<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 12, 1999
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>
<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>
1998 NON-EMPLOYEE DIRECTOR STOCK OPTION 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)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
Proposed Maximum Proposed Maximum Amount of
Title of Securities to Amount to be Offering Price per Aggregate Offering Registration Fee
be Registered Registered Share(1) Price(1)
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
<S> <C> <C> <C> <C>
Common Stock, Par
Value $.01 per share 300,000 $25.01 $3,614,145 $1,005
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
</TABLE>
(1) Estimated solely for purposes of determining the registration fee in
accordance with Rule 457(c) and (h) under the Securities Act of 1933,
as follows (i) in the case of 42,000 shares underlying options granted
and outstanding under the Plan on the date of filing of this Registration
Statement, based on the aggregate exercise price of $1,050,270 which
averages $25.01 per share, and (ii) in the case of 258,000 shares which
remain available for grant under the Plan on the date of filing of this
Registration Statement, based on the average of the high and low prices
of the registrant's Common Stock on November 5, 1999.
<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, 1998 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 Company's Quarterly Report on Form 10-Q for the period
ending March 31, 1999.
3. The Company's Quarterly Report on Form 10-Q for the period
ending June 30, 1999.
4. The Company's Quarterly Report on Form 10-Q for the
period ending September 30, 1999.
5. The Company's Proxy Statement in connection with the 1999
Annual Meeting of Shareholders filed with the Commission on March 8,
1999.
6. The Company's Current Reports on Form 8-K filed with the
Commission on May 4, 1999 and June 25, 1999.
7. 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
<PAGE>
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.
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 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.
<PAGE>
The directors and officers of the Company are insured against certain
liabilities under the Company's directors' and officers' liability insurance.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following exhibits are filed herewith:
Exhibit
NO. DOCUMENT
4.1 1998 Non-Employee Director Stock Option Plan
5.1 Opinion of General Counsel as to the legality of
securities being registered.
23.1 Consent of PricewaterhouseCoopers 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) of
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.
<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.
<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 November
10, 1999.
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 Ross A. Hyams 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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
Chairman of the Board,
/S/ CHRISTOPHER A. KUEBLER President and Chief Executive Officer
Christopher A. Kuebler (Principal Executive Officer) November 10, 1999
Corporate Senior Vice President and
/S/ CHARLES C. HARWOOD, JR. Chief Financial Officer (Principal
Charles C. Harwood, Jr. Financial Officer) November 10, 1999
/S/ MICHAEL GIANNETTO Vice President and Controller
Michael Giannetto (Principal Accounting Officer) November 10, 1999
/S/ ROBERT M. BAYLIS
Robert M. Baylis Director November 10, 1999
/S/ VAN C. CAMPBELL
Van C. Campbell Director November 10, 1999
/S/ IRWIN LERNER
Irwin Lerner Director November 10, 1999
/S/ J. RANDALL MACDONALD
J. Randall MacDonald Director November 10, 1999
/S/ NIGEL W. MORRIS
Nigel W. Morris Director November 10, 1999
/S/ KATHLEEN G. MURRAY
Kathleen G. Murray Director November 10, 1999
/S/ WILLIAM A. UGHETTA
William A. Ughetta Director November 10, 1999
</TABLE>
<PAGE>
EXHIBIT INDEX
EXHIBIT NO DOCUMENT PAGE NO.
4.1 1998 Non-Employee Director Stock Option Plan. FILED
HEREWITH.
5.1 Opinion of the General Counsel as to the legality
of securities being REGISTERED. FILED HEREWITH.
23.1 Consent of PricewaterhouseCoopers 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.
<PAGE>
EXHIBIT 4.1
COVANCE INC.
1998 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. ADMINISTRATION. The Administrator will be responsible for
administering the Plan. The Administrator will have authority to adopt such
rules as it may deem appropriate to carry out the purpose of the Plan, and shall
have authority to interpret and construe the provisions of the Plan and any
agreements and notices under the Plan and to make determinations pursuant to any
Plan provision. Each interpretation, determination or other action made or taken
by the Administrator pursuant to the Plan shall be final and binding on all
persons. The Administrator shall not be liable for any action or determination
made in good faith, and shall be entitled to indemnification and reimbursement
in the manner provided in the Company's Restated Articles of Incorporation and
By-Laws, as such documents may be amended from time to time.
