As filed with the Securities and Exchange Commission on June 18, 1997
Registration No. 333-
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
COVANCE INC.
(Exact name of Registrant as specified in its Charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 210 Carnegie Center 22-3265977
(State of Incorporation) Princeton, New Jersey 08540-6233 (I.R.S. Employer
(Address of principal executive offices) Identification Number)
</TABLE>
COVANCE INC.
CONVERSION EQUITY PLAN
(Full Title of the Plan)
Jeffrey S. Hurwitz, Esq.
Corporate Senior Vice President,
General Counsel and Secretary
Covance Inc.
210 Carnegie Center
Princeton, New Jersey 08540-6233
(Name and address of agent for service)
(609) 452-4430
(Telephone number, including area code, of agent for service)
Copy to:
Shearman & Sterling
599 Lexington Avenue
Room 712
New York, New York 10022
Attention: Stephen T. Giove, Esq.
(212) 848-7325
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Title of Securities to Amount to be Proposed Maximum Proposed Maximum Amount of
be Registered Registered Offering Price per Aggregate Offering Registration Fee
Share(1) Price(1)
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
Common Stock, Par 1,500,000 $19.625 $29,437,500 $8,920.45
Value $.01 per share
- -------------------------------------------------------------------------------------------------------
(1) Estimated solely for purposes of determining the registration fee in accordance with Rule 457(h)
under the Securities Act of 1933.
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with the
Introductory Note to Part I of Form S-8.
Item 2. Company Information and Employee Plan Annual Information.
Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with the
Introductory Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed or to be filed by Covance Inc. ("the
Company") with the Securities and Exchange Commission (the "Commission") are
incorporated by reference in this Registration Statement as of their respective
dates:
1. The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996 filed pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), containing audited
financial statements for the Registrant's latest fiscal year, including
any amendment or report filed for the purpose of updating such
description.
2. The description of the Company's Common Stock contained
in the Company's Registration Statement on Form 10, declared effective
by the Commission on November 26, 1996 pursuant to Section 12(b) of the
Exchange Act, including any amendment or report filed for the purpose
of updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing with the
Commission of a post-effective amendment to this Registration Statement that
indicates that all securities offered have been sold or effects the
deregistration of the balance of such securities then remaining unsold shall be
deemed to be incorporated herein by reference and to be part hereof from the
date of filing of such documents.
Item 4. Description of Securities.
Incorporated by reference to Registrant's Form 10 declared effective by
the Commission on November 26, 1996 pursuant to Section 12(b) of the Exchange
Act, including any amendment or report filed for the purpose of updating such
description.
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<PAGE>
Item 5. Interests of Named Experts and Counsel.
Jeffrey S. Hurwitz, Corporate Senior Vice President, General Counsel
and Secretary of the Company, issued the opinion as to the legality of
securities being registered herein, attached as Exhibit 5.1 hereto. Mr. Hurwitz
participates in the Conversion Equity Plan, other Company stock and option
benefit plans and holds directly shares of the Company's Common Stock.
Item 6. Indemnification of Directors and Officers.
As permitted by the Delaware Law, the Company's Restated Certificate of
Incorporation provides that directors of the Company shall not be personally
liable to the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Company or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, relating to prohibited dividends or distributions or the repurchase or
redemption of stock or (iv) for any transaction from which the director derives
an improper personal benefit. In addition, the Company's Restated Certificate of
Incorporation provides for indemnification of the Company's officers and
directors to the fullest extent permitted under Delaware law. Section 145 of the
Delaware Law provides that a corporation may indemnify any persons, including
officers and directors, who were or are, or are threatened to be made, parties
to any threatened, pending or completed legal action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of such corporation), by reason of the fact that such person
was an officer, director, employee or agent of such corporation or is or was
serving at the request of such corporation as an officer, director, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise. The indemnity may include expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding, provided such
person acted in good faith and in a manner he reasonably believed to be in or
not opposed to the corporation's best interests and, for criminal proceedings,
had no reasonable cause to believe that his conduct was unlawful. A Delaware
corporation may indemnify officers and directors in an action by or in the right
of the corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses that such officer or
director actually and reasonably incurred. Insofar as indemnification for
liabilities arising under the Securities Act of 1933, as amended (the
"Securities Act"), may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.
The directors and officers of the Company are insured against certain
liabilities under the Company's directors' and officers' liability insurance.
2
<PAGE>
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits are filed herewith:
Exhibit
No. Document
------- --------
4.1 Covance Inc. Conversion Equity Plan.
5.1 Opinion of General Counsel as to the legality of securities
being registered.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of General Counsel (contained in the opinion filed
as Exhibit 5.1 to this Registration Statement).
24.1 Power of Attorney (included on Signature Page).
Item 9. Undertakings.
The undersigned Company hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
(i) to include any prospectus required by Section 10(a)(3) o
the Securities Act.
(ii) to reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in this Registration
Statement.
3
<PAGE>
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (i) and (ii) of this section do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration Statement.
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) that, for purposes of determining any liability under the
Securities Act, each filing of the Company's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of the
Exchange Act) that is incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Company certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Princeton and State of New Jersey on June 16,
1997.
COVANCE INC.
By: /s/ Christopher A. Kuebler
---------------------------------------
Christopher A. Kuebler
Chairman, President and Chief Executive
Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Jeffrey S. Hurwitz and Diana Ingallinera Faillace each of them, his
true and lawful attorneys-in-fact and agents each with full power of
substitution and resubstitution for him in any and all capacities to sign any
and all amendments (including pre- or post-effective amendments) to this
Registration Statement on Form S-8 and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, hereby
ratifying and confirming all that each such attorney-in-fact, or his substitute
or substitutes, may do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
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Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Christopher A. Kuebler
- --------------------------
Christopher A. Kuebler Chairman of the Board, June 16, 1997
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Charles C. Harwood, Jr.
- ---------------------------
Charles C. Harwood, Jr. Corporate Senior Vice President and June 16, 1997
Chief Financial Officer (Principal
Financial Officer)
/s/ Michael Giannetto
- ---------------------------
Michael Giannetto Vice President and Controller June 16, 1997
(Principal Accounting Officer)
/s/ Robert M. Baylis
- ---------------------------
Robert M. Baylis Director June 16, 1997
/s/ Van C. Campbell
- ---------------------------
Van C. Campbell Director June 16, 1997
/s/ Irwin Lerner
- ---------------------------
Irwin Lerner Director June 16, 1997
/s/ J. Randall MacDonald
- ---------------------------
J. Randall MacDonald Director June 16, 1997
/s/ Nigel W. Morris
- ---------------------------
Nigel W. Morris Director June 16, 1997
/s/ William A. Ughetta
- ---------------------------
William A. Ughetta Director June 16, 1997
</TABLE>
<PAGE>
EXHIBIT INDEX
-------------
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<CAPTION>
Exhibit No Document Page No.
- ---------- -------- --------
<S> <C> <C>
4.1 Covance Inc. Conversion Equity Plan. Filed herewith.
5.1 Opinion of the General Counsel as to the legality of securities
being registered. Filed herewith.
23.1 Consent of Price Waterhouse LLP. Filed herewith.
23.2 Consent of General Counsel (contained in opinion filed as
Exhibit 5.1 to this Registration Statement). Filed herewith.
24.1 Power of Attorney (included on Signature Page). Filed herewith.
</TABLE>
COVANCE INC.
CONVERSION EQUITY PLAN
1. Purpose
-------
The Conversion Equity Plan (the "Program") is intended to replace those Corning
Incorporated ("Corning") stock grants and option grants made to employees of
Covance Inc. (the "Corporation") under the various Corning equity plans
("Corning Grants") with equivalent stock grants and/or option grants made
pursuant to the Program (collectively, the "Conversion Grants"). Such Corning
Grants were terminated as of December 31, 1996 in connection with the spin-off
(the"Spin-Off") of the Corporation from Corning. For the purposes of the
Program, the Corporation's employees shall include: (i) any employee of a
"subsidiary corporation" of the Corporation within the meaning of Section 424 of
the Internal Revenue Code of 1986, as amended (the "Code") or of any successor
section, or (ii) any employee of any other entity in which the Corporation holds
beneficially at least one-half of the ownership interest (such entity or
"subsidiary corporation" being referred to herein as a "Subsidiary"). The
Program shall consist of two plans: (a) the Stock Option Plan and (b) the
Incentive Stock Plan.
2. Administration
--------------
The Program shall be administered by a committee of disinterested persons
appointed by the Board of Directors of the Corporation, known as the
"Compensation and Organization Committee" (the "Committee"), consisting of not
less than three members of the Corporation's Board of Directors and each member
of which shall be a "non-employee director" within the meaning of Rule
16b-3(b)(3) promulgated under the Securities Exchange Act of 1934 (the "1934
Act") or any successor thereto and an "outside director" within the meaning set
forth in regulations promulgated under Section 162(m) of the Code. All grants
pursuant to this Program shall only be made to replace Corning Grants or to
fulfill, where applicable, the reload provisions of any Conversion Grant.
The Committee's interpretation and construction of any provisions of this
Program, the Stock Option Plan, the Incentive Stock Plan or any option or award
granted or contract executed hereunder shall be final unless otherwise
determined by the Board of Directors, which determination shall be final. No
member of the Board of Directors or the Committee shall be liable for any such
action or determination made in good faith.
3. Eligibility
-----------
Only employees of the Corporation or any Subsidiary who held Corning Grants are
eligible to participate in any Plan under the Program. Furthermore, the Program
may only be used (i) to replace grants to employees whose Corning Grants
terminated at the Spin-Off or (ii) for reload option provisions pursuant to any
Conversion Grant.
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<PAGE>
4. Stock
-----
The shares subject to options or grants under the Program shall be shares of the
Corporation's Common Stock, par value $.01 per share, either authorized but
unissued or issued and held in treasury or such other securities as may be
issued by the Corporation in substitution therefor. The total amount of the
Common Stock of the Corporation which may be (i) issued pursuant to options
granted under the Stock Option Plan and (ii) granted under the Incentive Stock
Plan, shall not exceed 1,500,000 shares. In each case, the number of shares
shall be subject to adjustment in accordance with the provisions of Section 5.
Shares from the unexercised portion of the options which expire or of the
options which are terminated during the period when options may be granted and
shares forfeited or not earned under the Incentive Stock Plan may again be the
subject of an option under the Stock Option Plan; provided, however, that such
shares may only be used to fulfill the obligation of the reload provision of any
Conversion Grant. Shares of the Common Stock of the Corporation used by an
optionee as full or partial payment to the Corporation for the purchase price of
shares subject to an option agreement, the terms of which explicitly provide for
the grant of an additional option as contemplated by Section 6(a)(i) hereof,
shall again be made available for use under the Program. Shares otherwise
surrendered upon the exercise of stock options may not again be the subject of
options or awards granted under the Program. Shares surrendered under the
Program in payment of taxes due upon the exercise of stock options or upon the
recognition of income for shares issued under the Incentive Stock Plan may not
again be issued under the Program.
No single eligible employee under the Stock Option Plan may receive grants of
stock options covering in excess of 150,000, or 10% of the total, shares
authorized under the Program. Shares which are subject to a cancelled or expired
option shall continue to count against this limitation for any eligible
employee.
5. Recapitalization
----------------
The number of shares of Common Stock which may be granted under the Incentive
Stock Plan or made subject to options granted under the Stock Option Plan in the
aggregate and to any single eligible employee, the number of shares covered by
each outstanding option, and the price per share thereunder, and the number of
shares covered by a grant under the Incentive Stock Plan shall all 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, the distribution of shares
of capital stock to stockholders of the Corporation, 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 a normal cash dividend) to the stockholders of the Corporation.
Subject to any required action by the stockholders, if the Corporation shall be
the surviving corporation in any merger or consolidation, any option granted
under the Stock Option Plan and any stock granted under the Incentive Stock Plan
shall apply to the securities to which a holder of the number of shares of
Common Stock subject to the option or such stock, as the case may
2
<PAGE>
be, would have been entitled before the occurrence of such event. A dissolution
or liquidation of the Corporation, or a merger or consolidation in which the
Corporation is not the surviving corporation, shall cause every option
outstanding under the Stock Option Plan to terminate, except that the surviving
corporation may, in its absolute and uncontrolled discretion, tender an option
or options to purchase its shares on terms and conditions, both as to number of
shares and otherwise, which will substantially preserve the rights and benefits
of any option then outstanding under the Stock Option Plan. Upon the dissolution
or liquidation of the Corporation, or upon the effective date of any merger or
consolidation in which the Corporation is not the survivor and in which the
survivor has not tendered options as provided in the preceding sentence, the
Corporation shall deliver to each optionee whose incentive stock options are
being terminated an amount in cash equal to the difference between the option
price and the fair market value of a share of the Corporation's Common Stock
determined in good faith by the Committee. In the case of such a merger or
consolidation in which the Corporation is not the survivor, the Corporation
shall also deliver to each person whose incentive stock options are being
terminated and to each person who had exercised an incentive stock option and
who was holding the shares so purchased for long-term capital gains treatment an
amount equal to the difference between the federal income tax which the person
would be required to pay as a result of being unable to hold such shares for
long-term capital gains purposes (assuming a sale price equal to the fair market
value as provided above) and the tax such person is required to pay as a result
of having to dispose of shares on account of such merger or consolidation.
In the event of a change in the Corporation's presently authorized Common Stock
which is limited to a change of authorized shares with par value into the same
number of shares with a different par value or into the same number of shares
without par value, the shares resulting from any such change shall be deemed to
be Common Stock within the meaning of the Program.
6. Stock Option Plan
-----------------
(a) The Committee may grant options, including but not limited to
performance-based stock options and incentive stock options permitted by
Section 422 of the Code, to purchase shares of Common Stock, evidenced by
agreements in such form as the Committee may approve, containing in
substance the following terms and conditions:
(i) The option price shall be payable in full upon the exercise of the
option and may be paid either in United States dollars, or under rules
established and maintained from time to time by the Committee, in
shares of the Common Stock of the Corporation owned by the optionee,
or a combination of cash and shares. Under such rules, an optionee
paying the purchase price of an option in already-owned, freely
transferable, unencumbered shares of Common Stock of the Corporation
may receive new options to purchase shares of Common Stock of the
Corporation at the then current market price for the same number of
shares surrendered upon exercise of the original option. In no
circumstance will the total number of shares subject to the new option
granted exceed the number of shares surrendered upon exercise of the
original option, will the new option be exercisable within twelve
months of the date of exercise or will the new option have a life
beyond that of the original option.
3
<PAGE>
Shares of the Corporation's Common Stock shall be valued at the mean
between the high and low selling prices of the Corporation's Common
Stock on the New York Stock Exchange on the date of exercise.
(ii) The option shall state the total number of shares to which it
pertains.
(iii) The option price for all such Conversion Grants shall be the prices
calculated for each option holder, (based upon the conversion formula
set forth in the Corporation's Board of Directors Board Book, dated
January 31, 1997 ("Board Book") in Tab 5, Exhibit M to the Board
Book), as specified in Exhibit L of the Board Book.
(iv) Each option granted under the Stock Option Plan shall expire on the
date designated by the Committee but in no event more than ten years
from the date the option is granted.
(v) The Committee may in its discretion provide that an option may not be
exercised in whole or in part for any period or periods of time
specified by the Committee. Except as may be so provided by the
Committee and except as otherwise provided herein, any option may be
exercised in whole at any time or in part from time to time after the
option has vested in accordance with the terms of the applicable
agreement and during its term; provided, however, that in no
circumstance will an option under the Stock Option Plan become
exercisable in less than twelve months from the date of grant;
provided, further, however, that the foregoing proviso shall not apply
to any Conversion Grants.
(vi) The aggregate fair market value (determined as of the time the option
is granted) of the stock for which any employee may be granted
incentive stock options under this Plan or any other plans of the
Corporation or any subsidiary of the Corporation shall not exceed
$100,000 (or such other limit as may be in effect from time to time
under Section 422 of the Code or any statutory successor thereto) in
any calendar year in which such option or any portion thereof first
becomes exercisable pursuant to the terms of the agreement between
such employee and the Corporation; provided, however, that the
foregoing shall not apply to any Conversion Grants.
(vii) If, in the opinion of counsel for the Corporation, the listing,
registration or qualification of the shares subject to option under
any securities exchange or under any state or Federal law, or the
consent or approval of any governmental regulatory body, or an
exemption from registration, is necessary or desirable, each option
shall be subject to the requirement that such option may not be
exercised in whole or in part unless such listing, registration,
qualification, consent, approval or exemption shall have been effected
or obtained free of any conditions not acceptable to the Committee.
4
<PAGE>
(viii) An optionee shall have no rights as a stockholder with respect to
shares covered by his option to purchase until the date of the
issuance or transfer of the shares to him and only after such shares
are fully paid. No adjustment will be made for dividends or other
rights for which the record date is prior to the date of such issuance
or transfer, except as provided in Section 5.
(ix) The option agreements authorized under the Stock Option Plan shall
contain such other provisions not inconsistent with this Program as
the Committee may deem advisable.
(b) The Conversion Grants granted under the Stock Option Plan in exchange for
the Corning Grants held by employees of the Corporation or a Subsidiary
shall be permitted to have the terms and conditions of the substitute
options varied from the terms and conditions set forth in Section 6 of this
Program to such extent as the Committee at the time of grant may deem
appropriate to conform, in whole or in part, to the provisions of the
Corning Grant stock options.
(c) If the optionee's employment by the Corporation or a Subsidiary shall
terminate, his option shall terminate unless otherwise determined by the
Committee, or specific provision has been otherwise made as evidenced by
the terms of the option agreement approved by the Committee. The Committee
shall have full power and authority to determine whether, to what extent
and under what circumstances any option shall be exercisable, suspended or
canceled in the event of an optionee's termination of employment.
If an optionee dies while in the employ of the Corporation or a Subsidiary,
or within three months after termination of employment with options
exercisable pursuant to action taken by the Committee or otherwise in
accordance with the preceding sentences, the optionee's estate, personal
representative or beneficiary shall have the right to exercise such option
in accordance with the terms of the option agreement with respect to all
shares subject to option on the date of death.
If an optionee shall be transferred from the Corporation to a Subsidiary or
from a Subsidiary to the Corporation or from a Subsidiary to another
Subsidiary, his employment shall not be deemed to have terminated. If an
optionee shall be employed by a corporation or an entity which ceases to be
a Subsidiary, the Committee may, subject to the provisions of clauses (iv)
and (v) of Paragraph (a) of this Section 6, permit the participant to
exercise options held for such period of time as it determines with respect
to all shares which were available for purchase by the optionee on the date
the corporation or entity ceased to be a Subsidiary.
5
<PAGE>
7. Incentive Stock Plan
--------------------
The Committee may award shares of Incentive Stock to eligible employees on the
terms set forth herein.
(a) "Incentive Stock" shall be shares of the Corporation's Common Stock awarded
pursuant to the terms of the Incentive Stock Plan.
(b) Subject to the limitations of Section 4, the Committee shall grant to all
employees holding Corning Grants representing restricted stock, a
comparable Conversion Grant award, (based upon the conversion formula set
forth in Tab 5, Exhibit M of the Board Book) as specified in Exhibit K of
the Board Book.
Shares of Incentive Stock shall be issued in the name of, and distributed
to, those employees designated by the Board as recipients of Incentive
Stock as follows:
(i) Each employee designated as a recipient of shares of Incentive Stock
shall receive, promptly after the date or dates the Committee
determines the number of such shares which such employee is to receive
not subject to the possibility of forfeiture and other restrictions,
one or more stock certificates registered in the name of the
designated employee for such number of shares, the ownership of which
is vested non-forfeitably and without restriction in such employee;
and
(ii) Certificates covering shares of Incentive Stock subject to the
possibility of forfeiture and other restrictions shall be issued
promptly after the date or dates the Committee determines the number
of such shares to be issued in the name of the designated employee but
held by the Corporation as provided in clause (d) below.
(c) The shares which are granted subject to restrictions and the possibility of
forfeiture (and all shares issued or distributed by means of dividends,
splits, combinations, reclassifications, or other capital changes thereon)
(i) may not be sold, assigned, transferred, pledged or otherwise
encumbered, except (A) for gifts to a spouse, ancestors, or descendants, or
to trusts for their benefit and (B) pursuant to the qualified domestic
relations orders referred to in Section 9 hereof, subject, however, in each
such case to the restrictions and possibility of forfeiture applicable to
such shares and (ii) except as otherwise provided in an agreement approved
by the Committee are to be forfeitable to the Corporation upon termination
of employment for any reason other than death, disability approved by the
Corporation or retirement with the consent of the Corporation. The
restrictions and possibility of forfeiture imposed by this clause (c) shall
lapse at such time and in such proportions as the Incentive Stock Plan or
the Conversion Grant agreements shall detail.
(d) Each certificate issued in respect of shares granted under the Incentive
Stock Plan subject to restrictions on transfer and the possibility of
forfeiture shall be registered in the name of the employee but shall be
held by the Corporation in safekeeping for the employee and until
6
<PAGE>
such restrictions and the possibility of forfeiture shall lapse. Such
certificates shall bear a legend substantially as follows:
"The transferability of this certificate and the shares of stock
represented hereby are restricted and the shares are subject to the further
terms and conditions (including forfeiture) contained in the Incentive
Stock Plan of Covance Inc. and an agreement executed pursuant thereto. A
copy of such Plan and such agreement are on file in the office of the
Secretary of Covance Inc., Princeton, New Jersey."
(e) An employee who is to receive shares of Incentive Stock only upon the
expiration of certain specified periods shall have no rights as a
stockholder with respect to any shares which may become vested in, or be
awarded to, him, as the case may be, until such shares have been actually
issued.
(f) The value of shares of the Incentive Stock for all Conversion Grants shall
be the prices calculated for each restricted stockholder (based upon the
conversion formula set forth in Tab 5, Exhibit M to the Board Book) as
specified in Exhibit K of the Board Book .
(g) The terms and conditions of the Conversion Grants granted under the
Incentive Stock Plan for the Corning Grants held by employees of the
Corporation or a Subsidiary may be varied from the terms and conditions set
forth in Section 7 of this Program to such extent as the Committee at the
time of grant may deem appropriate to conform them, in whole or in part, to
the provisions of the Corning Grant restricted stock agreements.
8. Amendment and Administration of the Program
-------------------------------------------
The Board of Directors may, upon the recommendation of the Committee, from time
to time alter, amend, suspend, or discontinue the Program or either Plan
thereunder, except that no alteration or amendment shall, without the approval
of the holders of a majority of the outstanding shares entitled to vote thereon,
increase the total number of shares which may be sold or awarded under the
Program, decrease the price at which options may be granted, change the
standards of eligibility of employees eligible to participate, cause any change
to the Stock Option Plan or an option requiring stockholder approval under
Treasury Regulation Section 1.162-27(e)(4), or extend the term of the Program or
of options granted thereunder. Adjustments in the total number of shares
purchasable or awardable under the Program or optioned or granted to any
individual and adjustments of the option price may be made, however, without
stockholder approval pursuant to the adjustment provisions described under the
provisions of Section 5 hereof. No amendment or modification shall apply to
affect adversely any employee with respect to Incentive Stock already awarded to
him or an option already granted. Anything to the contrary in this Section 8
notwithstanding, should the provisions of Rule 16b-3, or any successor rule,
under the 1934 Act be amended, the Board may amend the Program in accordance
with any modifications to such Rule.
7
<PAGE>
With respect to persons subject to Section 16 of the 1934 Act, transactions
under the Program are intended to comply with all applicable conditions of Rule
16b-3, or any successor rule, under the 1934 Act. To the extent any provision of
the Program or action by the Committee, the Board of Directors or any
administrator fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee or the Board of
Directors.
