Document:

First Amend to Credit and Security Agreement

 Exhibit 10.2
 FIRST AMENDMENT TO CREDIT
AGREEMENT
 THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the “First Amendment”) is made effective as of May ___, 2003, among
PEMCO AVIATION GROUP, INC., a Delaware corporation, PEMCO AEROPLEX, INC., an Alabama corporation, PEMCO ENGINEERS,
INC., a Delaware corporation, PEMCO WORLD AIR SERVICES, INC., a Delaware corporation, SPACE VECTOR CORPORATION, a Delaware
corporation (collectively, the “Borrowers”), SOUTHTRUST BANK, an Alabama banking corporation, as Agent (the “Agent”), SOUTHTRUST BANK,
an Alabama banking corporation, as a Lender, and COMPASS BANK, an Alabama banking corporation, as a Lender. Capitalized terms used herein but not defined shall have the meanings as set forth in the
Credit Agreement (as hereinafter defined).
 WHEREAS, pursuant to that certain Credit Agreement dated as of December 16, 2002, among
Borrowers, Agent, and the other Lender Parties a party thereto (the “Credit Agreement”), Lenders made available, subject to the terms and conditions thereof, (i) the Revolving Loan of up to
$20,000,000.00, (ii) the Swing Line Loan of up to $5,000,000.00, and (iii) the Term Loan of up to $5,000,000.00; and
 WHEREAS, Lender
Parties and Borrowers have agreed to amend the Credit Agreement in order to extend to Borrowers an additional loan in the amount of $5,000,000.00 for the purpose of purchasing issued and outstanding Equity Interests of Borrowers, as more
specifically hereinafter provided.
 NOW, THEREFORE, in consideration of One Dollar ($1.00) and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties agree that the Credit Agreement is hereby amended as follows:
 The Credit Agreement is hereby amended by
adding the following capitalized terms as defined terms in Section 1.1:
 “Treasury Stock Loan” means the loan which the Treasury Stock Loan Lenders have agreed to advance to Borrowers in accordance with the terms of Article IVA of this Agreement.
 “Treasury Stock Loan Advancement Termination Date” means the earlier of (i) May 22, 2004 (viz., the date one Year from the date of the Treasury Stock Note), or
(ii) the date of the occurrence of a Default.
 “Treasury Stock Loan Advances” means all
the Advances of the Treasury Stock Loan.
 “Treasury Stock Loan Applicable Margin” means
three percent (3.0%).
 
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 “Treasury Stock Loan Borrowing” means a borrowing consisting of
simultaneous Treasury Stock Loan Advances made by the Treasury Stock Loan Lenders.
 “Treasury Stock Loan
Commitment” means the commitment of the Treasury Stock Loan Lenders, subject to the terms of this Agreement, to lend Borrowers up to Five Million and 00/100
Dollars ($5,000,000.00) in principal amount outstanding from time to time until the Treasury Stock Loan Advancement Termination Date.
 “Treasury Stock Loan Credit Percentage” means a percentage based on a fraction, the numerator of which shall be the aggregate principal amount of Treasury Stock Loan Advances
outstanding at a particular time and owing to a Treasury Stock Loan Lender at such time, and the denominator of which shall be the aggregate principal amount of all Treasury Stock Loan Advances outstanding at such time and owing to all the Treasury
Stock Loan Lenders at such time (the Treasury Stock Loan Credit Percentages of the Treasury Stock Loan Lenders as of the date of the Treasury Stock Notes being as set forth on the attached Exhibit
“F”).
 “Treasury Stock Loan Interest-Only Period”
means the period from the date of the Treasury Stock Notes through the Treasury Stock Loan Advancement Termination Date.
 “Treasury Stock Loan Lenders” means the Treasury Stock Loan Lenders identified on Exhibit “F” attached to this Agreement, and any other Person that becomes a Treasury Stock Loan Lender pursuant to the
terms of this Agreement.
 “Treasury Stock Loan Maturity Date” means the earlier of (a)
December 16, 2007, or (b) the occurrence of an Event of Default.
 “Treasury Stock Notes”
means those certain Treasury Stock Notes from Borrowers to the Treasury Stock Loan Lenders, dated May 22, 2003, in the aggregate principal amount of $5,000,000.00, and includes any amendment to or modification of any such note and any promissory
note given in extension or renewal of, or in substitution for, such note.
 The Credit Agreement is hereby amended by deleting the definitions of “Commitments”, “Loans”, “Notes”, “Pro-Rata”
or “Pro-Rata Share”, “30-Day Adjusted LIBOR Rate”, “60-Day Adjusted LIBOR Rate” and “90-Day Adjusted LIBOR Rate”, and by substituting the following new definitions, respectively, in lieu thereof:
 “Commitments” means the Revolving Loan Commitment, the Swing Line Loan Commitment, the Term Loan Commitment, the Letter of Credit Commitment and
the Treasury Stock Loan Commitment.
 
