Document:

Exhibit 10.1

 

FEI
COMPANY

1995
STOCK INCENTIVE PLAN, AS AMENDED

 

As amended effective February 16,
2006

 

1.                                       Purpose. The purpose of this Stock Incentive Plan (the “Plan”)
is to enable FEI Company (the “Company”) to attract and retain the services of (1) selected
employees, officers and directors of the Company or of any subsidiary of the
Company and (2) selected non-employee agents, consultants, advisors,
persons involved in the sale or distribution of the Company’s products and
independent contractors of the Company or any subsidiary.

 

2.                                       Shares Subject to the Plan. Subject to adjustment as
provided below and in paragraph 14, the shares to be offered under the Plan
shall consist of Common Stock of the Company, and the total number of shares of
Common Stock that may be issued under the Plan shall not exceed 9,000,000
shares. The shares issued under the Plan may be authorized and unissued
shares or reacquired shares. If an option, stock appreciation right, restricted
stock unit or performance unit granted under the Plan expires, terminates or is
canceled, the unissued shares subject to such option, stock appreciation right,
restricted stock unit or performance unit shall again be available under the
Plan. If shares sold or awarded as a bonus under the Plan are forfeited to the
Company or repurchased by the Company, the number of shares forfeited or
repurchased shall again be available under the Plan.

 

3.                                       Effective Date and Duration of Plan.

 

(a)                                          Effective Date. The Plan shall
become effective as of April 21, 1995. No option, stock appreciation
right, restricted stock unit or performance unit granted under the Plan shall
become exercisable, however, until the Plan is approved by the affirmative vote
of the holders of a majority of the shares of Common Stock represented at a
shareholders meeting at which a quorum is present and any such awards under the
Plan prior to such approval shall be conditioned on and subject to such
approval. Subject to this limitation, options, stock appreciation rights,
restricted stock units and performance units may be granted and shares may be
awarded as bonuses or sold under the Plan at any time after the effective date
and before termination of the Plan.

 

(b)                                         Duration. The Plan shall continue in
effect until all shares available for issuance under the Plan have been issued
and all restrictions on such shares have lapsed. The Board of Directors may suspend
or terminate the Plan at any time except with respect to options, performance
units, restricted stock units and shares subject to restrictions then
outstanding under the Plan. Termination shall not affect any outstanding
options, any right of the Company to repurchase shares or the forfeitability of
shares issued under the Plan.

 

4.                                       Administration.

 

(a)                                          Board of Directors. The Plan shall
be administered by the Board of Directors of the Company, which shall determine
and designate from time to time the individuals to whom awards shall be made,
the amount of the awards and the other terms and conditions of the awards.
Subject to the provisions of the Plan, the Board of Directors may from
time to time adopt and amend rules and regulations relating to
administration of the Plan, advance the lapse of any waiting period, accelerate
any exercise date, waive or modify any restriction applicable to shares (except
those restrictions imposed by law) and make all other determinations in the
judgment of the Board of Directors necessary or desirable for the
administration of the Plan. The interpretation and construction of the
provisions of the Plan and related agreements by the Board of Directors shall
be final and conclusive. The Board of Directors may correct any defect or
supply any omission or reconcile any inconsistency in the Plan or in any
related agreement in the manner and to the extent it shall deem expedient to
carry the Plan into effect, and it shall be the sole and final judge of such
expediency.

 

(b)                                         Committee. The Board of Directors may delegate
to a committee of the Board of Directors or specified officers of the Company,
or both (the “Committee”) any or all authority for administration of the Plan.
If authority is delegated to a Committee, all references to the Board of
Directors in the Plan shall mean and relate to the Committee except (i) as
otherwise provided by the Board of Directors, (ii) that only the Board of
Directors may amend or terminate the Plan as provided in paragraphs 3 and
15 and (iii) that a Committee including

 

 

officers of the Company
shall not be permitted to grant options to persons who are officers of the
Company. To the extent that the Board of Directors determines it to be
desirable to qualify awards granted hereunder as “performance-based
compensation” within the meaning of Section 162(m) of the Internal Revenue
Code of 1986, as amended (the “Code”), the Plan shall be administered by a
Committee of two or more “outside directors” within the meaning of Section 162(m)
of the Code.

 

5.                                       Types of Awards; Eligibility. The Board of Directors may,
from time to time, take the following action, separately or in combination, under
the Plan: (i) grant Incentive Stock Options, as defined in section 422
of the Code, as provided in paragraphs 6(a) and 6(b); (ii) grant
options other than Incentive Stock Options (“Non-Statutory Stock Options”) as
provided in paragraphs 6(a) and 6(c); (iii) award stock bonuses as
provided in paragraph 7; (iv) sell shares subject to restrictions as
provided in paragraph 8; (v) grant stock appreciation rights as provided
in paragraph 9; (vi) grant cash bonus rights as provided in paragraph 10; (vii) grant
performance units as provided in paragraph 11; (viii) grant foreign
qualified awards as provided in paragraph 12; and (ix) grant restricted
stock units as provided in paragraph 13. Any such awards may be made to
employees, including employees who are officers or directors, and to other
individuals described in paragraph 1 who the Board of Directors believes have
made or will make an important contribution to the Company or any subsidiary of
the Company; provided, however, that only employees of the Company shall be
eligible to receive Incentive Stock Options under the Plan. The Board of
Directors shall select the individuals to whom awards shall be made and shall
specify the action taken with respect to each individual to whom an award is
made. At the discretion of the Board of Directors, an individual may be
given an election to surrender an award in exchange for the grant of a new
award.

 

6.                                       Option Grants.

 

(a)                                          General Rules Relating to Options.

 

(i)                                     Terms
of Grant. The Board of Directors may grant options under the Plan. With
respect to each option grant, the Board of Directors shall determine the number
of shares subject to the option, the option price, the period of the option,
the time or times at which the option may be exercised and whether the
option is an Incentive Stock Option or a Non-Statutory Stock Option. At the
time of the grant of an option or at any time thereafter, the Board of
Directors may provide that an optionee who exercised an option with Common
Stock of the Company shall automatically receive a new option to purchase
additional shares equal to the number of shares surrendered and may specify
the terms and conditions of such new options.

 

(ii)                                  Exercise
of Options. Except as provided in paragraph 6(a) (iv) or as
determined by the Board of Directors, no option granted under the Plan may be
exercised unless at the time of such exercise the optionee is employed by or in
the service of the Company or any subsidiary of the Company and shall have been
so employed or provided such service continuously since the date such option
was granted. Absence on leave or on account of illness or disability under rules established
by the Board of Directors shall not, however, be deemed an interruption of
employment or service for this purpose. Unless otherwise determined by the
Board of Directors, vesting of options shall not continue during an absence on
leave (including an extended illness) or on account of disability. Except as
provided in paragraphs 6(a) (iv) and 14, options granted under the
Plan may be exercised from time to time over the period stated in each
option in such amounts and at such times as shall be prescribed by the Board of
Directors, provided that options shall not be exercised for fractional shares.
Unless otherwise determined by the Board of Directors, if the optionee does not
exercise an option in any one year with respect to the full number of shares to
which the optionee is entitled in that year, the optionee’s rights shall be
cumulative and the optionee may purchase those shares in any subsequent
year during the term of the option.

 

(iii)                               Nontransferability.
Each Incentive Stock Option and, unless otherwise determined by the Board of
Directors, each other option granted under the Plan by its terms shall be
nonassignable and nontransferable by the optionee, either voluntarily or by
operation of law, except by will or by the laws of descent and distribution of
the state or country of the optionee’s domicile at the time of death.

 

(iv)                              Termination
of Employment or Service.

 

(A)                              General
Rule. Unless otherwise determined by the Board of Directors, in the event the
employment or service of the optionee with the Company or a subsidiary
terminates for

 

 

any reason other than
because of physical disability or death as provided in subparagraphs 6(a)(iv)(B) and
(C), the option may be exercised at any time prior to the expiration date
of the option or the expiration of 30 days after the date of such termination,
whichever is the shorter period, but only if and to the extent the optionee was
entitled to exercise the option at the date of such termination.

 

(B)                                Termination
Because of Total Disability. Unless otherwise determined by the Board of
Directors, in the event of the termination of employment or service because of
total disability, the option may be exercised at any time prior to the
expiration date of the option or the expiration of 12 months after the date of
such termination, whichever is the shorter period, but only if and to the
extent the optionee was entitled to exercise the option at the date of such
termination. The term “total disability” means a medically determinable mental
or physical impairment which is expected to result in death or which has lasted
or is expected to last for a continuous period of 12 months or more and which causes
the optionee to be unable, in the opinion of the Company and two independent
physicians, to perform his or her duties as an employee, director, officer
or consultant of the Company and to be engaged in any substantial gainful
activity. Total disability shall be deemed to have occurred on the first day
after the Company and the two independent physicians have furnished their
opinion of total disability to the Company.

 

(C)                                Termination
Because of Death. Unless otherwise determined by the Board of Directors, in the
event of the death of an optionee while employed by or providing service to the
Company or a subsidiary, the option may be exercised at any time prior to
the expiration date of the option or the expiration of 12 months after the date
of death, whichever is the shorter period, for any portion of the option
exercisable as of the date of death and any outstanding unvested portion of the
option, which shall become fully vested and immediately exercisable as of the
date of death, and only by the person or persons to whom such optionee’s rights
under the option shall pass by the optionee’s will or by the laws of descent
and distribution of the state or country of domicile at the time of death.

 

(D)                               Amendment
of Exercise Period Applicable to Termination. The Board of Directors, at the
time of grant or, with respect to an option that is not an Incentive Stock
Option, at any time thereafter, may extend the 30-day and 12-month
exercise periods any length of time not longer than the original expiration
date of the option, and may increase the portion of an option that is
exercisable, subject to such terms and conditions as the Board of Directors may determine.

 

(E)                                 Failure
to Exercise Option. To the extent that the option of any deceased optionee or
of any optionee whose employment or service terminates is not exercised within
the applicable period, all further rights to purchase shares pursuant to such
option shall cease and terminate.

