exhibit 10.3

 

RESTRICTED STOCK AGREEMENT

for the

J. B. HUNT TRANSPORT SERVICES, INC.

AMENDED AND RESTATED MANAGEMENT INCENTIVE PLAN

 

THIS  Restricted Stock Agreement (“Agreement”) made
as of                      by and between J. B. Hunt Transport Services, Inc. (“Company”)
and                                     (“Recipient”):

 

WHEREAS, the Company maintains
the J.B. Hunt Transport Services, Inc. Amended and Restated Management
Incentive Plan (the “Plan”) under which the Company’s Compensation Committee of
the Board of Directors (“Committee”) may, among other things, award shares of
the Company’s $.01 par value Common Stock (“Common Stock”) to such members of
the Company’s management as the Committee may determine, subject to terms,
conditions, or restrictions as it may deem appropriate;

 

WHEREAS, pursuant to the Plan,
the Committee has awarded to Recipient a Restricted Stock Award (“Award”)
conditioned upon the execution by the Company and the Recipient of this
Agreement setting forth all the terms and conditions applicable to such Award
in accordance with the laws of the State of Arkansas;

 

THEREFORE, in consideration of
the past services of the Recipient and the mutual promises and covenants
contained herein it is hereby agreed as follows:

 

1.                                      AWARD
OF SHARES:

 

Under the terms of the Plan, the Committee has awarded
to the Recipient an Award on                                 (“Award Date”), for                      shares of Common Stock subject to the terms, conditions and
restrictions set forth in this Agreement. 
There will be no purchase price required by the Recipient in connection
with this transaction.

 

2.                                      AWARD
RESTRICTIONS:

 

The Award vests as described below and each vested
portion of the Award shall expire thirty (30) days after each designated vesting
date.

 

Upon each vesting date and upon satisfaction of the
requirements of Paragraph 8, the Company shall cause a stock certificate to be
delivered, without legend, in an amount reflecting the number of shares vested
and registered on the Company’s books

 

 

in the name of the Recipient or the Recipient’s beneficiary.  Upon receipt of such stock certificate, the
Recipient or beneficiary are free, upon compliance with applicable law, to hold
or dispose of such certificate at will.

 

During the vesting period, those shares covered by the
Award, but not vested, are not transferable by the Recipient by means of sale,
assignment, exchange, pledge or otherwise. 
However, during the vesting period, the Recipient does have the right to
tender for sale or exchange with the Company’s written consent, any such shares
in the event of any tender offer within the meaning of Section 14(d) of
the Securities Exchange Act of 1934.

 

3.                                      ADMINISTRATION
OF AWARD:

 

The Restricted Stock shall be maintained in a
book-entry account (the “Account”) by and at the Company’s transfer agent until
the restrictions associated with such Restricted Stock expire pursuant to
Sections 2, 4 or 8.  The Recipient shall
execute and deliver to the transfer agent one or more stock powers in blank for
the Restricted Stock.  The Recipient
hereby agrees that the transfer agent shall maintain such Account and the
related stock power(s) pursuant to the terms of this Agreement until such
restrictions expire pursuant to Sections 2 or 4.   The shares of Restricted Stock subject to
these Awards are not eligible for dividend distributions (other than
adjustments described in Paragraph 5), not eligible to be voted and not
eligible to be enrolled in any dividend re-investment program until the
restrictions thereon expire.

 

The Committee shall have full authority and discretion
(subject only to the express provisions of the Plan) to decide all matters
relating to the administration and interpretation of the Plan and this
Agreement.  All such Committee
determinations shall be final, conclusive and binding upon the Company, the
Recipient, and any and all interested parties.

 

4.                                      EMPLOYMENT
TERMINATION:

 

Termination of the Recipient’s employment with the
Company for any reason other than death or disability, shall result in
forfeiture of the Award on the date of termination to the extent not already
vested.  If the Recipient terminates
employment with the Company due to death or disability during the vesting
period, that Award, to the extent not already vested, shall vest in full as of
the date of such termination.  If the
Recipient’s employment terminates on account of “early retirement” (as defined
by the Committee), or under special circumstances determined by the Committee,
the Award, to the extent not already vested, may be vested in full or in parts
as determined by the Committee. The Recipient may designate a beneficiary to
receive the stock certificate representing that portion of the Award
automatically vested upon death.  The
Recipient has the right to change such beneficiary designation at will.

 

5.                                      ADJUSTMENT
OF SHARES FOR RECAPITALIZATION, ETC.

 

In the event there is any change in the outstanding
Stock of the Company by reason of any reorganization, recapitalization, stock
split, stock dividend, combination of shares or otherwise, there shall be
substituted for or added to each share of Stock theretofore appropriated or
thereafter subject, or which may become subject, to this Award, the number and
kind of shares of stock or other securities into which each

 

 

outstanding share of Stock shall be so changed or for which each such
share shall be exchanged, or to which each such share shall be entitled, as the
case may be.  Adjustment under the
preceding provisions of this Section 5 will occur automatically upon any
such change in the outstanding Stock of the Company.  No fractional interest will be issued under
the Plan on account of any such adjustment.

