<PAGE>
As filed with the Securities and Exchange Commission on November 15, 1996
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
MEDAREX, INC.
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-2822175
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
1545 ROUTE 22 EAST 08801
ANNANDALE, NEW JERSEY (Zip Code)
(Address of Principal Executive Offices)
MEDAREX, INC. 1996 STOCK OPTION PLAN
(Full title of the plan)
DONALD L. DRAKEMAN
MEDAREX, INC.
1545 ROUTE 22 EAST
ANNANDALE, NEW JERSEY 08801
(Name and address of agent for service)
(908) 713-6001
(Telephone number, including area code, of agent for service)
Copy to:
DWIGHT A. KINSEY, ESQ.
SATTERLEE STEPHENS BURKE & BURKE LLP
230 PARK AVENUE
NEW YORK, NEW YORK 10169
(212) 818-9200
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================
Proposed Proposed maximum
Title of Securities to Amount to be maximum offering aggregate offering Amount of
be registered registered (1) price per share (2) price (2) registration fee
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $ .01
par value per share 350,000 shares $6.8125 $2,384,375 $723
================================================================================================
</TABLE>
(1) The registration statement also includes an indeterminable number of
additional shares that may become issuable as a result of the antidilution
adjustment provisions of the Plan.
(2) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(c) and (h) and based upon the average of the high and
low sale prices of the Company's Common Stock on November 12, 1996, as
reported by the Nasdaq National Market ("NASDAQ-NMS").
<PAGE>
PART II
Item 3. Incorporation of Documents by Reference.
- ------- ---------------------------------------
The following documents filed with the Securities and Exchange Commission are
hereby incorporated by reference:
(a) Annual Report on Form 10-K for the fiscal year ended December 31, 1995;
(b) Quarterly Report of the Company on Form 10-Q for the three month period
ended March 31, 1996; (c) Quarterly Report of the Company on Form 10-Q for the
six month period ended June 30, 1996; (d) Quarterly Report of the Company on
Form 10-Q for the nine month period ended September 30, 1996; (e) Proxy
Statement dated April 15, 1996 for Annual Meeting of Shareholders held on May
16, 1996; and (f) the description of the Registrant's Common Stock set forth in
the Registrant's Registration Statement on Form S-1 (File No. 33-98244),
including any amendments or reports filed for the purpose of updating such
description; and
All reports and other documents filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), after the filing hereof and prior to a filing of a post-
effective amendment which indicates that all securities offered hereby have been
sold or which deregisters all securities remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of the
filing of such reports and documents. Any statement contained herein or in any
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequent filed
document which also is or is deemed to be incorporated by reference herein
modified or superseded such statement. Any such statement so modified or
superseded shall not be deemed to constitute a part of this Registration
Statement, except as so modified or superseded.
Item 4. Description of Securities.
- ------- -------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
- ------- --------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers.
- ------- -----------------------------------------
Section 14A:3-5 of The New Jersey Business Corporation Act (the "NJBCA")
empowers a New Jersey corporation to indemnify any person who is or was a
director, officer, employee or agent of the indemnifying corporation or of any
constituent corporation absorbed by the indemnifying corporation in a
consolidation or merger and any person who is or was a director, officer,
trustee, employee or agent of any other enterprise, serving as such at the
request of the indemnifying corporation, or of any such constituent corporation,
or legal representative of any such director, officer, trustee, employee or
agent (a "corporate agent"), against his expenses and liabilities incurred in
connection with any proceeding involving the corporate agent, other than a
proceeding by or in the right of the corporation, if (a) such corporate agent
acted in good faith and in a manner he reasonably believed to
II-1
<PAGE>
be in or not opposed to the best interests of the corporation and (b) with
respect to any criminal proceeding, such corporate agent had no reason to
believe that his conduct was unlawful. In addition, a corporation may indemnify
such corporate agent against his expenses in connection with any proceeding by
or in the right of the corporation to procure a judgment in its favor which
involves such corporate agent by reason of his having been such corporate agent,
if he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation. However, in such proceeding no
indemnification shall be provided in respect of any claim, issue or matter as to
which such corporate agent shall have been adjudged to be liable to the
corporation, unless and only to the extent that the Superior Court of the State
of New Jersey or the court in which such proceeding was brought shall determine
upon application that despite the adjudication of liability, but in view of all
circumstances of the case, such corporate agent is fairly and reasonably
entitled to indemnity for such expenses as the Superior Court or such other
court shall deem proper.
Under the NJBCA, a corporation shall indemnify a corporate agent against
expenses to the extent that such corporate agent has been successful on the
merits or otherwise in any proceeding referred to above or in defense of any
claim, issue or matter therein.
The indemnification and advancement of expenses provided by or granted
pursuant to the NJBCA shall not exclude any other rights, including the right to
be indemnified against liabilities and expenses incurred in proceedings by or in
the right of the corporation, to which a corporate agent may be entitled under a
certificate of incorporation, bylaw, agreement, vote of shareholders, or
otherwise; provided that no indemnification shall be made to or on behalf of a
corporate agent if a judgment or other final adjudication adverse to the
corporate agent establishes that his acts or omissions (a) were in breach of his
duty of loyalty to the corporation or its shareholders, (b) were not in good
faith or involved a knowing violation of law or (c) resulted in receipt by the
corporate agent of an improper personal benefit.
The Restated Certificate of Incorporation, as amended, and Article XIII of
the Registrant's Amended and Restated By-Laws provide for the indemnification of
its Officers and Directors under certain circumstances and are incorporated
herein by reference.
Item 7. Exemption from Registration Claimed.
- -------- -----------------------------------
Not applicable.
Item 8. Exhibits.
- ------ ---------
Sequential
Exhibit No. Description Page No.
----------- ----------- ----------
4(a) Medarex, Inc. 1996 Stock Option 7
Plan.
4(b) Restated Certificate of Incorporation,
as amended, of Medarex, Inc.
(Incorporated by reference to Exhibit
3.1 to the Registrant's Registration
Statement on Form S-1 (File No.
33-98244) filed on October 17, 1995).
II-2
<PAGE>
4(c) Medarex, Inc. Amended and Restated
By-Laws (Incorporated by reference to
Exhibit 3.2 to the Registrant's
Registration Statement on Form S-1
(File No. 33-39956) filed on April 12,
1991).
5 Opinion of Satterlee Stephens Burke & 25
Burke LLP as to legality of the
securities being registered
15 Not Applicable
23(a) Consent of Ernst & Young LLP 27
23(b) Consent of Satterlee Stephens Burke &
Burke LLP (included in opinion filed
as Exhibit 5)
24 Power of Attorney (accompanies
signature pages to the Registration
Statement)
27 Not Applicable
28 Not Applicable
99 Not Applicable
Item 9. Undertakings.
