Exhibit 10.48


 


February 21,
2005


 


Michael C. Dugan, M.D.


 


Re:          Incentive
Arrangement


 


Dear Mike:


 


As you are aware, there has been considerable recent change at
Specialty, including the fantastic effort all our Team members put forth to
achieve the successful move to our new state-of-the-art Valencia facility, and
more recently, the announcement that Doug Harrington will be stepping down at
the end of March, concluding a very successful term as the Company’s CEO.  While change can certainly create uncertainty,
it can also create great new opportunities, including opportunities for our
Company, opportunities for all members of the Specialty Team, and very
importantly, opportunities for you and your future.  Specialty’s Board of Directors and Management
recognize you as an important leader at Specialty, and we want to avoid
potential distraction for you and other key employees during this time of
change.  Therefore, an incentive
arrangement has been developed to encourage and reward your continuing
commitment to Specialty, which you have helped make a world-class laboratory.


 


We are offering you an incentive bonus of $100,000 (the “Incentive
Bonus”), based on the terms specified herein. 
Payment of the Incentive Bonus is contingent upon your continued
employment with Specialty through at least February 20, 2006.  If you are still employed with the Company on
February 20, 2006, and have not been terminated for Cause (as defined in
Exhibit A to this letter) prior to that date, you will receive the Incentive
Bonus (less required withholdings and deductions) in a lump sum.  Should you resign or be terminated for Cause
prior to February 20, 2006, you will not be eligible to receive the incentive
bonus.  You were previously offered
certain severance protections by the Company if you were terminated other than
for Cause, and of course, the terms of that offer will remain in effect
throughout your employment with the Company, including following February 20,
2006.  However, should you be terminated
other than for Cause prior to February 20, 2006, you will not be eligible to
receive both payments, and thus you will receive only the greater of the two
offers (i.e., you will receive the severance protection payments, not the
Incentive Bonus).


 


Specialty’s standard policies and procedures, and all other terms of
your employment with the Company, including your “at will” employment status,
will remain in full effect.  Please also
remember that the terms of this offer are confidential and, as with


 





















 


all matters relating to compensation, should not be discussed with
other employees.  If you are in agreement
with the terms herein, please countersign below indicating your acceptance.


 


With your continued dedication and leadership we will ensure that
Specialty is headed for great success in the coming months and years, and we
will continue Specialty’s long tradition of excellence in laboratory medicine.


 


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  /s/ Nicholas R. Simmons

  	
   

  
	
   

  	
   

  
	
   

  	
  Nicholas R. Simmons

  
	
   

  	
  Vice-President & General Counsel

  



 


 


	
  /s/ Michael C. Dugan

  	
   

  
	
  Michael C. Dugan, M.D.

  



 





















 


Exhibit A


 


“Cause” shall mean a reasonable belief by the Board of Directors or
your supervisor that you have engaged in any one or more of the following:  (i) financial dishonesty, including, without
limitation, misappropriation of a material or substantial quantity of company
funds or property, or any attempt by you to secure any personal profit related
to the business or business opportunities of the Company without the informed,
written approval of the Company’s Board of Directors; (ii) gross
insubordination; (iii) gross negligence or reckless or willful misconduct in
the performance of your duties; (iv) misconduct which has a materially adverse
effect upon the Company’s business or reputation; (v) the conviction of, or
plea of nolo contendre to, any felony involving moral turpitude or fraud; or
(vi) a material violation of Company policies including, without limitation,
the Company’s policies on equal employment opportunity and prohibition of
unlawful harassment.