Document:

Exhibit
10.1

 

INDEMNIFICATION AGREEMENT

 

This
Indemnification Agreement (“Agreement”) is made as of                 
    , 2009 by and between Covance Inc., a Delaware
corporation (the “Company”), and                             
(“Indemnitee”).  This Agreement
supersedes and replaces any and all previous Agreements between the Company and
Indemnitee covering the subject matter of this Agreement.

 

RECITALS

 

WHEREAS,
highly competent persons have become more reluctant to serve publicly-held
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of the corporation;

 

WHEREAS,
it is reasonable, prudent and necessary for the Company contractually to
obligate itself to indemnify, and to advance expenses on behalf of, directors
to the fullest extent permitted by applicable law, and to set forth the
procedures pursuant to which such indemnification and advancement of expenses
will be provided, so that such directors will serve or continue to serve the
Company free from undue concern that they will not be so indemnified;

 

WHEREAS,
this Agreement is a supplement to and in furtherance of the By-laws of the
Company (“By-laws”), the Certificate of Incorporation of the Company (“Certificate
of Incorporation”) and any resolutions adopted pursuant thereto, and shall not
be deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder; and

 

NOW,
THEREFORE, in consideration of the premises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as follows:

 

Section 1.                                            Definitions.  As used in this Agreement:

 

(a)                                            “Corporate
Status” describes the status of a person who is or was a director, officer,
employee or agent of the Company or of any other corporation, limited liability
company, partnership or joint venture, trust or other enterprise which such
person is or was serving at the request of the Company.

 

(b)                                           “Change in
Control” shall be
deemed to occur if and when:  (i) 
any person (including as such term is used in Section 13(d) and 14(d)(2) of
the 1934 Act, as defined herein) becomes the beneficial owner, directly or
indirectly, of securities representing 20% or more of the combined voting power
of the Corporation’s then outstanding securities; or (ii)  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 Corporation’s Board of Directors are
different than the individuals who served on the Corporation’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 (iii)  when  the Corporation’s shareholders approve a
merger, or consolidation 

 

 

(where in each case the Corporation is not the
survivor thereof), or sale or disposition of all or substantially all of the
Corporation’s assets or a plan or partial or complete liquidation; or (iv) 
when an offeror (other than the Corporation) purchases shares of the
Corporation’s Common Stock pursuant to a tender or exchange offer for
securities representing 20% or more of the combined voting power of the
Corporation’s then outstanding securities. 
For purposes of this definition, “1934 Act” means the Securities and
Exchange Act of 1934, as amended, including the rules and regulations
promulgated thereunder.

 

(c)                                            “Disinterested
Director” means a director of the Company who is not and was not a party to the
Proceeding in respect of which indemnification is sought by Indemnitee.

 

(d)                                           “Enterprise”
shall mean the Company and any other corporation, limited liability company,
partnership, joint venture, trust or other enterprise of which Indemnitee is or
was serving at the request of the Company as a director, officer, employee,
agent or fiduciary.

 

(e)                                            “Expenses”
shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees, any federal, state, local or foreign taxes imposed on Indemnitee as a
result of the actual or deemed receipt of any payments under this Agreement,
ERISA excise taxes and penalties, and all other disbursements or expenses of
the types customarily incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, being or preparing to be a
witness in, or otherwise participating in, a Proceeding.  Expenses also shall include (i) Expenses
incurred in connection with any appeal resulting from any Proceeding, including
without limitation the premium, security for, and other costs relating to any
cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) Expenses
incurred by Indemnitee in connection with the interpretation, enforcement or
defense of Indemnitee’s rights under this Agreement, by litigation or
otherwise.  The parties agree that for
the purposes of any advancement of Expenses for which Indemnitee has made
written demand to the Company in accordance with this Agreement, all Expenses
included in such demand that are certified by affidavit of Indemnitee’s counsel
as being reasonable shall be presumed conclusively to be reasonable.  Expenses, however, shall not include amounts
paid in settlement by Indemnitee or the amount of judgments or fines against
Indemnitee.

