Exhibit 10.1


 


1991 STOCK PLAN OF


INCYTE CORPORATION


(As amended on April 3,
2008)


 


SECTION 1.  ESTABLISHMENT AND PURPOSE.


 


The Plan was adopted on November 7,
1991, amended and restated on February 15, 2001, and amended on February 27,
2002, March 15, 2003, March 13, 2007, March 11, 2008 and on April 3,
2008.  The purpose of the Plan is to
offer selected employees and consultants an opportunity to acquire a
proprietary interest in the success of the Company, or to increase such
interest, by purchasing Shares of the Company’s Stock.  The Plan provides both for the direct award
or sale of Shares and for the grant of Options to purchase Shares.  Options granted under the Plan may include
Nonstatutory Options as well as ISOs intended to qualify under section 422
of the Code.


 


The Plan is intended to
comply in all respects with Rule 16b-3 (or its successor) under the
Exchange Act and shall be construed accordingly.


 


SECTION 2.  DEFINITIONS.


 


(a)  “Board of Directors” shall mean the Board of Directors of the
Company, as constituted from time to time.


 


(b)  “Change in Control” shall mean the occurrence of either of
the following events:


 


(i) 
A change in the composition of the Board of Directors, as a result of which
fewer than one-half of the incumbent directors are directors who either:


 


(A)  Had been directors
of the Company 24 months prior to such change; or


 


(B)  Were elected, or
nominated for election, to the Board of Directors with the affirmative votes of
at least a majority of the directors who had been directors of the Company
24 months prior to such change and who were still in office at the time of
the election or nomination; or


 


(ii) 
Any “person” (as such term is used in sections 13(d) and 14(d) of the
Exchange Act) by the acquisition or aggregation of securities is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 50 percent or more of the combined voting power of the
Company’s then outstanding securities ordinarily (and apart from rights
accruing under special circumstances) having the right to vote at elections of
directors (the “Base Capital Stock”); except that any change in the relative
beneficial ownership of the Company’s securities by any person resulting solely
from a reduction in the aggregate number of outstanding shares of Base Capital
Stock, and any decrease thereafter in such person’s ownership of securities,
shall be disregarded until such person increases in any manner, directly or
indirectly, such person’s beneficial ownership of any securities of the
Company.


 


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


 


(d) “Committee” shall mean a committee of the Board of Directors,
as described in Section 3(a).


 


(e)  “Company” shall mean Incyte Corporation (formerly Incyte
Genomics, Inc.), a Delaware corporation.


 


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(f)  “Employee” shall mean (i) any individual who is a
common-law employee of the Company or of a Subsidiary or (ii) an
independent contractor who performs services for the Company or a Subsidiary
and who is not a member of the Board of Directors.  Service as an independent contractor shall be
considered employment for all purposes of the Plan except the second sentence
of Section 4(a).


 


(g)  “Exchange Act” shall mean the Securities Exchange Act of
1934, as amended.


 


(h)  “Exercise Price” shall mean the amount for which one Share
may be purchased upon exercise of an Option, as specified by the Committee in
the applicable Stock Option Agreement.


 


(i)  “Fair Market Value” with respect to a Share, shall mean the
market price of one Share of Stock, determined by the Committee as follows:


 


(i) 
If the Stock was traded over-the-counter on the date in question but was not
traded on The Nasdaq Stock Market, then the Fair Market Value shall be equal to
the last-transaction price quoted for such date by the OTC Bulletin Board or,
if not so quoted, shall be equal to the mean between the last reported
representative bid and asked prices quoted for such date by the principal
automated inter-dealer quotation system on which the Stock is quoted or, if the
Stock is not quoted on any such system, by the “Pink Sheets” published by the
National Quotation Bureau, Inc.;


 


(ii) 
If the Stock was traded on The Nasdaq Stock Market, then the Fair Market Value
shall be equal to the last reported sale price quoted for such date by The
Nasdaq Stock Market;


 


(iii) 
If the Stock was traded on a United States stock exchange on the date in
question, then the Fair Market Value shall be equal to the closing price
reported for such date by the applicable composite-transactions report; and


 


(iv) 
If none of the foregoing provisions is applicable, then the Fair Market Value
shall be determined by the Committee in good faith on such basis as it deems
appropriate.


