Document:

Exhibit 10.40

	
  

 
	
 Quest Diagnostics Incorporated 

 
	
 Equity Award Grant Certificate

 
	

 

 

	
  

 	
  

 
	
  

 	
 Grant Date:
 [Date]

 
	
  

 
	
  

 	
 Director:
 [Name]

 
	
  

 	

 

 
	
  

 	
 Number of
 Options: _____

 
	
  

 
	
  

 	
 Option
 Exercise Price: $____

 
	
  

 
	
  

 	
 Option
 Expiration Date: [Grant Date Plus 10 Years]

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Vesting Dates

 	
 % of

Grant 

 	
  

 	
 Incremental

 	
 Cumulative

 
	
  

 	

 

 	

 

 	

 

 	

 

 	

 

 
	
  

 
	
  

 	
 First Anniv.
 of Grant Date

 	
 33.3%

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Sec. Anniv.
 of Grant Date

 	
 33.3%

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Third Anniv.
 of Grant Date

 	
 33.4%

 	
  

 	
  

 	
  

 
	
  

 	

 

 	

 

 	

 

 	

 

 	

 

 
	
  

 	
 Restricted
 Stock Units:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 No. Of
 Shares Underlying Award: ____

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Vesting Date

 	
  

 	
  

 	
 % of Grant

 	
  

 	
 # of RSU’s

 
	

 

 	
  

 	
  

 	

 

 	
  

 	

 

 
	
 First Anniv.
 of Grant Date

 	
  

 	
 33.3%

 	
  

 	
  

 
	
 Sec. Anniv.
 of Grant Date

 	
  

 	
 33.3%

 	
  

 	
  

 
	
 Third Anniv.
 of Grant Date

 	
  

 	
 33.4%

 	
  

 	
  

 

This grant is
subject in all respects to the terms of the attached Equity Award Agreement
dated [of even date]. 

By execution
of this Equity Award Grant Certificate, the Director agrees that he or she has
received and reviewed a copy of (a) the Prospectus relating to
the Company’s Amended and Restated Long-Term Incentive Plan for Non-Employee
Directors, (b) the Company’s [2010] Annual Report to Shareholders on
Form 10-K, and (c) the Company’s Policy dated August 1, 2009
regarding Purchasing and Selling Securities (the “Policy”). The Director
further agrees to fully comply with the terms of the Policy.

	
  

 	
  

 	
  

 
	
 DIRECTOR

 	
  

 
	
  

 	
 [Name]

 
	

 

 	
  

 
	
 Date: 

 	
  

 	
  

 
	
  

 	

 

 	
  

 

1

QUEST
DIAGNOSTICS INCORPORATED

EQUITY AWARD AGREEMENT

This Equity Award Agreement (the “Agreement”) dated as of [date] (the
“Grant Date”) is by and between Quest Diagnostics Incorporated (the “Company”)
and __________ (the “Director”).

	
  

 	
  

 
	
  

 	
 Article 1 – Plan

 
	
  

 	
  

 
	
  

 	
 1.1 Plan.
 This Agreement is subject in all respects to the Company’s Amended and
 Restated Long-Term Incentive Plan for Non-Employee Directors (the “Plan”),
 which is incorporated herein by reference. The Director acknowledges that he
 or she has read the terms of the Plan and that those terms shall govern in
 the event of any conflict between the terms of the Plan and the terms of this
 Agreement. Additional copies of the Plan may be obtained from the Company’s
 Secretary, 3 Giralda Farms, Madison, New Jersey 07940.

 
	
  

 	
  

 
	
  

 	
 Article 2 – Options

 
	
  

 	
  

 
	
  

 	
 2.1 Award of
 Options. The Company hereby awards to the
 Director the number of stock options (each an “Option”) set forth in the
 attached grant certificate. Each Option entitles the Director, subject to the
 terms and conditions of this Agreement and the Plan, to purchase from the
 Company at the exercise price set forth in the attached grant certificate
 (the “Exercise Price”), one share of the Company’s Common Stock. The Options
 shall expire on the expiration date set forth in the attached grant
 certificate. The Options are not intended to be “incentive stock options”
 within the meaning of Section 422 of the Internal Revenue Code of 1986, as
 amended (the “Code”) and this Agreement shall be construed and interpreted in
 accordance with such intention. The Options shall vest and become exercisable
 on the vesting dates set forth in the attached grant certificate, regardless
 of whether the Director remains a director of the Company as of such dates.

