Exhibit 10.1
TRANSITION AGREEMENT
     This Transition Agreement (this “Agreement”), entered into as of
November 17, 2008, confirms the following understandings and agreements between
Spheris Inc. (f/k/a Spheris Holdings, Inc.) (the “Company”) and Steven E.
Simpson (hereinafter referred to as “you” or “your”).
WITNESSETH:
     WHEREAS, you and the Company are party to that certain Employment Agreement
dated as of October 12, 2004 (the “Employment Agreement”); and
     WHEREAS, you and the Company now desire to enter into a mutually
satisfactory arrangement concerning, among other things, your separation from
employment with the Company.
     NOW, THEREFORE, in consideration of the promises set forth herein, you and
the Company agree as follows:
     1. Transition Period. In exchange for your execution of this Agreement, and
your compliance with its terms and conditions, the Company agrees to the
following:
          (a) You confirm, effective as of the date hereof, your resignation as
the Chief Executive Officer of the Company and from any other officer positions
with Spheris Holding III, Inc., Company’s ultimate Parent (the “Parent”), and
its direct and indirect subsidiaries (collectively, and including, without
limitation, the Company, the “Company Group”). During the period commencing on
the date hereof and ending on January 17, 2009 (the “Separation Date”), you
shall remain an employee of the Company as part of its senior management team.
During such period you will continue to be paid the same base salary as in
effect immediately prior to your execution of this Agreement, and you shall
continue to be entitled to participate in all employee benefit plans in which
you are currently participating (to the extent such benefits continue to be
offered to similarly situated Company employees), in accordance with the terms
of such plans, as they may be in effect from time to time. Notwithstanding
anything herein, your employment with the Company shall remain “at-will,”
meaning that both you and the Company have the right to terminate your
employment with the Company at any time, for any reason, with or without notice,
subject to the terms of this Agreement.
          (b) You agree that during your continued employment with the Company,
you shall devote such time and attention during usual business hours, and shall
perform such reasonable transition services to the Company as the Board may
reasonably request.
          (c) Unless terminated earlier pursuant to paragraph 1(a) above, your
termination of employment with the Company and its subsidiaries effective on the
close of business on the Separation Date (the Separation Date, or such earlier
date, hereinafter referred to as the “Termination Date”).

 

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     2. Separation Payments.
          (a) By the later of (i) the date that is seven (7) calendar days from
Termination Date, and (ii) the Company’s next regular payroll date following
Termination Date, the Company will provide you with the Accrued Obligations (as
such term is defined in the Employment Agreement).
          (b) Provided you have not voluntarily quit your employment with the
Company prior to the Separation Date, in exchange for your executing a
non-revocable Separation and Release Agreement, a copy of which is attached
hereto (the “Release”) on or after the Termination Date, you will receive the
following payments and benefits:
     (i) Continuation of your base salary (at an annual rate of $350,000) for
the period commencing on the Termination Date and ending on the one (1) year
anniversary of the Termination Date (the “Severance Term”), payable in
accordance with the Company’s payroll practices and subject to applicable
withholdings;
     (ii) An amount equal to the Pro Rata Bonus (as such term is defined in the
Employment Agreement), equal to an aggregate of $173,611, payable in equal
installments during the Severance Term and in accordance with the Company’s
payroll practices and subject to applicable withholdings;
     (iii) Subject to your election to participate in continuation coverage
under the Company’s health plan pursuant to COBRA, payment of COBRA premiums for
you and your covered dependents in excess of the cost of such health insurance
coverage for active employees of the Company until the earlier of (A) expiration
of the Severance Term, or (B) the date that you commence employment with any
person or entity and, thus, are eligible for health insurance benefits; and
     (iv) Reimbursement for all legitimate business expenses incurred by you
which have not yet been reimbursed as of the date hereof, and an amount in
respect of 21 days of Paid Time Off you have accrued while employed.
          (c) In the event that any regular payroll date occurs prior to the
Effective Date (as defined in the Release), any amount that would otherwise have
been payable as a result of the subparagraphs (b)(i), (b)(ii) or (b)(iii) above
shall be deferred and paid together with the regular salary installment on the
first regular payroll date following the Effective Date.
          (d) You acknowledge and agree that the payment(s) and other benefits
provided pursuant to paragraph 2 are in full discharge of any and all
liabilities and obligations of the Company or any other member of the Company
Group to you, monetarily or with respect to employee benefits or otherwise,
including but not limited to any and all obligations arising under any alleged
written or oral employment agreement, policy, plan or procedure of the Company
or any other member of the Company Group and/or any alleged understanding or
arrangement between you and the Company or any other member of the Company Group
(other than claims for accrued and vested benefits under an employee benefit,
insurance, or pension plan of the Company or any other member of the Company
Group, subject to the terms and conditions of such plan(s)).