 


In all cases, the determination of Fair Market Value
by the Committee shall be conclusive and binding on all persons.


 


(j)  “ISO” shall mean an employee incentive stock option described
in section 422(b) of the Code.


 


(k)  “Nonstatutory Option” shall mean an employee stock option not
described in sections 422(b) or 423(b) of the Code.


 


(l)  “Offeree” shall mean an individual to whom the Committee has
offered the right to acquire Shares under the Plan (other than upon exercise of
an Option).


 


(m)  “Option” shall mean an ISO or Nonstatutory Option granted
under the Plan and entitling the holder to purchase Shares.


 


(n)  “Optionee” shall mean an individual who holds an Option.


 


(o)  “Plan” shall mean this Amended and Restated 1991 Stock Plan
of Incyte Corporation.


 


(p) “Purchase Price” shall mean the consideration for which one
Share may be acquired under the Plan (other than upon exercise of an Option),
as specified by the Committee.


 


(q)  “Service” shall mean service as an Employee.


 


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(r)  “Share” shall mean one share of Stock, as adjusted in
accordance with Section 9 (if applicable).


 


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


 


(t)  “Stock Option Agreement” shall mean the agreement between the
Company and an Optionee which contains the terms, conditions and restrictions
pertaining to his or her Option.


 


(u)  “Stock Purchase Agreement” shall mean the agreement between
the Company and an Offeree who acquires Shares under the Plan which contains
the terms, conditions and restrictions pertaining to the acquisition of such
Shares.


 


(v)  “Subsidiary” shall mean any corporation, if the Company
and/or one or more other Subsidiaries own not less than 50 percent of the
total combined voting power of all classes of outstanding stock of such
corporation.  A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.


 


(w)  “Total and Permanent Disability” shall mean that the Optionee
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 which has lasted, or can be expected to last, for a continuous
period of not less than one year.


 


SECTION 3.  ADMINISTRATION.


 


(a)  Committee Composition. 
The Plan shall be administered by the Committee.  The Committee shall consist of two or more
directors of the Company who shall satisfy the requirements of Rule 16b-3
(or its successor) under the Exchange Act with respect to the grant of Awards
to persons who are officers or directors of the Company under Section 16
of the Exchange Act or the Board itself. 
The Board may also appoint one or more separate committees of the Board,
each composed of one or more directors of the Company who need not qualify
under Rule 16b-3, who may administer the Plan with respect to Employees
who are not considered officers or directors of the Company under Section 16
of the Exchange Act, may grant Shares and Options under the Plan to such
Employees and may determine all terms of such grants.


 


(b)  Committee Procedures. 
The Board of Directors shall designate one of the members of the
Committee as chairman.  The Committee may
hold meetings at such times and places as it shall determine.  The acts of a majority of the Committee
members present at meetings at which a quorum exists, or acts reduced to or
approved in writing by all Committee members, shall be valid acts of the
Committee.


 


(c)  Committee Responsibilities. 
Subject to the provisions of the Plan, the Committee shall have full
authority and discretion to take the following actions:


 


(i)   To interpret the Plan and to apply its
provisions;


 


(ii)  To adopt, amend
or rescind rules, procedures and forms relating to the Plan;


 


(iii)  To authorize any
person to execute, on behalf of the Company, any instrument required to carry
out the purposes of the Plan;


 


(iv)  To determine when
Shares are to be awarded or offered for sale and when Options are to be granted
under the Plan;


 


(v)  To select the
Offerees and Optionees;


 


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(vi)  To determine the
number of Shares to be offered to each Offeree or to be made subject to each
Option;


 


(vii)  To prescribe the
terms and conditions of each award or sale of Shares, including (without
limitation) the Purchase Price, and to specify the provisions of the Stock
Purchase Agreement relating to such award or sale;


 


(viii)  To prescribe
the terms and conditions of each Option, including (without limitation) the
Exercise Price, to determine whether such Option is to be classified as an ISO
or as a Nonstatutory Option, and to specify the provisions of the Stock Option
Agreement relating to such Option;


 


(ix)  To amend any
outstanding Stock Purchase Agreement or Stock Option Agreement, subject to
applicable legal restrictions and to the consent of the Offeree or Optionee who
entered into such agreement;


 


(x)  To prescribe the
consideration for the grant of each Option or other right under the Plan and to
determine the sufficiency of such consideration; and


 


(xi)  To take any other actions deemed necessary or
advisable for the administration of the Plan.