 

(v)                                 Purchase
of Shares. Unless the Board of Directors determines otherwise, shares may be
acquired pursuant to an option granted under the Plan only upon receipt by the
Company of notice in writing from the optionee of the optionee’s intention to
exercise, specifying the number of shares as to which the optionee desires to
exercise the option and the date on which the optionee desires to complete the
transaction, and if required in order to comply with the Securities Act of
1933, as amended, containing a representation that it is the optionee’s present
intention to acquire the shares for investment and not with a view to
distribution. Unless the Board of Directors determines otherwise, on or before
the date specified for completion of the purchase of shares pursuant to an
option, the optionee must have paid the Company the full purchase price of such
shares in cash (including, with the consent of the Board of Directors, cash
that may be the proceeds of a loan from the Company (provided that, with
respect to an Incentive Stock Option, such loan is approved at the time of
option grant)) or, with the consent of the Board of Directors, in whole or in
part, in Common Stock of the Company valued at fair market value, restricted
stock, performance units or other contingent awards denominated in either stock
or cash, promissory notes and other forms of consideration. The fair market
value of Common Stock provided in payment of the purchase price shall be
determined by the Board of Directors. If the Common Stock of the Company is not
publicly traded on the date the option is exercised, the Board of Directors may consider
any valuation methods it deems appropriate and may, but is not required to,
obtain one or more independent appraisals of the Company. If the Common Stock
of the Company is publicly traded on the date the option is exercised, the fair
market value of Common Stock provided in payment of the purchase price shall be
the closing price of the Common Stock as reported in The Wall
Street Journal on the last trading day preceding the date the option
is exercised, or such other reported value of the Common Stock as shall be
specified by the Board of Directors. No shares shall be issued until

 

 

full payment for the
shares has been made. With the consent of the Board of Directors (which, in the
case of an Incentive Stock Option, shall be given only at the time of option
grant), an optionee may request the Company to apply automatically the
shares to be received upon the exercise of a portion of a stock option (even
though stock certificates have not yet been issued) to satisfy the purchase
price for additional portions of the option. Each optionee who has exercised an
option shall immediately upon notification of the amount due, if any, pay to
the Company in cash amounts necessary to satisfy any applicable federal, state
and local tax withholding requirements. If additional withholding is or becomes
required beyond any amount deposited before delivery of the certificates, the
optionee shall pay such amount to the Company on demand. If the optionee fails
to pay the amount demanded, the Company may withhold that amount from
other amounts payable by the Company to the optionee, including salary, subject
to applicable law. With the consent of the Board of Directors an optionee may satisfy
this obligation, in whole or in part, by having the Company withhold from the
shares to be issued upon the exercise that number of shares that would satisfy
the withholding amount due or by delivering to the Company Common Stock to
satisfy the withholding amount. Upon the exercise of an option, the number of shares
reserved for issuance under the Plan shall be reduced by the number of shares
issued upon exercise of the option.

 

(b)                                         Incentive Stock Options. Incentive
Stock Options shall be subject to the following additional terms and
conditions:

 

(i)                                     Limitation
on Amount of Grants. No employee may be granted Incentive Stock Options
under the Plan if the aggregate fair market value, on the date of grant, of the
Common Stock with respect to which Incentive Stock Options are exercisable for
the first time by that employee during any calendar year under the Plan and
under all incentive stock option plans (within the meaning of section 422
of the Code) of the Company or any parent or subsidiary of the Company exceeds
$100,000.

 

(ii)                                  Limitations
on Grants to 10 Percent Shareholders. An Incentive Stock Option may be
granted under the Plan to an employee possessing more than 10 percent of the
total combined voting power of all classes of stock of the Company or of any
parent or subsidiary of the Company only if the option price is at least 110
percent of the fair market value, as described in paragraph 6(b)(iv), of the
Common Stock subject to the option on the date it is granted and the option by
its terms is not exercisable after the expiration of five years from the date it
is granted.

 

(iii)                               Duration
of Options. Subject to paragraphs 6(a) (ii) and 6(b) (ii),
Incentive Stock Options granted under the Plan shall continue in effect for the
period fixed by the Board of Directors, except that no Incentive Stock Option
shall be exercisable after the expiration of 10 years from the date it is
granted.

 

(iv)                              Option
Price. The option price per share shall be determined by the Board of Directors
at the time of grant. Except as provided in paragraph 6(b) (ii), the
option price shall not be less than 100 percent of the fair market value of the
Common Stock covered by the Incentive Stock Option at the date the option is
granted. The fair market value shall be determined by the Board of Directors.
If the Common Stock of the Company is not publicly traded on the date the
option is granted, the Board of Directors may consider any valuation
methods it deems appropriate and may, but is not required to, obtain one or
more independent appraisals of the Company. If the Common Stock of the Company
is publicly traded on the date the option is exercised, the fair market value
shall be deemed to be the closing price of the Common Stock as reported in The Wall Street Journal on the day preceding the date the
option is granted, or, if there has been no sale on that date, on the last
preceding date on which a sale occurred or such other value of the Common Stock
as shall be specified by the Board of Directors.

 

(v)                                 Limitation
on Time of Grant. No Incentive Stock Option shall be granted on or after the
tenth anniversary of the effective date of the Plan.

 

(vi)                              Conversion
of Incentive Stock Options. The Board of Directors may at any time without
the consent of the optionee convert an Incentive Stock Option to a
Non-Statutory Stock Option.

 

(c)                                          Non-Statutory Stock Options.
Non-Statutory Stock Options shall be subject to the following terms and
conditions in addition to those set forth in Section 6(a) above:

 

(i)                                     Option
Price. The option price for Non-Statutory Stock Options shall be

 

 

determined by the Board
of Directors at the time of grant and may be any amount determined by the
Board of Directors. Notwithstanding the foregoing, with respect to
Non-Statutory Stock Options intended to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the Code, the option
price will be no less than 100 percent of the fair market value per share on
the date of grant.

 

(ii)                  Duration of
Options. Non-Statutory Stock Options granted under the Plan shall continue in
effect for the period fixed by the Board of Directors.

 

7.                                       Stock Bonuses. The Board of Directors may award shares
under the Plan as stock bonuses. Shares awarded as a bonus shall be subject to
the terms, conditions, and restrictions determined by the Board of Directors.
The restrictions may include restrictions concerning transferability and
forfeiture of the shares awarded, together with such other restrictions as may be
determined by the Board of Directors. If shares are subject to forfeiture, all
dividends or other distributions paid by the Company with respect to the shares
shall be retained by the Company until the shares are no longer subject to
forfeiture, at which time all accumulated amounts shall be paid to the
recipient. The Board of Directors may require the recipient to sign an
agreement as a condition of the award, but may not require the recipient
to pay any monetary consideration other than amounts necessary to satisfy tax
withholding requirements. The agreement may contain any terms, conditions,
restrictions, representations and warranties required by the Board of
Directors. The certificates representing the shares awarded shall bear any
legends required by the Board of Directors. The Company may require any
recipient of a stock bonus to pay to the Company in cash upon demand amounts
necessary to satisfy any applicable federal, state or local tax withholding
requirements. If the recipient fails to pay the amount demanded, the Company may withhold
that amount from other amounts payable by the Company to the recipient,
including salary or fees for services, subject to applicable law. With the
consent of the Board of Directors, a recipient may deliver Common Stock to
the Company to satisfy this withholding obligation. Upon the issuance of a
stock bonus, the number of shares reserved for issuance under the Plan shall be
reduced by the number of shares issued.

 

8.                                       Restricted Stock. The Board of Directors may issue
shares under the Plan for such consideration (including promissory notes and
services) as determined by the Board of Directors. Shares issued under the Plan
shall be subject to the terms, conditions and restrictions determined by the
Board of Directors. The restrictions may include restrictions concerning
transferability, repurchase by the Company and forfeiture of the shares issued,
together with such other restrictions as may be determined by the Board of
Directors. If shares are subject to forfeiture or repurchase by the Company,
all dividends or other distributions paid by the Company with respect to the
shares shall be retained by the Company until the shares are no longer subject
to forfeiture or repurchase, at which time all accumulated amounts shall be
paid to the recipient. All Common Stock issued pursuant to this paragraph 8
shall be subject to a purchase agreement, which shall be executed by the
Company and the prospective recipient of the shares prior to the delivery of
certificates representing such shares to the recipient. The purchase agreement may contain
any terms, conditions, restrictions, representations and warranties required by
the Board of Directors. The certificates representing the shares shall bear any
legends required by the Board of Directors. The Company may require any
purchaser of restricted stock to pay to the Company in cash upon demand amounts
necessary to satisfy any applicable federal, state or local tax withholding
requirements. If the purchaser fails to pay the amount demanded, the Company may withhold
that amount from other amounts payable by the Company to the purchaser,
including salary, subject to applicable law. With the consent of the Board of
Directors, a purchaser may deliver Common Stock to the Company to satisfy
this withholding obligation. Upon the issuance of restricted stock, the number
of shares reserved for issuance under the Plan shall be reduced by the number
of shares issued.

 

9.                                       Stock Appreciation Rights.

 

(a)                                          Grant. Stock appreciation rights may be
granted under the Plan by the Board of Directors, subject to such rules, terms,
and conditions as the Board of Directors prescribes.

 

(b)                                         Exercise.

 

(i)                                     Each
stock appreciation right shall entitle the holder, upon exercise, to receive
from the Company in exchange therefore an amount equal in value to the excess
of the fair market value

 

 

on the date of exercise
of one share of Common Stock of the Company over its fair market value on the
date of grant (or, in the case of a stock appreciation right granted in
connection with an option, the excess of the fair market value of one share of
Common Stock of the Company over the option price per share under the option to
which the stock appreciation right relates), multiplied by the number of shares
covered by the stock appreciation right or the option, or portion thereof, that
is surrendered. No stock appreciation right shall be exercisable at a time that
the amount determined under this subparagraph is negative. Payment by the
Company upon exercise of a stock appreciation right may be made in Common
Stock valued at fair market value, in cash, or partly in Common Stock and
partly in cash, all as determined by the Board of Directors.

