Exhibit 10.4

 

INCYTE CORPORATION 2010 STOCK INCENTIVE PLAN

 

NOTICE OF PERFORMANCE SHARE AWARD

 

You have been granted the following award of Performance Shares, representing
the right to receive on a future date shares of common stock of INCYTE
CORPORATION (“Incyte”) under the Incyte Corporation 2010 Stock Incentive Plan,
as amended (the “Plan”):

 

Date of Grant:

 

[Date of Grant]

 

 

 

Name of Recipient:

 

[Name of Recipient]

 

 

 

Target Grant of

 

 

Performance Shares:

 

[                      ]

 

 

 

Performance Period:

 

[                      ]

 

 

 

Performance Goals:

 

Your Performance Shares may be converted into actual shares of Incyte common
stock after the end of the Performance Period, depending on the level of
Incyte’s achievement of the performance goals described in Exhibit 1. No actual
shares will be issued unless Incyte achieves at least the “threshold” level of
performance with respect to at least one of the performance goals described in
Exhibit 1.

 

By your signature and the signature of Incyte’s representative below, you and
Incyte agree that this award of Performance Shares is granted under and governed
by the terms and conditions of the Plan and the Performance Share Award
Agreement (the “Agreement”), including Exhibit 1 thereto, that is attached to
and made a part of this document.

 

By signing this Notice, you further agree that Incyte may deliver by e-mail all
documents related to the Plan or this award.  You also agree that Incyte may
deliver these documents by posting them on a website maintained by Incyte or by
a third party under contract with Incyte.  If Incyte posts these documents on a
website, it will notify you by e-mail.

 

 

[NAME OF RECIPIENT]

 

INCYTE CORPORATION

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

Title:

 

Print Name

 

 

 

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INCYTE CORPORATION 2010 STOCK INCENTIVE PLAN
PERFORMANCE SHARE AWARD AGREEMENT

 

Payment

 

No cash payment is required upon receipt of this award, or for the issuance of
shares of Incyte common stock on settlement of the Performance Shares. You will,
however, have to make arrangements acceptable to Incyte for the payment of any
withholding taxes due as a result of the settlement of the Performance Shares.

 

 

 

Performance Shares

 

Your target grant of Performance Shares is shown in the Notice of Performance
Share Award (the “cover sheet”). This is the number of actual shares of Incyte
common stock that may be issued to you after the end of the Performance Period
if Incyte achieves the “target” level of performance with respect to each
performance goal for the Performance Period. Depending on Incyte’s performance,
you may receive a number of actual shares that is greater or less than your
target grant. If Incyte does not achieve at least the “threshold” level of
performance with respect to at least one of the performance goals set for the
Performance Period, you will receive no actual shares of Incyte common stock
under this award. 

 

 

 

Performance Period

 

The Performance Period covered by this award is shown in the cover sheet.

 

You must remain in service with Incyte (or any subsidiary) as an employee,
director, consultant or advisor for the entire Performance Period in order to
remain entitled to receive any actual shares of Incyte common stock in
settlement of the Performance Shares.

 

 

 

Forfeiture

 

If your service as an employee, director, consultant or advisor of Incyte (or
any subsidiary) terminates for any reason before the end of the Performance
Period, then your Performance Shares will be forfeited. This means that the
Performance Shares will be immediately canceled and you will receive no actual
shares of Incyte common stock after the end of the Performance Period. You will
receive no payment for any Performance Shares that are forfeited.

 

Incyte determines when your service terminates for this purpose.

 

 

 

Leaves of Absence

 

For purposes of this award, your service does not terminate when you go on a
military leave, a sick leave or another bona fide leave of absence, if the leave
was approved by Incyte in writing and the terms of the leave or applicable law
requires continued service crediting. But your service terminates when the
approved leave ends, unless you immediately return to active work.

 

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Nature of Performance Shares

 

The Performance Shares granted under this Agreement are mere bookkeeping
entries. They represent only Incyte’s unfunded and unsecured promise to issue
shares of Incyte common stock on a future date based on the level of Incyte’s
achievement of the specified performance goals. As a holder of Performance
Shares, you have no rights other than the rights of a general creditor of
Incyte.

 

 

 

No Voting Rights or Dividends

 

Your Performance Shares carry neither voting rights nor rights to dividends.
You, or your estate or heirs, have no rights as a stockholder of Incyte unless
and until your Performance Shares are settled by issuing shares of Incyte’s
common stock. No dividend equivalents will be provided and no adjustments will
be made for dividends or other rights if the applicable record date occurs
before your stock certificate is issued, except that in the case of a dividend
payable in the form of additional shares of Incyte common stock, your target
number of Performance Shares will be adjusted proportionately by multiplying
that number by the number of shares of Incyte common stock that a holder of one
share of Incyte common stock before the dividend payment date would hold after
the dividend payment date.