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 “Loans” means the loans and other extensions of credit, if any,
being made by any Lender to Borrowers pursuant to this Agreement, including, but not limited to, the Revolving Loan, the Swing Line Loan, the Term Loan, the Letters of Credit, and the Treasury Stock Loan.
 “Notes” means the Revolving Note, the Swing Line Note, the Term Notes and the Treasury Stock Notes.
 “Pro Rata” or “Pro Rata Share” of any amount means,
with respect to any Lender at any time (A) when referring to the Advances, the Loans or the Lenders, the product of such amount times such Lender’s Credit Percentage; (B) when referring to
Revolving Loan Advances, the Revolving Loan or the Revolving Loan Lenders, the product of such amount times such Revolving Loan Lender’s Revolving Loan Credit Percentage; (C) when referring to Term
Loan Advances, the Term Loan or the Term Loan Lenders, the product of such amount times such Term Loan Lender’s Term Loan Credit Percentage; (D) when referring to Treasury Stock Loan Advances, the
Treasury Stock Loan or the Treasury Stock Loan Lenders, the product of such amount times such Treasury Stock Loan Lender’s Treasury Stock Loan Credit Percentage; and (E) when referring to Letter of
Credit Advances or the Available Amount of the Letters of Credit, the product of such amount times such Lender’s Revolving Loan Credit Percentage.
 “30-Day Adjusted LIBOR Rate” means, for each respective 30-Day LIBOR Rate Interest Period, an interest rate equal to (A) with
respect to the Revolving Loan, the sum of (i) the applicable 30-Day LIBOR Rate, plus (ii) the Revolving Loan Applicable Margin; (B) with respect to the Term Loan, the sum of (i) the applicable 30-Day LIBOR Rate, plus (ii) the Term Loan Applicable
Margin; and (C) with respect to the Treasury Stock Loan, the sum of (i) the applicable 30-Day LIBOR Rate, plus (ii) the Treasury Stock Loan Applicable Margin.
 “60-Day Adjusted LIBOR Rate” means, for each respective 60-Day LIBOR Rate Interest Period, an interest rate equal to (A) with respect to the Revolving Loan, the
sum of (i) the applicable 60-Day LIBOR Rate, plus (ii) the Revolving Loan Applicable Margin; (B) with respect to the Term Loan, the sum of (i) the applicable 60-Day LIBOR Rate, plus (ii) the Term Loan Applicable Margin; and (C) with respect to the
Treasury Stock Loan, the sum of (i) the applicable 60-Day LIBOR Rate, plus (ii) the Treasury Stock Loan Applicable Margin.
 “90-Day Adjusted LIBOR Rate” means, for each respective 90-Day LIBOR Rate Interest Period, an interest rate equal to (A) with respect to the Revolving Loan, the sum of (i) the applicable 90-Day LIBOR Rate, plus
(ii) the Revolving Loan Applicable Margin; (B) with respect to the Term Loan, the sum of (i) the applicable 90-Day LIBOR Rate, plus (ii) the Term Loan Applicable Margin; and (C) with respect to the Treasury Stock Loan, the sum of (i) the

