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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.          )

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2010
Notice of
Annual Meeting &
Proxy Statement

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March 24, 2010

Dear Fellow Shareholder:

        You are cordially invited to attend the 2010 Annual Meeting of Shareholders of Covance Inc., to be held at 8:00 a.m., local time, on Thursday, May 6, 2010, 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 completing and returning the enclosed proxy or 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.

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COVANCE INC.

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NOTICE OF 2010 ANNUAL MEETING
OF SHAREHOLDERS

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        The 2010 Annual Meeting of the Shareholders of Covance Inc. (the "Company") will be held on Thursday, May 6, 2010, 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 three members to the Company's Class I Board of Directors.



2.

To approve the 2010 Employee Equity Participation Plan.



3.

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, 2010.

        Only shareholders of record at the close of business on March 10, 2010 are entitled to notice of, and to vote at, the Annual Meeting.

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

        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 the 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 other intermediary, 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 24, 2010

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COVANCE INC.
210 Carnegie Center
Princeton, New Jersey 08540

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PROXY STATEMENT

        

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2010 Annual Meeting of Shareholders
May 6, 2010

        

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Important Notice Regarding the Availability of Proxy Materials
for the Shareholder Meeting to Be Held on May 6, 2010

This Proxy Statement and the Annual Report are available
on Covance Inc.'s website at www.covance.com/investors.

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General Information

        The Board of Directors of Covance Inc. (the "Company" or "Covance") solicits your proxy for voting at the 2010 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 6, 2010, 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 for this proxy statement and card as well as a copy of Covance's 2009 Annual Report is March 24, 2010.

        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 ensure that your shares are voted by properly completing, signing, dating and returning the enclosed proxy card or voting through the internet or by telephone. 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 10, 2010 (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 other intermediary, 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, and an admission ticket and government issued picture identification will be required to enter the meeting.

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        When you provide your proxy, the shares of the Company's common stock ("Common Stock") represented by the proxy will be voted as you specify on the proxy card. As to the election of the Class I Directors, by marking the appropriate box you may (a) vote for all of the Class I Director nominees as a group, or (b) vote for one of the Class I Director nominees but not the others as you specify on the card, or (c) withhold your vote from the Class I 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, you will have granted authority to the named proxies solicited by the Company to vote FOR the election of the three nominees as Class I Directors, FOR the approval of the 2010 Employee Equity Participation Plan, and the ratification of the appointment of Ernst & Young LLP, as described in this proxy statement, and confer authority upon the individuals named as 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 persons named in the proxies solicited by the Company 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 10, 2010. 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:

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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.



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As to Proposal Two (Approval of the 2010 Employee Equity Participation Plan) and Proposal Three (Ratification of the Appointment of Independent Registered Public Accounting Firm), such resolutions require the affirmative vote of the majority of shares present or represented by proxy and entitled to vote, abstentions will be treated as votes cast on these matters and therefore will have the same effect as a vote against the matter while broker non-votes will not be treated at votes cast.

        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. Shares of Common Stock held in Covance's Employee Stock Purchase Plan ("ESPP") are held of record by the ESPP's administrator, UBS Financial Services Inc. ("UBS"), and are voted by UBS at the direction of ESPP plan participants. Participants in the 401(k) Plan may direct the trustee of the plan, and the participants in the ESPP may direct UBS, as to how to vote shares allocated to their 401(k) Plan and ESPP accounts, respectively, by properly signing, completing and returning the enclosed proxy card. The cutoff date for voting for participants in the 401(k) Plan is close of business on May 3, 2010. 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 administrator of the ESPP, UBS will not vote any shares as to which it has not received direction from participants in the ESPP or is otherwise not entitled to vote.

        As of February 26, 2010, there were 64,702,482 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 10, 2010, the record date.

