Exhibit 10.2


 


INCYTE CORPORATION


 


1997 EMPLOYEE STOCK PURCHASE PLAN


(as amended March 11,
2008)


 


The following constitute the provisions of the 1997 Employee Stock
Purchase Plan of Incyte Corporation, as amended and restated September 15,
2006 and as further amended March 11, 2008.


 


1.                                       Purpose.  The purpose of the Plan is to
provide employees of the Company and its Designated Subsidiaries with an
opportunity to purchase Common Stock of the Company through accumulated payroll
deductions.  It is the intention of the
Company to have the Plan qualify as an “Employee Stock Purchase Plan” under Section 423
of the Internal Revenue Code of 1986, as amended.  The provisions of the Plan, accordingly,
shall be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.


 


2.                                       Definitions.


 


(a)                                  “Administrator” shall mean the Board
or a committee consisting exclusively of members of the Board that has been
appointed by the Board and authorized to administer the Plan.


 


(b)                                 “Board” shall mean the Board of
Directors of the Company.


 


(c)                                  “Code” shall mean the Internal Revenue
Code of 1986, as amended.


 


(d)                                 “Common Stock” shall mean the Common
Stock, $.001 par value, of the Company.


 


(e)                                  “Company” shall mean Incyte Corporation.


 


(f)                                    “Compensation” shall mean all cash
salary, wages, commissions and bonuses, but shall not include any imputed
income or income arising from the exercise or disposition of equity
compensation.


 


(g)                                 “Effective Date” shall mean September 15,
2006.


 


(h)                                 “Designated Subsidiary” shall mean any
Subsidiary which has been designated by the Board from time to time in its sole
discretion as eligible to participate in the Plan.


 


(i)                                     “Employee” shall mean any individual
who is an Employee of the Company or its Designated Subsidiaries for tax
purposes whose customary employment is at least twenty (20) hours per week and
more than five (5) months in any calendar year.  For purposes of the Plan, the employment
relationship shall be treated as continuing intact while the individual is on
sick leave or other leave of absence approved by the Company or its Designated
Subsidiaries, as applicable.  Where the
period of leave exceeds 90 days and the individual’s right to reemployment is
not guaranteed either by statute or by contract, the employment relationship
shall be deemed to have terminated on the 91st day of such leave.


 


(j)                                     “Enrollment Date” shall mean the first
day of each Offering Period.


 


(k)                                  “Exercise Date” shall mean the last
Trading Day of each Purchase Period.


 


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(l)                                     “Fair Market Value” shall mean, as of
any date, the value of Common Stock determined as follows:


 


(1)                                  If the Common Stock is listed on any
established stock exchange other than The NASDAQ Stock Market, its Fair Market
Value shall be the last reported sale price for the Common Stock reported by
the applicable composite transactions report for such exchange on the date of
determination, as reported on such stock exchange’s website or such other source,
including The Wall Street Journal, as the
Administrator deems reliable; or


 


(2)                                  If the Common Stock is listed on The NASDAQ
Stock Market, its Fair Market Value shall be the last reported sale price for
the Common Stock quoted on The NASDAQ Stock Market on the date of
determination, as reported on www.nasdaq.com or such other source, including The Wall Street Journal, as the Administrator deems
reliable;


 


(3)                                  If the Common Stock is traded
over-the-counter and is quoted on the OTC Bulletin Board, its Fair Market Value
shall be the last transaction price for the Common Stock quoted by the OTC
Bulletin Board on the date of determination, as reported on www.otcbb.com or
such other source as the Administrator deems reliable;


 


(4)                                  If the Common Stock is traded
over-the-counter but is not quoted on the OTC Bulletin Board, its Fair Market
Value shall be the mean of the closing bid and asked prices for the Common
Stock on the date of determination, as reported on www.pinksheets.com or such
other source as the Administrator deems reliable; or


 


(5)                                  In the absence of an established market for
the Common Stock, the Fair Market Value thereof shall be determined in good
faith by the Board.


 


(m)                               “Offering Periods” shall mean the
periods of approximately twenty-four (24) months during which an option granted
pursuant to the Plan may be exercised, commencing on the first Trading Day on
or after May 1 and November 1 of each year and terminating on the
last Trading Day in the periods ending twenty-four months later.  The duration and timing of Offering Periods
may be changed pursuant to Section 4 of this Plan.


 


(n)                                 “Plan” shall mean this Employee Stock
Purchase Plan.


 


(o)                                 “Purchase Price” shall mean an amount
equal to 85% of the Fair Market Value of a share of Common Stock on the
Enrollment Date or on the Exercise Date, whichever is lower.


 


(p)                                 “Purchase Period” shall mean the
approximately six-month period commencing after one Exercise Date and ending
with the next Exercise Date, except that the first Purchase Period of any Offering
Period shall commence on the Enrollment Date and end with the next Exercise
Date.  The duration and timing of
Purchase Periods may be changed pursuant to Section 4 of this Plan.


 


(q)                                 “Reserves” shall mean the number of
shares of Common Stock covered by each option under the Plan which have not yet
been exercised and the number of shares of Common Stock which have been
authorized for issuance under the Plan but not yet placed under option.


 


(r)                                    “Subsidiary” shall mean a corporation
(as defined in Treasury Regulation section 1.421-1(i)), domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.


 


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(s)                                  “Trading Day” shall mean a day on
which the national securities exchange or stock market on which the Common
Stock is principally traded, or, if the Common Stock is not listed or quoted on
any securities exchange or stock market, the New York Stock Exchange, is open
for trading.


 


3.                                       Eligibility.


 


(a)                                  Any Employee who has been employed for one
month or more on a given Enrollment Date shall be eligible to participate in
the Plan.


 


(b)                                 Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an option under the Plan (i) to
the extent that, immediately after the grant, such Employee (or any other
person whose stock would be attributed to such Employee pursuant to Section 424(d) of
the Code) would own stock and/or hold outstanding options to purchase such
stock possessing five percent (5%) or more of the total combined voting power
or value of all classes of stock of the Company, its parent or any Subsidiary,
or (ii) to the extent that his or her rights to purchase stock under all
employee stock purchase plans of the Company, its parent and Subsidiaries
accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of
stock (determined at the fair market value of the shares at the time such
option is granted) for each calendar year in which such option is outstanding
at any time.


 


4.                                       Offering Periods.  The
Plan shall be implemented by consecutive, overlapping Offering Periods with a
new Offering Period commencing on the first Trading Day on or after May 1
and November 1 each year, or on such other dates as the Board shall
determine, and continuing thereafter until terminated in accordance with Section 19
hereof.  The Board or a committee thereof
shall have the power to change the duration of Offering Periods (including the
commencement dates thereof) and Purchase Periods thereunder with respect to
future offerings without stockholder approval if such change is announced at
least five (5) days prior to the scheduled beginning of the first Offering
Period to be affected thereafter.


 


5.                                       Participation.


 


(a)                                  An eligible Employee may become a participant
in the Plan by completing a subscription agreement authorizing payroll
deductions substantially in the form of Exhibit A to this Plan and filing
it with the Company’s stock administrator not later than ten (10) business
days prior to the applicable Enrollment Date.


 


(b)                                 Payroll deductions for a participant shall
commence on the first payroll following the Enrollment Date and shall end on
the last payroll in the Offering Period to which such authorization is
applicable, unless sooner terminated by the participant as provided in Section 10
hereof.


 


6.                                       Payroll Deductions.


 


(a)                                  At the time a participant files his or her
subscription agreement, he or she shall elect to have payroll deductions made
on each pay day during the Offering Period in an amount not less than one
percent (1%) and not more than ten percent (10%) of the participant’s
Compensation, with such amount designated in integral multiples of one percent
(1%); provided, however, that the aggregate of such payroll deductions during
any Offering Period shall not exceed ten percent (10%) of the participant’s
aggregate Compensation during such Offering Period.


 


(b)                                 All payroll deductions made for a participant
shall be credited to his or her account under the Plan and shall be withheld in
whole percentages only.  A participant
may not make any additional payments into such account.


 


(c)                                  A participant may discontinue his or her
participation in the Plan as provided in Section 10, or may increase or
decrease the rate of his or her payroll deductions as provided in this Section


 


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6(c). 
A participant may increase the rate of his or her payroll deductions
only as of the beginning of a Purchase Period. 
Such increase shall take effect with the first payroll following the
beginning of the new Purchase Period provided the participant has completed and
delivered to the Company’s stock administrator a new subscription agreement
authorizing the increase in the payroll deduction rate at least ten (10) business
days prior to the beginning of the new Purchase Period.  A participant may decrease the rate of his or
her payroll deductions each month.  Any
decrease shall become effective as of the first payroll of the next calendar
month following the date that the participant completes and delivers to the
Company’s stock administrator a new subscription agreement authorizing the
decrease in the payroll deduction rate. 
However, if the subscription agreement is not received at least five (5) business
days prior to such payroll, the decrease shall become effective as of the first
payroll of the second succeeding calendar month.  The Administrator may, in its discretion,
limit the number of participation rate changes during any Offering Period.  Subject to the foregoing, a participant’s
subscription agreement shall remain in effect for successive Offering Periods
unless terminated as provided in Section 10 hereof.


 


(d)                                 Notwithstanding the foregoing, to the extent
necessary to comply with Section 423(b)(8) of the Code and Section 3(b) hereof,
a participant’s payroll deductions may be decreased to zero percent (0%) at any
time during a Purchase Period.  Such a
decrease shall not be treated as a withdrawal from the Plan subject to Section 10,
unless the participant elects to withdraw pursuant to Section 10.  Payroll deductions shall recommence at the
rate provided in such participant’s subscription agreement at the beginning of
the first Purchase Period which is scheduled to end in the following calendar
year, unless the participant elects to withdraw from the Plan as provided in Section 10
hereof.


 


(e)                                  At the time the option is exercised, in whole
or in part, or at the time some or all of the Common Stock issued under the
Plan is disposed of, the participant must make adequate provision for the
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock.  At any time, the Company or a Designated
Subsidiary, as applicable, may, but shall not be obligated to, withhold from
the participant’s compensation the amount necessary to meet applicable
withholding obligations, including any withholding required to make available
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Employee.


 


7.                                       Grant of Option.  On
the Enrollment Date of each Offering Period, each eligible Employee participating
in such Offering Period shall be granted an option to purchase on each Exercise
Date during such Offering Period (at the applicable Purchase Price) up to a
number of shares of Common Stock determined by dividing such Employee’s payroll
deductions accumulated prior to such Exercise Date and retained in the
Participant’s account as of the Exercise Date by the applicable Purchase Price;
provided that in no event shall an Employee be permitted to purchase during
each Purchase Period more than eight thousand (8,000) shares of Common Stock
(subject to any adjustment pursuant to Section 18) on the Enrollment Date,
and provided further that such purchase shall be subject to the limitations set
forth in Sections 3(b) and 13 hereof. 
Exercise of the option shall occur as provided in Section 8 hereof,
unless the participant has withdrawn pursuant to Section 10 hereof.  The option shall expire on the last day of
the Offering Period.


 


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8.                                       Exercise of Option. 
Unless a participant withdraws from the Plan as provided in Section 10
hereof, his or her option for the purchase of shares of Common Stock shall be
exercised automatically on the Exercise Date, and the maximum number of full
shares of Common Stock subject to option shall be purchased for such
participant at the applicable Purchase Price with the accumulated payroll
deductions in his or her account.  No
fractional shares shall be purchased; any payroll deductions accumulated in a
participant’s account which are not sufficient to purchase a full share shall
be retained in the participant’s account for the subsequent Purchase Period or
Offering Period, subject to earlier withdrawal by the participant as provided
in Section 10 hereof.  Any other
monies left over in a participant’s account after the Exercise Date shall be
returned to the participant.  During a
participant’s lifetime, a participant’s option to purchase shares hereunder is
exercisable only by him or her.


 


9.                                       Delivery.  As promptly as practicable
after each Exercise Date on which a purchase of shares occurs, a share
certificate or certificates representing the number of shares of Common Stock
so purchased shall be delivered to a brokerage account designated by the
Company and kept in such account pursuant to a subscription agreement between
each participant and the Company and subject to the conditions described
therein which may include a requirement that shares be held and not sold for
certain time periods, or the Company shall establish some other means for such
participants to receive ownership of the shares.


 


10.                                 Discontinuation; Withdrawal.


 


(a)                                  A participant may discontinue his or her
participation in the Plan only by withdrawing from the Plan as provided in this
Section 10.  A participant may
withdraw all but not less than all the payroll deductions credited to his or
her account and not yet used to exercise his or her option under the Plan by
giving written notice to the Company substantially in the form of Exhibit B
to this Plan.  Such notice must be
received by the Company no later than 2:00 p.m. Pacific Standard Time on
the second Trading Day preceding the Exercise Date.  All of the participant’s payroll deductions
credited to his or her account shall be paid to such participant promptly after
receipt of notice of withdrawal and such participant’s option for the Offering
Period shall be automatically terminated, and no further payroll deductions for
the purchase of shares shall be made for such Offering Period.  If a participant withdraws from an Offering
Period, payroll deductions shall not resume at the beginning of the succeeding
Offering Period unless the participant delivers to the Company a new
subscription agreement in accordance with Section 5(a).


 


(b)                                 A participant’s withdrawal from an Offering
Period shall not have any effect upon his or her eligibility to participate in
any similar plan which may hereafter be adopted by the Company or in succeeding
Offering Periods which commence after the participant withdraws from the Plan,
subject to compliance with Section 5(a).


 


11.                                 Termination of Employment.


 


Upon a participant’s ceasing to be an Employee, for
any reason, he or she shall be deemed to have elected to withdraw from the Plan
and the payroll deductions credited to such participant’s account during the
Offering Period but not yet used to exercise the option shall be returned to
such participant or, in the case of his or her death, to the person or persons
entitled thereto under Section 15 hereof, and such participant’s option
shall be automatically terminated.


 


12.                                 Interest.  No interest shall accrue on
the payroll deductions of a participant in the Plan.


 


13.                                 Stock.


 


(a)                                  The maximum number of shares of Common Stock
which shall be made available for sale under the Plan shall be four million six
hundred thousand (4,600,000) shares, subject to adjustment upon changes in
capitalization of the Company as provided in Section 18 hereof.  If, on a given Exercise Date, the number of
shares with respect to which options are to be exercised exceeds the number of
shares then


 


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available under the Plan, the Company shall
make a pro rata allocation of the shares remaining available for purchase in as
uniform a manner as shall be practicable and as it shall determine to be
equitable.


 


(b)                                 The participant shall have no interest or
voting right in shares covered by his option until such option has been
exercised.


 


(c)                                  Shares purchased by a participant under the
Plan shall be registered in the name of the participant or in the name of the
participant and his or her spouse.


 


14.                                 Administration.  The
Plan shall be administered by the Administrator.  The Administrator shall have full and
exclusive discretionary authority to adopt such rules, guidelines and forms as
it deems appropriate to implement the Plan, to construe, interpret and apply
the terms of the Plan, to determine eligibility and to adjudicate all disputed
claims filed under the Plan.  Every
finding, decision and determination made by the Administrator shall, to the
full extent permitted by law, be final and binding upon all parties.


 


15.                                 Designation of Beneficiary.


 


(a)                                  A participant may file a written designation
of a beneficiary who is to receive any shares and cash, if any, from the
participant’s account under the Plan in the event of such participant’s death
subsequent to an Exercise Date on which the option is exercised but prior to
delivery to such participant of such shares and cash.  In addition, a participant may file a written
designation of a beneficiary who is to receive any cash from the participant’s
account under the Plan in the event of such participant’s death prior to
exercise of the option.  If a participant
is married and the designated beneficiary is not the spouse, spousal consent
shall be required for such designation to be effective.


 


(b)                                 Such designation of beneficiary may be
changed by the participant at any time by written notice.  In the event of the death of a participant
and in the absence of a beneficiary validly designated under the Plan who is
living at the time of such participant’s death, the Company shall deliver such
shares and/or cash to the executor or administrator of the estate of the
participant, or if no such executor or administrator has been appointed (to the
knowledge of the Company), the Company, in its discretion, may deliver such
shares and/or cash to the spouse or to any one or more dependents or relatives
of the participant, or if no spouse, dependent or relative is known to the
Company, then to such other person as the Company may designate.


 


16.                                 Transferability. 
Neither payroll deductions credited to a participant’s account nor any
rights with regard to the exercise of an option or to receive shares under the
Plan may be assigned, transferred, pledged or otherwise disposed of in any way
(other than by will, the laws of descent and distribution or as provided in Section 15
hereof) by the participant.  Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.


 


17.                                 Use of Funds.  All
payroll deductions received or held by the Company under the Plan may be used
by the Company for any corporate purpose, and the Company shall not be
obligated to segregate such payroll deductions.


 


18.                                 Adjustments Upon Changes in Capitalization,
Dissolution, Liquidation, Merger or Asset Sale.


 


(a)                                  Changes in Capitalization. 
Subject to any required action by the stockholders of the Company, the
Reserves, the maximum number of shares each participant may purchase each
Purchase Period (pursuant to Section 7), as well as the Purchase Price per
share and the number of shares of Common Stock covered by each option under the
Plan which has not yet been exercised shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or


 


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decrease in the number of outstanding shares
of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been “effected without receipt of consideration”.  Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and
conclusive.  Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an option.


 


(b)                                 Dissolution or Liquidation.  In
the event of the proposed dissolution or liquidation of the Company, the
Offering Periods shall terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board.


