Exhibit
10.2


 


COVANCE
INC.


 


RESTRICTED
STOCK AGREEMENT


 


2002
Employee Equity Participation Plan


(2006
Retention Incentive Award)


 


 


                RESTRICTED
STOCK AGREEMENT dated as of February 23, 2006 (the “Agreement”) between COVANCE
INC., a Delaware corporation (“Company”), located at 210 Carnegie Center,
Princeton, New Jersey 08540, and                           
(the “Employee”).


 


W
I T N E S S E T H:






                A.            WHEREAS, the Employee is currently
employed by the Company, or a corporation which is a “subsidiary corporation”
within the meaning of Section 424(f) of the Internal Revenue Code of 1986, as
amended, modified or supplemented from time to time (“Code”) or which is an
entity in which the Company holds beneficially at least fifty percent (50%) of
the ownership interest (each, a “Subsidiary Company”), in an important
executive, managerial or technical capacity.


 


                B.            WHEREAS, the Company desires to have
the Employee remain in the employment of the Company or a Subsidiary Company
and to afford the Employee the opportunity to acquire, or enlarge the Employee’s,
stock ownership in the Company so that the Employee may have a direct
proprietary interest in the Company’s success.


 


 


                NOW,
THEREFORE, in consideration of the premises, the mutual covenants and
agreements set forth below, and for other good and valuable consideration,
receipt of which is hereby acknowledged, the parties hereby agree as follows:


 


                1.  Grant of Shares.  Subject to the terms and conditions of the
Employee Equity Participation Plan (as amended, modified or supplemented from
time to time the “Plan”) and this Agreement, the Company hereby grants (“Grant”)
to the Employee, as of the date of this Agreement (“Grant Date”)                    
shares of Common Stock, par value $.01 per share (the “Common Stock”), of the
Company.


 


                2.  Vesting of Restricted Shares;
Rights.  (a) The Shares shall
vest on February 23, 2011.


 


                (b)  Subject to the terms and conditions of this
Agreement, Employee shall have all rights relating to the Shares, including the
right to vote and collect dividends as declared and paid by the Company,
subject to appropriate withholding to satisfy applicable tax requirements.

















 


                3.  Termination.  (a) 
The Grant with respect to any unvested Shares shall be forfeited and be
of no further force or effect upon the termination of the Employee’s
employment, for any reason, with the Company, except in the case of his death,
disability (as defined 22(e)(3) of the Code) or his retirement with the consent
of the Company, in which case all unvested Shares shall thereupon immediately
vest.


 


                (b)  If the Employee shall be transferred from the
Company to a Subsidiary Company, or from a Subsidiary Company to the Company,
or from a Subsidiary Company to a Subsidiary Company, his employment shall not
be deemed to be terminated by reason of such transfer.  The unvested portion of the Shares shall
terminate immediately if, while the Employee is employed by a Subsidiary
Company, such Subsidiary Company shall cease to be a Subsidiary Company and the
Employee is not thereupon transferred to and employed by the Company or another
Subsidiary Company.


 


                4.  Construction.  Whenever the word “Employee” is
used in any provision of this Agreement in circumstances where the provision
should logically be construed to apply to the estate, personal representative,
or beneficiary to whom this Grant may be transferred by Will, by the laws of
descent and distribution, or by a qualified domestic relations order pursuant
to the Code or Title I of the Employment Retirement Income Security Act of
1974, as amended, modified or supplemented from time to time (“ERISA”), it
shall be deemed to include such person.


 


                5.  Physical Possession of Shares;
Restrictions on Transfer. 
(a)  Each certificate of Shares
shall be registered in the name of the Employee but shall be held by the
Company until the Employee is entitled to physical possession of the Shares
pursuant to the terms of this Agreement. 
Until the Employee has received physical possession of the Shares, the
Employee may not give, grant, sell, exchange, transfer legal title, pledge,
assign or otherwise encumber or dispose of any unvested Shares granted pursuant
to the Plan or any interest therein or this Agreement, otherwise than by Will,
the laws of descent and distribution, or by a qualified domestic relations
order pursuant to the Code or Title I of ERISA.