 Page 45

 applicable 90-Day LIBOR Rate, plus (ii) the Treasury Stock Loan Applicable Margin.
 The Credit Agreement is hereby amended by adding the following new Section 1.11:
 1.11     Reference to Treasury Stock Loan Lenders. Any reference in this Agreement to “Treasury Stock Loan Lender” shall mean each and any Treasury Stock Loan
Lender, singularly; and any reference to “Treasury Stock Loan Lenders” shall mean all Treasury Stock Loan Lenders, collectively, and shall include any Person becoming a Treasury Stock Loan Lender pursuant to an Assignment and
Acceptance.
 The Credit Agreement is hereby amended by adding the following new Article IVA:
 ARTICLE IVA
 4A.      THE TREASURY STOCK LOAN
 4A.1        General Terms. Subject to the terms hereof, the Treasury Stock Loan
Lenders will lend Borrowers, from time to time until the Treasury Stock Loan Advancement Termination Date, such amounts which shall not exceed, in the aggregate principal amount at any one time outstanding, the Treasury Stock Loan Commitment. Each
Treasury Stock Loan Lender severally agrees, on the terms and conditions hereinafter set forth, to make Treasury Stock Loan Advances to Borrowers from time to time on any Business Day during the period from the date of the Treasury Stock Notes until
the Treasury Stock Loan Advancement Termination Date. Each Treasury Stock Loan Borrowing shall be in an aggregate amount of $500,000.00 or an integral multiple of $500,000.00 in excess thereof and shall consist of Treasury Stock Loan Advances made
simultaneously by the Treasury Stock Loan Lenders Pro Rata.
 4A.2    Disbursement of
the Treasury Stock Loan.
 (A)      In order to obtain
a Treasury Stock Loan Advance, a Borrower’s Representative shall deliver a Notice of Borrowing to Agent not later than 10:30 a.m. (Birmingham, Alabama time) on a date not less than five (5) Business Days prior to the date such Treasury Stock
Loan Advance is sought, such Notice of Borrowing to be accompanied by such documentation and information as Agent may require evidencing that the such Treasury Stock Loan Advance will be used for the purposes as set forth in Section 4A.6 of this
Agreement. 
 (B)       Upon Agent’s receipt of a Notice of
Borrowing, Agent shall deliver a Notice of Funding to each Treasury Stock Loan Lender at least one (1) Business Day prior to the date the Treasury Stock Loan Advance is to be made, and each Treasury Stock Loan Lender shall, before 10:30 A.M.
(Birmingham,
 
 Page 46

 Alabama time) on the date of such Treasury Stock Loan Advance, make available to Agent at Agent’s Account, in same day funds, such
Lender’s Pro Rata Share of such Treasury Stock Loan Advance.
 (C)       After Agent’s receipt of such funds and upon fulfillment of any applicable conditions set forth in this Agreement, Agent will make such funds available to Borrowers by crediting Borrower’s deposit account with Agent.
 4A.3        The Treasury Stock Notes. Borrowers’
obligation to repay the Treasury Stock Loan shall be evidenced by the Treasury Stock Notes.
 4A.4        Interest Rate. Interest on the Treasury Stock Loan shall be calculated as follows:
 (A)      During the entire term of the Treasury Stock Notes, except during any applicable 60-Day LIBOR Rate Interest Period or 90-Day
LIBOR Rate Interest Period, the outstanding principal balance of the Treasury Stock Notes shall bear interest at the applicable 30-Day Adjusted LIBOR Rate for each applicable 30-Day LIBOR Rate Interest Period.
 (B)       A Borrower’s Representative may from time to time deliver to Agent (i) a
60-Day LIBOR Rate Notice, in which case the outstanding principal balance of the Treasury Stock Notes shall bear interest at the applicable 60-Day Adjusted LIBOR Rate during the applicable 60-Day LIBOR Rate Interest Period, or (ii) a 90-Day LIBOR
Rate Notice, in which case the outstanding principal balance of the Treasury Stock Notes shall bear interest at the applicable 90-Day Adjusted LIBOR Rate during the applicable 90-Day LIBOR Rate Interest Period. Following the expiration of any
applicable LIBOR Rate Interest Period, if a Borrower’s Representative shall not have timely and properly delivered a LIBOR Rate Notice for a LIBOR Rate Interest Period to commence as of the expiration of the applicable expiring LIBOR Rate
Interest Period, then the outstanding principal balance of the Treasury Stock Notes shall automatically bear interest at the 30-Day Adjusted LIBOR Rate until the commencement of the next 60-Day LIBOR Rate Interest Period or 90-Day LIBOR Rate
Interest Period, if any.
 4A.5        Payments of Principal and
Interest. Principal and interest on the Treasury Stock Loan shall be payable as follows:
 (A)      On the first Payment Due Date following the date of the Treasury Stock Notes, and on each successive Payment Due Date thereafter during the Treasury Stock Loan Interest-Only Period, and
on the Treasury Stock Loan Advancement Termination Date, Borrowers shall pay to Agent for the account of the Treasury Stock Loan Lenders (based on each Treasury Stock Loan Lender’s Pro Rata Share of the Treasury Stock Loan Commitment at such
time) all accrued and unpaid interest on the outstanding principal balance of the Treasury Stock Notes.
 
