Exhibit 10.23


Amended and Restated


Employment Agreement


Between


Surya N. Mohapatra


and


Quest Diagnostics Incorporated


Dated as of November 7, 2008






Table of Contents


	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	
 

 
	
  

 
	
 1.

 	
 Employment

 	
 1

 
	
  

 	
  

 	
  

 
	
 2.

 	
 Term

 	
 2

 
	
  

 	
  

 	
  

 
	
 3.

 	
 Duties

 	
 2

 
	
  

 	
  

 	
  

 
	
 4.

 	
 Place of
 Performance

 	
 3

 
	
  

 	
  

 	
  

 
	
 5.

 	
 Cash
 Compensation

 	
 3

 
	
  

 	
 (a)

 	
 Base Salary

 	
 3

 
	
  

 	
 (b)

 	
 Annual Bonus

 	
 3

 
	
  

 	
 (c)

 	
 Deferral

 	
 3

 
	
  

 	
 (d)

 	
 Incentive
 Award Modifications

 	
 3

 
	
  

 	
 (e)

 	
 Signing
 Bonus

 	
 4

 
	
  

 	
  

 	
  

 	
  

 
	
 6.

 	
 Equity
 Awards

 	
 4

 
	
  

 	
 (a)

 	
 Option
 Grant

 	
 4

 
	
  

 	
 (b)

 	
 Additional
 Compensation

 	
 4

 
	
  

 	
 (c)

 	
 Restrictions
 on Option Shares

 	
 5

 
	
  

 	
  

 	
  

 	
  

 
	
 7.

 	
 Employee
 Benefits

 	
 5

 
	
  

 	
 (a)

 	
 General
 Provisions

 	
 5

 
	
  

 	
 (b)

 	
 Supplemental
 Executive Retirement Plan

 	
 5

 
	
  

 	
 (c)

 	
 Vacation and
 Sick Leave

 	
 5

 
	
  

 	
  

 	
  

 	
  

 
	
 8.

 	
 Applicable
 Taxes

 	
 6

 
	
  

 	
  

 	
  

 
	
 9.

 	
 Miscellaneous
 Benefits

 	
 6

 
	
  

 	
 (a)

 	
 Business
 Travel and Expenses

 	
 6

 
	
  

 	
 (b)

 	
 Executive
 Driver

 	
 6

 
	
  

 	
 (c)

 	
 Relocation
 Expenses

 	
 6

 
	
  

 	
 (d)

 	
 Non-Exclusivity

 	
 6

 
	
  

 	
  

 	
  

 	
  

 
	
 10.

 	
 Termination
 of Employment

 	
 6

 
	
  

 	
 (a)

 	
 Termination
 by the Company for Cause

 	
 6

 
	
  

 	
 (b)

 	
 Disability

 	
 7

 
	
  

 	
 (c)

 	
 Death

 	
 7

 
	
  

 	
 (d)

 	
 Termination
 by the Executive for Good Reason

 	
 7

 
	
  

 	
 (e)

 	
 Other Terminations

 	
 9

 
	
  

 	
 (f)

 	
 Notice of
 Termination

 	
 9

 
	
  

 	
 (g)

 	
 Resignation

 	
 9

 
	
  

 	
  

 	
  

 	
  

 
	
 11.

 	
 Compensation
 upon Termination or During Disability

 	
 9

 
	
  

 	
 (a)

 	
 Disability

 	
 9

 
	
  

 	
 (b)

 	
 Death

 	
 10

 



i






	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Termination
 for Cause; Termination by the Executive other than for Good Reason or
 Disability

 	
 10

 
	
  

 	
 (d)

 	
 Termination
 Resulting from Non-Renewal of this Agreement

 	
 11

 
	
  

 	
 (e)

 	
 All Other
 Terminations

 	
 11

 
	
  

 	
 (f)

 	
 Other
 Severance Provisions

 	
 13

 
	
  

 	
 (g)

 	
 Change in
 Control Protections and Excise Tax Gross-Up

 	
 13

 
	
  

 	
 (h)

 	
 Change in
 Control

 	
 15

 
	
  

 	
  

 	
  

 	
  

 
	
 12.

 	
 Non-Solicitation
 and Non-Competition

 	
 16

 
	
  

 	
 (a)

 	
 Term of
 Non-Compete

 	
 16

 
	
  

 	
 (b)

 	
 Term of
 Non-Solicitation of Customers

 	
 17

 
	
  

 	
 (c)

 	
 Term of
 Non-Solicitation of Employees

 	
 17

 
	
  

 	
 (d)

 	
 Term of
 Non-Compete, Non-Solicitation Automatically Extended

 	
 17

 
	
  

 	
 (e)

 	
 Definitions
 Applicable to Section 12

 	
 17

 
	
  

 	
 (f)

 	
 Expedited
 Arbitration Applicable to Section 12

 	
 18

 
	
  

 	
 (g)

 	
 Exclusive
 Property

 	
 18

 
	
  

 	
 (h)

 	
 Injunctive
 Relief

 	
 18

 
	
  

 	
  

 	
  

 	
  

 
	
 13.

 	
 Arbitration

 	
 19

 
	
  

 	
  

 	
  

 
	
 14.

 	
 Confidentiality

 	
 19

 
	
  

 	
  

 	
  

 
	
 15.

 	
 Other
 Matters

 	
 20

 
	
  

 	
 (a)

 	
 Entire
 Agreement

 	
 20

 
	
  

 	
 (b)

 	
 Assignment

 	
 20

 
	
  

 	
 (c)

 	
 Notices

 	
 20

 
	
  

 	
 (d)

 	
 Amendment/Waiver

 	
 20

 
	
  

 	
 (e)

 	
 Applicable
 Law

 	
 20

 
	
  

 	
 (f)

 	
 Severability

 	
 20

 
	
  

 	
 (g)

 	
 Successor in
 Interest

 	
 21

 
	
  

 	
 (h)

 	
 No
 Mitigation/No Offset

 	
 21

 
	
  

 	
 (i)

 	
 Joint
 Participation in Drafting

 	
 21

 
	
  

 	
 (j)

 	
 Section
 409A

 	
 21

 
	
  

 	
  

 	
  

 	
  

 
	
 16.

 	
 Indemnification

 	
 22

 
	
  

 	
  

 	
  

 
	
 17.

 	
 Authority

 	
 23

 



ii






Amended and Restated


Employment Agreement


Between


Surya N. Mohapatra


and


Quest Diagnostics Incorporated


          This
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) between QUEST
DIAGNOSTICS INCORPORATED (the “Company”), a Delaware corporation having its
principal place of business at 1290 Wall Street West, Lyndhurst, NJ 07071 and
SURYA N. MOHAPATRA (the “Executive”) is entered into on the date it has been
executed by both parties. 


          WHEREAS,
the Executive is currently employed as the Company’s President and Chief
Executive Officer and is a member of the Company’s Board of Directors and its
Chairman; and 


          WHEREAS,
the Company considers the services of the Executive to be unique and essential
to the success of the Company’s business; and 


          WHEREAS
the Company and the Executive had previously entered into an employment
agreement dated November 9, 2003 (the “Prior Agreement”); and 


          WHEREAS,
the Company and the Executive previously entered into this Agreement, as of
August 1, 2006 (the “Effective Date”), on the terms and conditions set forth
herein, which, except as otherwise provided herein, shall constitute the sole
and exclusive agreement relating to the employment of the Executive by the Company;
and


          WHEREAS,
the Company and the Executive wish to further amend and restate this Agreement
as of November 7, 2008, to cause this Agreement to comply with the terms of
Section 409A of the Internal Revenue Code of 1986, as amended. 


          NOW,
THEREFORE, in consideration of the foregoing premises, the mutual covenants,
terms and conditions set forth herein, and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, it is hereby agreed
between the Company and the Executive that his Prior Agreement shall be amended
and restated in its entirety as follows:


	
  

 	
  

 
	
 1.