 


                (b)  No assignment or transfer of any unvested
Shares, or of the rights represented thereby or this Agreement, whether
voluntary or involuntary, by operation of law or otherwise (except by Will, the
laws of descent and distribution, or a qualified domestic relations order
pursuant to the Code or Title I of ERISA), shall vest in the assignee or
transferee any interest or right herein whatsoever.  Further, immediately upon any attempt to
assign or transfer any unvested Shares granted pursuant to this Agreement, the
Grant shall immediately terminate and be of no further force or effect (except
by Will, the laws of descent and distribution, or a qualified domestic
relations order pursuant to the Code or Title I or ERISA).


 


                6.  Powers.  The existence of this Grant shall
not affect in any way the right or power of the Company or its stockholders to
make or authorize any or all adjustments, recapitalization, reorganizations or
other changes in the Company’s capital structure or its business, or any merger
or consolidation of the Company, or any issue of bonds, debentures, preferred
or prior preference stocks ahead of or affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.


 

















 


                7.  Change of Control.  Except as set forth in Paragraph 3
hereof, notwithstanding anything in this Agreement to the contrary, all Shares
which have not vested as of the date of a Change of Control (as defined below)
occurs, shall immediately vest upon a Change of Control and be delivered to the
Employee pursuant to the delivery provisions of this Agreement.  For purposes of this Agreement, a Change of
Control shall be defined as:


 


(1)   any person (including as such term is used in
Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended)
who becomes the beneficial owner, directly or indirectly, of securities
representing 20% or more of the combined voting power of the Company’s then
outstanding securities; or


 


(2)   as a result of a proxy contest or contests or
other forms of contested shareholder votes (in each case either individually or
in the aggregate), a majority of the individuals elected to serve on the
Company’s Board of Directors are different than the individuals who served on
the Company’s Board of Directors at any time within the two years prior to such
proxy contest or contests or other forms of contested shareholder votes (in
each case either individually or in the aggregate); or


 


(3)   when the Company’s shareholders approve a
merger, or consolidation (where in each case the Company is not the survivor
thereof), or sale or disposition of all or substantially all of the Company’s
assets or a plan or partial or complete liquidation; or


 


(4)   when an offerer (other than the Company)
purchases shares of the Company’s Common Stock pursuant to a tender or exchange
offer for securities representing 20% or more of the combined voting power of
the Company’s then outstanding securities.


 


                8.  Issuance of Shares; Power of
Attorney.  (a)  Within sixty (60) days of the date of this
Agreement, the Company shall cause its transfer agent to issue in the Employee’s
name a certificate evidencing the Shares granted pursuant to this
Agreement.  The certificate representing
unvested Shares shall be retained by the Company and shall bear a legend
stating that such Shares are subject to the provisions of this Agreement.  The Company may place a “stop transfer” order
with respect to all unvested Shares with its transfer agent.


 


                (b)  Within thirty (30) days of the vesting date
as set forth in Section 2 hereof, the Company shall cause its transfer agent to
issue to the Employee, upon the Company’s surrender of the appropriate
certificate representing unvested Shares, a new certificate representing the
Shares vested during the plan year.  The
transfer agent shall thereupon re-issue on behalf of and in the Employee’s name
a certificate representing the remaining unvested Shares still subject to the
terms of this Agreement, which certificate shall be retained by the Company.

















 


                (c)  The Company shall have the right to deduct from
any vested shares a number of shares sufficient to cover the withholding of any
federal, state or local or other governmental taxes or charges required by law
or such greater amount of withholding as permitted by applicable law, rules or
regulations, or to take such other action as may be necessary to satisfy any
such withholding obligations.


 


                (d)  The Employee hereby constitutes and appoints
the Company as his true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution for him in his name, place and stead, in any
and all capacities to take all actions and to execute all instruments necessary
and proper to carry out the issuance and cancellation of the Shares hereunder.


 


                (e)  The Employee represents and warrants that he
will take all actions necessary, as directed by the Company, to cancel the
certificate representing any or all unvested Shares upon termination of his
employment.


 


                9.  Changes in Law.  Notwithstanding anything in this
Agreement to the contrary, if at any time any law or regulations of any
governmental authority having jurisdiction in the premises shall require either
the Company or the Employee to take any action in connection with the Shares
then to be issued, the issue of such Shares shall be deferred until such action
shall have been taken.


