Exhibit 10.4


 


INCYTE CORPORATION 2010 STOCK INCENTIVE PLAN:


NONSTATUTORY STOCK OPTION AGREEMENT


OUTSIDE DIRECTORS


 


	
  Nonstatutory
  Stock Option

  	
   

  	
  This
  option is not intended to be an incentive stock option under section 422 of
  the Internal Revenue Code.

  
	
   

  	
   

  	
   

  
	
  Vesting

  	
   

  	
  Your
  right to exercise this option vests as shown on the Notice of Grant of Stock
  Options (the “cover sheet”).  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If
  this option award is an initial grant made under Section 12(a) of
  the Plan, the first installment consists of 25% of the total number of shares
  covered by this option. It becomes exercisable on the “full vest” date shown on the cover
  sheet. Each of the subsequent installments consists of 2.08333% of the total
  number of shares covered by this option. The subsequent installments become
  exercisable at the end of each of the 36 months following the full vest date
  of the first installment. The number of shares in each installment will be rounded to the
  nearest whole number. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If
  this option award is an annual grant made under Section 12(b) of
  the Plan, it becomes exercisable on the first anniversary of the date of
  grant or, if earlier, immediately prior to the next regular annual meeting of
  Incyte’s stockholders. Any portion of an annual grant made under
  Section 12(b) of the Plan that is outstanding will become
  immediately exercisable in full upon a Change in Control (as defined in the
  Plan).  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  No
  additional shares subject to this option will vest after your Incyte services
  has terminated for any reason.

  
	
   

  	
   

  	
   

  
	
  Term

  	
   

  	
  Your
  option will expire in any event at the close of business at Incyte
  headquarters on the day before the 10th anniversary of the Date of Grant, as
  shown on the cover sheet. (It will expire earlier if your Incyte service
  terminates, as described below.)

  
	
   

  	
   

  	
   

  
	
  Regular
  Termination  or
  Disability

  	
   

  	
  If
  your service as a director of Incyte terminates for any reason other than
  death, your option will expire at the close of business at Incyte
  headquarters on the earliest of the following dates:

   

  ·                  24 months after your
  service terminates, if the termination occurs because of your total and
  permanent disability (as defined below);

  



 


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  ·                  12 months after your
  service terminates, if the termination occurs because of your retirement from
  the Board of Directors after you have reached 70 years of age (“full
  retirement”); or

   

  ·                  6 months after your
  service terminates, if the termination occurs because of any reason other
  than your total and permanent disability, full retirement or death.  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Total and permanent
  disability” means that you are unable to engage in any substantial gainful
  activity by reason of any medically determinable physical or mental
  impairment which can be expected to result in death or which has lasted, or
  can be expected to last, for a continuous period of not less than one year.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Incyte
  determines when your service terminates for this purpose.

  
	
   

  	
   

  	
   

  
	
  Death

  	
   

  	
  If
  you die while serving as a director then your option will expire at the close
  of business at Incyte headquarters on the date 24 months after the date of
  death. During that 24-month period your estate or heirs may exercise the
  vested portion of your option.

  
	
   

  	
   

  	
   

  
	
  Restrictions
  on Exercise

  	
   

  	
  Incyte
  will not permit you to exercise this option Board of Directors or its
  delegate determines, in its sole and absolute discretion, that the issuance
  of shares at that time could violate any law or regulation.

  
	
   

  	
   

  	
   

  
	
  Notice
  of Exercise

  	
   

  	
  When
  you wish to exercise this option, you must notify Incyte by filing the proper
  “Notice of Exercise” form at the address given on the form. Your notice must
  specify how many shares you wish to purchase. Your notice must also specify
  how your shares should be registered (in your name only or in your and your spouse’s
  names as community property or as joint tenants with right of survivorship).
  The notice will be effective when it is received by Incyte.  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If
  someone else wants to exercise this option after your death, that person must
  prove to Incyte’s satisfaction that he or she is entitled to do so.