 	
 Employment.
 During the Employment Term, the Company shall continue to employ the
 Executive in a full-time capacity as President and Chief Executive Officer
 (“CEO”) of the Company, reporting directly to the Board of Directors of the
 Company (the “Board”), and the Executive shall accept such continued
 employment upon the terms and conditions set forth herein. The Executive has
 been elected to the Board and is its Chairman. If re-elected to the Board,
 the Executive shall continue to be its Chairman during the 

 










	
  

 	
  

 
	
  

 	
 Employment
 Term. During the Employment Term, the Board shall nominate the Executive as a
 director of the Company and shall use its best efforts to have the Executive
 re-elected to the Board for the duration of the Employment Term.

 
	
  

 	
  

 
	
 2.

 	
 Term.
 The term of the Executive’s employment under this Agreement, as amended,
 shall commence as of August 1, 2006 and continue through December 31, 2011 (the
 “Employment Term”). Subject to six (6) months written notice of non-renewal
 by either party to the other, this Agreement will be automatically renewed
 for successive one-year terms on December 31, 2011 and on each December 31st
 thereafter. For purposes of this Agreement, the “Employment Term” shall mean
 the period from August 1, 2006 to the earlier to occur of (i) the scheduled
 expiration of the Employment Term, including any extension thereof, or (ii)
 the termination of the Executive’s employment in accordance herewith. 

 
	
  

 	
  

 
	
 3.

 	
 Duties.
 During the Employment Term, the Executive shall, subject to the supervising
 powers of the Board, have those powers and duties consistent with the
 position of President and CEO in a company the size and nature of the Company,
 which powers shall in all cases include, without limitation, the power of
 supervision and control over, and responsibility for, the general management
 and operations of the Company (including the hiring and firing of employees
 and the appointment and termination of senior officers), development and
 implementation of a comprehensive strategic business plan, supervision of the
 day-to-day executive management process, and acting as spokesperson for the
 Company. During such period described in Section 1 as the Executive acts as
 Chairman, he shall have those powers and duties consistent with the position
 of Chairman. All senior officers and other officers with direct operational
 responsibilities shall report directly to the Executive unless the Executive
 in his sole discretion delegates such reporting responsibilities, in whole or
 in part, to another executive. It is the intention of the parties that the
 provisions of this Section 3 shall be applied in a manner consistent with the
 Sarbanes-Oxley Act of 2002, as amended from time to time. The Executive
 agrees to devote substantially all his working time and attention to the
 business of the Company. The Executive shall not, without the prior consent
 of the Company’s Board of Directors, be directly or indirectly engaged in any
 other trade, business or occupation for compensation requiring his personal
 services during the Employment Term. Nothing in this Agreement shall preclude
 the Executive from (i) engaging in charitable and community activities or
 from managing his personal investments, or (ii) serving as a member of the
 board of directors of an unaffiliated company not in competition with the
 Company, subject, however, with respect to each such board membership, to
 approval by the Company’s Board (not to be unreasonably withheld). During the
 Employment Term, the Executive shall be nominated for re-election as a member
 of the Board. 

 



2






	
  

 	
  

 	
  

 	
  

 
	
 4.

 	
 Place of
 Performance. The principal place of employment of
 the Executive shall be at the Company’s principal executive offices in
 Teterboro, New Jersey; Lyndhurst, New Jersey; or New York, New York. 

 
	
  

 	
  

 
	
 5.

 	
 Cash
 Compensation. The Executive shall be compensated for
 services rendered during the Employment Term as follows: 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Base Salary.
 During the Employment Term, including all of fiscal year 2006, the Executive
 shall be compensated at an annual base salary of no less than $1,023,000 (the
 base salary, at the rate in effect from time to time, is hereinafter referred
 to as the “Base Salary”). The Board, or a committee thereof, shall review and
 may, if appropriate, at its discretion, increase (but not decrease) the
 annual Base Salary during the Employment Term. Base Salary shall be reviewed
 annually and be adjusted to reflect (among other factors) increases generally
 granted to other senior executives of the Company and the Executive’s
 performance consistent with Company pay practices. The Base Salary shall be
 payable in equal bi-weekly installments. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Annual Bonus.
 In addition to the Base Salary provided for in Section 5(a) above, the
 Company will provide annual cash bonus awards to the Executive under its
 Management Incentive Plan (MIP) in accordance with the plan and any financial
 performance targets thereunder (“Annual Bonus”) each year during the
 Employment Term. Any Annual Bonus payable hereunder shall be paid between
 January 1st and March 15th of the year immediately
 following the year to which such Annual Bonus relates. During the portion of
 the Employment Term commencing January 1, 2007, the Executive’s target
 incentive opportunity under the Company’s MIP will be no less than 150% of
 Base Salary (the target bonus as a percentage of Base Salary, as in effect
 from time to time, is hereinafter referred to as the “Target Bonus”). The
 Target Bonus as a percentage of Base Salary shall be reviewed annually for
 increase (but not decrease) by the Board or a committee thereof. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Deferral.
 Pursuant to the terms of the Company’s Supplemental Deferred Compensation
 Plan (“SDCP”), the Executive may elect to defer from payments of Base Salary
 and Annual Bonus and any other eligible compensation amounts as provided for
 under the SDCP; provided that pursuant to Section 3.1(d) of the Company’s
 Supplemental Executive Retirement Plan (“SERP”) the Executive waived the Company’s
 match credit under the SDCP for fiscal year 2005 and thereafter. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Incentive
 Award Modifications. Any equity and option awards
 made to the Executive on or prior to the Effective Date and any equity and
 option awards that may be made to the Executive during the Employment Term
 shall be subject to, and shall benefit from, any amendments or revisions to
 the terms and conditions of any of the Company’s Incentive Compensation
 Programs that may be implemented on or after the Effective Date; provided
 that no amendments or 

 



3






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 revisions
 shall be made without the Executive’s written consent to any outstanding
 equity awards if such amendment or revision would subject the Executive to
 additional tax, interest or penalties under Section 409A of the Internal
 Revenue Code of 1986, as amended from time to time and its implementing
 regulations (“Section 409A”).

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Signing
 Bonus. At the end of the next regular payroll period
 following the Effective Date, the Company paid the Executive a one-time lump
 sum cash payment in the amount of $100,000, less applicable tax withholding,
 which bonus shall be deemed to be part of the Annual Bonus (as defined in the
 SERP) earned by the Executive for 2006 for purposes of the SERP.

 
	
  

 	
  

 	
  

 
	
 6.

 	
 Equity
 Awards. 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Option Grant.
 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 On or about
 the February 19, 2004 meeting of the Company’s Board of Directors (the
 “Option Grant Date”), except as noted below, the Executive was awarded
 options to purchase a total of 170,000 (one hundred seventy thousand) shares
 of the Company’s common stock (the “Option Shares”) at an exercise price
 equal to the average of the quoted high and low price per share of such
 common stock on the date of the award (the “Option Grant”). Except as
 otherwise provided herein, such options were granted in accordance with those
 provisions (including exercisability) established by the Board of Directors
 at the time such option was granted and applicable to other senior executives
 of the Company. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 Subject to
 Section 6(a)(v), the Option Shares shall vest as to 1/3rd thereof on each
 anniversary of the Option Grant Date, provided, that (A) on the applicable
 vesting date, the Executive is then still in the employ of the Company, or
 (B) the provisions of Section 11(g)(i) apply;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 Except as
 otherwise provided for in this Agreement, vested Option Shares may not be
 exercised after the expiration of the 10-year term of applicable Option
 Agreement. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 In the event
 that the Executive’s employment is terminated by the Company without Cause or
 by the Executive for Good Reason or upon the Executive’s death or Disability,
 or if the Executive is receiving severance pursuant to Section 11(d) hereof
 (for non-renewal of the Employment Term), the Option Shares shall be treated
 in accordance with the applicable termination provision of Section 11
 relating to the treatment of stock options upon such termination. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Additional
 Compensation. The Executive may be awarded
 additional compensation pursuant to the present or any future incentive
 compensation or 

 



