BIORELIANCE CORP
EMPLOYMENT AGREEMENT- CAPERS W. MCDONALD
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>8
<FILENAME>w65102exv10w6.htm
<DESCRIPTION>EMPLOYMENT AGREEMENT- CAPERS W. MCDONALD
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<P align="right"><FONT size="2"><B>EXHIBIT 10.6</B>
</FONT>

<P align="center"><FONT size="2"><B><u>EMPLOYMENT AGREEMENT</u></B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS AGREEMENT is effective the 22nd day of August, 2002 by and between
BioReliance Corporation, a Delaware corporation with principal offices located
at 14920 Broschart Road, Rockville, Maryland 20850, and all of its subsidiary
companies and its successors or assigns (the &#147;Corporation&#148;) and Capers W.
McDonald (the &#147;Executive&#148;).
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2"><B>1.</B></FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><u>POSITION AND EMPLOYMENT
RELATIONSHIP:</u></B></FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">1.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2">The Executive is currently employed as the President and
Chief Executive Officer (&#147;CEO&#148;) of the Corporation. Commencing on
the effective date of this Agreement for a term of twelve (12)
months (hereinafter referred to as &#147;Term&#148;), the Corporation hereby
agrees to continue to employ the Executive in his current position
or a comparable position consistent with his qualifications and
experience, and the business needs of the Corporation. At the end of
this twelve (12)&nbsp;month Term, this Agreement and all its provisions
will renew once for another Term of twelve (12)&nbsp;months, unless
ninety (90)&nbsp;days prior to the end of the original Term, the
Executive or the Chairman of the Board of the Corporation provides
written notice to the other of an intent not to renew the Agreement.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">2.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2">Such employment relationship is not at-will and is instead
governed by the terms and conditions set forth in this Agreement.
The Employment relationship, however, may be terminated by the
Corporation or the Executive prior to the expiration of this twelve
(12)&nbsp;month Term pursuant to sections E, F, I, and J respectively of
this Agreement.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">3.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2">As President and CEO, the Executive shall hold the
responsibilities of the most senior executive in the Corporation and
shall perform such duties as may be assigned to the Executive from
time to time by the Corporation&#146;s Board of Directors (&#147;the Board&#148;),
including, but not limited to the following: overseeing all
corporate functions; directing the organization toward the
attainment of sales and profit goals and maximum return on invested
capital; formulation of current and long-range plans and objectives
including quality, client satisfaction and Executive development
goals; and representing the organization in relations with its
clients and the communities in which it does business.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2"><B>2.</B></FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><u><B>LIMITATION ON OUTSIDE
ACTIVITIES:</B></U> The Executive shall devote his full
employment energies, interest, abilities and time to the performance of
the obligations hereunder and shall not, without written consent of the
Chairman of the Board, render to others any service of any kind for
compensation, and in addition, shall not engage in any activity which
conflicts or interferes with the performance of the Executive&#146;s duties
hereunder.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">Page 1 of 9</FONT>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2"><B>3.</B></FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><U>COMPENSATION:</U></B> For all services rendered by Executive pursuant to this
Agreement, Corporation will pay to Executive, and the Executive will
accept as full compensation hereunder, the following:</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">1.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2"><B>Base Salary: </B>The Executive&#146;s annual base salary (&#147;salary&#148;)
during calendar year 2002, as determined by the Compensation
Committee of the Board, shall be four hundred and three thousand
dollars ($403,000). The salary will be subject to all appropriate
federal, state and local withholding requirements and will be
payable in equal bi-weekly installments. The Executive&#146;s salary
during a subsequent calendar year during the Term of this Agreement
will be determined by the Compensation Committee of the Board, but
in no event shall the Executive&#146;s salary be less than the salary he
received during the prior calendar year.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">2.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2"><B>Performance Bonus: </B>If the Executive remains in the employ of
the Corporation through December&nbsp;31 of each year during the Term of
this Agreement, the Executive shall be eligible for a performance
bonus (&#147;bonus&#148;) based on individual and corporate performance
factors relating to mutually acceptable objectives. Executive&#146;s
bonus will be subject to all appropriate federal, state and local
withholding requirements. The exact amount of the bonus will be at
the discretion of the Compensation Committee of the Board. Unless
otherwise specified in this Agreement, the Corporation will be
obligated to pay the Executive the bonus as long as the Executive
(a)&nbsp;does not resign from the Corporation before December&nbsp;31 of each
year, or (b)&nbsp;is not terminated for Cause (as hereinafter defined),
or (c)&nbsp;does not fail to meet his individual performance objectives.
