Exhibit 10.31

COVANCE INC.  VARIABLE COMPENSATION PLANEffective January 1, 2004

1.Purpose:The purpose of the Covance Inc. Variable
Compensation Plan (as amended, modified or supplemented, from time to time, the "Plan") is to reward the accomplishments of participating employees of Covance Inc. ("Covance") and its
subsidiaries (collectively, the "Company") in achievement of company performance versus targets. The Plan does not constitute an amendment, supplement or modification of any individual employment
agreement between the Company and an employee.

2.Eligibility:Variable compensation awards under the Plan may
be made to individuals who are full-time or part-time employees of the Company (including executives of the Company)providedthat:



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3.Administration/Disputes:The Compensation and Organization
Committee of the Covance Board of Directors (the "Committee"), consisting of at least two members who qualify as outside directors under applicable Internal Revenue Code and Securities and Exchange
Commission (the "SEC") rules, codes and regulations, shall manage and administer the Plan. No member of the Committee shall be eligible for awards under the Plan. The Committee may adopt such
policies, rules and regulations that it deems necessary for governing, managing or administering the Plan. To the extent consistent with the Company's Amended and Restated Certificate of
Incorporation, no member of the Committee shall be liable for any action or determination with respect to the Plan, and the members shall be entitled to indemnification and reimbursement in the manner
provided in the Company's Amended and Restated Certificate of Incorporation, as amended, modified or supplemented from time to time. In the performance of its functions under the Plan, the Committee
shall be entitled to rely upon information and advice furnished by the Company's officers, accountants, counsel and any party the Committee deems necessary, and no member of the Committee shall be
liable for any action taken or not taken in reliance upon any such advice. Any dispute or disagreement which shall arise under, or as a result of, or pursuant to, this Plan shall be finally determined
by the Committee in its absolute and uncontrolled discretion, and any such determination or any other determination by the Committee under or pursuant to this Plan

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and
any interpretation by the Committee of the terms of this Plan, shall be final, binding and conclusive on all persons affected thereby.

4.Performance Year:The plan year is from January 1
through December 31.

5.Performance Targets:



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6.Determination of Business Unit Bonus Pools and Total Bonus
Pool:The Committee shall certify the Business Units' financial results and approve the amount of the total Bonus Pool before the payment of any variable
compensation under the Plan;provided,however, that for the purpose of determining the awards to
Individual Contributor employees, the CEO shall estimate the Business Unit financial results based on performance through November 30 of the performance year in question. Payout shall be made
to such employees on the basis of such estimates. The total Bonus Pool shall be the aggregate of the bonus pools for all of the Business Units determined in accordance with Section 5. The
Committee shall also determine whether the objectives of the CEO have been satisfied for the performance year in question. The CEO shall assess the performance of his executive management, including
the Corporate Senior Vice Presidents, compared to their applicable objectives for the performance year in question and shall, at the Committee's request, review such assessments with the Committee.

7.Bonus Pool Allocations:



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8.Adjustments:



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9.Payment Dates:Awards shall be paid no later than
December 31 of the applicable performance year for the Individual Contributor employees and no later than March 15 following the close of the applicable performance year for the
Manager/Supervisors and Key Executive/Executive Management employees. Awards are subject to all applicable tax laws and withholding requirements.

10.Earned Base Pay:For purposes of the Plan, earned base pay
is defined as the cumulative base salary paid to an employee during the Plan year. Because Individual Contributor awards shall be paid out before the end of the Plan year. Earned base pay will be
defined as cumulative base salary paid up to Mid-November plus an estimated amount of earned base pay for the remainder of the Plan year, using the formula stated below:

(Cumulative
Earned Salary) + (Per Pay Period Salary times the # of Pay Periods Remaining in Plan Year)

11.Governing Law; Binding Effect:THIS PLAN 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 ACCORDNACE WITH THE LAWS OF SAID STATE;PROVIDED,HOWEVER, THAT ALL MATTERS OF
CORPORATE GOVERNANCE AND OTHER CORPORATE MATTERS

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CONCERNING
DELAWARE CORPORATION SHALL BE GOVERNED BY THE DELAWARE GENERAL CORPORATION LAW. Except as otherwise expressly provided herein, this Plan shall be binding upon and inure to the benefit of
the parties hereto, their legal representatives, successors and assigns.

12.Termination of Employment:Participation in the Plan does
not create a contract of employment, or grant any employee of the Company the right to be retained in the service of, or otherwise employed by, the Company. Individuals will not receive a variable
compensation award under this Plan for the performance year in which their employment terminates for any reason or no reason or if they are terminated for any reason or no reason prior to the date the
variable compensation is actually paid for the performance year in question, except where otherwise provided in Paragraph 2 hereof. Without limiting the foregoing or Paragraph 2 hereof,
any individual whose
employment is terminated for wrongdoing, including, but not limited to, a violation of the Company's Business Integrity Plan, including the code of conduct, will forfeit all rights to payment under
this Plan.

13.Amendment, Suspension, or Termination:The Board or
Committee may, at any time, suspend, terminate, waive or amend the Plan (or provisions hereof, as applicable), in such respects as the Board or Committee deems to be in the best interest of the
Company. No amendment will adversely affect any right of any grantee, or his successors in interest, to keep any variable compensation award actually made hereunder before the effective date of the
amendment. Plan deferrals, if any, in effect at the Plan's termination remain in effect according to their original terms.

14.Effective Date:The Plan will take effect as of
January 1, 2004 and supersedes in its entirety all previous Covance Inc. Variable Compensation Plans, as well as the Covance Way Covance Inc. Variable Compensation Plan, as
amended, effective January 1, 1998, the Covance Inc. Variable Compensation Plan, as amended, and effective January 1, 1997, the Covance Inc. General Employee Variable
Compensation Plan, as amended, and effective January 1, 1997 and the Covance Biotechnology Services Inc. Variable Compensation Plan, as amended, and effective January 1, 1997.

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Appendix 1

COVANCE VARIABLE COMPENSATION PLAN BUSINESS UNITS
FOR ACCRUALS AND BONUS POOLS



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Appendix 2

Effect of Business Unit
Performance on Individual Payouts

Employee categories shall be determined by the General Manager of each Business Unit (except for Key Executive/Executive Management employees who shall be
determined by the Global Leadership Council). Category guidelines and payout percentages are set forth below.

Individual Contributor*generally defined as:



Business Unit Pre-Bonus Operating Margin

Percentage Bonus Payout of TargetLess than 90% of target

80%90% to 110% of target

100%More than 110% of target

120%


Manager/Supervisorgenerally defined as:



Business Unit Pre-Bonus Operation Margin

Percentage Bonus Payout of Target**0% to 80% of target

75%100% of target

100%120% of target

125%**


Key Executive/Executive ManagementCorporate Officers and select senior management employees to be determined annually by the
Global Leadership Council (GLC).

Business Unit Pre-Bonus Operation Margin

Percentage Bonus Payout of Target** ***

Orders Target Multiplier0% to 80% of target

65%

+/- 5% for every 1% orders target is100% of target

100%

exceeded (or missed) to a maximum of115% or greater of target

125%

+/- 25% change in the regular bonus pool


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