 

(f)                                              “Independent
Counsel” means a law
firm, or a member of a law firm, that is experienced in matters of corporation
law and neither presently is, nor in the past five years has been, retained to
represent:  (i) the Company or
Indemnitee in any matter material to either such party (other than with respect
to matters concerning the Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) any other
party to the Proceeding giving rise to a claim for indemnification
hereunder.  Notwithstanding the
foregoing, the term “Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or Indemnitee in
an action to determine Indemnitee’s rights under this Agreement.  The Company agrees to pay the reasonable fees
and expenses of the Independent Counsel referred to above and to fully indemnify
such counsel against any and all Expenses, claims, 

 

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liabilities and damages arising out of or relating
to this Agreement or its engagement pursuant hereto.

 

(g)                                           The term “Proceeding”
shall include any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry, administrative
hearing or any other actual, threatened or completed proceeding, whether
brought in the right of the Company or otherwise and whether of a civil,
criminal, administrative legislative, or investigative (formal or informal)
nature, including any appeal therefrom, in which Indemnitee was, is or will be
involved as a party, potential party, non-party witness or otherwise by reason
of the fact that Indemnitee is or was a director or officer of the Company, by
reason of any action taken by him or of any action on his part while acting pursuant
to his Corporate Status, in each case whether or not serving in such capacity at
the time any liability or Expense is incurred for which indemnification,
reimbursement, or advancement of Expenses can be provided under this
Agreement.  If the Indemnitee reasonably believes
in good faith that a given situation may lead to or culminate in the
institution of a Proceeding, such situation shall be considered a Proceeding
under this paragraph.

 

(h)                                           Reference to “other
enterprise” shall include employee benefit plans; references to “fines” shall
include any excise tax assessed with respect to any employee benefit plan;
references to “serving at the request of the Company” shall include any service
as a director, officer, employee or agent of the Company which imposes duties
on, or involves services by, such director, officer, employee or agent with
respect to an employee benefit plan, its participants or beneficiaries; and a
person who acted in good faith and in a manner he reasonably believed to be in
the best interests of the participants and beneficiaries of an employee benefit
plan shall be deemed to have acted in manner “not opposed to the best interests
of the Company” as referred to in this Agreement.

 

Section 2.                                            Indemnity in
Third-Party Proceedings.  The
Company shall indemnify Indemnitee in accordance with the provisions of this Section 2
if Indemnitee is, or is threatened to be made, a party to or a participant in
any Proceeding, other than a Proceeding by or in the right of the Company to
procure a judgment in its favor. 
Pursuant to this Section 2, Indemnitee shall be indemnified to the
fullest extent permitted by applicable law against all Expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred by
Indemnitee or on his behalf in connection with such Proceeding or any claim,
issue or matter therein, if Indemnitee acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company and, in the case of a criminal proceeding had no reasonable cause to
believe that his conduct was unlawful.

 

Section 3.                                            Indemnity in
Proceedings by or in the Right of the Company.  The Company shall indemnify Indemnitee in
accordance with the provisions of this Section 3 if Indemnitee is, or is
threatened to be made, a party to or a participant in any Proceeding by or in
the right of the Company to procure a judgment in its favor.  Pursuant to this Section 3, Indemnitee
shall be indemnified to the fullest extent permitted by applicable law against
all Expenses actually and reasonably incurred by him or on his behalf in
connection with such Proceeding or any claim, issue or matter therein, if
Indemnitee acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Company.  No 

 

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indemnification for Expenses
shall be made under this Section 3 in respect of any claim, issue or
matter as to which Indemnitee shall have been finally adjudged by a court to be
liable to the Company, unless and only to the extent that the Delaware Court of
Chancery or any court in which the Proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, Indemnitee is entitled to indemnification.

 

Section 4.                                            Indemnification
for Expenses of a Party Who is Wholly or Partly Successful.  Notwithstanding any other provisions of this
Agreement, to the fullest extent permitted by applicable law and to the extent
that Indemnitee is a party to (or a participant in) and is successful, on the
merits or otherwise, in any Proceeding or in defense of any claim, issue or
matter therein, in whole or in part, the Company shall indemnify Indemnitee
against all Expenses actually and reasonably incurred by him in connection
therewith.  If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee against all Expenses actually and reasonably
incurred by him or on his behalf in connection with or related to each
successfully resolved claim, issue or matter to the fullest extent permitted by
law.  For purposes of this Section and
without limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.