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PROPOSAL ONE

Election of Class I Directors

        The Board of Directors (the "Board") is divided into three classes, with two classes of three directors each, and one class of two directors, whose terms expire at successive annual meetings. Three Class I Directors will be elected at the Annual Meeting to serve for a term expiring at Covance's Annual Meeting in the year 2013. Each nominee elected as a Class I 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 Joseph L. Herring, John McCartney and Bradley T. Sheares for election as Class I Directors at the Annual Meeting.

        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 all 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.

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CLASS I NOMINEES
FOR TERMS EXPIRING IN 2013

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CLASS II DIRECTORS
WHOSE TERMS WILL EXPIRE IN 2011

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CLASS III DIRECTORS
WHOSE TERMS WILL EXPIRE IN 2012

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Stock Ownership of Directors,
Executive Officers and Certain Shareholders

Directors and Executive Officers

        The following table shows, as of February 26, 2010, 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. None of these shares are pledged as security.

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Certain Shareholders

        The following table shows those persons known to the Company as of February 26, 2010 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 to senior management in its operation of the Company. The Board reviews significant developments affecting Covance and acts on matters requiring Board approval. During 2009, the Board held five 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 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. 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.

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Director Independence

        The Board has affirmatively determined that seven of the eight current Directors are independent, under the New York Stock Exchange ("NYSE") Listing Standards, and Covance's more stringent independence standards. All such Directors are independent with respect to the Covance Board Committees on which they serve. 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 and Corporate Governance as Annex 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 2009 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:

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Dr. Barchi is an executive officer of an organization with which Covance does 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.



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Dr. Barchi 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.

        In 2009, each Director attended all of the Board meetings and Committee meetings held of which he or she was a member. Covance encourages members of the Board of Directors to attend the Annual Meeting of Shareholders. All of the Directors except one attended the 2009 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.

        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 are adequate, appropriate and in the best interests of Covance and our shareholders. Our Board further believes that having Mr. Herring serve as Chairman and Chief Executive Officer together with the presence of a 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.

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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 Guidelines. 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 2009. 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:

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



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The independent auditor's qualifications and independence.



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The Company's compliance with legal and regulatory requirements.



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



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The Company's capital and financing requirements and structure.



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Tax matters and risk management.



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



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

        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.

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Compensation and Organization Committee

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

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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);



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



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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 and Corporate Governance at Committee Charters.

        In connection with the setting of executive compensation, members of management, including the Chief Executive Officer and Senior Vice President—Human Resources, consult with Towers Watson, 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 Towers Watson on matters involving Chief Executive Officer compensation and contacts Towers Watson directly on executive compensation matters generally on an as-needed basis. Representatives of Towers Watson frequently attend meetings of the Compensation Committee at the Compensation Committee's invitation and answer questions and advise 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 Board meeting for the year.

        The current members of the Compensation Committee are Dr. Costley (Chair), Mr. Scodari and Dr. Sheares. The Compensation Committee met three times in 2009. Its duties and responsibilities are set forth in its charter and include the following:

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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.



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



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Administer the Company's equity compensation plans.



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Advise the Board on other compensation and benefit matters.



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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.

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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 and Corporate Governance at Committee Charters.

        The current members of the Corporate Governance Committee are Ms. Bang (Chair), Dr. Costley and Ms. Helton. The Corporate Governance Committee met three times in 2009. The duties and responsibilities are set forth in its charter and include the following:

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



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



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Develop and conduct an annual Board self-evaluation process.



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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.



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Consideration of unsolicited nominations for Board membership.



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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.

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. The Corporate Governance Committee also considers diversity of experience, background, 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

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possible candidates for Director to be considered by the Corporate Governance Committee for the 2011 Annual Meeting of Shareholders, the information specified below should be provided no later than October 29, 2010 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.

        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 and Corporate Governance.

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DIRECTOR COMPENSATION

        Management periodically reviews Director compensation arrangements with Towers Watson, an independent consulting firm retained by management. Management informs the Corporate Governance Committee of the data and information provided by Towers Watson regarding Director compensation. If desired, members of the Corporate Governance Committee may also communicate directly with Towers Watson. The Corporate Governance Committee makes its recommendations for action on Director compensation to the full Board of Directors.