4






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 long-term
 compensation program established for the senior executive officers of the
 Company (collectively the “Incentive Compensation Programs”), in an
 appropriate manner for the position occupied by the Executive and his
 performance therein relative to other Company senior executive officers and
 consistent with Company pay practices, provided that in all events the
 Executive shall be treated on a basis no less favorable than other senior
 executives are treated. Except as otherwise provided herein, compensation
 granted under such plans will be subject to the actual provisions and
 conditions applicable to such plans.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Restrictions
 on Option Shares. The Executive agrees in respect of
 the Option Shares that he shall not (i) sell, transfer or otherwise dispose
 of any Option Shares or any interest therein other than in compliance with
 the Company’s 1999 Employee Equity Participation Program, the stock option
 agreement between the Company and The Executive relating to such Option
 Shares, and the Company’s Policy for Purchasing and Selling Securities, (ii)
 enter into any transaction that is expected to result in a financial benefit
 arising from a decline in the value of the Company’s stock or (iii) enter
 into any hedging transactions, including, but not limited to the use of
 financial derivatives, short sales or any other similar transactions, without
 the prior written consent of the Board of Directors, in each case with
 respect to Subsections (i), (ii) and (iii) until the Option Shares are vested
 to the fullest extent provided for under this Agreement, and all restrictions
 against exercise of such Option Shares have expired or been terminated. 

 
	
  

 	
  

 	
  

 
	
 7.

 	
 Employee
 Benefits. 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 General
 Provisions. Except as expressly provided in this
 Agreement, the Executive shall be eligible to participate in all employee
 benefit and welfare plans offered by the Company to its senior executive
 officers (e.g., Life Insurance, Medical & Dental Insurance, Travel,
 Accident, STD & LTD, Flexible Spending Accounts, Regular and Supplemental
 AD&D, Optional/Supplemental Life Insurance, Profit Sharing, the 401(k)
 Plan and Employee Stock Purchase Plan) (collectively referred to as the
 “Benefit Plans”) on a basis that is no less favorable to the Executive than
 that made available to other senior executive officers of the Company,
 provided that the Executive shall be reimbursed, in accordance with Section
 15(j) hereof, for the costs of his annual participation in a comprehensive
 executive health assessment at a leading medical institution of his choice. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Supplemental
 Executive Retirement Plan. During the Employment
 Term, the Executive shall be entitled to participate in the Company’s SERP,
 as in effect from time to time in accordance with its terms. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Vacation and
 Sick Leave. The Executive shall be entitled to
 vacation and sick leave in accordance with the vacation and sick leave
 policies adopted by the Company from time to time, provided that the
 Executive shall be entitled to no less than five (5) weeks of paid vacation
 each calendar year. Any vacation shall 

 



5






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 be at such
 time and for such periods as shall be mutually agreed upon between the
 Executive and the Company. The Executive shall be entitled to all public holidays
 observed by the Company.

 
	
  

 	
  

 	
  

 	
  

 
	
 8.

 	
 Applicable
 Taxes. There shall be deducted from any compensation
 payments made under this Agreement any federal, state, and local taxes or
 other amounts required to be withheld under applicable law. 

 
	
  

 	
  

 
	
 9.

 	
 Miscellaneous
 Benefits. During the Employment Term, the Executive
 shall be entitled to perquisites at least as favorable as those provided
 other senior executives of the Company. In all events, the Company shall
 provide the Executive with the following additional benefits:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Business
 Travel and Expenses. The Executive shall be
 reimbursed by the Company for reasonable and other business expenses, as
 approved by the Company, that are incurred and accounted for in accordance
 with the Company’s normal practices and procedures for reimbursement of
 expenses. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Executive
 Driver. In order to ensure the accessibility and
 safety of the Executive during the Employment Term, the Company will
 reimburse the Executive for the costs of an executive driver for business
 purposes only (including transportation to and from work). The Company shall
 directly cover the costs of all other business-related transportation. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Relocation
 Expenses. The Company shall reimburse the Executive
 limited relocation expenses, to include home sale (including any sale on or
 after December 31, 2006, but not after December 31, 2007), purchase and
 moving expenses, but not including third party buy-out of existing residence,
 in accordance with the Company’s relocation policy if the Executive moves
 within the greater New York/New Jersey area prior to the expiration of the
 initial Employment Term of the Prior Agreement on December 31, 2006.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Non-Exclusivity.
 Nothing in this Agreement shall prevent the Executive from being entitled to
 receive any additional compensation or benefits as approved by the Company’s
 Board of Directors; provided, however, that in no event shall the Company
 make any loans to the Executive that are in violation of the Sarbanes-Oxley
 Act of 2002, as such act may be amended or supplemented from time to time,
 and the rules and regulations of the Securities and Exchange Commission
 promulgated thereunder. 

 
	
  

 	
  

 	
  

 
	
 10.

 	
 Termination
 of Employment. Notwithstanding any other provisions
 of this Agreement to the contrary, the employment of the Executive pursuant
 to this Agreement may be terminated as follows:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Termination
 by the Company for Cause. The Executive’s employment
 may be terminated for “Cause” by the Company as provided below. As used
 herein, the 

 



6






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 term “Cause”
 shall mean (i) conviction of the Executive for a felony; or (ii) the
 commission by the Executive of fraud or theft against, or embezzlement from,
 the Company. For purposes of this section, no act or failure to act on the
 Executive’s part shall be considered to be reason for termination for Cause
 if done, or omitted to be done, by the Executive in good faith and with the
 reasonable belief that the action or omission was in the best interests of
 the Company. Cause shall not exist unless and until there shall have been
 delivered to the Executive a copy of a resolution, duly adopted by the
 affirmative vote of not less than two thirds of the entire membership of the
 Board at a meeting of the Board held for the purpose (after no less than ten
 (10) days’ prior written notice to the Executive of such meeting and the
 purpose thereof and an opportunity for him, together with his counsel, to be
 heard before the Board at such meeting), of finding that in the good faith
 opinion of the Board, the Executive was guilty of the conduct set forth above
 in this Section 10(a) and specifying the particulars thereof in detail. The
 Date of Termination shall be the date the Board resolution specified herein
 is delivered to the Executive. Anything herein to the contrary notwithstanding,
 if, following a termination of the Executive’s employment by the Company for
 Cause based upon the conviction of the Executive for a felony, such
 conviction is overturned in a final determination on appeal, the Executive
 shall be entitled to the payments and the economic equivalent of the benefits
 the Executive would have received if his employment had been terminated by
 the Company without Cause.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Disability.
 The Executive’s employment may be terminated by the Company or the Executive
 upon the Executive’s Disability. For purposes of this Agreement, “Disability”
 shall mean the Executive’s inability, due to physical or mental incapacity,
 to substantially perform his duties for the Company for a period exceeding
 120 consecutive days. Any question as to the existence of the Disability of
 the Executive as to which the Executive (or his guardian) and the Company
 cannot agree shall be determined in writing by a qualified independent
 physician mutually acceptable to the Executive (or his guardian) and the
 Company. If the Executive (or his guardian) and the Company cannot agree as
 to a qualified independent physician, each shall appoint a physician and
 those two physicians shall select a third who shall make such determination
 in writing. The determination of Disability made by such medical doctor in
 writing to the Company and the Executive (or his guardian) shall be final and
 conclusive for all purposes of the Agreement and the Date of Termination
 shall be the date the notice of such determination is delivered to the
 Executive. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Death.
 The Executive’s employment shall terminate upon his death, and the date of
 his death shall be the Date of Termination for purposes of this Agreement. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Termination
 by the Executive for Good Reason. The Executive may
 terminate his employment hereunder for “Good Reason,” provided that the
 Executive shall have delivered a Notice of Termination within ninety (90)
 days after the occurrence of the event of Good Reason giving rise to such
 termination. For 

 



