<PAGE>
EXHIBIT 10.8
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is made and entered into as of this 4th
day
of April, 2005, by and between Spheris Operations Inc. (the
"Company") and
Joseph Degati (the "Employee").
WITNESSETH:
WHEREAS, the Company desires to enter into an employment
agreement
embodying the terms of Employee's employment (this "Agreement") and
Employee
desires to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
covenants
contained herein and for other good and valuable consideration, the
receipt of
which is mutually acknowledged, the Company and Employee agree as
follows:
Section 1. DEFINITIONS.
(a) "Accrued Obligations" shall mean (i) all accrued but unpaid
Base
Salary through the date of termination of Employee's employment,
(ii) any unpaid
or unreimbursed expenses incurred in accordance with Section 7
below, and (iii)
any benefits provided under the Company's employee benefit plans
upon a
termination of employment, in accordance with the terms
therein.
(b) "Annual Bonus" shall have the meaning set forth in Section
4(b).
(c) "Base Salary" shall mean the salary provided for in Section
4(a)
below or any increased salary granted to Employee pursuant to
Section 4(a).
(d) "Board" shall mean the Board of Directors of the Company.
(e) "Cause" shall mean
(i) a continuing failure, neglect or refusal by
Employee to perform in any material respect his duties or
responsibilities; (ii)
embezzlement, theft, larceny, material fraud or other acts of
dishonesty; (iii)
Employee's conviction of, admission to, or entry of pleas of no
contest to any
felony or any other crime which has, or may have within the
Company's reasonable
discretion, a material adverse effect on Employee's ability to
carry out his
duties under this Agreement or upon the reputation of the Company;
(iv)
consistent drunkenness by Employee or his illegal use of narcotics
which is, or
could reasonably be expected to become, materially injurious to the
reputation
or business of the Company or its affiliates or which impairs, or
could
reasonably be expected to impair, the performance of Employee's
duties
hereunder; or (v) Employee's material breach of this Agreement or
the
Noncompetition Agreement.
(f) "Disability" shall mean any physical or mental disability
or
infirmity that prevents the performance of Employee's duties
hereunder for a
period of (i) ninety (90) consecutive days 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
which Employee
and the Company cannot agree shall be determined by a
qualified,
<PAGE>
independent physician selected by the Company and approved by
Employee (which
approval shall not be unreasonably withheld). The determination of
any such
physician shall be final and conclusive for all purposes of this
Agreement.
(g) "Noncompetition Agreement" shall mean that certain
Confidential
Information, Non-Competition and Invention Assignment Agreement,
dated April 4,
2005 entered into by Employee and the Company.
(h) "Non-Renewal Notice" shall have the meaning set forth in
Section 2
hereof.
(i) "Severance Term" shall mean the period specified in Section
8(d)(ii) below.
(j) "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 terms and conditions set forth herein. Unless sooner
terminated
as provided in Section 8 hereof, the Term of Employment shall
commence on April
4, 2005 and shall continue during the period ending on the second
anniversary
thereof. Subject to Section 8 hereof, the Term of Employment shall
be extended
automatically without further action by either party by one
additional year
first on the second anniversary hereof of the Closing Date, and on
each
succeeding anniversary thereafter, unless, not later than ninety
(90) days prior
to the end of the Term of Employment (including any prior extension
thereof),
either the Company or Employee 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 the other,
Employee's
employment hereunder shall terminate on the close of the business
on the last
day 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 Information Officer of the Company (together
with such other
position or positions consistent with Employee's title as the Chief
Executive
Officer and/or Board shall specify from time to time) and shall
have such duties
typically associated with such title. Employee shall report to the
Chief
Executive Officer. Employee also agrees to serve as an officer
and/or director
of any subsidiary of the Company without additional
compensation.
(b) Employee shall devote his full business time, attention, skill
and
reasonable best efforts to the performance of his duties under this
Agreement
and shall not engage in any other business or occupation 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
-2-
<PAGE>
interests. Notwithstanding the foregoing, nothing herein shall
preclude Employee
from (i) serving, with the prior written consent of the Board, as a
member of
the board of directors or advisory boards (or their equivalents in
the case of a
non-corporate entity) of non-competing businesses and charitable
organizations,
(ii) engaging in charitable activities and community affairs, and
(iii) managing
his personal investments 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 the aggregate, with the
performance of
his duties and responsibilities hereunder.
Section 4. COMPENSATION. During the Term of Employment, Employee
shall
be entitled to the following compensation:
(a) Base Salary. Employee shall be paid an annualized Base
Salary,
payable in accordance with the regular payroll practices of the
Company, of not
less than $175,000 with increases, if any, as may be approved in
writing by the
Board.
(b) Annual Bonus. Employee shall be eligible for an annual
discretionary incentive bonus 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% of Employee's annual
Base Salary
for such year, although the actual Annual Bonus amount may be less
than or
greater than the target Annual Bonus depending upon the degree of
attainment of
individual and Company performance criteria established by the
Board for such
year. Employee shall receive the Annual Bonus in respect of any
year at the same
time as bonuses are paid to other executive officers of the
Company, but in no
event later than ninety (90) days after the end of the fiscal year
for which the
bonus is payable.
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 shall also be
entitled to the
same number of holidays, vacation, sick days (or the same amount of
paid time
off, as applicable) and other benefits as are generally allowed to
senior
executives of the Company 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 life of Employee for the sole benefit of the
Company, in
such amounts, and with such terms, as it may determine. All
premiums payable
thereon shall be the obligation of the Company. Employee shall have
no interest
in any such policy, but agrees to cooperate with the Company in
taking out such
insurance by submitting to physical examinations, supplying all
information
required by the insurance company, and executing all necessary
documents,
provided that no financial obligation is imposed on Employee by any
such
documents.
-3-
<PAGE>
Section 7. REIMBURSEMENT OF BUSINESS EXPENSES.
Employee is authorized to incur reasonable business expenses in
carrying out his duties and responsibilities under this Agreement
and the
Company shall promptly reimburse him for all business expenses
incurred in
connection with carrying out the business of the Company, subject
to
documentation in accordance with the Company's policy, as in effect
from time to
time.
Section 8. TERMINATION OF EMPLOYMENT.
(a) General. The Term of Employment shall terminate earlier than
as
provided in Section 2 hereof upon the earliest to occur of (i)
Employee's death,
(ii) a termination by reason of a Disability, (iii) a termination
by the Company
with or without Cause, or (iv) resignation by Employee. Upon any
termination of
Employee's employment for any reason, except as may otherwise be
requested by
the Company, Employee shall resign from any and all directorships,
committee
memberships 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 terminate automatically upon his death. The Company may
terminate
Employee's employment immediately upon the occurrence of a
Disability, such
termination to be effective upon Employee's receipt of written
notice of such
termination. In the event Employee's employment is terminated due
to his death
or Disability, Employee or his estate or his beneficiaries, as the
case may be,
shall be entitled to:
(i) The Accrued Obligations; and
(ii) Any unpaid Annual Bonus in respect to any completed fiscal
year
which has ended pri
