Document:

Exhibit 10.48

 

EXECUTION COPY

 

TRANSITION AGREEMENT

 

This Transition Agreement (“Agreement”) is made effective as of
January 25, 2006 (“Effective Date”), by and between Biosite Incorporated (“Company”) and Thomas M. Watlington
(“Mr. Watlington”), with respect to
the following facts:

 

A. Mr. Watlington
is currently employed by Company as Executive Vice President and Chief
Operating Officer.

 

B. Mr. Watlington’s
employment will cease effective March 31, 2006, unless terminated sooner by the
parties pursuant to Section 9 below (“Separation Date”).

 

C. The Company
desires that Mr. Watlington continue to provide consulting services on behalf
of the Company through December 31, 2006 and Mr. Watlington desires to continue
to provide such consulting services on behalf of the Company.

 

D. The parties
desire to set forth the terms and conditions of Mr. Watlington’s continuing
employment and subsequent transition from employment with the Company on the
terms and conditions set forth below.

 

THEREFORE, in
exchange for good and valuable consideration and in consideration of the
promises and mutual agreements hereinafter set forth, the parties agree as
follows:

 

1. Employment.
The Company agrees to continue to employ Mr. Watlington through the Separation
Date, and Mr. Watlington hereby accepts such employment, subject to the terms
and conditions set forth herein.

 

2. Duties.   Mr. Watlington’s ongoing requirement to
perform day-to-day services for the Company will cease on the Effective Date, with
the exception of the transition support as contemplated in Section 4 below.

 

3. At-Will
Employment Relationship. Notwithstanding anything to the contrary in this
Agreement, Mr. Watlington’s employment with the Company continues to be at-will
and may be terminated by Mr. Watlington or the Company at any time, subject to
the provisions of Section 9 below.  No
representative of the Company, other than the Company’s Chief Executive Officer,
has the authority to alter the at-will employment relationship. Any change to
the at-will employment relationship must be by specific written agreement
signed by Mr. Watlington and the Company’s Chief Executive Officer. Nothing in
this Agreement is intended to or should be construed to contradict, modify or
alter this at-will relationship.

 

4. Transition
from Employment. Unless Mr. Watlington’s employment with the Company is
terminated sooner, the parties mutually agree that Mr. Watlington will
transition from his employment with the Company as follows:

 

4.1 Regular
Employment. During the period from the Effective Date through March 31,
2006, Mr. Watlington shall remain employed by Company as a regular employee (the
“Regular Period”).  If for any reason Mr. Watlington’s employment
with the Company

 

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terminates prior to March 31, 2006, the Regular
Period shall refer to the period of Mr. Watlington’s actual dates of employment
from the Effective Date through his termination of employment with the Company.
Mr. Watlington’s service as an officer of the Company will cease effective upon
the termination of the Regular Period; however, his resignation shall not be
deemed to modify or amend his rights under that certain Indemnification
Agreement between Mr. Watlington and the Company dated March 2, 2005, which
shall remain in effect in accordance with its terms.

 

4.2 Active
Employment. During the Regular Period, Mr. Watlington will be deemed a
part-time employee performing less than thirty (30) hours of work per week for
the Company and will not be required to perform such work at the premises of
the Company, except as reasonably requested by the President or Chief Executive
Officer of the Company. Mr. Watlington’s access to the Company’s property
and systems will cease as of the conclusion of the Regular Period.

 

4.3 Services
During Regular Period.  During the Regular
Period, Mr. Watlington agrees to be available to the Company’s senior
management for consultation and transition support.  It is currently anticipated that this could
involve one or more weekly meetings and occasional emails and telephone
conversations; however, upon mutual agreement the parties may modify this
schedule and Mr. Watlington agrees during the entire Regular Period to use his
best efforts to cooperate and perform services on behalf of the Company during
this period as reasonably requested.

 

4.4 Ongoing
Consulting Services. Provided that (a) Mr. Watlington’s employment does not
terminate before March 31, 2006 pursuant to either subsection 9.1 or 9.2 below,
(b) Mr. Watlington complies with all the terms and conditions of this
Agreement, (c) upon commencement of the Consulting Period, Mr. Watlington
executes the Release attached as Exhibit A, and
(d) Mr. Watlington complies with all other written agreements that he has with
the Company and other applicable Company policies, during the period commencing
on the expiration of the Regular Period and ending December 31, 2006 (the “Consulting Period”) the Company
agrees to engage, and Mr. Watlington agrees that he will continue to provide,
ongoing services to the Company on a consulting basis as reasonably requested
from time to time, including occasional emails and telephone conversations.
Notwithstanding the foregoing, Mr. Watlington acknowledges and agrees that the
Company may terminate his service as a consultant under this Agreement for
Cause (as defined below). Mr. Watlington further agrees that, if requested by
the Company at any time during the Consulting Period, to the extent that it has
not been completed prior to the end of the Regular Period, he will resign his
positions as a director and/or officer of any of the Company’s subsidiaries and
take such other actions and execute such other documents as are reasonably
required to effect such resignations and the appointment by the Company of a
replacement for Mr. Watlington in any such capacities. As compensation for Mr.
Watlington’s ongoing services during the Consulting Period, the Company will offer
Mr. Watlington the consideration described in Section 5.3, to which Mr. Watlington
is not otherwise entitled. In addition, the parties each acknowledge and agree
that the Company’s offer to engage Mr. Watlington as a consultant during the
Consulting Period is in exchange for his agreement to the terms of this
Agreement, including without limitation the provisions of Sections 5, 7, 10 and
12 below. Mr. Watlington further acknowledges and agrees that the Company’s
engagement of

 

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him as a consultant to the Company for the
Consulting Period is of substantial value to him, in addition to the cash
compensation payable under Section 5.3.

 

5. Compensation.

 

5.1 Salary.  As compensation for Mr. Watlington’s performance
of his duties hereunder during the Regular Period, the Company shall continue
to pay to Mr. Watlington his base salary in effect on the Effective Date of
this Agreement (“Base Salary”). Unless otherwise expressly provided, all
payments will be payable in accordance with the standard payroll practices of
the Company, less required deductions for state and federal withholding tax,
social security and all other employment taxes and payroll deductions
(including without limitation any deferral of compensation into Company’s
sponsored deferred compensation plans in accordance with Mr. Watlington’s prior
elections and Mr. Watlington’s participation in the Company’s Employee Stock
Purchase Plan).

 

5.2 2005/2006
Incentive Compensation.  The parties
mutually agree that Mr. Watlington shall remain eligible for incentive
compensation (“Bonus”) for the fourth
quarter of 2005 (“Q4’05”) under the terms and conditions previously approved by
the Company’s Board of Directors under the Company’s Executive Bonus Plan. Bonus
earned and payable for Q4’05, if any, will be paid in accordance with Company’s
regular schedule for payment of incentive compensation and commensurate with
the Q4’05 bonus payments made to all other eligible members of senior
management, which is currently anticipated to be in mid-February 2006. Mr. Watlington
shall not be eligible for any bonus under any Company bonus plan or other
arrangement for the Company’s 2006 fiscal year and he shall not be eligible to
participate in and/or earn any other type of incentive compensation except as
specifically set forth in this Agreement.

 

5.3 Consulting
Period. Subject to the terms and conditions of this Agreement, during the Consulting
Period the Company shall pay Mr. Watlington a monthly retainer of one-thousand
five hundred dollars ($1,500).  Unless
otherwise expressly provided, all amounts due during the Consulting Period
shall be payable monthly in advance. The Company will provide Mr. Watlington a
Form 1099 for payments made under this section.

 

6. Fringe Benefits. Except as expressly provided in this
Agreement, during the Regular Period, Mr. Watlington will be eligible for all
customary and usual fringe benefits generally available to Company’s employees
residing in the State of California, subject to the terms and conditions of
Company’s benefit plan documents.

 

7. Stock
Option Awards. As of the Effective Date, Mr. Watlington shall no longer be
eligible to receive stock option awards that may be granted from time to time
by the Company to employees of the Company. 
Any stock option awards previously granted by the Company to Mr. Watlington
pursuant to the Company’s stock option plans shall not be affected by this
Agreement and shall continue on their respective terms in accordance with the
applicable stock option plan and stock option agreement between Mr. Watlington
and the Company, except as follows:

 

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7.1          As a condition to the Company’s
agreement to engage Mr. Watlington as a consultant to the Company during the
Consulting Period, Mr. Watlington acknowledges and agrees that as of the
Effective Date, and notwithstanding anything to the contrary in any individual
stock option agreement between the Company and Mr. Watlington, all future vesting
of stock options under the outstanding stock options listed on Schedule 7.1
shall immediately cease as of the Effective Date. Except as specifically set
forth in this Agreement, no other terms or conditions of such stock options
shall be deemed modified or amended by this Agreement.

 

7.2          Mr. Watlington further acknowledges
and agrees that each of the stock option agreements between the Company and Mr.
Watlington listed on Schedule 7.2 include provisions under which all future vesting
of such stock options shall automatically cease if he is scheduled to provide
less than thirty (30) hours of service per week to the Company. Mr. Watlington
acknowledges and agrees that during both the Regular Period and Consulting
Period that he will be scheduled to provide less than thirty (30) hours of
service to the Company, and therefore all future vesting of the stock options
listed on Schedule 7.2 shall cease as of the Effective Date unless and until
the Company makes an alternative determination regarding Mr. Watlington’s work
schedule.

 

7.3          Effective as of the end of the Regular
Period, any and all stock options listed under the column titled “Unvested” on
Schedules 7.1 and 7.2 shall terminate and be deemed cancelled. Upon such
termination and cancellation, such stock options may no longer be exercised at
any time and the shares underlying such options shall immediately be available
for issuance under the Company’s applicable stock option plan in accordance
with its terms.

 

8. Confidentiality;
Proprietary Information. Notwithstanding anything to the contrary in this
Agreement, Mr. Watlington acknowledges and agrees that during the Consulting
Period he shall continue to be subject to and bound by the terms and conditions
of his Proprietary Information and Inventions Agreement with the Company (the “Proprietary Rights Agreement”), and
any obligations therein applicable in his capacity as an employee of the
Company shall apply equally to his performance of services as a consultant to
the Company during the Consulting Period. The Company and Mr. Watlington
acknowledge and agree that full and complete compliance with all of the
provisions of the Proprietary Rights Agreement is a material consideration of
this Agreement and that the breach of any of its provisions shall also
constitute a material breach of this Agreement.

 

9. Termination of Employment.

 

9.1 Termination
for Cause by Company. Without limiting any other rights of the Company as
set forth in this Agreement or otherwise, the Company may terminate Mr. Watlington’s
employment immediately at any time for Cause. For purposes of this Agreement, “Cause” is defined as misconduct,
including, but not limited to: (a) conviction of any felony or any crime
involving moral turpitude or dishonesty, or entry of a plea of no lo contendere
(or an equivalent plea) in response to an indictment for such crime or felony;
(b) participation in a fraud or act of dishonesty against Company or any of its
affiliates; (c) breach of the Company’s policies, including, but not limited
to, the Company’s Code of Business Conduct and Ethics and Company’s policies
with respect to appropriate employee behavior and respect for co-workers; (d)
intentional damage to property of the Company or any of its affiliates; (e)
breach of any

 

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written agreement with the Company,
including, but not limited to, this Agreement; and (f) conduct which in the
good faith and reasonable determination of the Company’s Chief Executive
Officer or Board of Directors constitutes misconduct in violation of this
Agreement. Physical or mental disability shall not constitute “Cause.” In the
event that Mr. Watlington’s employment is terminated in accordance with this
subsection 9.1 during the Regular Period: (a) Mr. Watlington shall be
entitled to receive the applicable Base Salary then in effect, pro-rated to the
date of termination, and no other amounts; (b) Mr. Watlington shall not be
eligible to perform ongoing consulting services to the Company during the
Consulting Period; and (c) all other Company obligations to Mr. Watlington
pursuant to this Agreement will become automatically terminated and completely
extinguished.

 

9.2 Voluntary
Resignation by Mr. Watlington. Mr. Watlington may voluntarily resign his
position with the Company on ten days’ advance written notice. In the event of
Mr. Watlington’s resignation pursuant to this subsection 9.2 prior to the
expiration of the Regular Period: (a) Mr. Watlington will be entitled to
receive only the applicable Base Salary then in effect, pro-rated to the date
of termination, and no other amounts; (b) Mr. Watlington shall not be eligible
to perform ongoing consulting services to the Company during the Consulting Period;
and (c) all other Company obligations to Mr. Watlington pursuant to this
Agreement will become automatically terminated and completely extinguished.

 

10. No
Conflict of Interest. During the term of Mr. Watlington’s employment with
Company and the Consulting Period, Mr. Watlington shall not engage in any work,
paid or unpaid, that creates an actual conflict of interest with the Company.
Such work shall include, but is not limited to, directly or indirectly
competing with the Company in any way, or acting as an officer, director,
employee, consultant, volunteer, lender, or agent of any company, or any
affiliates or subsidiaries of those companies, that has substantial operations
in the field of in-vitro diagnostics; except that Mr. Watlington shall not be
restricted from working in such capacity for any early-stage company with
annual revenues of less than $10,000,000 so long as such company is not funded
or otherwise controlled by any other entity that Mr. Watlington would otherwise
be prohibited from working with under the immediately preceding clause. If such
a conflict occurs during the Regular Period, Mr. Watlington’s employment will
be subject to immediate termination for Cause pursuant to subsection 9.1.  If such a conflict occurs during the Consulting
Period, the Consulting Period shall be deemed to have terminated, and
thereafter no additional amounts shall be due by the Company to Mr. Watlington
under the terms of this Agreement. This Section 10 shall not in any way limit
the terms or conditions of Company’s Code of Business Conduct and Ethics
applicable to all employees of Company, nor shall it be deemed or interpreted
to have such effect.

 

11. Return
of Company Property.  Mr. Watlington
understands and agrees that as a condition of receiving the compensation and
benefits defined in this Agreement, all Company property, data and information
(whether in written, electronic or any other form) must be returned to the
Company on or before the expiration of the Regular Period.  By signing this Agreement, Mr. Watlington agrees
to return to Biosite on or before the expiration of the Regular Period all
property, data and information belonging to Biosite.  Notwithstanding the foregoing, Mr. Watlington
will be permitted to retain his Company-issued laptop computer and mobile phones
following the expiration of the Regular Period, provided that he has first
given the Company the opportunity to review such items and remove from them any
information deemed

 

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by the Company to be confidential or
proprietary information of the Company.  Mr. Watlington
also agrees to complete the Company’s exit interview paperwork and return it to
the Company on or before the expiration of the Regular Period.

 

12. Non-solicitation.
Mr. Watlington understands and agrees that the Company’s employees and
customers and any information regarding Company employees and/or customers are
confidential and constitute trade secrets of the Company.

 

12.1 Non-solicitation
of Customers or Prospects. Mr. Watlington agrees that during the term of
this Agreement, including the Consulting Period, Mr. Watlington will not, directly
or indirectly, separately or in association with others, interfere with, impair,
disrupt or damage Company’s relationship with any of its customers or customer
prospects. For instance, without limiting the foregoing, Mr. Watlington shall
not, either directly or indirectly, solicit or encourage others to solicit any
customers or customer prospects of Company for the purpose of diverting or
taking away business from Company.

 

12.2 Non-solicitation
of Company’s Employees. Mr. Watlington agrees that during the term of this
Agreement and for a period of three (3) years after the Effective Date, Mr. Watlington
will not, either directly or indirectly, separately or in association with
others, interfere with, impair, disrupt or damage Company’s business by
soliciting, encouraging or attempting to hire any of Company’s employees or
causing others to solicit or encourage any of Company’s employees to
discontinue their employment with Company.

 

13. Injunctive
Relief. Mr. Watlington acknowledges that his breach of the covenants
contained in Sections 10-12 (collectively “Covenants”)
would cause irreparable injury to the Company and agrees that in the event of
any such breach, notwithstanding Section 15 below, the Company shall be
entitled to seek injunctive relief or other equitable remedies without the
necessity of proving actual damages or posting any bond or other security.

 

14. Change
in Control Severance Benefit Plan. 
Mr. Watlington agrees that by signing this Agreement he is expressly
waiving all rights, if any, to benefits of any kind under the Company’s Change
in Control Severance Benefit Plan (effective October 22, 2004). Accordingly, as
of the Effective Date any and all of Mr. Watlington’s rights and benefits under
the Company’s Change in Control Severance Benefit Plan are hereby terminated
and extinguished in their entirety.

 

15. Agreement
to Arbitrate. Subject to Biosite’s rights under Section 13 above, in the
event of any dispute or claim relating to or arising out of either this
Agreement or the parties’ employment relationship or the termination of that
relationship (including, but not limited to, any claims of wrongful termination
or age, sex, race, disability or other discrimination, and any claims arising
out of this Agreement), Mr. Watlington and Company agree that all such disputes
shall be fully and finally resolved by binding arbitration conducted before a
single neutral arbitrator in San Diego, California pursuant to the rules for
arbitration of employment disputes by the American Arbitration Association. In
no event shall the request for arbitration be made after the date when institution
of legal or equitable proceedings based on such claims would be barred by the
applicable statute of limitations. The arbitrator shall permit adequate
discovery and is empowered to award all remedies otherwise available in a court
of competent jurisdiction, and

 

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any judgment rendered by the arbitrator may
be entered by any court of competent jurisdiction. The arbitrator shall issue
an award in writing and state the essential findings and conclusions on which
the award is based. By executing this Agreement, Mr. Watlington and the Company
are both waiving the right to a jury trial with respect to any such disputes.
The Company shall pay for the costs of the arbitrator, forum and filing fees.  Notwithstanding anything to the contrary set
forth herein, the provisions of this Section 15 shall terminate and be of no
further force or effect upon the first occurrence of any of the following
events (each, a “Change in Control”):

 

(a)           The consummation of a merger or
consolidation of the Company with or into another entity or any other corporate
reorganization, if more than 50% of the combined voting power of the continuing
or surviving entity’s securities outstanding immediately after such merger,
consolidation or other reorganization is not owned by persons who were
stockholders of the Company immediately prior to such merger, consolidation or
other reorganization, in substantially the same relative proportions as their
ownership of the combined voting power of the Company immediately prior to such
merger, consolidation or other reorganization;

 

(b)           When a majority of the Company’s
Board of Directors shall change within any 24 month period, unless the election
or the nomination for election by the Company’s stockholders of each new
director has been approved by a vote of at least a majority of the directors
then still in office who were directors at the beginning of the period; or

 

(c)           Any “person” (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) by
the acquisition or aggregation of securities is or becomes the beneficial
owner, directly or indirectly, of securities of the Company representing 50% or
more of the combined voting power of the Company’s then outstanding securities
ordinarily (and apart from rights accruing under special circumstances) having
the right to vote at elections of directors (the “Base
Capital Stock”); except that any change in the relative
beneficial ownership of the Company’s securities by any person resulting solely
from a reduction in the aggregate number of outstanding shares of Base Capital
Stock, and any decrease thereafter in such person’s ownership of securities,
shall be disregarded until such person increases in any manner, directly or
indirectly, such person’s beneficial ownership of any securities of the
Company.

 

The term “Change in Control” shall not
include a transaction, the sole purpose of which is to change the state of the
Company’s incorporation.

 

16. General
Provisions.

 

16.1 Successors
and Assigns. The rights and obligations of the Company under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of the Company.   Mr. Watlington
shall not be entitled to assign any of his rights or obligations under this
Agreement, which the parties agree are personal to him.

 

16.2 Waiver.
Either party’s failure to enforce any provision of this Agreement shall not in
any way be construed as a waiver of any such provision, or prevent that party
thereafter from enforcing each and every other provision of this Agreement.

 

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16.3 Attorneys
Fees. Each side shall bear its own attorneys’ fees in connection with any
dispute or claim relating to or arising out of either this Agreement or the
parties’ employment relationship or the termination of that relationship.

 

16.4 Severability.
In the event any provision of this Agreement is found to be unenforceable by an
arbitrator or court of competent jurisdiction, such provision shall be deemed
modified to the extent necessary to allow enforceability of the provision as so
limited, it being intended that the parties shall receive the benefit
contemplated herein to the fullest extent permitted by law. If a deemed
modification is not satisfactory in the judgment of such arbitrator or court,
the unenforceable provision shall be deemed deleted, and the validity and enforceability
of the remaining provisions shall not be affected thereby.

 

16.5 Interpretation:
Construction. The headings set forth in this Agreement are for convenience
only and shall not be used in interpreting this Agreement. This Agreement has
been drafted with the advice of legal counsel representing the Company, but Mr.
Watlington acknowledges that he has had the opportunity to seek independent
legal advice from his own attorney(s) with respect to the advisability of
executing this Agreement, and with respect to the meaning of California Civil
Code section 1542. Therefore, the normal rule of construction to the effect
that any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement.

 

16.6 Governing
Law. This Agreement will be governed by and construed in accordance with
the laws of the United States and the State of California. Each party consents
to the jurisdiction and venue of the state or federal courts in San Diego,
California, if necessary or appropriate under the terms and conditions of this
Agreement.

 

16.7 Notices.
Any notice required or permitted by this Agreement shall be in writing and
shall be delivered as follows with notice deemed given as indicated: (a) by
personal delivery when delivered personally; (b) by overnight courier upon
written verification of receipt; or (c) by certified or registered mail, return
receipt requested, upon verification of receipt. Notice shall be sent to the
addresses set forth below, or such other address as either party may specify in
writing.

 

16.8 Survival.
Sections 8 (“Confidentiality; Proprietary Information”), 10 (“No Conflict of
Interest”), 12 (“Non-solicitation”), 13 (“Injunctive Relief”), 14 (“Change in
Control Severance Benefit Plan”), 15 (“Agreement to Arbitrate”), 16 (“General
Provisions”) and 17 (“Entire Agreement; Modification”) of this Agreement shall
survive Mr. Watlington’s employment by the Company.

 

17. Entire
Agreement; Modification.  This
Agreement, including the surviving provisions of the Company’s Proprietary
Rights Agreement, are intended to be the entire agreement between the parties
and supersedes and cancels any and all other prior agreements, written or oral,
between the parties regarding this subject matter.  Only a written instrument executed by all
parties hereto may amend this Agreement. 
Each term of this Agreement is contractual and not merely a
recital.  Each party to this Agreement
has made such investigation of the facts pertaining to this settlement and
release, and all of the matters pertaining to this Agreement, as she/it deems
necessary.  Mr. Watlington is aware that
he may hereafter discover

 

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claims or facts in addition to or different
from those he now knows or believes to be true with respect to the matters
related herein.  Nevertheless, it is Mr. Watlington’s
intention to fully, finally, and forever settle and release all such matters,
and all claims relative thereto, which do now exist, may exist, or heretofore
have existed with regard to his employment by Biosite.  In furtherance of such intention, the
releases given herein shall be and remain in effect as full and complete
releases of all such matters notwithstanding the discovery or existence of any
additional or different claims or facts relative thereto.

 

THE PARTIES TO THIS AGREEMENT
HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH AND EVERY PROVISION
CONTAINED HEREIN.  WHEREFORE, THE PARTIES
HAVE EXECUTED THIS AGREEMENT ON THE DATES SHOWN BELOW.

 

	
  Dated:

  	
  3/1/06

  	
   

  	
  By:

  	
    /s/
  Thomas M. Watlington

  	
   

  
	
   

  	
   

  	
  Thomas M.
  Watlington

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
  3/3/06

  	
   

  	
  By:

  	
    /s/
  Kim D. Blickenstaff

  	
   

  
	
   

  	
   

  	
  Kim D. Blickenstaff

  
	
   

  	
   

  	
  Chairman and CEO

  
	
   

  	
   

  
	
   

  	
   

  
									

 

 

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EXHIBIT A

 

GENERAL
RELEASE OF ALL CLAIMS

 

This General Release of All Claims (“Release”)
is made by and between Biosite Incorporated (“Company”)
and Mr. Thomas M. Watlington (“Mr. Watlington”).