 

(ii)                                  A
stock appreciation right shall be exercisable only at the time or times
established by the Board of Directors. If a stock appreciation right is granted
in connection with an option, the following rules shall apply: (1) the
stock appreciation right shall be exercisable only to the extent and on the
same conditions that the related option could be exercised; (2) the stock
appreciation rights shall be exercisable only when the fair market value of the
stock exceeds the option price of the related option; (3) the stock
appreciation right shall be for no more than 100 percent of the excess of the
fair market value of the stock at the time of exercise over the option price; (4) upon
exercise of the stock appreciation right, the option or portion thereof to
which the stock appreciation right relates terminates; and (5) upon
exercise of the option, the related stock appreciation right or portion thereof
terminates.

 

(iii)                               The
Board of Directors may withdraw any stock appreciation right granted under
the Plan at any time and may impose any conditions upon the exercise of a
stock appreciation right or adopt rules and regulations from time to time
affecting the rights of holders of stock appreciation rights. Such rules and
regulations may govern the right to exercise stock appreciation rights
granted prior to adoption or amendment of such rules and regulations as
well as stock appreciation rights granted thereafter.

 

(iv)                              For
purposes of this paragraph 9, the fair market value of the Common Stock shall
be determined as of the date the stock appreciation right is exercised, under
the methods set forth in paragraph 6(b) (iv).

 

(v)                                 No
fractional shares shall be issued upon exercise of a stock appreciation right.
In lieu thereof, cash may be paid in an amount equal to the value of the
fraction or, if the Board of Directors shall determine, the number of shares may be
rounded downward to the next whole share.

 

(vi)                              Each
stock appreciation right granted in connection with an Incentive Stock Option,
and unless otherwise determined by the Board of Directors, each other stock
appreciation right granted under the Plan by its terms shall be nonassignable
and nontransferable by the holder, either voluntarily or by operation of law, except
by will or by the laws of descent and distribution of the state or country of
the holder’s domicile at the time of death, and each stock appreciation right
by its terms shall be exercisable during the holder’s lifetime only by the
holder.

 

(vii)                           Each
participant who has exercised a stock appreciation right shall, upon
notification of the amount due, pay to the Company in cash amounts necessary to
satisfy any applicable federal, state and local tax withholding requirements.
If the participant fails to pay the amount demanded, the Company may withhold
that amount from other amounts payable by the Company to the participant
including salary, subject to applicable law. With the consent of the Board of
Directors a participant may satisfy this obligation, in whole or in part,
by having the Company withhold from any shares to be issued upon the exercise
that number of shares that would satisfy the withholding amount due or by
delivering Common Stock to the Company to satisfy the withholding amount.

 

(viii)                        Upon the
exercise of a stock appreciation right for shares, the number of shares
reserved for issuance under the Plan shall be reduced by the number of shares
issued. Cash payments of stock appreciation rights shall not reduce the number
of shares of Common Stock reserved for issuance under the Plan.

 

10.                                 Cash Bonus Rights.

 

(a)                                          Grant. The Board of Directors may grant
cash bonus rights under the Plan in connection with (i) options granted or
previously granted, (ii) stock appreciation rights granted or previously
granted, (iii) stock bonuses awarded or previously awarded and (iv) shares
sold or previously sold under the Plan. Cash bonus rights

 

 

will be subject to rules,
terms and conditions as the Board of Directors may prescribe. Unless
otherwise determined by the Board of Directors, each cash bonus right granted
under the Plan by its terms shall be nonassignable and nontransferable by the
holder, either voluntarily or by operation of law, except by will or by the
laws of descent and distribution of the state or country of the holder’s
domicile at the time of death. The payment of a cash bonus shall not reduce the
number of shares of Common Stock reserved for issuance under the Plan.

 

(b)                                         Cash Bonus Rights in Connection With Options.
A cash bonus right granted in connection with an option will entitle an
optionee to a cash bonus when the related option is exercised (or terminates in
connection with the exercise of a stock appreciation right related to the
option) in whole or in part if, in the sole discretion of the Board of
Directors, the bonus right will result in a tax deduction that the Company has
sufficient taxable income to use. If an optionee purchases shares upon exercise
of an option and does not exercise a related stock appreciation right, the amount
of the bonus, if any, shall be determined by multiplying the excess of the
total fair market value of the shares to be acquired upon the exercise over the
total option price for the shares by the applicable bonus percentage. If the
optionee exercises a related stock appreciation right in connection with the
termination of an option, the amount of the bonus, if any, shall be determined
by multiplying the total fair market value of the shares and cash received
pursuant to the exercise of the stock appreciation right by the applicable
bonus percentage. The bonus percentage applicable to a bonus right, including a
previously granted bonus right, may be changed from time to time at the
sole discretion of the Board of Directors but shall in no event exceed 75 percent.

 

(c)                                          Cash Bonus Rights in Connection With Stock Bonus.
A cash bonus right granted in connection with a stock bonus will entitle the
recipient to a cash bonus payable when the stock bonus is awarded or
restrictions, if any, to which the stock is subject lapse. If bonus stock
awarded is subject to restrictions and is repurchased by the Company or
forfeited by the holder, the cash bonus right granted in connection with the
stock bonus shall terminate and may not be exercised. The amount and
timing of payment of a cash bonus shall be determined by the Board of
Directors.

 

(d)                                         Cash Bonus Rights in Connection With Stock
Purchases. A cash bonus right granted in connection with the
purchase of stock pursuant to paragraph 8 will entitle the recipient to a cash bonus
when the shares are purchased or restrictions, if any, to which the stock is
subject lapse. Any cash bonus right granted in connection with shares purchased
pursuant to paragraph 8 shall terminate and may not be exercised in the
event the shares are repurchased by the Company or forfeited by the holder
pursuant to applicable restrictions. The amount of any cash bonus to be awarded
and timing of payment of a cash bonus shall be determined by the Board of
Directors.

 

(e)                                          Taxes. The Company shall withhold
from any cash bonus paid pursuant to paragraph 10 the amount necessary to
satisfy any applicable federal, state and local withholding requirements.

 

11.                                 Performance Units. The Board of Directors may grant
performance units consisting of monetary units which may be earned in
whole or in part if the Company achieves certain goals established by the
Board of Directors over a designated period of time, but not in any event more
than 10 years. The goals established by the Board of Directors may include
earnings per share, return on shareholders’ equity, return on invested capital,
and such other goals as may be established by the Board of Directors. In
the event that the minimum performance goal established by the Board of
Directors is not achieved at the conclusion of a period, no payment shall be
made to the participants. In the event the maximum corporate goal is achieved,
100 percent of the monetary value of the performance units shall be paid to or
vested in the participants. Partial achievement of the maximum goal may result
in a payment or vesting corresponding to the degree of achievement as
determined by the Board of Directors. Payment of an award earned may be in
cash or in Common Stock or in a combination of both, and may be made when
earned, or vested and deferred, as the Board of Directors determines. Deferred
awards shall earn interest on the terms and at a rate determined by the Board
of Directors. Unless otherwise determined by the Board of Directors, each
performance unit granted under the Plan by its terms shall be nonassignable and
nontransferable by the holder, either voluntarily or by operation of law,
except by will or by the laws of descent and distribution of the state or
country of the holder’s domicile at the time of death. Each participant who has
been awarded a performance unit shall, upon notification of the amount due, pay
to the Company in cash amounts necessary to satisfy any applicable federal,
state and local tax withholding requirements. If the participant fails to pay
the amount demanded, the Company may withhold that amount from other
amounts payable by the Company to the participant, including salary or fees for
services, subject to applicable law. With the consent of the Board of Directors
a participant may satisfy this obligation, in whole or in part, by having
the Company withhold from any shares to be issued that

 

 

number of shares that
would satisfy the withholding amount due or by delivering Common Stock to the
Company to satisfy the withholding amount. The payment of a performance unit
incash shall not reduce the number of shares of Common Stock reserved for
issuance under the Plan. The number of shares reserved for issuance under the
Plan shall be reduced by the number of shares issued upon payment of an award.

 

12.                                 Foreign Qualified Grants. Awards under the Plan may be
granted to such officers and employees of the Company and its subsidiaries and
such other persons described in paragraph 1 residing in foreign jurisdictions
as the Board of Directors may determine from time to time. The Board of
Directors may adopt such supplements to the Plan as may be necessary
to comply with the applicable laws of such foreign jurisdictions and to afford
participants favorable treatment under such laws; provided, however, that no
award shall be granted under any such supplement with terms which are more
beneficial to the participants than the terms permitted by the Plan.

 

13.                                 Restricted Stock Units.

 

(a)                                          Grant. Restricted stock units may be
granted at any time and from time to time as determined by the Board of
Directors. For this purpose, a restricted stock unit shall mean a bookkeeping
entry representing an amount equal to the fair market value of one share of
Common Stock, granted pursuant to this paragraph 13. Each restricted stock unit
represents an unfunded and unsecured obligation of the Company. Each restricted
stock unit grant will be evidenced by an agreement that will specify such other
terms and conditions as the Board of Directors, in its sole discretion, will
determine, including all terms, conditions, and restrictions related to the
grant, the number of restricted stock units and the form of payout, which,
subject to paragraph 13(d), may be left to the discretion of the Board of
Directors.

 

(b)                                         Vesting Criteria and Other Terms.
The Board of Directors will set vesting criteria in its discretion, which,
depending on the extent to which the criteria are met, will determine the
number of restricted stock units that will be paid out to the participant. The
Board of Directors may set vesting criteria based upon the achievement of
Company-wide, business unit, or individual goals (including, but not limited
to, continued employment), or any other basis determined by the Board of
Directors in its discretion.