7






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 purposes of
 this Agreement, “Good Reason” shall not mean a termination resulting from
 non-renewal of this Agreement. “Good Reason” shall mean the occurrence of one
 or more of the following circumstances, without the Executive’s express written
 consent (except in the case of a Change in Control as provided in Section
 10(d)(viii) hereof), and which are not remedied by the Company within thirty
 (30) days of receipt of the Executive’s Notice of Termination except in the
 event of a Change in Control:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 an
 assignment to the Executive of any duties materially inconsistent with his
 position, duties, responsibilities, and status with the Company, or any
 material limitation of the powers of the Executive not consistent with the
 powers of the Executive contemplated by Section 3 hereof; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 any removal
 of the Executive from, or any failure to appoint or elect, or re-elect, the
 Executive to any position specified in Section 1 of this Agreement (subject
 to the last sentence of Section 1);

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 any change
 of the Executive’s title(s) as specified in Section 1 of this Agreement;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 the
 Company’s requiring the Executive, without his written consent, to be based
 at any office or location more than 75 miles commuting distance from the
 locations referred to in Section 4 of this Agreement;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (v)

 	
 a reduction
 in the Executive’s Base Salary or Annual Bonus target incentive opportunity
 as in effect from time to time, without his written consent; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (vi)

 	
 the failure
 of the Company to continue in effect any material Benefit Plan that was in
 effect on the Effective Date or provide the Executive with substantially
 equivalent benefits without his written consent;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (vii)

 	
 any other
 material breach by the Company of this Agreement;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (viii)

 	
 “Change in
 Control” as defined in Section 11(h) of this Agreement (whether or not the
 Executive consents to such Change in Control); 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ix)

 	
 a failure of
 the Company to secure a written assumption by any successor company as
 provided in Section 15(g) hereof; or 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (x)

 	
 any
 amendment to (or the termination of) the SERP that adversely impacts or
 otherwise reduces the Executive’s entitlements thereunder. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 In the event
 of a termination for Good Reason, except as otherwise provided herein, the
 Date of Termination shall be the date specified in the Notice of Termination,
 and shall not be more than thirty (30) days after the Notice of Termination. 

 



8






	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Other
 Terminations. Notwithstanding the foregoing, the Company
 or the Executive may terminate the Executive’s employment under this
 Agreement at any time, subject to the provisions of Section 10(f) hereof. If
 the Executive’s employment is terminated hereunder for any reason other than
 as set forth in Sections 10(a) through 10(d) hereof, the date on which a
 Notice of Termination is given or any later date (within 30 days) set forth
 in such Notice of Termination shall be the Date of Termination. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 Notice of
 Termination. Any termination of the Executive’s employment
 hereunder by the Company or by the Executive shall be communicated by written
 Notice of Termination to the other party hereto. For purposes of this
 Agreement, a “Notice of Termination” shall mean a notice that shall indicate
 the specific termination provision in this Agreement relied upon and shall
 set forth in reasonable detail the facts and circumstances claimed to provide
 a basis for termination of the Executive’s employment under the provisions so
 indicated and a date of termination. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 Resignation.
 Upon the Date of Termination for any reason (other than an expiration of the
 Employment Term), the Executive shall be deemed to have resigned as a
 director and/or officer of the Company; provided, however, that in the case
 of a non-renewal by the Company of the Employment Term in accordance with
 Section 2 hereof, the Date of Termination shall be the last day of the
 applicable Employment Term. 

 
	
  

 	
  

 	
  

 
	
 11.

 	
 Compensation
 upon Termination or During Disability. 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Disability.
 During any period (“Disability Period”), during the Employment Term that the
 Executive fails to perform his duties hereunder as a result of Disability,
 the Executive shall continue to (i) receive his full Base Salary and bonus
 otherwise payable for that period of the Employment Term including the
 Disability Period and (ii) participate in the Benefit Plans. In the event the
 Executive’s employment is terminated upon Disability (as defined in Section
 10(b) hereof), the Executive shall be entitled to: (1) the payments and benefits
 provided in Section 11(e)(i), (ii) and (iii), provided that the severance
 (Base Salary and Target Bonus) and benefit continuation period shall be three
 years, (2) a Pro-Rata Target Bonus (as defined herein) for the year in which
 termination for Disability occurs, payable in a lump-sum within 30 days
 following the Date of Termination (with the actual payment date during such
 30-day period to be determined in the Company’s sole discretion), and any
 earned and unpaid bonus relating to services performed by the Executive in
 the year preceding his termination due to Disability, (3) immediate vesting
 of all outstanding stock options, including the Option Shares, with all
 vested stock options remaining exercisable for the remainder of their
 original terms (and in the event there are any restrictions on exercising
 such options after vesting, the Executive shall be entitled to exercise any
 vested options as of the earlier of (i) one year after the option shares
 vested or (ii) one year after the Date of Termination). 

 



9






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Notwithstanding
 the foregoing, any cash payments made to the Executive during any calendar
 year pursuant to this provision after termination due to Disability shall be
 reduced by the sum of the amounts, if any, payable to the Executive during
 such calendar year under disability benefit plans of the Company or under the
 Social Security disability insurance program, where such amounts were not
 previously applied to reduce any such payment (provided the Company has paid
 the premiums associated with such plans; provided no such reduction shall
 occur unless it is permissible under Treas. Reg. 1.409A-3(i)(1)(ii)(A)
 without any additional tax, interest or penalties being imposed on the
 Executive under Section 409A). For purposes hereof, “Pro-Rata Target
 Bonus” means the Executive’s Target Bonus for the year in which the Date of
 Termination occurs multiplied by a fraction, the numerator of which is the
 number of days in the year ending on the Executive’s Date of Termination and
 the denominator of which is 365.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Death.
 If the Executive’s employment hereunder is terminated as a result of his
 death, then: (i) the Company shall pay the Executive’s estate or designated
 beneficiary, as soon as practicable after the Date of Termination (but in any
 event prior to the end of the calendar year in which the Executive’s death
 occurs or such later date as may be permitted under Section 409A of the Code
 without the Executive incurring any taxes or interest or penalties
 thereunder), a lump sum payment equal to (1) any Base Salary installments due
 in the month of death and any reimbursable expenses accrued or owing the
 Executive hereunder as of the Date of Termination, (2) a Pro-Rata Target
 Bonus (as defined in Section 11(a) hereof), payable in a lump-sum within 30
 days following the Date of Termination, and any earned and unpaid bonus
 relating to services performed by the Executive in the year preceding his
 death, and (3) the severance benefits set forth in Section 11(e)(i), (ii) and
 (iii) (provided that the severance (Base Salary and Target Bonus) and benefit
 continuation period on which such lump-sum payment is determined shall be
 three years), and (ii) all outstanding stock options, earned shares of
 incentive stock, and other awards granted to the Executive under the
 Incentive Compensation Programs shall immediately become fully vested as of
 the Date of Termination and all transfer restrictions shall lapse and all
 vested stock options, including the Option Shares, shall remain exercisable
 for the remainder of their original terms (and in the event there are any
 restrictions on exercising such options after vesting, the Executive shall be
 entitled to exercise any vested options as of the earlier of (i) one year
 after the option shares vested or (ii) one year after the Date of
 Termination, provided that the Board may, upon the written request of the
 Executive’s personal representative, waive or modify the restrictions on the
 exercise of any vested stock options). 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Termination
 for Cause; Termination by the Executive other than for Good Reason or
 Disability. If the Executive’s employment hereunder
 is terminated by the Company for Cause or by the Executive (other than for
 Good Reason or Disability), then (i) the Company shall pay the Executive, as
 soon as practicable 

 