 


                10.  Dispute.  Any dispute or disagreement which
shall arise under, as a result of, or pursuant to, this Agreement shall be
finally determined by the Company’s Compensation and Organization Committee of
the Board of Directors in its absolute and uncontrolled discretion, and any
such determination or any other determination by the Company’s Compensation and
Organization Committee of the Board of Directors under or pursuant to this
Agreement, and any interpretation by the Company’s Compensation and
Organization Committee of the Board of Directors of the terms of this
Agreement, shall be final, binding and conclusive on all persons affected
thereby.


 


                11.  Securities Law Restrictions.
The Employee represents and warrants that he or she is acquiring the Shares for
investment, for his or her own account and not with a view to the distribution
thereof, and that the Employee has no present intention of disposing of the
Shares or any interest therein or sharing ownership thereof with any other
person or entity.  The Employee shall not
sell, hypothecate or transfer the Shares except pursuant to an effective
registration statement under the Securities Act of 1933, as amended or an
applicable exemption thereto evidenced by an opinion of counsel in form and
substance satisfactory to the Company.


 


                12.  No Effect Upon Employment.   This Agreement does not give, nor shall it
be construed as giving, the Employee any right to employment by the Company or
any of its subsidiaries or affiliates.

















 


                13.  Governing Law;  Binding Effect.  THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW JERSEY (WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF)
AND ALL QUESTIONS CONCERNING THE VALIDITY AND CONSTRUCTION THEREOF SHALL BE
GOVERNED IN ACCORDANCE WITH THE LAWS OF SAID STATE; PROVIDED, HOWEVER,
THAT ALL MATTERS OF CORPORATE GOVERNANCE AND OTHER CORPORATE MATTERS CONCERNING
DELAWARE CORPORATIONS SHALL BE GOVERNED BY THE DELAWARE GENERAL CORPORATION LAW.
Except as otherwise expressly provided herein, this Agreement shall be binding
upon and inure to the benefit of the parties hereto, their legal
representatives, successors and assigns.


 


                14.           Effect on Compensation and
Discretionary Nature of Grant. 
Notwithstanding anything in this Agreement to the contrary, none of the
Shares, if any, granted or paid to Employee shall be considered compensation
for the purpose of determining Employee’s compensation under any other benefit
or compensation plan of the Company, including, without limitation, any bonus
plan, variable compensation plan, long-term incentive plan, pension plan or
other retirement plans.  The Employee
acknowledges and agrees that the Plan is discretionary in nature and may be
amended, cancelled, or terminated by the Company, in its sole discretion, at
any time.  The grant of restricted stock
under the Plan is a one-time benefit and does not create any contractual or
other right to receive a restricted grant of stock or benefits in lieu of
restricted stock in the future.  Future
grants of restricted stock, if any, will be at the sole discretion of the
Company, including, but not limited to, the timing of any grant, the number of
shares of restricted stock and the vesting provisions.


 


                15.           Section 83(b) Election.  If Employee makes an election with respect to
the receipt of the Shares pursuant to Section 83(b) of the Code (the “Election”),
such Election shall contain all information required by Treasury Regulation
Section 1.83-2 and shall, in accordance with that regulation, be filed no later
than 30 days after the transfer of the Shares to the Employee.  The Election shall be filed with the Internal
Revenue Service Center at which the Employee files his or her income tax
return.  Contemporaneously with such
filing, the Employee shall furnish a copy of the Election to the Company, in
accordance with Treasury Regulation Section 1.83-2(d).


 


                16.           Plan Document.  This Agreement is subject in all respects to
the Plan, a copy of which may be obtained from the Company’s Corporate Senior
Vice President, Human Resources, 210 Carnegie Center, Princeton, New
Jersey  08540.  To the extent that there is any inconsistency
or conflict between this Agreement and the Plan, the Plan shall control.


 


 


                IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.


 

















 


 


COVANCE INC.


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Joseph L. Herring

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Chairman of the Board and

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  James W. Lovett

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Corporate Senior Vice
  President,

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  General Counsel and
  Secretary

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  EMPLOYEE