EX-10 3 thagree.htm

SEVERANCE AGREEMENT

This Severance Agreement ("Agreement") is made and entered into effective the
1st day of September, 2001 by and between LABONE, INC. ("LabOne") and THOMAS J.
HESPE ("Employee");

WITNESSETH:

WHEREAS, LabOne and Employee entered into an Employment Agreement, dated March
5, 2001 ("Employment Agreement"); and

WHEREAS, LabOne and Employee have agreed to the termination of Employee's
employment; and

WHEREAS, LabOne and Employee desire to enter into agreements with respect to
such termination and to their relationship prior to and after Employee's
termination;

NOW, THEREFORE, in consideration of the promises herein contained, the parties
hereto agree as follows:

1. Effective Date of Termination. The effective time and date of Employee's
termination shall be midnight, August 31, 2002, or earlier in accordance with
the provisions of paragraph 9 hereof ("Termination Date").

2. Resignation of Offices; Duties and Responsibilities. Employee resigns all
offices held by Employee with LabOne and its affiliates effective immediately.
From September 1, 2001 through December 2, 2001 ("Initial Term"), Employee shall
use his best efforts to effect a smooth transition of his prior duties and
responsibilities for LabOne to Jim Mussatto (and others designated by LabOne),
to retain and preserve for LabOne its relationships with employees, customers,
contractors and others having existing or prospective relationships with LabOne,
and to protect and maintain the business and goodwill LabOne now enjoys. From
December 3, 2001 through the Termination Date ("Final Term"), Employee shall be
available at reasonable times, at the request of LabOne, to assist LabOne in the
retention of its relationships with customers and others having existing
relationships with LabOne. During both the Initial Term and the Final Term,
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: (a) disparaging LabOne, its affiliates
or their management to their employees or any third party, (b) promoting a
negative image of management of LabOne or its affiliates or the prospects of
LabOne or its affiliates, or (c) maligning the officers, directors, tactics or
strategies of LabOne.

3. Extent of Continuation of Employment Agreement.

(a) In general. Except as otherwise provided herein, the Employment Agreement is
hereby terminated and is of no further force or effect.

(b) Compensation. Employee's compensation as described in paragraph 4 of the
Employment Agreement shall continue during the Initial Term. Thereafter,
Employee shall be paid monthly compensation of $1,044.21 payable on the 15th day
of each month during the Final Term.

(c) Noncompetition and Nonsolicitation. Employee acknowledges his continuing
obligations pursuant to paragraph 8 of the Employment Agreement and agrees to
fulfill the requirements of said paragraph 8 of the Employment Agreement for a
period of two (2) years following the Termination Date; provided, however, that
Employee acknowledges that LabOne currently is engaged in performing substance
abuse testing for employment purposes and that the restrictive covenants set
forth in paragraph 8 of the Employment Agreement shall apply to that business in
addition to the clinical and insurance laboratory testing businesses.

(d) Confidentiality, Developments and Property. Employee acknowledges his
continuing obligations pursuant to paragraph 7 of the Employment Agreement and
agrees to continue hereafter to fulfill the requirements of said paragraph 7 of
the Employment Agreement. Employee hereby represents and warrants that he has
fully complied with paragraph 6 of the Employment Agreement. To the extent
Employee may have not already done so, he hereby: (i) assigns, transfers and
conveys all of his right, title and interest in and to any and all Developments
(as defined in paragraph 5 of the Employment Agreement) to LabOne, which
Developments shall become and remain the sole and exclusive property of LabOne;
and (ii) except the laptop computer and cell phone presently used by Employee
(which he may keep as his own), immediately upon the request of LabOne shall
return to LabOne all of its property in his possession, including (but not
limited to) computers and other equipment, credit and debit cards, phones,
files, correspondence, notes, recordings, marketing and other brochures, client
information and other original materials and copies thereof, in whatever format,
pertaining to any aspect of the business of LabOne. In addition, any information
stored or contained in computers or computer equipment, or accessible thereby,
which is owned by or pertains to LabOne or its affiliates shall be returned to
LabOne and all disks, back-ups or copies thereof in the possession of Employee
shall be returned to LabOne.

(e) Judicial Relief. LabOne and Employee agree that the provisions of paragraph
9 of the Employment Agreement continue in full force and effect and are not
terminated by this Agreement.

4. Effect of Agreement on Rights Under Certain Plans. This Agreement shall not
alter any right Employee has as of the Termination Date as a terminated employee
under LabOne's Long-Term Incentive Plans, Profit Sharing 401(K) Plan, Employees'
Money Purchase Pension Plan or Medical Benefits Plan. Payments made to Employee
pursuant to paragraphs 7 and 8 hereof shall not be considered compensation for
purposes of the Employees' Money Purchase Pension Plan and the Profit Sharing
401(K) Plan.

5. Communications. Employee agrees that he shall not hereafter voluntarily say,
write or do anything inconsistent with the terms of this Agreement which has an
adverse effect on the business, affairs, reputation or interests of LabOne or
its affiliates. Employee acknowledges that he has been privy to attorney-client
communications concerning LabOne's business and legal affairs. Employee agrees
never to voluntarily disclose to anyone any advice, recommendation or work
product of any of LabOne's attorneys without having first received a writing
from LabOne authorizing any such disclosure. Employee further agrees to give
LabOne prompt written notice in order to permit LabOne to seek injunctive relief
to protect its interests in the event of any attempt by a third party to require
any communication, disclosure or act by Employee which Employee is prohibited by
the foregoing from making or doing voluntarily.