- ------- ------------
The undersigned Registrant hereby undertakes as follows:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in
aggregate, represent a fundamental change in the information set
forth in this registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
- -------- -------
above shall not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Securities and Exchange Commission by the Registrant
II-3
<PAGE>
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at the time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities Act,
each filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in this registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(5) To deliver or cause to be delivered with the prospectus, to each person
to whom the prospectus is sent or given, the latest annual report to security
holders that is incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Exchange Act; and, where interim financial information required to be presented
by Article 3 of Regulation S-X is not set forth in the prospectus, to deliver,
or cause to be delivered to each person to whom the prospectus or cause to be
delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
(6) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-8 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT OR AMENDMENT THERETO TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF ANNANDALE, STATE OF NEW JERSEY, ON
THIS 22ND DAY OF OCTOBER, 1996.
MEDAREX, INC.
By:/s/Charles R. Schaller
-----------------------------------
Charles R. Schaller
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of Medarex, Inc., a New Jersey
corporation, do hereby constitute and appoint Donald L. Drakeman and Michael A.
Appelbaum, and either of them, the lawful attorney and agent, with power and
authority to do any and all acts and things and to execute any and all
instruments which said attorney and agent, determine may be necessary or
advisable or required to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules or regulations or requirements of the
Securities and Exchange Commission in connection with this Registration
Statement. Without limiting the generality of the foregoing power of authority,
the powers granted include the power and authority to sign the names of the
undersigned officers and directors in the capacities indicated below to this
Registration Statement, to any and all amendments and supplements thereof, and
to any and all instruments or documents filed as part of or in connection with
such Registration Statement, and each of the undersigned hereby certifies and
confirms all that said attorney and agent, shall do or cause to be done by
virtue hereof. The Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of the dates indicated below.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/Charles R. Schaller Chairman of the Board October 22, 1996
- -----------------------------------------------
Charles R. Schaller
/s/Donald L. Drakeman President, Chief Executive Officer and October 22, 1996
- ----------------------------------------------- Director (Principal Executive Officer)
Donald L. Drakeman
<S>
/s/Michael A. Appelbaum Senior Vice President - Finance and October 22, 1996
- ----------------------------------------------- Administration, Secretary, Treasurer,
Michael A. Appelbaum Chief Financial Officer and Director
(Principal Financial and Accounting
Officer)
/s/Michael W. Fanger Director October 22, 1996
- -----------------------------------------------
Michael W. Fanger
/s/Julius A. Vida Director October 22, 1996
- -----------------------------------------------
Julius A. Vida
/s/Irwin Lerner Director October 22, 1996
- -----------------------------------------------
Irwin Lerner
Director October 22, 1996
/s/W. Leigh Thompson, Jr.
- -----------------------------------------------
W. Leigh Thompson, Jr.
/s/Robert Iggulden Director October 22, 1996
- -----------------------------------------------
Robert Iggulden
</TABLE>
<PAGE>
MEDAREX, INC.
1996 STOCK OPTION PLAN
Section 1. PURPOSE OF THE PLAN. The purpose of the 1996 Stock
Option Plan (the "Plan") is to aid Medarex, Inc. (the "Corporation") and its
subsidiaries in securing and retaining directors, consultants, officers and
other key employees of outstanding ability and to motivate such employees to
exert their best efforts on behalf of the Corporation and its subsidiaries. In
addition, the Corporation expects that it will benefit from the added interest
which the respective optionees and participants will have in the welfare of the
Corporation as a result of their ownership or increased ownership of the Common
Stock of the Corporation (the "Stock").
Section 2. ADMINISTRATION. (a) the Board of Directors of the
Corporation (the "Board") shall designate a Committee of not less that two (2)
Directors (the "Committee") who shall serve at the pleasure of the Board. No
members of the Committee shall have received any of the Company's equity
securities for at least one (1) year prior to service on the Committee nor be
eligible to participate in the Plan or be granted or awarded any equity
securities of the Company under any other plan, except pursuant to a "formula
award" pursuant to Rule 16b-3(c) 2(ii) under the Securities Exchange Act of
1934, as amended (the "Exchange Act") while serving on the Committee. Each
member of the Committee shall be a "Disinterested Person" as defined under Rule
16b-3 under the Exchange Act. The Board shall fill any vacancies on the
Committee and may remove any member of the Committee at any time with or without
cause. The Committee shall select its chairman and hold its meetings at such
times and places as it may determine. A majority of the whole Committee present
at a meeting at which a quorum is present, or an act approved in writing by all
members of the Committee, shall be an act of the Committee. The Committee shall
have full power and authority, subject to such resolutions not inconsistent with
the provisions of the Plan as may from time to time be issued or adopted by the
Board (provided the entire Board acting on the matter are Disinterested
Persons), to grant to Eligible Persons (as defined herein) pursuant to the
provisions of the Plan (i) stock options to purchase shares, (ii) stock
appreciation rights, (iii) restricted stock, (iv) deferred stock, or (v) other
Stock-based awards permitted hereunder (each of the foregoing being an "AWARD"
and collectively, the "AWARDS"). The Committee shall also interpret the
provisions of the Plan and any AWARD issued under the Plan (and any agreements
relating thereto) and supervise the administration of the Plan.
(b) The Committee shall: (i) select the directors (excluding
Committee members), consultants, officers and other key employees of the
Corporation and its subsidiaries to whom AWARDS may from time to time be granted
hereunder; (ii) determine whether incentive stock options (under Section 422 of
the Internal Revenue Code of 1986, as the same may be amended from time to time,
hereinafter referred to as the "Code"), nonqualified stock options, stock
appreciation rights, restricted stock, deferred stock, or other Stock-based
awards, or a combination of the foregoing, are to be granted hereunder; (iii)
determine the number of shares to be covered by each AWARD granted hereunder;
(iv) determine the terms and conditions, not inconsistent with the provisions of
the Plan, of any AWARD granted hereunder (including but not limited to any
restriction and forfeiture condition on such AWARD and/or the
<PAGE>
shares of Stock relating thereto); (v) determine whether, to what extent and
under what circumstances AWARDS may be settled in cash; (vi) determine whether,
to what extent, and under what circumstances Stock and other amounts payable
with respect to an AWARD under this Plan shall be deferred either automatically
or at the election of the participant; and (vii) determine whether, to what
extent, and under what circumstances option grants and/or other AWARDS under the
Plan are to be made, and operate, on a tandem basis.
(c) All decisions made by the Committee pursuant to the provisions of
the Plan and related orders or resolutions of the Board (as and to the extent
permitted hereunder) shall be final, conclusive and binding on all persons,
including the Corporation, its shareholders, employees and Plan participants.
