Exhibit 10.4

NQO No. XX-XX

 

Option for

 

 

XXXXXX Shares

 

MEDAREX, INC.
NON-EMPLOYEE DIRECTOR NONQUALIFIED STOCK OPTION AGREEMENT
FOR 2005 EQUITY INCENTIVE PLAN

MEDAREX, INC. a New Jersey corporation (the “Company”), in consideration of the
value to it of the continuing services of XXXXXXX (hereinafter called
“Optionee”), which continuing services the grant of this option is designed to
secure, and in consideration of the various undertakings made herein by
Optionee, and pursuant to its 2005 Equity Incentive Plan (hereinafter called the
“Plan”), hereby grants to Optionee an option (the “Option”), evidenced by this
Option Agreement, exercisable  for the period and upon the terms hereinafter set
out, to purchase XXXXX shares (the “Option Amount”) of $.01 par value common
stock of the Company (“Common Stock”) at a price of $XXXXX per share (the
“Option Price”), which price represents at least the Fair Market Value (as such
term is defined in the Plan) of the shares as of the Date of Grant (as
hereinafter defined).

1.  Term of Option.  This Option is granted and dated on the date set forth next
above the signature shown (sometimes hereinafter called the “Date of Grant”),
and will terminate and expire, to the extent not previously exercised, one day
prior to the end of ten (10) years after the Date of Grant (i.e., on the XXX day
of XXXXX, XXXX), or at such earlier time as may be specified in Section 5
hereof.

2.  Vesting.  Except as set forth in the immediately following sentence or as
otherwise provided in the Plan or this Option Agreement, this Option will vest
and be exercisable as follows, provided that vesting will cease upon the
termination of the Optionee’s Service: The entire Option Amount shall vest on
the date that is six (6) months and one (1) day following the Date of Grant. 
Notwithstanding the foregoing, under no circumstances shall this Option be
exercisable within six (6) months (or such greater or lesser period prescribed
or permitted by any applicable rule or regulation promulgated under the
Securities Exchange Act of 1934, as amended, (the “Exchange Act”), including,
without limitation, Rule 16(b)-3) following the Date of Grant hereof; provided,
however, that upon the occurrence of an event constituting a Change in Control,
as such term is defined in the Plan, the Option Amount shall become immediately
vested and exercisable in full.

3.  Non-Transferability.  An Optionee may not sell or otherwise transfer an
Option except by will or the laws of descent and distribution or to an
Optionee’s family members pursuant to a gift (in accordance with the Plan) or by
means of a domestic relations order.

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4.  Manner of Exercise.  The Optionee (or other person entitled to exercise the
Option) shall purchase shares of Common Stock subject hereto by the payment to
the Company of the Option Price in full.  This Option is to be exercised by
written notice to the Company stating the full number of shares to be purchased
and the time of delivery thereof, which shall be at least 15 days after the
giving of notice unless an earlier date shall have been agreed upon between
Optionee (or other person entitled to exercise the Option) and the Company.  At
such time, the Company shall, without transfer or issue tax to the Optionee (or
other person entitled to exercise the Option), deliver at the principal office
of the Company, or at such other place as shall be mutually agreed upon, a
certificate or certificates for such shares against payment of the Option Price
therefor in full for the number of shares to be delivered; provided, however,
that the time of delivery may be postponed by the Company for such period as may
be required for it to comply with reasonable diligence with any requirements of
law.  Payment of the Option Price shall be made in cash either by a certified or
official bank check.

Notwithstanding the foregoing, provided that at the time of exercise the Common
Stock is publicly traded, payment in whole or in part of the Option Price may be
made in unrestricted shares of Common Stock which are already owned by the
Optionee free and clear of any liens, claims, encumbrances or security
interests, based upon the Fair Market Value (as defined in the Plan) of the
Common Stock on the date the Option is exercised.  No shares of Common Stock
shall be issued until full payment therefor has been made and any tax
withholding obligations have been satisfied (in accordance with Section 10(d)). 
If the Optionee (or other persons entitled to exercise the Option) fails to
accept a delivery of, or to pay for all or any part of the number of shares
specified in such notice upon tender or delivery thereof, the right to exercise
the Option with respect to such undelivered shares shall be thereupon
terminated.