10






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 after the
 Date of Termination, any Base Salary and any reimbursable expenses accrued or
 owing the Executive hereunder for services as of the Date of Termination; and
 (ii) the Executive shall immediately forfeit any unvested stock options. In
 the event of termination by the Company for Cause, the Executive shall have
 the right to exercise the vested unexercised portion of all outstanding stock
 option and stock awards prior to the Date of Termination, and the unexercised
 portion of any such award shall be forfeited thereafter and shall remain
 subject to the terms of each grant. In the event of termination by the
 Executive other than for Good Reason, the Executive shall have the right to
 exercise the vested unexercised portion of all outstanding stock options then
 held by the Executive for such period following the Date of Termination as
 shall be provided for under the terms of each grant.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Termination
 Resulting from Non-Renewal of this Agreement. If
 this Agreement is not renewed by the Company in accordance with Section 2
 hereof, expiration of the Employment Term following such non-renewal (or any
 earlier termination date specified by the Company on or after July 1st
 of the year in which the Employment Term expires) shall be deemed to be a
 termination of the Executive’s employment without Cause by the Company and
 the Executive shall be entitled to the payments, benefits and entitlements
 pursuant to Section 11(e) hereof (except that Section 11(e)(iv) hereof shall
 not apply, in this case, to any stock option granted prior to August 1, 2006)
 (with any notice of non-renewal made in connection with a Change in Control
 (either 90 days before a Change in Control or on or within 2 years following
 a Change in Control) being treated as a CIC Severance Event (as defined in
 Section 11(e)(i) hereof)), with any amounts payable under
 Section 11(e)(i) or (ii) paid in accordance with such clauses. For the
 avoidance of doubt, if this Section 11(d) is applicable, (i) any stock
 options granted prior to August 1, 2006 shall be treated in accordance with
 the terms of the applicable equity-based award plan and award agreement,
 including any applicable retirement provisions, and (ii) any stock options
 granted to the Executive on or after August 1, 2006 shall be treated in
 accordance with Section 11(e)(iv). Notwithstanding anything herein to the
 contrary, any notice of non-renewal provided pursuant to Section 2 hereof on
 or after June 30, 2014, and the subsequent expiration of the Employment Term
 after such notice of non-renewal (y) shall not be deemed to be a termination
 hereunder by the Company without Cause or by the Executive for Good Reason,
 and (z) shall not in and of itself entitle the Executive to receive any
 severance payments under this Agreement, the Company’s Executive Officer
 Severance Plan or any other severance plan of the Company, as in effect from
 time to time. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 All Other
 Terminations. The Executive’s employment may be
 terminated without Cause by the Board or the Company or by the Executive for
 Good Reason, provided that in such event: 

 



11






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 The
 Executive shall be entitled to receive, in equal monthly installments, his
 Base Salary and Target Bonus as established pursuant to Sections 5(a) and (b)
 of this Agreement, for the greater of (x) the remaining period of the
 Employment Term minus twenty-four (24) months or (y) for a period of two (2)
 years, provided that if the Executive terminates pursuant to Section
 10(d)(viii) hereof or if the Executive’s employment is terminated without
 Cause or for Good Reason within 90 days prior to a Change in Control or upon
 or within two (2) years following a Change in Control (as hereinafter
 defined), (“CIC Severance Event”), the Executive shall be entitled to three
 (3) times Base Salary and Target Bonus, payable in accordance with the next
 sentence. If the Executive terminates his employment pursuant to Section
 10(d)(viii) hereof or if the Executive’s employment is terminated upon or
 within two (2) years of a Change in Control and the Change in Control
 qualifies as a “change in control event” within the meaning of Treas. Reg.
 1.409A-3(i)(5)(i), then the severance of three (3) times the sum of Base
 Salary and Target Bonus shall be paid to the Executive in a cash lump sum
 within 30 days following such termination. If the Executive’s employment is
 terminated without Cause or for Good Reason (A) within 90 days prior to a
 Change in Control or (B) upon or within two (2) years following a Change
 in Control, or (C) the Executive terminates his employment pursuant to
 Section l0(d)(viii) hereof, and in the case of clauses (B) and (C) only, the
 Change in Control does not qualify as a “change in control event” within the
 meaning of Treas. Reg. 1.409A-3(i)(5)(i), the severance of
 three (3) times the sum of Base
 Salary and Target Bonus shall be paid to the Executive in 24 equal monthly
 installments and a trust that is in compliance with Rev. Proc. 92-64, which
 may, but need not be, the trust established under the Company’s Supplemental
 Deferred Compensation Plan, shall be funded by the date the first such
 monthly payment is due in an amount equal to the aggregate monthly
 installment payments due hereunder.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 The
 Executive shall be entitled to receive, in monthly installments (net of
 appropriate withholding), for the remaining period of this Agreement, his
 target Annual Bonus Award (including the stock and cash components) earned
 during the Employment Term of this Agreement and any earned and unpaid bonus
 relating to services performed by the Executive in the year preceding his
 termination by the Company without Cause or his termination for Good Reason
 provided that the bonus payment pursuant to this Section 11(e)(ii) shall not
 duplicate any bonus payments previously paid to the Executive. If the Executive
 terminates his employment pursuant to Section l0(d)(viii) hereof or if the
 Executive’s employment is terminated upon or within two (2) years of a Change
 in Control and the Change in Control qualifies as a “change in control event”
 within the meaning of Treas. Reg. 1.409A-3(i)(5)(i), then the payments due
 under this clause (ii) shall be paid to the Executive in a cash lump sum
 within 30

 



12






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 days
 following such termination. If the Executive’s employment is terminated without Cause or
 for Good Reason (A) within 90 days prior to a Change in Control or (B) upon
 or within two (2) years
 following a Change in Control, or (C) the Executive terminates his employment
 pursuant to Section l0(d)(viii) hereof, and in the case of clauses (B) and
 (C) only, the Change in Control does not qualify as a “change in control
 event” within the meaning of Treas. Reg. 1.409A-3(i)(5)(i), then the payments
 due under this clause (ii) shall be paid to the Executive in monthly
 installments for the remaining period of this Agreement and a trust that is
 in compliance with Rev. Proc. 92-64, which may, but need not be, the trust
 established under the Company’s Supplemental Deferred Compensation Plan,
 shall be funded by the date the first such monthly payment is due in an
 amount equal to the aggregate monthly installment payments due hereunder.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 The
 Executive and his eligible dependents shall be entitled to continue
 participation in the Company’s Benefit Plans at the same cost as other
 Company senior executives until the second anniversary of the Date of
 Termination (or the third anniversary of such date if the proviso in clause
 (i) of this Section 11(e) applies) or until such time as the Executive and
 his eligible dependents are covered by a successor employer’s comparable
 benefit plans, whichever is sooner; provided that to the extent that any
 Benefit Plan does not permit continuation of the Executive’s or his eligible
 dependents’ participation throughout such period, the Company shall provide
 the Executive, on the first business day of each calendar quarter, in
 advance, with an amount which is equal to the Company’s cost of providing
 such benefits; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 Any
 outstanding stock options shall continue to vest until the second anniversary
 of the Date of Termination (or the third anniversary of such date if the
 proviso in clause (i) of this Section 11(e) applies), with all vested options
 remaining exercisable for the remainder of their original terms (and in the
 event there are any restrictions on exercising such options after vesting,
 the Executive shall be entitled to exercise any vested options as of the
 earlier of (i) one year after the option shares vested or (ii) one year after
 the Date of Termination). 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 Other
 Severance Provisions. In the event of any termination,
 the Executive shall be entitled to any other payments, benefits or rights in
 accordance with this Agreement or any applicable plan, program, policy,
 arrangement of, or other agreements with, the Company or any affiliate
 (provided that in no event shall the Executive be entitled to duplication of
 any payment or benefit). 

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 Change in
 Control Protections and Excise Tax Gross-Up. 

