Exhibit 10.1
INDEMNIFICATION AGREEMENT
This Indemnification Agreement
(“Agreement”) is effective as of July 15, 2005 by
and between MedQuist Inc. (the “Company”), and John
Simmons (“Indemnitee”).
WHEREAS, the Company desires to
attract and retain the services of highly qualified individuals,
such as Indemnitee, to serve the Company and its subsidiaries as
directors, officers and in other capacities;
WHEREAS, the Company and Indemnitee
recognize the continued difficulty in obtaining liability insurance
for the directors, officers, employees and other agents of the
Company, the significant increases in the cost of such insurance
and the general reductions and limitations in the coverage of such
insurance;
WHEREAS, the Company and the
Indemnitee further recognize the substantial increase in corporate
litigation in general, subjecting directors, officers, employees
and other agents serving corporations to expensive litigation risks
at the same time as the availability and coverage of liability
insurance has been severely limited;
WHEREAS, the Company has adopted
bylaws (the “Bylaws”) providing for the indemnification
of directors, officers, employees and other agents of the Company,
including persons serving at the request of the Company in such
capacities with other corporations or enterprises, as authorized by
New Jersey law;
WHEREAS, the Bylaws and New Jersey
law, by their non-exclusive nature, permit agreements between the
Company and its directors, officers, employees and other agents
with respect to indemnification of such persons; and
WHEREAS, in order to induce
Indemnitee to accept a position with the Company as a director,
officer or in another capacity or capacities and/or continue to
provide services to the Company as a director, officer or in
another capacity or capacities, the Company wishes to provide for
the indemnification of, and the advancement of expenses to,
Indemnitee to the maximum extent now or hereafter permitted by
law;
NOW, THEREFORE, the Company and
Indemnitee hereby agree as follows.
1.
Indemnification
.
(a)
Third Party
Proceedings . The
Company shall indemnify Indemnitee if Indemnitee is or was a party
or is threatened to be made a party to any threatened, pending or
completed action, suit, proceeding or any arbitration or other
alternative dispute resolution mechanism, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the Company) by reason of the fact that Indemnitee is or
was a director, officer, employee or agent of the Company, or any
subsidiary of the Company, or by reason of the fact that Indemnitee
is or was serving at the request of the Company as a director,
officer, employee
or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses
(including attorneys’ fees), judgments, fines and amounts
paid in settlement (if such settlement is approved in advance by
the Company, which approval shall not be unreasonably withheld)
actually and reasonably incurred by Indemnitee in connection with
such action, suit or proceeding if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to
any criminal action or proceeding, had no reasonable cause to
believe Indemnitee’s conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that
Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that
Indemnitee’s conduct was unlawful.
(b)
Proceedings By or in the Right of
the Company . The
Company shall indemnify Indemnitee if Indemnitee was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Company or any
subsidiary of the Company to procure a judgment in its favor by
reason of the fact that Indemnitee is or was a director, officer,
employee or agent of the Company, or any subsidiary of the Company,
or by reason of the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys’ fees) and,
to the fullest extent permitted by law, amounts paid in settlement,
actually and reasonably incurred by Indemnitee in connection with
the defense or settlement of such action or suit if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company,
except that no indemnification shall be made in respect of any
claim, issue or matter as to which Indemnitee shall have been
adjudged to be liable to the Company unless and only to the extent
that the New Jersey court or the court in which such action or suit
was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of
the case, Indemnitee is fairly and reasonably entitled to indemnity
for such expenses which the New Jersey court or such other court
shall deem proper.
(c)
Mandatory Payment of
Expenses . To the
extent that Indemnitee has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to
in Sections 1(a) or (b) hereof, or in defense of any
claim, issue or matter therein, Indemnitee shall be indemnified
against expenses (including attorneys’ fees) actually and
reasonably incurred by Indemnitee in connection
therewith.
2.
Advancement of Expenses; Notice;
Indemnification Procedure .
(a)
Advancement of
Expenses . The
Company shall advance all expenses incurred by Indemnitee in
connection with the investigation, defense, settlement or appeal of
any civil or criminal action, suit or proceeding referenced in
Section 1(a) or (b) hereof (but not amounts actually
paid in settlement of any such action, suit or proceeding).
Indemnitee hereby undertakes to repay such amounts advanced only
if, and to the extent that, it shall ultimately be determined that
Indemnitee is not entitled to be indemnified by the Company as
authorized hereby.
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(b)
Notice of Indemnification Claim;
Cooperation by Indemnitee . Indemnitee shall, as a condition
precedent to his or her right to be indemnified under this
Agreement, give the Company notice in writing as soon as
practicable of any claim made against Indemnitee for which
indemnification will or could be sought under this Agreement.
Notice to the Company shall be directed to the General Counsel of
the Company at the address indicated on the signature page of
this Agreement (or such other address as the Company shall
designate in writing to Indemnitee). Notice shall be deemed
received as provided in Section 13 hereof. Indemnitee
also shall provide the Company such information and cooperation as
the Company may reasonably require and as shall be within
Indemnitee’s power.
(c)
Indemnification
Procedure . Any
indemnification and/or advances provided for in Sections 1 and 2
hereof shall be made no later than thirty (30) days after receipt
of the written request of Indemnitee. If a claim under this
Agreement, under any statute, or under any provision of the
Company’s Certificate of Incorporation or Bylaws providing
for indemnification, is not paid in full by the Company within
thirty (30) days after a written request for payment thereof has
first been received by the Company, Indemnitee may at any time
thereafter bring an action against the Company to recover the
unpaid amount of the claim. It shall be a defense to any such
action brought by Indemnitee (other than an action brought to
enforce a claim for expenses incurred in connection with any
action, suit or proceeding in advance of its final disposition)
that Indemnitee has not met the standards of conduct which make it
permissible under applicable law for the Company to indemnify
Indemnitee for the amount claimed. Notwithstanding the
foregoing, Indemnitee shall be entitled to receive advancements of
expenses pursuant to Section 2(a) hereof unless and until
such defense may be finally adjudicated by court order or judgment
from which no further right of appeal exists. It is the
intention of the parties that if the Company contests
Indemnitee’s right to indemnification, the question of
Indemnitee’s right to indemnification shall be for the court
to decide, and neither the failure of the Company (including its
Board of Directors, any committee or other subgroup of the Board of
Directors, independent legal counsel, or its stockholders) to have
made a determination that indemnification of Indemnitee is proper
in the circumstances because Indemnitee has met the applicable
standard of conduct required by applicable law, nor an actual
determination by the Company (including it Board of Directors, any
committee or other subgroup of the Board of Directors, independent
legal counsel, or its stockholders) that Indemnitee has not met
such applicable standard of conduct, shall create a presumption
that Indemnitee has or has not met the applicable standard of
conduct.
(d)
Notice to Insurers
. If, at the time of the
receipt of a notice of a claim pursuant to
Section 2(b) hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice
of the commencement of such proceeding to the insurer in accordance
with the procedures set forth in the applicable policy. The
Company shall thereafter take all action it deems reasonably
necessary or advisable to cause such insurers to pay, on behalf of
the Indemnitee, all amounts payable as a result of such proceeding
in accordance with the terms of such policies.
(e)
Selection of Counsel
. In the event the Company
shall be obligated under Section 2(a) hereof to pay the
expenses of any proceeding against Indemnitee, the Company shall
be
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entitled to assume the defense of such
proceeding, with counsel approved by Indemnitee (such approval not
to be unreasonably withheld), upon the delivery to Indemnitee of
written notice of its election to do so. After delivery of
such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be
liable to Indemnitee under this Agreement
