EXHIBIT 10.1
Laboratory Corporation of America Holdings
Senior Executive Transition Policy
This Senior Executive Transition Policy ("the Policy") is
adopted to state in a single document the policy of Laboratory
Corporation of America Holdings ("LabCorp") regarding Awards made
under Stock Incentive Plans to a Senior Executive if the Senior
Executive thereafter voluntarily terminates employment with LabCorp
before reaching age 65. For purposes of this Policy, the term
"Senior Executive" means a duly appointed President/CEO or Executive
Vice President of LabCorp. The term "Stock Incentive Plan" means the
Laboratory Corporation of America Holdings 1994 Stock Option Plan,
the Laboratory Corporation of America Holdings 2000 Stock Option
Plan, and any plan of a like kind that may be adopted hereafter. The
term "Award" means an Award as defined in a Stock Incentive Plan.
1. This Policy applies only to Eligible Senior Executives. An
"Eligible Senior Executive" is a Senior Executive who has
satisfied the requirements of Paragraph 2 of this Policy
(relating to a Confidentiality/Non-Compete Letter), who held
office as the President/CEO or an Executive Vice President of
LabCorp on or after April 1, 2004, and who at the time of his or
her voluntary termination has served as a Senior Executive of
LabCorp for at least five years and has been credited with at
least ten "Years of Service" as defined in the Laboratory
Corporation of America Employees' Retirement Savings Plan.
2. A Senior Executive satisfies the requirement of this Paragraph 2
of the Policy if he or she executes a Confidentiality/Non-
Compete Letter substantially in the form attached as Exhibit A
within 30 days of the later of the adoption of this Policy or
his or her appointment as a Senior Executive, and if he or she
executes such amended forms of such a letter as may reasonably
be required by the Board of Directors from time to time.
3. If an Eligible Senior Executive resigns from office and
terminates employment with LabCorp and its affiliates before
reaching age 65, and the Compensation Committee finds that the
Eligible Senior Executive's transition satisfies the transition
requirements described in Paragraph 4 of this Policy, then
LabCorp, acting through the Compensation Committee of the Board
of Directors, will take all steps necessary and proper to cause
all Unexpired Awards to continue to be eligible for vesting and
to continue to be or become exercisable, payable, or eligible
for the termination of restrictions (as the case may be)
following termination of employment on the same terms and
conditions as if the Eligible Senior Executive had remained
employed by LabCorp during the original exercise period (or, in
the case of an Eligible Senior Executive who dies following
resignation from office and termination of employment, as if the
Eligible Senior Executive had remained so employed through the
date of death). An "Unexpired Award" means an Award granted to
the Eligible Senior Executive that had not expired and, in the
case of an Award that is an option, had not been exercised; in
the case of an Award that consists of restricted stock, had not
yet become free of restrictions; or, in the case of any other
Award, had not become payable as of the date of his or her
termination of employment with LabCorp.
4. The transition requirements referred to in Paragraph 3 of this
Plan are as follows:
(a) the Eligible Senior Executive's announcement of a decision
or intention to terminate before age 65 ("Announcement"), and
his or her subsequent public statements regarding his or her
decision or intention to terminate employment, are each made at
a time and in a manner reasonably calculated to minimize any
adverse effect the Announcement and/or any such statement might
have on the shareholders of LabCorp;
(b) the Eligible Senior Executive's Announcement, his or her
announced termination date, and (if different) his or her actual
termination date, whether considered individually or in
conjunction with the dates of the Announcement, the scheduled
termination dates, and/or the actual termination dates of any
other Senior Executives, do not occur within a period of time
that the Compensation Committee finds unreasonably short;
(c) following his or her Announcement, the Eligible Senior
Executive cooperates to the full satisfaction of the
Compensation Committee in the Board of Directors' development of
a plan (the "Transition Plan") for the transition of his or her
duties to others, including his or her successor; and the
Eligible Senior Executive executes his or her duties under the
Transition Plan to the full satisfaction of the Compensation
Committee. A Senior Executive's duties under a Transition Plan
may include (without limitation) taking all steps assigned to
him or her by the Board in connection with the search for and/or
selection of a successor, and active cooperation in training a
successor and fully familiarizing the successor with sources of
relevant information necessary to carrying out the successor's
duties.