 

Section 5.                                            Indemnification
For Expenses of a Witness.  Notwithstanding any other provision of this
Agreement, to the fullest extent permitted by applicable law and to the extent
that Indemnitee is, by reason of his Corporate Status, a witness or otherwise
asked to participate in any Proceeding to which Indemnitee is not a party, he
shall be indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection therewith.

 

Section 6.                                            Exclusions.  Notwithstanding any provision in this
Agreement, the Company shall not be obligated under this Agreement to make any
indemnity in connection with any claim made against Indemnitee:

 

(a)                                            for which
payment has actually been made to or on behalf of Indemnitee under any
insurance policy or other indemnity provision, except with respect to any
excess beyond the amount paid under any insurance policy or other indemnity
provision (In the event that such actual payment is made under any insurance
policy or indemnity provision after the Company has made an indemnity under
this Agreement, Indemnitee shall promptly reimburse the Company for such
indemnity in the amount of such payment.); or

 

(b)                                           for (i) an
accounting of profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company within the meaning of Section 16(b) of
the Securities Exchange Act of 1934 (the “Exchange Act”) or similar provisions
of state statutory law or common law, or (ii) any reimbursement of the
Company by the Indemnitee of any bonus or other incentive-based or equity-based
compensation or of any profits realized by the Indemnitee from the sale of
securities of the Company, as required in each case under the Exchange Act
(including any such reimbursements that arise from an accounting restatement of
the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the
“Sarbanes-Oxley 

 

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Act”), or the payment to the
Company of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 306 of the Sarbanes-Oxley Act); or

 

(c)                                            in connection
with any Proceeding (or any part of any Proceeding) initiated by Indemnitee,
including any Proceeding (or any part of any Proceeding) initiated by
Indemnitee against the Company or its directors, officers, employees or other
indemnitees, unless (i) the Board authorized the Proceeding (or any part
of any Proceeding) prior to its initiation, (ii) the Proceeding is for
enforcement of this Agreement (to the extent that the Indemnitee prevails), or (iii) the
Company provides the indemnification, in its sole discretion, pursuant to the
powers vested in the Company under applicable law.

 

Section 7.                                            Advances of
Expenses. 
Notwithstanding any provision of this Agreement to the contrary, the
Company shall advance, to the extent not prohibited by law, the Expenses
incurred by Indemnitee in connection with any Proceeding (or any part of any
Proceeding) not initiated by Indemnitee, and such advancement shall be made
within twenty-one (21) days after the receipt by the Company of a statement or
statements requesting such advances from time to time, whether prior to or
after final disposition of any Proceeding. 
Advances shall be unsecured and interest free.  Advances shall be made without regard to
Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s
ultimate entitlement to indemnification under the other provisions of this
Agreement.  Advances shall also include
any and all reasonable Expenses incurred pursuing an action to enforce this
right of advancement, including Expenses incurred preparing and forwarding
statements to the Company to support the advances claimed.  Indemnitee undertakes to repay the amounts
advanced (without interest) to the extent that it is ultimately determined that
Indemnitee is not entitled to be indemnified by the Company.  No other form of undertaking shall be
required other than the execution of this Agreement.  This Section 7 shall not apply to any
claim made by Indemnitee for which indemnity is excluded pursuant to Section 6.

 

Section 8.                                            Procedure for
Notification and Defense of Claim.

