QuickLinks -- Click here to rapidly navigate through this document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

---

2011
Notice of
Annual Meeting &
Proxy Statement

---

March 28, 2011

Dear Fellow Shareholder:

        You are cordially invited to attend the 2011 Annual Meeting of Shareholders of Covance Inc., to be held at 8:00 a.m., local time, on Thursday, May 12, 2011, at the Princeton Marriott Hotel & Conference Center at Forrestal, 100 College Road East, Princeton, New Jersey. We hope that you will participate in the Annual Meeting either by attending and voting in person or by voting through the internet or by telephone as promptly as possible. Your vote is important.

        This Notice of Annual Meeting and Proxy Statement provide information about the matters to be acted upon by Covance's shareholders. The Proxy Statement also contains information about the role and responsibilities of the Board of Directors and its Committees and provides important information about each nominee for election as a Director and other matters to be acted on at the meeting.

---

COVANCE INC.

---

NOTICE OF 2011 ANNUAL MEETING
OF SHAREHOLDERS

---

        The 2011 Annual Meeting of the Shareholders of Covance Inc. (the "Company") will be held on Thursday, May 12, 2011, at 8:00 a.m., local time, at the Princeton Marriott Hotel & Conference Center at Forrestal, 100 College Road East, Princeton, New Jersey for the following purpose:

1.

To elect two members to the Company's Class II Board of Directors.




2.

To hold an advisory vote on executive compensation.




3.

To hold an advisory vote on the frequency of an advisory vote on executive compensation.




4.

To ratify the appointment of Ernst & Young LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2011.




5.

To vote on a shareholder proposal described in this proxy if properly presented at the meeting.

        Only shareholders of record at the close of business on March 17, 2011 are entitled to notice of, and to vote at, the Annual Meeting.

        We are pleased to provide our shareholders this year with the benefits provided by the proxy rules of the Securities and Exchange Commission that allow companies to furnish proxy materials to shareholders via the internet. These rules enable us to provide our shareholders with the information they need, while lowering the costs of printing and delivery, and reducing the environmental impact of the Annual Meeting. Accordingly, on or about March 28, 2011, we began mailing to shareholders of record a Notice of Internet Availability of Proxy Materials containing instructions on how to access the Proxy Statement and the Form 10-K Annual Report via the internet and how to vote online (http://www.edocumentview.com/CVD). The Notice of Internet Availability of Proxy Materials and the attached Proxy Statement also contain instructions on how to receive a paper copy of the proxy materials if you so choose. You will not receive printed copies of the proxy materials unless you request them. If you request the proxy materials be mailed to you, you can complete, date, sign and return the proxy card or voter instruction card in the self-addressed, postage-paid envelope provided to you.

        We hope you will attend the Annual Meeting in person. Whether or not you plan to attend the meeting, we urge you to vote by internet or telephone to ensure that your shares are represented at the meeting. Registered shareholders may vote (1) through the internet using the instructions described in the Notice of Internet Availability; (2) by telephone (from the United States, Puerto Rico and Canada) using the toll-free telephone number listed on the Notice of Internet Availability of Proxy Materials; or (3) if you elect to receive printed copies of the proxy materials by mail, by completing, signing, dating and returning the proxy card or voter instruction card in the postage-paid envelope provided. If your shares are held in the name of a bank, broker or nominee, follow the instructions you receive from your nominee on how to vote your shares. Registered Shareholders who attend the meeting may vote their shares personally even if they previously have voted their shares.

---

        An admission ticket and government-issued picture identification will be required to enter the meeting. All shareholders must have an admission ticket to attend the Annual Meeting. Shareholders may obtain an Annual Meeting ticket and directions to the Princeton Marriott Hotel & Conference Center at Forrestal, where it will be held, by writing to Secretary, Covance Inc., 210 Carnegie Center, Princeton, New Jersey 08540. If you are a registered holder, please indicate that in your request. If your shares are held by a bank, broker or nominee, you must enclose with your request evidence of your ownership of shares with your ticket request, which you can obtain from your broker, bank or nominee. Please submit your ticket request and proof of ownership as promptly as possible in order to ensure you receive your ticket in time for the meeting. Admission to the Annual Meeting will be on a first-come, first-served basis.

March 28, 2011

---

COVANCE INC.
210 Carnegie Center
Princeton, New Jersey 08540

---

PROXY STATEMENT

---

2011 Annual Meeting of Shareholders
May 12, 2011

---

Important Notice Regarding the Availability of Proxy Materials
for the Shareholder Meeting to Be Held on May 12, 2011

The Proxy Statement and the Annual Report are available
for viewing at http://www.edocumentview.com/CVD.

---

General Information

        The Board of Directors of Covance Inc. (the "Company" or "Covance") solicits your proxy for voting at the 2011 Annual Meeting of Shareholders of Covance and at any adjournment or postponement of this meeting ("Annual Meeting"). Covance will hold the Annual Meeting on Thursday, May 12, 2011, at 8:00 a.m., local time, at the Princeton Marriott Hotel & Conference Center at Forrestal, 100 College Road East, Princeton, New Jersey. The approximate date of mailing of the Notice of Internet Availability of Proxy Materials is March 28, 2011.

        Your vote is important and the Board of Directors urges you to exercise your right to vote. You are invited to attend the Annual Meeting in person to vote. Whether or not you plan to attend the Annual Meeting, please vote your shares using any of the following methods: vote by telephone or the Internet, as described in the instructions you receive in the Notice of Internet Availability of Proxy Materials. If you would like to receive a printed or e-mailed copy of the Proxy Statement and accompanying materials including a proxy card or voter instruction card enabling you to vote by mail, you must follow the instructions for requesting such materials included in the Notice of Internet Availability. You may revoke your proxy at any time before it is exercised in any one of three ways: (i) by giving written notice to the Secretary of the Company, (ii) by submitting a subsequently dated and properly signed proxy, or (iii) by attending the Annual Meeting and revoking the proxy. Your attendance at the Annual Meeting will not by itself revoke your proxy.

        All shareholders as of the close of business on March 17, 2011 (the "record date") may attend the Annual Meeting but must bring with them an admission ticket obtained from the Corporate Secretary of Covance. You may obtain the Annual Meeting ticket by writing to Secretary, Covance Inc., 210 Carnegie Center, Princeton, New Jersey 08540. If you are a registered holder, please indicate that in your request. If your shares are held by a bank, broker or nominee, you must enclose with your request evidence of your ownership of shares with your ticket request, which you can obtain from your broker, bank or nominee. Please submit your ticket request and proof of ownership as promptly as possible in order to ensure you

1

---

receive your ticket in time for the meeting. Admission to the Annual Meeting will be on a first-come, first-served basis, and an admission ticket and government issued picture identification will be required to enter the meeting.