 



13






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 Upon a
 Change in Control, the Executive’s outstanding equity awards (including, but
 not limited to, stock options) shall immediately vest and all vested stock
 options shall remain exercisable for the remainder of their original terms
 (provided that any restrictions on exercising such stock options shall
 lapse). 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 In the event
 that the Executive receives any payment, benefit, distribution or entitlement
 (including but not limited to the payment, benefits, distributions or
 entitlements pursuant to Section 11 of this Agreement) (a “Payment”) that
 would be subject to the excise tax under Section 4999 of the Internal Revenue
 Code of 1986, as amended (the “Code”) or any interest or penalties are
 incurred by the Executive with respect to such excise tax (such excise tax,
 together with any interest and penalties, are hereinafter collectively referred
 to as the “Excise Tax”), the Company shall pay to the Executive, as soon
 thereafter as practicable (but in any event no later than by the end of the Executive’s
 taxable year next following the taxable year in which the Excise Tax is
 remitted), an additional amount (a “Gross-Up Payment”) such that the
 net amount retained by the Executive, after deduction of any Excise Tax
 imposed upon the Payment and any federal, state, and local income tax and
 Excise Tax imposed upon the Gross-Up Payment, shall be equal to the Payment.
 The determination of whether an Excise Tax is due in respect to any payment,
 benefit, distribution or entitlement, the amount of the Excise Tax and the
 amount of the Gross-Up Payment shall be made by an independent auditor (the
 “Auditor”) jointly selected by the Company and the Executive and paid by the
 Company. If the Executive and the Company cannot agree on the firm to serve
 as the Auditor, then the Executive and the Company shall each select one
 nationally recognized accounting firm and those two firms shall jointly
 select one nationally recognized accounting firm to serve as the Auditor.
 Notwithstanding the Payment, (i) any other payments, benefits, distributions
 or entitlements received or to be received by the Executive in connection
 with a Change in Control or the Executive’s termination of employment
 (whether pursuant to the terms of this Agreement or any other plan,
 arrangement, or agreement with the Company, any person whose actions result
 in a Change in Control or any person affiliated with the Company or such
 person) shall be treated as “parachute payments” within the meaning of
 Section 280G(b)(2) of the Code, and all “excess parachute payments” within
 the meaning of Section 280G of the Code shall be treated as subject to the Excise
 Tax, unless in the opinion of the tax counsel selected by the Auditor, such
 other payments or benefits (in whole or in part) do not constitute parachute
 payments, or are otherwise not subject to the Excise Tax, and (ii) the
 Executive shall be deemed to pay federal income tax at the highest marginal
 rate applicable in the calendar year in which the Gross-Up Payment is made,
 and state and local income taxes at the highest marginal 

 



14






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 rate of
 taxation in the state and locality of the Executive’s residence on the date
 the Gross-Up Payment is made, net of the maximum reduction in federal income
 tax which could be obtained from deduction of such state and local taxes. In
 the event the actual Excise Tax or such income tax is determined by a non-appealable
 decision of the Internal Revenue Service to be more or less than the amount
 used to calculate the Gross-Up Payment, the Executive or the Company, as the
 case may be, shall pay to the other an amount reflecting the actual Excise
 Tax or such income tax within 30 days of such determination.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 Change in
 Control. For purposes of this Agreement, “Change in
 Control” of the Company shall be deemed to have occurred if:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 the
 Company’s shareholders approve any transaction that is contemplated to result
 in a “Qualifying Merger or Consolidation,” sale or disposition of all or
 substantially all of the Company’s assets or business or a plan of partial or
 complete liquidation, share exchange, amalgamation, recapitalization or
 similar transaction and such transaction is completed substantially in
 accordance with the terms approved by the shareholders; provided that
 notwithstanding anything to the contrary in this subsection (h)(i), no such
 merger, consolidation, sale or disposition shall be deemed to constitute a
 “Change in Control” if such transaction or series of transactions requires
 the Executive to be identified in any United States securities law filing
 solely as a result of his being a “person” (as such term is used in Section
 3(a)(9) and 13(d) of the Act) or a member of any “group” (as defined in
 Section 14(d)(2) of the Act) acquiring, holding or disposing of beneficial
 ownership of the Company’s securities and/or assets (but excluding any filing
 such as a Form 4 required as a result of being an officer or shareholder of
 the Company) and effecting a “Change in Control” as defined in this subclause
 (h)(i); or 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 during any
 period of not more than two (2) consecutive years (not including any period
 prior to the date of this Agreement), individuals who at the beginning of
 such period constitute the Board of Directors of the Company, and any new
 director (other than a director designated by a “person” (as hereinabove
 defined) who has entered into an agreement with the Company to effect a transaction
 described in clause (i), (iii) or (iv) of this Section) whose election was
 approved in a resolution of the Board by the Executive or whose election by
 the Board or nomination for election by the Company’s stockholders was
 approved by a vote of at least a majority of the directors then still in
 office who either were directors at the beginning of the period or whose
 election or nomination for election was previously so approved (including
 approval by the Executive in a resolution of the Board), cease for any reason
 to constitute at least a majority of the Board; or

 



15






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 any
 third-party (or any third parties acting as a “group,” as defined herein)
 acquires beneficial ownership (within the meaning of Rule 13d-3 promulgated
 under the Act) of securities representing at least 40% of the Company’s
 Voting Power in a transaction that is not part of a Qualifying Merger or
 Consolidation (a “Share Acquisition”) and subsequent to such Share
 Acquisition either (1) the Company is no longer a public company for U.S.
 securities law purposes, or (2) there is a material diminution of the
 Executive’s position, duties or responsibilities (including, without
 limitation, a termination of the Executive’s employment by the Company) or
 any other breach of this Agreement by the Company or event giving rise to a
 Good Reason termination by the Executive. Notwithstanding the provisions of
 the immediately preceding sentence, in the event that the Executive ceases to
 be the CEO within the 90-day period prior to the Share Acquisition as a
 result of the termination of his employment by the Company without Cause or
 by the Executive for Good Reason, the provisions of clause (1) and (2) shall
 not apply. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 For purposes
 of this Section (h), (x) “Qualifying Merger or Consolidation” shall mean any
 of the following: (1) any merger or consolidation between the Company or a
 subsidiary thereof and any entity in which the surviving entity (whether or
 not the Company) is not a publicly traded entity and the Executive is not CEO
 of the publicly traded parent (if any) of the surviving entity, (2) any
 merger or consolidation between the Company or any subsidiary thereof and any
 entity in which the surviving entity (whether or not the Company) is publicly
 traded and the Executive is not CEO of such surviving entity, or (3) any
 merger or consolidation between the Company or a subsidiary thereof and any
 entity if the shareholders of the Company immediately prior to the merger or
 consolidation hold, directly or indirectly, less than 50% of the Voting Power
 of the Company (or the ultimate parent corporation of the Company) (there
 being excluded from the number of shares held by such shareholders, but not
 from the Voting Shares of the combined company, any shares received by
 Affiliates of such other company in exchange for stock of such other company)
 immediately after such merger or consolidation, “Voting Power” means the
 total voting power of all outstanding securities having general voting power
 to elect the directors of the specified corporation, (y) “Act” means the
 Securities Exchange Act of 1934, as amended and (z) “Affiliate” means a
 person or other entity that directly or indirectly controls, is controlled
 by, or is under common control with, the company with respect to which the
 transaction is taking place. 

 
	
  

 	
  

 	
  

 	
  

 
	
 12.

 	
 Non-Solicitation
 and Non-Competition. 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Term of
 Non-Compete. Subject to Section 12(d), during his
 employment with the Company and for a period of one (1) year following the
 Date of Termination, the 

 