 

(a)                                            Indemnitee
shall notify the Company in writing of any matter with respect to which
Indemnitee intends to seek indemnification or advancement of Expenses hereunder
as soon as reasonably practicable following the receipt by Indemnitee of
written notice thereof.  The written
notification to the Company shall include a description of the nature of the
Proceeding and the facts underlying the Proceeding.  To obtain indemnification under this
Agreement, Indemnitee shall submit to the Company a written request, including
therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to
what extent Indemnitee is entitled to indemnification following the final
disposition of such Proceeding.  The
omission by Indemnitee to notify the Company hereunder will not relieve the
Company from any liability which it may have to Indemnitee hereunder or
otherwise than under this Agreement, and any delay in so notifying the Company
shall not constitute a waiver by Indemnitee of any rights under this
Agreement.  The Secretary of the Company
shall, promptly upon receipt of such a request for indemnification, advise the
Board in writing that Indemnitee has requested indemnification.

 

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(b)                                           The Company
will be entitled to participate in the Proceeding at its own expense.

 

Section 9.                                            Procedure Upon
Application for Indemnification.

 

(a)                                            Upon written
request by Indemnitee for indemnification pursuant to Section 8(a), a
determination, if required by applicable law, with respect to Indemnitee’s
entitlement thereto shall be made in the specific case:  (i) if a Change in Control shall have
occurred, by Independent Counsel in a written opinion to the Board, a copy of
which shall be delivered to the Indemnitee; or (ii) if a Change in Control
shall not have occurred, (A) by a majority vote of the Disinterested
Directors, even though less than a quorum of the Board, or (B) if there
are no such Disinterested Directors or, if such Disinterested Directors so
direct, by Independent Counsel in a written opinion to the Board, a copy of
which shall be delivered to Indemnitee.  Indemnitee
shall cooperate with the person, persons or entity making such determination
with respect to Indemnitee’s entitlement to indemnification, including
providing to such person, persons or entity upon reasonable advance request any
documentation or information which is not privileged or otherwise protected
from disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination.  Any
costs or Expenses (including attorneys’ fees and disbursements) incurred by
Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Company (irrespective of the determination
as to Indemnitee’s entitlement to indemnification).

 

(b)                                           In the event
that legal counsel is retained pursuant to Section 9(a), written notice of
the selection shall be provided promptly to Indemnitee.  Upon the due commencement of any judicial
proceeding pursuant to Section 11(a) of this Agreement, legal counsel
shall be discharged and relieved of any further responsibility in such capacity
(subject to the applicable standards of professional conduct then prevailing).

 

Section 10.                                      Presumptions
and Effect of Certain Proceedings.

 

(a)                                            In making a
determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall, to the fullest
extent not prohibited by law, presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for
indemnification in accordance with Section 8(a) of this Agreement,
and the Company shall, to the fullest extent not prohibited by law, have the
burden of proof to overcome that presumption in connection with the making by
any person, persons or entity of any determination contrary to that
presumption.

 

(b)                                           Subject to Section 11(d),
if the person, persons or entity empowered or selected under Section 9 of
this Agreement to determine whether Indemnitee is entitled to indemnification
shall not have made a determination within sixty (60) days after receipt by the
Company of the request therefor, the requisite determination of entitlement to
indemnification shall, to the fullest extent not prohibited by law, be deemed
to have been made and Indemnitee shall be entitled to such indemnification,
absent (i) a misstatement by Indemnitee of a material fact, or an omission
of a material fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such 

 

6

 

indemnification under
applicable law; provided, however, that such 60-day period may be extended for
a reasonable time, not to exceed an additional thirty (30) days, if the person,
persons or entity making the determination with respect to entitlement to
indemnification in good faith requires such additional time for the obtaining
or evaluating of documentation and/or information relating thereto; and
provided, further, that the foregoing provisions of this Section 10(b) shall
not apply if the determination of entitlement to indemnification is to be made
by legal counsel pursuant to Section 9(a) of this Agreement.

 

(c)                                            The termination
of any Proceeding or of any claim, issue or matter therein, by judgment, order,
settlement or conviction, or upon a plea of nolo  contendere or
its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Company or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was unlawful.

 

(d)                                           Actions of
Others.  The knowledge and/or actions,
or failure to act, of any director, officer, agent or employee of the
Enterprise shall not be imputed to Indemnitee for purposes of determining the
right to indemnification under this Agreement.

 

Section 11.                                      Remedies of
Indemnitee.