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     3. Release and Waiver of Claims.
          (a) As used in this Agreement, the term “claims” will include all
claims, covenants, warranties, promises, undertakings, actions, suits, causes of
action, obligations, debts, accounts, attorneys’ fees, judgments, losses and
liabilities, of whatsoever kind or nature, in law, equity or otherwise.
          (b) For and in consideration of the payments and benefits described in
the paragraph 1 above, and other good and valuable consideration, you, for and
on behalf of yourself and your heirs, administrators, executors and assigns,
effective the date hereof, do fully and forever release, remise and discharge
the Company, its direct and indirect parents, subsidiaries and affiliates,
together with their respective officers, directors, partners, shareholders,
employees and agents (collectively, and with the Company, the “Company Parties”)
from any and all claims whatsoever up to the date hereof which you had, may have
had, or now have against the Company Parties, for or by reason of any matter,
cause or thing whatsoever, including any claim arising out of or attributable to
your employment or the termination of your employment with the Company, whether
for tort, breach of express or implied employment contract, intentional
infliction of emotional distress, wrongful termination, unjust dismissal,
defamation, libel or slander, or under any federal, state or local law dealing
with discrimination based on age, race, sex, national origin, handicap,
religion, disability or sexual orientation. The parties intend the release
contained herein to be a general release of any and all claims to the fullest
extent permissible by law.
          (c) You acknowledge and agree that as of the date you execute this
Release, you have no knowledge of any facts or circumstances that give rise or
could give rise to any claims under applicable laws. Similarly, the Company
acknowledges and agrees that as of the date it executes this Release, it has no
knowledge of any facts or circumstances that give rise or could give rise to any
claims under applicable laws.
          (d) Notwithstanding the foregoing, nothing in this Agreement shall be
a waiver of: (i) your rights with respect to payment of amounts under this
Agreement, (ii) your right to benefits due to terminated employees under any
employee benefit plan of the Company or any other member of the Company Group in
which you participated (excluding any severance or similar plan or policy), in
accordance with the terms thereof (including you rights to elect COBRA
coverage), (iii) any claims that cannot be waived by law; or (iv) your right of
indemnification as provided by, and in accordance with the terms of, the
Company’s by-laws or a Company insurance policy providing such coverage, as any
of such may be amended from time to time.
     4. Knowing and Voluntary Waiver. You expressly acknowledge and agree that
you:
          (a) Are able to read the language, and understand the meaning and
effect, of this Agreement;
          (b) Have no physical or mental impairment of any kind that has
interfered with your ability to read and understand the meaning of this
Agreement or its terms,

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and that you are not acting under the influence of any medication, drug or
chemical of any type in entering into this Agreement;
          (c) Are specifically agreeing to the terms of the release contained in
this Agreement because the Company has agreed to pay you the consideration set
forth in paragraph 1 above, which the Company has agreed to provide because of
your agreement to accept it in full settlement of all possible claims you might
have or ever had, and because of your execution of this Agreement;
          (d) Were advised to consult with your attorney regarding the terms and
effect of this Agreement; and
          (e) Have signed this Agreement knowingly and voluntarily.
     5. No Suit. You represent and warrant that you have not previously filed,
and to the maximum extent permitted by law agree that you will not file, a
complaint, charge or lawsuit against any of the Company Parties regarding any of
the claims released herein. If, notwithstanding this representation and
warranty, you have filed or file such a complaint, charge or lawsuit, you agree
that you shall cause such complaint, charge or lawsuit to be dismissed with
prejudice and shall pay any and all costs required in obtaining dismissal of
such complaint, charge or lawsuit, including without limitation the attorneys’
fees of any of the Company Parties against whom you have filed such a complaint,
charge, or lawsuit.
     6. Successors and Assigns. The provisions hereof shall enure to the benefit
of your heirs, executors, administrators, legal personal representatives and
assigns and shall be binding upon your heirs, executors, administrators, legal
personal representatives and assigns.
     7. Severability. If any provision of this Agreement shall be held by any
court of competent jurisdiction to be illegal, void or unenforceable, such
provision shall be of no force and effect. The illegality or unenforceability of
such provision, however, shall have no effect upon and shall not impair the
enforceability of any other provision of this Agreement.
     8. Non-Disparagement. You agree that you will make no disparaging or
defamatory comments regarding any member of the Company Group or their
respective current or former directors or officers in any respect or make any
comments concerning any aspect of your relationship with any member of the
Company Group or the conduct or events which precipitated your termination of
employment from any member of the Company Group. Similarly, the Board shall
instruct each officer and director of the Company Group to refrain from making
any disparaging or defamatory comments regarding you in any respect or making
any comments concerning any aspect of your relationship with any member of the
Company Group or the conduct or events which precipitated your termination of
employment from any member of the Company Group (it being understood that the
foregoing shall not prevent any representative of the Company Group from
verifying your employment to any potential subsequent employer). The obligations
of you and the Company under this paragraph 6 shall not apply to disclosures
required by applicable law, regulation or order of a court or governmental
agency.

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     9. Cooperation.
          (a) You agree that you will provide reasonable cooperation to the
Company and/or any other member of the Company Group and its or their respective
counsel in connection with any investigation, administrative proceeding or
litigation relating to any matter that occurred during your employment in which
you were involved or of which you have knowledge. The Company agrees to use it
best efforts to schedule events regarding your cooperation under this paragraph
at a time that is convenient for you. The Company agrees to reimburse you for
reasonable out-of-pocket expenses and attorney’s fees incurred at the request of
the Company with respect to your compliance with this paragraph.
          (b) You agree that, in the event you are subpoenaed by any person or
entity (including, but not limited to, any government agency) to give testimony
or provide documents (in a deposition, court proceeding or otherwise) which in
any way relates to your employment by the Company and/or any other member of the
Company Group, you will give prompt notice of such request to Dan Kohl, the
Company’s CEO (or his successor or designee), and will make no disclosure until
the Company and/or the other member of the Company Group have had a reasonable
opportunity to contest the right of the requesting person or entity to such
disclosure. The Company agrees to reimburse you for reasonable out-of-pocket
expenses and attorney’s fees incurred in connection with any such request, and
if you are interviewed, deposed or testify in connection with any proceeding
involving your work at the Company.
     10. Continuing Obligations. You hereby acknowledge and agree to abide by
the continuing obligations set forth in the Noncompetition Agreement (as defined
in the Employment Agreement).
     11. Return of Property. You agree that as of the Termination Date you will
have returned to the Company all property belonging to the Company and/or any
other member of the Company Group, including but not limited to all proprietary
and/or confidential information and documents (including any copies thereof) in
any form belonging to the Company, cell phone, Blackberry, beeper, keys, card
access to the building and office floors, Employee Handbook, phone card,
computer user name and password, disks and/or voicemail code. You further
acknowledge and agree that the Company shall have no obligation to make the
payment(s) and provide the benefits referred to in paragraph 2 above unless and
until you have satisfied all your obligations pursuant to this paragraph.
     12. Non-Admission. Nothing contained in this Agreement will be deemed or
construed as an admission of wrongdoing or liability on the part of you or any
member of the Company Group.
     13. Entire Agreement. This Agreement constitutes the entire understanding
and agreement of the parties hereto regarding the termination of your
employment. This Agreement supersedes all prior negotiations, discussions,
correspondence, communications, understandings and agreements between the
parties relating to the subject matter of this Agreement, including, without
limitation, the Employment Agreement.

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     14. Governing Law; Jurisdiction. EXCEPT WHERE PREEMPTED BY FEDERAL LAW,
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH FEDERAL LAW
AND THE LAWS OF THE STATE OF TENNESSEE, APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED IN THAT STATE. EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ANY RIGHT TO
TRIAL BY JURY IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING UNDER OR IN
CONNECTION WITH THIS AGREEMENT.
     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth below.

            SPHERIS INC.
      By:   /s/ Brian P. Callahan       Name:   Brian P. Callahan       Title:  
Chief Financial Officer    