16






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Executive
 will not provide services, in any capacity, whether as an employee,
 consultant, independent contractor, or otherwise, to any person or entity
 that provides products or services that compete with the Business of the
 Company, including but not limited to: Laboratory Corporation of America
 Holdings, Inc.; Mayo Laboratory; ARUP; Bio Reference Laboratories; ENZO,
 Inc.; Sonic Healthcare Limited; or their successors or assigns, except that
 after the termination of Executive’s employment this restriction shall only
 apply to North America. If so requested in writing by the Executive, the
 Company shall advise the Executive promptly in writing in advance (but in no
 case later than 30 calendar days) as to whether, in the exercise of its
 reasonable judgment, the Company views any proposed activity contemplated by
 the Executive as constituting a competing “Business,” provided that nothing
 herein shall prevent the Executive from, after the termination of his
 employment, being a passive owner of not more than five percent (5%) of the
 outstanding stock of any class of a corporation that is publicly traded.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Term of
 Non-Solicitation of Customers. Subject to Section
 12(d), for a period of one (1) year following the Date of Termination, the
 Executive will not directly or indirectly solicit the Business of any
 customer of the Company during the one (1) year period prior to the
 termination of the employment relationship with the Company for any purpose
 other than to obtain, maintain and/or service the customer’s Business for the
 Company. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Term of
 Non-Solicitation of Employees. Subject to Section
 12(d), for a period of one (1) year following the Date of Termination, the
 Executive agrees not to, directly or indirectly, recruit, solicit or hire any
 employees of the Company to work for the Executive or any other person or
 entity. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Term of
 Non-Compete, Non-Solicitation Automatically Extended.
 Notwithstanding the provisions of Sections 12(a), 12(b), and 12(c), in the
 event that the Employment Term is not renewed by the Company and the
 Executive is receiving severance pursuant to Section 11(d) hereof, the period
 of (1) one year referred to in the said Sections shall automatically be
 deemed to be 18 (eighteen) months following the expiration of the Employment
 Term. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Definitions
 Applicable to Section 12. As used in this Section,
 the following terms shall have their respective definitions:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 “Business”
 shall include (A) clinical laboratory, pathology, toxicology, pharmaceutical
 testing, clinical trials, (B) Clinical Laboratory Medical Information
 Services, (C) clinical laboratory testing kits; and (D) any other product or
 service which the Company planned, provided or discussed during the (1) one;
 year period prior to the termination of the Executive’s employment. 

 



17






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 “Clinical
 Laboratory Medical Information Services” shall mean medical information
 services which contain a substantial clinical laboratory data component. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 “Indirectly
 solicit” shall include, but is not to be limited to, providing any of the
 Company’s proprietary information to another individual, or entity, or
 allowing the use of the Executive’s name by any company (or any employees of
 any other company) other than the Company, in the solicitation of the
 Business of Company’s customers. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 Expedited
 Arbitration Applicable to Section 12. In the event
 there is a dispute under this Section, the parties agree to hold an expedited
 hearing in the City of New York, New York, before an arbitrator under
 American Arbitration Association Rules. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 Exclusive
 Property. The Executive confirms that all
 confidential information is and shall remain the exclusive property of the
 Company. All business records, papers and documents kept or made by the
 Executive relating to the business of the Company, its affiliates and
 subsidiaries (other than his personal records) shall be and remain the
 property of the Company. Upon the termination of his employment with the
 Company or upon the request of the Company at any time, the Executive shall
 promptly deliver to the Company, and shall not without the consent of the
 Board retain copies of, any written materials not previously made available
 to the public, or records and documents made by the Executive in his
 possession concerning the business or affairs of the Company or any of its
 affiliates or subsidiaries (other than his personal records); provided,
 however, that subsequent to any such termination, the Company shall provide
 the Executive with copies (the cost of which shall be borne by the Executive)
 of any documents that are requested by the Executive and that the Executive
 has determined in good faith are (i) required to establish a defense to a
 claim that the Executive has not complied with his duties hereunder or (ii)
 necessary to the Executive in order to comply with applicable law. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 Injunctive
 Relief. Without intending to limit the remedies
 available to the Company, the Executive acknowledges that a breach of any of
 the covenants contained in this Section 12 may result in material irreparable
 injury to the Company or its affiliates or subsidiaries for which there is no
 adequate remedy at law, that it will not be possible to measure damages for
 such injuries precisely and that, in the event of such a breach or threat
 thereof, the Company shall be entitled to obtain a temporary restraining
 order and/or a preliminary or permanent injunction restraining the Executive
 from engaging in activities prohibited by this Section 12 or such other
 relief as may be required to specifically enforce any of the covenants in
 this Section 12. The Executive hereby agrees that the Company shall not be
 required to post any bond or other security in connection with any such
 equitable relief. Without intending to limit the remedies available to the 

 



18






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Executive,
 the Executive shall be entitled to seek specific performance of the Company’s
 obligations under this Agreement.

 
	
  

 	
  

 	
  

 	
  

 
	
 13.

 	
 Arbitration.
 In the event of any difference of opinion or dispute between the Executive
 and the Company with respect to the construction or interpretation of this
 Agreement or the alleged breach thereof (including the SERP), which cannot be
 settled amicably by agreement of the parties, then such dispute shall be
 submitted to and determined by arbitration by a single arbitrator in the city
 of New York, New York in accordance with the rules then in effect of the
 Commercial Arbitration Panel of the American Arbitration Association (the
 “AAA”), and judgment upon the award rendered shall be final, binding and
 conclusive upon the parties and may be entered in the highest court, state or
 federal, having jurisdiction. Each party shall bear its own costs and
 expenses of the arbitration, including its own attorneys’ fees, and its
 allocable share of the costs and expenses of the arbitrator; provided,
 however, that following a Change in Control, the Executive shall be entitled
 to be reimbursed by the Company for his costs and expenses in connection with
 any dispute relating to this Agreement (including the SERP) to the same
 extent and in the same manner as a participant would be reimbursed pursuant
 to Section 9 of the Executive Officer Severance Plan as in effect from time
 to time; provided that if such
 costs are not reimbursed in connection with a dispute exempt from Section
 409A pursuant to Treas. Reg. 1.409A-1(b)(11) then such payment shall be made by the Company to the Executive no
 later than the end of the year following the year in which the dispute is
 resolved.

 
	
  

 	
  

 
	
 14.

 	
 Confidentiality.
 During the Employment Term, and except as otherwise required by law, the
 Executive shall not disclose or make accessible to any business, person or
 entity, or make use of (other than in the course of the business of the
 Company) any trade secrets, proprietary knowledge or confidential
 information, which he shall have obtained during his employment by the
 Company and which shall not be generally known to or recognized by the
 general public. All information regarding or relating to any aspect of either
 the Company’s business, including but not limited to that relating to
 existing or contemplated business plans, activities or procedures, current or
 prospective clients, current or prospective contracts or other business
 arrangements, current or prospective products, facilities and methods,
 manuals, intellectual property, price lists, financial information (including
 the revenues, costs, or profits associated with any of the Company’s products
 or services), or any other information acquired because of the Executive’s employment
 by the Company, shall be conclusively presumed to be confidential; provided,
 however, that: Confidential Information shall not include any information
 known generally to the public; (other than as a result of unauthorized
 disclosure by the Executive) or any specific information or type of
 information generally not considered information disclosed by the Company or
 any officer thereof to a third party without restrictions on the disclosure
 of such information. The Executive’s obligations under this Section 14 shall
 be in addition to any other confidentiality or nondisclosure obligations of
 the Executive of the Company at law or under any other agreements. 

 



19






	
  

 	
  

 	
  

 	
  

 
	
 15.

 	
 Other
 Matters. 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Entire
 Agreement. This Agreement constitutes the entire
 agreement between the Company and the Executive relating to the subject
 matter hereof, and supersedes any previous agreements, commitments and
 understandings, written or oral, with respect to the matters provided herein
 other than any equity award agreements. As used in this Agreement, terms such
 as “herein,” “hereof,” “hereto” and similar language shall be construed to
 refer to this entire instrument and not merely the paragraph or sentence in
 which they appear, unless so limited by express language. In the event of any
 inconsistency between this Agreement and the provisions of any plan, policy,
 program, arrangement or other agreement, the provisions most favorable to the
 Executive shall control. Any reference to the employment agreement between
 the Executive and the Company in any Company plan, program, arrangement or
 other agreement shall be deemed to be a reference to this Agreement, as
 amended, and, as such, any reference to a section of the Prior Agreement
 shall be interpreted to mean the appropriate section of this Agreement.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Assignment.
 Except as set forth below, this Agreement and the rights and obligations
 contained herein shall not be assignable or otherwise transferable by either
 party to this Agreement without the prior written consent of the other party
 to this Agreement. Notwithstanding the foregoing, any amounts owing to the
 Executive upon his death shall inure to the benefit of his heirs, legatees,
 personal representatives, executor or administrator. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Notices.
 Any and all notices provided for under this Agreement shall be in writing and
 hand delivered or sent by first class registered or certified mail, postage
 prepaid, return receipt requested, addressed to the Executive at his
 residence or to the Company at its usual place of business, and all such
 notices shall be deemed effective at the time of delivery or at the time
 delivery is refused by the addressee upon presentation. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Amendment/Waiver.
 No provision of this Agreement may be amended, waived, modified, extended or
 discharged unless such amendment, waiver, extension or discharge is agreed to
 in writing signed by both the Company and the Executive. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Applicable
 Law. This Agreement and the rights and obligations
 of the parties hereunder shall be construed, interpreted, and enforced in
 accordance with the laws of the State of New York (applicable to contracts to
 be performed wholly within such State). 