 


(c)                                  Merger or Asset Sale.  In
the event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, limited
liability company or other entity, the Plan shall terminate upon the date of
the consummation of such transaction and any Purchase Periods then in progress
shall be shortened by setting a new Exercise Date (the “New Exercise Date”) and
any Offering Periods then in progress shall end on the New Exercise Date,
unless the plan of merger, consolidation or reorganization provides
otherwise.  The New Exercise Date shall
be determined by the Board in its sole discretion; provided, that the New
Exercise Date shall be before the date of the Company’s proposed sale or
merger.  The Administrator shall notify
each participant in writing, at least ten (10) business days prior to the
New Exercise Date, that the Exercise Date for the participant’s option has been
changed to the New Exercise Date and that the participant’s option shall be
exercised automatically on the New Exercise Date, unless prior to such date the
participant has withdrawn from the Offering Period as provided in Section 10
hereof.  The Plan shall in no event be
construed to restrict the Company’s right to undertake any liquidation,
dissolution, merger, consolidation or other reorganization.


 


19.                                 Amendment or Termination.


 


(a)                                  The Board may at any time and for any reason
terminate or amend the Plan.  Except as
provided in Section 18 hereof, no such termination can affect options
previously granted, provided that an Offering Period may be terminated by the
Board on any Exercise Date if the Board determines that the termination of the
Plan is in the best interests of the Company and its stockholders.  Except as provided in Section 18 hereof,
no amendment may make any change in any option theretofore granted which
adversely affects the rights of any participant.  To the extent necessary to comply with Section 423
of the Code (or any successor rule or provision or any other applicable
law, regulation or stock exchange rule), the Company shall obtain stockholder
approval in such a manner and to such a degree as required.


 


(b)                                 Without stockholder consent and without
regard to whether any participant rights may be considered to have been “adversely
affected,” the Administrator shall be entitled to change the Offering Periods
or Purchase Periods, limit the frequency and/or number of changes in the amount
withheld during an Offering Period, establish the exchange ratio applicable to
amounts withheld in a currency other than U.S. dollars, permit payroll
withholding in excess of the amount designated by a participant in order to
adjust for delays or mistakes in the Company’s processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure that amounts applied
toward the purchase of Common Stock for each participant properly correspond
with amounts withheld from the participant’s Compensation, and establish such
other limitations or procedures as the Administrator determines in its sole
discretion advisable which are consistent with the Plan.


 


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20.                                 Notices.  All notices or other
communications by a participant to the Company under or in connection with the
Plan shall be deemed to have been duly given when received in the form
specified by the Company at the location, or by the person, designated by the
Company for the receipt thereof.


 


21.                                 Conditions Upon Issuance of Shares. 
Shares shall not be issued with respect to an option unless the exercise
of such option and the issuance and delivery of such shares pursuant thereto
shall comply with all applicable provisions of law, domestic or foreign,
including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange or stock
market upon which the shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance.


 


As a condition to the exercise of an option, the
Company may require the person exercising such option to represent and warrant
at the time of any such exercise that the shares are being purchased only for
investment and without any present intention to sell or distribute such shares
if, in the opinion of counsel for the Company, such a representation is
required by any of the aforementioned applicable provisions of law.


 


22.                                 No Rights As An Employee. 
Nothing in the Plan or in any right granted under the Plan shall confer
upon a participant any right to continue in the employ of the Company or any
Designated Subsidiary for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Company or any Designated
Subsidiary or of a participant, which rights are hereby expressly reserved by
each, to terminate his or her employment at any time and for any reason, with
or without cause.


 


23.                                 Term of Plan.  The
Plan, as amended and restated, shall become effective upon the Effective
Date.  It shall continue until terminated
under Section 19 hereof.


 


24.                                 Automatic Transfer to Low Price Offering Period.  To
the extent permitted by any applicable laws, regulations, or stock exchange
rules, if the Fair Market Value of the Common Stock on any Exercise Date in an
Offering Period is lower than the Fair Market Value of the Common Stock on the
Enrollment Date of such Offering Period, then all participants in such Offering
Period shall be automatically withdrawn from such Offering Period immediately
after the exercise of their option on such Exercise Date and automatically
re-enrolled in the immediately following Offering Period as of the first day
thereof.


 


25.                                 Execution.  To record the amendment and
restatement of the Plan by the Board as of the Effective Date, and further
amendment by the Board as of March 11, 2008, the Company has caused its
authorized officer to execute the same.


 


	
   

  	
  INCYTE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/ Patricia A. Schreck

  
	
   

  	
   

  	
   

  
	
   

  	
  Its

  	
   General Counsel

  



 


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