(d) No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any AWARD
thereunder.
Section 3. STOCK SUBJECT TO THE PLAN. Except as otherwise
provided by this Section 3, the total number of shares of Stock available for
distribution under the Plan is 350,000. The total number of shares of stock
with respect to which AWARDS may be granted to any participant in any year is
100,000 shares. Such shares may consist, in whole or in part, of authorized and
unissued shares or treasury shares, except that treasury shares must be used in
the case of restricted stock. If any shares that have been optioned cease to be
subject to option because the option has expired or has been deemed to have
expired or has been surrendered pursuant to the Plan, or if any shares of
restricted stock are forfeited or such AWARD otherwise terminates without the
actual or deemed delivery of such shares, such shares shall again be subject to
an AWARD under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, extraordinary cash dividend, or other change
in corporate structure affecting the Stock, such adjustment shall be made in the
aggregate number of shares which may be delivered under the Plan, in the number
and/or option price of shares subject to outstanding options granted under the
Plan, and/or in the number of shares subject to restricted stock, deferred
stock, or other Stock-based awards granted under the Plan as may be determined
to be appropriate by the Committee, in its sole discretion; provided that the
number of shares subject to any AWARDS shall always be a whole number; and
provided further that, with respect to incentive stock options, no such
adjustment shall be authorized to the extent that such adjustment would
constitute a modification as defined in Section 424(h)(3) of the Code or cause
the Plan to violate Section 422(b)(1) of the Code or any successor provision
thereto. Such adjusted option price shall also be used to determine the amount
payable by the Corporation upon the exercise of any stock appreciation right
associated with any option. In addition, subject to the limitations provided in
Section 11, the Committee is authorized to make adjustments in the terms and
conditions of, and performance criteria relating to, AWARDS in recognition of
unusual or nonrecurring events (including, without limitation, events described
in this paragraph) affecting the Corporation or the financial statements of the
Corporation, or in response to changes in applicable laws, regulations or
accounting principles.
2
<PAGE>
Section 4. ELIGIBILITY. Directors, consultants, officers and
other key employees of the Corporation and its subsidiaries (but excluding
members of the Committee) who are responsible for the management, growth,
profitability and protection of the business of the Corporation and its
subsidiaries are eligible to be granted AWARDS under the Plan (each an "Eligible
Person" and collectively "Eligible Persons"). The participants under the Plan
shall be selected from time to time by the Committee, in its sole discretion,
from among those eligible, and the Committee shall determine, in its sole
discretion, the number of shares covered by each stock option, the number of
stock appreciation rights (if any) granted to each optionee, and the number of
shares (if any) subject to restricted stock, deferred stock or other Stock-based
awards granted to each participant.
For purposes of the Plan, a subsidiary of the Corporation shall be any
corporation which at the time qualifies as a subsidiary thereof under the
definition of "subsidiary corporation" in Section 424(f) of the Code.
Section 5. STOCK OPTIONS. Any stock option granted under the
Plan shall be in such form as the Committee may from time to time approve. Any
such option shall be subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall deem desirable.
(a) OPTION PRICE. The purchase price per share of the Stock
purchasable under a stock option shall be determined by the Committee, but will
be not less than 100% of the fair market value of the Stock on the date of the
grant of the option, as determined in accordance with procedures established by
the Committee. Notwithstanding the foregoing, the purchase price per share of
the Stock purchasable under any incentive stock option granted to any person who
is the beneficial owner of more than 10% of the Corporation's issued and
outstanding Stock (a "10% owner") shall not be less then 110% of the fair market
value of the Stock on the date of the grant of the option, as determined in
accordance with procedures established by the Committee.
(b) OPTION PERIOD. The term of each stock option shall be fixed by
the Committee, but no incentive stock option shall be exercisable after the
expiration of 10 years from the date the option is granted. Notwithstanding
the foregoing, no incentive stock option granted to a 10% owner shall be
exercisable after the expiration of five years from the date the option is
granted.
(c) EXERCISABILITY. (1) Stock options shall be exercisable at such
time or times as determined by the Committee at or subsequent to the date of
grant. Unless otherwise determined by the Committee at or subsequent to the date
of grant, no stock option shall be exercisable until the first anniversary date
of the granting of the option, except as provided in paragraphs (f), (g) or (h)
of this Section 5; provided, however, that notwithstanding the foregoing from
and after a Change of Control (as hereinafter defined) all stock options shall
become immediately exercisable to the full extent of the AWARD.
(2) Solely for Federal income tax purposes, to the extent that
the aggregate fair market value of Stock with respect to which incentive stock
options are
3
<PAGE>
exercisable for the first time by a participant during any calendar year exceeds
$100,000.00 (as of the date of grant), such options shall be treated as options
which are not incentive stock options. For purposes of this rule, options shall
be taken into account in the order in which they were granted.
(3) As used herein, "Change of Control" shall mean any of the
following events:
(A) An acquisition (other than directly from the Corporation) of
any voting securities of the Corporation (the "Voting Securities") by any
"Person" (as the term "person" is used for purposes of Section 13(d) or
14(d) of the Exchange Act) immediately after which such Person has
"Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 15% or more of the combined voting power of the
Corporation's then outstanding Voting Securities; provided, however, that
in determining whether a Change of Control has occurred, voting securities
which are acquired in a "Non-Control Acquisition" (as hereinafter defined)
shall not constitute an acquisition which would cause a Change of Control.
A "Non-Control Acquisition" shall mean an acquisition by (i) an
employee benefit plan (or a trust forming a part thereof) maintained by (x)
the Corporation or (y) any corporation or other Person of which a majority
of its voting power or its equity securities or equity interest is owned
directly or indirectly by the Corporation (a "Subsidiary"), (ii) the
Corporation or any Subsidiary, or (iii) any Person in connection with a
Non-Control Transaction (as defined below);
(B) The individuals who, as of April 30, 1991 were members of
the Board (the "Incumbent Board"), cease for any reason to constitute at
least 66 2/3% of the Board; provided, however, that if the election, or
nomination for election by the Corporation's stockholders, of any new
director was approved by a vote of at least 66 2/3% of the Incumbent Board,
such new director shall be considered as a member of the Incumbent Board;
provided, further, however, that no individual shall be considered a member
of the Incumbent Board if such individual initially assumed office as a
result of either an actual or threatened "Election Contest" (as described
in Rule 14a-11 promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board (a "Proxy Contest") including by reason of any
agreement intended to avoid or settle any Election Contest or Proxy
Contest; or
(C) Approval of the Corporation's shareholders of: (1) a merger,
consolidation or reorganization involving the Corporation, unless (i) the
stockholders of the Corporation, immediately before such merger,
consolidation or reorganization, own, directly or indirectly immediately
following such merger, consolidation or reorganization, at least 66 2/3% of
the combined voting power of the outstanding Voting Securities of the
Corporation resulting from such merger or consolidation or reorganization
(the "Surviving Corporation") in substantially the same proportion as their
ownership of the Voting Securities immediately before such merger,
consolidation or reorganization, (ii)
4
<PAGE>
the individuals who were members of the Incumbent Board immediately prior
to the execution of the agreement providing for such merger, consolidation
or reorganization constitute at least 66 2/3% of the members of the board
of directors of the Surviving Corporation, and (iii) no Person, other than
the Corporation, any Subsidiary, any employee benefit plan (or any trust
forming a part thereof) maintained by the Corporation, the Surviving
Corporation or any Subsidiary, or any Person who, immediately prior to
such merger, consolidation or reorganization had Beneficial Ownership of
15% or more of the then outstanding Voting Securities of the Corporation,
has Beneficial Ownership of 15% or more of the combined voting power of the
Surviving Corporation's then outstanding voting securities (a transaction
described in clause (i) through (iii) shall herein be referred to as a
"Non-Control Transaction"); (2) a complete liquidation or dissolution of
the Corporation; or (3) an agreement for the sale or other disposition of
all or substantially all of the assets of the Corporation to any Person
(other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change of Control shall not be
deemed to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the outstanding
Voting Securities as a result of the acquisition of Voting Securities by
the Corporation which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares Beneficially
Owned by the Subject Person, provided that if a Change of Control would
occur (but for the operation of this sentence) as a result of the
acquisition of Voting Securities by the Corporation, and after such share
acquisition, the subject securities which increase the percentage of the
then outstanding Voting Securities Beneficially Owned by the Subject
Person, then a Change of Control shall occur.
(d) METHOD OF EXERCISE. Stock options may be exercised, in whole or
in part, by giving written notice of exercise to the Corporation specifying the
number of shares to be purchased. Such notice shall be accompanied by payment
in full of the purchase price in cash, either by certified or bank check;
provided, however, that after a Change of Control (x) an optionee (other than an
optionee who initiated a Change of Control in a capacity other than as an
officer or director of the Corporation) who is an officer or director of the
Corporation (within the meaning of Section 16 of the Exchange Act and the rules
and regulations promulgated thereunder), during the 60-day period after six (6)
months after a Change of Control, with respect to an option that is
unaccompanied by a stock appreciation right and (y) any other optionee, during
the 60-day period from and after a Change of Control, who at the time of
exercise is not an officer or director with respect to an option that is
unaccompanied by a stock appreciation right shall, unless the Committee shall
determine otherwise at the time of grant, have the right, in lieu of the payment
of the full purchase price of the shares of the Stock being purchased under the
stock option and by giving written notice to the Corporation, to elect (within
such respective periods) to surrender all or part of the stock option to the
Corporation and to receive in cash an amount equal to the amount by which the
fair market value per share of the Stock on the date of exercise shall exceed
the purchase price per share under the stock option multiplied by the number of
shares of the Stock granted under the stock option as to which the right granted
by this proviso shall have been exercised. However, any officer, director or
10% owner (collectively, "Insider") may settle the right granted by this proviso
by either (A) settling
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the right to the extent that such settlement falls within one of four ten-day
periods, each period beginning on the third business day following the release
of the Company's quarterly or annual financial summary statements of sales and
earnings (the "Summary Statements"), as the case may be, and ending on the
twelfth business day following each such date (each such period being a "Window
Period") and provided that the Company shall have been subject to Section 13(a)
of the Exchange Act for at least a year prior to such settlement and has filed
all reports and statements required to be filed thereunder for that year; or (B)
pursuant to an irrevocable election to settle the right no earlier than six (6)
months after the date of such election, which election need not occur during a
Window Period and provided further that the transaction giving rise to the award
-------- -------
of the right is approved by the Company's shareholders (excluding Insider
shareholders).
The written notice provided by the optionee shall specify the
optionee's election to purchase shares subject to the stock option or to receive
the cash payment herein provided.
Notwithstanding the foregoing, the Committee may, in its sole
discretion, authorize payment in whole or in part of the purchase price to be
made in unrestricted stock already owned by the optionee, or, in the case of
the nonqualified stock option, in restricted stock, or deferred stock subject to
an AWARD hereunder (based upon the fair market value of the Stock on the date
the option is exercised as determined by the Committee). The Committee may
authorize such payment at or after grant, except that in the case of an
incentive stock option, any right to make payment in unrestricted stock already
owned must be included in the option at the time of grant. No shares of Stock
shall be issued until full payment therefor has been made. Subject to paragraph
(i) of this Section 5, an optionee shall have the rights to dividends or other
rights of a stockholder with respect to shares subject to the option when the
optionee has given written notice of exercise, has paid in full for such shares,
and, if requested, has given the representation described in paragraph (a) of
Section 14.
As used in this paragraph (d) of Section 5, the fair market value of
the Stock on the date of exercise shall mean:
(i) with respect to an election by an optionee to receive cash in
respect of a stock option which is not an incentive stock option, the
"Change of Control Fair Market Value", as defined below; and
(ii) with respect to an election by an optionee to receive cash
in respect of a stock option which is an incentive stock option, the
fair market value of the Stock on the date of exercise, determined in
the same manner as the fair market value of the Stock on the date of
grant of a stock option is determined pursuant to paragraph (a) of
Section 5 of the Plan.
(e) NONTRANSFERABILITY OF OPTIONS. No stock option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution, and such options shall be exercisable, during the optionee's
lifetime, only by the optionee.
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(f) TERMINATION BY DEATH. Except to the extent otherwise provided by
the Committee at or after the time of grant, if an optionee's relationship with
or employment by the Corporation and/or any of its subsidiaries terminates by
reason of death, the stock option may thereafter be immediately exercised in
full by the legal representative of the estate or by the legatee of the optionee
under the will of the optionee, for a period of 15 months from the date of such
death or until the expiration of the stated period of the option whichever
period is the shorter.
(g) TERMINATION BY REASON OF RETIREMENT OR PERMANENT DISABILITY.
Except to the extent otherwise provided by the Committee at or after the time of
grant, if an optionee's relationship with or employment by the Corporation
and/or any of its subsidiaries terminates by reason of retirement or permanent
disability, any stock option held by such optionee may thereafter be exercised
in full, but may not be exercised after three years from the date of such
termination or the expiration of the stated period of the option, whichever
period is the shorter; provided, however, that if the optionee dies within such
three-year period, any unexercised stock option held by such optionee shall
thereafter be exercisable to the extent to which it was exercisable at the time
of death for a period of 12 months from the date of the optionee's death or for
the stated period of the option, whichever period is the shorter.
