TRANSITION SERVICES
AGREEMENT
This Transition Services Agreement
("Agreement") is made and entered into effective the 2
nd day of September, 2004 by and between LABONE,
INC . ("LabOne") and JOHN W. MCCARTY ("Employee");
WITNESSETH :
WHEREAS , LabOne and Employee entered
into an Employment Agreement dated February 28, 2000 ("Employment
Agreement"); and
WHEREAS , LabOne and Employee have
agreed to the terms of Employee's resignation and the orderly
transition of Employee's responsibilities to his successor; and
WHEREAS , LabOne and Employee intend
that this Agreement records their agreement.
NOW, THEREFORE , in consideration of
the promises herein contained, LabOne and the Employee agree as
follows:
1. Effective Date of
Termination. The effective time and date of Employee's
resignation shall be midnight, March 31, 2005, or earlier in
accordance with the provisions of paragraph 7 hereof ("Resignation
Effective Date").
2. Resignation of
Offices; Duties and Responsibilities. Employee resigns all
offices held by Employee with LabOne and its affiliates effective
as of the Resignation Effective Date. From the date of this
Agreement through the Resignation Effective Date ("Term"), Employee
shall (a) perform effectively all tasks and responsibilities as
Chief Financial Officer of LabOne and its affiliates, including but
not limited to direction and oversight of their financial
activities and accounting practices and the nurturing and
maintenance of positive relationships within the banking, financial
analyst, and investing communities; (b) use his best efforts to
retain and preserve for LabOne and its affiliates their
relationships with employees, customers, contractors and others
having existing or prospective relationships with them, and to
protect and maintain the business and goodwill LabOne and its
affiliates now enjoy; (c) use his best efforts to complete by
December 31, 2004 all documentation, testing and remediation
required pursuant to Section 404 of the Sarbanes-Oxley Act for
LabOne to then have effective internal controls over financial
reporting; and (d) effect an orderly transition of his duties and
responsibilities to his successor and/or other persons designated
by LabOne. Before and after the Resignation Effective Date,
Employee shall not engage in any behavior or act or omit to act in
any manner which has or tends to have the effect of disparaging
LabOne, its affiliates or their management to their employees or
any third party. Before and after the Resignation Effective Date,
LabOne shall not engage in any behavior or act or omit to act in
any manner which has or tends to have the effect of disparaging
Employee to any third party.
3. Continuation of
Employment Agreement; Additional Transition Terms.
(a)
General . Except as otherwise provided herein, the
Employment Agreement will terminate as of the Resignation Effective
Date and be of no further force or effect.
(b)
Compensation; Additional Payments . Employee's current
monthly base salary of $18,750 per month ("Base Amount") shall
continue during the Term. Beginning in the month immediately
following the month in which the Resignation Effective Date occurs,
and continuing monthly thereafter for an aggregate of twelve
months, LabOne shall pay the Base Amount to Employee; provided,
however, that such payments are conditioned upon Employee's
continued satisfaction of his post-employment obligations under
this Agreement and the Employment Agreement. In addition, provided
that Employee has performed his obligations under this Agreement
and the Employment Agreement, (i) on the Resignation Effective
Date, Employee will receive payment for four (4) weeks of unused
vacation and (ii) when paid by LabOne to all other participants and
without regard to whether or not such payment occurs prior to the
Resignation Effective Date, Employee will receive his portion of
the 2004 Management Incentive Plan payout.
(c)
Accelerated Vesting of Stock Options. Employee's LabOne
stock option for 20,000 shares that is scheduled to vest on May 27,
2005 shall vest on the Resignation Effective Date. If the
Resignation Effective Date occurs prior to February 27, 2005,
Employee's LabOne stock option for 4,000 shares that is scheduled
to vest on February 27, 2005 also shall vest on the Resignation
Effective Date (in either event such option or options shall
constitute the "Accelerated Vesting Options"). Employee may not
exercise Accelerated Vesting Options prior to the anniversary of
the Resignation Effective Date, and such right to exercise shall
continue thereafter for 180 days. If LabOne undergoes a "Change of
Control" as that term is defined in Employee's Stock Option
Agreement[s] governing the Accelerated Vesting Options ("Option
Agreement"), Employee may exercise the Accelerated Vesting Options
prior to the anniversary of the Resignation Effective Date in
accordance with the Option Agreement. If Employee fails to comply
with the terms and conditions of this Agreement, including the
post-termination obligations described in this Ag
