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Subsequent Events
6 Months Ended
Jun. 30, 2011
Subsequent Events [Abstract]  
Subsequent Events [Text Block]
Subsequent Events
Termination of Long Term Incentive Plan
Our Long Term Incentive Plan was terminated on July 11, 2011.
Appointment of Executive Chairman and Chief Executive Officer
On July 11, 2011, the Company's Board of Directors appointed Roger L. Davenport to the position of Chairman and Chief Executive Officer ("CEO"), effective July 11, 2011, and the MedQuist Holdings Board of Directors appointed Mr. Davenport to the position of Chairman and CEO of MedQuist Holdings, also effective July 11, 2011.
As previously announced, Peter Masanotti, the former President and CEO of the Company and MedQuist Holdings, separated employment with the Company and MedQuist Holdings, effective as of the close of business on July 11, 2011. As previously announced, Robert Aquilina, the former Executive Chairman of MedQuist Holdings, separated employment with MedQuist Holdings effective on the close of business on June 30, 2011. Mr. Aquilina continues to serve as a member of the MedQuist Holdings Board of Directors. In addition, Mr. Aquilina, the Company's former Chairman of the Board of Directors, also resigned from the Company's Board of Directors effective July 11, 2011.


Announcement by MedQuist Holdings - Merger Agreement
On July 11, 2011, MedQuist Holdings, two of its wholly-owned subsidiaries (the "Subs"), MultiModal Technologies, Inc., a Pennsylvania corporation ("MultiModal"), and Michael Finke, as the representative of MultiModal's shareholders, entered into an Agreement and Plan of Merger and Reorganization (the "Merger Agreement"). The Merger Agreement provides for MedQuist Holdings' acquisition of MultiModal through a series of mergers between MultiModal and the Subs (the "Merger"). As a result of the Merger, MultiModal would become a direct wholly owned subsidiary of MedQuist Holdings.
Pursuant to the Merger Agreement, on the closing date of the Merger, MedQuist Holdings will pay an aggregate of approximately $48.4 million in cash to MultiModal's shareholders and optionholders, with funding provided in part by a loan to MedQuist Holdings from the Company for the sole purpose of funding the transaction on terms no less favorable than what would be obtained in an arm's-length transaction, in addition to MedQuist Holdings' available cash and available borrowings under its revolving credit facility. MedQuist Holdings will also issue an aggregate of 4,134,896 shares of our common stock to MultiModal's shareholders who are "accredited investors" within the meaning of Regulation D promulgated under the Securities Act of 1933, subject to adjustments for working capital, cash and tax treatment. MedQuist Holdings is also obligated to pay up to approximately $28.8 million of additional cash consideration in three installments of approximately $16.3 million, $4.8 million and $7.7 million, respectively, following the first, second and third anniversaries of the closing date of the Merger. The recipients of MedQuist Holdings' common stock as merger consideration will have registration rights and will be subject to restrictions on trading as set forth in a Stockholders Agreement to be entered into as of the closing date of the Merger. Certain shareholders of MultiModal will also enter into restrictive covenant agreements as of the closing of the Merger, which will prohibit them from, among other things, competing against MedQuist Holdings for five years after the closing of the Merger. On the closing date of the Merger, MedQuist Holdings will also grant to certain of MultiModal's employees that become our employees up to $10 million of restricted shares of our common stock.
The Merger Agreement contains customary representations, warranties and covenants by MultiModal and MedQuist Holdings. MultiModal has agreed, among other things, to generally conduct its business in the ordinary course until the closing of the Merger and not to solicit competing transactions. Each of the parties to the Merger Agreement covenants to use commercially-reasonable efforts to cause the Merger to be consummated.
The Merger Agreement has been approved by MedQuist Holdings' and MultiModal's boards of directors, as well as all of MultiModal's shareholders. The closing of the Merger is subject to certain customary conditions, including receipt of applicable antitrust approvals under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The Merger Agreement also contains certain termination rights for both MedQuist Holdings and MultiModal and further provides that, upon termination of the Merger Agreement under under certain circumstances, MedQuist Holdings will be obligated to pay MultiModal a termination fee of $13 million.
The merger is expected to provide Medquist Holdings ownership of speech and natural language understanding technologies, facilitate consolidation to a single speech recognition platform, provide a broader product offering to local and regional transcription partners and leverage MultiModal's cloud based services to enhance gross margins.