 

6.                                      COMPANY
RECORDS

 

Records of the Company or its Subsidiaries or
Affiliates regarding any period(s) of service, termination of service and the
reason therefore, and other matters shall be conclusive for all purposes
hereunder, unless determined by the Company to be incorrect.

 

7.                                      NO
LIABILITY FOR GOOD FAITH DETERMINATION.

 

The members of the Board and the Committee shall not
be liable for any act, omission, interpretation or determination taken or made
in good faith with respect to this Agreement or the Restricted Stock granted
hereunder and all members of the Board or the Committee and each and any
officer or employee of the Company acting on their behalf shall, to the extent
permitted by law, be fully indemnified and protected by the Company in respect
of any such action, determination or interpretation.

 

8.                                      WITHHOLDING
TAXES.

 

The Company will require the Recipient receiving the
shares of Common Stock under an Award, to reimburse the Company for such taxes
required to be withheld by the Company and withhold any distribution in whole
or in part until the Company is so reimbursed. 
The Recipient may satisfy the withholding obligation using cash or
Company Common Stock owned (other than through this Award) by the Recipient for
at least six months prior to the vesting date.

 

9.                                      IMPACT
ON OTHER BENEFITS:

 

The value of the Award (either on the Award Date or at
the time the shares are vested) shall not be includable as compensation or
earnings for purposes of any other benefit plan offered by the Company.

 

10.                               ACCELERATION
OF VESTING:

 

Notwithstanding anything contained in this Agreement
to the contrary, in the event that, at any time following the date of a “change
of control” (as hereinafter defined)  (i) a
Recipient’s employment with the Company or one of its subsidiaries terminates
as a result of such Recipient’s retirement, termination without “just cause”
(as hereinafter defined) by the Company or one of its subsidiaries, or
resignation by the Recipient for good reason; or (ii) with respect to a
recipient employed by one of the Company’s subsidiaries, a “sale transaction”
(as hereinafter defined) is effected; then all vesting restrictions on any
shares of the Company’s Common Stock or acquiring Company Common Stock awarded
to that participant under this Agreement shall immediately lapse and such
shares shall be vested.

 

 

For purposes of this Plan, “just cause” shall mean the
willful and continued failure of a Recipient to substantially perform his
duties with the Company or one of its subsidiaries after a written demand for
substantial performance is delivered to such participant by the Board of
Directors of the Company, or its subsidiary, which specifically identifies the
manner in which the board believes that such participant has not substantially
performed his duties; or willful misconduct by the Recipient materially injures
the Company or its subsidiaries monetarily or otherwise (it being understood
that no act, or failure to act, on the part of a recipient shall be considered “willful”
unless done, or omitted to be done, by such Recipient in bad faith and with
knowledge that the action or omission was not in the best interest of the
Company or such subsidiary).

 

“Sale transaction” shall mean, with respect to an
employee of one of the Company’s subsidiaries, the direct or indirect sale or
other disposition by the Company of in excess of fifty percent (50%) of the voting
capital stock of such subsidiary, the complete liquidation of such subsidiary,
or the sale by such subsidiary or all or substantially all of its assets.

 

For purposes of this Paragraph 10, “change of control”
means:

 

(1)           Any
transaction involving the acquisition (“Acquisition Transaction”), by any
person, corporation, partnership or other entity, or any group (collectively
referred to herein as a “person”), of beneficial ownership of shares
representing thirty percent (30%) or more of the Company’s then outstanding
voting securities entitled to vote generally in the election of directors (“Voting
Securities”), but excluding, for this purpose, any such acquisition by (a) the
Company or any of its subsidiaries or any employee benefit plan (or related
trust) of the Company, or any of its subsidiaries, or (b) any corporation
with respect to which immediately following such acquisition, shares
representing more than fifty percent (50%) of such corporation’s Voting
Securities are beneficially owned, directly or indirectly, by those persons who
are the beneficial owners of the Company’s voting securities immediately prior
to such acquisition; or

 

(2)           Persons
who as of May 1, 2005 constitute the Company’s board of directors (the “Incumbent
Board”) cease, for any reason, to constitute at least a majority of the board,
provided that any person becoming a director of the Company subsequent to May 1,
2005 whose election was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall, for the purposes of this
Agreement, be considered to be a member of the Incumbent Board; or

 

(3)           Approval
by the stockholders of the Company of a reorganization, merger or consolidation
with respect to which those persons who were the beneficial owners of the
Company’s voting securities immediately prior to such reorganization, merger or
consolidation, do not, following such reorganization, merger or consolidation,
beneficially own, directly or indirectly, shares representing more than fifty
percent (50%) of the voting securities of the corporation

 

 

resulting from such reorganization, merger or
consolidation, or a complete liquidation or dissolution of the Company or the
sale or other disposition of all or substantially all of the assets of the Company.