 


All decisions, interpretations and other actions of
the Committee shall be final and binding on all Offerees, all Optionees, and
all persons deriving their rights from an Offeree or Optionee.  No member of the Committee shall be liable
for any action that he or she has taken or has failed to take in good faith
with respect to the Plan, any Option, or any right to acquire Shares under the
Plan.


 


SECTION 4.  ELIGIBILITY.


 


(a)  General Rule.  Only
Employees, as defined in Section 2(f), shall be eligible for designation
as Optionees or Offerees by the Committee.  In addition, only individuals who are employed
as common-law employees by the Company or a Subsidiary shall be eligible for
the grant of ISOs.


 


(b)  Ten-Percent Stockholders. 
An Employee who owns more than 10 percent of the total combined
voting power of all classes of outstanding stock of the Company or any of its
Subsidiaries shall not be eligible for the grant of an ISO unless (i) the
Exercise Price is at least 110 percent of the Fair Market Value of a Share
on the date of grant and (ii) such ISO by its terms is not exercisable
after the expiration of five years from the date of grant.


 


(c)  Attribution Rules. 
For purposes of Subsection (b) above, in determining stock
ownership, an Employee shall be deemed to own the stock owned, directly or
indirectly, by or for such Employee’s brothers, sisters, spouse, ancestors and
lineal descendants.  Stock owned,
directly or indirectly, by or for a corporation, partnership, estate or trust
shall be deemed to be owned proportionately by or for its stockholders, partners
or beneficiaries.  Stock with respect to
which such Employee holds an option shall not be counted.


 


(d)  Outstanding Stock. 
For purposes of Subsection (b) above, “outstanding stock” shall
include all stock actually issued and outstanding immediately after the
grant.  “Outstanding stock” shall not
include shares authorized for issuance under outstanding options held by the
Employee or by any other person.


 


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SECTION 5.  STOCK SUBJECT TO PLAN.


 


(a)  Basic Limitation. 
Shares offered under the Plan shall be authorized but unissued Shares or
treasury Shares.  The aggregate number of
Shares which may be issued under the Plan (upon exercise of Options or other
rights to acquire Shares) shall not exceed 29,350,000 Shares, subject to
adjustment pursuant to Section 9. 
Notwithstanding the foregoing, the number of Shares that may be issued
under the Plan, other than (i) upon exercise of Options or (ii) pursuant
to any sale under a Stock Purchase Agreement for a Purchase Price at least
equal to 100 percent of the Fair Market Value of a Share on the date of such
Stock Purchase Agreement, shall not exceed 200,000 Shares, subject to
adjustment pursuant to Section 9. The number of Shares that are subject to
Options or other rights outstanding at any time under the Plan shall not exceed
the number of Shares that then remain available for issuance under the
Plan.  The Company, during the term of
the Plan, shall at all times reserve and keep available sufficient Shares to satisfy
the requirements of the Plan.


 


(b)  Additional Shares.  In
the event that any outstanding Option or other right for any reason expires or
is canceled or otherwise terminated, the Shares allocable to the unexercised
portion of such Option or other right shall again be available for the purposes
of the Plan.  In the event that Shares
issued under the Plan are reacquired by the Company pursuant to any forfeiture
provision, right of repurchase or right of first refusal, such Shares shall
again be available for the purposes of the Plan.


 


SECTION 6.  TERMS AND CONDITIONS OF AWARDS OR SALES.


 


(a)  Stock Purchase Agreement. 
Each award or sale of Shares under the Plan (other than upon exercise of
an Option) shall be evidenced by a Stock Purchase Agreement between the Offeree
and the Company.  Such award or sale
shall be subject to all applicable terms and conditions of the Plan and may be
subject to any other terms and conditions which are not inconsistent with the
Plan and which the Committee deems appropriate for inclusion in a Stock
Purchase Agreement.  The provisions of
the various Stock Purchase Agreements entered into under the Plan need not be
identical.


