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
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
shoul