(h) OTHER TERMINATION. Unless otherwise determined by the Committee
at or after grant, if an optionee's relationship with or employment by the
Corporation terminates for any reason other than death, permanent disability or
retirement, the stock option shall thereupon terminate; provided, however, that
if such termination is by action of the Corporation and other than discharge for
reason of willful violation of the rules of the Corporation or by voluntary
resignation of the optionee, in either case within 18 months following a Change
of Control, any stock options held by the optionee may be exercised by the
optionee until the earlier of six months and one day after such termination or
the expiration of such options in accordance with their terms.
(i) OPTION BUYOUT. The Committee may at any time offer to repurchase
an option (other than an option which has been held for less than six months by
an Insider) based on such terms and conditions as the Committee shall establish
and communicate to the optionee at the time that such offer is made.
(j) FORM OF SETTLEMENT. In its sole discretion, the Committee may
provide, at the time of grant, that the shares to be issued upon an option's
exercise shall be in the form of restricted stock or deferred stock, or may
reserve other than with respect to incentive stock options the right to so
provide after the time of grant.
Section 6. STOCK APPRECIATION RIGHTS. (a) GRANT AND EXERCISE. Stock
appreciation rights may be granted in conjunction with (or in accordance with
Section 9, separated from) all or part of any stock option granted under the
Plan, as follows: (i) in the case of a nonqualified stock option, such rights
may be granted either at the time of the grant of such option or at any
subsequent time during the term of the option; and (ii) in the case of an
incentive stock option, such rights may be granted only at the time of the grant
of the option. A "stock appreciation right" is a right to receive cash or
Stock, as provided in this Section 6, in lieu of the purchase
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<PAGE>
of a share under a related option. A stock appreciation right, or applicable
portion thereof, shall terminate and no longer be exercisable upon the
termination or exercise of the related stock option, except that a stock
appreciation right granted with respect to less than the full number of shares
covered by a related stock option shall not be reduced until the exercise or
termination of the related stock option exceeds the number of shares not
covered by the stock appreciation right. A stock appreciation right may be
exercised by an optionee, in accordance with paragraph (b) of this Section 6, by
surrendering the applicable portion of the related stock option. Upon such
exercise and surrender, the optionee shall be entitled to receive an amount
determined in the manner prescribed in paragraph (b) of this Section 6. Options
which have been so surrendered, in whole or in part, shall no longer be
exercisable to the extent the related stock appreciation rights have been
exercised.
(b) TERMS AND CONDITIONS. Stock appreciation rights shall be subject
to such terms and conditions, not inconsistent with the provisions of the Plan,
as shall be determined from time to time by the Committee, including the
following:
(i) Stock appreciation rights shall be exercisable only at such
time or times and to the extent that the stock options to which they
relate shall be exercisable. Except as otherwise provided in Section
5, an Insider (as previously defined in Section 5) may only settle a
stock appreciation right by satisfying either of the following
conditions:
(A) the stock appreciation right is (i) settled at least six
(6) months after its date of grant and (ii) such settlement occurs
during a Window Period and provided that the Company shall have been
subject to Section 13(a) of the Exchange Act for at least a year prior
to such settlement and has filed all reports and statements required
to be filed thereunder for that year; or else
(B) the settlement of the stock appreciation right is made
pursuant to an irrevocable election to settle the right no earlier
than six (6) months after the date of such election, which election
need not occur during a Window Period.
None of the conditions of this Section 6(i) shall be
applicable in the event of death or permanent disability of the
optionee.
(ii) Upon the exercise of a stock appreciation right, an optionee
shall be entitled to receive up to, but no more than, an amount in
cash or whole shares of the Stock as determined by the Committee in
its sole discretion equal to the excess of the fair market value of
one share of Stock over the option price per share specified in the
related stock option multiplied by the number of shares in respect of
which the stock appreciation right shall have been exercised;
provided, however, that the payment in settlement of stock
appreciation rights during the period from and after a Change of
Control shall be entirely in cash. Each stock appreciation right may
be exercised only at the time and so long as a related option, if any,
would be exercisable or as otherwise permitted by applicable law;
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<PAGE>
provided, however, that no stock appreciation right granted under the
Plan to an Insider then subject to Section 16 of the Exchange Act
shall be exercised during the first six months of its term. The fair
market value of the Stock on the date of exercise of a stock
appreciation right shall be determined in the same manner as the fair
market value of the Stock on the date of grant of a stock option is
determined pursuant to paragraph (a) of Section 5 of the Plan;
provided, however, that during the 60-day period from and after a
Change of Control, the fair market value of the Stock on the date of
exercise shall mean, with respect to the exercise of a stock
appreciation right accompanying an option which is not an incentive
stock option, the "Change of Control Fair Market Value."
For purposes of this Plan, the "Change of Control Fair Market
Value" shall mean the higher of (x) the highest reported sale price,
regular way, of a share of the Stock on the Composite Tape for New
York Stock Exchange Listed Stock during the 60-day period prior to the
date of the Change of Control or, if such security is not listed or
admitted to trading on the New York Stock Exchange, on the principal
national securities exchange on which such security is listed or
admitted to trading or, if not listed or admitted to trading on any
national securities exchange, on the Nasdaq National Market or, if
such security is not quoted on such Nasdaq National Market, the
average of the closing bid and asked prices during such 60-day period
in the over-the-counter market as reported by the National Association
of Securities Dealers Automated Quotation ("NASDAQ") system or, if bid
and asked prices for such security during such period shall not have
been reported through NASDAQ, the average of the bid and asked prices
for such period as furnished by any New York Stock Exchange member
firm regularly making a market in such security selected for such
purpose by the Board of Directors of the Corporation or a committee
thereof or, if such security is not publicly traded, the fair market
value thereof as determined by an independent investment banking or
appraisal firm experienced in the valuation of such securities
selected in good faith by the Board of Directors of the Corporation or
a committee thereof or, if no such investment banking or appraisal
firm is in the good faith judgment of the Board of Directors or such
committee available to make such determination, as determined in good
faith by the Board of Directors of the Corporation or such committee
and (y) if the Change of Control is the result of a transaction or
series of transactions described in paragraph (i) or (iii) of the
definition of Change of Control set forth in Section 5(c), the highest
price per share of the Stock paid in such transaction or series of
transactions (in the case of a Change of Control described in such
paragraph (i) of Section 5(c), as reflected in any Schedule 13D filed
by the person having made the acquisition).
