Exhibit 10.3


 


INCYTE
CORPORATION 2010 STOCK INCENTIVE PLAN:


NONSTATUTORY
STOCK OPTION AGREEMENT


 


	
  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 in 25 installments over a three-year period, as shown on
  the Notice of Grant of Stock Options (the “cover sheet”). The first
  installment consists of 33.33% 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 2.77791% of the total
  number of shares covered by this option. The subsequent installments become
  exercisable at the end of each of the 24 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. No additional shares will vest after
  your Incyte service 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 7th 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

  	
   

  	
  If your service as an
  employee, director, consultant or advisor of Incyte (or any subsidiary)
  terminates for any reason except death or total and permanent disability,
  then your option will expire at the close of business at Incyte headquarters
  on the 90th day after your termination date. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Incyte determines when
  your service terminates for this purpose.

  
	
   

  	
   

  	
   

  
	
  Death

  	
   

  	
  If you die as an
  employee, director, consultant or advisor of Incyte (or any subsidiary), then
  your option will expire at the close of business at Incyte headquarters on
  the date 6 months after the date of death. During that 6-month period, your
  estate or heirs may exercise the vested portion of your option.

  



 


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  Disability

  	
   

  	
  If your service as an employee, director, consultant
  or advisor of Incyte (or any subsidiary) terminates because of your total and
  permanent disability, then your option will expire at the close of business
  at Incyte headquarters on the date 6 months after your termination date. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Incyte determines when your service terminates for
  this purpose.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “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.

  
	
   

  	
   

  	
   

  
	
  Leaves of Absence

  	
   

  	
  For purposes of this
  option, 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 in any event when the approved leave ends, unless
  you immediately return to active work.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Incyte determines which
  leaves count for this purpose and the date the approved leave ends.

  
	
   

  	
   

  	
   

  
	
  Restrictions on Exercise

  	
   

  	
  Incyte will not permit
  you to exercise this option if the committee designated by the Board of
  Directors to administer the Plan (the “Committee”) 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 

  



 


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  sell
  your option shares and to deliver all or a portion of the sale proceeds to
  Incyte in payment of the option price and 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 Committee 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 an employee, director, consultant or advisor of
  Incyte (or a subsidiary).

  
	
   

  	
   

  	
   

  
	
  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 retained by Incyte (or any
  subsidiaries) in any capacity. Incyte (and any subsidiaries) reserve the
  right to terminate your service at any 

  



 


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  time, with or without
  cause.

  
	
   

  	
   

  	
   

  
	
  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 Incyte
  Corporation 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
  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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