5. This Policy may be modified, terminated, or amended at any time
by the Compensation Committee, provided, however, that no
modification, termination, or amendment of the Policy adopted
after a Senior Executive has made an Announcement will apply to
such Senior Executive without his or her written consent.
EXHIBIT A
[NAME]
President OR Executive Vice President
Laboratory Corporation of America Holdings
430 S. Spring Street, First Floor
Burlington, NC 27215
Dear ________________:
This letter is intended to memorialize your agreement, as the
_________________________ of Laboratory Corporation of America
Holdings ("the Company"), to certain duties of confidentiality, non-
competition, and similar matters during your employment, and
following your termination of employment, with the Company and any of
its affiliates (collectively, "LabCorp"). If you sign and return
this letter on or before _________ __, 2004, you will satisfy the
requirement of Section 2 of the Senior Executive Transition Policy
for being an "Eligible Senior Executive" as defined in that Policy.
Defined Terms. For purposes of this letter, "Laboratory Testing"
refers to the collection for testing and/or testing of specimens from
human beings for the purposes of diagnosis, treatment, or care of
disease or illness; monitoring or providing data for the analysis of
a regimen of treatment, a therapy, or a diagnostic or therapeutic
procedure; and/or detection or analysis of the presence or absence of
factors, chemicals or compounds. "Clinical Trial" refers to
assembling, validating, or analyzing data relating to the safety or
effectiveness of a drug or medical device.
Receipt of Confidential Information. You acknowledge that in the
course of your employment with LabCorp, you have developed and will
develop an extensive knowledge of LabCorp's business, including but
not limited to business strategies, cost information, marketing
information, product and service information, new products and
services under development, and plans for the expansion of product
and service lines (including, without limitation, plans for the
acquisition or licensing of intellectual property relating to
Laboratory Testing). In addition, you acknowledge that in your
employment you have access to information regarding LabCorp's
business plans, sales methods, and customers on a corporate-wide
basis in every market in which LabCorp conducts business. The
knowledge and information referred to above will be referred to as
"Confidential Information."
Competition. You and the Company agree that LabCorp will suffer
significant and irreparable injury, for which damages at law would
not be a measurable or adequate remedy, if you become employed by any
corporation or entity that competes with LabCorp or if you provide
services to any such corporation or entity in any other capacity that
would permit you to take advantage of the Confidential Information
acquired by you during the course of your employment with LabCorp
(including by breaching any of the numbered covenants contained in
this paragraph). Accordingly, you agree that during your employment
by LabCorp and for a period of two (2) years following your
termination of employment, you will not, directly or indirectly:
1. Become employed by or otherwise become interested in (as
owner, stockholder, partner, co-venturer, director, officer,
employee, agent, consultant, or otherwise) any corporation or
entity that is engaged (a) in the business of Laboratory Testing
in the United States and/or Canada at a location that is within
five (5) miles of any location at which one or more employees of
LabCorp is regularly engaged in any aspect of the business of
Laboratory Testing (including, without limitation, any regular
collection site served by LabCorp); or (b) that is engaged in
the business of Clinical Trials in a country in which LabCorp is
engaged in the business of Clinical Trials. This paragraph
shall not prevent you from holding not more than five (5)
percent of the outstanding securities of any class of any
publicly traded company, other than a company primarily engaged
in Laboratory Testing.
2. Solicit sales or business from any corporation or entity that
was a customer of LabCorp within the one-year time period
preceding your termination of employment provided, however, that
the solicitation of sales of products or services not offered by
LabCorp at the time of such solicitation shall not be deemed a
violation of this provision.