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 (B)       On the first Payment Due Date following
the Treasury Stock Loan Advancement Termination Date, and on each successive Payment Due Date thereafter until the entire indebtedness evidenced by the Treasury Stock Notes is paid in full, Borrowers shall pay to Agent for the account of the
Treasury Stock Loan Lenders (based on each Treasury Stock Loan Lender’s Pro Rata Share of the Treasury Stock Loan Commitment at such time) (i) a principal payment equal to the outstanding principal balance of the Treasury Stock Loan on the
Treasury Stock Loan Advancement Termination Date, divided by forty-three (43) (viz., the number of months from the Treasury Stock Loan Advancement Termination Date to the Treasury Stock Loan Maturity Date), plus (ii) all accrued and unpaid interest
thereon.
 (C)       If not earlier demanded pursuant to Section 11.3
hereof, the outstanding principal balance of the Treasury Stock Loan, together with all accrued and unpaid interest thereon, shall be due and payable to Agent for the account of the Treasury Stock Loan Lenders (based on each Treasury Stock Loan
Lender’s Pro Rata Share at such time) on the Treasury Stock Loan Maturity Date.
 4A.6        Use of Proceeds of Treasury Stock Loan. The proceeds of the Treasury Stock Loan shall be used to purchase issued and outstanding Equity Interests
of Borrowers from any Person who is not or has never been an Affiliate of Borrower (or any predecessor of Borrower).
 Borrowers and Lender Parties acknowledge and
agree that all of the Collateral (including, but not limited to, the Mortgaged Property) shall secure all of the Obligations (including, but not limited to the obligation to pay the principal of and interest on the Treasury Stock Notes), and each
Borrower hereby grants, bargains, sells, transfers, assigns, sets over, conveys, re-grants, re-bargains, re-sells, re-transfers, re-assigns, re-sets over and re-conveys to Agent, its successors and assigns, a Lien on, upon and in the
Collateral.
 The Credit Agreement is hereby amended by substituting the Exhibit “F” attached to this First Amendment in lieu of the Exhibit “F”
attached to the Credit Agreement, and all references in the Credit Agreement to “Exhibit “F”“ shall mean Exhibit “F” as attached to this First Amendment.
 As a condition to the effectiveness of this First Amendment: (a) Borrowers shall have executed and delivered to Lenders the Treasury Stock Notes; (b) Borrowers shall have paid to Agent for the benefit of the Treasury
Stock Loan Lenders a commitment fee in the amount of $50,000.00, and shall have reimbursed Lender Parties for all of Lender Parties’ fees and expenses, including, but not limited to, any and all filing fees, recording fees, and expenses and
fees of Lender Parties’ legal counsel, incurred in connection with the preparation of this First Amendment and any and all documents executed and delivered in connection herewith; (c) Agent shall have received an opinion of Borrowers’
counsel with respect to the due authorization, execution and delivery of this First Amendment
 
