COVANCE INC.
RESTRICTED STOCK PLAN
FOR NON-EMPLOYEE DIRECTORS
COVANCE INC.
RESTRICTED STOCK PLAN
FOR NON-EMPLOYEE DIRECTORS
1. Purpose
The Restricted Stock Plan for Non-Employee Directors (the "Plan") is to be a
part of the compensation paid by Covance Inc. (the "Corporation") for service
as a director to individuals who are not employees of (i) the Corporation,
(ii) any subsidiary corporation of the Corporation within the meaning of
Section 424 (f) of the Internal Revenue Code of 1986, as amended (the "Code")
or of any successor section (a "Subsidiary") or (iii) any other entity in
which he Corporation has at least one half of the ownership interest (such
persons being referred to herein as "Non-Employee Directors"). The Plan is
intended to increase the proprietary interest of the Non-Employee Directors,
as owners of additional shares of Covance Inc. common stock ("Common Stock"),
in the Corporation's success and progress.
2. Administration
The Plan shall be administered by the Committee of the Board of Directors of
the Corporation, which shall consist of at least three directors who together
shall have the authority to adopt rules and regulations for carrying out the
Plan and to interpret, construe and implement the provisions of the Plan. The
Committee may obtain such advice or assistance as it deems appropriate from
persons not serving on the committee.
3. Eligibility
Any Director of Covance Inc. (the "Corporation") who is not an officer or
employee of the Corporation or a Subsidiary thereof is eligible to
participate in the Plan.
4. Restricted Stock
The stock subject to grant under the Plan shall be limited to shares of the
Corporation's Common Stock, from the authorized and unissued Covance Board
approved pool of 105,000 shares of Covance Inc. Common Stock.
5. Recapitalization
The number of units in the participant's market value account shall be
proportionally adjusted for any increase or decrease in the number of issued
shares of Common Stock of the Corporation resulting from a subdivision or
consolidation of shares or other capital adjustment, or the payment of a
stock dividend or other increase or decrease in such shares effected without
receipt of consideration by the Corporation, or any distribution or spin-off
of assets (other than cash) to the stockholders of the Corporation.
6. Terms of Grant
a) Issuance - Each individual upon becoming a Non-Employee Director, and
eligible to participate in the Plan pursuant to Section 3 hereof, shall be
issued by the Corporation one or more certificates representing in the
aggregate Two Thousand (2,000) shares of the Common Stock of the
Corporation, which shares shall be issued and subject to the provisions of
the Plan. Each individual shall be issued by the Corporation one or more
certificates representing in aggregate two hundred (200) shares of the
Common Stock of the Corporation per year of service.
b) Restrictions on Transfer - All shares granted to a Participant shall be
subject to restriction on transfer so long as the Participant remains a
Non-Employee Director and may not be sold, assigned, transferred, pledged
or otherwise encumbered while the Participant is a Non-Employee Director.
c) Forfeitability - Except as set forth in the next paragraph, in the event
the Participant ceases to be a Non-Employee Director of the Corporation
all shares of Common Stock granted to him under the Plan shall be
forfeited and all rights of the Participant to such shares shall terminate
without further obligation on the part of the Corporation; provided
however, if such cessation is on account of death or medical or health
reasons which render the Participant unable to perform the duties and
responsibilities owed to the Corporation in his capacity as a director,
the possibility of forfeiture shall lapse in its entirety and all such
shares shall be vested in him.
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