 

(c)                                          Earning Restricted Stock Units. Upon
meeting the applicable vesting criteria, the participant will be entitled to
receive a payout as specified in the award agreement. Notwithstanding the
foregoing, at any time after the grant of restricted stock units, the Board of
Directors, in its sole discretion, may reduce or waive any vesting
criteria that must be met to receive a payout.

 

(d)                                         Form and Timing of Payment. Payment of
earned restricted stock units will be made as soon as practicable after the
date(s) set forth in the award agreement. The Board of Directors, in its sole
discretion, may pay earned restricted stock units in cash, shares of
Common Stock, or a combination thereof. Shares of Common Stock represented by
restricted stock units that are fully paid in cash again will be available for
grant under the Plan.

 

(e)                                          Cancellation. On the date set forth
in the award agreement, all unearned restricted stock units will be forfeited
to the Company.

 

(f)                                            Transferability. Unless otherwise
determined by the Board of Directors, each restricted stock unit granted under
the Plan by its terms shall be nonassignable and nontransferable by the holder,
either voluntarily or by operation of law, except by will or by the laws of
descent and distribution of the state or country of the holder’s domicile at
the time of death.

 

14.                                 Changes in Capital Structure.

 

(a)                                          Stock Splits; Stock Dividends. If the outstanding Common Stock of the Company is
hereafter increased or decreased or changed into or exchanged for a different
number or kind of shares or other securities of the Company by reason of any
stock split, combination of shares or dividend payable in shares,
recapitalization or reclassification appropriate adjustment shall be made by
the Board of Directors in the number and kind of shares available for grants
under the Plan. In addition, the Board of Directors shall make appropriate
adjustment in the number and kind of shares as to which outstanding options, or
portions thereof then unexercised,

 

 

shall be exercisable, so
that the optionee’s proportionate interest before and after the occurrence of
the event is maintained. Notwithstanding the foregoing, the Board of Directors
shall have no obligation to effect any adjustment that would or might result in
the issuance of fractional shares, and any fractional shares resulting from any
adjustment may be disregarded or provided for in any manner determined by
the Board of Directors. Any such adjustments made by the Board of Directors
shall be conclusive.

 

(b)                                          Mergers, Reorganizations, Etc. In the event of a merger, consolidation, plan of exchange,
acquisition of property or stock, separation, reorganization or liquidation to
which the Company or a subsidiary is a party or a sale of all or substantially
all of the Company’s assets (each, a “Transaction”), the Board of Directors
shall, in its sole discretion and to the extent possible under the structure of
the Transaction, select one of the following alternatives for treating
outstanding options under the Plan:

 

(i)                                     Outstanding
options shall remain in effect in accordance with their terms.

 

(ii)                                  Outstanding
options shall be converted into options to purchase stock in the corporation
that is the surviving or acquiring corporation in the Transaction. The amount,
type of securities subject thereto and exercise price of the converted options
shall be determined by the Board of Directors of the Company, taking into
account the relative values of the companies involved in the Transaction and
the exchange rate, if any, used in determining shares of the surviving corporation
to be issued to holders of shares of the Company. Unless otherwise determined
by the Board of Directors, the converted options shall be vested only to the
extent that the vesting requirements relating to options granted hereunder have
been satisfied.

 

(iii)                               The
Board of Directors shall provide a 30-day period prior to the consummation of
the Transaction during which outstanding options may be exercised to the
extent then exercisable, and upon the expiration of such 30-day period, all
unexercised options shall immediately terminate. The Board of Directors may, in
its sole discretion, accelerate the exercisability of options so that they are
exercisable in full during such 30-day period.

 

(c)                                          Dissolution of the Company. In the event of the dissolution of the Company, options
shall be treated in accordance with paragraph 14(b)(iii).

 

(d)                                         Rights Issued by Another Corporation. The Board of Directors may also grant options, stock
appreciation rights, performance units, stock bonuses and cash bonuses and issue
restricted stock under the Plan having terms, conditions and provisions that
vary from those specified in this Plan provided that any such awards are
granted in substitution for, or in connection with the assumption of, existing
options, stock appreciation rights, stock bonuses, cash bonuses, restricted
stock and performance units granted, awarded or issued by another corporation
and assumed or otherwise agreed to be provided for by the Company pursuant to
or by reason of a Transaction.

 

15.                                 Amendment of Plan. The Board of Directors may at any
time, and from time to time, modify or amend the Plan in such respects as it
shall deem advisable because of changes in the law while the Plan is in effect
or for any other reason. Except as provided in paragraphs 6(a)(iv), 9, 10 and
14, however, no change in an award already granted shall be made without the
written consent of the holder of such award.

 

16.                                 Approvals. The obligations of the Company under the Plan are
subject to the approval of state and federal authorities or agencies with
jurisdiction in the matter. The Company will use its best efforts to take steps
required by state or federal law or applicable regulations, including rules and
regulations of the Securities and Exchange Commission and any stock exchange on
which the Company’s shares may then be listed, in connection with the
grants under the Plan. The foregoing notwithstanding, the Company shall not be
obligated to issue or deliver Common Stock under the Plan if such issuance or
delivery would violate applicable state or federal securities laws.

 

17.                                 Employment and Service Rights. Nothing in the Plan or any
award pursuant to the Plan shall (i) confer upon any employee any right to
be continued in the employment of the Company or any subsidiary or interfere in
any way with the right of the Company or any subsidiary by whom such employee
is employed to terminate such employee’s employment at any time, for any
reason, with or without cause, or to decrease such employee’s compensation or
benefits, or (ii) confer upon any person engaged by the Company any right
to be retained or

 

 

employed by the Company
or to the continuation, extension, renewal, or modification of any
compensation, contract, or arrangement with or by the Company.

 

18.                                 Rights as a Shareholder. The recipient of any award under
the Plan shall have no rights as a shareholder with respect to any Common Stock
until the date of issue to the recipient of a stock certificate for such
shares. Except as otherwise expressly provided in the Plan, no adjustment shall
be made for dividends or other rights for which the record date occurs prior to
the date such stock certificate is issued.

 

19.                                 Restricted Stock Unit Grants to Non-Employee Directors.

 

(a)                                          Initial Board Grants.
Each Non-Employee Director shall be automatically granted restricted stock
units equal to 5,000 shares of Common Stock on the date such person first
becomes a Non-Employee Director, whether through election by the shareholders
of the Company or appointment by the Board of Directors to fill a vacancy. A “Non-Employee
Director” is a director who is not an officer or employee of the Company or any
of its subsidiaries. Notwithstanding the foregoing, a director who ceases to be
an employee of the Company but remains a director of the Company and thereby
becomes a Non-Employee Director shall not receive the grant of restricted stock
units provided under this paragraph 19(a).

 

(b)                                         Additional Grants.
Each Non-Employee Director shall be automatically granted additional restricted
stock units equal to 2,500 shares of Common Stock in each calendar year
subsequent to the year in which such person became a Non-Employee Director,
such restricted stock units to be granted as of the date of the Company’s
annual meeting of shareholders held in such calendar year, provided that the
Non-Employee Director continues to serve in such capacity as of such date.

 

(c)                                          Terms of Restricted Stock Units.

 

(i)                                     Award
Agreement. Each award of restricted stock units granted pursuant to this
paragraph 19 shall be evidenced by an agreement that will specify the number of
restricted stock units and such other terms and conditions as the Board of
Directors, in its sole discretion, shall determine, including all terms,
conditions, and restrictions related to the grant and the form of payout,
which, subject to paragraph 19(c)(iii), may be left tot he discretion of
the Board of Directors.

 

(ii)                                  Vesting.
Each award of restricted stock units shall vest as to twenty-five (25%) of the
restricted stock units on each anniversary of its date of grant provided that
the Non-employee Director continues to serve as a director of the Company on
such date. Notwithstanding the foregoing, if the Non-employee Director ceases
to be a director of the Company due to death, one hundred percent (100%) of the
unvested portion of the restricted stock units subject to the award shall vest
on the date of the Non-employee Director’s death.

 

(iii)                               Form and
Timing of Payment. Payment of restricted stock units shall be made as soon as
practicable following the date on which such restricted stock units vest in
accordance with paragraph 19(ii). The Board of Directors, in its sole
discretion, may pay vested restricted stock units in cash, shares of
Common Stock, or a combination thereof. Shares of Common Stock represented by
restricted stock units that are fully paid in cash shall again be available for
grant under the Plan.

 

(d)                                         Section 409A Compliance.
Unless otherwise determined by the Board of Directors, grants made under
this paragraph 19 shall comply with the provisions of Section 409A of the
Code. The Board of Directors of the Company reserves the right to amend this
paragraph 19 as it deems necessary or advisable, in its sole discretion and
without the consent of the Employee, to comply with Section 409A of the
Code or to otherwise avoid imposition of any additional tax or income
recognition under Section 409A of the Code.

 

(e)                                          Nontransferability.
Each restricted stock unit by its terms shall be nonassignable and
nontransferable by the holder, either voluntarily or by operation of law,
except by will or by the laws of descent and distribution of the state or
country of the holder’s domicile at the time of death.

 

 

20.                                 Code Section 162(m) Provisions.

 

(a)                                          Option and SAR Annual Share Limit.
No individual shall be granted, in any calendar year, options and stock
appreciation rights to purchase more than 250,000 shares of Common Stock;
provided, however, that such limit shall be 200,000 shares of Common Stock in
the individual’s first calendar year of Company service.

 

(b)                                         Restricted Stock, Stock Bonus, Restricted Stock
Unit and Performance Unit Annual Limits. No individual shall be
granted, in any calendar year, more than 75,000 shares of Common Stock in the
aggregate of the following: (i) restricted stock, (ii) stock bonuses,
or (iii) restricted stock units. No individual shall be granted, in any
calendar year, performance units having an initial value greater than
$2,000,000.

 

(c)                                          Section 162(m) Performance Goals.
“Performance Goals” shall mean the goal(s) (or combined goal(s)) determined by
the Committee (in its discretion) to be applicable to an employee with respect
to an award of restricted stock, stock bonuses, restricted stock units and
performance units. As determined by the Committee, the Performance Goals
applicable to an award may provide for a targeted level or levels of
achievement using one or more of the following measures: (a) Operating
Income, (b) Pretax Income, and (c) Return on Sales. The Performance
Goals may differ from employee to employee and from award to award. Any
criteria used may be measured, as applicable, (i) in absolute terms, (ii) in
relative terms (including, but not limited to, passage of time and/or against
another company or companies), (iii) on a per-share basis, (iv) against
the performance of the Company as a whole or of a business unit of the Company,
and/or (v) to the extent not otherwise specified by the definition of the
Performance Goal, on a pre-tax or after-tax basis. Prior to the Determination
Date, the Committee shall determine whether any element(s) or item(s) shall be
included in or excluded from the calculation of any Performance Goal with
respect to any Participants.

 

(i)                                     “Operating
Income” means the Company’s or a business unit’s income from operations
determined in accordance with generally accepted accounting principles.

 

(ii)                                  “Pretax
Income” means the Company’s or a business unit’s income before taxes,
determined in accordance with generally accepted accounting principles.

 

(iii)                               “Return
on Sales” means the percentage equal to the Company’s or a business unit’s
Operating Income before incentive compensation, divided by the Company’s or the
business unit’s, as applicable, revenue, determined in accordance with
generally accepted accounting principles.

 

(d)                                         Section 162(m) Performance Restrictions.
For purposes of qualifying grants of restricted stock, stock bonuses,
restricted stock units and performance units as “performance-based compensation”
under Section 162(m) of the Code, the Committee, in its discretion, may set
restrictions based upon the achievement of Performance Goals. The Performance
Goals shall be set by the Committee on or before the latest date permissible to
enable the restricted stock, stock bonuses, restricted stock units and
performance units to qualify as “performance-based compensation” under Section 162(m)
of the Code. In granting restricted stock, stock bonuses, restricted stock
units and performance units which are intended to qualify under Section 162(m)
of the Code, the Committee shall follow any procedures determined by it from
time to time to be necessary or appropriate to ensure qualification of the
award under Section 162(m) of the Code (e.g., in determining the
Performance Goals).

 

(e)                                          Changes in Capitalization. The
numerical limitations in Sections 20(a) and 20(b) shall be adjusted
proportionately in connection with any change in the Company’s capitalization
as described in Section 14(a).

 

(f)                                            If
an award is cancelled in the same calendar year in which it was granted (other
than in connection with a transaction described in Section 14 of the
Plan), the cancelled award will be counted against the limits set forth in
subsections (a) and (b) above. For this purpose, if the exercise
price of an option is reduced, the transaction will be treated as a
cancellation of the option and the grant of a new option.

 

Adopted: April 21,
1995

Approved by Shareholders:
May 5, 1995Exhibit 10.39

EMPLOYMENT AGREEMENT dated as of
April 7, 2006 (as amended, modified or supplemented from time to time,
this “Agreement”), among TODD E. ANDREWS
(the “Executive”), MEDQUEST, INC.,
a Delaware corporation (the “Company”), and MQ ASSOCIATES,
INC., a Delaware corporation and parent entity of the Company (the “Parent”).

WHEREAS,
the Company desires to employ the Executive, and the Executive desires to be
employed by the Company, on the terms and conditions contained herein.

NOW,
THEREFORE, in consideration of the mutual promises and
covenants contained herein, the parties agree as follows:

1.              Employment. The Company
hereby employs the Executive and the Executive accepts such employment upon the
terms and conditions hereinafter set forth.

2.              Term of Employment. Subject
to earlier termination pursuant to the provisions of Section 6, the
term of the Executive’s employment pursuant to this Agreement shall commence on
and as of the date hereof (the “Effective Date”) and shall terminate on
the third anniversary of the Effective Date, subject to automatic annual
extensions for successive periods of one year each as of the third anniversary
of the Effective Date and each anniversary thereafter, unless either party
gives written notice of nonrenewal to the other at least 180 days before the
term would otherwise terminate (such period, the “Employment Period”).

3.              Duties; Extent of Service. During
the Employment Period, the Executive (a) shall serve as a senior executive
officer of the Company and the Parent with the title and position of Chief
Financial Officer, reporting to the Chief Executive Officer, and (b) shall
have supervisory responsibility in such capacity over matters as may be
specified from time to time by the Chief Executive Officer, consistent with the
Executive’s position and general area of experience and skills, provided, that in all cases the Executive shall be subject
to the oversight and supervision of the Chief Executive Officer in the
performance of his duties, (c) upon the request of the Chief Executive
Officer, shall serve as an officer and/or director of any of the Company’s
subsidiaries and/or other affiliates, and (d) shall render all services
reasonably incident to the foregoing. The Executive hereby accepts such
employment, agrees to serve in the capacities indicated, and agrees to use the
Executive’s best efforts in, and shall devote the Executive’s full working
time, attention, skill and energies to the advancement of the interests of the
Company, the Parent and their subsidiaries and to the performance of the
Executive’s duties and responsibilities hereunder. The Executive shall not
during the Employment Period be engaged in any other business activity that, in
the reasonable judgment of the Board of Directors 

 

 

of the Parent and/or the
Company (the “Board of Directors”), would conflict with the ability of the
Executive to perform his duties under this Agreement, whether or not such
activity is pursued for gain, profit or other pecuniary advantage.

4.              Salary and Bonus.

a.            Base Salary.  During the Employment Period, the Company
shall pay the Executive total base compensation at the rate of $300,000.00 per
annum, subject to increase from time to time at the discretion of the Chief
Executive Officer (as in effect from time to time, the “Base Salary”). Such
Base Salary shall be subject to withholding under applicable law, shall be pro
rated for partial years and shall be payable in periodic installments not less
frequently than monthly in accordance with the Company’s usual practice for senior
executive officers of the Company as in effect from time to time.

b.            Annual Bonus.  During the Employment Period, in addition to
the Base Salary, the Executive shall be eligible to receive an annual bonus
(the “Annual Bonus”) from the Company, based upon the achievement of
certain annual objectives (the “Bonus Objectives”) to be mutually agreed
upon by the Executive and the Chief Executive Officer. If 100% of the Bonus
Objectives shall be satisfied by the Executive, such Annual Bonus shall be
equal to 50% of the Base Salary (the “Target Annual Bonus”). The Annual
Bonus will be reduced ratably if less than 100% of such Bonus Objectives shall
be satisfied by the Executive and the Executive will have an opportunity, based
solely on the discretion of the Chief Executive Officer, to earn an Annual
Bonus in excess of the Target Annual Bonus taking into account personal
performance, bonus awards made to other members of the Company’s senior
management team and Company performance. The Annual Bonus calculated with
respect to any fiscal year will be earned and accrued, to the extent the Bonus
Objectives shall be achieved, if the Executive is an employee of the Company on
the last day of such fiscal year.

c.            Equity.  The Company shall recommend to the Board of
Directors that the Executive participate in the Company’s stock option or other
equity interest plans in effect from time to time, with grants, exercise
prices, vesting and other provisions that are commensurate with the Executive’s
position and responsibilities and the grants provided to other members of
senior management.

5.              Benefits.

a.            Effective from and after the first
day of the month following the 30th day of the Employment Period, or such earlier
date as may be permitted pursuant to the terms of the applicable plans or
policies, and throughout the remainder of the Employment Period, the Executive
shall be entitled to participate in any and all medical, dental, vision care,
short and long term disability, life insurance, and accidental death and
disability plans, retirement arrangements and automobile allowance programs as
in effect from time to time for senior executive officers of the Company
generally and approved by the Board of Directors. Such participation shall be
subject to (i) the terms of the applicable plan documents (including, as
applicable, provisions granting discretion to the Board of Directors or any
administrative or other committee provided for therein or contemplated thereby)
and (ii) generally applicable policies of the Company.

 

 2
 

 

b.            During the Employment Period, to the
extent permitted by law, the Executive shall be entitled to four (4) weeks
paid vacation during each twelve (12) month period worked, commencing on
the Effective Date; provided, however, that the Executive shall
be entitled to accumulate not more than eight weeks of unused vacation for
which the Executive shall be compensated if the Executive’s employment is
terminated.

c.            The Company shall promptly reimburse
Executive for all reasonable business expenses incurred by Executive during the
Employment Period in accordance with the Company’s practices for senior
executive officers of the Company as in effect from time to time. Such
reimbursement shall include, for a period not to exceed the shorter of (i) six
months after the Effective Date and (ii) such time as Executive and his
immediate family have relocated to Atlanta, Georgia, coach airfare each week
between Executive’s current residence in California and Atlanta, Georgia.

d.            Compliance with the provisions of
this Section 5 shall in no way create or be deemed to create any
obligation, express or implied, on the part of the Parent or any of its
affiliates with respect to the continuation of any particular benefit or other
plan or arrangement maintained by them or their affiliates as of or prior to
the date hereof or the creation and maintenance of any particular benefit or
other plan or arrangement at any time after the date hereof.

6.              Termination and Termination
Benefits; Effect of Termination. Notwithstanding the provisions of Sections 2
or 3, the Executive’s employment under this Agreement shall terminate
under the following circumstances:

a.            Termination by the Company for
Cause. The Employment Period may be terminated by the Company for Cause
without further liability on the part of the Company or any of its affiliates
upon written notice to the Executive, such termination to be effective on the
date specified in such notice. “Cause” means (i) a failure by the
Executive to observe policies of the Parent and its affiliates generally
applicable to executives of the Parent and its affiliates that causes material
harm to the Parent or its affiliates, (ii) gross negligence or willful
misconduct by the Executive in the performance of his duties, (iii) failure
by the Executive to substantially perform the duties contemplated by Section 3
hereof, which failure is not remedied within ten (10) days after a written
notice of such failure is delivered to the Executive by the Company, or (iv) the
commission by the Executive of any act of fraud, theft or financial dishonesty
with respect to the Company, the Parent or any of its or their affiliates, (iv) the
Executive’s indictment, conviction of, or pleading no contest or nolo
contendere to, any felony or a lesser crime involving dishonesty or (v) the
material breach by the Executive of this Agreement (including, without
limitation, the failure to perform his duties hereunder in accordance with Section 3
hereof other than absences due to illness, injury, vacations or holidays), or
any other material agreement or contract between or among the Executive, the
Company, the Parent or any of its or their affiliates, which breach (if
susceptible to cure) is not cured by the Executive within ten (10) days
following written notice by the Company to the Executive of such breach.

b.            Termination by the Executive.
The Employment Period may be terminated by the Executive by written notice to
the Chief Executive Officer without Good 

 

 3
 

 

Reason at least 90 days
prior to such termination and with Good Reason at least 30 days prior to
such termination, such termination to be effective on the date specified in
such notice. “Good Reason” means (i) a reduction in the Executive’s
Base Salary, (ii) a material reduction in the Executive’s duties or
reporting relationships provided in this Agreement, (iii) a material
breach of this Agreement by the Company, or (iv) any requirement that the
Executive relocate his principal place of business to a location more than 50
miles from the Company’s headquarters as of the date hereof; provided,
however, that if the Executive consents to such relocation, or actually
relocates, such relocation requirement shall not constitute Good Reason.

c.            Termination by the Company
Without Cause. The Employment Period under this Agreement may be terminated
by the Company without further liability on the part of the Company or any of
its affiliates without Cause upon written notice to the Executive, such
termination to be effective as of the date of such notice.

d.            Certain Termination Benefits.
Unless otherwise specifically provided in this Agreement, all of the Company’s
obligations under this Agreement shall terminate on the date of termination of
the Employment Period. Notwithstanding the foregoing, in the event of
termination of the Executive’s employment with the Company by the Executive for
Good Reason or by the Company without Cause (including a termination without
Cause as contemplated by the last paragraph of Section 8.a), the
Company shall provide to Executive the following termination benefits (“Termination
Benefits”):

(i)            continuation of the Executive’s Base
Salary at the rate then in effect pursuant to Section 4.a;

(ii)           an amount equal to the product of (A) that
portion, expressed as a percentage, of the year-to-date Bonus Objectives
realized by the Executive as of the date of such termination and (B) the
product of (x) the quotient obtained by dividing (I) the number of
calendar days elapsed from the beginning of the respective calendar year to the
date of such termination by (II) 365 and (y) the Target Annual Bonus
with respect to the year of termination for which the Executive is eligible,
which amount shall be paid to the Executive at the frequency and in the manner
provided for payments pursuant to clause (i) above; provided, however,
that in the event that such termination without Cause or for Good Reason shall
be effective on the date of the consummation of a Sale of the Company (as
defined in that certain Stockholders’ Agreement, dated as of August 15,
2002, as amended from time to time, among the Parent and the stockholders party
thereto (the “Stockholders’ Agreement”)) or, within 180 days thereafter,
such amount shall be payable on the effective date of such termination; and

(iii)          continuation of group health, dental,
and disability plan benefits as described in Section 5.a of this
Agreement, with the cost for such benefits shared in the same relative
proportion by the Company and the Executive as in effect on the date of
termination.

 

 4
 

 

The Termination Benefits
set forth in clauses (i) and (iii) above shall continue, so long as
the Executive is in compliance with the Executive’s continuing obligations
under this Agreement, until eighteen (18) months after the date of
termination; provided, however, that in the event that such
termination without Cause or for Good Reason shall be effective on the date of
the consummation of a Sale of the Company (as defined in Section 6(c)(ii) hereof)
or, within 180 days thereafter, the Termination Benefits set forth in
clause (i) shall be in an amount equal to two times Executive’s Base
Salary and shall be payable on the effective date of such termination. The
Company and the Executive agree that the Termination Benefits paid by the
Company to the Executive under this Section 6.d shall be contingent
upon the Executive’s delivery of a general release of any and all claims (other
than those arising under this Section 6.d and Section 6.f)
upon termination of employment in the form attached hereto as Exhibit A
(with such changes as may be necessitated by any change in law after the date
hereof to obtain the full benefits thereunder), it being understood that no
Termination Benefits shall be provided unless and until the Executive executes
and delivers such release and such release shall not be revoked. Notwithstanding anything contained herein to the
contrary, any payment required to be made pursuant to clause (ii) above
that would result in a violation of, or a default under, any agreement
governing any indebtedness for borrowed money of the Parent or any of its
affiliates, shall not be made so
long as such agreement would prohibit such payment or such payment would result
in a violation or default thereunder; provided, however, that the
Parent shall use its good faith efforts to negotiate with the lenders under any
such agreement to permit the payment of such amounts as promptly as practicable.
Any such delay in making such payments shall not be deemed to be a violation of
this Agreement so long as the Employment Period and/or termination date shall
be extended until such time as such payments are made; provided, however,
that any compensation that Executive shall receive from the Company during such
extension of the Employment Period and/or termination date shall be offset
against, and in no event shall be greater than, the aggregate amount of the
aforementioned delayed payments. The Executive shall not be required to
mitigate the amount of any payment provided for in this Section 6
by seeking other employment or otherwise, and the amount of any payment or
benefit provided for in this Section 6 shall not be reduced by any
compensation earned by the Executive as the result of employment by another
employer or by retirement benefits.

e.            Death or Disability. The
Executive’s employment and all obligations of the Company hereunder shall
terminate upon the death or Disability of the Executive, other than the
obligation to pay the greater of (A) the product of (x) the aggregate
amount of the Annual Bonus the Executive received in the preceding calendar
year and (y) that portion, expressed as a percentage, of the Bonus
Objectives for the calendar year of termination realized by the Executive as of
the date of such termination and (B) the prorated bonus amount as
calculated pursuant to Section 6.d(ii). “Disability” means a
condition under which the Executive is unable due to illness or injury to
perform the essential functions of the Executive’s then existing position or
positions under this Agreement for a continuous six-month period with
reasonable accommodation, as determined in the sole discretion of the Chief
Executive Officer.

f.             Continuing Obligations. Notwithstanding
termination of the Employment Period or any other provision hereof, the Company
shall remain obligated to pay (without duplication of any payment hereunder)
all earned (to the date of such termination of the Employment Period) but
unpaid Base Salary, the earned and accrued Annual Bonus for any completed
fiscal year as of the date of termination of the Employment Period (to the
extent the 

 

 5
 

 

Bonus Objectives shall
have been achieved) as set forth in this Section 6, benefits,
payments, or rights to which the Executive remains entitled after the
termination of the Employment Period pursuant to the terms of any agreement,
plan, program or policy, and reimbursement for business expenses incurred to
the date of termination of the Employment Period that are reimbursable in
accordance with the terms of this Agreement. Notwithstanding termination of
this Agreement as provided in this Section 6 or any other
termination of the Executive’s employment with the Company, the Executive’s
obligations under Section 7 and Section 8 hereof shall
survive any termination of the Executive’s employment with the Company at any
time and for any reason.

g.            Effect of Termination.  Effective immediately upon termination of the
Employment Period, regardless of reason, and without the necessity of any
further action on the part of the Executive, the Company or any other person,
the Executive’s service (i) on any and all boards of directors, boards of
managers or similar governing bodies of any of the Parent and any of its
subsidiaries, (ii) as an officer of the Parent and any of its subsidiaries
and (iii) as an employee of the Parent and any of its subsidiaries shall,
in each case, be terminated and the Executive shall be deemed to have resigned
from any and all such positions then held by the Executive.

7.              Confidentiality; Proprietary
Rights.

a.            In the course of performing services
hereunder on behalf of the Parent, the Company (including all predecessors and
successors of each of the Parent and the Company) and its and their affiliates
(the Parent and its subsidiaries collectively, the “Employer Parties”),
the Executive from time to time will have access to Confidential Information
(as defined below). The Executive agrees (a) to hold the Confidential
Information in strict confidence, (b) not to disclose the Confidential
Information to any person (other than in the ordinary course of the regular
business of the Employer Parties), and (c) not to use, directly or
indirectly, any of the Confidential Information for any purpose other than on
behalf of the Employer Parties. All documents, records, data, apparatus,
equipment and other physical property, whether or not pertaining to
Confidential Information, that are furnished to the Executive by any Employer
Party or are produced by the Executive in connection with the Executive’s
employment will be and remain the sole property of the applicable Employer
Party. Upon the termination of the Employment Period for any reason and as and
when otherwise requested by any Employer Party, all Confidential Information
(including, without limitation, all data, memoranda, customer lists, notes,
programs and other papers and items, and reproductions thereof relating to the
foregoing matters) in the Executive’s possession or control shall be
immediately returned to the Company.

b.            The Executive hereby confirms that
the Executive is not bound by the terms of any agreement with any previous
employer or other party that restricts in any way the Executive’s engagement in
any business. The Executive represents to the Company that the Executive’s
execution of this Agreement, the Executive’s employment with the Company and
the performance of the Executive’s proposed duties for the Employer Parties
will not violate any obligations the Executive may have to any such previous
employer or other party. In the Executive’s work for the Employer Parties, the
Executive will not disclose or make use of any information in violation of any agreements
with or rights of any such previous employer or other party, and the Executive
will not bring to the premises of the Employer Parties any copies or 

 

 6
 

 

other tangible
embodiments of non-public information belonging to or obtained from any such previous
employment or other party. The Executive represents and warrants that he is not
a party to any consulting or advisory agreement with any third party (including
a previous employer) that would interfere with the Executive’s performance of
his obligations and duties hereunder and the Executive shall advise and update
the Chief Executive Officer (including providing copies of notices, agreements
and other relevant documentation) from time to time and as requested by the
Chief Executive Officer of any matters or developments relating to his
relationship with any previous employer.