3. SHARES AVAILABLE. Subject to the provisions of Section 7(b) of the
Plan, the maximum number of shares of Common Stock which may be issued under the
Plan shall not exceed the Section 3 Limit. Either authorized and unissued shares
of Common Stock or treasury shares may be delivered pursuant to the Plan. For
purposes of determining the number of shares that remain available for issuance
pursuant to the Plan, (i) the number of shares of Common Stock underlying
Options shall be charged against the Section 3 Limit, (ii) the Section 3 Limit
shall be increased by the number of shares subject to an Option which lapses,
expires or is otherwise terminated without the issuance of such shares, and
(iii) the Section 3 Limit shall be increased by such number of shares of Common
Stock used by an optionee as full or partial payment to the Company for the
purchase price of shares subject to an Option, the terms of which explicitly
provide for the grant of additional Options as contemplated by Section 4(e)(vi)
hereof.
4. OPTIONS. Each Non-Employee Director shall receive grants of Options
under the Plan as follows:
(a) OPTION GRANTS.
(i) INITIAL GRANT. Non-Employee Directors who are members of
the Board on the Effective Date shall be granted an Initial Option to
purchase 3,000 shares of Common Stock as of the Initial Grant Date.
Non-Employee Directors who are elected or appointed to the Board after
the Effective Date shall be granted an Initial Option to purchase 3,000
shares of Common Stock as of the date of their election or appointment
to the Board.
(ii) ANNUAL GRANTS. Each Non-Employee Director shall receive
an Annual Option to purchase 3,000 shares of Common Stock on each
subsequent calendar January 2nd, PROVIDED that the individual has
remained in continuous service as a Director of the Company through
such date and is a Non-Employee Director on such date. Each Annual
Option award shall be automatic, shall not require any action on the
part of the Board or its designees, and shall be made by the Company
automatically issuing an award agreement to each Non-Employee Director.
(b) EXERCISE PRICE. The per share exercise price of each Option shall
be not less than 100% of the Fair Market Value of a share of Common Stock as of
the date of grant of the Option determined in accordance with the provisions of
the Plan.
(c) VESTING. Options shall vest and become exercisable in equal annual
installments on each of the first through third anniversaries of the date of
grant, PROVIDED that the Non-Employee Director has remained in continuous
service as a Director of the Company through each such vesting date.
(d) TERM OF OPTIONS.
(i) TEN-YEAR TERM. Each Option shall expire ten (10) years
from its date of grant, subject to earlier termination as provided
herein.
<PAGE>
(ii) EXERCISE FOLLOWING TERMINATION OF SERVICE DUE TO DEATH.
If a Non-Employee Director ceases to be a member of the Board by reason
of such Director's death, the Options granted to such Non-Employee
Director shall become immediately vested and may be exercised by such
Non-Employee Director's Beneficiary, at any time during the remaining
life of the Option. At the end of such period, the unexercised vested
portion of the Option shall expire.
(iii) TERMINATION OF OPTIONS IF A NON-EMPLOYEE DIRECTOR IS
REMOVED FROM THE BOARD FOR CAUSE. In the event a Non-Employee Director
is removed from the Board for "cause," all Options granted to such
Director (whether or not then vested and exercisable) shall immediately
terminate and be of no further force and effect as of the effective
date of such Non-Employee Director's removal from the Board. Whether a
Non-Employee Director is removed by the Board for "cause" shall be
determined by the Board in accordance with the Restated Articles of
Incorporation and the By-Laws of the Company.
(iv) EXERCISE FOLLOWING OTHER TERMINATIONS OF SERVICE. If a
Non-Employee Director ceases to be a member of the Board for any reason
other than death, disability, removal from the Board for cause or
retirement or resignation with consent of the Company, the Options
granted to such Non-Employee Director may be exercised by such
Director, but only to the extent the Option was exercisable at the time
of such Director's termination, at any time within ninety (90) days
after the date of such termination of service, subject to the earlier
expiration of such Options as provided in Section 4(d)(i) above. At the
end of such ninety-day period, the vested portion of the Option shall
expire. The unvested portion of the Option shall expire on the date of
the Non-Employee Director's termination of service with the Board.
(v) EXERCISE FOLLOWING RETIREMENT OR RESIGNATION WITH CONSENT
OF COMPANY. In the event a Non-Employee Director retires or resigns
from the Board with the consent of the Company, the Options granted to
such Non-Employee Director shall become immediately vested and may be
exercised by such Non-Employee Director at any time during the
remaining life of the Option. At the end of such period, the
unexercised vested portion of the Option shall expire.
