Exhibit 10.1


 


MEDAREX, INC. 2008 DEFERRED COMPENSATION PROGRAM


 


1.                                       Introduction


 


The
purpose of the Medarex, Inc. 2008 Deferred Compensation Program is to
provide a select group of management or highly compensated employees of the
Company with the ability to defer the receipt of portions of their bonus
compensation payable for services rendered to the Company.  It is intended that the Program will assist
in retaining qualified individuals to serve as officers of the Company.  The Program also is intended to promote the
interests of the Company and its shareholders by providing Participants with
the opportunity to have the value of a portion of such deferred bonus
compensation measured on the basis of the value of the Company’s common stock
and may provide for matching awards upon completion of a vesting period.


 


Any
Restricted Stock Units that are credited pursuant to the Program and any shares
of Common Stock subject to such Restricted Stock Units that are issued pursuant
to the Program shall be credited or issued, as applicable, pursuant to Section 13
of the Medarex, Inc. 2005 Equity Incentive Plan.  If so determined by the Committee, any cash
payments made under the Program may be made pursuant to Section 10 of the
Medarex Inc. 2005 Equity Incentive Plan.


 


2.                                       Definitions


 


a.             “Base Award” means the portion a
Participant’s Restricted Stock Unit Award granted with respect to a Voluntary
Deferral as described in Section 4(c).


 


b.             “Board” means the Board of
Directors of the Company.


 


c.             “Bonus” means a Participant’s
annual bonus granted by the Company to a Participant without regard to any
decreases as a result of (i) an election to defer a portion of such bonus
under the Program or (ii) an election between benefits or cash provided
under a program of the Company maintained pursuant to Section 401(k) of
the Code.


 


d.             “Cash Account” means a bookkeeping
account maintained by the Company reflecting the amount of deferred cash
compensation credited to a Participant pursuant to Section 4(b).


 


e.             “Code” means the Internal Revenue
Code of 1986, as amended.


 


f.              “Committee” means the Compensation
and Organization Committee of the Board.


 


g.             “Common Stock” means the common
stock, par value $.01 per share, of the Company.


 


h.             “Company” means Medarex, Inc.,
a New Jersey corporation.


 

















 


i.              “Fair Market Value” means, as of
any date, the value of a share of Common Stock or other property as determined
by the Committee, in its discretion, or by the Company, in its discretion, if
such determination is expressly allocated to the Company herein, subject to the
following, provided that such determination complies with the Company’s Policy and
Procedures for the Granting of Stock Options and Other Equity-Based Incentives:


 


                                i.              Except as otherwise determined by
the Committee, if, on such date, the Common Stock is listed on a national or
regional securities exchange or market system, the Fair Market Value of a share
of Common Stock shall be the closing price of a share of Common Stock (or the
mean of the closing bid and asked prices of a share of Common Stock if the
Common Stock is so quoted instead) as quoted on the Nasdaq National Market, the
Nasdaq SmallCap Market or such other national or regional securities exchange
or market system constituting the primary market for the Common Stock, as
reported in The Wall Street Journal or such other source as the Company  deems reliable.  If the relevant date does not fall on a day
on which the Common Stock has traded on such securities exchange or market
system, the date on which the Fair Market Value shall be established shall be
the last day on which the Common Stock was so traded prior to the relevant
date, or such other appropriate day as shall be determined by the Committee, in
its discretion.


 


                                ii.             Notwithstanding the foregoing, the
Committee may, in its discretion, determine the Fair Market Value on the basis
of the opening, closing, high, low or average sale price of a share of Common
Stock or the actual sale price of a share of Common Stock received by a
Participant, on such date or the trading day immediately preceding such
date.  The Committee may vary its method
of determination of the Fair Market Value as provided herein for different
purposes under the Program.


 


                                iii.            If, on such date, the Common Stock
is not listed on a national or regional securities exchange or market system,
the Fair Market Value of a share of Common Stock shall be as determined by the
Committee in good faith and in accordance with Section 409A of the Code
without regard to any restriction other than a restriction which, by its terms,
will never lapse.


 


j.              “Grant Date” means the date as of
which a Restricted Stock Unit Award is credited to a Participant’s Restricted
Stock Unit Account, which shall be the date on which the Bonus with respect to
which a Voluntary Deferral applies is paid, as determined by the Committee.


 


k.             “Matching Award” means an
additional Restricted Stock Unit Award granted by the Company to a Participant
with respect to a Base Award pursuant to Section 4(c).


 


l.              “Original Payment Date” means a date
selected by a Participant to receive distribution of the amounts credited to
both the Participant’s Cash Account and Restricted Stock Unit Account for a
Program Year in accordance with Section 4(a).  If the Participant has not selected an
Original Payment Date, the Original Payment Date shall be deemed to be the
earliest of (i) the date that is three (3) years following the date
on which the Bonus with respect to the 


 

















 


applicable
Program Year otherwise would have been paid, (ii) the Participant’s Separation
from Service, (iii) the Participant’s death, or (iv) the
Participant’s Permanent Disability.


 


m.            “Participant” means any employee of
the Company designated by the Committee to be a participant in the Program.


 


n.             “Permanent Disability” means
the Participant (i) is 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 can be expected to last for a
continuous period of not less than 12 months, or (ii) is, by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than 3 months under an accident and health plan covering employees of the
participant’s employer.


 


o.             “Program Year” means the calendar
year.


 


p.             “Restricted Stock Unit” means a
non-voting unit of measurement based on the Fair Market Value of a share of
Common Stock, which entitles a Participant to receive payment in accordance
with the terms of the Program.


 


q.             “Restricted Stock Unit Account”
means a bookkeeping account maintained by the Company reflecting the Restricted
Stock Units credited to a Participant pursuant to Section 4(c).


 


r.              “Restricted Stock Unit Award”
means an award of Restricted Stock Units granted pursuant to Section 4(c).


 


s.             “Separation from Service”
means a termination of employment with the Company (including any person considered
to be a single employer with the Company under Sections 414(b) or (c) of
the Code) for any reason; provided, however,
that employment shall not be considered as terminated by reason of a military
leave, sick leave, or other bona fide leave of absence (such as temporary
employment by the government) if the period of such leave does not exceed six
months, or if longer, so long as the individual’s right to reemployment with
the Company is provided by statute or contract. 
If the period of leave exceeds six months and the individual’s right to
reemployment is not provided by either statute or contract, the employment
relationship shall be considered to terminate on the first date immediately
following such six-month period.  Whether
a termination of employment has occurred shall be determined under all the
facts and circumstances and in accordance with Section 409A of the Code
and Treasury Regulations promulgated thereunder.


 


t.              “Specified Employee” means a
key employee of the Company within the meaning of Section 416(i) of
the Code (without regard to paragraph (5) thereof) if the stock of the
Company is publicly traded on an established securities market or otherwise
(within the meaning of Section 409A of the Code and the Treasury
Regulations promulgated thereunder).  The
determination of Specified Employees shall be made in accordance with the
Treasury Regulations promulgated under Section 409A of the Code.


 

















 


u.             “Voluntary Deferral” means the
deferral of a Participant’s Bonus based on the election of the Participant
pursuant to Section 4(a).


 


3.                                       Administration


 


The
Program shall be administered by the Committee. 
The Committee shall have full authority to administer the Program,
including the discretionary authority to interpret and construe all provisions
of the Program, to resolve all questions of fact arising under the Program, and
to adopt such rules and regulations for administering the Program, as it
may deem necessary or appropriate. 
Decisions of the Committee shall be final and binding on all parties.  The Committee may delegate administrative
responsibilities under the Program to appropriate officers or employees of the
Company.  All expenses of the Program
shall be borne by the Company.


 


4.                                       Deferral Elections and
Participant Accounts


 


a.                                       Voluntary Deferral Elections


 


For
each Program Year, a Participant may elect to defer up to an aggregate of one
hundred percent (100%) of the Participant’s Bonus (in increments of twenty-five
percent (25%)) as a Voluntary Deferral under the Program.  Such Voluntary Deferral shall be made on the
basis of a Participant’s written election for each Program Year stating the
following:


 


(i)            the percentage of the Participant’s
Bonus (in increments of twenty-five percent (25%)) that the Participant elects
to defer in the form of cash and credited to the Participant’s Cash Account;


 


(ii)           the percentage of the Participant’s
Bonus (in increments of twenty-five percent (25%)) that the Participant elects
to defer in the form of Restricted Stock Units and credited to the Participant’s
Restricted Stock Unit Account; and


 


        (iii)          an
Original Payment Date; provided, however,
that (A) such Original Payment Date may not be any earlier than three (3) years
following the date on which the Bonus with respect to the applicable Program
Year otherwise would have been paid and (B) if the Participant does not
select an Original Payment Date, such amounts shall be distributed upon the
earliest of (i) the date that is three (3) years following the date
on which the Bonus with respect to the applicable Program Year otherwise would
have been paid, (ii) the Participant’s Separation from Service, (iii) the
Participant’s death, or (iv) the Participant’s Permanent Disability.


 


Such
election shall be made in the form required by the Committee and shall be
delivered to the Company no later than December 31 of the calendar year
prior to the calendar year in which the services with respect to which the
Bonus is payable will be performed; provided,
however, that (i) any employee who is hired by the Company and
becomes a Participant after such December 31 may elect to defer his or her
Bonus for the calendar year in which the services with respect to which the Bonus
is payable by delivering an election to the 


 

















 


Company
within thirty (30) days following the date that the employee becomes a
Participant, and (ii) in the Company’s discretion, with respect to any
Bonus (or portion thereof) that qualifies as performance-based compensation
within the meaning of Section 409A of the Code and Treasury Regulations
promulgated thereunder, the deferral election may be delivered to the Company
no later than six months before the end of the Program Year with respect to
which such Bonus (or portion thereof) is determined.  Such election shall be
irrevocable.


 


b.                                      Cash Accounts


 


                i.              If a Participant makes a Voluntary
Deferral and elects to defer a portion of the Participant’s Bonus in the form
of cash, the Participant’s Cash Account shall be credited with the following: (i) the
aggregate dollar amount of the Participant’s Bonus with respect to which the
Participant has elected to defer in the form of cash; and (ii) in
accordance with Section 4(b)(ii), the amount of applicable gains or losses
with respect to such amounts that are deemed to be invested in one or more of
the investment funds designated by the Participant pursuant to Section 4(b)(ii).


 


                ii.             The Committee shall designate one
or more investment funds that shall be available for hypothetical investment of
the amounts credited to a Participant’s Cash Account and shall provide each
Participant with a list of such investment funds.  The Participant may designate, in such manner
as provided by the Committee, one or more such investment funds that his or her
Cash Account will be deemed to be invested in for purposes of determining the
amount of gains or losses to be credited to his or her Cash Account; provided, however, that if the Participant does not
designate the deemed investment of his or her Cash Account, the Participant’s
Cash Account shall be deemed to be invested in the money market investment fund
offered under the Program.  A Participant
may change the designation made under this Section 4(b)(ii) by filing
an election at the time and in the manner specified by the Company.


 


c.                                       Restricted Stock Unit
Accounts


 


If
a Participant makes a Voluntary Deferral and elects to defer a portion of the
Participant’s Bonus in the form of Restricted Stock Units, the Participant’s
Restricted Stock Unit Account shall be credited with the following: (i) as
a Base Award, the number of Restricted Stock Units (or fractions thereof)
determined by dividing (A) the aggregate dollar amount of the
Participant’s Bonus with respect to which the Participant has elected to defer
in the form of Restricted Stock Units under Section 4(a), by (B) the
Fair Market Value of the Common Stock on the date the Bonus is paid, as
determined by the Committee; and (ii) in the sole discretion of the
Committee, for each Base Award, a Matching Award equal to twenty-five percent
(25%) of the number of Restricted Stock Units subject to the Base Award.


 


d.                                      Dividend Equivalents


 


As
of any date that cash or stock dividends are paid with respect to the Common
Stock from time to time, each Restricted Stock Unit Award credited to a
Participant’s Restricted Stock Unit Account shall be credited with an
additional number of Restricted Stock Units (or fractions thereof) equal to the
following: (i) with respect to cash dividends, (A) the aggregate 


 

















 


dollar
amount of the cash dividend that would have been paid on that Restricted Stock
Unit Award had the underlying Restricted Stock Units been actual Common Stock,
divided by (B) the Fair Market Value of the Common Stock on the dividend
payment date; and (ii) with respect to stock dividends, the aggregate
number of shares of Common Stock that would have been paid on that Restricted
Stock Unit Award had the underlying Restricted Stock Units been actual Common
Stock on the dividend payment date.


 


e.                                       Certain Adjustments


 


If
there shall occur any recapitalization, reclassification, share dividend, share
split, reverse share split, or other distribution with respect to the Common
Stock, or other change in corporate structure affecting the Common Stock, the
Participants’ Restricted Stock Unit Accounts automatically shall be
appropriately adjusted in a manner consistent with the terms of this
Program.  It is intended that such
adjustments shall seek to put each Participant in the same economic position
the Participant was in prior to the change (but without duplication of any
benefits that may be provided under Section 4(d)).  Except as is expressly provided in this Section 4(e),
Participants shall have no rights as a result of any such change in the Common
Stock or other event.


 


5.                                       Vesting of Restricted Stock
Unit Awards


 


For
any given Restricted Stock Unit Award, the Base Award shall be fully vested at
all times.  The Matching Award, if any,
shall be completely unvested as of the Grant Date.  Subject to Section 7, one-third (1/3rd)
of the Matching Award shall vest on each anniversary of the Grant Date over a
period of three (3) years until the Matching Award is fully vested,
provided that the Participant remains continuously employed by the Company from
the Grant Date to the applicable vesting date.


 


6.                                       Distribution of Benefits


 


a.             Subject to Sections
6(d), 6(e) and 7, the amounts credited to a Participant’s Cash Account and
Restricted Stock Unit Account, to the extent vested, for a Program Year shall
be distributed to the Participant in a single lump sum  on
the Original Payment Date, if any, selected by the Participant pursuant to the
Participant’s election under Section 4(a). 
If the Participant has not selected an Original Payment Date, such
amounts shall be distributed in a single lump sum upon the earliest of (i) the
date that is three (3) years following the date on which the Bonus with
respect to the applicable Program Year otherwise would have been paid, (ii) the
Participant’s Separation from Service, (iii) the Participant’s death, or (iv) the
Participant’s Permanent Disability.


 


b.             For purposes of
distribution under the Program, (i) the value of a Participant’s Cash
Account shall equal the amount credited to the Participant’s Cash Account, as
adjusted for any gains or losses in accordance with Section 4(b)(ii), as
of the date of distribution, and (ii) the value of a Participant’s
Restricted Stock Unit Account shall equal the Fair Market Value of any
Restricted Stock Units, to the extent vested, 
credited to such Restricted Stock Unit Account as of the date of distribution.


 

















 


c.             Notwithstanding the
foregoing and subject to Sections 6(d), 6(e) and 7, a Participant may elect to
further defer the date for any payment under the Program by making a subsequent
deferral election with respect to such payment. 
The new date as of which such payment is to be made shall be the
“Deferred Payment Date.”  Any such
subsequent deferral election shall not be effective unless it is made more than twelve (12)
months prior to the Original Payment Date (or, with respect to a subsequent
deferral election made after an initial deferral election, the Deferred Payment
Date).  The Deferred Payment Date for any
subsequent deferral election must be a date that is at least five (5) years
following the date the payment otherwise would have been made.  The subsequent deferral election shall be
made in writing and in the form required by the Committee.


 


d.             Anything in the
Program to the contrary notwithstanding, but subject to Section 6(e), in
the event of a Participant’s death, Separation from Service or Permanent
Disability prior to the date, if any, selected by the Participant pursuant to
the Participant’s election under Section 4(a), all vested amounts credited
to the Participant’s Cash Account and Restricted Stock Unit Account shall be
distributed following the date of such death, Separation from Service or
Permanent Disability.


 


e.             All payments of the
benefits under this Program shall be made within fifteen (15) days following
the date the Participant shall be entitled to receive a benefit hereunder.  Payment of amounts credited to a
Participant’s Cash Account shall be made in the form of cash and payment of
amounts credited to a Participant’s Restricted Stock Unit Account may be made
in the form of Common Stock or cash, at the discretion of the Committee.  Notwithstanding the foregoing, if a
Participant is a Specified Employee, any payment under the Program due to such
Participant’s Separation from Service shall not be made until six (6) months
after the date of such Separation from Service (or, if earlier, the
Participant’s date of death).


 


7.                                       Termination of Employment


 


                In the event a Participant’s
employment with the Company is terminated for any reason (including a
termination by the Company or by reason of the Participant’s resignation, death
or Permanent Disability), all unvested benefits hereunder shall be fully and
immediately forfeited by the Participant.


 


8.                                       Change in Control


 


a.             Anything herein to the contrary
notwithstanding, in the event of a Change in Control (as defined under the
Company’s 2005 Equity Incentive Plan), all of a Participant’s Restricted Stock
Unit Awards (including the full Matching Awards, if any,) credited to the
Participant’s Restricted Stock Unit Account shall become fully and immediately
vested.


 


b.             If the Change in Control (as
described in Section 8(a)) also constitutes a change in control event
within the meaning of Section 409A of the Code and the Treasury
Regulations promulgated thereunder, all benefits payable under this Program
shall be distributed within 


 

















 


fifteen
(15) days following the date of such Change in Control.  Otherwise, such benefits shall be distributed
in accordance with Section 6.


 


9.                                       Beneficiaries


 


Any
payment required to be made to a Participant hereunder that cannot be made to
the Participant because of his or her death shall be made to the Participant’s
beneficiary or beneficiaries, subject to applicable law.  Each Participant shall have the right to
designate in writing from time to time a beneficiary or beneficiaries by filing
a written notice of such designation with the Committee.  In the event a beneficiary designated by the
Participant does not survive the Participant and no successor beneficiary is
selected, or in the event no valid designation has been made, such Participant’s
beneficiary shall be such Participant’s estate.


 


10.                                 Unfunded Status


 


The
Program shall be unfunded, and all benefits payable to Participants under the
Program represent merely unfunded, unsecured promises of the Company to provide
a benefit to Participants in the future. 
To the extent that any person acquires a right to receive payments from
the Company under the Program, such right shall be no greater than the right of
any unsecured general creditor of the Company.


 


11.                                 Transfers
Prohibited


 


No
transfer (other than pursuant to Section 9) by a Participant of any right
to any payment hereunder, whether voluntary or involuntary, by operation of law
or otherwise, and whether by means of alienation by anticipation, sale,
transfer, assignment, bankruptcy, pledge, attachment, charge, or encumbrance of
any kind, shall vest the transferee with any interest or right, and any attempt
to so alienate, sell, transfer, assign, pledge, attach, charge, or otherwise
encumber any such amount, whether presently or thereafter payable, shall be
void and of no force or effect.


 


12.                                 Limitation of
Rights


 


Nothing
contained in the Program shall confer upon any Participant any right (i) as
a shareholder of the Company or (ii) with respect to the continuation of
the Participant’s status as an employee of the Company.


 


13.                                 Termination and
Amendment


 


The
Program may be terminated at any time by the Committee and the Program may be
amended by the Committee from time to time in any respect; provided,
however, that no such termination or amendment may reduce the value
of amounts theretofore credited or creditable to a Participant’s Cash Account
or Restricted Stock Unit Account without the affected Participant’s prior
written consent.


 

















 


14.                                 Withholding
Taxes


 


Where
a Participant or other person is entitled to receive a payment pursuant to the
Program, the Company shall withhold, or make suitable arrangements with the
Participant for the payment of, the amount of any taxes that the Company may be
required to withhold before delivery to such Participant or other person of such
payment.


 


15.                                 Choice of Law


 


The
Program and all rights hereunder shall be subject to and interpreted in
accordance with the laws of the State of New Jersey, without reference to the
principles of conflicts of laws, and to applicable federal securities laws.