Notwithstanding the foregoing, provided that at the time of exercise the Common
Stock is publicly traded, payment in whole or in part of the Option Price may be
made pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board that, prior to the issuance of Common Stock, results in
either the receipt of cash (or check) by the Company or the receipt of
irrevocable instructions to pay the aggregate exercise price to the Company from
the sales proceeds.

5.  Termination of Service.

(a)           Death.  If any Optionee’s relationship with or employment by the
Company and/or any of its subsidiaries terminates by reason of death, this
Option may thereafter be exercised immediately in full by the legal
representative of the estate or by the legatee of the Optionee under the will of
the Optionee until the expiration of the stated term of the Option.

(b)           Disability.  If the Optionee’s relationship with or employment by
the Company and/or any of its subsidiaries terminates by reason of “Disability”
(as defined in Section 409A(a)(2)(C) of the Code), this Option may thereafter be
exercised in full by the Optionee for a period of three years from the date of
such termination or expiration of the stated term of the Option, whichever
period is the shorter.

(c)           Termination for Cause.  If the Optionee’s relationship with or
employment by the Company is terminated by the Company for “Cause” (as defined
in the Plan), the Option shall

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thereupon terminate.  Notwithstanding the foregoing, nothing herein shall be
deemed to alter the at-will employment status of an employee of the Company in
any way.

(d)           Other Termination.  If the Optionee’s relationship with or
employment by the  Company terminates for any reason other than death or
Disability or for Cause, this Option may, to the extent such Option has vested,
thereafter be exercised by the Optionee for a period of three months from the
date of such termination or expiration of the stated term of the Option,
whichever period is the shorter; provided, however, that if such termination is
by action of the Company within 18 months following a Change in Control (other
than discharge for Cause), any unexercised portion of this Option may be
exercised by the Optionee until the earlier of six months and one day after such
termination or the expiration of such Option in accordance with the terms
hereof.

(e)           Directors.  Notwithstanding anything in this Section 5 to the
contrary, if the Optionee is a non-employee member of the Board of Directors of
the Company, when such Optionee’s term on the Board of Directors of the Company
terminates by reason of retirement, permanent disability (as determined by the
Committee in its discretion) or resignation (in each case, except in the event
of a willful violation of the Company’s policies), this Option, to the extent
such Option has vested, shall remain exercisable until the expiration of the
stated term of the Option.

6.  Adjustments on Recapitalization; Dissolution or Liquidation.  The number of
shares of Common Stock subject hereto and the Option Price per share shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of the Common Stock resulting from the subdivision or consolidation of
the shares, or the payment of a stock dividend after the Date of Grant, or other
decrease or increase in the shares of Common Stock outstanding effected without
receipt of consideration by the Company; provided, however, that any Options to
purchase fractional shares resulting from such adjustments shall be eliminated.

Notwithstanding anything in this Option Agreement to the contrary, in the event
of the proposed dissolution, liquidation or reorganization of the Company, other
than pursuant to certain mergers or consolidations), the Option granted
hereunder shall terminate as of a date to be fixed by the Committee (as that
term is defined in the Plan); provided that not less than 30 day’s prior written
notice of the date so fixed shall be given to the Optionee, and the Optionee
shall have the right, during the period of thirty (30) days preceding such
termination, to exercise his or her Option as to all or any part of the shares
covered thereby, including shares as to which such Option would not otherwise be
exercisable.