        When you provide your proxy, the shares of the Company's common stock ("Common Stock") represented by the proxy will be voted in accordance with your instructions. As to the election of the Class II Directors, by marking the appropriate box you may (a) vote for both of the Class II Director nominees as a group, or (b) vote for one of the Class II Director nominees but not the other as you specify, or (c) withhold your vote from the Class II Director nominees as a group. As to the other items, you may vote "for" or "against" the item or "abstain" from voting by marking the appropriate box. If you sign your proxy card without specifying any choices or indicate when voting on the internet or by telephone that you wish to vote as recommended by the Board, you will have granted authority to the named proxies solicited by the Company ("named proxies") to vote FOR the election of the two nominees as Class II Directors; FOR the approval, on an advisory basis, of the compensation of the Named Executives (as defined in the Summary Compensation Tables); for EVERY ONE YEAR regarding the frequency, on an advisory basis, of a vote on executive compensation; FOR the ratification of the appointment of Ernst & Young LLP; AGAINST the shareholder proposal, as described in this Proxy Statement; and confer authority upon the named proxies to vote your shares in their discretion on any other matters properly presented at the Annual Meeting. Should any matter not described in this Proxy Statement be properly presented at the meeting, the named proxies will vote in accordance with their judgment. The Board of Directors currently knows of no other business that will be presented for consideration at the Annual Meeting.

        You are entitled to notice of, and to vote at, the Annual Meeting if you were a shareholder on the record date which is March 17, 2011. A majority of the shares of Common Stock issued and outstanding will constitute a quorum for the Annual Meeting. Abstentions and broker non-votes are counted as present for purposes of determining a quorum. A broker non-vote occurs when a nominee holds shares for a beneficial owner but cannot vote on a proposal because the nominee does not have discretionary power and has not received instructions from the beneficial owner.

        Voting at the Annual Meeting will work as follows:

•

As to Proposal One (Director elections), Directors are elected by a plurality vote so the nominees receiving the highest vote totals will be elected. The outcome of the Director vote will not be affected by abstentions or broker non-votes.



•

As to Proposal Two (advisory vote on executive compensation) and Proposal Three (advisory vote on the frequency of an advisory vote on executive compensation), such proposals are advisory and not binding on the Company. Shares present and not voted, whether by broker non-vote, abstention or otherwise, will have no effect on these advisory votes.



•

As to Proposal Four (Ratification of the Appointment of Independent Registered Public Accounting Firm), such proposal requires the affirmative vote of the majority of shares present or represented by proxy and entitled to vote. This proposal is considered a "routine" matter under the rules of the New York Stock Exchange and therefore brokerage firms have the authority to vote their customers' shares if the customers have not furnished voting instructions. Abstentions will be treated as shares present.



•

As to Proposal Five (shareholder proposal), such resolution requires the affirmative vote of the majority of shares present or represented by proxy and entitled to vote. Abstentions will be treated as shares present.

        Shares of Common Stock held in Covance's Stock Purchase Savings Plan ("401(k) Plan"), are held of record and are voted by the trustee of the 401(k) Plan at the direction of 401(k) Plan participants. Participants in the 401(k) plan will be provided with a full paper set of proxy materials instead of the Notice of Internet Availability of Proxy Materials because of certain legal requirements. Participants in the

2

---

401(k) Plan may direct the trustee of the plan, and the participants in the Employee Stock Purchase Plan ("ESPP") may direct UBS Financial Services, Inc. ("UBS"), as to how to vote shares allocated to their 401(k) Plan and ESPP accounts, respectively. The cutoff date for voting for participants in the 401(k) Plan is close of business on May 9, 2011. The 401(k) Plan trustee will vote shares as to which they have not received direction in accordance with the terms of the plan documents.

        As of February 18, 2011, there were 60,410,386 shares of Common Stock issued and outstanding. Each shareholder is entitled to one vote for each share of Common Stock registered in that person's name as of March 17, 2011, the record date.

3

---

PROPOSAL ONE

Election of Class II Directors

        The Board of Directors (the "Board of Directors" or the "Board") is divided into three classes, with one class of three directors and two classes of two directors each, whose terms expire at successive annual meetings. Two Class II Directors will be elected at the Annual Meeting to serve for a term expiring at Covance's Annual Meeting in the year 2014. Each nominee elected as a Class II Director will continue in office until his or her successor has been duly elected and qualified, or until his or her earlier death, resignation or retirement. The Board has nominated Gary E. Costley and Sandra L. Helton for election as Class II Directors at the Annual Meeting. Prior to February 17, 2011, Ms. Helton had been a Class III Director. After the retirement of Kathleen G. Bang from the Board on January 10, 2011, Ms. Helton was appointed by the Board on February 17, 2011 as a Class II Director in order to ensure that the Classes are as equal in size as possible. Consequently, Ms. Helton shall stand for reelection in 2011 instead of 2012.

        The Board of Directors recommends that shareholders vote FOR the election of the above named nominees for election as Director.

        Unless there is a contrary indication, shares of Common Stock represented by valid proxies will be voted FOR the election of both of the nominees. If for any reason a nominee should become unable to serve as a Director, the shares represented by valid proxies will be voted for the election of such other person as the Board may recommend, or the Board may reduce the number of Directors to eliminate the vacancy.

        Set forth below is the principal occupation of, and certain information regarding, such nominees, and the other Directors whose terms of office will continue after the Annual Meeting.

4

---

---

CLASS II NOMINEES
FOR TERMS EXPIRING IN 2014

---

5

---

---

CLASS III DIRECTORS
WHOSE TERMS WILL EXPIRE IN 2012

---

6

---

---

CLASS I DIRECTORS
WHOSE TERMS WILL EXPIRE IN 2013

---

7

---

Stock Ownership of Directors,
Executive Officers and Certain Shareholders

Directors and Executive Officers

        The following table shows, as of February 18, 2011, the number of shares of Common Stock beneficially owned by each Director and nominee for election as Director, for each of the Named Executives (as defined in the Summary Compensation Table), and by the Directors and executive officers as a group, and currently exercisable options held by any of them.

8

---

Certain Shareholders

        The following table shows those persons known to the Company as of February 18, 2011 to be the beneficial owners of more than five (5%) percent of the Company's Common Stock. In furnishing the information below, the Company has relied on information filed by the beneficial owners with the Securities and Exchange Commission ("SEC").

CORPORATE GOVERNANCE
The Board of Directors and its Committees

        The Board provides oversight of senior management in its operation of the Company. The Board reviews significant developments affecting Covance and acts on matters requiring Board approval. During 2010, the Board held eleven meetings. The Board periodically reviews Covance's corporate governance policies and practices and modifies those practices when required by law or when deemed by the Board to be in the best interests of the Company. The Board also considers policies and practices suggested by other

9

---

groups active in corporate governance. The charters of each Board committee and Covance's corporate governance guidelines are posted on Covance's website at www.covance.com under Investor Relations. Covance has also adopted a Code of Ethics for Financial Professionals, which is applicable to Covance's Chief Executive Officer, Chief Financial Officer, Controller and certain other financial and accounting professionals, and a Business Integrity Program applicable to all employees, as well as the Board of Directors. These codes are also posted on Covance's website. In the event Covance adopts an amendment to the Code of Ethics for Financial Professionals or Business Integrity Program, or grants a waiver thereunder, Covance will also post that information on its website. Covance has adopted Guidelines for Executive Ownership in Covance Stock, which are also posted on its website.