 
	
  

 	
  

 
	
  

 	
 2.2 Rights Prior to
 Exercise. The Director shall not have any rights
 as a stockholder with respect to any shares subject to the Options prior to
 the date on which he or she (or, if the shares are held in “street name”, the
 broker designated by the Director) is recorded as the holder of such shares
 on the records of the Company. 

 
	
  

 	
  

 
	
  

 	
 2.3 Payment of
 Exercise Price Upon Exercise. The Director may
 exercise the Options in accordance with the procedures specified by the
 Company from time to time. The Exercise Price of the Options shall be paid in
 full with, or in a combination of, (a) cash or (b) shares of Common Stock
 that have been owned by the Director, are fully vested and freely
 transferable by the Director, and have a total Fair Market Value on the date
 of delivery equal to the Exercise Price, duly endorsed or accompanied by
 stock powers executed in blank, Alternatively, to the extent permitted by,
 and in accordance with procedures specified by, the Company from time to
 time, the Director may pay the Exercise Price of the Options using a net
 share settlement procedure or through the withholding of shares of Common
 Stock subject to the Options valued using the Fair Market Value on the date
 of exercise. For purposes of this Agreement, “Fair Market Value” means, as of
 any date, the mean of the high and low sales price of a share of Common Stock
 on the New York Stock Exchange Composite Tape on such date (or if no sale is
 reported on such date, the mean between the high and the low reported on the
 most recent preceding date on which a sale took place).

 

2

	
  

 	
  

 
	
  

 	
 Article 3 - RSUs

 
	
  

 	
  

 
	
  

 	
 3.1 Award of RSUs.
 The Company awards to the Director the number of restricted share units
 (“RSUs”) set forth in the attached grant certificate. Each RSU corresponds to
 one share of the Company’s Common Stock and constitutes a contingent and
 unsecured promise of the Company to pay the Director one share of Common
 Stock on the vesting date for the RSU. The RSUs shall vest on the vesting dates
 set forth in the attached grant certificate, regardless of whether the
 Director remains a director of the Company as of such dates.

 
	
  

 	
  

 
	
  

 	
 3.2 Status as Unsecured Creditor.
 As the holder of RSUs, the Director has only the rights of a general
 unsecured creditor of the Company. The Director will not be a stockholder
 with respect to the Common Stock corresponding to the RSUs unless and until
 the RSUs convert to shares.

 
	
  

 	
  

 
	
  

 	
 3.3 Dividend
 Equivalents. Until the RSUs convert to shares, if the Company pays a regular
 or ordinary dividend on its Common Stock, the Director will be paid a
 dividend equivalent for vested and unvested RSUs.

 
	
  

 	
  

 
	
  

 	
 3.4 Taxes. The Fair Market Value of any Common Stock
 delivered to the Director under this Agreement upon conversion of any RSU will
 be considered taxable income when such Common Stock is delivered to the
 Director. 

 
	
  

 	
  

 
	
  

 	
 Article 4 - General

 
	
  

 	
  

 
	
  

 	
 4.1
 Non-Transferability. The Options, RSUs and any
 right arising hereunder shall not be transferable other than by will or the
 laws of descent and distribution. During the Director’s lifetime, the Options
 shall be exercisable only by the Director, except to the extent of a
 disability (as defined in Section 22(e)(3) of the Code), in which case they
 may be exercised by the Director’s legal representative. 

 
	
  

 	
  

 
	
  

 	
 4.2 Share Ownership.
 The Director agrees that any
 shares of Common Stock issued hereunder shall be subject to the restrictions
 set forth in the Company’s Executive Share Ownership Guidelines (“Minimum
 Share Ownership Policy”). The Director acknowledges and agrees that the
 investment risk associated with the retention of any shares of Common Stock,
 whether pursuant to the Minimum Share Ownership Policy or otherwise, is the
 Director’s sole responsibility and the Director hereby holds the Company
 harmless against any claim of loss related to the retention of such shares.

 
	
  

 	
  

 
	
  

 	
 4.3 Physical
 Possession of Shares. Each certificate
 representing shares of Common Stock delivered to the Director under this
 Agreement shall be registered in the name of the Director or, if the Director
 elects to hold the shares in “street name”, in the name of a broker
 designated by the Director.

 
	
  

 	
  

 
	
  

 	
 4.4 Interpretation.
 Any dispute, disagreement or matter of interpretation that shall arise under
 this Agreement shall be finally determined by the Compensation Committee of
 the Board of Directors of the Company in its absolute discretion. All
 decisions, actions and interpretations of the Compensation Committee shall be
 final, conclusive and binding upon all parties.

 

3

	
  

 	
  

 
	
  

 	
 4.5 Governing Law.
 This Agreement and all rights hereunder shall be governed by, and construed
 and interpreted in accordance with, the laws of the State of New Jersey
 applicable to contracts made and to be performed entirely within such state
 (without reference to its principles of conflicts of law).

 
	
  

 	
  

 
	
  

 	
 4.6 Effective.
 This Agreement shall become effective only after the Director has executed
 and returned to the Company’s Executive Compensation Department (Attention:
 Lisa M. Zajac) a signed copy of the attached Equity Award Grant Certificate.

 

4Exhibit 10.41 

	
  

 
	
 Quest Diagnostics Incorporated

 
	
 Elective Option Grant Certificate

 
	

 

 

	
  

 	
  

 
	
  

 	
 Grant Date:
 [Date]

 
	
  

 	
  

 
	
  

 	
 Director:
 [Name]

 
	
  

 	

 

 
	
  

 	
 Number of
 Options: ___

 
	
  

 	
  

 
	
  

 	
 Option
 Exercise Price: $ ____

 
	
  

 	
  

 
	
  

 	
 Option
 Expiration Date: [Grant Date plus 10 years]

 

This grant is subject in all respects to the terms of the attached
Elective Option Award Agreement dated [of even date]. 

By execution of this Elective Option Grant Certificate, the Director
agrees that he or she has received and reviewed a copy of
(a) the Prospectus relating to the Company’s Amended and Restated
Long-Term Incentive Plan for Non-Employee Directors,
(b) the Company’s [2010] Annual Report to Shareholders on Form 10-K,
and (c) the Company’s Policy dated August 1, 2009 regarding
Purchasing and Selling Securities (the “Policy”). The Director further agrees
to fully comply with the terms of the Policy.

	
  

 	
  

 	
  

 
	
 DIRECTOR

 	
  

 
	
  

 	
  

 
	

 

 	
  

 
	
 [Name]

 	
  

 
	
 Date: 

 	

  

 	
  

 
	
  

 	

 

 	
  

 

1

QUEST
DIAGNOSTICS INCORPORATED

ELECTIVE OPTION AWARD AGREEMENT

This Elective Option Award Agreement (the “Agreement”) dated as of
[Date] (the “Grant Date”) is by and between Quest Diagnostics Incorporated (the
“Company”) and [Name] (the “Director”).

	
  

 	
  

 
	
  

 	
 Article 1 – Plan

 
	
  

 	
  

 
	
  

 	
 1.1 Plan.
 This Agreement is subject in all respects to the Company’s Amended and
 Restated Long-Term Incentive Plan for Non-Employee Directors (the “Plan”),
 which is incorporated herein by reference. The Director acknowledges that he
 or she has read the terms of the Plan and that those terms shall govern in
 the event of any conflict between the terms of the Plan and the terms of this
 Agreement. Additional copies of the Plan may be obtained from the Company’s
 Secretary, 3 Giralda Farms, Madison, New Jersey 07940.

 
	
  

 	
  

 
	
  

 	
 Article 2 – Options

 
	
  

 	
  

 
	
  

 	
 2.1 Award of
 Options. The Company hereby awards to the
 Director the number of stock options (each an “Option”) set forth in the
 attached grant certificate. Each Option entitles the Director, subject to the
 terms and conditions of this Agreement and the Plan, to purchase from the
 Company at the exercise price set forth in the attached grant certificate
 (the “Exercise Price”), one share of the Company’s Common Stock. The Options
 shall expire on the expiration date set forth in the attached grant
 certificate. The Options are not intended to be “incentive stock options” within
 the meaning of Section 422 of the Internal Revenue Code of 1986, as amended
 (the “Code”) and this Agreement shall be construed and interpreted in
 accordance with such intention. The Options vest upon grant and are
 exercisable immediately.

 
	
  

 	
  

 
	
  

 	
 2.2 Rights Prior to
 Exercise. The Director shall not have any rights
 as a stockholder with respect to any shares subject to the Options prior to
 the date on which he or she (or, if the shares are held in “street name”, the
 broker designated by the Director) is recorded as the holder of such shares
 on the records of the Company. 

 
	
  

 	
  

 
	
  

 	
 2.3 Payment of
 Exercise Price Upon Exercise. The Director may
 exercise the Options in accordance with the procedures specified by the
 Company from time to time. The Exercise Price of the Options shall be paid in
 full with, or in a combination of, (a) cash or (b) shares of Common Stock
 that have been owned by the Director, are fully vested and freely
 transferable by the Director, and have a total Fair Market Value on the date
 of delivery equal to the Exercise Price, duly endorsed or accompanied by
 stock powers executed in blank. Alternatively, to the extent permitted by,
 and in accordance with procedures specified by, the Company from time to
 time, the Director may pay the Exercise Price of the Options using a net
 share settlement procedure or through the withholding of shares of Common
 Stock subject to the Options valued using the Fair Market Value on the date
 of exercise. For purposes of this Agreement, “Fair Market Value” means, as of
 any date, the mean of the high and low sales price of a share of Common Stock
 on the New York Stock Exchange Composite Tape on such date (or if no sale is
 reported on such date, the mean between the high and the low reported on the
 most recent preceding date on which a sale took place).

 
	
  

 	
  

 

2

	
  

 	
 Article 3 - General

 
	
  

 	
  

 
	
  

 	
  

 
	
  

 	
 3.1
 Non-Transferability. The Options and any right
 arising hereunder shall not be transferable other than by will or the laws of
 descent and distribution. During the Director’s lifetime, the Options shall
 be exercisable only by the Director, except to the extent of a disability (as
 defined in Section 22(e)(3) of the Code), in which case they may be exercised
 by the Director’s legal representative. 

 
	
  

 	
  

 
	
  

 	
 3.2 Share Ownership.
 The Director agrees that any
 shares of Common Stock issued hereunder shall be subject to the restrictions
 set forth in the Company’s Executive Share Ownership Guidelines (“Minimum
 Share Ownership Policy”). The Director acknowledges and agrees that the
 investment risk associated with the retention of any shares of Common Stock,
 whether pursuant to the Minimum Share Ownership Policy or otherwise, is the
 Director’s sole responsibility and the Director hereby holds the Company
 harmless against any claim of loss related to the retention of such shares.

 
	
  

 	
  

 
	
  

 	
 3.3 Physical
 Possession of Shares. Each certificate
 representing shares of Common Stock delivered to the Director under this
 Agreement shall be registered in the name of the Director or, if the Director
 elects to hold the shares in “street name,” in the name of a broker
 designated by the Director.

 
	
  

 	
  

 
	
  

 	
 3.4 Interpretation.
 Any dispute, disagreement or matter of interpretation that shall arise under
 this Agreement shall be finally determined by the Compensation Committee of
 the Board of Directors of the Company in its absolute discretion. All
 decisions, actions and interpretations of the Compensation Committee shall be
 final, conclusive and binding upon all parties.

 
	
  

 	
  

 
	
  

 	
 3.5 Governing Law.
 This Agreement and all rights hereunder shall be governed by, and construed
 and interpreted in accordance with, the laws of the State of New Jersey
 applicable to contracts made and to be performed entirely within such state
 (without reference to its principles of conflicts of law).

 
	
  

 	
  

 
	
  

 	
 3.6 Effective.
 This Agreement shall become effective only after the Director has executed
 and returned to the Company’s Executive Compensation Department (Attention:
 Lisa M. Zajac) a signed copy of the attached Elective Option Grant
 Certificate.

  

 

3

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