 


(b)  Duration of Offers and Nontransferability of Rights.  Any right to acquire Shares under the Plan
(other than an Option) shall automatically expire if not exercised by the
Offeree within 30 days after the grant of such right was communicated to the
Offeree by the Committee.  Such right
shall not be transferable and shall be exercisable only by the Offeree to whom
such right was granted.


 


(c)  Purchase Price.  The
Purchase Price of Shares to be offered under the Plan shall not be less than
the par value of such Shares.  Subject to
the preceding sentence, the Purchase Price shall be determined by the Committee
at its sole discretion.  The Purchase
Price shall be payable in a form described in Section 8.


 


(d)  Withholding Taxes.  As
a condition to the award, purchase, vesting or sale of Shares, the Offeree
shall make such arrangements as the Committee may require for the satisfaction
of any federal, state, local or foreign withholding tax obligations that may
arise in connection with such Shares. 
The Committee may permit the Offeree to satisfy all or part of his or her
tax obligations related to such Shares by having the Company withhold a portion
of any Shares that otherwise would be issued to him or her or by surrendering
any Shares that previously were acquired by him or her.  The Shares withheld or surrendered shall be
valued at their Fair Market Value on the date when taxes otherwise would be
withheld in cash.  The payment of taxes
by assigning Shares to the Company, if permitted by the Committee, shall be
subject to such restrictions as the Committee may impose, including any
restrictions required by rules of the Securities and Exchange Commission.


 


(e)  Restrictions on Transfer of Shares.  Any Shares awarded or sold under the Plan
shall be subject to such special forfeiture conditions, rights of repurchase,
rights of first refusal and other transfer restrictions as the Committee may
determine.  Such restrictions shall be
set forth in the applicable Stock Purchase Agreement and shall apply in
addition to any general restrictions that may apply to all holders of Shares.


 


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SECTION 7.  TERMS AND CONDITIONS OF OPTIONS.


 


(a)  Stock Option Agreement. 
Each grant of an Option under the Plan shall be evidenced by a Stock
Option Agreement between the Optionee and the Company.  Such Option shall be subject to all applicable
terms and conditions of the Plan and may be subject to any other terms and
conditions which are not inconsistent with the Plan and which the Committee
deems appropriate for inclusion in a Stock Option Agreement.  The provisions of the various Stock Option
Agreements entered into under the Plan need not be identical.


 


(b)  Number of Shares. 
Each Stock Option Agreement shall specify the number of Shares that are
subject to the Option and shall provide for the adjustment of such number in
accordance with Section 9.  The
Stock Option Agreement shall also specify whether the Option is an ISO or a
Nonstatutory Option.  Options granted to
any Optionee in a single calendar year shall in no event cover more than
800,000 Shares, subject to adjustment in accordance with Section 9.


 


(c)  Exercise Price.  Each
Stock Option Agreement shall specify the Exercise Price.  The Exercise Price of an ISO shall not be
less than 100 percent of the Fair Market Value of a Share on the date of grant,
and a higher percentage may be required by Section 4(b).  The Exercise Price of a Nonstatutory Option
shall not be less than 100 percent of the Fair Market Value of a Share on the
date of grant.  Subject to the preceding
two sentences, the Exercise Price under any Option shall be determined by the
Committee at its sole discretion.  The
Exercise Price shall be payable in a form described in Section 8.


 


(d)  Withholding Taxes.  As
a condition to the exercise of an Option, the Optionee shall make such
arrangements as the Committee may require for the satisfaction of any federal,
state, local or foreign withholding tax obligations that may arise in
connection with such exercise.  The
Optionee shall also make such arrangements as the Committee may require for the
satisfaction of any federal, state, local or foreign withholding tax
obligations that may arise in connection with the disposition of Shares
acquired by exercising an Option.  The
Committee may permit the Optionee to satisfy all or part of his or her tax
obligations related to the Option by having the Company withhold a portion of
any Shares that otherwise would be issued to him or her or by surrendering any
Shares that previously were acquired by him or her.  Such Shares shall be valued at their Fair
Market Value on the date when taxes otherwise would be withheld in cash.  The payment of taxes by assigning Shares to
the Company, if permitted by the Committee, shall be subject to such
restrictions as the Committee may impose, including any restrictions required
by rules of the Securities and Exchange Commission.