 

For purposes of this Paragraph 10, “acquisition
transaction” means any of the following events:

 

(a)                                  A
merger, reorganization or consolidation involving the Company in which the
outstanding stock is converted into or exchanged for the Common Stock of
another entity, provided that such other entity has not, prior to or at the
time of such merger, reorganization or consolidation, directly or indirectly
acquired beneficial ownership of in excess of twenty percent (20%) of the
outstanding shares of the Company for consideration other than such Common
Stock (such a merger, reorganization or consolidation being herein referred to
as a “Stock Merger Transaction”); or

 

(b)                                 Any
merger, reorganization or consolidation involving the Company which is not a
Stock Merger Transaction and with respect to which these persons who were the
beneficial owners of the Company stock immediately prior to such merger,
reorganization, or consolidation, do not, following such merger,
reorganization, or consolidation, beneficially own, directly or indirectly,
shares representing more than fifty percent (50%) of the Common Stock of the
corporation resulting from such merger, reorganization or consolidation, or a
complete liquidation or dissolution of the Company or the sale or other disposition
of all or substantially all of the assets of the Company.

 

11.                               RIGHT
TO CONTINUED EMPLOYMENT:

 

Nothing in this Agreement or in the Plan shall confer
on a Recipient any right to continue in the employ of the Company or in any way
affect the Company’s right to terminate the Recipient’s employment without
prior notice at any time for any and no reason.

 

12.                               AMENDMENTS:

 

This Agreement shall be subject to the terms of the
Plan as amended except that the Award that is the subject of this Agreement may
not in any way be restricted or limited by any Plan amendment or termination
approved after the date of the award without the Recipient’s written consent.

 

 

13.                               FORCE
AND EFFECT:

 

The various provisions of this Agreement are severable
in their entirety.  Any determination of
invalidity or unenforceability of any one provision shall have no effect on the
continuing force and effect of the remaining provisions.

 

14.                               PREVAILING
LAWS:

 

This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Arkansas applicable to
corporations and the issuance of stock by Arkansas corporations.

 

15.                               SUCCESSORS:

 

This Agreement shall be binding upon and inure to the
benefit of the successors, assigns and heirs of the respective parties.

 

16.                               NOTICE:

 

Unless waived by the Company, any notice to the
Company required under or relating to this Agreement shall be in writing and
addressed to:

 

J. B. HUNT TRANSPORT SERVICES, INC.

Attention:  Kirk
Thompson

P. O. Box 130

Lowell, Arkansas 
72745

 

17.                               TERMS

 

Any terms used in this Agreement that are not
otherwise defined shall have the meanings prescribed to them in the Plan.

 

18.                               ENTIRE
AGREEMENT:

 

This Agreement contains the entire understanding of
the parties and shall not be modified or amended except in writing and duly
signed by the parties.  No waiver by
either party of any default under this Agreement shall be deemed a waiver of
any later default.

 

 

IN WITNESS THEREOF, the parties
have signed this Agreement as of the date hereof.

 

 

	
   

  	
  J. B. HUNT TRANSPORT SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   Kirk Thompson

  
	
   

  	
   President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Recipient:Exhibit 10.1

 

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:

 

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

 

(2)                                  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.

 

(3)                                  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;

 

 

(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)                                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;

 

(6)                                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 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:

 

(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)                                  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:

 

(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 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.

 

(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.

 

(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 his permitted
transferee and then subject to forfeiture will be immediately and automatically
forfeited; and

 

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

 

(3)                                In addition to
the remedies specified in Section 4(f)(2) and any other relief
awarded by any court, if Employee breaches any of the Covenants:

 

(i)                                   Employee will
be required to account for and pay over to the Company all compensation,
profits, monies, accruals, increments or other benefits derived or received by
Employee as a result of any such breach; and

 

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

 

 

(4)                                  If Employee
breaches Section 4, then the duration of the restriction therein
contained will be extended for a period equal to the period that Employee was
in breach of such restriction.

 

5.                                       Termination.  Employee’s employment by the Company may be
terminated at any time.  Upon
termination, Employee will be entitled to the payment of accrued and unpaid
salary through the date of such termination. 
All salary, commissions and benefits will cease at the time of such
termination, subject to the terms of any benefit plans then in force or
enforceable under applicable law and applicable to Employee, and the Company
will have no further liability or obligation hereunder by reason of such
termination; provided, however, that subject
to Section 4(f)(2)(iii), if Employee’s employment is terminated by
the Company without Cause, Employee will be entitled to (a) continued
payment of 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.                                       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.

 

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:

  	
   

  	
   

  
	
   

  	
   

  	
  Frank
  W. Lavelle

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  
	
  Accepted
  and Agreed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  R.
  Scott Bennett

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