Director Independence

        The Board has affirmatively determined that six of the seven current Directors are independent, under the New York Stock Exchange ("NYSE") Listing Standards, and Covance's more stringent independence standards. Each of the independent directors has no relationship with the Company (other than as a director or shareholder) or has only categorically immaterial relationships as defined in the independence standards. Covance's independence standards are available on Covance's website at www.covance.com under Investor Relations, Corporate Governance as Exhibit A to the Corporate Governance Guidelines. Relationships defined as categorically immaterial under the guidelines are set forth in paragraph F of the independence standards. Individuals who have served as Directors in 2010 who have been determined to be independent are:

        All Directors meet applicable additional independence requirements with respect to the Covance Board Committees on which they serve.

        In making its independence determinations, the Board considered transactions between the Company and entities associated with the independent directors. The Board's independence determinations included reviewing the following transactions:

•

Dr. Barchi is an executive officer of Thomas Jefferson University, with which Covance has done business. The amount that Covance paid to or received from this organization for goods and services did not, in any of the previous three fiscal years, exceed the greater of $1 million, or 1% of such other company's annual revenues. In past years, Covance has paid Thomas Jefferson University amounts for the participation of Thomas Jefferson University's doctors as investigators in clinical trials managed by Covance. In 2010, the Company did not pay to or receive any amounts from this organization.



•

Dr. Barchi, Mr. McCartney and Dr. Sheares are directors of organizations that do business with Covance. These business relationships are as a supplier or purchaser of goods or services on an arms-length basis.

        In 2010, each Director attended all of the Board meetings and Committee meetings held of which he or she was a member, except Ms. Helton missed two meetings and Mr. Scodari missed one meeting. Covance encourages members of the Board of Directors to attend the Annual Meeting of Shareholders. All of the Directors except one attended the 2010 Annual Meeting.

        The non-management members of the Board of Directors meet at regularly scheduled executive sessions without the presence of any members of the Company's management. Dr. Costley, who was elected Lead Director by the Board, presides at these executive sessions.

10

---

        Mr. Herring serves as both Chairman of the Board and Chief Executive Officer of Covance. Dr. Costley serves as the Lead Director of the Board. Our Board of Directors believes it is important to retain the flexibility to allocate the responsibilities of the offices of the Chairman and the Chief Executive Officer as it deems appropriate at the time. Over the last several years, our Board has considered many governance practices, including the separation of the offices of the Chairman and Chief Executive Officer. Our Board continues to believe that the current Board structure and the independence standards that it has put in place provide the Company with an efficient and effective leadership model fostering accountability and effective decision-making. Our Board further believes that having Mr. Herring serve as Chairman and Chief Executive Officer, together with the presence of a strong, independent Lead Director, who presides over executive sessions of the independent directors and counsels the Chairman on issues of interest to the independent directors among other duties, provides unified, responsible and accountable leadership for Covance at this time.

COMMITTEES OF THE BOARD

        The Board of Directors has established three standing committees to assist the Board in carrying out its duties: the Audit and Finance Committee, the Compensation and Organization Committee, and the Corporate Governance Committee.

Audit and Finance Committee

        Covance has an Audit and Finance Committee (the "Audit Committee") composed of a minimum of three directors who all satisfy the independence requirements of the Securities Exchange Act of 1934 (the "Exchange Act"), as amended, the rules adopted by the SEC thereunder, and the listing standards of the NYSE. The Audit Committee functions under a charter which is posted on Covance's website under Investor Relations, Corporate Governance. The Board of Directors has determined that Sandra Helton meets the definition of "audit committee financial expert" as such term is defined under the rules of the SEC. The Board of Directors has also determined that the other members of the Audit Committee possess the necessary level of financial literacy required to enable them to serve effectively as Audit Committee members. Covance maintains an Internal Audit Department to provide management and the Audit Committee with ongoing assessments of Covance's risk management processes and system of internal control.

        The members of the Audit Committee are Ms. Helton (Chair), Dr. Barchi, and Mr. McCartney. The Audit Committee met nine times during 2010. The Audit Committee's duties and responsibilities are set forth in its charter which is available on Covance's website at www.covance.com under Investor Relations, Corporate Governance at Committee Charters. Such duties and responsibilities include providing assistance to the Board of Directors in fulfilling its responsibilities with respect to the oversight of:

•

The integrity of the Company's financial statements and internal controls.



•

The independent auditor's qualifications and independence.



•

The Company's compliance with legal and regulatory requirements.



•

The performance of the Company's internal audit function and its independent auditor.



•

The Company's capital and financing requirements and structure.



•

Tax matters and risk management.



•

The appointment, compensation, oversight responsibility and dismissal of the Company's independent auditing firm.



•

The pre-approval of all auditing services and allowable non-audit services provided to the Company by its independent auditing firm.

11

---

        As set forth in the charter of the Audit Committee of the Company, the Audit Committee is charged with reviewing and discussing the Company's policies and processes with respect to risk assessment and risk management. The Audit Committee oversees the Company's risk management function and works with the Company's Chief Financial Officer in fulfilling this oversight responsibility. The Audit Committee has direct access to the Company's Chief Financial Officer with respect to risk management and other matters. Covance also has an Enterprise Risk Council ("ERC") consisting of the Chief Financial Officer, General Counsel, regulatory personnel, the head of our Environmental Health and Safety function, our internal auditor, the head of our security function and other personnel. The ERC coordinates risk management with an enterprise viewpoint, recommends actions and prioritization and documents proactive management. The ERC meets at least quarterly and reports to the Chief Executive Officer on at minimum a quarterly basis and to the Audit Committee on at minimum an annual basis. The Board of Directors' role in risk oversight does not impact the Board's leadership structure.

Compensation and Organization Committee

        The Compensation and Organization Committee (the "Compensation Committee") is composed of a minimum of three directors who all satisfy:

•

the independence requirements required by the Exchange Act, as amended, and the rules adopted by the SEC thereunder (including Rule 16b-3 of the Exchange Act);



•

the corporate governance and other listing standards of the NYSE; and



•

the "outside director" requirements under Section 162(m) of the Internal Revenue Code.

        All present members of the Compensation Committee meet these requirements. The Compensation Committee functions under a charter which is available on Covance's website at www.covance.com under Investor Relations, Corporate Governance at Committee Charters.

        In connection with the setting of executive compensation, members of management, including the Chief Executive Officer and Vice President—Human Resources, consult with Pay Governance LLC ("Pay Governance"), an independent consulting firm retained by the Compensation Committee, to gather all relevant information and to propose to the Compensation Committee executive compensation arrangements for executives other than the Chief Executive Officer. The Compensation Committee works directly with Pay Governance on matters involving Chief Executive Officer compensation and contacts Pay Governance directly on executive compensation matters generally on an as-needed basis. A representative of Pay Governance frequently attends meetings of the Compensation Committee at the Compensation Committee's invitation and answers questions and advises the Compensation Committee at those meetings. At a regularly scheduled meeting of the Compensation Committee and Board of Directors, performance targets for the year are set, which targets are in line with budgets set at a meeting of the full Board of Directors.

        The current members of the Compensation Committee are Dr. Sheares (Chair), Dr. Costley, and Mr. Scodari. The Compensation Committee met five times in 2010. Its duties and responsibilities are set forth in its charter and include the following:

•

Review and make recommendations to the independent members of the Board regarding corporate goals and objectives relevant to Chief Executive Officer compensation, the CEO's performance and the CEO's compensation.



