The following description of the 401(k) Plan of LabOne, Inc. (the Plan) provides only general information. Participants should refer to the Summary Plan Description text for a more complete description of the Plan's provisions.

The Plan was adopted by the Board of Directors of LabOne, Inc. (the Company) effective January 1, 1987. The Plan is administered by the Company. Employees of the Company are eligible for participation at the beginning of each calendar quarter following the date the employee completes five hundred hours of service, attains age 20 1/2, and completes six consecutive months of employment or one year of eligibility service, as defined.

The Plan allows participating employees to deduct their contributions from personal taxable income. Contributions made by the Company and participating employees will not be required to be included in the employees' taxable income until the year of withdrawal from the Plan.

The accompanying financial statements have been prepared on an accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America.

Substantially all costs and expenses incurred in administering the Plan are paid by the Company.

The Plan's investments are held in a bank trust account. Investments in securities are stated at fair value. The fair value of marketable securities is based upon quotations from national securities exchanges. Plan assets include investments in common stock of the Company. Purchases and sales of investments are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

Forfeitures are based on the nonvested portion of the employer contributions upon employee termination. Forfeited amounts are applied as a reduction of Company contributions.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The Plan's investments are stated at fair value determined primarily by quoted market prices.

The following presents investments that represent 5% or more of the Plan's net assets at December 31, 2001 or 2000:

During the years ended December 31, 2001, 2000, and 1999, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value as follows:

At May 24, 2002, the fair value of 732,096 shares of common stock of the Company was $17,680,118.

Company contributions are invested in Company common stock. Employees can also elect to invest their contributions in Company common stock. Information about the net assets and the significant components of the changes in net assets relating to both the nonparticipant and participant-directed investment in Company common stock for the years ended December 31, 2001, 2000, and 1999 is as follows:

Participating employees may elect to contribute to the Plan up to 10% of their annual earnings subject to certain Internal Revenue Service (IRS) limitations. The Company has the discretion to contribute up to an additional 50% of the participant's contributions, not to exceed 5% of the participant's annual compensation. The Company elected to contribute the maximum amount for 2001, 2000, and 1999. Since 1987, all Company contributions have been invested in Company common stock.

Funds may be transferred between accounts at any time upon notification to American Century Investments, Inc., excluding the Company contributions, which must be invested in Company common stock.

Effective for Plan years 1996 and thereafter, the Company amended the Plan during 1997 to redefine compensation for highly compensated employees. Severance pay for highly compensated employees is not considered compensation for Plan purposes. Therefore, highly compensated employees are restricted from making Plan contributions from severance pay.

Upon retirement or termination of employment, Plan participants are entitled to receive full value of their contributions and earnings thereon. Each participant becomes 100% vested in Company contributions after five years of service and is 100% vested upon disability, death, or attainment of age sixty-five while employed by the Company.

Loans to participants may be authorized by the Plan's Administrative Committee. The amount may not be less than $500 and may not exceed one-half of the participants' vested account balances (limited to $50,000). Loans must carry a reasonable rate of interest defined as not less than the prime rate plus 1% at the date of the last day of the month preceding loan issuance. The loan period varies from one to five years.

The Plan has received a determination letter from the IRS, dated December 17, 1997, stating that the Plan meets the requirements of Section 401(a) of the Internal Revenue Code (the Code), and the trust is exempt from federal income taxes under the provisions of Section 501(a) of the Code.

The Plan Administrator is not aware of any activity or transactions that may adversely affect the qualified status of the Plan.

Participants will not be taxed on Company contributions, their pretax contributions up to $10,500 in 2001 and 2000, or income of the trust until they receive distributions from the Plan. Participants' pretax contributions are subject to Social Security taxes and federal unemployment taxes.

At December 31, 2001, participants whose account balances totaled $224,602 had notified the Plan Administrator that they had elected to withdraw from the Plan. This amount is presented herein as a component of net assets in the accompanying financial statements, but is presented as a liability of the Plan on Form 5500.

The following is a reconciliation of net assets available for plan benefits from the financial statements to the Form 5500 at December 31, 2001 and 2000:

The following is a reconciliation of distributions to participants per the financial statements to the Form 5500 for the years ended December 31, 2001, 2000, and 1999:

Certain Plan investments are shares of mutual funds managed by American Century Investments, Inc. American Century Investments, Inc. is the record-keeper as defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions. In addition, the Plan also holds shares of Company common stock.

The following summarizes the number of associate participants by fund as of December 31, 2001 and 2000:

Included in the Company stock account are participants who receive their employer match in this account, but make their own contributions to another account.