Exhibit 10.2


 


[EMPLOYEE]


[ADDRESS]


 


[Grant Date:                       ]


 


COVANCE
INC.


 


NON-QUALIFIED
STOCK OPTION AWARD


 


2007 Employee
Equity Participation Plan


 


NON-QUALIFIED
STOCK OPTION AWARD granted by COVANCE INC., a Delaware Company (the “Company”),
located at 210 Carnegie Center, Princeton, New Jersey 08540, to the “Employee”.


 


A.  WHEREAS, the Employee is now employed by the
Company, or a corporation which is a “subsidiary corporation” of the Company,
within the meaning of Section 424(f) of the Internal Revenue Code of
1986, as amended, modified or supplemented from time to time (the “Code”) or
which is an entity in which the Company holds beneficially at least fifty
percent (50%) of the ownership interest (each, “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 direct proprietary
interest in the Company’s success;


 


NOW, THEREFORE, in
consideration of the premises and of the mutual covenants and terms and
conditions set forth below, the parties hereto agree as follows:


 


1.  Grant; Vesting.
(a)  Subject to the terms and conditions of the 2007 Employee Equity
Participation Plan (as such plan may be amended, modified or supplemented from
time to time, the “Plan”) and the terms and conditions of this Award, the Company
hereby grants to the Employee, from the date of this Award  (“Grant Date”), to the Expiration Date (Ten (10) years
minus one day from Grant Date), the option (the “Option”) to purchase from the
Company up to an aggregate of [Number] shares (the “Shares”) of the Company’s
common stock, par value $.01 per share (“Common Stock”) at the exercise price
of             
per share (the “Option Price”).  This
Option is not an incentive stock option under Section 422 of the Code.


 


(b)  The
Option shall vest and may be exercised, in whole or in part, as follows:


 


(i)                                     Commencing
twelve (12) months after the Grant Date, one-third (1/3) of the aggregate
Shares.


 

















 


(ii)                                  Commencing
twenty-four (24) months after the Grant Date, an additional one-third (1/3) of
the aggregate Shares.


 


(iii)                               Commencing thirty-six
(36) months after the Grant Date, an additional one-third (1/3) of the
aggregate Shares.


 


2.  Exercise.  (a)  The Option shall be exercised by
the Employee delivering to the Senior Vice President, Human Resources, or
Covance’s designated administrator, (i) written notice specifying the
numbers of Shares the Employee desires to purchase, and (ii) the Option
Price of the Shares being exercised and the amount of any applicable federal
and state withholding taxes (the “Purchase Price”).  The Purchase Price shall be payable in (A) cash,
(B) a certified check payable to the Company or (C) shares of Common
Stock owned for at least six months by the Employee with a Current Market Value
(as defined below) equal to the Purchase Price duly endorsed or accompanied by
stock power executed in blank.  Current
Market Value shall mean the closing selling price of Common Stock on the date
of exercise as reported by the New York Stock Exchange.  In no event will the Employee receive or be
entitled to an additional or “reload” stock option by virtue of exercise of the
Option.


 


(b)  Within
fifteen (15) business days after any exercise of the Option, in whole or in
part, by the Employee, the Company shall instruct the transfer agent to issue
to the Employee the number of shares with respect to which the Option shall be
so exercised.


 


3.  Termination.  The Option, whether vested or unvested, shall
terminate and be of no further force or effect in accordance with the following
provisions:


 


(a)                                  Expiration.  The
occurrence of the Expiration Date.


 


(b)                                 Normal or Early Retirement With the Consent of the Company.  If the Employee’s employment shall terminate
on account of normal retirement or early retirement with the consent of the
Company, the Options granted to such
Employee shall become immediately vested and may be exercised by such Employee
at any time during the remaining life of the Option.  At the end of such period, the unexercised
portion of the Option shall expire.


 


(c)                                  Early Retirement Without Consent, Voluntary Termination or Termination
for Performance.  If the
Employee shall retire early without the consent of the Company, voluntarily
leave the employ of the Company or if the Employee’s employment shall be
terminated for performance, the portion of the Option which had vested prior to
such retirement or termination may be exercised for 90 days following such
retirement or termination to the extent exercisable at the date of such
retirement or termination, and the portion of the Option which had not vested
prior to such retirement or termination shall terminate immediately upon such
retirement or termination.


 


(d)                                 Death.  If the
Optionee shall die while employed, the Option granted to such Employee shall
become immediately vested and may be exercised by the 


 


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Optionee’s duly appointed legal representative for one year following
such death. At the end of
such period, the unexercised portion of the Option shall expire.


 


(e)                                  Disability.  If the
Employee’s employment shall terminate as a result of disability (as defined in Section 22(e) (3) of
the Code), the Options granted to such
Employee shall become immediately vested and may be exercised by such Employee for
one year after such termination of employment. 
At the end of such period, the unexercised portion of the Option shall
expire.


 


(f)                                    Divestiture, etc.  If
the Employee’s employment is terminated due to a reduction in force or
divestiture or discontinuance of certain of the Company’s operations, the
portion of the Option which had vested prior to such termination may be
exercised for one year after such termination of employment, and shall
terminate thereafter.


 


(g)                                 Dereliction of Duties or Harmful Acts. If the Employee shall
cause the Company to suffer financial harm or damage to its reputation (either
before or after termination of employment) through (i) dishonesty, (ii) material
violation of the Company’s standards of ethics or conduct, or (iii) material
deviation from the duties owed the Company by the Employee, this Option shall
terminate and be of no further force or effect.


 


(h)                                 Transfers. 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 another Subsidiary Company, his or her employment
shall not be deemed to be terminated by reason of such transfer.  The portion of the Option that had already
vested may be exercised for one year after the date on which a Subsidiary
Company in which the Employee is employed shall cease to be a Subsidiary
Company and the Employee is not thereupon transferred to and employed by the
Company or another Subsidiary Company, and shall terminate thereafter.


 


4. Construction. 
Whenever the word “Employee” is used in any provision of ths document  under circumstances where the provision should
logically be construed to apply to the estate, personal representative, or
beneficiary to whom this Option may be transferred by Will, by the laws of
descent and distribution, or 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.  Restrictions on Transfer.  The Option is not transferable by the
Employee otherwise than by Will, the laws of descent and distribution, or a
qualified domestic relations order pursuant to the Code or Title I of ERISA.  During the Optionee’s lifetime, the Option
shall be exercisable only by the Employee and any shares purchased upon the
exercise of the Option shall be issued in the name of the Employee alone.  No assignment or transfer of the Option, or
of the rights represented thereby, 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 


 


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right herein to
the Option whatsoever.  Further,
immediately upon any attempt to assign or transfer the Option, the Option shall
terminate and be of no further force or effect.


 


6.  Rights.  The Employee shall not be deemed, for any
purpose, to be a stockholder of the Company with respect to any Shares
underlying the Option which shall not have been exercised and payment and issue
made as provided in this document.


 


7.  Powers.  The existence of this Option 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.


 


8.  Adjustments;
Recapitalization.  The Shares
subject to the Option are shares of the Common Stock of the Company as
constituted on the date of this Award, but if and whenever, prior to the
delivery by the Company of the Shares subject to the Option, the Company shall
effect a subdivision or consolidation of shares, or other capital adjustment,
or the payment of a stock dividend, or other increase or reduction of the
number of shares of Common Stock outstanding, without receiving compensation
therefor in money, services or property, then (a) in the event of any
increase in the number of such shares outstanding, the number of Shares then
remaining subject to the Option shall be proportionately increased, and the
cash consideration payable per share shall be proportionately reduced, and (b) in
the event of a reduction in the number of shares outstanding, the number of
Shares of then remaining subject to the Option shall be proportionately
reduced, and the cash consideration payable per share shall be proportionately
increased.  There shall be no adjustment
to the Option with respect to the payment of cash dividends to the Company’s
stockholders.


 


9.  Change of Control.  All Options which have not vested
as of the date of a Change of Control (as defined below) occurs, shall vest and
be immediately exercisable by Employee upon a Change of Control.  For purposes of this Award, 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
Company shareholders approve a merger or consolidation (where in each case the
Company is not the survivor thereof), a sale or disposition of all or 


 


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substantially all of the Company’s assets, or a plan of partial or
complete liquidation; or


 


(4)                                  where
an offerer (other than the Company) purchases shares of Common Stock pursuant
to a tender exchange offer for such shares.


 


10.  Changes in Law.   Notwithstanding anything in the terms and
conditions of this Award to the contrary, if at any time from the Grant Date to
the Expiration Date, 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.


 


11.  Dispute.  Any dispute or disagreement which shall arise
under, or as a result of, or pursuant to, this Award shall be finally
determined by the Company’s Compensation 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 Committee of the Board of
Directors under or pursuant to this Award and any interpretation by the Company’s
Compensation Committee of the Board of Directors of the terms of this Award,
shall be final, binding and conclusive on all persons affected thereby.


 


12.  Securities Law
Restrictions.  The Employee
represents and warrants that he or she is acquiring this Option, and, in the
event this Option is exercised, 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 this Option or the Shares or any
interest therein or sharing ownership thereof with any other person or
entity.  The Employee shall not sell,
pledge or transfer the Shares except pursuant to an effective registration
statement under the Securities Act of 1933, as amended.


 


13.  Data Authorization.  The Employee acknowledges and consents to the
collection, use, processing and transfer of personal data as described in this
paragraph.  The Company, its subsidiaries
and the Employee’s employer hold certain personal information about the
Employee, including the Employee’s name, home address and telephone number,
date of birth, social security number or other employee identification number,
salary, nationality, job title, any shares of stock or directorships held in
the Company, details of all options or any other entitlement to shares of stock
awarded, canceled, purchased, vested, unvested or outstanding in the Employee’s
favor, for the purpose of managing and administering the Plan (“Data”).  The Company and/or its subsidiaries will
transfer Data amongst themselves as necessary for the purpose of
implementation, administration and management of the Employee’s participation
in the Plan, and the Company and/or any of its subsidiaries may each further
transfer Data to any third parties assisting the Company in the implementation,
administration and management of the Plan. 
These recipients may be located in the European Economic Area, the
United States, or elsewhere.  The
Employee authorizes them to receive, possess, use, retain and transfer the
Data, in electronic or other form, for the purposes of implementing,
administering and managing the Employee’s participation in the Plan, including
any requisite transfer of such Data as may be required for the administration
of the Plan and/or the subsequent holding of shares of stock on the Employee’s
behalf to a broker or other third party with whom the Employee may elect to
deposit any shares of stock acquired pursuant to the Plan.  The Employee may, at any time, review Data,
require any necessary amendments to it or withdraw the consents herein in
writing 


 


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by contacting the Company; however, withdrawing
consent may affect the Employee’s ability to participate in the Plan.


 


14.  Discretionary Nature of
Plan.  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 stock options
under the Plan is a one-time benefit and does not create any contractual or
other right to receive a grant of stock options or benefits in lieu of stock
options in the future.  Future grants of
stock options, if any, will be at the sole discretion of the Company,
including, but not limited to, the timing of any grant, the number of stock
options, vesting provisions, and the exercise price.


 


15.  No Effect on Employment.  This Award 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.


 


16.  Governing Law;  Binding Effect.  THIS
AWARD 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 Award shall be binding upon
and inure to the benefit of the parties hereto, their legal representatives, successors
and assigns.


 


17.  Effect on
Compensation. Notwithstanding anything in these terms and conditions
to the contrary, none of the Options or the Shares subject to the Options, 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.


 


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


 


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