•

Approve the compensation of the Company's executive officers other than the Chief Executive Officer pursuant to delegation from the Board of Directors.



•

Administer the Company's equity compensation plans.

12

---

•

Advise the Board on other compensation and benefit matters.



•

Create a Compensation Committee Report to be included in the Company's Proxy Statement, as required by the SEC.

        In addition, it is the responsibility of the Compensation Committee to review and recommend to the Board of Directors that the Compensation Discussion and Analysis be included in the Company's Annual Report on Form 10-K and Proxy Statement.

Compensation Committee Interlocks and Insider Participation

        No member of the Compensation Committee is or has been an officer or employee of the Company or any of its subsidiaries. In addition, no member of the Compensation Committee had any relationships with the Company or any other entity that require disclosure under the proxy rules and regulations promulgated by the SEC, and no executive officer of the Company served on the Compensation Committee or Board of any company that employed any member of the Company's Board of Directors.

Corporate Governance Committee

        The Corporate Governance Committee is composed of a minimum of three directors who all satisfy the independence requirements of the Exchange Act, as amended, the rules adopted by the SEC thereunder, and the corporate governance and other listing standards of the NYSE. The Corporate Governance Committee functions as Covance's nominating committee under a charter which is available on Covance's website at www.covance.com under Investor Relations, Corporate Governance at Committee Charters.

        The current members of the Corporate Governance Committee are Mr. Scodari (Chair), Dr. Costley and Ms. Helton. The Corporate Governance Committee met five times in 2010. The duties and responsibilities are set forth in its charter and include the following:

•

Review and assess the Company's principles and practices on corporate governance.



•

The recommendation to the Board of policies regarding Board committees, committee members and committee chairs.



•

Develop and conduct an annual Board self-evaluation process.



•

The identification, review and assessment of nominees for election as members of the Board of Directors and the recommendation of qualified nominees to the Board.



•

Consideration of unsolicited nominations for Board membership.



•

Review of non-employee Director compensation and the recommendation of compensation arrangements to the Board.

Related Party Transactions

        The Board of Directors has adopted a written policy with respect to Related Party Transactions which requires that all such transactions either meet the guidelines set forth in the policy, be on terms comparable to those that could be obtained in an arms-length dealing with an unrelated third-party and be approved by the disinterested members of the Corporate Governance Committee, or be approved by the disinterested members of the Board of Directors. The policy defines a Related Party as an executive officer or Director of the Company, a five percent or greater shareholder of the Company, an immediate family member of an executive officer or Director, or an entity owned or controlled by one of the foregoing. A Related Party Transaction is defined as a transaction between Covance and a related party other than transactions available to all employees generally, transactions involving less than $5,000, or transactions involving compensation approved by the Board of Directors or the Compensation Committee.

13

---

Board Nomination Process

        The Corporate Governance Committee is responsible for reviewing with the Board, on an annual basis, the composition of the Board as a whole. The Corporate Governance Committee is responsible for recommending Director nominees to the Board, including renomination of persons who are already Directors, in accordance with the policies and principles in its charter and the Corporate Governance Guidelines. The Corporate Governance Committee's minimum qualifications for nominees include the following: reputation for integrity; honesty; judgment and discretion; expertise in his or her chosen field, which field should have some relevance to Covance's business; knowledge, or the willingness and ability to quickly become knowledgeable, in Covance's business; and contribution to the mix of skills and viewpoints on the Board as a whole. While the Company does not have a policy with respect to the consideration of diversity in identifying director nominees, the Corporate Governance Committee considers diversity of experience, background, gender and ethnicity as positive factors in determining Board composition.

        The Corporate Governance Committee considers suggestions from many sources, including shareholders, regarding possible candidates for Director. In order for shareholder suggestions regarding possible candidates for Director to be considered by the Corporate Governance Committee for the 2012 Annual Meeting of Shareholders, the information specified below should be provided no later than October 31, 2011 to the Secretary of the Company. The notice should contain the proposed nominee's full name, biographical information regarding the proposed nominee and the proposed nominee's relationship to the shareholder.

        The process of nominating directors is as follows. First, the Corporate Governance Committee identifies a need to add a new Board member or to fill a vacancy on the Board. The Corporate Governance Committee then identifies candidates by seeking input from Board members, hiring a search firm, if appropriate, and considering recommendations for nominees submitted by shareholders. After the interview process, which includes non-management members of the Board, the Corporate Governance Committee determines which candidates the Corporate Governance Committee will recommend to the Board for nomination as a director. The Corporate Governance Committee then makes its recommendations to the entire Board, which determines which candidates are nominated by the Board of Directors or elected to fill a vacancy.

Contacting the Board of Directors

        In order to provide Covance's shareholders and other interested parties with a direct and open line of communication to the Board of Directors, Covance has adopted the following procedures for communications to Directors. Security holders of the Company and other interested persons may communicate with the Lead Director, chairs of Covance's Corporate Governance Committee, Audit Committee or Compensation Committee or with the non-management directors of Covance as a group by sending an e-mail to boardofdirectors@covance.com. The e-mail should specify which of the foregoing is the intended recipient. All communications received in accordance with these procedures will be reviewed initially by Covance's Investor Relations Department. The Investor Relations Department will relay all such communications to the appropriate Director or Directors unless the Investor Relations Department determines that the communication: does not relate to the business or affairs of Covance or to the functioning or constitution of the Board of Directors or any of its committees; relates to routine or insignificant matters that do not warrant the attention of the Board of Directors; is an advertisement or other commercial solicitation or communication; or is frivolous or offensive.

        The Director or Directors who receive any such communication will have discretion to determine whether the subject matter of the communication should be brought to the attention of the full Board of Directors or one or more of its committees and whether any response to the person sending the communication is appropriate.

14

---

        Covance's Investor Relations Department will retain copies of all communications received pursuant to these procedures for a period of at least one year.

        The Corporate Governance Committee or the Board of Directors will review the effectiveness of these procedures from time to time and, if appropriate, recommend changes.

Website Access to Covance Corporate Governance Documents

        The charters of the Audit Committee, the Compensation Committee, and the Corporate Governance Committee, as well as the Corporate Governance Guidelines and Director Independence Standards, the Code of Ethics for Financial Professionals and the Company's Business Integrity Program may be accessed through our website at www.covance.com under Investor Relations, Corporate Governance.

15

---

DIRECTOR COMPENSATION

        The Corporate Governance Committee of the Board of Directors and/or the Compensation and Organization Committee of the Board of Directors periodically review Director compensation arrangements with Pay Governance, an independent consulting firm retained by the Compensation and Organization Committee, which provides informal advice on Director compensation to members of the Corporate Governance Committee. The Corporate Governance Committee makes its recommendations for action on Director compensation to the full Board of Directors.

2010 Director Compensation Table

        Members of the Board who are employees of the Company or its subsidiaries are not compensated for service on the Board or any of its Committees. In 2010, non-employee Directors received a retainer fee of $36,000 per annum. In addition, Committee members received $2,000 for each Board and Committee meeting attended. The Chair of the Audit Committee is entitled to receive an additional annual retainer of $10,000 and the Chairs of the Compensation Committee and the Corporate Governance Committee are each entitled to receive an additional annual retainer of $7,500. The Lead Director receives an additional annual retainer of $20,000. In 2010, Directors also received options to purchase up to 2,800 shares of the Company's Common Stock pursuant to Covance's Non-Employee Directors' Stock Option Plan

16

---

("DSOP"). Options granted pursuant to the DSOP have an exercise price not less than 100% of the fair market value on the date of grant and vest in equal annual installments on each of the first through third anniversaries of the date of grant. Directors are reimbursed for travel and related expenses incurred on behalf of Covance.

