materially injurious to the reputation or business of the Company or itsaffiliates or which impairs, or could reasonably be expected to impair, the performance ofEmployee’s duties hereunder; or (v) Employee’s material breach of this Agreement or theNoncompetition Agreement.          (f) “Closing” shall have the meaning set forth in the Securities Purchase Agreement.          (g) “Closing Date” shall have the meaning set forth in the Securities PurchaseAgreement.          (h) “Disability” shall mean any physical or mental disability or infirmity thatprevents the performance of Employee’s duties hereunder for a period of (i) ninety (90) consecutivedays or (ii) one hundred twenty (120) non-consecutive days during any twelve (12) month period.Any question as to the existence, extent or potentiality of Employee’s Disability upon whichEmployee and the Company cannot agree shall be determined by a qualified, independent physicianselected by the Company and approved by Employee (which approval shall not be unreasonablywithheld). The determination of any such physician shall be final and conclusive for all purposesof this Agreement.          (i) “Noncompetition Agreement” shall mean that certain Confidential Information,Non-Competition and Invention Assignment Agreement, dated August 14, 2002, entered into by Employeein connection with the Prior Agreement, as amended in accordance with its terms from time to time.          (j) “Non-Renewal Notice” shall have the meaning set forth in Section 2 hereof.          (k) “Securities Purchase Agreement” shall mean that certain Securities PurchaseAgreement, dated October 12, 2004, by and among Spheris Holdings LLC and Spheris Holding Inc.          (l) “Severance Term” shall mean the period specified in Section 8(d)(ii) below.          (m) “Term of Employment” shall mean the period specified in Section 2 below.          Section 2. **Acceptance and Term of Employment**.          The Company agrees to employ Employee and Employee agrees to serve the Company on the termsand conditions set forth herein. Unless sooner terminated as provided in Section 8 hereof, theTerm of Employment shall commence on the Closing Date and shall continue during the period endingon the second anniversary of the Closing Date. Subject to Section 8 hereof, the Term of Employmentshall be extended automatically without furtheraction by either party by one additional year first on the second anniversary of the ClosingDate, and on each succeeding anniversary thereafter, unless, not later than ninety (90) days priorto the end of the Term of Employment (including any prior extension thereof), either the Company orEmployee shall have notified the other in writing of its intention not to renew this Agreement (a“Non-Renewal Notice”). Once the Company or Employee has delivered a Non-Renewal Notice to
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the other, Employee’s employment hereunder shall terminate on the close of the business on the lastday of the Term of Employment.          Section 3. **Position, Duties and Responsibilities**.          (a) During the Term of Employment, Employee shall be employed and serve as the Chief MedicalOfficer of the Company (together with such other position or positions consistent with Employee’stitle as the Chief Executive Officer and/or Board shall specify from time to time) and shall havesuch duties typically associated with such title. Employee shall report to the Chief ExecutiveOfficer. Employee also agrees to serve as an officer and/or director of any subsidiary of theCompany without additional compensation.          (b) Employee shall devote his full business time, attention, skill and reasonable best effortsto the performance of his duties under this Agreement and shall not engage in any other business oroccupation during the Term of Employment without the written permission of the Board, including,without limitation, any activity that (x) conflicts with the interests of the Company, (y)interferes with the proper and efficient performance of his duties for the Company, or (z)interferes with the exercise of his judgment in the Company’s best interests. Notwithstanding theforegoing, nothing herein shall preclude Employee from (i) serving, with the prior written consentof the Board, as a member of the board of directors or advisory boards (or their equivalents in thecase of a non-corporate entity) of non-competing businesses and charitable organizations, (ii)engaging in charitable activities and community affairs, and (iii) managing his personalinvestments and affairs; provided, however, that the activities set out in clauses (i), (ii) and(iii) shall be limited by Employee so as not to materially interfere, individually or in theaggregate, with the performance of his duties and responsibilities hereunder.          Section 4. **Compensation**. During the Term of Employment, Employee shall be entitled to thefollowing compensation:          (a) Base Salary. Employee shall be paid an annualized Base Salary, payable inaccordance with the regular payroll practices of the Company, of not less than $165,000.00, withincreases, if any, as may be approved in writing by the Board.          (b) Annual Bonus. Employee shall be eligible for an annual discretionary incentivebonus award determined by the Board in respect of each fiscal year during the Term of Employment(the “Annual Bonus”). The target Annual Bonus for each such year shall be 50% ofEmployee’s annual Base Salary for such year, although the actual Annual Bonus amount may be lessthan or greater than the target Annual Bonus depending upon the degree of attainment of individualand Company performance criteria established by the Board for such year. Employee shall receivethe Annual Bonus in respect of any year at the same time as bonuses are paid toother executive officers of the Company, but in no event later than ninety (90) days after theend of the fiscal year for which the bonus is payable.
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          Section 5. **Employee Benefits**.          During the Term of Employment, Employee shall be entitled to participate in health, insurance,retirement and other benefits provided to other senior executives of the Company. Employee shallalso be entitled to the same number of holidays, vacation, sick days (or the same amount of paidtime off, as applicable) and other benefits as are generally allowed to senior executives of theCompany in accordance with the Company policy in effect from time to time.          Section 6. **Key-Man Insurance**.          At any time during the Term of Employment, the Company shall have the right to insure the lifeof Employee for the sole benefit of the Company, in such amounts, and with such terms, as it maydetermine. All premiums payable thereon shall be the obligation of the Company. Employee shallhave no interest in any such policy, but agrees to cooperate with the Company in taking out suchinsurance by submitting to physical examinations, supplying all information required by theinsurance company, and executing all necessary documents, provided that no financial obligation isimposed on Employee by any such documents.          Section 7. **Reimbursement of Business Expenses**.          Employee is authorized to incur reasonable business expenses in carrying out his duties andresponsibilities under this Agreement and the Company shall promptly reimburse him for all businessexpenses incurred in connection with carrying out the business of the Company, subject todocumentation in accordance with the Company’s policy, as in effect from time to time. Expensescovered by this provision include but are not limited to professional dues, subscriptions, fees andother reasonable expense associated with the Executive’s medical license and continuing educationrequirements, and other reasonable fees and expenses of which Executive participates in theCompany’s best interests.          Section 8. **Termination of Employment**.          (a) General. The Term of Employment shall terminate earlier than as provided inSection 2 hereof upon the earliest to occur of (i) Employee’s death, (ii) a termination by reasonof a Disability, (iii) a termination by the Company with or without Cause, or (iv) resignation byEmployee. Upon any termination of Employee’s employment for any reason, except as may otherwise berequested by the Company, Employee shall resign from any and all directorships, committeememberships or any other positions Employee holds with the Company or any of its affiliates.          (b) Termination due to Death or Disability. Employee’s employment shall terminateautomatically upon his death. The Company may terminate Employee’s employment immediately upon theoccurrence of a Disability, such termination to be effective upon Employee’s receipt of writtennotice of such termination. In the event Employee’s employmentis terminated due to his death or Disability, Employee or his estate or his beneficiaries, asthe case may be, shall be entitled to:               (i) The Accrued Obligations; and
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               (ii) Any unpaid Annual Bonus in respect to any completed fiscal year which has endedprior to the date of such termination, which amount shall be paid at such time Annual Bonusamounts are paid to other senior executives.Following such termination of Employee’s employment by the reason of death or Disability, except asset forth in this Section 8(b), Employee shall have no further rights to any compensation or anyother benefits under this Agreement.          (c) Termination by the Company for Cause.               (i) A termination for Cause shall not take effect unless the provisions of thissubsection (i) are complied with. Employee shall be given not less than two (2) weekswritten notice by the Board of the intention to terminate him for Cause, such notice tostate in detail the particular act or acts or failure or failures to act that constitute thegrounds on which the proposed termination for Cause is based and to be delivered within six(6) months of the occurrence of such act, acts, failures or failures to act. Employee shallhave two (2) weeks after the date that such written notice has been given to Employee inwhich to cure such conduct, to the extent such cure is possible. If he fails to cure suchconduct, the termination shall be effective on the date immediately following the expirationof the two (2) weeks notice period. During any cure period provided hereunder, the Boardmay, in its sole and absolute discretion, prohibit Employee from entering the premises ofthe Company or otherwise performing his duties hereunder.               (ii) In the event the Company terminates Employee’s employment for Cause, he shall beentitled only to the Accrued Obligations. Following such termination of Employee’semployment for Cause, except as set forth in this Section 8(c)(ii), Employee shall have nofurther rights to any compensation or any other benefits under this Agreement.          (d) Termination by the Company without Cause. The Company may terminate Employee’semployment without Cause, effective upon Employee’s receipt of written notice of such termination.In the event Employee’s employment is terminated by the Company without Cause (other than due todeath or Disability), Employee shall be entitled to:               (i) The Accrued Obligations;               (ii) Continuation of Base Salary for a period of 6 months following the date of suchtermination (the “Severance Term”), payable in accordance with the Company’s payrollpractices;               (iii) Any unpaid Annual Bonus in respect to any completed fiscal year which has endedprior to the date of such termination, which amount shall be paid at such time Annual Bonusamounts are paid to other senior executives; and               (iv) Should Employee be eligible for and elect to continue his health insurancepursuant to COBRA following the date of such termination, payment of COBRA premiums inexcess of the cost of such health insurance coverage for active employees of the Companyuntil the earlier of: (A) expiration of the Severance Term, or