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 and the Treasury Stock Notes, and the enforceability of the Loan Documents, as amended by this First Amendment, such opinion letter to be in
form and substance acceptable to Agent; (d) Agent shall have received appropriate resolutions of Borrowers’ directors, in a form satisfactory to Agent, authorizing Borrowers to enter into this First Amendment and any other documentation
required by Agent in connection with this First Amendment; (e) Agent shall have received a Bringdown and Incumbency Certificate of each Borrower, in a form satisfactory to Agent; (f) Borrowers shall have executed and delivered to Agent all further
documents and perform all other acts which Agent reasonably deems necessary or appropriate to perfect or protect its security for the Loans; and (g) Borrowers shall have delivered to Agent such other documentation, if any, as may be requested by
Agent to satisfy Agent that this First Amendment, and all other documents and instruments executed by Borrowers in connection with this First Amendment or in furtherance hereof have each been duly authorized, executed and delivered on behalf of
Borrowers, and constitute valid and binding obligations of Borrowers.
 Each Borrower represents and warrants to Lender Parties that all representations and warranties given by
such Borrower in Article IX of the Credit Agreement are true and correct as of the date of this First Amendment, except to the extent affected by this First Amendment. Each Borrower represents and warrants to Lender Parties that as of the date of
this First Amendment, such Borrower is in full compliance with all of the covenants of such Borrower contained in Article X of the Credit Agreement, except to the extent affected by this First Amendment.
 Except as heretofore or herein expressly modified, or as may otherwise be inconsistent with the terms of this First Amendment (in which case the terms and conditions of this First Amendment shall govern), all terms of
the Credit Agreement and all documents and instruments executed and delivered in furtherance thereof shall be and remain in full force and effect, and the same are hereby ratified and confirmed in all respects.
 * * * * *
 
 Page 49

 IN WITNESS WHEREOF, this First Amendment has been duly executed as of the day and year first above
written.
  

	  
 	  
 	 BORROWERS:
 
	  
 	  
 	  
 	  
 
	  
 	  
 	 PEMCO AVIATION GROUP, INC.
 
	 
 
 
 	  
 	 By: 
 	 
 /s/ JOHN R. LEE
 
	  
 	  
 	  
 	 
 
	  
 	  
 	 Its:
 	  Sr. Vice President and Chief Financial Officer
 
	  
 	  
 	  
 	 
 
	  
 	  
 	  
 	  
 
	  
 	  
 	 PEMCO AEROPLEX, INC.
 
	 
 
 
 	  
 	 By: 
 	 
 /s/ JOHN R. LEE
 
	  
 	  
 	  
 	 
 
	  
 	  
 	 Its:
 	 Sr. Vice President and Chief Financial Officer 
 
	  
 	  
 	  
 	 
 
	  
 	  
 	  
 	  
 
	  
 	  
 	 PEMCO ENGINEERS, INC.
 
	 
 
 
 	  
 	 By: 
 	 
 /s/ JOHN R. LEE
 
	  
 	  
 	  
 	 
 
	  
 	  
 	 Its:
 	 Sr. Vice President and Chief Financial Officer 
 
	  
 	  
 	  
 	 
 
	  
 	  
 	  
 	  
 
	  
 	  
 	 PEMCO WORLD AIR SERVICES, INC.
 
	 
 
 
 	  
 	 By: 
 	 
 /s/ JOHN R. LEE
 
	  
 	  
 	  
 	 
 
	  
 	  
 	 Its:
 	 Sr. Vice President and Chief Financial Officer 
 
	  
 	  
 	  
 	 
 
	  
 	  
 	  
 	  
 
	  
 	  
 	 SPACE VECTOR CORPORATION
 
	 
 
 
 	  
 	 By: 
 	 
 /s/ JOHN R. LEE
 
	  
 	  
 	  
 	 
 
	  
 	  
 	 Its:
 	 Sr. Vice President and Chief Financial Officer 
 
	  
 	  
 	  
 	 
 
	  
 	  
 	  
 	  
 
	  
 	  
 	 AGENT:
 
	  
 	  
 	  
 
	  
 	  
 	 SOUTHTRUST BANK, as Agent 
 
	 
 
 
 	  
 	 By: 
 	 
 
  /s/ AUSTIN DAVIS
 
	  
 	  
 	  
 	 
 
	  
 	  
 	 Its:
 	  Assistant Vice President
 
	  
 	  