        In May 2010, the non-employee members of the Board of Directors received a grant of 1,600 hypothetical shares of the Company's Common Stock pursuant to Covance's Restricted Unit Plan for Non-Employee Members of the Board of Directors ("DRUP"). Awards under this plan vest three years after the award date, provided the recipient remains a Director of Covance, and are paid in cash upon vesting. Awards also vest upon retirement as a Director with the consent of the Board of Directors. The DRUP provides that on every anniversary of the award date, each non-employee Director at that time shall receive an award under the DRUP in an amount approved by the Board of Directors.

        Pursuant to the Directors' Deferred Compensation Plan ("DDCP"), each non-employee Director may elect to defer until a date specified by the Director, the receipt of all or a portion of his or her cash compensation. The DDCP provides that amounts deferred may be allocated to (i) a cash account upon which amounts deferred may earn interest, compounded quarterly, at the base rate of Citibank, N.A. in effect on certain specified dates, (ii) a market value account, the value of which will be based upon the market value of Covance Common Stock from time to time, or (iii) a combination of such accounts. All non-employee Directors are eligible to participate in the DDCP.

Section 16(a) Beneficial Ownership Reporting Compliance

        Section 16(a) of the Exchange Act, as amended, requires that Directors, certain executive officers of the Company and greater than 10% beneficial owners of the Company's Common Stock report their ownership of, and transactions in, the Company's Common Stock with the SEC. Based solely upon a review of these filings and written representations from the reporting persons that no annual forms were required, Covance believes that all filing requirements applicable to its officers and Directors and greater than 10% beneficial owners with respect to ownership of the Company's Common Stock were complied with during 2010.

Director Stock Ownership Guidelines

        Non-employee members of the Board of Directors are encouraged to be shareholders of the Company through purchases of Common Stock or through their participation in the Company's director equity benefit plans. The Board of Directors has established guidelines to help ensure they each maintain an appropriate equity stake in the Company. These guidelines provide that, within specified transition periods, Directors should attain and hold shares of Common Stock of the Company, of an amount equal to five times the director's total cash retainer for Board membership on date of appointment.

17

---

Report of the Audit and Finance Committee

        The Audit and Finance Committee has reviewed and discussed with management Covance's audited financial statements for the year ended December 31, 2010, and has discussed with Covance's independent registered public accounting firm, Ernst & Young LLP ("E&Y"), the matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees).

        The Audit and Finance Committee has reviewed the written disclosures and the letter from E&Y required by applicable requirements of the Public Company Accounting Oversight Board regarding E&Y's communications with the Audit and Finance Committee concerning independence and has discussed with the firm its independence. The Audit and Finance Committee has also considered whether the provision of non-audit services to Covance by E&Y is compatible with maintaining E&Y's independence.

        Based on the review and discussions referred to above, the Audit and Finance Committee has recommended to the Board of Directors that the financial statements referred to above be included in Covance's Annual Report on Form 10-K for the year ended December 31, 2010.

Members of the Audit and Finance Committee

Sandra L. Helton, Chair
Robert Barchi
John McCartney

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

        The aggregate fees billed Covance by E&Y for professional services for the audit of Covance's annual financial statements, review of the financial statements included in Covance's Quarterly Reports on Form 10-Q and services that are normally provided by the independent accountant in connection with statutory and regulatory filings or engagements for 2009 and 2010 were approximately $2,316,104 and $1,978,075, respectively.

Audit Related Fees

        The aggregate fees billed Covance by E&Y for professional services for assurance and related services that are reasonably related to the audit or review of Covance's financial statements for 2009 and 2010 were approximately $26,076 and $34,175, respectively. These services include employee benefit plan audits, merger and acquisition due diligence, accounting assistance and audits in connection with proposed or consummated acquisitions or divestitures and consultations concerning financial accounting and reporting standards.

Tax Fees

        There were no fees billed Covance by E&Y for professional services for tax compliance, tax advice and tax planning in 2009 or 2010.

All Other Fees

        There were no such fees in 2009 and 2010.

Audit Committee Pre-Approval of Audit and Non-Audit Services

        The Audit Committee is responsible for appointing Covance's independent registered public accounting firm and approving the terms of the firm's services. The Audit Committee's policy for the pre-approval of all audit and permissible non-audit services to be provided by the independent registered public accounting firm is described below.

18

---

        Audit Services.    The Audit Committee is to appoint the Company's independent registered public accounting firm each fiscal year and pre-approve the engagement of the independent registered public accounting firm and the fee to be billed for the audit services to be provided.

        Non-Audit Services.    All non-audit services to be performed by the independent registered public accounting firm are required to be pre-approved by the Audit Committee. In determining whether to grant such approval, the Audit Committee will determine whether the provision of such non-audit services will impair the independent registered public accounting firm's independence. There were no non-audit services billed by E&Y in 2010.

EXECUTIVE COMPENSATION
Compensation Discussion and Analysis

Executive Summary

        Covance prides itself on its pay-for-performance culture, and continues to evolve and evaluate its executive pay programs. A large portion of executive compensation at Covance is variable based on performance. Covance has a consistent record over the years of paying lower bonuses and less performance-based equity when company performance has been weaker, and paying more when company performance has been stronger. Due to business performance in 2010, most executive officers will receive bonuses below target, all will receive performance-based equity awards below target, and none will receive merit increases in their base salary in 2011.

        A significant portion of executive officer pay is tied to performance. As discussed in greater detail below, our executive compensation plan has three main components: base salary, annual cash incentive, and equity grants (consisting of stock options and performance-based restricted stock). With respect to Covance's CEO, approximately half of this compensation is performance-based and almost another third is in the form of stock options, which, while not directly performance-based, cannot be profitable if the Company's common stock does not increase in value.

Summary of Recent Developments

        Over the past two years, in order to better align executive compensation with shareholder interests, Covance has implemented the following changes to executive policies and pay practices:

•

Moved from a delayed single-trigger to double trigger with respect to change-in-control payments in executive officer employment agreements thereby requiring that an executive officer be terminated or constructively terminated in order to receive enhanced benefits following a change-in-control;



•

Eliminated excise tax gross-ups in executive officer employment agreements;



•

Eliminated financial counseling and car allowance perquisite benefits for executive officers;



•

Enacted a clawback policy with respect to incentive compensation awards based on performance measures that are subsequently restated or adjusted; and



•

Eliminated gross-up payments for the Supplemental Executive Retirement Plan participants, as well as such payments related to any executive programs.

        A significant portion of executive officer compensation is delivered in the form of equity grants, and Covance targets at least half of these equity grants to be in the form of performance-based restricted shares.

19

---

Executive Compensation Philosophy

        Covance's executive pay program is based on our philosophy which focuses on the following key elements: performance culture; leadership stability; internal equity; and market competitiveness. The program is founded on and driven by the following five principles:

1.

Aligning management rewards with shareholder returns;

2.

Incenting performance and rewarding results which lead to profitable growth over time;

3.

Providing market competitive compensation at target performance levels;

4.

Differentiating compensation based on performance at the individual, business unit and total company level; and

5.

Retention of high performing executives.

        Following is a brief outline of how these objectives are reflected in our executive compensation practices:

        Executive compensation is variable with a substantial portion (a higher percent than the average of our peer group companies) of management's pay being at risk.

•

Covance believes that the percentage of compensation that is variable in nature should be higher the more senior ranking the officer, based on level of responsibility consistent with market practice. On average 60% of an executive officer's total compensation—and close to approximately 73% in the case of the Chief Executive Officer—is variable in nature.



•

As part of a pay-for-performance environment, Covance compensation programs provide higher payouts when performance exceeds targets and lower or no payouts when performance is below targets. Incorporated in these programs are wide ranges of outcomes intended to incent superior performance consistent with the company's pay-for-performance philosophy.



•

Individual performance ratings for each executive officer have a substantial impact (positive or negative) on compensation. These performance metrics are discussed further below.

        Executive compensation programs are structured to align management rewards with long-term shareholder returns.

•

Approximately 57% of Mr. Herring's total annual compensation (at target) is delivered in the form of Covance equity, and vests over multiple years, as is almost 40% in the case of the other Named Officers.



•

Covance executive officers have equity ownership requirements that align their economic interests with those of our long-term shareholders.

        Executive compensation programs reward performance that leads to profitable growth over time.

•

Covance executive officers, consisting of the Chief Executive Officer, Chief Operating Officer, Corporate Executive Vice Presidents and Corporate Senior Vice Presidents, have the majority of their annual compensation opportunities tied to these quantitative and formula-based business drivers: profit, net orders, backlog and return on assets. Of these drivers:



•

Profit measures current operating performance;



•

Net orders and backlog are indicators of longer term growth; and



•

Return on assets promotes good stewardship of shareholder capital.



•

Each of these measures significantly affects executive officer compensation. In aggregate, they are designed to foster a balanced focus of management's attention on both near-term and long-term profit and growth, and use of shareholder capital in ways that generate economic value.

20

---

        Executive compensation is market competitive at target performance levels.

•

Covance believes a competitive total compensation package is required to attract, retain and motivate the executive talent needed to achieve our long-term strategic objectives and shorter-term performance targets.

        Covance provides the following elements of compensation for the following reasons:

•

Base salary provides a fixed level of compensation, sufficient to attract and retain executives in light of competitive employment alternatives;



•

Annual cash incentive provides a variable compensation opportunity, with all or portions of such incentive being contingent based on individual, business unit, and company performance, and is used to motivate executives to meet or exceed business goals and personal objectives;



•

Equity compensation provides opportunity for long-term variable compensation which seeks to align executives' interests with those of our shareholders (i.e., sustained, long-term profitable growth) and promote retention; and



•

Retirement and other benefits offer a relatively fixed level of value, with minimal risk, sufficient to attract and retain executives.

        In aggregate, Covance allocates and balances total target compensation among each pay element in a manner consistent with our executive compensation principles and with an emphasis on competitive market practices. Covance generally sets executive officer target pay as follows:

•

Base pay at median competitive base salary, although executives new to a role may lag the market median initially;



•

Target cash incentive percent opportunity generally at or above market median;



•

Target equity opportunity at the median competitive target equity; and



•

Market competitive retirement and other benefit plan offerings.

        The intended result is total target compensation that approximates at or slightly above the median compensation of our competitive marketplace for executive talent (in both mix and target value). In some cases where an executive's total target compensation falls below the market median, we are working to incrementally move our executives to market. We consider each individual's past year performance results as an integral part of all pay decisions, and consider the individual's successful performance over time in his or her role in base pay and equity grant decisions.

        Covance utilizes balanced and targeted business drivers in compensation programs.

        The Covance executive compensation programs provide for a balanced and broad-based rewards approach to achieving both short- and long-term financial results. Executive officers are incented to drive financial outcomes based on the key business drivers within our pay programs. Covance's executive pay programs are designed to reward a breadth of behaviors that drive key business outcomes leading to profitable growth over time. Executive pay program targets are derived from these desired business outcomes. Covance focuses on the key motivators that attract, retain, and reward outstanding performance, as well as align with the interests of our shareholders to create a strong pay-for-performance culture.

        The Covance annual cash incentive plan is based on a combination of operating profit and net orders. These financial metrics are aligned structurally with the Covance peer group companies. We believe operating profit and net orders are appropriate incentive drivers for Covance, as they focus attention on both short-term and long-term performance/success. Current year operating profit is a solid barometer of short-term performance/success. Net orders are an indicator of longer-term growth potential, as the revenue generated from most orders spans over multiple years.

21

---

        The Covance performance share plan is based on a combination of both return on assets and backlog growth. We believe these financial metrics are appropriate measures to drive both short-term and long-term performance/success contingent on both one-and three-year performance cycles. Return on assets is a measure, which not only looks at earnings, but also the level of assets deployed to generate those earnings, thereby promoting good stewardship of shareholder capital. Backlog growth is an indicator of longer-term growth potential, as backlog is attributable to projects which will generate revenue and earnings over future years. This measure is a reflection of successful execution of operational and service excellence.

Determination of Executive Compensation Amounts

Benchmark/Peer Group

        To assess the competitiveness of pay for each executive, Covance annually benchmarks the core elements of its executive compensation program (i.e., base salary, annual cash incentive, and equity) from two groups.

•

Data from compensation surveys on approximately 150 like-sized companies with revenues ranging between $1.0 and $3.0 billion (as identified by Pay Governance, an independent consulting firm retained by the Compensation Committee); and



•

52 industry "peer" companies in the contract research or bio/pharmaceutical industry that represent either direct business competitors and/or organizations that we most typically compete with for drug development talent.

        While the peer group includes companies both larger and smaller in size than Covance, all market data is size-adjusted to provide appropriate comparisons to Covance. This adjustment is designed to ensure that we do not determine market competitive levels at too high a level because the peer group includes companies larger than Covance or too low a level because the peer group includes smaller companies. The size adjustment is accomplished by Pay Governance as follows:

•

Where possible and appropriate, survey data is adjusted, using common statistical methods, to result in a better correlation between the survey data and Covance's corporate revenue. This approach allows us to compare ourselves to an appropriate population of companies minimizing the impact of revenue scope.

        The list below represents the 52 peer organizations for 2010:

        Covance derives "market competitive" compensation as a 25% weighting of the survey data and a 75% weighting of the peer company data sets. We continue to include larger companies in the peer group because we frequently compete for talent from larger companies, often within the peer group, and need to offer competitive compensation.

22

---

        All market data are provided by Pay Governance.

Setting Compensation

        Overall, five main factors are taken into account when setting each individual executive officer's compensation:

•

Competitive market data,



•

Company performance,



•

Individual performance,



•

Comparison of compensation among the executive officers, and



•

Retention considerations.

        In general, Covance attempts to set total targeted compensation, consisting of base salary, annual cash incentive, equity awards, retirement and other benefits to the median of our competitive market data. For individual officers, other factors, such as experience and position scope, are taken into account and may result in target pay being set above or below the overall competitive market data target.

        The actual compensation delivered (versus target amounts) for each individual executive officer varies depending on Company and individual performance. In general, we expect that our executive officers will be paid at market levels if Company and individual targets are achieved, above market levels if targets are exceeded and below market levels if targets are not achieved. In some cases our variable compensation plans (incentive and equity) may pay out nothing for below target results and/or individual performance. In 2010, Covance paid actual compensation (base pay, annual cash incentive, equity) to its named executives ranging from 72% to 99% of target.

        Specifically for the Chief Executive Officer, the independent members of the Board of Directors set business and related performance targets and compensation levels based upon the recommendation and approval of the Compensation Committee. For other executive officers, the Compensation Committee on delegation from the Board of Directors, approves business and related performance targets and compensation levels after receiving recommendations from the Chief Executive Officer and Corporate Vice President—Human Resources.

        Company and business unit performance targets are set as part of the annual budget process which is completed prior to each performance year (typically in December). We endeavor to set targets at aggressive but attainable levels in light of then current and prospective business conditions. Management presents to the Board industry growth projections and competitor performance information. In combination with the Company's long-term strategic plan and growth aspirations, the annual targets are set to achieve continued market leadership. In the assessment of actual performance against targets, Covance's annual cash incentive and equity compensation plans allow for the use of discretion by the Compensation Committee to award lower or higher payout levels than the pre-established criteria and formulae would provide. These provisions are intended to ensure that extraordinary circumstances unrelated to performance do not inequitably increase or decrease compensation. This discretion was not used in 2010.

        We are mindful of the potential impact upon Covance of Section 162(m) of the Internal Revenue Code, which prohibits public companies from deducting certain executive remuneration in excess of $1,000,000. While reserving our right to offer such compensation arrangements as may from time to time be necessary to attract and retain top-quality management, we intend generally to structure such arrangements, where feasible, so as to minimize or eliminate the impact of the limitations of Section 162(m). Section 162(m) does not presently apply to any Covance executive remuneration.

23

---

        The Compensation Committee also reviews tally sheets, which reflect all elements of each executive officer's compensation, both current and historical. Tally sheets are a reference tool that the Compensation Committee uses at least annually in its comprehensive assessment of executive officers' total pay.

        Covance's Board of Directors assesses its executive talent (including all executive officers) annually, including reviewing succession plans for each executive officer position. Covance occasionally determines that additional long-term awards are appropriate for select executive officers to ensure their retention and the leadership continuity required to achieve our long-term strategic goals and objectives. The value of these awards is above the target compensation levels determined from our annual review of our competitive market data. No such awards were granted in 2010.

Overall Plan Design and Features

        Covance sets and presents an annual business plan to the Board of Directors prior to each year. This translates into specific business goals and objectives that are used to establish financial and non-financial targets for executive officers' variable compensation (Annual Cash Incentive Plan and Performance-Based Restricted Stock Plan). Covance believes that the degree of difficulty associated with attaining the target levels set at the beginning of each year is challenging but attainable. The targets are developed based on estimated contract research organization ("CRO") industry performance projections, with our targets generally set to exceed these estimates (e.g., setting our revenue growth targets above what we believe the overall CRO market is expected to grow by). The intended result is that if Company performance exceeds the targets then actual compensation should be greater than market norms (and vice versa should Company performance fall short of targets). This approach is consistent with our pay-for-performance principles.

Elements of Compensation Program

        The primary elements of the compensation program include base salary, annual cash incentive, equity grants (consisting of stock options and performance-based restricted stock), and an executive retirement benefit. A portion of base salary and annual cash incentive may be deferred under a non-qualified deferred compensation plan. Executive officers also participate in Company benefit plans extended to other full-time Covance employees such as medical and dental insurance, a 401(k) Plan with Company match (US employees only) and a defined benefit type pension plan (select UK employees).

Pay Mix

        Covance seeks to align executive officer and shareholder interests in a pay-for-performance environment. For 2010, on average, 60% of an executive officer's total compensation—and close to approximately 73% in the case of the Chief Executive Officer—is contingent, with the amount actually paid tied to achievement of pre-established Company objectives and individual goals.

24

---

        The charts below illustrate the 2010 allocation of target compensation for executive officers:

        The above charts reflect target annual cash incentive levels and target equity compensation levels for the most recent year. The mix of compensation reflected in the above charts differs from the compensation figures disclosed in the Executive Compensation Tables in this Proxy Statement for the Named Executives because the Executive Compensation Tables reflect both actual compensation paid (e.g., for annual cash incentive), and the fair market value of equity awards on date of grant.

Individual Elements of Pay—Details

Base Salary

        As mentioned in the "Benchmark/Peer Group" section, Covance establishes base salaries for executive officers after an annual evaluation of market data, individual experience and performance over time in role. Base salary increases generally become effective March 1 of each year, although in 2010, base pay increases were delayed until July 1, 2010. The Committee in 2010 provided Mr. Herring with a market adjustment of 15% to bring his base pay to the median of the size-adjusted peer group as discussed above.

        In light of challenging market conditions that drove the need for cost reduction actions initiated in late 2010, and to lead by example, Mr. Herring and the other Named Executives will not be receiving merit salary increases in 2011. The Committee expects that Mr. Herring's base salary will be below the size-adjusted peer group median for 2011.

Annual Cash Incentive Plan

        As with base salaries, Covance sets executive officer target annual cash incentive levels after an annual review of market data. The actual cash incentive paid to individual executive officers is determined in three steps:

1.

The annual cash incentive pool in which executive officers participate is initially determined based on actual Company and/or business unit performance against pre-established profit targets with a range of variability from 65% to 125% of target. In 2010, the plan utilized a corporate operating income target of $229,000,000.

2.

Once the initial incentive pool is determined as described above, the pool is further adjusted and finalized based on performance against pre-established net order targets which increases the range of

25

---

variability to 49% to 156% of target. In 2010, the plan used a net orders target of $2,343,000,000. The resulting annual cash incentive pool for corporate executive officers, including Messrs. Herring and Klitgaard, equaled 81% of the target incentive, for Mr. Lovett equaled 90% of the target incentive, and for Mr. Cimino equaled 81% of the target incentive.

3.

An individual performance factor is applied based on the executive officer's individual performance to arrive at the actual cash incentive amount paid. Individual performance ratings are based on an assessment of each executive's achievements against business targets and the strength of each officer's leadership competencies, with each area (performance against business targets and individual behaviors) of roughly equal weight (individual performance factors range from 0% to 160%). The total range of variation as a result of Company performance against operating income and net orders targets, and an executive's individual performance factor is 0% to 250% of target. The individual performance factor for each Named Executive was as follows: Mr. Herring 80%; Mr. Klitgaard 90%; Mr. Lovett 130%; and Mr. Cimino 90%.

Mr. Barr resigned as an officer and employee of the Company effective after December 31, 2010. Pursuant to Mr. Barr's severance agreement, he received an annual cash incentive payment equal to his target annual incentive.

        Covance leaders are assessed on performance against annual individual objectives and the following leadership behaviors:

•

Wins Client Loyalty—Keep client satisfaction high and lead the organization to deliver on client expectations.



•

Leads by Example—Articulate and demonstrate behaviors that support the Company vision.