7.  Subject to Plan.  This Option is subject to all the terms and conditions of
the Plan (and specifically to the power of the Committee to make interpretations
of the Plan and of the Options granted thereunder, and of the Board of Directors
of the Company (“Board of Directors”) to alter, amend, suspend or discontinue
the Plan subject to the limitations expressed in the Plan), the provisions of
which are hereby made a part of this Option.  By acceptance hereof, Optionee
acknowledges receipt of a copy of a Summary Plan Description, which describes
the basic terms and conditions of the Plan, and recognizes and agrees that
determinations, interpretations or other actions respecting the Plan may be made
by a majority of the Board of Directors or of the Committee, and that such
determinations, interpretations or other

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actions are final, conclusive and binding upon all parties, including Optionee. 
In the event of any conflict between the provisions of this Option Agreement and
those of the Plan, the provisions of the Plan shall control.

8.  Rights as Shareholder.  This Option shall not entitle Optionee or any
permitted transferee hereof to any rights of a shareholder of the Company or to
any notice of proceedings of the Company or to any notice of proceedings of the
Company in respect of any shares issuable upon exercise of this Option unless
and until the Optionee has given to the Company a written notice of exercise,
has paid in full the Option Price for such shares and, if applicable, has given
a representation to the Company that he or she is purchasing such shares for
investment only and not with a view towards any distribution.  The Company shall
not be required to issue or deliver any certificate for shares of its Common
Stock purchased hereunder prior to compliance with applicable federal and state
laws and regulations with respect to the issuance, registration or listing of
such shares.

9. Securities Laws.    Optionee acknowledges that he or she has been informed
of, or is otherwise familiar with, the nature and the limitations imposed by the
Securities Act of 1933, as amended (the “Act”), the Exchange Act, and the rules
and regulations thereunder (in particular, Rule 144, promulgated under the Act
and Section 16 of the Exchange Act, and Rule 16b-3 promulgated thereunder),
concerning the shares issuable upon exercise of this Option and agrees to be
bound by the restrictions embodied in such Act, the Exchange Act, and all the
rules and regulations promulgated thereunder.

10.  Miscellaneous; Governing Law.

(a)           In the event the Option shall be exercised in whole, this Option
Agreement shall be surrendered to the Company for cancellation.  In the event
the Option shall be exercised in part, or a change in the number or designation
of the Common Stock shall be made, this Option Agreement shall be delivered by
Optionee to the Company for the purpose of making appropriate notation thereon,
or of otherwise reflecting, in such manner as the Company shall determine, the
partial exercise or the change in the number of designation of the Common Stock.

(b)           The Option shall be exercised in accordance with such
administrative regulations as the Committee shall from time to time adopt.

(c)           The Option and this Option Agreement shall be construed,
administered and governed in all respects under and by the laws of the State of
New Jersey.

(d)           Optionee hereby agrees that he or she will make such arrangements
as the Company deems necessary to discharge any federal, state, or local income
or payroll tax withholding obligations imposed upon the Company with respect to
this Option.  Upon Optionee’s request and subject to the Company’s approval, in
its sole discretion, and in compliance with any applicable conditions or
restrictions of law, the Company may withhold from fully vested shares of Common
Stock otherwise issuable to Optionee upon exercise of the Option a number of
whole shares of Common Stock having a Fair Market Value, determined as of the
date of exercise, not in excess of the minimum amount of tax required to be
withheld by law.

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(e)           Nothing contained in this Agreement shall confer upon Optionee the
right to employment by or service with the Company or any of its subsidiaries.

IN WITNESS WHEREOF, this Option Agreement is executed as of the XXX day of XXXX,
XXX.

 

MEDAREX, INC.

 

 

 

 

 

 

By:

 

 

 

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The undersigned Optionee hereby accepts the foregoing Non-Qualified Stock Option
Agreement No. XX-XX dated as of XXXXX X, XXXX (the “Date of Grant”), and the
undertakings on his or her part contained therein, and agrees to all of the
terms and conditions thereof.

DATED:

,

 

 

 

 

Optionee — XXXXXXXXXX

 

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