c.            During and after the Employment
Period, the Executive shall reasonably cooperate with the Employer Parties in
the defense or prosecution of any claims or actions now in existence or which
may be brought in the future against or on behalf of any Employer Party or any
of their respective affiliates that relate to events or occurrences that
transpired while the Executive was employed by the Company. The Executive’s
reasonable cooperation in connection with such claims or actions shall include,
but not be limited to, being available to meet with counsel to prepare for
discovery or trial and to act as a witness on behalf of the Employer Parties or
any of their respective affiliates at mutually convenient times. During and
after the Employment Period, the Executive also shall reasonably cooperate with
the Employer Parties in connection with any investigation or review of any
federal, state or local regulatory authority as any such investigation or
review relates to events or occurrences that transpired while the Executive was
employed by the Company. The Company shall reimburse the Executive for any
reasonable out-of-pocket expenses incurred in connection with the
Executive’s performance of obligations pursuant to this Section 7.c,
and in the event the Executive’s performance of obligations under this Section 7.c
requires more than 20 hours of the Executive’s time, the Company will pay the
Executive an hourly rate of $250 per hour for his time, beginning only as of
such 21st hour.

d.            The Executive recognizes that the
Employer Parties and their respective affiliates possess a proprietary interest
in all of the information described in Section 7.a and have the
exclusive right and privilege to use, protect by copyright, patent or
trademark, or otherwise exploit the processes, ideas and concepts described
therein to the exclusion of the Executive, except as otherwise agreed between
the Company and the Executive in writing. The Executive expressly agrees that
any products, inventions or discoveries made by the Executive or the Executive’s
agents or affiliates in the course of the Executive’s employment, including any
of the foregoing that is based on or arises out of the information described in
Section 7.a, shall be the property of and inure to the exclusive
benefit of the Company. The Executive further agrees that any and all products,
inventions, or discoveries developed by the Executive (whether or not able to
be protected by copyright, patent or trademark) during the course of his
employment, or involving the use of the time, materials or other resources of
the Employer Parties or any of their respective affiliates, shall be promptly
disclosed to the Company and shall become the exclusive property of the
Company, and the Executive shall execute and deliver any and all documents
necessary or appropriate to implement the foregoing.

e.            During the Employment Period, the
Executive will offer or otherwise make known or available to the Company, as directed
by the Chief Executive Officer or Board of Directors and without additional
compensation or consideration, any business prospects, contracts or other
business opportunities that the Executive may discover, find, 

 

 7
 

 

develop or otherwise have
available to the Executive in the Company’s general industry and further agrees
that any such prospects, contacts or other business opportunities shall be the
property of the Company (or other appropriate Employer Party, as applicable).

f.             The Executive acknowledges that the
provisions of this Section 7 and the following Section 8
are an integral part of the Executive’s employment arrangements with the
Company.

g.            For purposes of this Agreement, the
term “Confidential Information” shall mean: information belonging to any
Employer Party that is of value to any Employer Party or with respect to which
any Employer Party has rights in the course of conducting its respective
business and the disclosure of which could result in a competitive or other
disadvantage to any Employer Party. Confidential Information includes
information, whether or not patentable or copyrightable, in written, oral,
electronic or other tangible or intangible forms, stored in any medium,
including, by way of example and without limitation, trade secrets, ideas,
concepts, designs, configurations, specifications, drawings, blueprints,
diagrams, models, prototypes, samples, flow charts, processes, techniques,
formulas, software, improvements, inventions, data, know-how, discoveries,
copyrightable materials, marketing plans and strategies, sales and financial
reports and forecasts, studies, reports, records, books, contracts,
instruments, surveys, computer disks, diskettes, tapes, computer programs and
business plans, prospects and opportunities (such as possible acquisitions or
dispositions of businesses or facilities) that have been discussed or
considered by the management of any Employer Party. Confidential Information
includes information developed by the Executive in the course of the Executive’s
employment by the Company, as well as other information to which the Executive
may have access in connection with the Executive’s employment. Confidential
Information also includes the confidential information of others with which any
Employer Party has a binding confidentiality agreement. Notwithstanding the
foregoing, Confidential Information does not include information in the public
domain, unless due to breach of the Executive’s duties under Section 7.a.

8.              Non-Competition;
Non-Solicitation; Other Boards.

a.            The Executive acknowledges that, in
the course of his employment with the Company and/or its affiliates and their
predecessors, he will become familiar with the Company’s and its affiliates’
and their predecessors’ trade secrets and with other confidential information
concerning the Company, its affiliates and their respective predecessors and
that his services will be of special, unique and extraordinary value to the
Company and its affiliates. Therefore, the Executive agrees that, during the
Employment Period and for one (1) year thereafter (the “Non-Compete
Period”), he shall not directly or indirectly own, manage, control,
participate in, consult with, render services for, or in any manner engage in
or represent any business competing with the Business of the Company or its
affiliates within any Restricted Territory. “Business” means the
management and/or operation of outpatient diagnostic imaging centers. “Restricted
Territory” means the states and/or other territories set forth on Schedule
I; provided, that, not less than annually, the Company and the
Executive shall update Schedule I to (i) add to Schedule I
any states or other territories in which the Company or its affiliates is then
conducting its Business and (ii) delete from Schedule I any states
or other territories in which the Company or its affiliates is no longer
conducting its Business; provided, further, that, in the 

 

 8
 

 

event that the Company
and the Executive fail to agree on any such update, the then-existing Schedule
I (as may have been previously amended) shall govern.

Notwithstanding
the foregoing, if the Executive’s employment is terminated as a result of a
scheduled expiration of the Employment Period or a nonrenewal as provided in Section 2,
or if the Company fails to provide the post-termination benefits pursuant to
Section 6.d, the Executive shall not be bound by the non-competition
and non-solicitation restrictions in this Section 8, except to the
extent that the Company notifies the Executive in writing on or prior to the date
of such scheduled expiration or nonrenewal that the Company has elected to
treat such scheduled expiration or nonrenewal as a Termination without Cause.

b.            Nothing herein shall prohibit the
Executive from being a passive owner of not more than 2% of the outstanding
stock of any class of a corporation that is publicly traded, so long as the
Executive has no active participation in the business of such corporation.

c.            During the Non-Compete Period, the
Executive shall not directly, or indirectly through another person or entity, (i) induce
or attempt to induce any employee of any Employer Party to leave the employ of
such Employer Party, or in any way interfere with the relationship between such
Employer Party, on the one hand, and any employee thereof, on the other hand, (ii) hire
any person who was an employee of any Employer Party until sixty (60) days
after such individual’s employment relationship with such Employer Party has
been terminated or (iii) induce or attempt to induce any customer,
supplier, licensee or other business relation of any Employer Party to cease
doing business with such Employer Party, or in any way interfere with the
relationship between any such customer, supplier, licensee or business
relation, on the one hand, and such Employer Party, on the other hand.

d.            The Executive understands that the
foregoing restrictions may limit his ability to earn a livelihood in a business
similar to the business of the Employer Parties, but he nevertheless believes
that he will receive sufficient consideration and other benefits as an employee
of the Company and the Parent and as otherwise provided hereunder to clearly
justify such restrictions (including any restrictions imposed in the future by
any amendment to Schedule I mutually agreed upon by the Company and
the Executive) which, in any event (given his education, skills and ability),
the Executive does not believe would prevent him from otherwise earning a
living. The Executive has carefully considered the nature and extent of the
restrictions placed upon him by this Agreement, and hereby acknowledges and
agrees that the same are reasonable in time and territory (including as such
territory as may hereafter be amended by mutual agreement of the Company and
the Executive) and do not confer a benefit upon any Employer Party
disproportionate to the detriment of the Executive.

9.              Non-Disparagement. From the
Effective Date through the date that is the second anniversary of the date of
the termination of the Employment Period, the Executive agrees that he will not
make, or cause to be made, any statement, observation, or opinion, or
communicate any information (whether oral or written), to any person other than
a member of the Board of Directors, that disparages any Employer Party or is
likely in any way to harm the business or the reputation of any Employer Party,
or any of their respective former, present, or future directors, officers,
stockholders or employees.

 9

 

10.            Certain
Restrictions on Transfers; Fees in Connection with Certain Sales of Common
Stock. If the Parent at any time shall register an offering and sale of
shares of Common Stock under the Securities Act of 1933, as amended (or any
successor statute thereto) (the “Securities Act”), in an underwritten
offering (i) pursuant to an initial public offering or (ii) pursuant
to any other registration under the Securities Act (other than on Form S-4
or Form S-8 promulgated under the Securities Act or any successor
forms thereto), if requested by the managing underwriter(s) and provided
that the directors and officers of the Parent are so restricted, the Executive
shall not sell, make any short sale of, grant any option for the purchase of,
or otherwise dispose of any capital stock of the Parent (other than (A) any
shares of Common Stock held by, or issuable to, the Executive that are included
in such registration or (B) a Permitted Transfer (as defined in the
Stockholders’ Agreement)) without the prior written consent of the Parent for a
period as shall be determined by the managing underwriters, which period cannot
begin more than seven (7) days prior to the effectiveness of such
registration statement and cannot last more than ninety (90) days (180 days in
the case of the Parent’s or the Company’s initial public offering) after the
effective date of such registration statement.

11.            Parties
in Interest; Certain Remedies. It is specifically understood and agreed
that this Agreement is intended to confer a benefit, directly and indirectly,
on the Parent, the Company and their direct and indirect subsidiaries and
affiliates, and that any breach of the provisions of this Agreement by the
Executive will result in irreparable injury to the Parent, the Company and
their subsidiaries and affiliates, that the remedy at law alone will be an
inadequate remedy for such breach and that, in addition to any other remedy it
may have, the Parent, the Company or their subsidiaries and affiliates shall be
entitled to enforce the specific performance of this Agreement by the Executive
through both temporary and permanent injunctive relief without the necessity of
posting a bond or proving actual damages, but without limitation of their right
to damages and any and all other remedies available to them, it being
understood that injunctive relief is in addition to, and not in lieu of, such
other remedies.