 

 

 

Settlement of Performance Shares

 

The Performance Shares will be settled after the end of the Performance Period
and after the Compensation Committee of Incyte’s Board of Directors has
certified Incyte’s level of achievement with respect to each of the performance
goals specified for the Performance Period. In no event will settlement occur
later than March 15th of the calendar year following the last year of the
Performance Period.

 

At the time of settlement, your target number of Performance Shares may be
adjusted upwards or downwards by applying multiplier percentages based on
Incyte’s performance for the Performance Period. You will receive one share of
Incyte common stock for each Performance Share that you remain entitled to after
applying the multiplier percentages.

 

 

 

Withholding Taxes

 

No stock certificates will be distributed to you unless you make acceptable
arrangements, satisfactory to Incyte, to pay any withholding taxes that may be
due as a result of the settlement of the Performance Shares.

 

 

 

Award Nontransferable

 

You may not sell, transfer, assign, pledge or otherwise dispose of any of your
Performance Shares. For instance, you may not use your Performance Shares as
security for a loan. If you attempt to do any

 

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of these things, your Performance Shares will immediately become invalid. You
may, however, dispose of any vested but unsettled Performance Shares in your
will.

 

Regardless of any marital property settlement agreement, Incyte is not obligated
to recognize your former spouse’s interest in your Performance Shares in any
way.

 

 

 

Beneficiary Designation

 

You may designate a beneficiary in writing to receive your Performance Shares in
the event you die after the end of the Performance Period and before settlement
of the Performance Shares. A beneficiary designation must be filed with Incyte
on the proper form, and it will be recognized only if it has been received at
Incyte’s headquarters before your death. If you file no beneficiary designation
or if none of your designated beneficiaries survives you, then your estate will
receive any settlement of Performance Shares that you are entitled to at the
time of your death.

 

 

 

Restrictions on Resale

 

By signing the cover sheet of this Agreement, you agree not to sell any shares
of Incyte common stock issued upon settlement of the Performance Shares at a
time when applicable laws or Incyte policies prohibit a sale. This restriction
will apply as long as you are an employee, director, consultant or advisor of
Incyte (or any subsidiary).

 

 

 

Retention Rights

 

Neither your award nor this Agreement gives you the right to be retained by
Incyte (or any subsidiary) in any capacity. Incyte (and any subsidiaries)
reserve the right to terminate your service at any time, with or without cause.

 

 

 

Adjustments

 

In the event of a stock split, a stock dividend or a similar change in Incyte
common stock, the number of your Performance Shares covered by this award may be
adjusted pursuant to the Plan.

 

 

 

Recovery and Reimbursement of Gain

 

Incyte shall have the right to recover, or receive reimbursement for, any
compensation or profit realized by the issuance or settlement of Performance
Shares under this Agreement, or by the disposition of any shares issued upon
settlement of the Performance Shares, to the extent Incyte has such a right of
recovery or reimbursement under applicable securities laws.

 

 

 

Compliance with Section 409A of the Code

 

Incyte intends that the issuance and settlement of the Performance Shares
awarded under this Agreement will qualify for an exemption from the application
of, or will otherwise comply with, Section 409A of the Internal Revenue Code.
Incyte reserves the right, to the extent it deems necessary or advisable, to
amend this Agreement without your consent in order to maintain such
qualification for

 

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exemption or compliance. By reserving this right, however, Incyte is not
guarantying that Section 409A will never apply to the issuance or settlement of
the Performance Shares, or that the requirements of Section 409A will be
complied with.

 

 

 

Applicable Law

 

This Agreement will be interpreted and enforced under the laws of the State of
Delaware (without regard to its choice of law provisions).

 

 

 

The Plan and Other Agreements

 

The text of the Incyte Corporation 2010 Stock Incentive Plan (the “Plan”) is
incorporated in this Agreement by reference. All capitalized terms not defined
in this Agreement are subject to definition under the Plan. If there is any
discrepancy between the terms and conditions of this Agreement and the terms and
conditions of the Plan, the terms and conditions of the Plan shall control.

 

This Agreement and any Exhibit hereto, the cover sheet and the Plan constitute
the entire understanding between you and Incyte regarding this award. Any prior
agreements, commitments or negotiations concerning this award are superseded.
This Agreement may be amended by the Committee without your consent; however, if
any such amendment would materially impair your rights or obligations under the
Agreement, this Agreement may be amended only by another written agreement,
signed by you and Incyte.

 

By signing the cover sheet of this Agreement, you agree to all

of the terms and conditions described above and in the Plan.

 

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