This bonus will be paid within thirty (30)&nbsp;calendar days after
receipt by the Corporation of its audited financial statements.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">3.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2"><B>Stock Options</B>: As an inducement to remain in the employ of
the Corporation and as an incentive to build the Corporation&#146;s
value, the Corporation may grant to the Executive additional stock
options. The number of option shares to be granted and their timing
and other terms will be determined by the Compensation Committee of
the Board and governed by the Corporation&#146;s 1997 Incentive Plan (as
adopted May&nbsp;28, 1997 and amended and restated September&nbsp;24, 1997,
May&nbsp;21, 1998, May&nbsp;13, 1999, and June&nbsp;10, 2002) &#091;hereinafter referred
to as &#147;1997 Incentive Plan"&#093;, which is attached hereto as Exhibit&nbsp;1.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">D.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><u>BENEFITS AND
PERQUISITES:</u></B></FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">1.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2"><B>Medical and Other Insurance Coverage: </B>The Corporation shall
provide such medical and other insurance coverage to the Executive
to the extent and on the terms that such benefits are made available
to other similarly situated employees. This provision does not
alter the Corporation&#146;s right to modify or eliminate any employee</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">Page 2 of 9</FONT>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2">benefit plan from time to time and does not guarantee the
continuation of any kind or level of benefit or perquisite.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">2.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2"><B>Paid Personal Leave: </B>The Executive shall receive vacation, sick and
personal holiday leave pursuant to the Corporation&#146;s Paid Personal Leave Policy
(&#147;PPL&#148;) under the schedule for an Executive of the Company, which is attached
hereto as Exhibit&nbsp;2 and incorporated herein by reference.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">3.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2"><B>Other Perquisites and Benefits: </B>The Corporation will provide
the Executive with appropriate office space, as it deems necessary,
and will provide telephone, computer, email and internet access as
required to perform the Executive&#146;s duties during the term of his
employment.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">E.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><U>COMPENSATION UPON CHANGE
IN CONTROL:</u></B> Notwithstanding any other
provision in this Agreement, if there is a &#147;change in control&#148; of the
Corporation (as hereinafter defined) during the Term of this Agreement and
within twelve (12)&nbsp;months thereafter, either (1)&nbsp;the Executive is
terminated Without Cause (as hereinafter defined in section F) or (2)&nbsp;the
Executive&#146;s responsibilities are significantly reduced and, as a result,
the Executive terminates his employment pursuant to section J, the
Executive shall be entitled to the compensation and benefits set forth
below. For purposes of this provision, it shall not be considered a
significant reduction in the Executive&#146;s responsibilities if changes in
these responsibilities are those that would be normally anticipated as a
result of the Corporation becoming a subsidiary or a division of another
company and thus no longer a separately traded public company, provided
that the Executive has responsibilities that would customarily be
associated with those of a president and chief executive officer of a
subsidiary or a general manager of a division comparable to the
Corporation.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">1.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2"><B>Base Compensation: </B>The Corporation shall pay the Executive
sixteen (16)&nbsp;months of his then current base salary. This
compensation will be paid in two parts, as follows: (a)&nbsp;an initial
lump-sum payment of eight (8)&nbsp;months of base salary will be paid
within ten (10)&nbsp;working days of termination of employment and (b)
beginning six (6)&nbsp;months after termination of employment, equal
monthly payments for eight (8)&nbsp;months thereafter. This second
payment in section (b)&nbsp;will be correspondingly reduced by any base
compensation payments the Executive receives through new employment.
The Executive is obligated to inform the Corporation, its
successors and assigns, in writing within ten (10)&nbsp;calendar days of
his acceptance of such new employment and include in this notice
what his base compensation and expected start date are. However, if
the Executive&#146;s base compensation at such new employment is equal to
or exceeds his prior base salary at the Corporation, the Executive
may simply confirm this fact in the notice in lieu of disclosing the
actual new base compensation figure.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">Page 3 of 9</FONT>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">2.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2"><B>Stock Options: </B>The disposition of any and all stock options
granted by the Corporation to the Executive will be governed by the
1997 Incentive Plan.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">3.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2"><B>Bonus Compensation: </B>The Corporation shall pay the Executive
his performance bonus, pro-rated, within thirty (30)&nbsp;calendar days
after receipt by the Corporation of its audited financial
statements.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">4.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2"><B>Medical Benefits: </B>If the Executive elects to continue
medical benefits coverage under COBRA, the Corporation will pay the
applicable COBRA premium for a period of the lesser of eighteen (18)
months or until such time as the Executive obtains other employment
that provides medical benefits coverage, provided the Executive and
any of his eligible dependents elect COBRA continuation coverage.
This provision is otherwise subject to all applicable COBRA
continuation requirements and does not alter the Corporation&#146;s right
to amend or terminate its medical plan.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">5.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2"><B>Other Benefits: </B>If the Executive is involved in pre-approved
course work eligible for reimbursement under the Corporation&#146;s
Tuition Assistance Program (&#147;Program&#148;) or has an education
assistance loan outstanding under that Program, the Corporation will
reimburse any remaining balance due on the course work and forgive
any indebtedness in connection with the outstanding education
assistance loan. This provision is otherwise subject to all
applicable Tuition Assistance Program requirements and does not
alter the Corporation&#146;s right to amend or terminate its Program.</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">A &#147;change in control&#148; for purpose of this Agreement shall be deemed to
have occurred if the Corporation is subject to an acquisition in
accordance with Section&nbsp;2.12 (a)&nbsp;of the Corporation&#146;s 1997 Incentive
Plan, which is attached hereto as Exhibit&nbsp;1.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">The privileges, compensation, and benefits set forth in section E survive
the expiration of this Agreement as long as there is a &#147;change in
control&#148; as herein defined during the Term of this Agreement.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">All compensation paid by the Corporation under section E will be subject
to all appropriate federal, state and local withholding requirements.
Also, notwithstanding anything contained in this Agreement to the
contrary, to the extent that any payment or distribution of any type to
or for the benefit of the Executive by the Corporation, any affiliate of
the Corporation, any person who acquires ownership or effective control
of the Corporation or ownership of a substantial portion of the
Corporation&#146;s assets (within the meaning of Section&nbsp;280G of the Internal
Revenue Code of 1986 as amended (the &#147;Code&#148;), and the regulations
thereunder), or any affiliate of such person, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (the &#147;Total Payment&#148;), is or will be subject to the excise tax
imposed under Section&nbsp;4999 of the Code (the &#147;Excise Tax&#148;), then</FONT></TD>
</TR>
</TABLE>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">the Total Payments shall be reduced (but not below zero) if and to the extent
necessary so that no portion of the Total Payments will be subject to the
Excise Tax. The Corporation shall reduce or eliminate the Total Payments
by first reducing or eliminating the portion of the Total Payments which
is payable in cash and then by reducing or eliminating payments which are
not payable in cash, in each case in reverse order beginning with
payments or benefits which are paid the farthest in time from the
determination that the Total Payments need to be reduced. All
determinations required to be made under this provision shall be made by
a nationally recognized accounting firm that is the Corporation&#146;s outside
auditor at the time of such determinations.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Any dispute between the Executive and the Corporation, it successors and
assigns, involving section E will be resolved by arbitration in
accordance with section Q below, except any 280G determination made by
Corporation&#146;s outside auditor shall be binding, final, and conclusive
upon the Corporation and the Executive.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">F.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><U>TERMINATION OF
EMPLOYMENT:</U></B> During the Term of this Agreement,
Executive&#146;s employment is not at-will and may be terminated by the
Corporation only on two bases: (1)&nbsp;Cause; or (2)&nbsp;Without Cause. As used
in this Agreement, &#147;Cause&#148; shall mean that the Executive:</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="90%"><FONT size="2">committed an act or acts of personal dishonesty
intended to result in the Executive&#146;s personal enrichment at
the expense of the Corporation, and which constitute(s) fraud,
embezzlement, grand larceny or any felonious act;</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="90%"><FONT size="2">materially failed or refused to perform the
Executive&#146;s essential duties and obligations as an employee of
the Corporation;</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="90%"><FONT size="2">committed an act of willful misconduct;</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">(4)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="90%"><FONT size="2">was convicted of a felony or other serious crime;</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">(5)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="90%"><FONT size="2">has engaged in the unlawful use of narcotics;</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">(6)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="90%"><FONT size="2">engaged in abusive use of alcohol to a degree, or
in a manner, that would materially and adversely affect the
performance of the Executive&#146;s assigned work or degrade the
reputation of the Corporation;</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">(7)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="90%"><FONT size="2">violated the terms of the Confidentiality, Trade
Secrets and Noncompetition Agreement he signed on June&nbsp;15,
1998;</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">(8)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="90%"><FONT size="2">violated or breached the terms of this Agreement;
or</FONT></TD>
</TR>
</TABLE>
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<TR valign="top">
        <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">(9)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="90%"><FONT size="2">is unable to perform the essential functions of
his position due to disability, injury, or illness as set
forth in section I below or due to death.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">In accordance with these definitions of Cause, the Board, or a delegated
committee of the Board, will in its sole discretion decide whether the
Executive shall be terminated for Cause after affording the Executive an
opportunity to be heard on the matter. The Board, or the delegated
committee of the Board, will in its sole discretion determine the time,
place, and manner of the opportunity for the Executive to be heard, but
to the extent practicable any such meeting will take place in Montgomery
County, Maryland during regular business hours. If the Executive fails
to appear or to follow the manner of opportunity afforded by the Board or
its committee, the Board, or the delegated committee, may render its
decision without hearing the Executive&#146;s views.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Any reason for termination other than those set forth above will be
deemed to be Without Cause.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">G.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><U>TERMINATION WITHOUT
CAUSE &#151; EFFECT ON FUTURE COMPENSATION:</U></B> In the event
Executive is terminated Without Cause and there has not been a &#147;change in
control&#148; as defined in section E of the Agreement, Executive will be
entitled to receive the following compensation and benefits:</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">1.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2"><B>Base Compensation: </B>The Corporation shall pay the Executive
his then current base salary for twelve (12)&nbsp;months. Such
compensation shall be paid in equal monthly payments and will be
subject to all appropriate federal, state and local withholding
requirements.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">2.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2"><B>Stock Options: </B>The disposition of any and all stock options
granted by the Corporation to the Executive will be governed by the
1997 Incentive Plan.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">3.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2"><B>Bonus Compensation: </B>The Corporation shall pay the Executive
his performance bonus, pro-rated, within thirty (30)&nbsp;calendar days
after receipt by the Corporation of its audited financial
statements.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">4.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2"><B>Medical Benefits: </B>If the Executive elects to continue
medical benefits coverage under COBRA, the Corporation will pay the
applicable COBRA premium for a period of the lesser of eighteen (18)
months or until such time as the Executive obtains other employment
that provides medical benefits coverage, provided the Executive and
any of his eligible dependents elect COBRA continuation coverage.
This provision is otherwise subject to all applicable COBRA
continuation requirements and does not alter the Corporation&#146;s right
to amend or terminate its medical plan.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">Page 6 of 9</FONT>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">5.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="92%"><FONT size="2"><B>Other Benefits: </B>If the Executive is involved in pre-approved
course work eligible for reimbursement under the Corporation&#146;s
Tuition Assistance Program (&#147;Program&#148;) or has an education
assistance loan outstanding under that Program, the Corporation will
reimburse any remaining balance due on the course work and forgive
any indebtedness in connection with the outstanding education
assistance loan. This provision is otherwise subject to all
applicable Tuition Assistance Program requirements and does not
alter the Corporation&#146;s right to amend or terminate its Program.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">H.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><U>TERMINATION WITH CAUSE
&#151; EFFECT ON FUTURE COMPENSATION:</U></B> In the event
Executive is terminated for Cause, Executive will be entitled to no future
compensation from the Corporation and any and all stocks options granted
by the Corporation to the Executive will be disposed of in accordance with
the 1997 Incentive Plan. Moreover, the Executive will not earn any
additional compensation after the effective date of such termination.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">I.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><U>DISABILITY:</U></B> If the Executive is unable to perform the essential
functions of his position due to illness, injury, or incapacity for a
period of more than twelve weeks following the use of all available Paid
Personal Leave (&#147;PPL&#148;), the compensation otherwise payable to him under
this Agreement shall cease and the Corporation may terminate his
employment unless the Board determines otherwise or the Executive is able
to perform the essential functions of his position with reasonable
accommodation.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">J.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><U>TERMINATION OF EMPLOYMENT BY EXECUTIVE:</U></B> Executive may terminate his
employment upon thirty (30)&nbsp;days written notice to the Chairman of the
Board. Unless otherwise provided herein, if the Executive terminates his
employment, the Executive shall only be entitled to base compensation
through the last day actually worked as well as any bonus compensation for
which the work period, performance criteria, and receipt of audited
financial statements requirement have been fully met. The Board may
provide the Executive with additional compensation, if the Board in its
discretion deems such additional compensation warranted. Also, the
disposition of any and all stock options granted by the Corporation to the
Executive will be governed by the 1997 Incentive Plan.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">K.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><U>CONFIDENTIALITY AND
NONCOMPETITION:</U></B> By signing below, the Executive
acknowledges his ongoing and continuing obligation to abide by the
Confidentiality, Trade Secrets and Noncompetition Agreement that he
executed on June&nbsp;15, 1998 (&#147;Trade Secrets Agreements&#148;), which is attached
hereto as Exhibit&nbsp;3 and incorporated herein by reference.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">L.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><U>NO PRIOR AGREEMENTS:</U></B> The Executive represents and warrants that he is
not a party or otherwise subject to or bound by the terms of any contract,
agreement or understanding which in any manner would limit or otherwise
affect his ability to perform his obligations hereunder. The Executive
further represents and warrants that his employment with the</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">Page 7 of 9</FONT>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Corporation will not require the disclosure or use of any confidential
information belonging to prior employers or to other persons or entities.
The Executive understands that the Corporation does not expect or desire
and in fact disapproves of and forbids the Executive to use or disclose,
in the performance of his duties for the Corporation, any such
confidential information belonging to prior employers or other persons or
entities.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">M.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><U>ASSIGNMENT:</U></B> This Agreement is personal to Executive and may not be
assigned in any way by Executive without prior written consent by the
Board of Directors of the Corporation. Any attempted assignment by
Executive will be void. Notwithstanding anything in this section to the
contrary, however, this Agreement may be assigned by the Corporation to
any parent, subsidiary, successor, or affiliate entity. The rights and
obligations under this Agreement will inure to the benefit of and will be
binding upon the heirs, legatees, administrators, and personal
representatives of Executive and upon the successors, representatives,
and assigns of the Corporation.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">N.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><U>ILLEGAL OR INVALID PROVISION:</U></B> The parties intend for all provisions of
this Agreement to be enforced and enforceable to the fullest extent
permitted by law. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws in effect
during the term hereof, however, that provision will be fully severable.
This Agreement will be construed and enforced as if such illegal, invalid,
or unenforceable provision had never comprised a part hereof, and the
remaining provisions will remain in full force and effect and will not be
affected by the illegal, invalid, or unenforceable provision or by its
severance from this Agreement. Furthermore, in lieu of each such illegal,
invalid, or unenforceable provision, there will be added automatically, as
a part of this Agreement, a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and be legal,
valid, and enforceable.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">O.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><U>GOVERNING LAW:</U></B> This Agreement shall be construed and governed by the
laws of the State of Maryland without regard to any conflict of laws rules
or provisions.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">P.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><U>ENTIRE
AGREEMENT:</U></B> This Agreement constitutes the entire Agreement
between the Corporation and the Executive. This Agreement may not be
changed orally, but only by an agreement in writing signed by the parties.
This Agreement supersedes all prior agreements, discussions or statements
regarding the Executive&#146;s employment, except for the Confidentiality,
Trade Secrets and Noncompetition Agreement attached hereto as Exhibit&nbsp;3,
which will survive.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">Q.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><U>ARBITRATION:</U></B> Notwithstanding any other provision in this Agreement, any
claim or controversy relating to or arising out of this Agreement shall be
resolved exclusively by arbitration in accordance with the commercial
rules then obtaining of the American Arbitration Association. This
Arbitration provision, including any challenges to its enforceability, is
governed by the Federal Arbitration Act. The arbitration shall take place
in Montgomery County, Maryland. The Corporation and Executive shall bear
separately </FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">Page 8 of 9</FONT>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">their respective attorney&#146;s fees. The Corporation shall bear the cost of the
arbitration and any fees required by the commercial rules then obtaining
of the American Arbitration Association.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">R.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><U>MUTUAL UNDERSTANDING:</U></B> Each party has read this entire Agreement, fully
understands the contents hereof, has had the opportunity to obtain
independent advice as to its legal effect, and is under no duress or
obligation of any kind to execute it. This Agreement reflects the mutual
understanding of the parties with the respect to all subject matters
addressed herein and will be construed accordingly.</FONT></TD>
</TR>
</TABLE>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="5%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="37%">&nbsp;</TD>
        <TD width="15%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="37%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD colspan="3" align="left" valign="top"><FONT size="2">
BioReliance Corporation</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">By:</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
&nbsp;&nbsp;&nbsp;&nbsp;/s/ William J. Gedale<BR>
</FONT><HR size="1" noshade><FONT size="2">
&nbsp;&nbsp;&nbsp;&nbsp;William J. Gedale<BR>
&nbsp;&nbsp;&nbsp;&nbsp;Chairman, Compensation Committee<BR>
&nbsp;&nbsp;&nbsp;&nbsp;Board of Directors
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">By:
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;/s/ Capers W. McDonald<BR>
</FONT><HR size="1" noshade><FONT size="2">
&nbsp;&nbsp;&nbsp;&nbsp;Capers W. McDonald</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
        <TD colspan="3" align="left" valign="top"><FONT size="2">
Address: 14920 Broschart Road<BR>
Rockville, MD 20850</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">Date:</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
&nbsp;&nbsp;&nbsp;&nbsp;August 6, 2002<BR>
</FONT><HR size="1" noshade><FONT size="2">
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Date:
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;August 22, 2002<BR>
</FONT><HR size="1" noshade></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">Page 9 of 9</FONT>




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