(vi) EXERCISE FOLLOWING TERMINATION OF SERVICE DUE TO
DISABILITY. If a Non-Employee Director ceases to be a member of the
Board by reason of such Director's disability (as defined in Section
22(e)(3) of the Code), the Options granted to such Non-Employee
Director shall become immediately vested may be exercised by such
Director (or his legally appointed guardian), at any time during the
remaining life of the Option. At the end of such period, the
unexercised vested portion of the Option shall expire.
(e) TIME AND MANNER OF EXERCISE OF OPTIONS.
(i) NOTICE OF EXERCISE. Subject to the other terms and
conditions hereof, a Non-Employee Director may exercise any Option, to
the extent such Option is vested, by giving written notice of exercise
to the Company; PROVIDED, HOWEVER, that in no event shall an Option be
exercisable for a fractional share. The date of exercise of an Option
shall be the later of (A) the date on which the Company receives such
written notice or (B) the date on which the conditions provided in
Section 4(e)(ii) are satisfied.
(ii) METHOD OF PAYMENT. The consideration to be paid for the
shares to be issued upon exercise of an Option may consist of (A) cash,
(B) certified, bank or broker check, (C) other shares which have a Fair
Market Value on the date of surrender equal to the aggregate exercise
price of the shares as to which the Option shall be exercised, or (D) a
combination of any of the above.
(iii) STOCKHOLDER RIGHTS. A Non-Employee Director shall have
no rights as a stockholder with respect to any shares of Common Stock
issuable upon exercise of an Option until a certificate evidencing such
shares shall have been issued to the Non-Employee pursuant to Section
4(e)(v), and no adjustment shall be made for dividends or distributions
or other rights in respect of any share for which the record date is
prior to the date upon which the Non-Employee Director shall become the
holder of record thereof.
(iv) LIMITATION ON EXERCISE. No Option shall be exercisable
unless the Common Stock subject thereto has been registered under the
Securities Act and qualified under applicable state "blue sky" laws in
connection with the offer and sale thereof, or the Company has
determined that an exemption from registration under the Securities Act
and from qualification under such state "blue sky" laws is available.
(v) ISSUANCE OF SHARES. Subject to the foregoing conditions,
as soon as is reasonably practicable after its receipt of a proper
notice of exercise and payment of the exercise price of the Option
for the number of shares with respect to which the Option is
exercised, the Company shall deliver to the Non-Employee Director
(or following the Non-Employee Director's death or disability, the
Beneficiary or legally appointed guardian, respectively, entitled to
exercise the Option), at the principal office of the Company or at
such other location as may be acceptable to the Company and the
Non-Employee Director (or such Beneficiary or guardian), one or more
stock certificates for the appropriate number of shares of Common
Stock issued in connection with such exercise. Shares sold in
connection with a "cashless exercise" shall be delivered to the
broker referred to therein in accordance with the procedures
established by the Company from time to time.
(vi) RELOAD. If payment of the Option's exercise price is
made in whole or in part with freely transferable, unencumbered shares
of the Company's Common Stock, the Non-Employee Director shall receive
new non-qualified stock options to purchase the Common Stock at the
then current market price (being the mean between the high and low
selling prices of the Common Stock on the New York Stock Exchange on
the date of exercise) for the same number of shares surrendered upon
exercise of the original Option. In no circumstance (A) will the total
number of shares subject to the new Option granted exceed the number of
shares surrendered upon exercise of the original Option, (B) will the
new Option be exercisable within twelve months of the date of exercise,
or (C) will the new Option have a life beyond that of the original
Option. Shares of Common Stock surrendered to the Company pursuant to
this Section 4(e)(vi) shall be valued at the closing price of the
Common Stock on the New York Stock Exchange on the date of exercise.
(f) RESTRICTIONS ON TRANSFER. An Option may not be transferred,
pledged, assigned, or otherwise disposed of, except by will or by the laws of
descent and distribution.
(g) NON-QUALIFIED STOCK OPTIONS. Only non-qualified stock options may
be granted to Non-Employee Directors pursuant to this Plan.
(h) SHAREHOLDER APPROVAL. Any Options granted pursuant to this Plan are
subject to the approval of the Plan by the Company's shareholders and no rights
shall vest with respect to any grant hereunder or otherwise under this Agreement
until and unless such approval is received.