  
	
   

  	
   

  	
   

  
	
  Form of
  Payment

  	
   

  	
  When
  you submit your notice of exercise, you must include payment of the option
  price for the shares you are purchasing. Payment may be made in one (or a
  combination of two or more) of the following forms:

   

  ·                  Your personal check, a
  cashier’s check or a money order.

   

  ·                  Irrevocable directions to
  a securities broker approved by Incyte to sell your option shares and to
  deliver all or a portion of the sale proceeds to Incyte in payment of the
  option price and 

  



 


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  withholding
  taxes. (The balance of the sale proceeds, if any, will be delivered to you.)
  The directions must be given by signing a special “Notice of Exercise” form
  provided by Incyte.

   

  ·                  Irrevocable directions to
  a securities broker approved by Incyte to pledge your option shares for a
  margin loan and to deliver all or a portion of the loan proceeds to Incyte in
  payment of the option price and withholding taxes. (The balance of the loan
  proceeds, if any, will be delivered to you.) The directions must be given by
  signing a special “Notice of Exercise” form provided by Incyte.

   

  ·                  Certificates for Incyte
  stock that you have owned for at least 6 months, along with any forms needed
  to effect a transfer of the shares to Incyte. The value of the shares,
  determined as of the effective date of the option exercise, will be applied
  to the option price.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A form of payment will not
  be available if the Board of Directors or its delegate determines, in its
  sole and absolute discretion, that such form of payment could violate any law
  or regulation.

  
	
   

  	
   

  	
   

  
	
  Withholding
  Taxes

  	
   

  	
  You
  will not be allowed to exercise this option unless you make acceptable
  arrangements, satisfactory to Incyte, to pay any withholding taxes that may
  be due as a result of the option exercise.

  
	
   

  	
   

  	
   

  
	
  Restrictions
  on Resale

  	
   

  	
  By
  signing the cover sheet of this Agreement, you agree not to sell any option
  shares at a time when applicable laws or Incyte policies prohibit a sale.
  This restriction will apply as long as you are a director of Incyte.

  
	
   

  	
   

  	
   

  
	
  Transfer
  of Option

  	
   

  	
  Prior
  to your death, only you may exercise this option. You cannot transfer or
  assign this option. For instance, you may not sell this option or use it as
  security for a loan. If you attempt to do any of these things, this option
  will immediately become invalid. You may, however, dispose of this option in
  your will.  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Regardless
  of any marital property settlement agreement, Incyte is not obligated to
  honor a notice of exercise from your former spouse, nor is Incyte obligated
  to recognize your former spouse’s interest in your option in any other way.

  
	
   

  	
   

  	
   

  
	
  Retention
  Rights

  	
   

  	
  Neither
  your option nor this Agreement gives you the right to be elected as, or to be
  nominated for election as a director of Incyte or to remain a director of
  Incyte.

  



 


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  Stockholder
  Rights

  	
   

  	
  You,
  or your estate or heirs, have no rights as a stockholder of Incyte until a
  certificate for your option shares has been issued. No adjustments are made
  for dividends or other rights if the applicable record date occurs before
  your stock certificate is issued, except as described in the Plan.

  
	
   

  	
   

  	
   

  
	
  Recovery and
  Reimbursement of Option Gain

  	
   

  	
  Incyte shall have the
  right to recover, or receive reimbursement for, any compensation or profit
  realized by the exercise of this option or by the disposition of any option
  shares to the extent Incyte has such a right of recovery or reimbursement
  under applicable securities laws.

  
	
   

  	
   

  	
   

  
	
  Adjustments

  	
   

  	
  In the event of a stock
  split, a stock dividend or a similar change in Incyte stock, the number of
  shares covered by this option and the exercise price per share may be
  adjusted pursuant to the Plan.

  
	
   

  	
   

  	
   

  
	
  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 2010 Stock Incentive Plan (the “Plan”) is incorporated in this
  Agreement by reference and attached to this Agreement. 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, cover sheet and the Plan constitute the entire understanding
  between you and Incyte regarding this option. Any prior agreements,
  commitments or negotiations concerning this option are superseded. This
  Agreement may be amended by the Board of Directors or its delegate without
  your consent; however, if 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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