Exhibit 10.1
COVANCE INC.
2008 NON-EMPLOYEE DIRECTOR
STOCK OPTION PLAN
1.
PURPOSE
The
purpose of the Plan is to retain the services of qualified
individuals who are not employees of the Company to serve as
members of the Board and to secure for the Company the benefits of
the incentives inherent in increased Common Stock ownership by such
individuals by granting such individuals Options to purchase shares
of Common Stock.
2.
EFFECTIVE DATE AND DURATION OF PLAN
The
Plan shall become effective upon its approval by the shareholders
of the Corporation. Unless previously terminated by the
Corporation’s Board of Directors (the “Board”),
the Plan shall have a term of ten years.
3.
DEFINITIONS
(a) “1934 Act” means the
Securities and Exchange Act of 1934, as amended, including the
rules and regulations promulgated thereunder.
(b) “Award” means a stock
option, as described in and granted under the Plan.
(c) “Change of Control” is
defined in Section 11(b).
(d) “Code” means the Internal
Revenue Code of 1986, as amended, including any rules and
regulations promulgated thereunder or any successor body of laws,
rules and regulations.
(e) “Fair Market Value” means
the closing selling price of the Shares on the New York Stock
Exchange Composite Tape on the valuation date, or, if there were no
sales on the valuation date, the average of the closing selling
prices on the New York Stock Exchange Composite Tape on the first
trading day before and the first trading day after the valuation
date.
(f) “Grant Price” means the
Closing Price of a share of Company’s Common Stock on the
date of grant of the Option.
(g) “Non-Employee
Director” means a member of the Board who is not an
employee of the Company or any of its Subsidiaries.
(h) “Participant” means a
Director who has been granted an Award under the Plan.
(i) “Shares” means the Common
Stock of the Corporation, par value $0.01 per share.
(j) “Treasury Shares” means
authorized and issued, but not outstanding, Shares.
4.
PLAN ADMINISTRATION
(a) The Corporate Governance Committee
(the “Committee”) shall be responsible for
administering the Plan.
(b) The Committee shall have full and
exclusive power to interpret the Plan and to adopt such rules,
regulations, and guidelines for carrying out the Plan as it may
deem necessary or proper, all of which power shall be executed in
the best interests of the Corporation and in keeping with the
provisions and objectives of the Plan. All decisions made by
the Committee shall be final, binding and conclusive on all persons
interested in the Plan or any Awards.
The
Committee may delegate from time to time during the term of the
Plan to one or more executive officers or directors of the
Corporation the authority to carry out some or all of its
responsibilities provided that the Committee may not delegate its
authority and powers in any way which would be inconsistent with
the requirements of the Code or the 1934 Act nor may the Committee
delegate responsibilities that may impact the number of options a
Non-Employee Director may receive. The Committee may at any
time rescind the authority delegated to any such executive officer
or director.
To
the extent consistent with the Corporation’s Amended and
Restated Certificate of Incorporation, no member of the Committee
shall be liable for any action or determination with respect to the
Plan, and the members shall be entitled to indemnification and
reimbursement in the manner provided in the Corporation’s
Restated Certificate of Incorporation, as amended, modified or
supplemented from time to time. In the performance of its
functions under the Plan, the Committee shall be entitled to rely
upon information and advice furnished by the Corporation’s
officers, accountants, counsel and any other party the Committee
deems necessary, and no member of the Committee shall be liable for
any action taken or not taken in reliance upon any such
advice.
(c) The Committee may, from time to time,
alter or amend, and the Board of Directors may terminate, the Plan
as it shall deem advisable, subject to any requirement for
shareholder approval imposed by applicable law or securities
exchange listing requirements. However, the Committee and
Board may not, without the approval of the Corporation’s
shareholders, amend the Plan to increase the number of Shares that
may be issued under the Plan (except for adjustments pursuant to
Section 7 hereof), or authorize the amendment of any
outstanding stock option to reduce the Grant Price specified by
Section 8(a) hereof. “Furthermore, except in
connection with a corporate transaction involving the Corporation
(including, without limitation, any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization,
merger, consolidation, split-up, spin-off, combination, or exchange
of shares), the terms of outstanding awards may not be amended to
reduce the exercise price of outstanding Options or cancel
outstanding Options in exchange for cash, other awards or Options
with an exercise price that is less than the exercise price of the
original Options without stockholder approval.”
(d) The termination of the Plan, either
pursuant to Section 2, Section 4(c) or otherwise,
shall not cause any previously granted Awards to terminate. After
the termination of the Plan, any previously granted Awards shall
remain in effect and shall continue to be governed by the terms of
the Plan, the Awards, and any applicable Award
Agreements.
5.
OPTION GRANTS
(a) Annual Grants. Each
Non-Employee Director shall receive an Annual Option to purchase
such number of shares of Common Stock as is determined by the Board
of Directors on or prior to the first business day of each year of
the Plan, such grant to be made as of the first business day of
such year (“Grant Date”) provided that such
number of shares shall not exceed 2,800 and provided,
further , the individual has remained in continuous service as
a Director of the Company through the Grant Date and is a
Non-Employee Director on the Grant Date. Each Annual Option
award shall be made by the Company issuing an award agreement to
each Non-Employee Director.
(b) New Directors .
Non-Employee Directors who are elected or appointed to the Board
after the Annual Grant shall be granted an Initial Option to
purchase such number of shares of Common Stock as was determined by
the Board of Directors to be granted to the other Non-Employee
Directors in such year.
6.
LIMITATION ON NUMBER OF SHARES
(a) Subject to the provisions of this
Section 6 and Section 7 hereof, up to 200,000 Shares may
be issued under the Plan. The stock subject to the provisions
of this Plan shall be shares of authorized but unissued Shares and
Treasury Shares.
(b) In addition to the Shares authorized
by Section 6(a) hereof, Shares that are issued under the
Plan which are subsequently forfeited in accordance with the terms
of the Award Agreement or shares that are not issued because of the
cancellation, termination, or expiration of Awards and/or similar
events under the Plan may be issued under the Plan.
(c) Subject to the adjustment provisions
set forth herein, an individual Participant may not receive Awards
with respect to more than 25% of the number of Shares specified in
Section 6(a) hereof over the term of the Plan.
7.
ADJUSTMENT PROVISIONS
In
the event that any dividend or other distribution (whether in the
form of Shares, other securities, or other property), extraordinary
cash dividend, recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Shares or other securities,
the exercisability of stock purchase rights received under any
shareholders’ rights plan, the issuance of warrants or other
rights to purchase Shares or other securities, or other similar
corporate transaction or event materially affects the Shares with
respect to which Awards have been or may be issued under the Plan,
then the Committee shall, in a manner and to the extent that the
Committee deems appropriate to prevent any dilution or enlargement
of the benefits or potential benefits intended to be made available
under the Plan:
(a) adjust the number and type of
securities that thereafter may be issued under the Plan,
(b) adjust the number and type of
securities subject to outsta
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