                  /s/ Steven E. Simpson     Steven E. Simpson         

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SEPARATION AND RELEASE AGREEMENT
     This Separation and Release Agreement (this “Release”) confirms the
following understandings and agreements between Spheris Inc. (the “Company”) and
Steven E. Simpson (hereinafter referred to as “you” or “your”).
     In consideration of the promises set forth herein, you and the Company
agree as follows:
     1. Employment Status and Separation Payments.
          (a) You acknowledge your separation from employment with the Company
and its direct and indirect parent(s) and subsidiaries (collectively, with the
Company, the “Company Group”) effective as of the Termination Date, and that
after the Termination Date you shall not represent yourself as being an
employee, officer, agent or representative of the Company or any other member of
the Company Group (as defined below) for any purpose. The Termination Date shall
be the termination date of your employment for purposes of participation in and
coverage under all benefit plans and programs sponsored by or through the
Company and any other member of the Company Group, except as otherwise provided
under the terms of the Transition Agreement between you and the Company dated
November 17, 2008 (the “Transition Agreement”).
          (b) In consideration of your release and waiver of claims set forth in
paragraph 2 below, the Company will provide you with severance benefits
described in paragraph 2 of the Transition Agreement (the “Consideration”).
          (c) You acknowledge and agree that the payment(s) and other benefits
provided pursuant to this paragraph 1 are in full discharge of any and all
liabilities and obligations of the Company or any other member of the Company
Group to you, monetarily or with respect to employee benefits or otherwise,
including but not limited to any and all obligations arising under any alleged
written or oral employment agreement, policy, plan or procedure of the Company
or any other member of the Company Group and/or any alleged understanding or
arrangement between you and the Company or any other member of the Company Group
(other than claims for accrued and vested benefits under an employee benefit,
insurance, or pension plan of the Company or any other member of the Company
Group, subject to the terms and conditions of such plan(s)).
     2. Release and Waiver of Claims.
     (a) As used in this Release, the term “claims” will include all claims,
covenants, warranties, promises, undertakings, actions, suits, causes of action,
obligations, debts, accounts, attorneys’ fees, judgments, losses and
liabilities, of whatsoever kind or nature, in law, equity or otherwise.
     (b) For and in consideration of the payments and benefits described in the
paragraph 1 above, and other good and valuable consideration, you, for and on
behalf of yourself and your heirs, administrators, executors and assigns,
effective the date hereof, do fully and forever release, remise and discharge
the Company, its direct and indirect parents, subsidiaries

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and affiliates, together with their respective officers, directors, partners,
shareholders, employees and agents (collectively, and with the Company, the
“Company Parties”) from any and all claims whatsoever up to the date hereof
which you had, may have had, or now have against the Company Parties, for or by
reason of any matter, cause or thing whatsoever, including any claim arising out
of or attributable to your employment or the termination of your employment with
the Company, whether for tort, breach of express or implied employment contract,
intentional infliction of emotional distress, wrongful termination, unjust
dismissal, defamation, libel or slander, or under any federal, state or local
law dealing with discrimination based on age, race, sex, national origin,
handicap, religion, disability or sexual orientation. This release of claims
includes, but is not limited to, all claims arising under the Age Discrimination
in Employment Act (“ADEA”), Title VII of the Civil Rights Act, the Americans
with Disabilities Act, the Civil Rights Act of 1991, the Family Medical Leave
Act, and the Equal Pay Act, each as may be amended from time to time, and all
other federal, state and local laws, the common law and any other purported
restriction on an employer’s right to terminate the employment of employees. The
parties intend the release contained herein to be a general release of any and
all claims to the fullest extent permissible by law.
     (c) You acknowledge and agree that as of the date you execute this Release,
you have no knowledge of any facts or circumstances that give rise or could give
rise to any claims under any of the laws listed in the preceding paragraph.
Similarly, the Company acknowledges and agrees that as of the date it executes
this Release, it has no knowledge of any facts or circumstances that give rise
or could give rise to any claims under any of the laws listed in the preceding
paragraph.
     (d) You specifically release all claims relating to your employment and its
termination under ADEA, a United States federal statute that, among other
things, prohibits discrimination on the basis of age in employment and employee
benefit plans.
     (e) Notwithstanding the foregoing, nothing in this Release shall be a
waiver of: (i) your rights with respect to payment of amounts under this
Release, (ii) your right to benefits due to terminated employees under any
employee benefit plan of the Company or any other member of the Company Group in
which you participated (excluding any severance or similar plan or policy), in
accordance with the terms thereof (including you rights to elect COBRA
coverage), (iii) any claims that cannot be waived by law; or (iv) your right of
indemnification as provided by, and in accordance with the terms of, the
Company’s by-laws or a Company insurance policy providing such coverage, as any
of such may be amended from time to time.
     3. Knowing and Voluntary Waiver. You expressly acknowledge and agree that
you:
     (a) Are able to read the language, and understand the meaning and effect,
of this Release;
     (b) Have no physical or mental impairment of any kind that has interfered
with your ability to read and understand the meaning of this Release or its
terms, and that you are not acting under the influence of any medication, drug
or chemical of any type in