9. Assignability
-------------
Except as otherwise provided in Section 7(c), no option or Incentive Stock
granted under the Program shall be assignable or transferable except by Will, by
the laws of descent and distribution, or pursuant to qualified domestic
relations orders as defined in or meeting the requirements of the Code or Title
I of the Employee Retirement Income Security Act of 1974, as amended. During the
lifetime of an optionee, an option shall be exercisable only by him and any
shares purchased upon the exercise of an option shall be issued in the name of
the optionee alone.
10. Effective Date and Term of Program.
----------------------------------
The Program became effective upon approval by a majority of the votes cast at a
meeting of the Corporation's stockholders by stockholders entitled to vote
thereon on December 30, 1996. No shares may be optioned or awarded under the
Program after the tenth anniversary, plus 60 calendar days, of the Program's
effective date.
11. Use of Proceeds
---------------
Proceeds from the sale of stock under the Program shall constitute general funds
of the Corporation.
12. Withholding
-----------
Whenever under the Program shares are to be issued in satisfaction of options or
awards granted thereunder, the Corporation shall have the right to require the
employee to remit to it an amount in cash, in shares of the Corporation's Common
Stock, or though the reduction of shares to be issued thereof, necessary to
satisfy federal, state and local withholding tax requirements prior to the
delivery of any certificate or certificates for shares. Whenever under the
Program payments are to be made in cash, such payment shall be net of an amount
necessary to satisfy federal, state and local withholding tax requirements.
8
<PAGE>
To record the adoption of the Program, the Corporation has caused its authorized
officers to affix its corporate name and seal effective as of December 30, 1996.
COVANCE INC.
Attest:
By: /s/ Jeffrey S. Hurwitz
----------------------
/s/ Diana Ingallinera Faillace Title: Corporate Senior Vice President
- ------------------------------ -------------------------------
Exhibit 5.1
June 16, 1997
Covance Inc.
210 Carnegie Center
Princeton, New Jersey 08540
Re: Covance Inc.
Conversion Equity Plan
Registration Statement on Form S-8
----------------------------------
Ladies and Gentlemen:
I am issuing this opinion in my capacity as General Counsel of Covance
Inc., a Delaware corporation (the "Company"), in connection with the
registration by the Company under the Securities Act of 1933, as amended (the
"Securities Act"), of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), on a Registration Statement on Form S-8 (the "Registration
Statement"). The Registration Statement relates to the issuance and sale of up
to 1,500,000 shares of Common Stock pursuant to the Covance Inc. Conversion
Equity Plan comprising an employee benefit plan (the "Plan"). Capitalized terms
used and not otherwise defined herein shall have the meanings ascribed to them
in the Registration Statement.
As such counsel, I have made such legal and factual examinations and
inquiries as I have deemed advisable for the purpose of rendering this opinion.
Based upon the foregoing, it is my opinion that the Common Stock, when issued,
delivered and paid for in the manner described in the Plan, will be validly
issued, fully paid and non-assessable.
The opinions contained herein relate solely to the Delaware General
Corporation Law, and I express no opinion herein concerning the laws of any
other jurisdiction. This opinion is rendered to the Company in connection with
the filing by the Company of the Registration Statement with the Securities and
Exchange Commission pursuant to the Securities Act and is solely for the benefit
of the Company in connection with such filing. The opinions expressed herein may
not be used or relied on by any other person, nor may this letter or any copies
thereof be furnished to a third party, filed with a government agency, quoted,
cited or otherwise referred to without our prior written consent, except as
noted below.
<PAGE>
June 16, 1997
Page 2
I hereby consent to the reference to myself under the caption "Legal
Matters" in the prospectus included in the Registration Statement. I hereby
consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement.
Very truly yours,
/s/ Jeffrey S. Hurwitz
--------------------------------
Jeffrey S. Hurwitz
Corporate Senior Vice President,
General Counsel and
Secretary
Exhibit 23.1
June 18, 1997
Consent of Independent Accountants
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 27, 1997, appearing on page 39
of Covance Inc.'s 1996 Annual Report on Form 10-K for the fiscal year ended
December 31, 1996.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