6. Release. Employee hereby releases and discharges LabOne, its parent and
subsidiaries, and their respective officers, directors, agents, employees,
representatives, successors and assigns, from and against any and all demands,
claims, causes of actions, sums due (except for those provided herein), damages,
costs and expenses, related to or arising out of the Employment Agreement,
Employee's employment, and any act or omission of LabOne, its subsidiaries and
other affiliates, or their respective officers, directors, agents, employees or
representatives which has occurred as of the Termination Date, INCLUDING WITHOUT
LIMITATION THOSE ARISING UNDER THE EMPLOYMENT RETIREMENT INCOME SECURITY ACT, AS
AMENDED, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII
OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED, and all state statutes and
regulations prohibiting discrimination, whether such demands, claims or causes
of action are presently known or unknown.

7. Payments to Employee. Subject to any applicable withholding, LabOne agrees to
pay to Employee by check on the following dates the sums set forth below:

         Date                                                              
                                  Payment (a) One payment on December 1, 2001
16,667 (b) Eight payments commencing January 1, 2002,  and
continuing monthly on the first day of each month
thereafter ending August 1,   2002. 12,500 (c) Four payments commencing
September 1, 2002, and
continuing monthly on the first day of each month
thereafter ending December 1, 2002. 1,044

8. Contingent Additional Payment to Employee. In the events that Employee has
performed all his obligations to be then performed by him as required by this
Agreement and that the transition of customers and the retention of employees
and the business and goodwill of LabOne have been, in the subjective opinion of
the president of LabOne, smoothly and otherwise successfully completed, Employee
shall be paid an additional $75,000.00 on June 1, 2002.

9. Termination of Employment; Effect. Employee's employment pursuant to this
Agreement shall terminate prior to midnight, August 31, 2002, upon the
occurrence of Employee's death or disability (as defined in paragraph 10(b) of
the Employment Agreement), for cause which shall include any breach of this
Agreement, or in the event that at any time the transition of customers and the
retention of employees and the business and goodwill of LabOne are not, in the
subjective opinion of the president of LabOne, proceeding smoothly and
successfully. LabOne and Employee agree that (a) only the obligations of
Employee contained in paragraphs 3(c)-(e), 5, 6, 10 and 13 hereof shall survive
and continue after any termination of Employee's employment pursuant to this
Agreement; and (b) only the obligations of LabOne contained in paragraphs 4,
7(a) and (b), 10 and 13 shall survive and continue after any termination of
Employee's employment pursuant to this paragraph 9.

10. Miscellaneous.

(a) Injunctive Relief. LabOne and Employee agree that in the event Employee
violates, or threatens to violate, paragraphs 3(c), 3(d) or 5 hereof, LabOne is
reasonably likely to suffer irreparable damages which may be difficult or
impossible to value in monetary damages and entitling LabOne to injunctive
relief.

(b) Integrated Agreement. This Agreement sets forth the final and complete
understanding of the parties with respect to the subject matter hereof. Any
previous agreements or understandings between the parties regarding the subject
matter hereof are merged into and are superseded by this Agreement. This
Agreement may not be amended without the written consent of the parties hereto.

(c) Assignment. This Agreement is not assignable by Employee. This Agreement
shall bind any successor of LabOne.

(d) Governing Law. This Agreement shall be governed by and interpreted under the
laws of the State of Kansas. All remedies provided for herein are nonexclusive.

11. TWENTY ONE-DAY EVALUATION PERIOD. EMPLOYEE UNDERSTANDS THAT HE HAS
TWENTY-ONE (21) DAYS IMMEDIATELY FOLLOWING THE DAY THAT HE RECEIVES THIS
SEVERANCE AGREEMENT IN WHICH TO CONSIDER WHETHER OR NOT HE WANTS TO SIGN THIS
SEVERANCE AGREEMENT.

12. CONSULTATION WITH ATTORNEY AND RIGHT TO REVOKE. EMPLOYEE ACKNOWLEDGES THAT
HE HEREBY IS ADVISED TO CONSULT WITH AN ATTORNEY OF HIS CHOICE PRIOR TO SIGNING
THIS AGREEMENT, AS IMPORTANT RIGHTS ARE AFFECTED BY THIS AGREEMENT. EMPLOYEE MAY
REVOKE THIS AGREEMENT AT ANY TIME DURING THE SEVEN (7) DAYS IMMEDIATELY
FOLLOWING ITS SIGNING BY GIVING LABONE WRITTEN NOTICE OF REVOCATION. THIS
AGREEMENT WILL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL SUCH SEVEN-DAY
REVOCATION PERIOD HAS EXPIRED.

13. Confidential Agreement. The parties agree not to disclose to any person or
private or government entity (except their respective legal counsel, taxing
authorities for the purpose of disputing or resolving tax controversies or as
required by law) the facts or circumstances out of which this Agreement arises
and not to disclose to any person or private or government entity (except their
respective legal counsel, taxing authorities for the purpose of disputing or
resolving tax controversies or as required by law) the terms and fact of this
Agreement, except as may be necessary to enforce its terms.

IN WITNESS WHEREOF, this Agreement has been executed as of the date and year
first above written.

 

"Employer" "Employee" LabONE, Inc.           By: /s/ W. Thomas Grant II         
    /s/ Thomas J. Hespe   Thomas J. Hespe