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(B) the date Employeecommences employment with any person or entity and, thus, is eligible for health insurancebenefits.Notwithstanding the foregoing, the payments and benefits described in subsections (ii), (iii) or(iv) above shall immediately terminate, and the Company shall have no further obligations toEmployee with respect thereto, in the event that Employee breaches any provision of theNoncompetition Agreement.          Following such termination of Employee’s employment by the Company without Cause, except asset forth in this Section 8(d), Employee shall have no further rights to any compensation or anyother benefits under this Agreement.          (e) Termination by Employee. Employee may resign from his employment by providing theCompany thirty (30) days’ written notice of such resignation. In the event of a termination ofemployment by Employee under this Section 8(e), Employee shall be entitled only to the AccruedObligations. In the event of termination of Employee’s employment under this subsection (e), theCompany may, in its sole and absolute discretion, prohibit Employee from entering the premises ofthe Company for all or any portion of the notice period (which in no event shall be treated as atermination without Cause), provided that the Company shall continue to pay to Employee his thencurrent Base Salary and continue benefits provided pursuant to Section 5 for the duration of thenotice period. Following such termination of Employee’s employment by reason of Employee’sresignation, except as set forth in this Section 8(e), Employee shall have no further rights to anycompensation or any other benefits under this Agreement.          (f) Expiration of the Term of Employment. Notwithstanding anything herein to thecontrary, (i) in no event shall delivery of a Non-Renewal Notice by the Company in and of itselfconstitute a termination without Cause; and (ii) in no event shall delivery of a Non-Renewal Noticeby Employee constitute an event pursuant to which the Company may terminate Employee’s employmentfor Cause or constitute a termination by employee subject to Section 8(e). Upon such expiration ofthe Term of Employment, Employee shall be entitled to:               (i) The Accrued Obligations; and               (ii) Any unpaid Annual Bonus in respect to any completed fiscal year which has endedprior to the date of such termination, which amount shall be paid at such time Annual Bonusamounts are paid to other senior executives.Notwithstanding the foregoing, in the event that the expiration of the Term of Employment is as aresult of the Company’s delivery of a Non-Renewal Notice, in lieu of the payments and benefitsdescribed in subsections (i) and (ii) above, the Employee shall be entitled to the same paymentsand benefits as provided in Section 8(d) above for a termination without Cause. Following suchtermination of Employee’s employment upon expiration of the Term of Employment, except asset forth in this Section 8(f), Employee shall have no further rights to any compensation or anyother benefits under this Agreement.          (g) Release. Notwithstanding any provision herein to the contrary, the Company mayrequire that, prior to payment of any amount or provision of any benefit pursuant
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to Section8(d)(ii), (iii) or (iv) above (including by reason of a termination of employment as a result ofthe Company’s delivery of a Non-Renewal Notice pursuant to Section 8(f) above), Employee shall haveexecuted a customary general release in favor of the Company and its affiliates and related partiesin such form as is reasonably required by the Company, and any waiting periods contained in suchrelease shall have expired.          Section 9. **Noncompetition Agreement**.          The Noncompetition Agreement shall remain in full force and effect in accordance with itsterms, and Employee represents and warrants to the Company that he will continue to comply with theobligations provided thereunder. Employee acknowledges that the provisions of the NoncompetitionAgreement shall survive any termination of his employment hereunder.          Section 10. **Representations and Warranties of Employee**.          Employee represents that:          (a) Employee is entering into this Agreement voluntarily and that his employment hereunder andcompliance with the terms and conditions hereof will not conflict with or result in the breach byhim of any agreement to which he is a party or by which he may be bound;          (b) he has not violated, and in connection with his employment with the Company will notviolate, any non-solicitation or other similar covenant or agreement by which he is or may bebound; and          (c) in connection with his employment with the Company he will not use any confidential orproprietary information he may have obtained in connection with employment with any prior employer.          Section 11. **Taxes**.          The Company may withhold from any payments made under this Agreement all applicable taxes,including but not limited to income, employment and social insurance taxes, as shall be required bylaw.          Section 12. **Set Off; Mitigation**.          The Company’s obligation to pay Employee the amounts provided and to make the arrangementsprovided hereunder shall be subject to set-off, counterclaim or recoupment of amounts ascertainableto a sum certain owed by Employee to the Company or its affiliates. Employee shall not be requiredto mitigate the amount of any payment provided for pursuant tothis Agreement by seeking other employment or otherwise and the amount of any payment providedfor pursuant to this Agreement shall not be reduced by any compensation earned as a result ofEmployee’s other employment or otherwise.
