Exhibit 10.1
October 26, 2005
Via Overnight Mail and
Facsimile
Mr. R. Scott Bennett
6 Kenwood Court
Malvern, PA 19355
Dear Scott:
On behalf of MedQuist Inc. (the
“ Company ”), this Agreement describes the terms
of your new employment as the Company’s Senior Vice President
- Sales & Marketing, which must commence on a date
mutually agreed to in writing by you and the Company (the “
Employment Commencement Date ”). For purposes of
this Agreement, you are referred to as the “ Employee
.” Other capitalized terms used in this Agreement have
the meanings defined in Section 7 , below.
1.
Term . The Company shall
employ Employee hereunder for a three (3) year term commencing
on the Employment Commencement Date hereof (the “ Term
”), which Term will be automatically extended for additional
one (1) year periods beginning on the third anniversary of the
Employment Commencement Date and upon each subsequent anniversary
thereof unless either party provides the other party with at least
ninety (90) days prior written notice of its intention not to renew
this Agreement unless terminated earlier pursuant to Sections 3 or
5 of this Agreement.
2.
Consideration
.
a.
Compensation
. As
consideration for all services rendered by Employee to the Company
and for the Covenants contained herein, Employee will be entitled
to:
(1)
base salary at an annual rate of
$240,000, subject to review and adjustment annually during the
Term;
(2)
signing bonus of $150,000 to be
paid within thirty (30) days of Employment Commencement Date.
In the event that you voluntarily resign from the Company within
your first 12 months of employment, this signing bonus must be
repaid on a pro rata basis.
(3)
participate in MedQuist’s
Management Bonus Plan, commencing in 2006. Your target bonus
in this plan will be 45% of your base salary for 2006 and following
years. The target bonus is the payment amount that the
Employee shall be eligible to receive if the Company and Employee
both attain the pre-established bonus plan target objectives.
The actual bonus award may be higher or lower than the target bonus
amount based upon achievement of the objectives by Employee and the
Company. Management Bonus Plan target objectives shall be
developed on or before February 28 th of each year
of the Management Bonus Plan. Payment of $54,000, which is
equal to half of your annual target bonus for the year ending
December 31, 2006, is guaranteed;
(4)
participate in the same employee
benefit plans available generally to other full-time employees of
the Company, subject to the terms of those plans (as the same may
be modified, amended or terminated from time to time); (benefits
information package enclosed);
(5)
receive relocation support in
accordance with the Company Relocation Policy. This
relocation offer will be in effect for the first twenty-four (24)
months of your employment;
(6)
if Employee’s employment is
terminated by the Company without Cause, the severance pay and
benefits described below in Section 5 .
b.
Long Term
Incentives . In addition, from
time to time, the Board may review the performance of the Company
and Employee and, in its sole discretion, may grant stock options,
shares of restricted stock or other equity-based incentives to
Employee to reward extraordinary performance and/or to encourage
Employee’s future efforts on behalf of the Company. The
grant of any such equity incentives will be subject to the terms of
the Company’s equity-based plans and will be evidenced by a
separate award agreement by and between the Company and
Employee.
(1)
Upon joining MedQuist, you will
become entitled to a special stock option grant of 60,000 shares of
non-qualified stock options (“Special Option Grant”) to
purchase Company common stock, no par value (“Common
Stock”), pursuant to the Company’s Stock Option Plan
adopted May 29, 2002 (the “Option Plan”).
The grant date of the Special Option Grant will occur on the later
of (i) the date the Company becomes current in its reporting
obligations under the Securities Exchange Act of 1934; or
(ii) the first date thereafter when the Form S8
Registration Statement for the Option Plan complies with the
requirement of the Securities Exchange Commission provided that you
are still an employee on the grant date. The option price for
the Special Option Grant shall be equal at least to the fair market
value of the Company’s Common Stock as of the grant
date. The Special Option Grant will be subject to all of the
terms and conditions of the Option Plan and the Stock Option
Agreement that will be issued if and when the grant becomes
effective. Your right to exercise the option will vest in
equal 20% installments on each of the first five
(5) anniversaries of the grant date. In the event of a
“Change of Control” (as defined below) of the Company
while you are an employee, your Special Option Grant may, from and
after the date which is six months after the Change of Control (but
not beyond the expiration date of the option), be exercised for up
to 100% of the total number of shares then subject to the Special
Option Grant minus the number of shares previously purchased upon
exercise of such option (as adjusted for any change in the
outstanding shares of the Common Stock of the Company in accordance
with the terms of the Option Plan) and your vesting date will
accelerate accordingly. A “Change of Control”
shall be deemed to have occurred upon the happening of any of the
following events:
(i)
A change within a twelve-month
period in the holders of more than 50% of the outstanding voting
stock of the Company; or
(ii)
Any other event deemed to
constitute a “Change of Control” by the Company’s
Board of Directors.
(2)
Contingent upon Employee’s
continued attainment of performance objectives, the Company agrees
to deliver a long term incentive value of $120,000 annually through
one of the following, as determined in the Company’s sole
discretion: (i) a stock option grant pursuant to the Option
Plan, (ii) a restricted stock grant or (iii) a cash-based
long term incentive program to be developed. The long term
incentive value of Company stock will be calculated based on an
industry accepted stock valuation methodology.
3.
Employment-At-Will
. Nothing
contained in this Agreement is intended to create an employment
relationship whereby Employee will be employed other than as an
“at-will” employee. Employee’s employment
by the Company may be terminated by Employee or the Company at any
time; provided, however, that while employed by the Company,
the terms and conditions of Employee’s employment by the
Company will be as herein set forth; and provided further,
that Section 4 of this Agreement will survive the
termination of Employee’s employment.
4.
Covenants.
a.
Non-Solicitation
. While
employed by the Company and for the twelve (12) month period
following the cessation of that employment for any reason (and
without regard to whether such cessation was initiated by Employee
or the Company), Employee will not do any of the following without
the prior written consent of the Company:
(1)
solicit, entice or induce, either
directly or indirectly, any person, firm or corporation who or
which is a client or customer of the Company or any of its
subsidiaries to become a client or customer of any other person,
firm or corporation;
(2)
influence or attempt to influence,
either directly or indirectly, any customer of the Company or its
subsidiaries to terminate or modify any written or oral agreement
or course of dealing with the Company or its subsidiaries (except
in Employee’s capacity as an employee of the Company);
or
(3)
influence or attempt to influence,
either directly or indirectly, any person to terminate or modify
any employment, consulting, agency, distributorship, licensing or
other similar relationship or arrangement with the Company or its
subsidiaries (except in Employee’s capacity as an employee of
the Company).
b.
Non-Disclosure
. Employee
shall not use for Employee’s personal benefit, or disclose,
communicate or divulge to, or use for the direct or indirect
benefit of any person, firm, association or company other than
Company, any “Confidential Information,” which term
shall mean any information regarding the business methods, business
policies, policies, procedures, techniques, research or development
projects or results, historical or projected financial information,
budgets, trade secrets, or other knowledge or processes of, or
developed by, Company or any other confidential information
relating to or dealing with the business operations of Company,
made known to Employee or learned or acquired by Employee while in
the employ of Company, but Confidential Information shall not
include information otherwise lawfully known generally by or
readily accessible to the general public. The foregoing
provisions of this subsection shall apply during and after the
period when the Employee is an employee of the Company and shall be
in addition to (and not a limitation of) any legally applicable
protections of Company interest in confidential information, trade
secrets, and the like. At the termination of Employee’s
employment with Company, Employee shall return to the
Company all copies of
Confidential Information in any medium, includ
|