3. Employ or retain, or arrange to have any other person or
entity employ or retain, any person who shall have been employed
or retained by LabCorp as a director or officer at any time
during the one-year time period preceding the termination of
your employment.
4. Attempt to influence any director or officer of LabCorp to
terminate or modify his or her employment arrangement with
LabCorp.
You agree that the foregoing restrictions are necessary for the
reasonable and proper protection of the Company; are reasonable in
respect to subject matter, length of time, geographic scope, customer
scope, and scope of activity to be restrained; and are not unduly
harsh and oppressive so as to deprive you of a livelihood or to
unduly restrict your opportunity to earn a living after termination
of your employment with the Company.
Confidentiality. During the term of your employment with LabCorp and
thereafter, except as required by or pursuant to law, you shall not,
without the written consent of the Board or a person authorized
thereby, disclose to any person, other than an employee of LabCorp or
a person to whom disclosure is reasonably necessary or appropriate in
connection with the performance by you of your duties as a Senior
Executive of LabCorp, any Confidential Information or Business
Information obtained by you while in the employ of LabCorp. The term
"Business Information" means any information pertaining to LabCorp's
conduct of its Laboratory Testing and/or Clinical Trial business that
is not readily and easily available to the public or to those in
LabCorp's industry, including, without limitation, LabCorp's prices,
pricing methods, costs, profits, profit margins, suppliers,
procedures, processes, research and development projects, data,
goals, activities, business strategies, marketing techniques, the
identities or addresses of LabCorp's employees, the functions of
LabCorp's employees, and any customer-related information.
Property. During the term of this Agreement, you shall not make,
copy, maintain, distribute, divulge the contents of, or remove from
LabCorp's offices or premises any documents, records, or similar
materials containing Confidential Information or Business Information
unless necessary or appropriate in accordance with your duties and
responsibilities as [President OR Executive Vice President]. Upon
termination of your employment with LabCorp, you shall leave with or
immediately return to LabCorp all originals and copies of the
foregoing LabCorp property then in your possession, whether prepared
by you or by others.
Duty of Loyalty/Nondisparagement. During the term of your employment
and for a period of five years following your termination of
employment, you will not (except as required by or pursuant to law)
communicate to anyone, whether by word or deed, whether directly or
through any intermediary, and whether expressly or by suggestion or
innuendo, any statement, whether characterized as one of fact or of
opinion, that is intended to cause or that reasonably would be
expected to cause any person to whom it is communicated to have (1) a
lowered opinion of the Company or any affiliate, including a lowered
opinion of any products manufactured, sold, or used by, or any
services offered or rendered by the Company or any affiliate; and/or
(2) a lowered opinion of the creditworthiness or business prospects
of the Company or any affiliate.
Interpretation and Enforcement. You and the Company agree that this
letter will be interpreted and construed under the laws of North
Carolina (exclusive of any laws relating to choice of law in the
event of conflicts of law and of any principle causing ambiguities to
be construed against the drafter), and that the covenants contained
in the Competition portion of this letter will be construed and
interpreted so as to permit their enforcement to the maximum extent
permitted thereunder (including, to the extent necessary, by treating
each provision of this letter as severable and separately
enforceable, and/or by reforming any such separate provisions to the
minimum extent necessary to permit enforcement of such covenants to
the fullest extent permitted). You consent to the exclusive
jurisdiction of the courts of North Carolina over any action or
proceeding relating to the validity and/or construction of this
letter, and agree that you will not bring or remove any such action
or proceeding other than in or to a court established by the State of
North Carolina.
If this Agreement is acceptable to you, please sign and date this
letter where indicated below.
Laboratory Corporation of America Holdings
By:__________________________________
Accepted:
______________________________ ___/___/04
[NAME OF SENIOR EXECUTIVE]
[TITLE]