 

1. General Release. In exchange for the Company’s agreement to
offer Mr. Watlington the opportunity to continue to provide services to the
Company during the Consulting Period and to perform such other obligations as
described in the Transition Agreement to which this General Release of All
Claims (“Release”) is attached as an exhibit,
subject to the Company’s performance of such obligations, Mr. Watlington
unconditionally, irrevocably and absolutely releases and discharges the
Company, and any parent and subsidiary corporations, divisions and affiliated
corporations, partnerships or other affiliated entities of the Company, past
and present, as well as Company’s employees, officers, directors, agents,
successors and assigns (collectively, “Released Parties”),
from all claims related in any way to the transactions or occurrences between
Mr. Watlington and the Company to date, to the fullest extent permitted by law,
including, but not limited to, Mr. Watlington’s employment with the Company,
and/or Mr. Watlington’s transition from employment with the Company, and all
other losses, liabilities, claims, charges, demands and causes of action, known
or unknown, suspected or unsuspected, arising directly or indirectly out of or
in any way connected with Mr. Watlington’s employment with the Company. This
release is intended to have the broadest possible application and includes, but
is not limited to, any tort, contract, common law, constitutional or other
statutory claims, including, but not limited to alleged violations of the
California Labor Code or the federal Fair Labor Standards Act, Title VII of the
Civil Rights Act of 1964 and the California Fair Employment and Housing Act,
the Americans with Disabilities Act, the Age Discrimination in Employment Act
of 1967, as amended, and all claims for attorneys’ fees, costs and expenses.
Mr. Watlington hereby expressly waives his right to recovery of any type,
including damages or reinstatement, in any administrative or court action,
whether state or federal, and whether brought by Mr. Watlington or on Mr. Watlington’s
behalf, related in any way to the matters released herein.

 

2. California Civil Code
Section 1542 Waiver. Mr. Watlington agrees that this release is to be
interpreted broadly and includes the waiver of all rights under California
Civil Code section 1542, which provides that

 

“a general release does not
extend to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor .”

 

3. Representation
Concerning Filing of Legal Actions. By signing this Release, Mr. Watlington
represents and warrants that he has not filed any claims against the Company or
any of the other Released Parties in any court or with any governmental agency
and, to the fullest extent permitted by law, he will not prosecute, nor allow
to be prosecuted on his behalf, in any state or federal court or administrative
agency, any claim related to the matters released herein.

 

4. Return of Company
Property. Mr. Watlington represents and warrants that he has previously
returned to the Company all property, data and information belonging to the
Company and agrees that he will not use or disclose to others any confidential
or proprietary information of the Company or the Released Parties.

 

5. Older Workers’ Benefit
Protection Act. Mr. Watlington understands that this Release is intended to
satisfy the requirements of the Older Workers’ Benefit Protection Act, 29 U.S.C.
§ 626{f).

 

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Accordingly, by signing this Release, Mr. Watlington acknowledges that:
(a) he has read and understands the terms of this Release; (b) that this
Release advises him in writing that he may consult with an attorney before
executing this agreement, if desired; (c) that he has obtained and considered
such legal counsel as he deems necessary; (d) that he has twenty-one (21) days
to consider whether or not to sign this Release (although he may elect not to
use the full 21-day period); and (e) that by signing this Release, he
acknowledges that he does so freely, knowingly, and voluntarily. The Release
shall not become effective or enforceable until the eighth day after Mr. Watlington
signs it. In other words, Mr. Watlington may revoke acceptance of this Release
within seven (7) days after signing it. Any revocation must be in writing and
received by the Company’s Chief Executive Officer, by 5:00 p.m. Pacific Time on
the seventh day in order to be effective (“Release Effective Date”).
Any payments and benefits described in Sections 5 and 6 of the Transition
Agreement for which Mr. Watlington is eligible then will become due and
payable, provided the Release has not been revoked. This Release does not waive
or release any rights or claims that Mr. Watlington may have under the Age
Discrimination in Employment Act that arise after the execution of this
Release.

 

THE PARTIES TO THIS RELEASE HAVE READ THE FOREGOING RELEASE AND FULLY
UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES
HAVE FREELY AND VOLUNTARILY EXECUTED THIS RELEASE ON THE DATES SHOWN BELOW.

 

 

	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Thomas M. Watlington

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Kim D. Blickenstaff

  
	
   

  	
   

  	
  Chairman
  & CEO

  
									

 

TW
/s/ TW   KB /s/ KB   please initial each page

 

11

 

SCHEDULE 7.1

 

 

	
  Number

  	
   

  	
  Grant

  Date

  	
   

  	
  Plan

  	
   

  	
  Type

  	
   

  	
  Granted

  	
   

  	
  Price

  	
   

  	
  Exercised*

  	
   

  	
  Vested*

  	
   

  	
  Unvested*

  	
   

  
	
  IS002014

  	
   

  	
  6/18/2002

  	
   

  	
  1996

  	
   

  	
  ISO

  	
   

  	
  4,008

  	
   

  	
  $

  	
  24.9500

  	
   

  	
  0.00

  	
   

  	
  593

  	
   

  	
  3,415

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IS002384

  	
   

  	
  6/18/2003

  	
   

  	
  1996

  	
   

  	
  ISO

  	
   

  	
  2,222

  	
   

  	
  $

  	
  47.6600

  	
   

  	
  0.00

  	
   

  	
  0

  	
   

  	
  2,222

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NQ000176

  	
   

  	
  6/18/2002

  	
   

  	
  1996

  	
   

  	
  NQ

  	
   

  	
  52,242

  	
   

  	
  $

  	
  24.9500

  	
   

  	
  0.00

  	
   

  	
  50,112

  	
   

  	
  2,130

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NQ000521

  	
   

  	
  6/18/2003

  	
   

  	
  1996

  	
   

  	
  NQ

  	
   

  	
  47,778

  	
   

  	
  $

  	
  47.6600

  	
   

  	
  0.00

  	
   

  	
  32,575

  	
   

  	
  15,203

  	
   

  

 

* Information as of the Effective Date.

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

 

TW
/s/ TW   KB /s/ KB   please initial each page

 

12

 

SCHEDULE 7.2

 

 

	
  Number

  	
   

  	
  Grant

  Date

  	
   

  	
  Plan

  	
   

  	
  Type

  	
   

  	
  Granted

  	
   

  	
  Price

  	
   

  	
  Exercised*

  	
   

  	
  Vested*

  	
   

  	
  Unvested*

  	
   

  
	
  IS002499

  	
   

  	
  6/18/2004

  	
   

  	
  1996

  	
   

  	
  ISO

  	
   

  	
  2,263

  	
   

  	
  $

  	
  44.1800

  	
   

  	
  0.00

  	
   

  	
  0

  	
   

  	
  2,263

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IS002625

  	
   

  	
  6/17/2005

  	
   

  	
  1996

  	
   

  	
  ISO

  	
   

  	
  1,873

  	
   

  	
  $

  	
  53.3800

  	
   

  	
  0.00

  	
   

  	
  0

  	
   

  	
  1,873

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NQ006270

  	
   

  	
  6/18/2004

  	
   

  	
  1996

  	
   

  	
  NQ

  	
   

  	
  32,737

  	
   

  	
  $

  	
  44.1800

  	
   

  	
  0.00

  	
   

  	
  14,032

  	
   

  	
  18,705

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NQ006475

  	
   

  	
  10/22/2004

  	
   

  	
  1996

  	
   

  	
  NQ

  	
   

  	
  15,000

  	
   

  	
  $

  	
  49.1500

  	
   

  	
  0.00

  	
   

  	
  4,688

  	
   

  	
  10,312

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NQ006777

  	
   

  	
  6/17/2005

  	
   

  	
  1996

  	
   

  	
  NQ

  	
   

  	
  48,127

  	
   

  	
  $

  	
  53.3800

  	
   

  	
  0.00

  	
   

  	
  6,250

  	
   

  	
  41,877

  	
   

  

 

* Information as of the Effective Date.

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

 

TW
/s/ TW   KB /s/ KB   please initial each page

 

13Exhibit
10.1

 

WASHINGTON
GROUP INTERNATIONAL, INC.

2004
EQUITY INCENTIVE PLAN

 

OPTION RIGHTS AGREEMENT

 

 

THIS AGREEMENT (the “Agreement”),
dated as of                         ,
is made by and between Washington Group International, Inc., a Delaware corporation
hereinafter referred to as “Corporation”, and                        ,
an employee of the Corporation or Subsidiary of the Corporation, hereinafter
referred to as “Optionee.”

 

WHEREAS, the Corporation
wishes to afford the Optionee the opportunity to purchase shares of its $.01
par value common stock; and

 

WHEREAS, the Corporation
wishes to carry out the Plan (as hereinafter defined), the terms of which are
hereby incorporated herein by reference and made a part hereof; and

 

WHEREAS, the execution of an
Option Rights Agreement in the form hereof has been duly authorized by a
resolution of the Board duly adopted on                           ,
and incorporated herein by reference; and

 

WHEREAS, this Option Right
is intended to be a nonqualified stock option and shall not be treated as an “incentive
stock option” within the meaning of that term under Section 422 of the Code;

 

NOW, THEREFORE, in
consideration of the mutual covenants herein contained and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
hereto do hereby agree as follows:

 

 

ARTICLE
I

DEFINITIONS

 

Wherever the following terms
are used in this Agreement with initial capital letters, they shall have the
meanings specified in the Plan unless the context clearly indicates otherwise.

 

Section 1.1 — Board

Section 1.2 — Change in Control

Section 1.3 - Code

Section 1.4 - Common Shares

Section 1.5 — Corporation

Section 1.6 — Date of Grant

Section 1.7 - Exchange Act

Section 1.8 — Securities Act

Section 1.9 — Subsidiary

Section 1.10 — Year of Service

 

Wherever the following terms
are used in this Agreement with initial capital letters, they shall have the
meanings specified below unless the context clearly indicates otherwise.  The masculine pronoun shall include the
feminine and neuter, and the singular the plural, where the context so
indicates.

 

Section 1.11 — Beneficiary

 

                “Beneficiary”
means the person or persons properly designated by the Optionee to exercise the
Optionee’s rights under the Plan and this Agreement in the event of the
Optionee’s death, or if the Optionee has not designated such person or persons,
or such person or persons shall all have pre-deceased the Optionee, the
executor, administrator or personal representative of the Optionee’s
estate.  Designation, revocation and
redesignation of Beneficiaries must be made in writing in accordance with rules
established by the Corporation and shall be effective upon delivery to the
Corporation.

 

Section 1.12 — Employee

 

                “Employee”
means any officer or other employee of the Corporation or any Subsidiary.

 

Section 1.13 — Fair
Market Value

 

“Fair Market Value” means
either (a) the closing price of the Common Shares on the date in question (or
if there was no sale on the date in question, the closing price of the Common
Shares on the most recent date on which there was a sale) on the NASDAQ
National Market (or other national stock exchange) as published in The Wall Street Journal, or (b) if there
is no trading of Common Shares on the NASDAQ National Market (or other national
stock exchange), the fair market value of the Common Shares as determined by
the Board from time to time.

 

Section 1.14 — Optionee 

 

“Optionee” means the
Employee named above to whom Option Rights are awarded under this Agreement and
the Plan.

 

Section 1.15 — Option
Right

 

                “Option
Right” means the right to purchase Common Shares evidenced by this Agreement.

 

Section 1.16 — Plan 

 

“Plan” means the Washington
Group International, Inc. 2004 Equity Incentive Plan, as the same may be
amended or restated from time to time.

 

Section 1.17 — Secretary

 

“Secretary” means the
Secretary of the Corporation.

 

 

 

 

Section 1.18 — Termination
of Employment

 

“Termination of Employment”
means the time when the employer-employee relationship between the Corporation
or a Subsidiary and the Optionee is terminated for any reason, including
(without limitation) a termination by resignation, discharge, death, permanent
and total disability or retirement, but excluding (a) terminations where there
is a simultaneous reemployment or continuing employment of the Optionee by the
Corporation or a Subsidiary and (b) in the discretion of the Board,
terminations that result in a temporary severance of the employer-employee
relationship that does not exceed one year. 
The Board shall determine the effect of all matters and questions
relating to Termination of Employment, including (without limitation) the
question of whether a Termination of Employment resulted from a discharge for
good cause, and all questions of whether particular leaves of absence
constitute Termination of Employment.