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          Section 13. **Dispute Resolution**.          Any controversy arising out of or relating to this Agreement or the breach hereof (other thanclaims arising under the Noncompetition Agreement) shall be settled by binding arbitration inaccordance with the Employment Dispute Resolution Rules of the American Arbitration Association andjudgment upon the award rendered may be entered in any court having jurisdiction thereof. Thearbitrator shall be selected by mutual agreement of the Company and Employee, or if the Company andEmployee are unable to agree on an arbitrator, the arbitrator shall be appointed by the AmericanArbitration Association. The costs of any such arbitration proceedings, including all reasonablelegal fees, disbursements, and other costs paid or incurred by the prevailing party arising out ofor resulting from such proceedings, shall be reimbursed by the non-prevailing party. Any awardmade by such arbitrator shall be final, binding and conclusive on the parties for all purposes, andjudgment upon the award rendered by the arbitrator may be entered in any court having jurisdictionthereof.          Section 14. **Successors and Assigns; No Third-Party Beneficiaries**.          (a) The Company. This Agreement shall inure to the benefit of and be enforceable by,and may be assigned by the Company to, any purchaser of all or substantially all of the Company’sbusiness or assets, any successor to the Company or any assignee thereof (whether direct orindirect, by purchase, merger, consolidation or otherwise). The Company will require any suchpurchaser, successor or assignee to expressly assume and agree to perform this Agreement in thesame manner and to the same extent that the Company would be required to perform it if no suchpurchase, succession or assignment had taken place.          (b) Employee. Employee’s rights and obligations under this Agreement shall not betransferable by Employee by assignment or otherwise, without the prior written consent of theCompany; provided, however, that if Employee shall die, all amounts then payable toEmployee hereunder shall be paid in accordance with the terms of this Agreement to Employee’sdevisee, legatee or other designee or, if there be no such designee, to Employee’s estate.          (c) No Third-Party Beneficiaries. Except as set forth in subsection (b) above,nothing expressed or referred to in this Agreement will be construed to give any person other thanCompany and Employee any legal or equitable right, remedy or claim under or with respect to thisAgreement or any provision of this Agreement.          Section 15. **Waiver and Amendments**.          Any waiver, alteration, amendment or modification of any of the terms of this Agreement shallbe valid only if made in writing and signed by the parties hereto; provided,however, that any such waiver, alteration, amendment or modification is consented to on theCompany’s behalf by the Board. No waiver by either of the parties hereto of their rights hereundershall be deemed to constitute a waiver with respect to any subsequent occurrences ortransactions hereunder unless such waiver specifically states that it is to be construed as acontinuing waiver.
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          Section 16. **Severability and Governing Law**.          If any covenants or such other provisions of this Agreement are found to be invalid orunenforceable by a final determination of a court of competent jurisdiction: (a) the remainingterms and provisions hereof shall be unimpaired, and (b) the invalid or unenforceable term orprovision hereof shall be deemed replaced by a term or provision that is valid and enforceable andthat comes closest to expressing the intention of the invalid or unenforceable term or provisionhereof. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATEOF TENNESSEE (WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES THEREOF) APPLICABLE TOCONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.          Section 17. **Notices**.          (a) Every notice or other communication relating to this Agreement shall be in writing, andshall be mailed to or delivered to the party for whom it is intended at such address as may fromtime to time be designated by it in a notice mailed or delivered to the other party as hereinprovided, provided that, unless and until some other address be so designated, all notices orcommunications by Employee to the Company shall be mailed or delivered to the Company at itsprincipal executive office, and all notices or communications by the Company to Employee may begiven to Employee personally or may be mailed to Employee at Employee’s last known address, asreflected in the Company’s records.          (b) Any notice so addressed shall be deemed to be given: (i) if delivered by hand, on thedate of such delivery; (ii) if mailed by courier or by overnight mail, on the first business dayfollowing the date of such mailing; and (iii) if mailed by registered or certified mail, on thethird business day after the date of such mailing.          Section 18. **Section Headings**.          The headings of the sections and subsections of this Agreement are inserted for convenienceonly and shall not be deemed to constitute a part thereof, affect the meaning or interpretation ofthis Agreement or of any term or provision hereof.          Section 19. **Entire Agreement**.          This Agreement, together with the Noncompetition Agreement, constitutes the entireunderstanding and agreement of the parties hereto regarding the employment of Employee including,without limitation, the Prior Agreement. This Agreement supersedes all prior negotiations,discussions, correspondence, communications, understandings and agreements between the partiesrelating to the subject matter of this Agreement, including, without limitation, the PriorAgreement.
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          Section 20. **Survival of Operative Sections**.          Upon any termination of Employee’s employment, the provisions of Section 8 through Section 21of this Agreement shall survive to the extent necessary to give effect to the provisions thereof.          Section 21. **Counterparts**.          This Agreement may be executed in two or more counterparts, each of which shall be deemed tobe an original but all of which together shall constitute one and the same instrument. Theexecution of this Agreement may be by actual or facsimile signature.* * *[Signatures to appear on the following page.]
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          IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first abovewritten.      SPHERIS OPERATIONS INC.