5. DESIGNATION/CHANGE OF BENEFICIARY. Each Non-Employee Director may
designate a Beneficiary to exercise an Option upon the Non-Employee Director's
death by executing a Beneficiary Designation Form. A Non-Employee Director may
change an earlier Beneficiary designation by executing a later Beneficiary
Designation Form and delivering it to the Administrator. The execution of a
Beneficiary Designation Form and its receipt by the Administrator will revoke
and rescind any prior Beneficiary Designation Form.
6. CHANGE IN CONTROL. Anything in the Plan to the contrary
notwithstanding, in the event of a Change in Control of the Company, any Options
outstanding as of the date such Change in
Control is determined to have occurred that are not yet exercisable and vested
on such date shall become fully exercisable and vested.
7. RECAPITALIZATION OR REORGANIZATION.
(a) AUTHORITY OF THE COMPANY AND SHAREHOLDERS. The existence of the
Plan shall not affect or restrict in any way the right or power of the Company
or the shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Stock, or the dissolution or liquidation of the Company, or
any sale or transfer of all or an part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.
(b) CHANGE IN CAPITALIZATION. Notwithstanding any other provision of
the Plan, in the event of any change in the outstanding Common Stock by reason
of a stock dividend, recapitalization, reorganization, merger, consolidation,
stock split, combination or exchange of shares (a "CHANGE IN CAPITALIZATION"),
(i) such proportionate adjustments as may be necessary (in the form determined
by the Administrator in its sole discretion) to reflect such change shall be
made to prevent dilution or enlargement of the rights of Non-Employee Directors
under the Plan with respect to the aggregate number of shares of Common Stock
authorized to be awarded under the Plan, the number of shares of Common Stock
covered by each outstanding Option and the exercise prices in respect thereof
<PAGE>
and the number of shares of common Stock covered by future Option grants and
(ii) the Administrator may make such other adjustments, consistent with the
foregoing, as it deems appropriate in its sole discretion.
(c) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, each outstanding Option will vest and
become exercisable on a date prior to the consummation of the proposed action
that is reasonably sufficient to enable the Non-Employee Directors to exercise
their Options.
8. TERMINATION AND AMENDMENT TO THE PLAN. The Plan shall terminate on
the tenth anniversary of the Effective Date. Following such date, no further
grants of Options shall be made pursuant to the Plan. Notwithstanding anything
herein to the contrary, the Board may at any time and from time to time
terminate, modify, suspend or amend the Plan in whole or in part; PROVIDED,
HOWEVER, that no such termination, modification, suspension or amendment shall
be effective without shareholder approval if such approval is required to comply
with any applicable law or stock exchange rule; and PROVIDED FURTHER, that the
Board may not, without shareholder approval, increase the maximum number of
shares issuable under the Plan except as provided in Section 7(b) above,
decrease the price at which Options may be granted, materially increase the
benefits of the Plan to Directors (except to the extent of an increase of the
number of Options which may be granted to Directors at any time), or extend the
term of the Plan or any Options granted thereunder.
9. MISCELLANEOUS.
(a) NO RIGHT TO RE-ELECTION. Nothing in the Plan shall be deemed to
create any obligation on the part of the Board to nominate any of its members
for reelection by the Company's stockholders, nor confer upon any Non-Employee
Director the right to remain a member of the Board for any period of time, or at
any particular rate of compensation.
(b) SECURITIES LAW RESTRICTIONS. The Administrator may require each
Non-Employee Director purchasing or acquiring shares of Common Stock pursuant to
the Plan to agree with the Company in writing that such Non-Employee Director is
acquiring the shares for investment and not with a view to the distribution
thereof. All certificates for shares of Common Stock delivered under the Plan
shall be subject to such stock-transfer orders and other restrictions as the
Administrator may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission or any exchange upon
which the Common Stock is then listed, and any applicable federal or state
securities law, and the Administrator may cause a legend or legends to be put on
any such certificates to make appropriate reference to such restrictions. No
shares of Common Stock shall be issued hereunder unless the Company shall have
determined that such issuance is in compliance with, or pursuant to an exemption
from, all applicable federal and state securities laws.
(c) EXPENSES. The costs and expenses of administering the Plan shall be
borne by the Company.
(d) APPLICABLE LAW. Except as to matters of federal law, the Plan and
all actions taken thereunder shall be governed by and construed in accordance
with the laws of the State of Delaware without giving effect to conflicts of law
principles.
(e) EFFECTIVE DATE. The Plan shall be effective as of the date of Board
approval.
10. DEFINITIONS. Capitalized words not otherwise defined in the Plan
have the meanings set forth blow:
"ADMINISTRATOR" means the General Counsel of the Company or
the individual appointed by the General Counsel to administer the Plan.
"ANNUAL OPTION" means an Option granted to a Non-Employee
Director pursuant to Section 4(a)(ii) of the Plan.
"BENEFICIARY" or BENEFICIARIES" means an individual or entity
designated by a Non-Employee Director on a Beneficiary Designation Form
to exercise Options in the event of the Non-Employee Director's death;
PROVIDED, HOWEVER, that, if no such individual or entity is designated
or if no such designated individual is alive at the time of the
Non-Employee Director's death, Beneficiary shall mean the Non-Employee
Director's estate.
<PAGE>
"BENEFICIARY DESIGNATION FORM" means a document, in a form
approved by the Administrator to be used by Non-Employee Directors to
name their respective Beneficiaries. No Beneficiary Designation Form
shall be effective unless it is signed by the Non-Employee Director and
received by the Administrator prior to the date of death of the
Non-Employee Director.
"BOARD" means the Board of Directors of the Company.
"CHANGE IN CONTROL" means the happening of any of the
following:
(i) When any "person", as such term is used in Sections 13(d)
and 14(d) of the Exchange Act (other than the Company, a Subsidiary or
a Company employee benefit plan, including any trustee of such plan
acting as trustee) is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing twenty percent (20%) or more of
the combined voting power of the Company's then outstanding securities;
or
(ii) as a result of a proxy contest or contests or other forms
of contested shareholder votes (in each case either individually or in
the aggregate), a majority of the individuals elected to serve on the
Board are different than the individuals who served on the Board at any
time within the two years prior to such proxy contest or contests or
other forms of contested shareholder votes (in each case either
individually or in the aggregate); or
(iii) when Company shareholders approve a merger, or
consolidation (where in each case the Company is not the survivor
thereof), or sale or disposition of all or substantially all of the
Company's assets or a plan or partial or complete liquidation; or
(iv) where an offerer (other than the Company) purchases
shares of the Company's Common Stock pursuant to a tender or exchange
offer for such shares.
"CODE" means the Internal Revenue Code of 1986, as amended,
and the applicable rules and regulations promulgated thereunder.
"COMMON STOCK" means the common stock of the Company, $.01 par
value per share.
"COMPANY" means Covance Inc., a Delaware corporation.
"EFFECTIVE DATE" means the date of Board approval.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the applicable rules and regulations promulgated
thereunder.
"FAIR MARKET VALUE" means the value of Common Stock determined
by the closing price of the Common Stock (or the closing bid if no
sales were reported), as quoted on the New York Stock Exchange for the
date of determination or, if the date of determination is not a trading
day, the immediately preceding trading day, as reported in THE WALL
STREET JOURNAL or such other source as the Administrator deems
reliable. In the absence of an established market for the Common Stock,
the Fair Market Value thereof shall be determined in good faith by the
Administrator.
"INITIAL GRANT DATE" means March 16, 1998.
"INITIAL OPTION" means an Option granted to a Non-Employee
Director pursuant to Section 4(a)(i) of the Plan.
"NON-EMPLOYEE DIRECTOR" means a member of the Board who is not
an employee of the Company or any of its Subsidiaries.
"OPTION" means an option to purchase shares of Common Stock
awarded to a Non-Employee Director pursuant to the Plan and includes
Initial Options and Annual Options.
"PLAN" means the Covance Inc. 1998 Non-Employee Director Stock
Option Plan.
<PAGE>
"SECURITIES ACT" means the Securities Act of 1933, as amended,
and the applicable rules and regulations promulgated thereunder.
"SECTION 3 LIMIT" means 300,000 shares.
"SUBSIDIARY" means any corporation which is a "subsidiary
corporation" within the meaning of Section 424(f) of the Code with
respect to the Company.
<PAGE>
EXHIBIT 5.1
November 10, 1999
Covance Inc.
210 Carnegie Center
Princeton, New Jersey 08540
Re: Covance Inc.
1998 Non-Employee Director Stock Option 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 300,000 shares of Common Stock pursuant to the 1998 Non-Employee Director
Stock Option Plan comprising a non-employee Director 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 my prior written consent,
except as noted below.
<PAGE>
November 10,1999
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
<PAGE>
EXHIBIT 23.1
November 10, 1999
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 20, 1999, appearing on page 26
of Covance Inc.'s Annual Report on Form 10-K for the fiscal year ended December
31, 1998.
/s/ PricewaterhouseCoopers LLP