(iii) No stock appreciation right shall be transferable by a
participant otherwise than by will or by the laws of descent and
distribution, and stock appreciation rights shall be exercisable,
during the participant's lifetime, only by the participant.
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<PAGE>
(iv) Upon the exercise of a stock appreciation right, the stock
option or part thereof to which such stock appreciation right is
related shall be deemed to have been exercised for the purpose of the
limitation of the number of shares of the Stock to be issued under the
Plan, as set forth in Section 3 of the Plan.
(v) Stock appreciation rights granted in connection with
incentive stock options may be exercised only when the market price of
the Stock subject to the incentive stock option exceeds the option
price of the incentive stock option.
Section 7. RESTRICTED STOCK. (a) STOCK AND ADMINISTRATION. Shares of
restricted stock may be issued either alone or in addition to stock options,
stock appreciation rights, deferred stock or other Stock-based awards granted
under the Plan. The Committee shall determine the directors (excluding
Committee members), consultants, officers and key employees of the Corporation
and its subsidiaries to whom, and the time or times at which, grants of
restricted stock will be made, the number of shares to be awarded, the time or
times within which such AWARDS may be subject to forfeiture, and all other
conditions of the AWARDS. The provisions of restricted stock AWARDS need not be
the same with respect to each recipient.
(b) AWARDS AND CERTIFICATES. The prospective recipient of an AWARD
of shares of restricted stock shall not, with respect to such AWARD, be deemed
to have become a participant, or to have any rights with respect to such AWARD,
until and unless such recipient shall have executed an agreement or other
instrument evidencing the AWARD and delivered a fully executed copy thereof to
the Corporation and otherwise complied with the then applicable terms and
conditions.
(i) Each participant shall be issued a stock certificate in
respect of shares of restricted stock awarded under the Plan. Such
certificate shall be registered in the name of the participant, and
shall bear an appropriate legend referring to the terms, conditions,
and restrictions applicable to such AWARD, substantially in the
following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the Medarex, Inc. 1996 Stock Option Plan and an
Agreement entered into between the registered owner and Medarex, Inc.
Copies of such Plan and Agreement are on file in the offices of
Medarex, Inc., 1545 Route 22 East, Annandale, New Jersey 08801."
(ii) The Committee shall require that the stock certificates
evidencing such shares be held in custody by the Corporation until the
restrictions thereon shall have lapsed, and shall require, as a
condition of any restricted stock AWARD, that the participant shall
have delivered a stock power, endorsed in blank, relating to the Stock
covered by such AWARD.
(c) RESTRICTIONS AND CONDITIONS. The shares of restricted stock
awarded pursuant to the Plan shall be subject to the following restrictions and
conditions:
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(i) subject to the provisions of this Plan during a period set
by the Committee commencing with the date of such AWARD (the
"restriction period"), the participant shall not be permitted to sell,
transfer, pledge, or assign shares of restricted stock awarded under
the Plan. Within these limits the Committee may provide for the lapse
of such restrictions in installments where deemed appropriate.
(ii) Except as provided in paragraph (c) of this Section 7, the
participants shall have, with respect to the shares of restricted
stock, all of the rights of a stockholder of the Corporation,
including the right to vote the restricted stock and the right to
receive any cash dividends. The Committee, in its sole discretion, may
permit or require the payment of cash dividends to be deferred and, if
the Committee so determines, reinvested in additional restricted stock
or otherwise reinvested. Certificates for shares of unrestricted stock
shall be delivered to the participant promptly after, and only after,
the period of forfeiture shall expire without forfeiture in respect of
such shares of restricted stock.
(iii) Subject to the provisions of paragraph (c)(iv) of this
Section 7, upon termination of employment of any reason during the
restriction period, all shares still subject to restriction shall be
forfeited by the participant and reacquired by the Corporation.
(iv) In the event of a participant's retirement, permanent
disability, or death, or in cases of special circumstances, the
Committee may, in its sole discretion, when it finds that a waiver
would be in the best interests of the Corporation, waive in whole or
in part any or all remaining restrictions with respect to such
participant's shares of restricted stock.
(v) Notwithstanding anything in the foregoing to the contrary,
upon a Change of Control any and all restrictions on restricted stock
shall lapse regardless of the restriction period established by the
Committee and all such restricted stock shall become fully vested and
nonforfeitable.
Section 8. DEFERRED STOCK AWARDS. (a) STOCK AND ADMINISTRATION. AWARDS
of the right to receive Stock that is not to be distributed to the participant
until after a specified deferral period (such AWARD and the deferred stock
delivered thereunder hereinafter as the context shall require, referred to as
the "deferred stock") may be made either alone or in addition to stock options,
stock appreciation rights, or restricted stock, or other Stock-based awards
granted under the Plan. The Committee shall determine the directors (excluding
Committee members), consultants, officers and key employees of the Corporation
and its subsidiaries to whom and the time or times at which deferred stock shall
be awarded, the number of shares of deferred stock to be awarded to any
participant, the duration of the period (the "Deferral Period") during which,
and the conditions under which, receipt of the Stock will be deferred, and the
terms and conditions of the AWARD in addition to those contained in paragraph
(b) of this Section 8. In its sole discretion, the Committee may provide for a
minimum payment at the end of the
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applicable Deferral Period based on a stated percentage of the fair market value
on the date of grant of the number of shares covered by a deferred stock AWARD.
The Committee may also provide for the grant of deferred stock upon the
completion of a specified performance period. The provisions of deferred stock
AWARDS need not be the same with respect to each recipient.
(b) TERMS AND CONDITIONS. Deferred stock AWARDS made pursuant to this
Section 8 shall be subject to the following terms and conditions:
(i) Subject to the provisions of the Plan, the shares to be
issued pursuant to a deferred stock AWARD may not be sold, assigned,
transferred, pledged or otherwise encumbered during the Deferral
Period or Elective Deferral Period (defined below), where applicable,
and may be subject to a risk of forfeiture during all or such portion
of the Deferral Period as shall be specified by the Committee. At the
expiration of the Deferral Period and Elective Deferral Period, share
certificates shall be delivered to the participant, or the
participant's legal representative, in a number equal to the number of
shares covered by the deferred stock AWARD.
(ii) Amounts equal to any dividends declared during the Deferral
Period with respect to the number of shares covered by a deferred
stock AWARD will be paid to the participant currently, or deferred and
deemed to be reinvested in additional deferred stock or otherwise
reinvested, as determined at the time of the AWARD by the Committee,
in its sole discretion.
(iii) Subject to the provisions of paragraph (b)(iv) of this
Section 8, upon termination of the relationship with or employment by
the Corporation for any reason during the Deferral Period for a given
deferred stock AWARD, the deferred stock in question shall be
forfeited by the participant.