 

 

ARTICLE
II

AWARD
OF OPTION RIGHT

 

Section 2.1 - Grant of
Award

 

In consideration of the
Optionee’s execution of this Agreement and for other good and valuable
consideration, on the date hereof the Corporation irrevocably awards to the
Optionee the option to purchase any part or all of an aggregate of                   
shares of its Common Shares upon the terms and subject to the conditions set
forth in the Plan and in this Agreement.

 

Section 2.2 - Purchase
Price

 

The
purchase price of the shares of stock covered by the Option Right shall be $     
per share without commission or other charge.

 

Section 2.3 - Adjustments
in Option Right

 

The
Board may make or provide for such adjustments in the (a) number of Common
Shares covered by outstanding Option Rights awarded hereunder, (b) prices per
share applicable to such Option Rights, and (c) kind of shares (including
shares of another issuer) covered thereby, as the Board in its sole discretion
may in good faith determine to be equitably required in order to prevent
dilution or enlargement of the rights of Optionees, that otherwise would result
from (x) any stock dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of the Corporation,
(y) any merger, consolidation, spin-off, split-off, split-up, reorganization,
partial or complete liquidation or other distribution of assets, issuance of
rights or warrants to purchase securities or (z) any other corporate
transaction or event having an effect similar to any of the foregoing.  In the event of any such transaction or
event, the Board may provide in substitution for any or all outstanding awards
under this Agreement such alternative consideration as it may in good faith
determine to be equitable under the circumstances and may require in connection
therewith the surrender of all awards so replaced.

 

 

 

 

 

ARTICLE
III

PERIOD
OF EXERCISABILITY

 

Section 3.1 - Commencement
of Exercisability

 

(a)                                  This Option Right
shall become exercisable in three (3) cumulative installments as follows:

 

(i)                                     The first
installment shall consist of one-third (1/3) of the shares covered by the
Option Right and shall become exercisable on the first anniversary of the Date
of Grant.

 

(ii)                                  The second
installment shall consist of one-third (1/3) of the shares covered by the
Option Right and shall become exercisable on the second anniversary of the Date
of Grant.

 

(iii)                               The third
installment shall consist of one-third (1/3) of the shares covered by the
Option Right and shall become exercisable on the third anniversary of the Date
of Grant.

 

(b)                                 Any portion of
the Option Right that has not yet become exercisable pursuant to 3.1(a) shall
become exercisable in full immediately in the event of a Change in Control.

 

(c)                                  No portion of
the Option Right which is unexercisable at Termination of Employment shall
thereafter become exercisable.

 

Section 3.2 - Duration
of Exercisability

 

The installments provided
for in Section 3.1 are cumulative.  Each
such installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.

 

Section 3.3 - Expiration
of Option Right

 

                The Option
Right may not be exercised to any extent by anyone after the first to occur of
the following events:

 

(a)                                  The
expiration of ten (10) years from the date the Option Right was awarded; or

 

(b)                                 Except
as set forth in 3.3(c) and (d), the expiration of three (3) months after the
Optionee’s Termination of Employment; or

 

(c)                                  The
expiration of twelve (12) months from the date of the Optionee’s Termination of
Employment by reason of permanent and total disability (within the meaning of
Section 22(e)(3) of the Code) or by reason of retirement at or after the
attainment of (a) age 65, (b) age 55 with at least 10 Years of Service, or (c)
30 Years of Service; or

 

(d)                                 If
the Optionee dies while the Option Right is exercisable, the expiration of
twelve (12) months from the date of the Optionee’s death.

 

 

 

 

ARTICLE IV

EXERCISE
OF OPTION RIGHT

 

Section 4.1 - Person
Eligible to Exercise

 

During the lifetime of the
Optionee, only he or his guardian or legal representative may exercise the
Option Right or any portion thereof. 
After the death of the Optionee, any exercisable portion of the Option
Right may, prior to the time when the Option Right becomes unexercisable under
Section 3.3, be exercised by his personal representative or by any person
empowered to do so under the Optionee’s will or under the then applicable laws
of descent and distribution.

 

Section 4.2 - Partial
Exercise

 

Any exercisable portion of the Option Right or the entire Option Right,
if then wholly exercisable, may be exercised in whole or in part at any time
prior to the time when the Option Right or portion thereof becomes
unexercisable under Section 3.3; provided, however, that each partial exercise
shall be for not less than one hundred (100) shares and shall be for whole
shares only.

 

Section 4.3 - Manner of
Exercise

 

The Option Right or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following prior
to the time when the Option Right or such portion becomes unexercisable under
Section 3.3:

 

(a)                                  Notice in
writing signed by the Optionee or the other person then entitled to exercise
the Option Right or portion, stating that the Option Right or portion is
thereby exercised, such notice complying with all applicable rules established
by the Board; and

 

(b)                                 Full payment
for the shares with respect to which such Option Right or portion is exercised,
which payment shall be (i) in cash or by check acceptable to the Corporation;
(ii) through the delivery of Common Shares owned by the Optionee for at least
twelve months, duly endorsed for transfer to the Corporation with a Fair Market
Value on the date of delivery equal to the aggregate exercise price of the
Option Right or exercised portion thereof; (iii) through an arrangement with a
bank or broker for payment from the proceeds of sale through the bank or broker
of some or all of the Common Shares to which the exercise relates; or (iv)
through any combination of the consideration provided in the foregoing
subparagraphs (i), (ii) or (iii); and

 

(c)                                  Such
representations and documents as the Board deems necessary or advisable to
effect compliance with all applicable provisions of the Exchange Act, the
Securities Act and any other federal or state securities laws or
regulations.  The Board may also take
whatever additional actions it deems appropriate to effect such compliance
including (without limitation) placing legends on share certificates and
issuing stop-transfer notices to agents and registrars;

 

(d)                                 Full payment to
the Corporation (or other employer corporation) of all amounts which under
federal, state or local tax law, it is required to withhold upon exercise of
the Option Right; provided, however, the Corporation may permit the
Optionee, upon delivery of a written election to the Secretary of the
Corporation (or to such other person who may be designated by the Board) to
elect payment of this tax obligation from the proceeds of sale through a bank
or broker of some or all of the Common Shares to which the exercise relates;
and

 

(e)                                  In the event
the Option Right or portion shall be exercised pursuant to Section 4.1 by any
person or persons other than the Optionee, appropriate proof of the right of
such person or persons to exercise the Option Right.