 


(e)  Exercisability.  Each
Stock Option Agreement shall specify the date when all or any installment of
the Option is to become exercisable.  A
Stock Option Agreement may provide for accelerated exercisability in the event
of the Optionee’s death, Total and Permanent Disability or retirement or other
events.


 


(f)  Effect of Change in Control. 
The Committee may determine, at the time of granting an Option or
thereafter, that such Option shall become exercisable on an accelerated basis
in the event that a Change in Control occurs with respect to the Company.  If the Committee finds that there is a
reasonable possibility that, within the succeeding six months, a Change in
Control will occur with respect to the Company, then the Committee may
determine that all outstanding Options shall be exercisable on an accelerated
basis.


 


(g)  Term.  The Stock
Option Agreement shall specify the term of the Option.  The term shall not exceed 10 years from the
date of grant, except as otherwise provided in Section 4(b).  Subject to the preceding sentence, the
Committee at its sole discretion shall determine when an Option is to expire.


 


(h)  Nontransferability. 
Except as may be provided in the applicable Stock Option Agreement with
respect to a Nonstatutory Option, no Option shall be transferable by the
Optionee other than by will, by beneficiary designation delivered to the
Company, or by the laws of descent and distribution.  An Option may be exercised during the
lifetime of the Optionee only by the Optionee or by the Optionee’s guardian or
legal representative.  No Option or
interest therein may be transferred, assigned, pledged or hypothecated by the


 


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Optionee during his or her lifetime, whether by
operation of law or otherwise, or be made subject to execution, attachment or
similar process.


 


(i)  Termination of Service (Except by Death).  Except as may be provided in the applicable
Stock Option Agreement, if an Optionee’s Service terminates for any reason
other than the Optionee’s death, then such Optionee’s Option(s) shall
expire on the earliest of the following occasions:


 


(i)  The expiration
date determined pursuant to Subsection (g) above;


 


(ii)  The date 90 days
after the termination of the Optionee’s Service for any reason other than Total
and Permanent Disability; or


 


(iii)  The date six
months after the termination of the Optionee’s Service by reason of Total and
Permanent Disability.


 


The Optionee may exercise all or part of his or her
Option(s) at any time before the expiration of such Option(s) under
the preceding sentence, but only to the extent that such Option(s) had
become exercisable before the Optionee’s Service terminated or became
exercisable as a result of the termination.  The balance of such Option(s) shall lapse
when the Optionee’s Service terminates. 
In the event that the Optionee dies after the termination of the
Optionee’s Service but before the expiration of the Optionee’s Option(s), all
or part of such Option(s) may be exercised (prior to expiration) by the
executors or administrators of the Optionee’s estate or by any person who has
acquired such Option(s) directly from the Optionee by bequest, beneficiary
designation or inheritance, but only to the extent that such Option(s) had
become exercisable before the Optionee’s Service terminated or became
exercisable as a result of the termination.


 


(j)  Leaves of Absence. 
Except as may be provided in the applicable Stock Option Agreement, for
purposes of Subsection (i) above, Service shall be deemed to continue
while the Optionee is on military leave, sick leave or other bona fide leave of
absence (as determined by the Committee). 
The foregoing notwithstanding, in the case of an ISO granted under the
Plan, Service shall not be deemed to continue beyond the first 90 days of such
leave, unless the Optionee’s reemployment rights are guaranteed by statute or
by contract.


 


(k)  Death of Optionee. 
Except as may be provided in the applicable Stock Option Agreement, if
an Optionee dies while he or she is in Service, then such Optionee’s Option(s) shall
expire on the earlier of the following dates:


 


(i)  The expiration
date determined pursuant to Subsection (g) above; or


 


(ii)  The date six
months after the Optionee’s death.