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entering into this Release;
     (c) Are specifically agreeing to the terms of the release contained in this
Release because the Company has agreed to pay you the Consideration, which the
Company has agreed to provide because of your agreement to accept it in full
settlement of all possible claims you might have or ever had, and because of
your execution of this Release;
     (d) Acknowledge that but for your execution of this Release, you would not
be entitled to the Consideration;
     (e) Understand that, by entering into this Release, you do not waive rights
or claims under ADEA that may arise after the date you execute this Release;
     (f) Had or could have the entire Review Period in which to review and
consider this Release, and that if you execute this Release prior to the
expiration of the Review Period, you have voluntarily and knowingly waived the
remainder of the Review Period;
     (g) Were advised to consult with your attorney regarding the terms and
effect of this Release; and
     (h) Have signed this Release knowingly and voluntarily.
     4. No Suit. You represent and warrant that you have not previously filed,
and to the maximum extent permitted by law agree that you will not file, a
complaint, charge or lawsuit against any of the Company Parties regarding any of
the claims released herein. If, notwithstanding this representation and
warranty, you have filed or file such a complaint, charge or lawsuit, you agree
that you shall cause such complaint, charge or lawsuit to be dismissed with
prejudice and shall pay any and all costs required in obtaining dismissal of
such complaint, charge or lawsuit, including without limitation the attorneys’
fees of any of the Company Parties against whom you have filed such a complaint,
charge, or lawsuit. This paragraph 4 shall not apply, however, to a claim of age
discrimination under ADEA.
     5. Successors and Assigns. The provisions hereof shall enure to the benefit
of your heirs, executors, administrators, legal personal representatives and
assigns and shall be binding upon your heirs, executors, administrators, legal
personal representatives and assigns.
     6. Severability. If any provision of this Release shall be held by any
court of competent jurisdiction to be illegal, void or unenforceable, such
provision shall be of no force and effect. The illegality or unenforceability of
such provision, however, shall have no effect upon and shall not impair the
enforceability of any other provision of this Release.

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     7. Continuing Obligations. You hereby acknowledge and agree to abide by
your continuing obligations set forth in paragraphs 8 (Non-Disparagement), 9
(Cooperation) and 10 (Continuing Obligations) of the Transition Agreement. In
addition, you hereby represent that you have fully complied with (and shall
continue to comply with) your obligation to return all Company property to the
Company (including, but not limited to confidential documents and copies
thereof) under paragraph 11 (Return of Property) of the Transition Agreement.
     8. Non-Admission. Nothing contained in this Release will be deemed or
construed as an admission of wrongdoing or liability on the part of you or any
member of the Company Group.
     9. Entire Agreement. This Release constitutes the entire understanding and
agreement of the parties hereto regarding the termination of your employment.
This Release supersedes all prior negotiations, discussions, correspondence,
communications, understandings and agreements between the parties relating to
the subject matter of this Release.
     10. Governing Law; Jurisdiction. EXCEPT WHERE PREEMPTED BY FEDERAL LAW,
THIS RELEASE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH FEDERAL LAW
AND THE LAWS OF THE STATE OF TENNESSEE, APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED IN THAT STATE. EACH PARTY TO THIS RELEASE HEREBY WAIVES ANY RIGHT TO
TRIAL BY JURY IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING UNDER OR IN
CONNECTION WITH THIS RELEASE.
     11. Opportunity for Review; Acceptance. You have until twenty-one (21) days
following the Termination Date (the “Review Period”) to review and consider this
Release. To accept this Release, and the terms and conditions contained herein,
prior to the expiration of the Review Period, you must execute and date this
Release where indicated below and return the executed copy of the Release to the
Company, to the attention of Dan Kohl, the Company’s Chief Executive Officer.
Notwithstanding anything contained herein to the contrary, this Release will not
become effective or enforceable for a period of seven (7) calendar days
following the date of its execution (the “Revocation Period”), during which time
you may revoke your acceptance of this Release by notifying Dan Kohl, in
writing. To be effective, such revocation must be received by the Company no
later than 5:00 p.m. on the seventh (7th) calendar day following its execution.
Provided that the Release is executed and you do not revoke it, the eighth (8th)
day following the date on which this Release is executed shall be its effective
date (the “Effective Date”). In the event of your failure to execute and deliver
this Release on or following the Termination Date but prior to the expiration of
the Review Period, you execute this Release prior to the Termination Date, or
otherwise revoke this Release during the Revocation Period, this Release will be
null and void and of no effect, and the Company will have no obligations
hereunder.
*           *           *

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     IN WITNESS WHEREOF, the parties hereto have executed this Release as of the
date set forth below.

            Spheris Inc.
      By:           Name:           Title:
Dated:   
   

                        Steven E. Simpson      Dated:     

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