 	  
 	 
 

  
 
 Page 50

  

	  
 	  
 	 LENDERS:
 
	  
 	  
 	  
 
	  
 	  
 	 SOUTHTRUST BANK 
 
	 
 
 
 	  
 	 By: 
 	 
 
 
  /s/ AUSTIN DAVIS
 
 
	  
 	  
 	  
 	 
 
	  
 	  
 	 Its:
 	 Assistant Vice President
 
	  
 	  
 	  
 	 
 
	  
 	  
 	  
 	  
 
	  
 	  
 	 COMPASS BANK
 
	 
 
 
 	  
 	 By: 
 	 
 
  /s/ ASHLEY GOETZ 
 
	  
 	  
 	  
 	 
 
	  
 	  
 	 Its:
 	  Assistant Relationship Manager
 
	  
 	  
 	  
 	 
 

  
 
 Page 511993 Directors' Stock Option Plan

 Exhibit 10.4 
  
 AMENDED AND RESTATED 
 1993 DIRECTORS’ STOCK OPTION PLAN OF 
 INCYTE CORPORATION 
 (As Amended June 23, 2003) 
  
 SECTION 1. INTRODUCTION. 
  
 The Plan was adopted on July 28, 1993, amended and restated as of August 3, 1993, amended as of March 22, 1995, amended and restated as of March 18, 1998,
amended and restated as of March 30, 2001, amended as of May 1, 2001, amended as of December 20, 2001, amended as of February 27, 2002, amended as of February 25, 2003, amended as of March 15, 2003 and amended as of June 23, 2003. The purpose of the
Plan is to offer the Company’s Nonemployee Directors 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 seeks to achieve this
purpose by providing for the grant of nonstatutory options to purchase Stock. 
  
 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% 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) “Company” shall mean Incyte Corporation (formerly Incyte Genomics, Inc.), a Delaware corporation. 
  
 (e) “Employee” shall mean an employee (within the meaning of
section 3401(c) of the Code and the regulations thereunder) of the Company or of a Subsidiary of the Company. 
  
 (f) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. 
  
 (g) “Exercise Price” shall mean the amount for which one
Share may be purchased upon exercise of an Option, as specified in the applicable Stock Option Agreement. 
  
 (h) “Fair Market Value” shall mean the market price of Stock, determined by the Board of Directors as follows: 
  
 (i) If 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 mean between the last reported representative bid and asked prices quoted for such date by the principal automated inter-dealer quotation system
on which 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 Stock was traded over-the-counter on the date in question and was 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 Nasdaq Stock Market; 
  
 (iii) If Stock was traded on a 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 Board of Directors in good faith on such basis as it deems appropriate. 
  
 In all cases, the determination of Fair Market Value by the Board of Directors shall be
conclusive and binding on all persons. 
  
 (i)
“Nonemployee Director” shall mean a member of the Board of Directors who (i) is not an Employee, (ii) does not own five percent or more of the Stock, (iii) does not represent an owner of five percent or more of the Stock and (iv)
does not join the Board of Directors pursuant to, or as a result of, a contractual arrangement between the Company and a third party. 
  

 2 

 (j) “Nonstatutory Option” shall mean a stock option not described in sections 422(b) or
423(b) of the Code. 
  
 (k) “Option” shall mean a
Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares. 
  
 (l) “Optionee” shall mean an individual who holds an Option. 
  
 (m) “Plan” shall mean this 1993 Directors’ Stock Option Plan of Incyte Corporation (formerly Incyte Genomics, Inc.), as it may be
amended from time to time. 
  
 (n) “Reverse
Split” shall mean the one-for-two reverse split of the Stock authorized by the Board of Directors prior to the initial adoption of the Plan. 
  
 (o) “Service” shall mean service as a member of the Board of Directors, whether or not as a Nonemployee Director. 
  
 (p) “Share” shall mean one share of Stock, as adjusted in
accordance with Section 6 (if applicable). All references to numbers of Shares in Section 3 hereof give effect to the Reverse Split and the 100% stock dividends paid in November 1997 and August 2000. 
  