 


All or part of the Optionee’s Option(s) may be
exercised at any time before the expiration of such Option(s) under the
preceding sentence by the executors or administrators of the Optionee’s estate
or by any person who has acquired such Option(s) directly from the
Optionee by bequest, beneficiary designation or inheritance, but only to the
extent that such Option(s) had become exercisable before the Optionee’s
death or became exercisable as a result of the Optionee’s death.  The balance of such Option(s) shall lapse
when the Optionee dies.


 


(l)  No Rights as a Stockholder. 
An Optionee, or a transferee of an Optionee, shall have no rights as a
stockholder with respect to any Shares covered by his or her Option until he or
she becomes entitled, pursuant to the terms of such Option, to receive such
Shares.  No adjustments shall be made,
except as provided in Section 9.


 


(m)  Modification, Extension and Assumption of Options.  Within the limitations of the Plan, the
Committee may modify, extend or assume outstanding Options or may accept the
cancellation of outstanding Options (whether granted by the Company or another
issuer) in return for the grant of new Options for the same


 


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or a different number of Shares and at the same or a
different Exercise Price; provided, however, that the Committee may not modify
outstanding Options to lower the Exercise Price nor may the Committee assume or
accept the cancellation of outstanding Options in return for the grant of new
Options with a lower Exercise Price, unless such action has been approved by
the Company’s stockholders.  The
foregoing notwithstanding, no modification of an Option shall, without the
consent of the Optionee, impair such Optionee’s rights or increase his or her
obligations under such Option.


 


(n)  Restrictions on Transfer of Shares.  Any Shares issued upon exercise of an Option
may be subject to such special forfeiture conditions, rights of repurchase,
rights of first refusal and other transfer restrictions as the Committee may
determine.  Such restrictions shall be
set forth in the applicable Stock Option Agreement and shall apply in addition
to any general restrictions that may apply to all holders of Shares.


 


SECTION 8.  PAYMENT FOR SHARES.


 


(a)  General Rule.  The
entire Purchase Price or Exercise Price of Shares issued under the Plan shall
be payable in lawful money of the United States of America at the time when
such Shares are purchased, except as provided in Subsections (b), (c), (d), (e) and
(f) below.


 


(b)  Surrender of Stock. 
To the extent that a Stock Option Agreement so provides, payment may be
made all or in part with Shares which have already been owned by the Optionee
or the Optionee’s representative for more than six months and which are surrendered
to the Company in good form for transfer. 
Such Shares shall be valued at their Fair Market Value on the date when
the new Shares are purchased under the Plan.


 


(c)  Services Rendered.  At
the discretion of the Committee, Shares may be awarded under the Plan in
consideration of services rendered to the Company or a Subsidiary prior to the
award.  If Shares are awarded without the
payment of a Purchase Price in cash, the Committee shall make a determination
(at the time of the award) of the value of the services rendered by the Offeree
and the sufficiency of the consideration to meet the requirements of Section 6(c).


 


(d)  Promissory Note.  To
the extent that a Stock Option Agreement or Stock Purchase Agreement so
provides, a portion of the Exercise Price or Purchase Price (as the case may
be) of Shares issued under the Plan may be paid with a full-recourse promissory
note, provided that (i) the par value of such Shares must be paid in
lawful money of the United States of America at the time when such Shares are
purchased, (ii) the Shares are pledged as security for payment of the
principal amount of the promissory note and interest thereon and (iii) the
interest rate payable under the terms of the promissory note shall not be less
than the minimum rate (if any) required to avoid the imputation of additional
interest under the Code.  Subject to the
foregoing, the Committee (at its sole discretion) shall specify the term,
interest rate, amortization requirements (if any) and other provisions of such
note.


 


(e)  Exercise/Sale.  To the
extent that a Stock Option Agreement so provides, payment may be made all or in
part by the delivery (on a form prescribed by the Company) of an irrevocable
direction to a securities broker approved by the Company to sell Shares and to
deliver all or part of the sales proceeds to the Company in payment of all or
part of the Exercise Price and any withholding taxes.