 

(a)                                            Subject to Section 11(d),
in the event that (i) a determination is made pursuant to Section 9
of this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 7
of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 9(a) of this
Agreement within ninety (90) days after receipt by the Company of the request
for indemnification, (iv) payment of indemnification is not made pursuant
to Section 4 or 5 within ten (10) days after receipt by the
Company of a written request therefor, (v) payment of indemnification
pursuant to Section 2 or 3 of this Agreement is not made within ten (10) days
after a determination has been made that Indemnitee is entitled to indemnification,
or (vi) in the event that the Company or any other person takes or
threatens to take any action to declare this Agreement void or unenforceable,
or institutes any litigation or other action or Proceeding designed to deny, or
to recover from, the Indemnitee the benefits provided or intended to be
provided to the Indemnitee hereunder, Indemnitee shall be entitled to an
adjudication by a court of his entitlement to such indemnification or
advancement of Expenses.

 

(b)                                           In the event
that a determination shall have been made pursuant to Section 9(a) of
this Agreement that Indemnitee is not entitled to indemnification, any judicial
proceeding commenced pursuant to this Section 11 shall be conducted in all
respects as a de  novo trial on the merits and Indemnitee shall
not be prejudiced by reason of that adverse determination.  In any judicial proceeding commenced pursuant
to this Section 11 the Company shall have the burden of proving Indemnitee
is not entitled to indemnification or advancement of Expenses.

 

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(c)                                            If a
determination shall have been made pursuant to Section 9(a) of this
Agreement that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in any judicial proceeding commenced pursuant to
this Section 11, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under
applicable law.

 

(d)                                           Notwithstanding
anything in this Agreement to the contrary, no determination as to entitlement
of Indemnitee to indemnification under this Agreement shall be required to be
made prior to the final disposition of the Proceeding.

 

Section 12.                                      Non-exclusivity;
Insurance; Subrogation; Other Payments.

 

(a)                                            The rights of
indemnification and to receive advancement of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee
may at any time be entitled under applicable law, the Certificate of
Incorporation, the By-laws, any agreement, a vote of stockholders or a
resolution of directors, or otherwise.  To
the extent that a change in Delaware law, whether by statute or judicial
decision, permits greater indemnification or advancement of Expenses than would
be afforded currently under the By-laws, the Certificate of Incorporation and
this Agreement, it is the intent of the parties hereto that Indemnitee shall
enjoy by this Agreement the greater benefits so afforded by such change.

 

(b)                                           To the extent
that the Company maintains an insurance policy or policies providing liability
insurance for directors, officers, employees, or agents of the Enterprise,
Indemnitee shall be covered by such policy or policies in accordance with its
or their terms to the maximum extent of the coverage available for any such
director, officer, employee or agent under such policy or policies.  If, at the time of the receipt of a notice of
a claim pursuant to the terms hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of such
claim or of the commencement of a Proceeding, as the case may be, to the
insurers in accordance with the procedures set forth in the respective
policies.  The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such Proceeding in accordance
with the terms of such policies.

 

(c)                                            In the event of
any payment under this Agreement, the Company shall be subrogated to the extent
of such payment to all of the rights of recovery of Indemnitee, who shall
execute all papers required and take all action necessary to secure such
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce such rights.

 

(d)                                           The Company
shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable (or for which advancement is provided hereunder)
hereunder if and to the extent that Indemnitee has otherwise actually received
such payment under any insurance policy, contract, agreement or otherwise.

 

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(e)                                            The Company’s
obligation to indemnify or advance Expenses hereunder to Indemnitee who is or
was serving at the request of the Company as a director, officer, employee or
agent of any other corporation, limited liability company, partnership, joint
venture, trust, employee benefit plan or other enterprise shall be reduced by
any amount Indemnitee has actually received as indemnification or advancement
of Expenses from such other corporation, limited liability company,
partnership, joint venture, trust or other enterprise.

 

Section 13.                                      Duration of
Agreement.  This
Agreement shall continue until and terminate upon the later of: (a) ten (10) years
after the date that Indemnitee shall have ceased to serve as a director of the
Company or in other Corporate Status due to service as a director of the
Company or (b) one (1) year after the final termination of any
Proceeding then pending in respect of which Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any proceeding
commenced by Indemnitee pursuant to Section 11 of this Agreement relating
thereto.  This Agreement shall be binding
upon the Company and its successors and assigns, and the Company agrees to
assign this Agreement to any purchaser of substantially all of the assets and
to secure the agreement of such purchaser to assume this Agreement.  This Agreement shall inure to the benefit of
Indemnitee and his heirs, executors and administrators.

 

Section 14.                                      Severability.  If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including without limitation, each portion of any
Section of this Agreement containing any such provision held to be
invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby and shall
remain enforceable to the fullest extent permitted by law; (b) such
provision or provisions shall be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (c) to the fullest extent possible, the provisions of
this Agreement shall be construed so as to give effect to the intent manifested
thereby.

 

Section 15.                                      Merger.  This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof;
provided, however, that this Agreement is a supplement to and in furtherance of
the Certificate of Incorporation, the By-laws and applicable law, and shall not
be deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.

 

Section 16.                                      Modification
and Waiver.  No
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by the parties thereto. 
No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions of this Agreement nor shall
any waiver constitute a continuing waiver.

 

Section 17.                                      Notice by
Indemnitee.  Indemnitee
agrees promptly to notify the Company in writing upon being served with any
summons, citation, subpoena, complaint, indictment, information or other
document relating to any Proceeding or matter which may be subject to
indemnification or advancement of Expenses covered hereunder.  The failure of Indemnitee to so 

 

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notify the Company shall not
relieve the Company of any obligation which it may have to the Indemnitee under
this Agreement or otherwise.

 

Section 18.                                      Notices.  All notices, requests,
demands and other communications under this Agreement shall be in writing and
shall be deemed to have been duly given if (a) delivered by hand and
receipted for by the party to whom said notice or other communication shall
have been directed, (b) mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so
mailed, (c) mailed by reputable overnight courier and receipted for by the
party to whom said notice or other communication shall have been directed or (d) sent
by facsimile transmission, with receipt of oral confirmation that such
transmission has been received, for each party, at the address indicated on the
signature page of this Agreement, or at such other address as each party shall
provide to the other party.

 

Section 19.                                      Applicable Law
and Consent to Jurisdiction.  This Agreement and the legal relations among
the parties shall be governed by, and construed and enforced in accordance
with, the laws of the State of Delaware, without regard to its conflict of laws
rules.  The Company and Indemnitee hereby
irrevocably and unconditionally (i) agree that any action or proceeding
arising out of or in connection with this Agreement may be brought in the Chancery
Court of the State of Delaware (the “Delaware Court”), or in any other state or
federal court in the United States of America with subject matter and personal
jurisdiction, but not in any court in any other country, (ii) waive any
objection to the laying of venue of any such action or proceeding in the
Delaware Court, and (iii) waive, and agree not to plead or to make, any
claim that any such action or proceeding brought in the Delaware Court has been
brought in an improper or inconvenient forum.

 

Section 20.                                      Identical
Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall for
all purposes be deemed to be an original but all of which together shall
constitute one and the same Agreement.

 

Section 21.                                      Miscellaneous.  Use of the masculine pronoun shall be deemed
to include usage of the feminine pronoun where appropriate.  The headings of this Agreement are inserted
for convenience only and shall not be deemed to affect construction of this
Agreement.

 

IN WITNESS WHEREOF, the
parties have caused this Agreement to be signed as of the day and year first
above written.

 

 

	
  COVANCE INC.

  	
   

  	
  INDEMNITEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
  Name:

  
	
  Office:

  	
  Secretary

  	
   

  	
  Address:

  	
   

  
	
  Address: 

  	
  210 Carnegie Center

  	
   

  	
   

  	
   

  
	
   

  	
  Princeton, NJ 08540

  	
   

  	
   

  	
   

  
						

 

10Exhibit 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 

 

2

 

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 

 

3

 

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 

 

4

 

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 

 

5

 

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.

 

6

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