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 Severability.
 The Executive hereby expressly agrees that all of the covenants in this
 Agreement are reasonable and necessary in order to protect the Company and
 its business. If any provision or any part of any provision of this Agreement
 shall be invalid or unenforceable under applicable law, such part shall be
 ineffective only to the extent of such invalidity or unenforceability and
 shall not affect in any 

 



20






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 way the
 validity or enforceability of the remaining provisions of this Agreement, or
 the remaining parts of such provision.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 Successor in
 Interest. In the event the Company merges or
 consolidates with or into any other corporation or corporations, or sells or
 otherwise transfers substantially all of its assets to another corporation or
 other entity, the provisions of this Agreement shall be binding upon and
 inure to the benefit of the entity surviving or resulting from the merger or
 consolidation or to which the assets are sold or transferred and, prior to
 the consummation of any such event, the Company shall obtain the express
 written assumption of this Agreement by the other entity (other than in the
 case of a merger after which the Company is the surviving entity). All
 references herein to the Company refer with equal force and effect to any
 corporate or other successor of the entity that acquires directly or
 indirectly by merger, consolidation, purchase or otherwise, all or
 substantially all of the assets of the Company. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 No
 Mitigation/No Offset. In the event of any
 termination of employment, the Executive shall be under no obligation to seek
 other employment, and there shall be no offset against entitlements, amounts
 or benefits due him under this Agreement or otherwise on account of any
 remuneration attributable to any subsequent employer or claims asserted by
 the Company or any affiliate. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 Joint Participation
 in Drafting. Each party to this Agreement has
 participated in the negotiation and drafting hereof. As such, the language
 used herein shall be deemed to be the language chosen by the parties hereto
 to express their mutual intent, and no rule of strict construction shall be
 applied against any party to this Agreement.

 
	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 Section 409A.
 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 Notwithstanding
 anything to the contrary in this Agreement or elsewhere, if the Executive is
 a “specified employee” as determined pursuant to Section 409A of the Code as
 of the date of the Executive’s “separation from service” (within the meaning
 of Treas. Reg. 1.409A-1(h)) and if any payment or benefit provided for in
 this Agreement or otherwise both (x) constitutes a “deferral of compensation”
 within the meaning of Section 409A and (y) cannot be paid or provided in the
 manner otherwise provided without subjecting the Executive to “additional
 tax”, interest or penalties under Section 409A, then any such payment or
 benefit that is payable during the first six months following the Executive’s
 “separation from service” shall be paid or provided to the Executive in a
 cash lump-sum, with interest at the “Interest Rate”, on the first business
 day of the seventh calendar month following the month in which the Executive’s
 “separation from service” occurs. The “Interest Rate” shall be the six (6)
 month LIBOR rate published in The Wall Street Journal in the Borrowing
 Benchmark Table (or similar compilation) on the date of the Executive’s


 



21






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 “separation from service” (or if such date is not a business day, the
 next preceding business day), and will be calculated for the actual number of
 days elapsed from the date of the Executive’s “separation from service”
 through the date of payment; provided that if such rate is not
 available in The Wall Street Journal, then the “Interest Rate” shall be
 such similar rate as the Company and the Executive agree.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 Any payment
 or benefit due upon a termination of the Executive’s employment that
 represents a “deferral of compensation” within the meaning of Section 409A
 shall only be paid or provided to the Executive upon a “separation from
 service”. Notwithstanding anything to the contrary in Section 11 of this
 Agreement or elsewhere, any payment or benefit under Section 11 or
 otherwise that is exempt from Section 409A pursuant to Treas. Reg. 1.409A-1(b)(9)(v)(A)
 or (C) shall be paid or provided to the Executive only to the extent that the
 expenses are not incurred, or the benefits are not provided, beyond the last
 day of the second taxable year of the Executive following the taxable year of
 the Executive in which the “separation from service” occurs; and provided
 further that such expenses are reimbursed no later than the last day of the
 third taxable year following the taxable year of the Executive in which the
 “separation from service” occurs. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 Except as
 otherwise expressly provided herein, to the extent any expense reimbursement
 or the provision of any in-kind benefit under this Agreement is determined to
 be subject to Section 409A of the Code, the amount of any such expenses
 eligible for reimbursement, or the provision of any in-kind benefit, in one
 calendar year shall not affect the expenses eligible for reimbursement in any
 other taxable year (except for any life-time or other aggregate limitation
 applicable to medical expenses), in no event shall any expenses be reimbursed
 after the last day of the calendar year following the calendar year in which
 the Executive incurred such expenses, and in no event shall any right to
 reimbursement or the provision of any in-kind benefit be subject to
 liquidation or exchange for another benefit.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 For the
 purposes of this Agreement, each payment made pursuant to Section 11(e)(i)
 and (ii) shall be deemed to be separate payments, amounts payable under
 Section 11 of this Agreement shall be deemed not to be a “deferral of
 compensation” subject to Section 409A to the extent provided in the
 exceptions in Treasury Regulation Sections 1.409A-1(b)(4) (“short-term
 deferrals”) and (b)(9) (“separation pay plans,” including the exception under
 subparagraph (iii)) and other applicable provisions of Treasury Regulation
 Section 1.409A-1 through A-6. 

 
	
  

 	
  

 	
  

 	
  

 
	
 16.

 	
 Indemnification.
 The Company shall indemnify the Executive to the full extent permitted by law
 and the By-laws of the Company for all expenses, costs, liabilities and legal
 fees 

 



22






	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (collectively, “Damages”) that the Executive may
 incur in the discharge of all his duties hereunder, including, without
 limitation, the right to be paid in advance by the Company for his expenses
 in defending a civil or criminal action, proceeding or investigation prior to
 the final disposition thereof. The Executive shall be insured under the
 Company’s Directors’ and Officers’ Liability Insurance Policy as in effect
 from time to time. Notwithstanding any other provision of this Agreement to
 the contrary, any termination of the Executive’s employment or of this
 Agreement shall have no effect on the continuing operations of this Section
 16.

 
	
  

 	
  

 	
  

 	
  

 
	
 17.

 	
 Authority.
 The execution, delivery and performance of this Agreement has been duly
 authorized by the Company and this Agreement represents the valid, legal and
 binding obligation of the Company, enforceable against the Company according
 to its terms. 

 



[signature page to follow]


23










[Employment Agreement Signature Page]


          IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed on its
own behalf and has caused its corporate seal to be affixed, and the Executive
has executed this Agreement on his own behalf intending to be legally bound, as
of the date first written above. 


	
  
 	
  
 	
  
 
	
  
 	
 QUEST
 DIAGNOSTICS INCORPORATED
 
	
  
 	
  
 	
  
 
	
  
 	
 By:
 	
 /s/ David W. Norgard
 
	
  
 	
  
 	
 
 
	
  
 	
 Name:
 	
  David W. Norgard
 
	
  
 	
 Title:
 	
 Vice President Human Resources
 
	
  
 	
 Date:
 	
 November 7, 2008 
 



ATTEST:


Secretary

/s/ William J. O'Shaughnessy, Jr.


	
  
 	
  
 
	
  
 	
 EXECUTIVE
 
	 
	 

	
  
 	
 /s/ Surya N. Mohapatra
 
	
  
 	
 
 
	
  
 	
 Surya N.
Mohapatra
 
	
  
 	
 Date: November 7, 2008
 



24