 

Section 4.4 - Conditions
to Issuance of Stock Certificates

 

The Common Shares deliverable upon the exercise of the Option Right, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been repurchased by the Corporation.  Such shares shall be fully paid and non-assessable.  The Corporation shall not be required to
issue or deliver any certificate or certificates for shares of stock purchased
upon the exercise of the Option Right or portion thereof prior to fulfillment
of all of the following conditions:

 

(a)                                  The admission
of such shares to listing on all stock exchanges on which such class of stock
is then listed; and

 

(b)                                 The completion
of any registration or other qualification of such shares under any state or
federal law or under rulings or regulations of the Securities and Exchange
Commission or of any other governmental regulatory body, which the Board shall
deem necessary or advisable; and

 

(c)                                  The obtaining
of any approval or other clearance from any state or federal governmental
agency which the Board shall determine to be necessary or advisable; and

 

(d)                                 The payment to
the Corporation (or other employer corporation) of all amounts which, under
federal, state or local tax law, it is required to withhold upon exercise of
the Option Right; and

 

(e)                                  The lapse of
such reasonable period of time following the exercise of the Option Right as
the Board may from time to time establish for reasons of administrative
convenience.

 

Section 4.5 - Rights as
Shareholder

 

The holder of the Option Right shall not be, nor have any of the rights
or privileges of, a shareholder of the Corporation in respect of any shares
purchasable upon the exercise of any part of the Option Right unless and until
certificates representing such shares shall have been issued by the Corporation
to such holder.

 

ARTICLE V

OTHER
PROVISIONS

 

Section 5.1 - Administration

 

The Board shall have the power to interpret the Plan and this Agreement
and to adopt such rules for the administration, interpretation and application
of the Plan as are consistent therewith and to interpret, amend or revoke any
such rules.  All actions taken and all
interpretations and determinations made by the Board in good faith shall be
final and binding upon the Optionee, the Corporation and all other interested
persons.  No member of the Board shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or the Option Right.

 

Section 5.2 - Option
Right Not Transferable

 

Option Rights under the Plan
may not be sold, pledged, assigned or transferred in any manner other than by
will or the laws of descent and distribution; provided, however, an
Optionee may designate

 

a Beneficiary to exercise his Option Right or
other rights under the Plan after his death. 
Neither the Option Right nor any interest or right therein or part
thereof shall be liable for the debts, contracts or engagements of the Optionee
or his successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section
5.2 shall not prevent transfers by will or by the applicable laws of descent
and distribution.  An Option Right shall
be exercised during the Optionee’s lifetime only by the Optionee or his
guardian or legal representative.

 

Section 5.3 - Shares to
Be Reserved

 

The Corporation shall at all times during the term of the Option Right
reserve and keep available such number of shares of stock as will be sufficient
to satisfy the requirements of this Agreement.

 

Section 5.4 — No
Guarantee of Employment

 

Nothing in this Agreement or
in the Plan shall confer upon the Optionee any right to continue in the employ
of the Corporation or any Subsidiary, or shall interfere with or restrict in
any way the rights of the Corporation and its Subsidiaries, which are hereby
expressly reserved, to discharge the Optionee at any time for any reason
whatsoever, with or without cause.

 

Section 5.5 - Notices

 

Any notice to be given under
the terms of this Agreement to the Corporation shall be addressed to the
Corporation in care of its Secretary, and any notice to be given to the
Optionee shall be addressed to him at the address given beneath his signature
hereto.  By a notice given pursuant to
this Section 5.5, either party may hereafter designate a different address for
notices to be given to him.  Any notice
which is required to be given to the Optionee shall, if the Optionee is then
deceased, be given to the Optionee’s personal representative if such
representative has previously informed the Corporation of his status and
address by written notice under this Section 5.5.  Any notice shall be deemed duly given when
enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.

 

Section 5.6 - Titles

 

Titles are provided herein
for convenience only and are not to serve as a basis for interpretation or
construction of this Agreement.

 

Section 5.7 - Construction

 

This Agreement shall be
administered, interpreted and enforced under the internal substantive laws of
the State of Delaware.

 

Section 5.8 - Conformity
to Securities Laws

 

The Optionee acknowledges
that the Plan is intended to conform to the extent necessary with all
applicable federal and state laws, rules and regulations, including provisions
of the Securities Act and 

 

the Exchange Act and any and all regulations
and rules promulgated by the Securities and Exchange Commission thereunder,
including without limitation Rule 16b-3 under the Exchange Act. Notwithstanding
anything herein to the contrary, the Plan shall be administered, and the Option
Right is awarded and may be exercised, only in such a manner as to conform to
such laws, rules and regulations.  To the
extent permitted by applicable law, the Plan and this Agreement shall be deemed
amended to the extent necessary to conform to such laws, rules and regulations.

 

IN WITNESS WHEREOF, this
Agreement has been executed and delivered by the parties hereto.

 

WASHINGTON GROUP INTERNATIONAL, INC.

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Larry L. Myers

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Senior Vice President —
  Human Resources

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  OPTIONEE

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Spousal Consent

 

The undersigned has read and
is familiar with the preceding Agreement and the Plan and hereby consents and
agrees to be bound by all the terms of the Agreement and the Plan.  Without limiting the foregoing, the
undersigned specifically agrees that the Corporation may rely on any
authorization, instruction or election made under the Agreement by the Optionee
alone and that all of his or her right, title or interest, if any, in the
Common Shares purchased by the Optionee under the Agreement, whether arising by
operation of community property law, by property settlement or otherwise, shall
be subject to all of such terms.

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Printed
  Name

  

Exhibit A: 
Copy of the Plan

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00098-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00098-of-00352.parquet"}]]