 (q) “Stock” shall mean the Common Stock ($.001 par value) of
the Company. 
  
 (r) “Stock Option Agreement”
shall mean the agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to his or her Option. 
  
 (s) “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.

  
 (t) “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. 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 shall not exceed 1,100,000 Shares, subject to adjustment pursuant to Section 6. The number of Shares that are
subject to Options at any time 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. 
  

 3 

 (b) Additional Shares. In the event that any outstanding Option for any reason expires or is
canceled or otherwise terminated, the Shares allocable to the unexercised portion of such Option shall again be available for the purposes of the Plan. 
  
 SECTION 4. 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 that are not inconsistent with the Plan and that the Board of Directors deems appropriate for inclusion in
a Stock Option Agreement. 
  
 (b) Initial Grants. Each new
Nonemployee Director who first joins the Board of Directors after March 30, 2001 shall receive an Option covering 30,000 Shares within one business day after his or her initial election to the Board of Directors. The number of Shares included in an
Option shall be subject to adjustment under Section 6. 
  
 (c)
Annual Grants. On the first business day following the conclusion of each regular annual meeting of the Company’s stockholders, each Nonemployee Director who will continue serving as a member of the Board of Directors thereafter shall
receive an Option covering 10,000 Shares, subject to adjustment under Section 6. Each Nonemployee Director who is not initially elected at a regular annual meeting of the Company’s stockholders shall receive an Option to purchase a pro rata
portion of 10,000 Shares within ten business days of such Director’s election based on the number of full months remaining from date of election until the next regular annual meeting of the Company’s stockholders divided by twelve. Any
fractional shares resulting from such calculation shall be rounded up to the nearest whole number. 
  
 (d) Exercise Price. The Exercise Price under each Option shall be equal to 100 percent of the Fair Market Value of the Stock subject to such Option
on the date when such Option is granted. The entire Exercise Price of Shares issued under the Plan shall be payable in cash when such Shares are purchased, except as follows: 
  
 (i) Payment may be made all or in part with Shares that have already been owned by the Optionee or the
Optionee’s representative for more than six months and that 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.

  
 (ii) 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. 
  
 (iii)
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

  

 4 

 
loan proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes. 
  
 (e) Vesting. Each Option granted under Subsection (b) above shall
become exercisable (i) as to one-fourth ( 1/4) of the total number of shares covered by such Option on the first
anniversary of the date of grant and (ii) as to one-forty-eighth ( 1/48) of the total number of shares covered by
such Option on each of a series of thirty-six (36) monthly installments thereafter. Except as set forth in the next succeeding sentence and in the last sentence of this Subsection (e), each Option granted under Subsection (c) above shall become
exercisable in full on the first anniversary of the date of grant. Except as set forth in the last sentence of this Subsection (e), each Option granted under Subsection (c) to Nonemployee Directors who were not initially elected at a regular annual
meeting of the Company’s stockholders shall become exercisable in full at the next regular annual meeting of the Company’s stockholders following the date of grant. Notwithstanding the foregoing, each Option granted under Subsection (c)
above that is outstanding shall become exercisable in full in the event that a Change in Control occurs with respect to the Company. 
  
 (f) Term of Options. Subject to Subsections (g) and (h) below, each Option shall expire on the 10th anniversary of the date when such Option was
granted. 
  
 (g) Termination of Service (Except by Death).
If an Optionee’s Service terminates for any reason other than death, then his or her Options shall expire on the earliest of the following occasions: 
  
 (i) The expiration date determined pursuant to Subsection (f) above; 
  
 (ii) The date 24 months after the termination of the Optionee’s Service, if the termination occurs
because of his or her Total and Permanent Disability; or 
  
 (iii) The date six months after the termination of the Optionee’s Service for any reason other than Total and Permanent Disability. 
  
 The Optionee may exercise all or part of his or her Options at any time before the expiration of such Options under the preceding sentence,
but only to the extent that such Options had become exercisable before his or her Service terminated. The balance of such Options shall lapse when the Optionee’s Service terminates. In the event that the Optionee dies after the termination of
his or her Service but before the expiration of his or her Options, all or part of such Options may be exercised at any time prior to their expiration by the executors or administrators of the Optionee’s estate or by any person who has acquired
such Options directly from him or her by bequest, inheritance or beneficiary designation under the Plan, but only to the extent that such Options had become exercisable before his or her Service terminated. 
  