2009 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 2009, non-employee Directors received a retainer fee of $36,000 per annum. In addition, Committee members received $2,500 for each Committee meeting attended and $5,000 (in lieu of the $2,500 fee) for each Committee meeting chaired. The Chairs of the

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Audit Committee and the Compensation Committee also received an additional annual retainer of $7,500. The Lead Director receives an additional annual retainer of $20,000. 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 ("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 2010, Director cash compensation for meetings attended or chaired has been restructured such that non-employee Directors shall be entitled to receive $2,000 for each Board and Committee meeting attended (with no additional payment for meetings chaired). In addition, the Chair of the Audit Committee shall be entitled to receive an additional annual retainer of $10,000 and the Chairs of the Compensation Committee and the Corporate Governance Committee shall each be entitled to receive an additional annual retainer of $7,500.

        In May 2009, the non-employee members of the Board of Directors received a grant of 2,000 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 2009.

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 better 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.

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Report of the Audit and Finance Committee

        The Audit Committee has reviewed and discussed with management Covance's audited financial statements for the year ended December 31, 2009, 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 Committee has reviewed the written disclosures and the letter from E&Y required by applicable requirements of the Public Company Accounting Overnight Bound regarding E&Y's communications with the Audit Committee concerning independence and has discussed with the firm its independence. The Audit 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 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, 2009.

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 2008 and 2009 were approximately $2,382,716 and $2,316,104, 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 2008 and 2009 were approximately $21,730 and $26,076, 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 2008 or 2009.

All Other Fees

        There were no such fees in 2008 and 2009.

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

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pre-approval of all audit and permissible non-audit services to be provided by the independent registered public accounting firm is described below.

        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 2009.

EXECUTIVE COMPENSATION
Compensation Discussion and Analysis

Executive Compensation Principles

        Covance's executive compensation programs are founded on and driven by the following four principles:

1.

Aligning management rewards with shareholder returns;

2.

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

3.

Providing market competitive compensation at target performance levels; and

4.

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

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

1.

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.

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On average 50% to 70% of an executive officer's total compensation—and close to 80% in the case of the Chief Executive Officer, is variable in nature.

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As part of a pay for performance environment, Covance compensation programs provide wide payout ranges that reward performance above target and reduce or eliminate payouts when targets are not achieved.

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

2.

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

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Almost 40% of an executive officer's total annual compensation (at target) is delivered in the form of Covance equity, and vests over multiple years.

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

3.

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

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

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Profit measures current operating performance;

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•

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. This is intended to achieve a balanced focus of management's attention on both near-term and long-term profit and growth.

4.

Executive compensation is market competitive at target performance levels.

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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:

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



•

Annual cash bonus provides a variable compensation opportunity, with all or portions of such bonus 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 long-term variable compensation opportunities, and seeks to align executives' interests with those of our shareholders (i.e., sustained, long-term profitable growth); 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:

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Base pay at median competitive base salary;



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Target cash bonus opportunity at or above the median competitive target bonus;



•

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 target compensation of our competitive marketplace for executive talent (in both mix and target value). In some cases where executives fall below the market median, we are working to incrementally move our executives closer to this competitive market position. We consider each individual's past year individual 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.

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, cash bonus, and equity) from two groups.

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Approximately 150 like-sized companies with revenues ranging between $1.0 and $3.0 billion (as identified by Towers Watson); and



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55 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.

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        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. The size adjustment is accomplished by Towers Watson, an independent consulting firm retained by the Compensation Committee as follows:

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Where possible and appropriate, regression analyses are performed to size-adjust the survey data to achieve a close correlation with Covance's corporate revenue range and the revenue ranges of its business units.



•

Tabular data and various data sub-cuts are also evaluated to ensure accuracy, to provide additional information for the analysis, as well as where regression data are unavailable.