•

Inspires Others—Connect individuals to Covance and build organization excitement and alignment around the Company purpose and goals.



•

Drives Growth—Identify opportunities and implement solutions that expand the business.



•

Builds Talented Teams—Assess and develop individual organization talent.



•

Confronts Constructively—Readily challenge status quo while maintaining and building relationships.



•

Gets it Done—Create urgency and balance analysis and action that leads to timely decision making and outstanding implementation.

        The following table shows the range of variability and parameters of the determination of 2010 incentives.

        The 2010 annual cash incentive target for Named Executives equaled 70% of each individual's base salary, except for the Chief Executive Officer and Chief Operating Officer whose targets were set at 100% and 80% of base salary, respectively. As a group in 2010, the actual cash incentives were paid at 82% of target for the year.

26

---

        The actual cash incentives paid to the Named Executives were calculated as follows:

        Covance has a clawback policy pursuant to which it may recapture incentive cash awards paid to an officer where the performance measure upon which the award was based is subsequently restated or otherwise adjusted in a manner that would have reduced the size of the payment had such adjustment been known at the time of payment.

Equity Compensation

        Covance provides equity compensation to executive officers primarily in two forms—stock options and performance-based restricted stock—the intended value associated with each vehicle being approximately equal using valuation methods as provided under generally accepted accounting principles. Equity compensation represents approximately 57% of the total target compensation for the Chief Executive Officer and approximately 40% for the other named executive officers. While the intent is to grant awards at the median of the target competitive data, actual individual awards, which are granted annually in February of each year, may be higher or lower dependent upon the performance of each executive officer in the prior year and internal equity factors.

        The Compensation Committee also periodically reviews competitive market data regarding equity plan design and payout ranges to ensure that Covance's plans are designed to best fit the Company's objectives while being in line with competitive market practice.

        Management and the Compensation Committee believe equity compensation is important to align shareholder and executive officer interests by creating an "ownership culture." Executive officers maintain a meaningful economic interest in Covance stock due to the following four factors:

1.

Equity Ownership Guidelines. Covance has equity ownership guidelines requiring executive officers to attain and hold specified amounts of Common Stock of the Company. For the Chief Executive Officer, the number of required shares is set at the time of appointment and equals two times (2x) base salary and target annual cash incentive, divided by Covance's share price on that date. For all other executive officers, the required number of shares equals one times (1x) base salary and target annual cash incentive. The target levels and timeframes to achieve ownership were determined after reviewing overall general market practice and the approaches used by our peer companies.

27

---

The following example shows how a typical executive officer's share ownership target is determined, assuming a base salary of $350,000, a 70% target incentive opportunity and a Covance share price on the date of appointment of $55.

All executive officers have five years from the date of their appointment as an executive officer to achieve their ownership target. Only shares owned count towards the target (e.g., unvested options and restricted stock do not count towards the target). As of year end 2010, all executive officers either have fulfilled or are on track to fulfill their goal by their individual target dates.

2.

Options and Unvested Performance-Based Restricted Stock Awards. Executive officers have a further economic interest in Covance stock from their stock options and unvested performance-based restricted stock. Stock options vest in three equal installments over three years while performance-based restricted stock vests 100% at the end of the second calendar year following the year in which they are granted to the extent the performance conditions are met. For example, shares awarded in February 2010 vest in December of 2012.

3.

Limits on Executive Officer Sales of Covance Stock. Internal guidelines limit executive officers' ability to sell Covance equity.

4.

Hedging Policy. Covance has a policy on hedging transactions that is designed to ensure that no executive officer engages in any transaction that has the effect of hedging the executive officer's interest in Covance stock.

Stock Options

        Covance grants option awards to executive officers annually. All such awards are approved by the Compensation Committee, or independent members of the Board of Directors in the case of the Chief Executive Officer, at a regularly scheduled meeting with the meeting dates being selected approximately one year prior to the actual meeting. These meetings typically take place in February, shortly after current year performance goals are set, previous year performance is evaluated, and previous year full-year financial results are publicly released. The date of these meetings also serves as the date for setting the exercise price of the award, as well as the award's grant date.

        In keeping with industry norms, newly hired executive officers who begin employment during the year may receive a "one-time" option award. Such options are granted and priced as of the date they are approved by the Compensation Committee. Those dates are not timed with respect to any Company or market event.

        Executive officer options vest in three equal installments over three years. The intended value of stock options awarded is determined by reference to competitive benchmarks, as previously discussed under the "Setting Compensation" section above. The number of options granted is determined using valuation methods as provided under generally accepted accounting principles. Under the 2010 Employee Equity Participation Plan, the option's exercise price is equal to the closing price of Covance stock on the date the awards are approved.

Performance-Based Restricted Stock

        Performance-based restricted stock is also typically approved and granted at the regularly scheduled Compensation Committee and Board of Directors meetings noted previously. In general, the target value

28

---

and resulting target number of shares is determined by reference to competitive benchmarks, comparison of compensation among the executive officers, and individual performance. The actual number of shares ultimately earned is performance-based and, through 2010, has varied depending on the Company's performance against two financial metrics—backlog growth and return on assets. Performance against the metrics is determined using financial information as published in the Company's annual filings with the SEC. Exceeding one or both of the targets can result in an increase in the actual number of shares awarded from the target number of shares. Conversely, falling short of one or both of the targets can result in a reduction in the actual number of shares awarded from the target number of shares. In 2010, the backlog growth target was 5.7%, which was expected to reflect a "book-to-bill" ratio of 1.14 to 1. The return on assets target was 9.2%.

        This plan operates under a series of three-year performance cycles. During the initial grant year, the executive officer is granted a target share award. Performance in the initial grant year against the two metrics noted above can result in the initial target award being adjusted down to 0% or up to 200% of the target. The shares awarded vest at the end of the second calendar year following the year in which the number of such shares are determined. In each of the two years following the initial year in which the shares are awarded, each executive officer has the opportunity to earn up to an additional 20% of the actual shares earned in the initial year. These additional awards are granted and earned based upon the Company's actual backlog growth and return on assets versus pre-established targets in each subsequent year. The second and third year financial targets are also set and approved by the Compensation Committee. Any additional shares earned vest at the same time as the initial grant. Each three-year cycle has a maximum potential payout of 220% of the initial target share award. Once achieved, the executive officer would no longer be eligible for any additional grants during the relevant three-year cycle.

        As an example, assume an executive officer received a target grant of 4,000 performance-based restricted shares at the beginning of 2010 and achieved the following performance factors over the next three years:

1.

Year 1 (2010)—actual return on asset and backlog growth performance dictates a 80% payout against target;

2.

Year 2 (2011)—return on asset and backlog growth dictates an upward adjustment of 10% of the grant as adjusted for 2010 performance; and

3.

Year 3 (2012)—return on asset and backlog growth dictates an upward adjustment of 10% of the grant as adjusted for 2010 performance.

        In this example the executive officer would earn an overall performance share award of 3,840 shares related to the three-year 2010 performance cycle (an actual award of 3,200 shares from the first year, an additional 320 share award in both 2011 and 2012). All shares from the 2010 performance cycle vest at the end of 2012. The table below shows how the number of shares awarded would be calculated in such a scenario.

29

---