12.            Notices.
All notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if faxed (with transmission
acknowledgment received), delivered personally or by nationally recognized
overnight courier (providing proof of delivery) or mailed by certified or
registered mail (return receipt requested) as follows:

To the Company or the Parent:

MedQuest, Inc.

4300 North Point Parkway

Alpharetta, GA 30022

Fax: (770) 734-9652

Attention: Chief Executive Officer

with a copy to:

MedQuest, Inc.

4300 North Point Parkway

Alpharetta, GA 30022

 10
 

 

Fax: (678) 992-7538

Attention: General Counsel

To Executive:

c/o MedQuest, Inc.

4300 North Point Parkway

Alpharetta, GA 30022

Fax: (770) 734-9652,

or to such other
address or fax number of which any party may notify the other parties as
provided above. Notices shall be effective as of the date of such delivery,
mailing or fax.

13.            Scope
of Agreement. The parties acknowledge that the time, scope, geographic area
(including as such geographic area may be amended pursuant to Section 8)
and other provisions of Section 8 hereof have been specifically
negotiated by sophisticated parties and agree that all such provisions are
reasonable under the circumstances of the transactions contemplated hereby, and
are given as an integral and essential part of the transactions contemplated
hereby. The Executive has independently consulted with counsel and has been
advised in all respects concerning the reasonableness and propriety of the
covenants contained herein, with specific regard to the business to be
conducted by the Parent, the Company and their subsidiaries and affiliates, and
represents that this Agreement is intended to be, and shall be, fully
enforceable and effective in accordance with its terms.

14.            Severability.
In the event that any covenant contained in this Agreement shall be determined
by any court of competent jurisdiction to be unenforceable by reason of its
extending for too great a period of time or over too great a geographical area
or by reason of its being too extensive in any other respect, it shall be
interpreted to extend only over the maximum period of time for which it may be
enforceable and/or over the maximum geographical area as to which it may be
enforceable and/or to the maximum extent in all other respects as to which it
may be enforceable, all as determined by such court in such action. The existence
of any claim or cause of action that the Executive may have against the Parent,
the Company or any of their subsidiaries or affiliates shall not constitute a
defense or bar to the enforcement of any of the provisions of this Agreement.

15.            No
Amendment of Certain Indemnification Provisions. The Employer Parties shall
not amend or modify their respective certificates of incorporation to reduce
the breadth of indemnification available thereunder for directors of the
Employer Parties from that in effect as of the date hereof. If an Employer
Party shall enter into indemnification agreements with its directors or
officers providing indemnification related to their positions as directors or
officers, as applicable, the Executive shall be entitled to enter into the same
indemnification agreement as the Employer Party shall enter into with such
other directors or officers, as applicable.

16.            Miscellaneous.
This Agreement shall be governed by and construed under the laws of the State
of Georgia, without consideration of its choice of law provisions, and shall
not be amended, modified or discharged in whole or in part except by an
agreement in writing

 11
 

 

signed
by both of the parties hereto. The failure of either of the parties to require
the performance of a term or obligation or to exercise any right under this
Agreement or the waiver of any breach hereunder shall not prevent subsequent
enforcement of such term or obligation or exercise of such right or the
enforcement at any time of any other right hereunder or be deemed a waiver of
any subsequent breach of the provision so breached, or of any other breach
hereunder. This Agreement shall inure to the benefit of, and be binding upon
and assignable to, successors of the Employer Parties by way of merger,
consolidation or sale and may not be assigned by the Executive. This Agreement
supersedes and terminates all prior understandings and agreements between the
parties (or their predecessors) relating to the subject matter hereof. For
purposes of this Agreement, the term “person” shall be construed broadly
and shall include an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or a governmental authority (or any
department, agency or political subdivision thereof); a “subsidiary” of
a person means any corporation more than 50 percent of whose outstanding voting
securities, or any partnership, joint venture or other entity more than 50
percent of whose total equity interest, is directly or indirectly owned by such
person; and an “affiliate” of a person shall mean, with respect to a
person or entity, any person or entity which directly or indirectly controls,
is controlled by, or is under common control with such person or entity.

17.            Arbitration.
Except with respect to matters as to which injunctive relief may be sought
pursuant to Section 11 hereof, all disputes relating to the
Executive’s employment by the Company or the Parent or pursuant to this
Agreement shall be submitted to arbitration in Atlanta, Georgia and shall be
subject to the commercial arbitration rules of the American Arbitration
Association then in effect. Each of the Company, the Parent and the Executive
shall bear its or his own costs and expenses related to such arbitration; provided,
that, notwithstanding the foregoing, the Company shall pay that portion of the
Executive’s reasonable expenses relating to such dispute equal to the
percentage of claims, based on dollar amounts (out of the aggregate of such
claims adjudicated) (if at all) under which the Executive shall have prevailed
in the arbitration, as finally determined by the arbitrator, who shall
specifically be asked to render a decision on such point.

18.            Parachute
Payment. Notwithstanding any other provision of this Agreement or any other
agreement, if the aggregate payments and benefits payable to the Executive
under this Agreement and under any other plan, program, arrangement, or
agreement of the Parent or an affiliate would result in a “parachute payment”
(within the meaning of Section 280G of the Internal Revenue Code), then
the payments and benefits under this Agreement, or any other agreement,
arrangement, program or plan will be reduced to the minimum extent necessary to
cause no such parachute payment to occur, but such reduction will be made only
if the aggregate payments and benefits as so reduced would result in the
Executive retaining a larger after-tax (taking into account all income,
employment and excise taxes applicable to the Executive) amount than if no such
reduction were made. If such reduction is to be made, the Executive shall
select which payments and benefits will be reduced.

*      *      *

 12
 

 

IN WITNESS WHEREOF, the parties
have executed this Employment Agreement as of the date first set forth above.

	
  

  	
  COMPANY:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MEDQUEST, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ C.
  CHRISTIAN WINKLE

  
	
   

  	
   

  	
  Name: C. Christian Winkle

  
	
   

  	
   

  	
  Title: Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PARENT:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MQ ASSOCIATES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ C.
  CHRISTIAN WINKLE

  
	
   

  	
   

  	
  Name: C.
  Christian Winkle

  
	
   

  	
   

  	
  Title: Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ TODD E.
  ANDREWS

  
	
   

  	
   

  	
  Todd E. Andrews

  
	
   

  	
   

  
						

 

 

 13
 

 

Schedule I

Restricted Territory

1.                                      Georgia

2.                                      North
Carolina

3.                                      South
Carolina

4.                                      Arizona

5.                                      Florida

6.                                      Missouri

7.                                      Alabama

8.                                      Tennessee

9.                                      Virginia

10.                                Texas

11.                                Wisconsin

12.                                New
Mexico

13.                                Illinois

 14
 

 

Exhibit A

Form of
General Release

In consideration of the payments and benefits set forth in your
Employment Agreement dated as of               ,
2006 (as may be amended from time to time, the “Employment Agreement”)
with each of MQ ASSOCIATES, INC. and MEDQUEST, INC. (collectively, the “Companies”), you
voluntarily, knowingly and willingly release and forever discharge the
Companies, their subsidiaries, affiliates and parents, together with each of
those entities’ respective officers, directors, shareholders, employees,
agents, fiduciaries and administrators (collectively, the “Releasees”)
from any and all claims and rights of any nature whatsoever that you now have
or in the future may have against them solely arising from, or relating to,
your relationship with the Companies. This release includes, but is not limited
to, any rights or claims relating in any way to your employment relationship
with the Companies or any of the other Releasees or the termination thereof,
any contract claims (express or implied, written or oral), or any rights or
claims under any statute, including, without limitation, the Americans with
Disabilities Act, the Age Discrimination in Employment Act, the Older Workers’
Benefit Protection Act, the Rehabilitation Act of 1973 (including Section 504
thereof), the Family Medical Leave Act, Title VII of the 1964 Civil Rights Act,
the Civil Rights Act of 1866 (42 U.S.C. § 1981), the Civil Rights Act of 1991,
the Equal Pay Act, the Fair Labor Standards Act, the National Labor Relations
Act, the Worker Adjustment and Retraining Notification Act, the Employee
Retirement Income Security Act of 1974, all as amended, Georgia state law and
any other federal, state or local law. This release specifically includes, but
is not limited to, any claims based upon the right to the payment of wages,
bonuses, vacation, pension benefits, 401(k) plan benefits, stock benefits
or any other employee benefits (unless expressly provided to be payable after
the date hereof pursuant to the Employment Agreement), or any other rights
arising under federal, state or local laws prohibiting discrimination and/or
harassment on the basis of race, color, age, religion, sex, national origin,
mental or physical disability, military status, harassment or any other basis
prohibited by law.

By
signing and returning this General Release, you acknowledge that you:

(a) 
have had at least twenty-one (21) days to review and consider its terms;

(b) 
have carefully read and fully understand the terms of this General Release;

(c) 
are entering into this General Release voluntarily and knowing that you are
releasing claims that you have or may have against the Company, including any
claims under the Age Discrimination in Employment Act;

(d) have
had a reasonable opportunity to seek advice from an attorney of your choosing
prior to signing this General Release;

(e) release
all claims that arise up to and including the date of execution of this General
Release in return for the consideration specified in the Employment Agreement,
to which you otherwise would not have been entitled; and

 15
 

 

(f) have
been advised to consult an attorney before executing this General Release.

You further represent
that you have not filed against the Companies or any of the other Releasees any
complaints, charges or lawsuits with any governmental agency or any court prior
to the date of this General Release.

You understand that you may revoke this General
Release in writing by so notifying the General Counsel of MQ Associates, Inc.,
in writing, at MedQuest, Inc., 4300 North Point Parkway, Alpharetta, GA
30022 (fax: (678) 992-7538) within seven (7) days of executing
this General Release. You understand that if you revoke this General Release
you will not be entitled to any benefits as set forth in Section 6.d
of your Employment Agreement.

	
  Read, Accepted and Agreed
  to:

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Todd E. Andrews

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  
	
   

  
			

 

 

 16

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