 


(f)  Exercise/Pledge.  To
the extent that a Stock Option Agreement so provides, payment may be made all
or in part by the delivery (on a form prescribed by the Company) of an
irrevocable direction to pledge Shares to a securities broker or lender
approved by the Company, as security for a loan, and to deliver all or part of
the loan proceeds to the Company in payment of all or part of the Exercise
Price and any withholding taxes.


 


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SECTION 9.  ADJUSTMENT OF SHARES.


 


(a)  General.  In the event
of a subdivision of the outstanding Stock, a declaration of a dividend payable in
Shares, a declaration of a dividend payable in a form other than Shares in an
amount that has a material effect on the value of Shares, a combination or
consolidation of the outstanding Stock into a lesser number of Shares, a
recapitalization, a spinoff, a reclassification or a similar occurrence, the
Committee shall make appropriate adjustments in one or more of (i) the
number of Shares available for future grants under Section 5, (ii) the
limit set forth in Section 7(b), (iii) the number of Shares covered
by each outstanding Option or (iv) the Exercise Price under each
outstanding Option.


 


(b)  Reorganizations.  In
the event that the Company is a party to a merger or other reorganization,
outstanding Options shall be subject to the agreement of merger or
reorganization.  Such agreement may
provide, without limitation, (i) for the assumption of outstanding Options
by the surviving corporation or its parent, (ii) for their continuation by
the Company, if the Company is a surviving corporation, (iii) for payment
of a cash settlement equal to the difference between the amount to be paid for
one Share pursuant to such agreement and the Exercise Price or (iv) for
the acceleration of their exercisability followed by the cancellation of
Options not exercised, in all cases without the Optionees’ consent.  Any cancellation shall not occur until after
such acceleration is effective and Optionees have been notified of such
acceleration.


 


(c)  Reservation of Rights. 
Except as provided in this Section 9, an Optionee or Offeree shall
have no rights by reason of (i) any subdivision or consolidation of shares
of stock of any class, (ii) the payment of any dividend or (iii) any
other increase or decrease in the number of shares of stock of any class.  Any issue by the Company of shares of stock
of any class, or securities convertible into shares of stock of any class,
shall not affect, and no adjustment by reason thereof shall be made with
respect to, the number or Exercise Price of Shares subject to an Option.  The grant of an Option pursuant to the Plan
shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure, to merge or consolidate or to dissolve, liquidate, sell or
transfer all or any part of its business or assets.


 


SECTION 10.  SECURITIES LAWS.


 


Shares shall not be issued
under the Plan unless the issuance and delivery of such Shares comply with (or
are exempt from) all applicable requirements of law, including (without
limitation) the Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, state securities laws and regulations, and
the regulations of any stock exchange on which the Company’s securities may
then be listed.


 


SECTION 11.  NO EMPLOYMENT RIGHTS.


 


No provision of the Plan,
nor any right or Option granted under the Plan, shall be construed to give any
person any right to become, to be treated as, or to remain an Employee.  The Company and its Subsidiaries reserve the
right to terminate any person’s Service at any time and for any reason.


 


SECTION 12.  DURATION AND AMENDMENTS.


 


(a)  Term of the Plan.  The
Plan, as amended as set forth herein, shall become effective as of March 11,
2008, subject to approval of the Company’s stockholders.  The Plan shall terminate automatically on February 15,
2011 and may be terminated on any earlier date pursuant to Subsection (b) below.


 


(b)  Right to Amend or Terminate the Plan.  The Board of Directors may amend, suspend or terminate
the Plan at any time and for any reason. 
An amendment of the Plan shall be subject to the approval of the Company’s
stockholders to the extent required by applicable laws, regulations, rules,
listing standards or other requirements, including (without limitation) Rule 16b-3
under the Exchange Act.  Stockholder
approval shall not be required for any other amendment of the Plan.


 


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(c)  Effect of Amendment or Termination.  No Shares shall be issued or sold under the
Plan after the termination thereof, except upon exercise of an Option granted
prior to such termination.  The
termination of the Plan, or any amendment thereof, shall not affect any Share
previously issued or any Option previously granted under the Plan.


 


SECTION 13.  EXECUTION.


 


To record the Plan as
amended by the Board of Directors on April 3, 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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