(iv) In the event of the participant's retirement, permanent
disability or death during the Deferral Period (or Elective Deferral
Period, where applicable), or in cases of special circumstances, the
Committee may, in its sole discretion, when it finds that a waiver
would be in the best interests of the Corporation, waive in whole or
in part any or all of the remaining deferral limitations imposed
hereunder with respect to any or all of the participant's deferred
stock. Anything in the Plan to the contrary notwithstanding, upon the
occurrence of a Change of Control, the Deferral Period and the
Elective Deferral Period with respect to each deferred stock AWARD
shall expire immediately and all share certificates relating to such
deferred stock AWARDS shall be delivered to each participant or the
participant's legal representative.
(v) Prior to completion of the Deferral Period, a participant
may elect to defer further the receipt of the deferred stock AWARD for
a specified period or until a specified event (the "Elective Deferred
Period"), subject in each case to the approval of the Committee and
under such terms as are determined by the Committee, all in its sole
discretion.
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(vi) Each deferred stock AWARD shall be confirmed by a deferred
stock agreement or other instrument executed by the Committee and by
the participant.
Section 9. OTHER STOCK-BASED AWARDS. (a) STOCK AND ADMINISTRATION.
Other AWARDS of the Stock and other AWARDS that are valued in whole or in part
by reference to, or are otherwise based on the Stock ("Other Stock-based
AWARDS"), including (without limitation) performance shares and convertible
debentures, may be granted either alone or in addition to other AWARDS granted
under the Plan. Subject to the provisions of the Plan, the Committee shall have
sole and complete authority to determine the directors (excluding Committee
members), consultants, officers and key employees of the Corporation and/or any
of its subsidiaries to whom and the time or times at which such Other Stock-
based AWARDS shall be made, the number of shares of the Stock to be awarded
pursuant to such Other Stock-based AWARDS and all other conditions of the Other
Stock-based AWARDS. The Committee may also provide for the grant of the Stock
upon the completion of a specified performance period. The provisions of Other
Stock-based AWARDS need not be the same with respect to each recipient.
(b) TERMS AND CONDITIONS. Other Stock-based AWARDS made pursuant
to this Section 9 shall be subject to the following terms and conditions:
(i) Subject to the provisions of this Plan, shares or interests
in shares subject to Other Stock-based AWARDS made under this Section
9 may not be sold, assigned, transferred, pledged or otherwise
encumbered prior to the date on which the shares are issued, or, if
later, the date on which any applicable restriction, performance or
deferral period lapses.
(ii) Subject to the provisions of this Plan and the Other Stock-
based AWARD agreement, the recipients of Other Stock-based AWARDS
under this Section 9 shall be entitled to receive, currently or on a
deferred basis, interest or dividends or interest or dividend
equivalents with respect to the number of shares or interests therein
covered by the Other Stock-based AWARDS, as determined at the time of
the Other Stock-based AWARDS by the Committee, in its sole discretion,
and the Committee may provide that such amounts (if any) shall be
deemed to have been reinvested in additional Stock or otherwise
reinvested.
(iii) Any Other Stock-based AWARDS under this Section 9 and any
Stock covered by any such Other Stock-based AWARD may be forfeited to
the extent so provided in the Other Stock-based AWARD agreement, as
determined by the Committee, in its sole discretion.
(iv) In the event of the participant's retirement, permanent
disability or death, or in cases of special circumstances, the
Committee may, in its sole discretion, when it finds that a waiver
would be in the best interests of the Corporation, waive in whole or
in part any or all of the remaining limitations imposed hereunder (if
any) with respect to any or all Other Stock-based
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AWARDS under this Section 9. Anything in the Plan to the contrary
notwithstanding, any limitations imposed with respect to any Other
Stock-based AWARD under this Section 9, including any provision
providing for the forfeiture of any Other Stock-based AWARD under any
circumstance, shall terminate immediately upon a Change of Control and
the number of shares of or interests in the Stock subject to such
Other Stock-based AWARD shall be delivered to the participant (or, in
the case of an Other Stock-based AWARD with respect to which such
number is not determinable, such number of shares of or interests in
the Stock as is determined by the Committee and set forth in the terms
of such Other Stock-based AWARD).
(v) Each Other Stock-based AWARD under this Section 9 shall
be confirmed by an agreement or other instrument executed by the
Corporation and by the participant.
(vi) The Stock or interests therein (including securities
convertible into the Stock) paid or awarded on a bonus basis under
this Section 9 shall be issued for no cash consideration; the Stock or
interests therein (including securities convertible into the Stock)
purchased pursuant to a purchase right awarded under this Section 9
shall be priced at least 50% of the fair market value of the Stock on
the date of grant.
(vii) No Other Stock-based AWARD in the nature of a purchase
right shall be transferable by the participant otherwise than by will
or by the laws of descent and distribution, and such purchase rights
shall be exercisable during the participant's lifetime only by the
participant.
(viii) Each Other Stock-based AWARD to an Insider under this
Section 9 shall be subject to all of the limitations and
qualifications that may be required by Section 16 of the Exchange Act
and all of the rules and regulations promulgated thereunder.
Section 10. TRANSFER, LEAVE OF ABSENCE, ETC. For purposes of the Plan:
(a) a transfer of an employee from the Corporation to a subsidiary, or vice
versa, or from one subsidiary to another; (b) a leave of absence, duly
authorized in writing by the Corporation, for military service or sickness, or
for any other purposes approved by the Corporation if the period of such leave
does not exceed 90 days; and (c) a leave of absence in excess of 90 days, duly
authorized in writing by the Corporation, shall not be deemed a termination of
employment.
Section 11. AMENDMENTS AND TERMINATION. The Board may amend, alter, or
discontinue the Plan, but no amendment, alteration, or discontinuation shall be
made which would impair the rights of an optionee or participant under any AWARD
theretofore granted, without the optionee's or participant's consent, or which
without the approval of the shareholders would:
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<PAGE>
(a) except as is provided in Section 3 of the Plan, increase the total
number of shares available for the purpose of the Plan;
(b) subsequent to the date of grant decrease the option price of any
stock option to less than 100% (110% in the case of a 10% owner of an
incentive stock option) of the fair market value on the date of the
granting of the option;
(c) extend the maximum option period under Section 5(b) of the Plan;
or
(d) otherwise materially increase the benefits accruing to
participants under, or materially modify the requirements as to eligibility
for participation in, the Plan.
The Committee may amend the terms of any AWARD theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any holder without such holder's consent. Notwithstanding the foregoing, the
Board or the Committee may, in its discretion, amend the Plan or terms of any
outstanding AWARD held by a person then subject to Section 16 of the Exchange
Act without the consent of any holder in order to preserve exemptions under said
Section 16 which are or become available from time to time under rules of the
Securities and Exchange Commission. The Committee may also substitute new stock
options for previously granted options, including previously granted options
having higher option prices.
Section 12. UNFUNDED STATUS OF THE PLAN. The Plan is intended to
constitute an "unfunded" plan for incentive and deferred compensation. With
respect to any payments not yet made to a participant or optionee by the
Corporation, nothing contained herein shall give any such participant or
optionee any rights that are greater than those of a general creditor of the
Corporation. In its sole discretion, the Committee may authorize the creation
of trusts or other arrangements to meet the obligations created under the Plan
to deliver the Stock; provided, however, that the existence of such trusts or
other arrangements is consistent with the unfunded status of the Plan.
Section 13. EMPLOYMENT AT WILL. Nothing contained in the Plan, or in any
option granted pursuant to the Plan, nor in any agreement made pursuant to the
Plan, shall confer upon any optionee any right with respect to continuance of
employment by the Company or its subsidiaries, nor interfere in any way with the
right of the Company or its subsidiaries to terminate the optionee's employment
at will or change the optionee's compensation at any time.
Section 14. GENERAL PROVISIONS. (a) The Committee may require each
participant purchasing shares pursuant to an AWARD under the Plan to represent
to and agree with the Corporation in writing that such participant is acquiring
the shares without a view to distribution thereof. The certificates for such
shares may include any legend which the Committee deems appropriate to reflect
any restrictions on transfer.
(b) All certificates for shares of the Stock delivered under the Plan
pursuant to any AWARD shall be subject to such stock-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations,
and other requirements of the
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Securities and Exchange Commission, any stock exchange upon which the Stock is
then listed, and any applicable Federal or state securities law, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
(c) Recipients of shares of restricted stock, deferred stock and other
Stock-based awards under the Plan (other than options) shall not be required to
make any payment or provide consideration other than the rendering of services.
(d) AWARDS granted under the Plan may, in the discretion of the
Committee, be granted either alone or in addition to, in tandem with, or in
substitution for, any other AWARDS granted under the Plan. If AWARDS are
granted in substitution for other AWARDS, the Committee shall require the
surrender of such other AWARDS in consideration for the grant of the new AWARDS.
AWARDS granted in addition to or in tandem with other AWARDS may be granted
either at the same time as or at a different time from the grant of such other
AWARDS. The exercise price of any option or the purchase price of any Other
Stock-based AWARD in the nature of a purchase right:
(i) granted in substitution for outstanding AWARDS or in lieu of
any other right to payment by the Corporation shall be the fair market
value of shares at the date such substitute AWARDS are granted or
shall be such fair market value at that date reduced to reflect the
fair market value of the AWARDS or other right to payment required to
be surrendered by the participant as a condition to receipt of the
substitute AWARD; or
(ii) retroactively granted in tandem with outstanding AWARDS
shall be either the fair market value of shares at the date of grant
of later AWARDS or the fair market value of shares at the date of
grant of earlier AWARDS.
(e) Nothing contained in this Plan shall prevent the Board of
Directors from adopting other or additional compensation arrangements, subject
to shareholder approval if such approval is required; and such arrangements may
be either generally applicable or applicable only in specific cases.
Section 15. TAXES. (a) Participants shall make arrangements satisfactory
to the Committee regarding payment of any Federal, state, or local taxes of any
kind required by law to be withheld with respect to any income which the
participant is required, or elects, to include in his gross income and the
Corporation and its subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
participant. Anything contained herein to the contrary notwithstanding, the
Committee may, in its sole discretion, authorize acceptance of Stock received in
connection with the grant or exercise of an AWARD or otherwise previously
acquired in satisfaction of withholding requirements.
(b) Notwithstanding any provisions to the contrary in this Section
15, an Insider may only satisfy tax withholding requirements with the settlement
of a stock appreciation right or with shares of the Company's Common Stock if he
has held such stock or stock appreciation
16
<PAGE>
right for at least six (6) months and (i) makes an election and settlement
during a Window Period; or (ii) makes an election in advance during a Window
Period to take effect the next following Window Period, or (iii) the cash
settlement of the tax obligation occurs no earlier than six (6) months after the
date of an irrevocable election made by an Insider, which election need not
occur during a Window Period; provided that the Company shall have been subject
-------- ----
to Section 13(a) of the Exchange Act for at least a year prior to any such
election and has filed all reports and statements required to be filed
thereunder for that year.
Section 16. EFFECTIVE DATE OF THE PLAN. The Plan shall be effective on
the date it is approved by the vote of the holders of a majority of all
outstanding shares of Common Stock.
Section 17. TERM OF THE PLAN. No AWARD shall be granted pursuant to the
Plan after May 16, 2006, but AWARDS theretofore granted may extend beyond that
date.
17
<PAGE>
Exhibit No. 5
Opinion of Satterlee Stephens Burke & Burke LLP as to Legality of
the Securities being Registered
<PAGE>
Exhibit 5.1
SATTERLEE STEPHENS BURKE & BURKE LLP
230 Park Avenue
New York, N.Y. 10169-0079
(212) 818-9200
November 15, 1996
Medarex, Inc.
1545 Route 22 East
Annandale, New Jersey 08801
Dear Sirs:
You have asked for our opinion in connection with a Registration
Statement on Form S-8 to be filed with the Securities and Exchange Commission
for registration pursuant to the Securities Act of 1933, as amended of 350,000
shares of common stock, par value $.01 per share, of Medarex, Inc. (the
"Company") reserved for issuance pursuant to the Company's 1996 Stock Option
Plan (the "Plan").
As counsel for the Company, we are familiar with the Plan, as amended
to date, and with the corporate proceedings relating thereto and to the
Registration Statement hereinabove referred to. Based on the foregoing, it is
our opinion that the shares reserved under the Plan, upon issuance on exercise
in accordance with the provisions of the stock option agreements evidencing
options granted thereunder, will be validly issued, fully paid and non-
assessable with no personal liability attaching to the ownership thereof under
the laws of the State of New Jersey.
We understand that a copy of this opinion will be filed as an exhibit
to the Registration Statement and we hereby consent to such filing.
SATTERLEE STEPHENS BURKE & BURKE LLP
<PAGE>
Exhibit No. 23(a)
Consent of Ernst & Young LLP
<PAGE>
Consent of Independent Auditors
-------------------------------
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-0000) pertaining to the 1996 Stock Option Plan of Medarex, Inc. of
our report dated February 2, 1996, with respect to the financial statements of
Medarex, Inc. included in its Annual Report (Form 10-K) for the year ended
December 31, 1995, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Princeton, New Jersey
November 12, 1996