 (h) Death of Optionee. If an Optionee dies while he or she is in
Service, then his or her Options shall expire on the earlier of the following dates: 
  
 (i) The expiration date determined pursuant to Subsection (f) above; or 
  

 5 

 (ii) The date 24 months after his or her death. 
  
 All or part of the Optionee’s Options may be exercised at any time before the expiration
of such Options under the preceding sentence by the executors or administrators of his or her estate or by any person who has acquired such Options directly from him or her by bequest, inheritance or beneficiary designation under the Plan.

  
 (i) Nontransferability. No Option shall be transferable
by the Optionee other than by will, by written beneficiary designation 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 Optionee during his or her lifetime, whether by operation of law or otherwise, or be made subject to execution, attachment or similar process.

  
 (j) Stockholder Approval. Subsection (e) above
notwithstanding, no Option shall be exercisable under any circumstances unless and until the Company’s stockholders have approved the Plan. 
  
 (k) Notwithstanding the foregoing, the Board of Directors may from time to time increase the number of Shares subject to an initial or annual grant of
Options under Subsection (b) or (c) above to any Nonemployee Director to the extent the Board of Directors determines necessary to induce a Nonemployee Director to become or remain a Nonemployee Director or to reflect an increase in the duties or
responsibilities of the Nonemployee Director, subject to all terms and conditions of the Plan otherwise applicable to grants of Options, except that the Exercise Price under each such Option may be equal to or greater than one hundred percent (100%)
of the Fair Market Value of the Stock subject to the Option on the date when such Option is granted and each such Option may become exercisable on the same schedule as set forth in Subsection (e) or on a lengthier schedule, as the Board of Directors
in each case shall determine. 
  
 SECTION 5. MISCELLANEOUS PROVISIONS.

  
 (a) 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 adjustment shall be made,
except as provided in Section 6. 
  
 (b) Modification,
Extension and Assumption of Options. Within the limitations of the Plan, the Board of Directors 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 or a different number of Shares and at the same or a different Exercise Price. 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. 
  
 (c) Restrictions on Issuance of Shares. 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 
  

 6 

 
amended, 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. The Company may impose restrictions upon the sale, pledge or other transfer of such Shares (including the placement of appropriate legends on stock certificates) if, in the judgment of the Company and
its counsel, such restrictions are necessary or desirable in order to achieve compliance with the provisions of the Securities Act of 1933, as amended, the securities laws of any state or any other law. 
  
 (d) Withholding Taxes. The Company’s obligation to deliver Stock
upon the exercise of an Option shall be subject to any applicable tax withholding requirements. 
  
 (e) No Retention Rights. No provision of the Plan, nor any Option granted under the Plan, shall be construed as giving any person the right to be
elected as, or to be nominated for election as, a Nonemployee Director or to remain a Nonemployee Director. 
  
 SECTION 6. 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 spin-off, a reclassification or a similar occurrence, the Board of Directors shall make appropriate
adjustments in one or more of (i) the number of Options available for future grants under Section 3, (ii) the number of Shares to be covered by each new Option under Section 4, (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 shall provide (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 6, an Optionee 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 
  

 7 

 
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 7. DURATION AND AMENDMENTS. 
  
 (a) Term of the Plan. The Plan shall become effective on the date of
its adoption by the Board of Directors, subject to approval of the Company’s stockholders. The Plan shall remain in effect until it is terminated under 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, except that the provisions of the Plan relating to the amount, price and timing of Option grants shall not be amended more than once in any six-month period. Any 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. 
  
 (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 Option
previously granted under the Plan. 
  
 SECTION 8. EXECUTION. 
  
 To record the amendment of the Plan as of June 23, 2003, the Company has
caused its authorized officer to execute the same. 
  

	INCYTE CORPORATION
		
	 By
	 	 /s/    LEE BENDERGEY

		
	 Title
	 	 Executive Vice President

  

 8

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