Exhibit 10.2

 

AMENDMENT TO CHANGE IN CONTROL AND SEVERANCE AGREEMENT

 

This Amendment to Change in Control and Severance Agreement (the “Amendment”) is
made and entered into by and between Endocyte, Inc., a Delaware corporation (the
“Company”), and              (“Employee”), effective          , 2018, to amend
the Change in Control and Severance Agreement (“Agreement”) made and entered
into effective as of          , 20  , by and between the Company and Employee. 
Capitalized terms used but not defined herein shall have the meanings set forth
in the Agreement.

 

1.                                      Section 5 of the Agreement is amended in
its entirety to read as follows:

 

5.                                      Excise Tax Gross-Up.

 

(a)                                 In the event it is determined that any
severance, payment or distribution by the Company to or for the benefit of
Employee (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 5 (“Payment” and, collectively,
the “Payments”)) would be subject to the excise tax imposed by Section 4999 of
the Code, or any interest or penalties are incurred by Employee with respect to
such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the “Excise Tax”), then Employee
shall be entitled to receive, except as provided in Section 5(c), an additional
payment (a “Gross-Up Payment”) in an amount such that after payment by Employee
of all taxes (including any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and any interest and
penalties imposed with respect thereto) and any Excise Tax imposed upon the
Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to
the Excise Tax imposed upon the Payments.

 

(b)                                 All determinations required to be made under
this Section 5, including whether and when a Gross-Up Payment is required, the
amount of such Gross-Up Payment, the calculation of any Overage Amount (as
defined in Section 5(c)), and the assumptions to be utilized in arriving at such
determinations, shall be made by the Company’s independent registered public
accounting firm, legal counsel or such other nationally recognized accounting
firm selected by the Company (the “Firm”).  Employee shall provide the Firm and
the Company with such information and documents as the Firm and the Company
shall reasonably request in order to make the determination pursuant to
Section 5.  The Firm may rely on reasonable, good faith assumptions and
approximations concerning the application of Section 4999 of the Code.  All fees
and expenses of the Firm shall be borne solely by the Company.  The initial

 

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Gross-Up Payment (if any), as determined pursuant to this Section 5 and except
as provided in Section 5(c), shall be paid by the Company to Employee or
remitted to the Internal Revenue Service, as applicable, within 30 days
following the date on which the Excise Tax is paid by Employee or withheld by
the Company.  Any determination by the Firm shall be binding upon the Company
and Employee.  As a result of the uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the Firm hereunder, it
is possible that Gross-Up Payments which will not have been made by the Company
should have been made (“Underpayment”) or that Gross-Up Payments which will have
been made should not have been made (“Overpayment”), consistent with the
calculations required to be made hereunder.  In such event, as soon as
practicable following the first anniversary of the Closing Date, the Firm shall
determine the amount of the Underpayment or Overpayment, as applicable and
subject to Section 5(c), that has occurred and (i) in the event of an
Underpayment, any such Underpayment shall be promptly paid by the Company to or
for the benefit of Employee and (ii) in the event of an Overpayment, Employee
shall repay to the Company an amount in cash equal to the Overpayment as soon as
practicable but no later than twenty (20) business days after Employee is
informed in writing of such Overpayment.  For the purposes of this section,
“Closing Date” shall have the meaning set forth in the Agreement and Plan of
Merger dated as of October 17, 2018, by and among Novartis AG, Edinburgh Merger
Corporation, and the Company.

 

(c)                                  Employee acknowledges and agrees that, in
no event shall the Gross-Up Payment payable to all employees of the Company
exceed $5,000,000 in the aggregate.  In the event that the sum of Employee’s
Gross-Up Payment and all gross-up payment obligations of the Company, whether
pursuant to this Agreement or otherwise (collectively, “All Gross-Up Payments”),
exceeds $5,000,000 (the “Payment Cap”), then the Gross-Up Payment to which
Employee is entitled under Section 5(a) shall be decreased by the Overage
Amount, as defined below.  The estimated amount of Employee’s Gross-Up Payment
and the estimated aggregate amount of All Gross-Up Payments are set forth on
Schedule A hereto.  The “Overage Amount” shall be calculated using the following
formula:

 

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If the Payment Cap is exceeded and Employee has already received the Gross-Up
Payment, then Employee shall repay the Company an amount in cash equal to the
Overage Amount as soon as practicable but no later than twenty (20) business
days after Employee is informed in writing of such Overage Amount.  In addition,
the Company shall have the power and the right to deduct or withhold from
amounts otherwise payable to Employee an amount equal to the Overage Amount. 
Notwithstanding Section 5(b), if

 

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the Payment Cap is exceeded prior to Employee receiving the Gross-Up Payment,
then the Gross-Up Payment to be paid to Employee by the Company shall be
decreased by the Overage Amount and shall be subject to the Company’s recovery
of Overage Amounts from other applicable employees.

 

2.                                      This Amendment, together with the
Agreement, represents the entire understanding and agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior oral
and written and all contemporaneous oral negotiations, commitments and
understandings between such parties.

 

3.                                      This Amendment may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute the same instrument.

 

4.                                      This Amendment may not be modified or
amended except by a written agreement duly executed by both parties hereto.

 

IN WITNESS WHEREOF, Employee and the Company have executed this Amendment,
intending it to be effective as of the date first written above.

 

COMPANY:

 

EMPLOYEE:

 

 

 

ENDOCYTE, INC.

 

 

 

 

 

By:

 

 

 

 

[Name]

 

[Name]

 

[Title]

 

 

 

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SCHEDULE A

 

Estimated Amount of Employee’s Gross-Up Payment: $[                    ]

 

Estimated Amount of All Gross-Up Payments: $[                    ]

 

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