        The table below lists the 55 peer organizations for 2010:

        Covance derives "market competitive" compensation as a 25% weighting of the general industry 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 and need to offer competitive compensation.

        All market data is provided by Towers Watson.

Setting Compensation

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

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competitive market data,



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Company performance,



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individual performance,



•

internal equity, and



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retention considerations.

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

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        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 (bonus and equity) may pay out nothing for below target results.

        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 Senior 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 cash bonus 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 to ensure that extraordinary circumstances unrelated to performance do not inequitably increase or decrease compensation. This discretion was not used in 2009.

        The Compensation Committee also reviews tally sheets, which reflect all elements of each executive officer's compensation, including their current and historical equity compensation. 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 are above the target compensation levels determined from our annual review of our competitive market data. No such awards were granted in 2009.

Overall Plan Design and Features

Elements of Compensation Program

        The primary elements of the compensation program include base salary, annual incentive cash bonus, equity grants (consisting of stock options and performance-based restricted stock), and an executive retirement benefit. A portion of base salary and annual incentive cash bonus 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. On average, between 50% and 70%, (approximately 66% in 2009), of an executive officer's total compensation—and close to 82% 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.

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        The chart below illustrates the 2009 allocation of target compensation for executive officers:

        The above charts reflect target incentive cash bonus 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 proxy tables for the Named Executives because the proxy tables reflect both actual compensation paid (e.g., for cash bonus), 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 2009 base pay increases were delayed until May 1, 2009.

Annual Incentive Cash Bonus Plan

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

1.

The annual incentive cash bonus pool in which executive officers participate is initially sized based on actual Company and/or business unit performance against pre-established profit targets (the range of variability is from 65% to 125% of target). In 2009 the plan utilized a corporate post-bonus operating income target of $266,410,000 and a net order target of $2,240,000,000;

2.

The size of the bonus pool in which executive officers participate is adjusted and finalized based on performance against pre-established net order targets (increasing the range of variability to 49% to 156% of target). In 2009, post-bonus operating income was $228,610,000 and net orders were $2,372,054,000. This resulted in a bonus pool for corporate officers, including Messrs. Herring, Barr, and Klitgaard, equaling 75% of the target bonus, and Mr. Cimino and Ms. Tanner of 115% and 156% of the target bonus respectively; and

3.

An individual multiplier is applied based on the executive officer's individual performance to arrive at the actual bonus 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%, resulting in a total range of variation of 0% to 250% of target). The individual multiplier for each Named Executive was as follows: Mr. Herring 120%; Mr. Barr 50%; Mr. Klitgaard 110%; Mr. Cimino 120%; and Ms. Tanner 155%.

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

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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.



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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.

        For example, the following table shows the range of variability and parameters of the determination of 2009 bonuses.

        The 2009 cash bonus target for all executive officers 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 2009, the actual cash bonuses were paid at 89% of target for the year.

        The following factors were utilized in determining Mr. Herring's bonus:

        The actual bonus paid to Mr. Herring was $730,600 calculated as follows:

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(1)

The amounts shown reflect service awards that all Covance employees are eligible to receive upon completing an established number of years of service with the Company.

(2)

The amounts shown reflect grant date fair market value based on the target payout of these performance-based awards. The maximum value for each stock award would be 220% of the initial target grant and assumes the highest level of performance achieved. If the highest level of performance were to be achieved by the named Executive Officer, the maximum values for each officer would be as follows: for Mr. Herring $3,130,270, Mr. Klitgaard $631,308, Mr. Barr $789,091, Mr. Cimino $447,169 and Ms. Tanner $447,169. Please refer to the "Compensation Discussion and Analysis" section above for a description of the terms of these awards.

(3)

The amounts shown reflect grant date fair market value as determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation. Assumptions used in this calculation are included in footnote 10 to the Company's Financial Statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009. Please refer to the "Compensation Discussion and Analysis" section above for a description of the terms of these awards.

(4)

The amounts shown reflect additional benefits and payments provided to the Named Executives including the following: