Document:

exv10w2

Exhibit 10.2

Adopted effective 12/31/97

Amended 7/2/2001

Amended 2/19/2004

Amended 5/29/05

Amended 8/17/05

ENDOCYTE, INC.

1997 STOCK PLAN

     1. Purposes of the Plan. The purposes of this Stock Plan are to attract and retain the best
available personnel for positions of substantial responsibility, to provide additional incentive to
Employees, Directors and Consultants and to promote the success of the Company’s business. Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined
by the Administrator at the time of grant. Stock Purchase Rights may also be granted under the
Plan.

     2. Definitions. As used herein, the following definitions shall apply:

          (a) “Administrator” means the Board or any of its Committees as shall be administering the
Plan in accordance with Section 4 hereof. [Board designated itself to be the Administrator on
August 17, 2005.]

          (b) “Applicable Laws” means the requirements relating to the administration of stock option
plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock
exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws
of any foreign country or jurisdiction where Options or Stock Purchase Rights are granted under the
Plan.

          (c) “Board” means the Board of Directors of the Company.

          (d) “Code” means the Internal Revenue Code of 1986, as amended.

          (e) “Committee” means a committee of Directors appointed by the Board in accordance with
Section 4 hereof.

          (f) “Common Stock” means the common stock of the Company.

          (g) “Company” means Endocyte, Inc., an Indiana corporation.

          (h) “Consultant” means any person who is engaged by the Company or any Parent or Subsidiary
to render consulting or advisory services to such entity.

          (i) “Director” means a member of the Board.

          (j) “Employee” means any person, including officers and Directors, employed by the Company
or any Parent or Subsidiary of the Company. A Service Provider

 

 

shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations
of the Company or between the Company, its Parent, any Subsidiary, or any successor. For purposes
of Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of
a leave of absence approved by the Company is not so guaranteed, on the 181st day of such leave any
Incentive Stock Option held by the Optionee shall cease to be treated as an Incentive Stock Option
and shall be treated for tax purposes as a Nonstatutory Stock Option. Neither service as a
Director nor payment of a director’s fee by the Company shall be sufficient to constitute
“employment” by the Company.

          (k) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

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

               (i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq National Market or The Nasdaq Small Cap Market of
The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such exchange or system for the last
market trading day prior to the time of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;

               (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of determination; or

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

          (m) “Incentive Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code.

          (n) “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive
Stock Option.

          (o) “Option” means a stock option granted pursuant to the Plan.

          (p) “Option Agreement” means a written or electronic agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The Option Agreement
is subject to the terms and conditions of the Plan.

          (q) “Option Exchange Program” means a program under which (i) outstanding Options and/or Stock Purchase Rights are surrendered or cancelled in exchange for awards of the same type (which may
have higher or lower exercise prices and different terms), awards of a different type, and/or cash, (ii) Optionees would have the opportunity to transfer any outstanding Options and Stock Purchase Rights to a financial institution or other person or entity selected by the Administrator, and/or (iii) the exercise price of an outstanding award is increased or reduced. The Administrator will determine the terms and conditions of any Option Exchange Program in its sole discretion.

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          (r) “Optioned Stock” means the Common Stock subject to an Option or a Stock Purchase Right.

          (s) “Optionee” means the holder of an outstanding Option or Stock Purchase Right granted
under the Plan.

          (t) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in
Section 424(e) of the Code.

          (u) “Plan” means this 1997 Stock Plan.

          (v) “Restricted Stock” means shares of Common Stock acquired pursuant to a grant of a Stock
Purchase Right under Section 10 below.

          (w) “Service Provider” means an Employee, Director or Consultant.

          (x) “Share” means a share of the Common Stock, as adjusted in accordance with Section 12
below.

          (y) “Stock Purchase Right” means a right to purchase Common Stock pursuant to Section 10
below.

          (z) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as
defined in Section 424(f) of the Code.

     3. Stock Subject to the Plan. Subject to the provisions of Section 12 of the Plan, the maximum
aggregate number of Shares which may be subject to option and sold under the Plan is two million
(2,000,000) Shares. The Shares may be authorized but unissued, or reacquired, Common Stock.

     If an Option or Stock Purchase Right expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased Shares
which were subject thereto shall become available for future grant or sale under the Plan (unless
the Plan has terminated). However, Shares that have actually been issued under the Plan, upon
exercise of either an Option or Stock Purchase Right, shall not be returned to the Plan and shall
not become available for future distribution under the Plan, except that if Shares of Restricted
Stock are repurchased by the Company at their original purchase price, such Shares shall become
available for future grant under the Plan.

     4. Administration of the Plan.

          (a) The Plan shall be administered by the Board or a Committee appointed by the Board, which
Committee shall be constituted to comply with Applicable Laws.

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          (b) Powers of the Administrator. Subject to the provisions of the Plan and, in the case of
a Committee, the specific duties delegated by the Board to such Committee, and subject to the
approval of any relevant authorities, the Administrator shall have the authority in its discretion:

               (i) to determine the Fair Market Value;

               (ii) to select the Service Providers to whom Options and Stock Purchase Rights may from time
to time be granted hereunder;

               (iii) to determine the number of Shares to be covered by each such award granted hereunder;

               (iv) to approve forms of agreement for use under the Plan;

               (v) to determine the terms and conditions of any Option or Stock Purchase Right granted
hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time
or times when Options or Stock Purchase Rights may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or Stock Purchase Right of the Common Stock relating thereto, based
in each case on such factors as the Administrator, in its sole discretion, shall determine;

               (vi) to determine whether and under what circumstances an Option may be settled in cash under
Subsection 9(e) instead of Common Stock;

               (vii) to reduce the exercise price of any Option to the then current Fair Market Value if the
Fair Market Value of the Common Stock covered by such Option has declined since the date the Option
was granted;

               (viii) to initiate an Option Exchange Program;

               (ix) to prescribe, amend and rescind rules and regulations relating to the Plan, including
rules and regulations relating to sub-plans established for the purpose of qualifying for preferred
tax treatment under foreign tax laws;

               (x) to allow Optionees to satisfy withholding tax obligations by electing to have the Company
withhold from the Shares to be issued upon exercise of an Option or Stock Purchase Right that
number of Shares having a Fair Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined. All elections by Optionees to have Shares
withheld for this purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable; and

               (xi) to construe and interpret the terms of the Plan and awards granted pursuant to the Plan.

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          (c) Effect of Administrator’s Decision. All decisions, determinations and interpretations
of the Administrator shall be final and binding on all Optionees.

     5. Eligibility.

          (a) Nonstatutory Stock Options and Stock Purchase Rights may be granted to Service Providers.
Incentive Stock Options may be granted only to Employees.

          (b) Each Option shall be designated in the Option Agreement as either an Incentive Stock
Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent
that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by the Optionee during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted. The Fair Market Value of the Shares
shall be determined as of the time the Option with respect to such Shares is granted.

          (c) Neither the Plan nor any Option or Stock Purchase Right shall confer upon any Optionee any
right with respect to continuing the Optionee’s relationship as a Service Provider with the
Company, nor shall it interfere in any way with his or her right or the Company’s right to
terminate such relationship at any time, with or without cause.

     6. Term of Plan. Subject to Section 18 of the Plan, the Plan shall become effective upon its
adoption by the Board. It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 14 of the Plan.

     7. Term of Option. The term of each Option shall be stated in the Option Agreement; provided,
however, that the term shall be no more than ten (10) years from the date of grant thereof. In the
case of an Incentive Stock Option granted to an Optionee who, at the time the Option is granted,
owns stock representing more than ten percent (10%) of the voting power of all classes of stock of
the Company or any Parent or Subsidiary, the term of the Option shall be five (5) years from the
date of grant or such shorter term as may be provided in the Option Agreement.

     8. Option Exercise Price and Consideration.

          (a) The per share exercise price for the Shares to be issued upon exercise of an Option shall
be such price as is determined by the Administrator, but shall be subject to the following:

               (i) In the case of an Incentive Stock Option

                    (A) granted to an Employee who, at the time of grant of such Option, owns stock representing
more than ten percent (10%) of the voting power of all classes

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of stock of the Company or any Parent or Subsidiary, the exercise price shall be no less than one hundred ten percent (110%) of
the Fair Market Value per Share on the date of grant.

                    (B) granted to any other Employee, the per Share exercise price shall be no less than 100% of
the Fair Market Value per Share on the date of grant.

               (ii) In the case of a Nonstatutory Stock Option, the per Share exercise price shall be
determined by the Administrator.

               (iii) Notwithstanding the foregoing, Options may be granted with a per

Share exercise price other than as required above pursuant to a merger or other corporate
transaction.

          (b) The consideration to be paid for the Shares to be issued upon exercise of an Option,
including the method of payment, shall be determined by the Administrator (and, in the case of an
Incentive Stock Option, shall be determined at the time of grant). Such consideration may consist
of (1) cash, (2) check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more than six months on
the date of surrender, and (y) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which such Option shall be exercised, (5)
consideration received by the Company under a cashless exercise program implemented by the Company
in connection with the Plan, or (6) any combination of the foregoing methods of payment. In making
its determination as to the type of consideration to accept, the Administrator shall consider if
acceptance of such consideration may be reasonably expected to benefit the Company.

     9. Exercise of Option.

          (a) Procedure for Exercise: Rights as a Shareholder. Any Option granted hereunder shall be
exercisable according to the terms hereof at such times and under such conditions as determined by
the Administrator and set forth in the Option Agreement. Unless the Administrator provides
otherwise, vesting of Options granted hereunder shall be tolled during any unpaid leave of absence.
An Option may not be exercised for a fraction of a Share.

     An Option shall be deemed exercised when the Company receives: (i) written or electronic
notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise
the Option, and (ii) full payment for the Shares with respect to which the Option is exercised.
Full payment may consist of any consideration and method of payment authorized by the Administrator
and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall
be issued in the name of the Optionee or, if requested by the Optionee, in the name of the Optionee
and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company), no right to vote or
receive dividends or any other rights as a shareholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such
Shares promptly after the Option is exercised. No

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adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided
in Section 12 of the Plan.

     Exercise of an Option in any manner shall result in a decrease in the number of Shares
thereafter available, both for purposes of the Plan and for sale under the Option, by the number of
Shares as to which the Option is exercised.

          (b) Termination of Relationship as a Service Provider. If an Optionee ceases to be a
Service Provider, such Optionee may exercise his or her Option within such period of time as is
specified in the Option Agreement (of at least thirty (30) days) to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of the term of the
Option as set forth in the Option Agreement). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for three (3) months following the Optionee’s
termination. If, on the date of termination, the Optionee is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If,
after termination, the Optionee does not exercise his or her Option within the time specified by
the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.

          (c) Disability of Optionee. If an Optionee ceases to be a Service Provider as a result of
the Optionee’s total and permanent disability, as defined in Section 22(e)(3) of the Code, the
Optionee may exercise his or her Option within such period of time as is specified in the Option
Agreement to the extent the Option is vested on the date of termination (but in no event later than
the expiration of the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12)
months following the Optionee’s termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested portion of the Option
shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option
within the time specified herein, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.

          (d) Death of Optionee. If an Optionee dies while a Service Provider, the Option may be
exercised within such period of time as is specified in the Option Agreement (but in no event later
than the expiration of the term of such Option as set forth in the Option Agreement) by the
Optionee’s estate or by a person who acquires the right to exercise the Option by bequest or
inheritance, but only to the extent that the Option is vested on the date of death. In the absence
of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12)
months following the Optionee’s termination. If, at the time of death, the Optionee is not vested
as to his or her entire Option, the Shares covered by the unvested portion of the Option shall
immediately revert to the Plan. The Option may be exercised by the executor or administrator of
the Optionee’s estate or, if none, by the person(s) entitled to exercise the Option under the
Optionee’s will or the laws of descent or distribution. If the Option is not so exercised within
the time specified herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

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          (e) Buyout Provisions. The Administrator may at any time offer to buy out for a payment in
cash or Shares, an Option previously granted, based on such terms and conditions as the
Administrator shall establish and communicate to the Optionee at the time that such offer is made.

     10. Stock
Purchase Rights.

          (a) Rights to Purchase. Stock Purchase Rights may be issued either alone, in addition to,
or in tandem with other awards granted under the Plan and/or cash awards made outside of the Plan.
After the Administrator determines that it will offer Stock Purchase Rights under the Plan, it
shall advise the offeree in writing or electronically of the terms, conditions and restrictions
related to the offer, including the number of Shares that such person shall be entitled to
purchase, the price to be paid, and the time within which such person must accept such offer. The
offer shall be accepted by execution of a Restricted Stock purchase agreement in the form
determined by the Administrator.

          (b) Repurchase Option. Unless the Administrator determines otherwise, the Restricted Stock
purchase agreement shall grant the Company a repurchase option exercisable upon the voluntary or
involuntary termination of the purchaser’s service with the Company for any reason (including death
or disability). The purchase price for Shares repurchased pursuant to the Restricted Stock
purchase agreement shall be the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall
lapse at such rate as the Administrator may determine.

          (c) Other Provisions. The Restricted Stock purchase agreement shall contain such other
terms, provisions and conditions not inconsistent with the Plan as may be determined by the
Administrator in its sole discretion.

          (d) Rights as a Shareholder. Once the Stock Purchase Right is exercised, the purchaser
shall have rights equivalent to those of a shareholder and shall be a shareholder when his or her
purchase is entered upon the records of the duly authorized transfer agent of the Company. No
adjustment shall be made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 12 of the Plan.

     11. Non-Transferability of Options and Stock Purchase Rights. Unless determined otherwise by the
Administrator, Options and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee. If
the Administrator makes an Option or Stock Purchase Right transferable, such Option or Stock
Purchase Right shall contain such additional terms and conditions as the Administrator deems
appropriate.

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     12. Adjustments Upon Changes in Capitalization, Merger or Asset Sale.

          (a) Changes in Capitalization. Subject to any required action by the shareholders of the
Company, the number of shares of Common Stock covered by each outstanding Option or Stock Purchase
Right, and the number of shares of Common Stock which have been authorized for issuance under the
Plan but as to which no Options or Stock Purchase Rights have yet been granted
or which have been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each such outstanding
Option or Stock Purchase Right, shall be proportionately adjusted for any increase or decrease in
the number of issued shares of Common Stock resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt of consideration
by the Company. The conversion of any convertible securities of the Company shall not be deemed to
have been “effected without receipt of consideration.” Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares of Common Stock subject to an Option
or Stock Purchase Right.

          (b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of
the Company, the Administrator shall notify each Optionee as soon as practicable prior to the
effective date of such proposed transaction. The Administrator in its discretion may provide for
an Optionee to have the right to exercise his or her Option until fifteen (15) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as to which the
Option would not otherwise be exercisable. In addition, the Administrator may provide that any
Company repurchase option applicable to any Shares purchased upon exercise of an Option or Stock
Purchase Right shall lapse as to all such Shares, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated. To the extent it has not been previously
exercised, an Option or Stock Purchase Right will terminate immediately prior to the consummation
of such proposed action.

          (c) Merger or Asset Sale. In the event of a merger of the Company with or into another
corporation, or the sale of substantially all of the assets of the Company, each outstanding Option
and Stock Purchase Right shall be assumed or an equivalent option or right substituted by the
successor corporation or a Parent or Subsidiary of the successor corporation. In the event that
the successor corporation refuses to assume or substitute for the Option or Stock Purchase Right,
the Optionee shall fully vest in and have the right to exercise the Option or Stock Purchase Right
as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested or
exercisable. If an Option or Stock Purchase Right becomes fully vested and exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the Administrator shall
notify the Optionee in writing or electronically that the Option or Stock Purchase Right shall be
fully exercisable for a period of fifteen (15) days from the date of such notice, and the Option or
Stock Purchase Right shall terminate upon the expiration of such period. For the purposes of this
paragraph, the Option or Stock Purchase Right shall be

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considered assumed if, following the merger or sale of assets, the option or right confers the right to purchase or receive, for each Share of
Optioned Stock subject to the Option or Stock Purchase Right immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or property) received
in the merger or sale of assets by holders of Common Stock for each Share held on the effective
date of the transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares); provided, however,
that if such consideration received in the merger or sale of assets is not solely common stock of
the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of the Option or Stock Purchase Right, for each
Share of Optioned Stock subject to the Option or Stock Purchase Right, to be solely common stock of
the successor corporation or its Parent equal in fair market value to the per share consideration
received by holders of Common Stock in the merger or sale of assets.

          (d) Termination Following a Change of Control. Any outstanding option that is assumed
or replaced and does not otherwise accelerate following a merger or sale of assets described in
subsection (c) above, will automatically accelerate in the event the optionee’s service terminates
through an “Involuntary Termination” effected within eighteen (18) months following the effective
date of the merger or sale of assets. Any option so accelerated will remain exercisable until the
earlier of (i) the expiration of the option term or (ii) the end of the one-year period measured
from the date of the Involuntary Termination. An Involuntary Termination will be deemed to occur
upon (i) the optionee’s involuntary dismissal or discharge by the Company or its successor for
reasons other than “cause” or (ii) such individual’s voluntary resignation following (A) a change
in his or her position with the Company which materially reduces his or her level of
responsibility, (B) a reduction in his or her level of compensation (including base salary, fringe
benefits and any corporate-performance based bonus or incentive programs) by more than ten percent
or (C) a relocation of such individual’s place of employment by more than fifty (50) miles,
provided and only if such change, reduction or relocation is effected by the Company or its
successor without the optionee’s prior written consent. [Added August 17, 2005.]

     13. Time of Granting Options and Stock Purchase Rights. The date of grant of an Option or Stock
Purchase Right shall, for all purposes, be the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other date as is determined by
the Administrator. Notice of the determination shall be given to each Service Provider to whom an
Option or Stock Purchase Right is so granted within a reasonable time after the date of such grant.

     14. Amendment and Termination of the Plan.

          (a) Amendment and Termination. The Board may at any time amend, alter, suspend or
terminate the Plan.

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          (b) Shareholder Approval. The Board shall obtain shareholder approval of any Plan
amendment to the extent necessary and desirable to comply with Applicable Laws.

          (c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan shall impair the rights of any Optionee, unless mutually agreed otherwise
between the Optionee and the Administrator, which agreement must be in writing and signed by the
Optionee and the Company. Termination of the Plan shall not affect the Administrator’s ability to
exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to
the date of such termination.

     15. Conditions
Upon Issuance of Shares.

          (a) Legal Compliance. Shares shall not be issued pursuant to the exercise of an Option
unless the exercise of such Option and the issuance and delivery of such Shares shall comply with
Applicable Laws and shall be further subject to the approval of counsel for the Company with
respect to such compliance.

          (b) Investment Representations. As a condition to the exercise of an Option, the
Administrator may require the person exercising such Option to represent and warrant at the time of
any such exercise that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

     16. Inability to Obtain Authority. The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

     17. Reservation of Shares. The Company, during the term of this Plan, shall at all times reserve
and keep available such number of Shares as shall be sufficient to satisfy the requirements of the
Plan.

     18. Shareholder Approval. The Plan shall be subject to approval by the shareholders of the Company
within twelve (12) months after the date the Plan is adopted. Such shareholder approval shall be
obtained in the degree and manner required under Applicable Laws.

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ENDOCYTE, INC.

1997 STOCK PLAN

STOCK OPTION GRANT AGREEMENT

     Unless otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Option Agreement, dated [___].

I. NOTICE OF GRANT

     Optionee [___]

     The undersigned Optionee has been granted an Option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as follows:

	 	 	 	 	 

	Grant Number
	 	 	[_____]	 
	 
	 	 	 	 
	Date of Grant
	 	 	[_____]	 
	 
	 	 	 	 
	Vesting Commencement Date
	 	 	[_____]	 
	 
	 	 	 	 
	Exercise Price per Share
	 	$	[_____]	 
	 
	 	 	 	 
	Total Number of Shares Granted
	 	 	[_____]	 
	 
	 	 	 	 
	Total Exercise Price
	 	$	[_____]	 
	 
	 	 	 	 
	Type of Option:
	 	_____ Incentive Stock Option
	 
	 	 	 	 
	 
	 	_____ Nonstatutory Stock Option
	 
	 	 	 	 
	Term/Expiration Date:
	 	10 years / [_____]

     Vesting Schedule:

     This Option shall be exercisable, in whole or in part, according to the following vesting
schedule, with any fractions being rounded down to the nearest whole number and made up in the last
month of vesting:

	 	___ 	 	One-half of these options shall vest at the end of the
Grantee’s 24th full month of employment and
1/24th of the remaining options will vest each month as
the Grantee completes his or her 25th through
48th months of service, or
	 
	 	___ 	 	1/48th these options shall vest
at the end of the current month and 1/48th shall vest at
the end of each of the next 47 months, provided, however, that if
the Optionee has not been employed for 24 full months, then no
options shall vest until the Optionee has completed 24 full months
of service and any options that would have vested, but for this
limitation, shall accrue and vest in a lump sum when the Optionee
has completed 24 full months of service, or
	 
	 	___ 	 	___options shall vest on ___, 20___and the rest
of the options shall vest at the rate of ___ per month on the last day
of each of the next ___months.

     Termination Period:

     This Option shall be exercisable for thirty (30) days after Optionee ceases to be a Service
Provider. Upon Optionee’s death or Disability, this Option may be exercised for one year after
Optionee ceases to be a Service Provider. In no event may Optionee exercise this Option after the
Term/Expiration Date as provided above.

 

 

II. AGREEMENT

     (1) Grant of Option. The Company hereby grants to the Optionee named in the Notice of
Grant (the “Optionee”), an option (the “Option”) to purchase the number of Shares set forth in the
Notice of Grant, at the exercise price per Share set forth in the Notice of Grant (the “Exercise
Price”), and subject to the terms and conditions of the Plan, which is incorporated herein by
reference. Subject to Section 14(c) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and this Option Agreement, the terms and conditions of the Plan shall
prevail.

     If designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this Option is
intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code.
Nevertheless, to the extent that it exceeds the $100,000 rule of Code Section 422(d), this Option
shall be treated as a Nonstatutory Stock Option (“NSO”).

     2. Exercise of Option.

     (a) Right to Exercise. This Option shall be exercisable during its term in accordance
with the Vesting Schedule set out in the Notice of Grant and with the applicable provisions of the
Plan and this Option Agreement.

     (b) Method of Exercise. This Option shall be exercisable by delivery of an exercise
notice (the “Exercise Notice”) which shall state the election to exercise the Option, the number of
Shares with respect to which the Option is being exercised, and such other representations and
agreements as may be required by the Company. The Exercise Notice shall be accompanied by payment
of the aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed to be
exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by the
aggregate Exercise Price.

     No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such
exercise complies with Applicable Laws. Assuming such compliance, for income tax purposes the
Shares shall be considered transferred to the Optionee on the date on which the Option is exercised
with respect to such Shares.

     3. Optionee’s Representations. In the event the Shares have not been registered
under the Securities Act of 1933, as amended, at the time this Option is exercised, the Optionee
shall, if required by the Company, concurrently with the exercise of all or any portion of this
Option, deliver to the Company an Investment Representation Statement in a form reasonably
acceptable to the Plan Administrator.

     4. Lock-Up Period. Optionee hereby agrees that, if so requested by the Company or
any representative of the underwriters (the “Managing Underwriter”) in connection with any
registration of the offering of any securities of the Company under the Securities Act, Optionee
shall not sell or otherwise transfer any Shares or other securities of the Company during the
180-day period (or such other period as may be requested in writing by the Managing Underwriter and
agreed to in writing by the Company) (the “Market Standoff Period”) following the effective date of
a registration statement of the Company filed under the Securities Act. Such restriction shall
apply only to the first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to the public in an
underwritten public offering under the Securities Act. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions until the end of such
Market Standoff Period.

     5. Method of Payment. Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee:

     (a) cash or check;

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     (b) consideration received by the Company under a formal cashless exercise program adopted by
the Company in connection with the Plan;

     (c) surrender of other Shares which, (i) in the case of Shares acquired upon exercise of an
option, have been owned by the Optionee for more than six (6) months on the date of surrender, and
(ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the
Exercised Shares; or

     (d) with the Administrator’s consent, delivery of Optionee’s promissory note (the “Note”) in
a form reasonably provided by the Plan Administrator, in the amount of the aggregate Exercise Price
of the Exercised Shares together with the execution and delivery by the Optionee of a Security
Agreement in a form reasonably provided by the Plan Administrator. The Note shall bear interest at
the “applicable federal rate” prescribed under the Code and its regulations at time of purchase,
and shall be secured by a pledge of the Shares purchased by the Note pursuant to the Security
Agreement.

     6. Restrictions on Exercise. This Option may not be exercised until such time as the
Plan has been approved by the shareholders of the Company, or if the issuance of such Shares upon
such exercise or the method of payment of consideration for such shares would constitute a
violation of any Applicable Law.

     7. Non-Transferability of Option. This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be exercised during the
lifetime of Optionee only by Optionee. The terms of the Plan and this Option Agreement shall be
binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

     8. Term of Option. This Option may be exercised only within the term set out in the
Notice of Grant, and may be exercised during such term only in accordance with the Plan and the
terms of this Option.

     9. Tax Consequences. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES.

III. OWNERSHIP OF SHARES

     10. Company’s Right of First Refusal. Before any Shares held by Optionee or any
transferee (either being sometimes referred to herein as the “Holder”) may be sold or otherwise
transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall
have a right of first refusal to purchase the Shares on the terms and conditions set forth in this
Section (the “Right of First Refusal”).

     (a) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the
Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to sell or
otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee
(“Proposed Transferee”); (iii) the number of Shares to be transferred to each Proposed Transferee;
and (iv) the bona fide cash price or other consideration for which the Holder proposes to transfer
the Shares (the “Offered Price”), and the Holder shall offer the Shares at the Offered Price to the
Company or its assignee(s).

     (b) Exercise of Right of First Refusal. At any time within thirty (30) days after
receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the
Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to
any one or more of the Proposed Transferees, at the purchase price determined in accordance with
subsection (c) below.

     (c) Purchase Price. The purchase price (“Purchase Price”) for the Shares purchased
by the Company or its assignee(s) under this Section shall be the Offered Price. If the Offered
Price includes consideration other than cash, the cash equivalent value of the non-cash
consideration shall be determined by the Board of Directors of the Company in good faith.

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     (d) Payment. Payment of the Purchase Price shall be made, at the option of the
Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any
outstanding indebtedness of the Holder to the Company (or, in the case of repurchase by an
assignee, to the assignee), or by any combination thereof within 30 days after receipt of the
Notice or in the manner and at the times set forth in the Notice.

     (e) Holder’s Right to Transfer. If all of the Shares proposed in the Notice to be
transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s)
as provided in this Section, then the Holder may sell or otherwise transfer such Shares to that
Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within 120 days after the date of the Notice, that any such sale or other
transfer is effected in accordance with any applicable securities laws and that the Proposed
Transferee agrees in writing that the provisions of this Section shall continue to apply to the
Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not
transferred to the Proposed Transferee within such period, a new Notice shall be given to the
Company, and the Company and/or its assignees shall again be offered the Right of First Refusal
before any Shares held by the Holder may be sold or otherwise transferred.

     (f) Exception for Certain Family Transfers. Anything to the contrary contained in
this Section notwithstanding, the transfer of any or all of the Shares during the Optionee’s
lifetime or on the Optionee’s death by will or intestacy to the Optionee’s immediate family or a
trust for the benefit of the Optionee’s immediate family shall be exempt from the provisions of
this Section. “Immediate Family” as used herein shall mean spouse, lineal descendant or
antecedent, father, mother, brother or sister. In such case, the transferee or other recipient
shall receive and hold the Shares so transferred subject to the provisions of this Section, and
there shall be no further transfer of such Shares except in accordance with the terms of this
Section.

     (g) Termination of Right of First Refusal. The Right of First Refusal shall
terminate as to any Shares upon the first sale of Common Stock of the Company to the general public
pursuant to a registration statement filed with and declared effective by the Securities and
Exchange Commission under the Securities Act of 1933, as amended.

     11. Restrictive Legends and Stop-Transfer Orders.

          (a) Legends. The Company shall cause the legends set forth below or legends substantially
equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Shares
together with any other legends that may be required by the Company or by state or federal
securities laws:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COMPANY COUNSEL
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD
BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE OPTION
AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE
SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF
THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL
ARE BINDING ON TRANSFEREES OF THESE SHARES.

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     (b) Stop-Transfer Notices. In order to ensure compliance with the
restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to
its transfer agent, if any, and, if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.

     (c) Refusal to Transfer. The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of any of the provisions
of this Agreement or (ii) to treat as owner of such Shares or to
accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so
transferred.

IV. OTHER TERMS

     12. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter hereof, and may not be
modified adversely to the Optionee’s interest except by means of a writing signed by the Company
and Optionee. This agreement is governed by the internal substantive laws but not the choice of
law rules of Indiana.

     13. No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE
PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION
OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN
EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD,
FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE
COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.

     14. Optionee acknowledges receipt of a copy of the Plan and represents that he or she is
familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of
the terms and provisions thereof. Optionee has reviewed the Plan and this Option in their
entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and
fully understands all provisions of the Option. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon any questions
arising under the Plan or this Option. Optionee further agrees to notify the Company upon any
change in the Optionee’s residence address.

	 	 	 	 	 
	OPTIONEE 	ENDOCYTE, INC.

 	 
	
	By:  	 	 
	
	 	P. Ron Ellis, President and 	 
	 	 	Chief Executive Officer 	 

-5-exv10w3

	 	 	 	 	 

Exhibit 10.3

Adopted effective: 2/1/07

Amended: 2/12/08

Amended: 3/5/09

Amended: 2/11/10

ENDOCYTE, INC.

2007 STOCK PLAN

     1. Purposes of the Plan. The purposes of this Plan are to attract and retain the best
available personnel for positions of substantial responsibility, to provide additional incentive to
Employees, Directors and Consultants and to promote the success of the Company’s business. Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined
by the Administrator at the time of grant. Stock Purchase Rights may also be granted under the
Plan.

     2. Definitions. As used herein, the following definitions shall apply:

          (a) “Administrator” means the Board or any of its Committees as shall be administering the
Plan in accordance with Section 4 hereof.

          (b) “Applicable Laws” means the requirements relating to the administration of stock option
plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock
exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws
of any foreign country or jurisdiction where Options or Stock Purchase Rights are granted under the
Plan.

          (c) “Board” means the Board of Directors of the Company.

          (d) “Code” means the Internal Revenue Code of 1986, as amended.

          (e) “Committee” means a committee of Directors appointed by the Board in accordance with
Section 4 hereof.

          (f) “Common Stock” means the common stock of the Company.

          (g) “Company” means Endocyte, Inc., an Indiana corporation.

          (h) “Consultant” means any person who is engaged by the Company or any Parent or Subsidiary
to render consulting or advisory services to such entity.

          (i) “Director” means a member of the Board.

          (j) “Employee” means any person, including officers and Directors, employed by the Company
or any Parent or Subsidiary of the Company. A Service Provider shall not cease to be an Employee
in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations
of the Company or between the Company, its Parent, any Subsidiary, or any successor. For purposes
of Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of
a leave of absence approved by the Company is not so guaranteed, on the 181st day of such leave any
Incentive Stock Option held by the Optionee shall cease to be treated as an Incentive Stock Option
and

 

 

shall be treated for tax purposes as a Nonstatutory Stock Option. Neither service as a
Director
nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by
the Company.

          (k) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          (kk) “Exchange Program” means a program under which (i)
outstanding Options and/or Stock Purchase Rights are surrendered or cancelled in
exchange for awards of the same type (which may have higher or lower exercise prices
and different terms), awards of a different type, and/or cash, (ii) Optionees would have
the opportunity to transfer any outstanding Options and Stock Purchase Rights to a
financial institution or other person or entity selected by the Administrator, and/or (iii)
the exercise price of an outstanding award is increased or reduced.
The Administrator will determine the terms and conditions of any Exchange Program in its sole discretion.

          (l) “Fair Market Value” means, as of any date, the value of Common Stock determined by the
Administrator in good faith by the reasonable application of a reasonable valuation method that
meets the standards set forth in Section 409A of the Code or Section 422 of the Code, as
applicable.

          (m) “Incentive Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code.

          (n) “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive
Stock Option.

          (o) “Option” means a stock option granted pursuant to the Plan.

          (p) “Option Agreement” means a written or electronic agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The Option Agreement
is subject to the terms and conditions of the Plan.

          (q) “Optioned Stock” means the Common Stock subject to an Option or a Stock Purchase Right.

          (r) “Optionee” means the holder of an outstanding Option or Stock Purchase Right granted
under the Plan.

          (s) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in
Section 424(e) of the Code.

          (t) “Plan” means this 2007 Stock Plan.

          (u) “Restricted Stock” means shares of Common Stock acquired pursuant to a grant of a Stock
Purchase Right under Section 10 below.

          (v) “Service Provider” means an Employee, Director or Consultant.

          (w) “Share” means a share of the Common Stock, as adjusted in accordance with Section 12
below.

          (x) “Stock Purchase Right” means a right to purchase Common Stock pursuant to Section 10
below.

          (y) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as
defined in Section 424(f) of the Code.

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     3. Stock Subject to the Plan. Subject to the provisions of Section 12 of the Plan, the
maximum aggregate number of Shares which may be subject to Incentive Stock Options,
Nonstatutory Stock Options and sold pursuant to Stock Purchase Rights under the Plan is three
million three hundred five thousand thirty-six (3,305,036) Shares. The Shares may be authorized
but unissued, or reacquired, Common Stock.

     If an Option or Stock Purchase Right expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto shall become available for
future grant or sale under the Plan (unless the Plan has terminated). However, Shares that have
actually been issued under the Plan, upon exercise of either an Option or Stock Purchase Right,
shall not be returned to the Plan and shall not become available for future distribution under the
Plan.

     4. Administration of the Plan.

          (a) Administrator. The Plan shall be administered by the Board or a Committee appointed by
the Board, which Committee shall be constituted to comply with Applicable Laws.

          (b) Powers of the Administrator. Subject to the provisions of the Plan and, in the case of
a Committee, the specific duties delegated by the Board to such Committee, and subject to the
approval of any relevant authorities, the Administrator shall have the authority in its discretion:

               (i) to determine the Fair Market Value;

               (ii) to select the Service Providers to whom Options and Stock Purchase Rights may from time
to time be granted hereunder;

               (iii) to determine the number of Shares to be covered by each such award granted hereunder;

               (iv) to approve forms of agreement for use under this Plan;

               (v) to determine the terms and conditions of any Option or Stock Purchase Right granted
hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time
or times when Options or Stock Purchase Rights may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or Stock Purchase Right of the Common Stock relating thereto, based
in each case on such factors as the Administrator, in its sole discretion, shall determine;

               (vi) to determine whether and under what circumstances an Option may be settled in cash under
Subsection 9(e) instead of Common Stock;

               (vii) to prescribe, amend and rescind rules and regulations relating to the Plan, including
rules and regulations relating to sub-plans established for the purpose of qualifying for preferred
tax treatment under foreign tax laws;

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               (viii) to allow Optionees to satisfy withholding tax obligations by electing to have the
Company withhold from the Shares to be issued upon exercise of an Option or Stock Purchase Right
that number of Shares having a Fair Market Value equal to the amount required to be withheld. The
Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of
tax to be withheld is to be determined. All elections by Optionees to have Shares withheld for
this purpose shall be made in such form and under such conditions as the Administrator may deem
necessary or advisable; and

               (ix) to construe and interpret the terms of the Plan and awards granted pursuant to the Plan.

          (c) Effect of Administrator’s Decision. All decisions, determinations and interpretations
of the Administrator shall be final and binding on all Optionees.

     5. Eligibility.

          (a) Nonstatutory Stock Options and Stock Purchase Rights may be granted to Service Providers.
Incentive Stock Options may be granted only to Employees and all Employees are eligible to receive
Incentive Stock Options.

          (b) Each Option shall be designated in the Option Agreement as either an Incentive Stock
Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent
that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by the Optionee during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted. The Fair Market Value of the Shares
shall be determined as of the time the Option with respect to such Shares is granted.

          (c) Neither the Plan nor any Option or Stock Purchase Right shall be a contract for employment
or otherwise confer upon any Optionee any right with respect to continuing the Optionee’s
relationship as a Service Provider with the Company, nor shall it interfere in any way with his or
her right or the Company’s right to terminate such relationship at any time, with or without cause.

     6. Term of Plan. Subject to Section 18 of the Plan, the Plan shall become effective
beginning the earlier of its adoption by the Board or its approval by the shareholders of the
Company. It shall continue in effect for a term of ten (10) years unless sooner terminated under
Section 14 of the Plan.

     7. Term of Option. The term of each Option shall be stated in the Option Agreement;
provided, however, that the term of an Incentive Stock Option shall be no more than ten (10) years
from the date of grant thereof. In the case of an Incentive Stock Option granted to an Optionee
who, immediately prior to the time the Option is granted, owns stock representing more than ten
percent (10%) of the total combined voting power of all classes of stock of the Company or any
Parent or Subsidiary, the term of the Option shall be five (5) years from the date of grant or such
shorter term as may be provided in the Option Agreement.

-4-

 

     8. Option Exercise Price and Consideration.

          (a) The per share exercise price for the Shares to be issued upon exercise of an Option shall
be such price as is determined by the Administrator, but shall be subject to the following:

               (i) In the case of an Incentive Stock Option

                    (A) granted to an Employee who, immediately prior to the time of grant of such Option, owns
stock representing more than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary, the exercise price shall be no less than one
hundred ten percent (110%) of the Fair Market Value per Share on the date of grant.

                    (B) granted to any other Employee, the per Share exercise price shall be no less than one
hundred percent (100%) of the Fair Market Value per Share on the date of grant.

               (ii) In the case of a Nonstatutory Stock Option, the per Share exercise price shall be no less
than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

          (b) The consideration to be paid for the Shares to be issued upon exercise of an Option,
including the method of payment, shall be determined by the Administrator (and, in the case of an
Incentive Stock Option, shall be determined at the time of grant). Such consideration may consist
of (1) cash, (2) check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more than six months on
the date of surrender, and (y) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which such Option shall be exercised, (5)
consideration received by the Company under a cashless exercise program implemented by the Company
in connection with the Plan, or (6) any combination of the foregoing methods of payment. In making
its determination as to the type of consideration to accept, the Administrator shall consider if
acceptance of such consideration may be reasonably expected to benefit the Company.

     9. Exercise of Option.

          (a) Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder shall be
exercisable according to the terms hereof at such times and under such conditions as determined by
the Administrator and set forth in the Option Agreement. Unless the Administrator provides
otherwise, vesting of Options granted hereunder shall be tolled during any unpaid leave of absence.
An Option may not be exercised for a fraction of a Share.

     An Option shall be deemed exercised when the Company receives: (i) written or electronic
notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise
the Option, and (ii) full payment for the Shares with respect to which the Option is exercised.
Full payment may consist of any consideration and method of payment authorized by the Administrator
and permitted by the Option Agreement and the Plan. Shares issued upon

-5-

 

exercise of an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the Shares are issued (as
evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights as a shareholder
shall exist with respect to the Shares, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date is prior to the
date the Shares are issued, except as provided in Section 12 of the Plan.

     Exercise of an Option in any manner shall result in a decrease in the number of Shares
thereafter available, both for purposes of the Plan and for sale under the Option, by the number of
Shares as to which the Option is exercised.

          (b) Termination of Relationship as a Service Provider. If an Optionee ceases to be a
Service Provider, such Optionee may exercise his or her Option within such period of time as is
specified in the Option Agreement (of at least thirty (30) days) to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of the term of the
Option as set forth in the Option Agreement). In the absence of a specified time in the Option
Agreement the Option shall remain exercisable for three (3) months following the Optionee’s
termination. If, on the date of termination, the Optionee is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If,
after termination, the Optionee does not exercise his or her Option within the time specified by
the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.

          (c) Disability of Optionee. If an Optionee ceases to be a Service Provider as a result of
the Optionee’s total and permanent disability, as defined in Section 22(e)(3) of the Code, the
Optionee may exercise his or her Option within such period of time as is specified in the Option
Agreement to the extent the Option is vested on the date of termination (but in no event later than
the expiration of the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, or in the case of an Incentive Stock Option, the Option
shall remain exercisable for twelve (12) months following the Optionee’s termination due to total
and permanent disability. If, on the date of termination, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option shall revert to the
Plan. If, after termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.

          (d) Death of Optionee. If an Optionee dies while a Service Provider, the Option may be
exercised within such period of time as is specified in the Option Agreement (but in no event later
than the expiration of the term of such Option as set forth in the Option Agreement) by the
Optionee’s estate or by a person who acquires the right to exercise the Option by bequest or
inheritance, but only to the extent that the Option is vested on the date of death. In the absence
of a specified time in the Option Agreement, or in the case of an Incentive Stock Option, the
Option shall remain exercisable for twelve (12) months following the Optionee’s termination due to
death. If, at the time of death, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall immediately revert to the

-6-

 

Plan. The Option may be exercised by the executor or administrator of the Optionee’s estate or, if
none, by the person(s) entitled to exercise the Option under the Optionee’s will or the laws of
descent or distribution. If the Option is not so exercised within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

     10. Stock Purchase Rights.

          (a) Rights to Purchase. Stock Purchase Rights may be issued either alone, in addition to,
or in tandem with other awards granted under the Plan and/or cash awards made outside of the Plan.
After the Administrator determines that it will offer Stock Purchase Rights under the Plan, it
shall advise the offeree in writing or electronically of the terms, conditions and restrictions
related to the offer, including the number of Shares that such person shall be entitled to
purchase, the price to be paid (which shall be no less than one hundred percent (100%) of the Fair
Market Value per Share on the date of grant), and the time within which such person must accept
such offer. The offer shall be accepted by execution of a Restricted Stock purchase agreement in
the form determined by the Administrator.

          (b) Repurchase Option. Unless the Administrator determines otherwise, the Restricted Stock
purchase agreement shall grant the Company a repurchase option exercisable at any time after the
voluntary or involuntary termination of the purchaser’s service with the Company for any reason
(including death or disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the purchaser and may be
paid by cancellation of any indebtedness of the purchaser to the Company. The repurchase option
shall lapse at such rate as the Administrator may determine.

          (c) Other Provisions. The Restricted Stock purchase agreement shall contain such other
terms, provisions and conditions not inconsistent with the Plan as may be determined by the
Administrator in its sole discretion.

          (d) Rights as a Shareholder. Once the Stock Purchase Right is exercised, the purchaser
shall have rights equivalent to those of a shareholder and shall be a shareholder when his or her
purchase is entered upon the records of the duly authorized transfer agent of the Company. No
adjustment shall be made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 12 of the Plan.

     11. Non-Transferability of Options and Stock Purchase Rights. Incentive Stock Options may
not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than
by the laws of descent and distribution and may be exercised during the lifetime of the Optionee
only by the Optionee. Unless determined otherwise by the Administrator, Nonstatutory Stock Options
and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the Administrator makes a
Nonstatutory Stock Option or Stock Purchase Right transferable, such Nonstatutory Stock Option or
Stock Purchase Right shall contain such additional terms and conditions as the Administrator deems
appropriate.

-7-

 

     12. Adjustments Upon Changes in Capitalization, Merger or Asset Sale.

          (a) Changes in Capitalization. Subject to any required action by the shareholders of the
Company, the number of shares of Common Stock covered by each outstanding Option or Stock Purchase
Right, and the number of shares of Common Stock which have been authorized for issuance under the
Plan but as to which no Options or Stock Purchase Rights have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option or Stock Purchase Right, as well
as the price per share of Common Stock covered by each such outstanding Option or Stock Purchase
Right, shall be proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of consideration by the Company.
The conversion of any convertible securities of the Company shall not be deemed to have been
“effected without receipt of consideration.” Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option or Stock Purchase
Right.

          (b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of
the Company, the Administrator shall notify each Optionee as soon as practicable prior to the
effective date of such proposed transaction. The Administrator in its discretion may provide for
an Optionee to have the right to exercise his or her Option until fifteen (15) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as to which the
Option would not otherwise be exercisable. In addition, the Administrator may provide that any
Company repurchase option applicable to any Shares purchased upon exercise of an Option or Stock
Purchase Right shall lapse as to all such Shares, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated. To the extent it has not been previously
exercised, an Option or Stock Purchase Right will terminate immediately prior to the consummation
of such proposed action.

          (c) Merger or Asset Sale. In the event of a merger of the Company with or into another
corporation, or the sale of substantially all of the assets of the Company, each outstanding Option
and Stock Purchase Right shall be assumed or an equivalent option or right substituted by the
successor corporation or a Parent or Subsidiary of the successor corporation. In the event that
the successor corporation refuses to assume or substitute for the Option or Stock Purchase Right,
the Optionee shall fully vest in and have the right to exercise the Option or Stock Purchase Right
as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested or
exercisable. If an Option or Stock Purchase Right becomes fully vested and exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the Administrator shall
notify the Optionee in writing or electronically that the Option or Stock Purchase Right shall be
fully exercisable for a period of fifteen (15) days from the date of such notice, and the Option or
Stock Purchase Right shall terminate upon the expiration of such period. For the purposes of this
paragraph, the Option or Stock Purchase Right shall be considered assumed if, following the merger
or sale of assets, the option or right confers the right to purchase or receive, for each Share of
Optioned Stock subject to the Option or Stock Purchase

-8-

 

Right immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or
other securities or property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the merger or sale of assets is
not solely common stock of the successor corporation or its Parent, the Administrator may, with the
consent of the successor corporation, provide for the consideration to be received upon the
exercise of the Option or Stock Purchase Right, for each Share of Optioned Stock subject to the
Option or Stock Purchase Right, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by holders of Common
Stock in the merger or sale of assets.

          (d) Termination Following a Change of Control. Any outstanding option that is assumed
or replaced and does not otherwise accelerate following a merger or sale of assets described in
subsection (c) above, will automatically accelerate in the event the Optionee’s service terminates
through an Involuntary Termination effected within eighteen (18) months following the effective
date of the merger or sale of assets. Any option so accelerated will remain exercisable until the
earlier of (i) the expiration of the option term or (ii) the end of the one-year period measured
from the date of the Involuntary Termination. An “Involuntary Termination” will be deemed to occur
upon (i) the optionee’s involuntary dismissal or discharge by the Company or its successor for
reasons other than “cause” or (ii) such individual’s voluntary resignation following (A) a change
in his or her position with the Company which materially reduces his or her level of
responsibility, (B) a reduction in his or her level of compensation (including base salary, fringe
benefits and any corporate-performance based bonus or incentive programs) by more than ten percent
or (C) a relocation of such individual’s place of employment by more than fifty (50) miles,
provided and only if such change, reduction or relocation is effected by the Company or its
successor without the optionee’s prior written consent.

     13. Time of Granting Options and Stock Purchase Rights. The date of grant of an Option or
Stock Purchase Right shall, for all purposes, be the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other date as is determined by
the Administrator. Notice of the determination shall be given to each Service Provider to whom an
Option or Stock Purchase Right is so granted within a reasonable time after the date of such grant.

     14. Amendment and Termination of the Plan.

          (a) Amendment and Termination. The Board may at any time amend, alter, suspend or
terminate the Plan.

          (b) Shareholder Approval. The Board shall obtain shareholder approval of any Plan
amendment to the extent necessary and desirable to comply with Applicable Laws.

          (c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan shall impair the rights of any Optionee, unless mutually agreed otherwise
between the Optionee and the Administrator, which agreement must be in writing and signed by the
Optionee and the Company. Termination of the Plan shall not affect

-9-

 

the Administrator’s ability to exercise the powers granted to it hereunder with respect to Options
granted under the Plan prior to the date of such termination.

     15. Conditions Upon Issuance of Shares.

          (a) Legal Compliance. Shares shall not be issued pursuant to the exercise of an Option
unless the exercise of such Option and the issuance and delivery of such Shares shall comply with
Applicable Laws and shall be further subject to the approval of counsel for the Company with
respect to such compliance.

          (b) Investment Representations. As a condition to the exercise of an Option, the
Administrator may require the person exercising such Option to represent and warrant at the time of
any such exercise that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares.

     16. Inability to Obtain Authority. The inability of the Company to obtain authority from
any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

     17. Reservation of Shares. The Company, during the term of this Plan, shall at all times
reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements
of the Plan.

     18. Shareholder Approval. The Plan shall be subject to approval by the shareholders of the
Company within twelve (12) months after the date the Plan is adopted. Such shareholder approval
shall be obtained in the degree and manner required under Applicable Laws.

     19. Unfunded. This Plan is intended to be an unfunded plan for incentive compensation.
With respect to any payments not yet made to an Optionee, nothing contained in this Plan or any
award agreement shall give the Optionee any rights greater than that of a general unsecured
creditor of the Company.

-10-

 

ENDOCYTE, INC.

2007 STOCK PLAN

STOCK OPTION GRANT AGREEMENT

     Unless otherwise defined herein, the terms defined in the Endocyte, Inc. 2007 Stock Plan,
as amended from time to time (the “Plan”), shall have the same defined meanings in this Option
Agreement, dated [___].

I. NOTICE OF GRANT

     Optionee [___]

     The undersigned Optionee has been granted an Option to purchase Common Stock of the
Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows:

	 	 	 	 	 

	 
	 	Grant Number	 	[_____]-07
	 
	 
	 	Date of Grant	 	[_____]
	 
	 
	 	Vesting Commencement Date	 	[_____]
	 
	 
	 	Exercise Price per Share	 	$[_____]
	 
	 
	 	Total Number of Shares Granted	 	[_____]
	 
	 
	 	Total Exercise Price	 	$[_____]
	 
	 
	 	Type of Option:	 	_____ Incentive Stock Option
	 
	 
	 	 	 	_____ Nonstatutory Stock Option
	 
	 
	 	Term/Expiration Date:	 	10 years / [_____]

     Vesting Schedule:

     This Option shall be exercisable, in whole or in part, according to the following vesting
schedule, with any fractions being rounded down to the nearest whole number and made up in the last
month of vesting:

	 	_____	 	One-half of these options shall vest at the end of the Grantee’s
24th full month of employment and 1/24th of the remaining options
will vest each month as the Grantee completes his or her 25th through
48th months of service, or
	 
	 	_____	 	1/48th these options shall vest at the end of
the current month and 1/48th shall vest at the end of each of the next
47 months; provided, however, that if the Optionee has not been employed for 24
full months, then no options shall vest until the Optionee has completed 24 full
months of service and any options that would have vested, but for this limitation,
shall accrue and vest in a lump sum when the Optionee has completed 24 full months
of service, or
	 
	 	_____	 	___options shall vest on ___, 20___, and the rest of the
options shall vest at the rate of ___per month on the last day of each of the next
___months.

     Termination Period:

     The vested portion of this Option, if any, shall be exercisable for thirty (30) days after
Optionee ceases to be a service provider. Upon Optionee’s death or disability (pursuant to Section
9(c) of the Plan), this Option may be exercised for twelve (12) months after Optionee ceases to be
a service provider. In no event may Optionee exercise this Option after the Term/Expiration Date as
provided above.

 

 

II. AGREEMENT

     1. Grant of Option. The Company hereby grants to the Optionee named in the Notice of
Grant (the “Optionee”), an option (the “Option”) to purchase the number of Shares set forth in the
Notice of Grant, at the exercise price per Share set forth in the Notice of Grant (the “Exercise
Price”), and subject to the terms and conditions of the Plan, which is incorporated herein by
reference. Subject to Section 14(c) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and this Option Agreement, the terms and conditions of the Plan shall
prevail.

     If designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this Option is
intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code.
Nevertheless, to the extent that it exceeds the $100,000 rule of Code Section 422(d), this Option
shall be treated as a Nonstatutory Stock Option (“NSO”).

     2. Exercise of Option.

     (a) Right to Exercise. This Option shall be exercisable during its term in accordance
with the Vesting Schedule set out in the Notice of Grant and with the applicable provisions of the
Plan and this Option Agreement.

     (b) Method of Exercise. This Option shall be exercisable by delivery of an exercise
notice (the “Exercise Notice”) which shall state the election to exercise the Option, the number of
Shares with respect to which the Option is being exercised (the “Exercised Shares”), and such other
representations and agreements as may be required by the Company. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all Exercised Shares. This Option
shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice
accompanied by the aggregate Exercise Price.

     No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such
exercise complies with Applicable Laws. Assuming such compliance, for income tax purposes the
Shares shall be considered transferred to the Optionee on the date on which the Option is exercised
with respect to such Shares.

     3. Optionee’s Representations. In the event the Shares have not been registered under
the Securities Act of 1933, as amended, at the time this Option is exercised, the Optionee shall,
if required by the Company, concurrently with the exercise of all or any portion of this Option,
deliver to the Company an Investment Representation Statement in a form reasonably acceptable to
the Administrator.

     4. Lock-Up Period. Optionee hereby agrees that, if so requested by the Company or any
representative of the underwriters (the “Managing Underwriter”) in connection with any registration
of the offering of any securities of the Company under the Securities Act, Optionee shall not sell
or otherwise transfer any Shares or other securities of the Company during the 180-day period (or
such other period as may be requested in writing by the Managing Underwriter and agreed to in
writing by the Company) (the “Market Standoff Period”) following the effective date of a
registration statement of the Company filed under the Securities Act. Such restriction shall apply
only to the first registration statement of the Company to become effective under the Securities
Act that includes securities to be sold on behalf of the Company to the public in an underwritten
public offering under the Securities Act. The Company may impose stop-transfer instructions with
respect to securities subject to the foregoing restrictions until the end of such Market Standoff
Period.

     5. Method of Payment. Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee:

     (a) cash or check;

     (b) consideration received by the Company under a formal cashless exercise program adopted by
the Company in connection with the Plan;

     (c) surrender of other Shares which, (i) in the case of Shares acquired upon exercise of an
option, have been owned by the Optionee for more than six (6) months on the date of surrender, and
(ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the
Exercised Shares; or

- 2 -

 

     (d) with the Administrator’s consent, delivery of Optionee’s promissory note (the “Note”) in a
form reasonably provided by the Plan Administrator, in the amount of the aggregate Exercise Price
of the Exercised Shares together with the execution and delivery by the Optionee of a Security
Agreement in a form reasonably provided by the Plan Administrator. The Note shall bear interest at
the “applicable federal rate” prescribed under the Code and its regulations at time of purchase,
and shall be secured by a pledge of the Shares purchased by the Note pursuant to the Security
Agreement.

     6. Restrictions on Exercise. This Option may not be exercised until such time as the
Plan has been approved by the shareholders of the Company, or if the issuance of such Shares upon
such exercise or the method of payment of consideration for such shares would constitute a
violation of any Applicable Law.

     7. Non-Transferability of Option. This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be exercised during the
lifetime of Optionee only by Optionee. The terms of the Plan and this Option Agreement shall be
binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

     8. Term of Option. This Option may be exercised only within the term set out in the
Notice of Grant, and may be exercised during such term only in accordance with the Plan and the
terms of this Option.

     9. Tax Consequences. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS
OPTION OR DISPOSING OF THE SHARES.

III. OWNERSHIP OF SHARES

     10. Company’s Right of First Refusal. Before any Shares held by Optionee or any
transferee (either being sometimes referred to herein as the “Holder”) may be sold or otherwise
transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall
have a right of first refusal to purchase the Shares on the terms and conditions set forth in this
Section (the “Right of First Refusal”).

     (a) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the Company
a written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to sell or otherwise
transfer such Shares; (ii) the name of each proposed purchaser or other transferee (“Proposed
Transferee”); (iii) the number of Shares to be transferred to each Proposed Transferee; and
(iv) the bona fide cash price or other consideration for which the Holder proposes to transfer the
Shares (the “Offered Price”), and the Holder shall offer the Shares at the Offered Price to the
Company or its assignee(s).

     (b) Exercise of Right of First Refusal. At any time within thirty (30) days after
receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the
Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to
any one or more of the Proposed Transferees, at the purchase price determined in accordance with
subsection (c) below.

     (c) Purchase Price. The purchase price (“Purchase Price”) for the Shares purchased by
the Company or its assignee(s) under this Section shall be the Offered Price. If the Offered Price
includes consideration other than cash, the cash equivalent value of the non-cash consideration
shall be determined by the Board of Directors of the Company in good faith.

     (d) Payment. Payment of the Purchase Price shall be made, at the option of the Company
or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding
indebtedness of the Holder to the Company (or, in the case of repurchase by an assignee, to the
assignee), or by any combination thereof within 30 days after receipt of the Notice or in the
manner and at the times set forth in the Notice.

     (e) Holder’s Right to Transfer. If all of the Shares proposed in the Notice to be
transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s)
as provided in this Section, then the Holder may sell or otherwise transfer such Shares to that
Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within 120 days after the date of the Notice, that any such sale or other
transfer is effected in accordance with any applicable securities laws and that the Proposed
Transferee agrees in writing that the provisions of this Section shall continue to apply to the
Shares in the hands of

- 3 -

 

such Proposed Transferee. If the Shares described in the Notice are not transferred to the
Proposed Transferee within such period, a new Notice shall be given to the Company, and the Company
and/or its assignees shall again be offered the Right of First Refusal before any Shares held by
the Holder may be sold or otherwise transferred.

     (f) Exception for Certain Family Transfers. Anything to the contrary contained in this
Section notwithstanding, the transfer of any or all of the Shares during the Optionee’s lifetime or
on the Optionee’s death by will or intestacy to the Optionee’s immediate family or a trust for the
benefit of the Optionee’s immediate family shall be exempt from the provisions of this Section.
“Immediate Family” as used herein shall mean spouse, lineal descendant or antecedent, father,
mother, brother or sister. In such case, the transferee or other recipient shall receive and hold
the Shares so transferred subject to the provisions of this Section, and there shall be no further
transfer of such Shares except in accordance with the terms of this Section.

     (g) Termination of Right of First Refusal. The Right of First Refusal shall terminate
as to any Shares upon the first sale of Common Stock of the Company to the general public pursuant
to a registration statement filed with and declared effective by the Securities and Exchange
Commission under the Securities Act of 1933, as amended.

     11. Restrictive Legends and Stop-Transfer Orders.

     (a) Legends. The Company shall cause the legends set forth below or legends
substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the
Shares together with any other legends that may be required by the Company or by state or federal
securities laws:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED
OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF
COMPANY COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET
FORTH IN THE OPTION AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE
SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH
TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE
SHARES.

     (b) Stop-Transfer Notices. In order to ensure compliance with the restrictions
referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer
agent, if any, and, if the Company transfers its own securities, it may make appropriate notations
to the same effect in its own records.

     (c) Refusal to Transfer. The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of any of the provisions
of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

IV. OTHER TERMS

     12. Entire Agreement; Governing Law. The Plan is incorporated herein by reference. The
Plan and this Option Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof, and may not be modified adversely
to the Optionee’s interest except by means of a writing signed by the Company and Optionee. This
agreement is governed by the internal substantive laws but not the choice of law rules of Indiana.

- 4 -

 

     13. No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A
DIRECTOR AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION
OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN
EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A DIRECTOR FOR THE VESTING PERIOD, FOR ANY
PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT
TO TERMINATE OPTIONEE’S RELATIONSHIP AS A DIRECTOR AT ANY TIME, WITH OR WITHOUT CAUSE.

     14. Optionee acknowledges receipt of a copy of the Plan and represents that he or she is
familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of
the terms and provisions thereof. Optionee has reviewed the Plan and this Option in their entirety,
has had an opportunity to obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Administrator upon any questions arising under
the Plan or this Option. Optionee further agrees to notify the Company upon any change in the
Optionee’s residence address.

	 	 	 	 	 
	OPTIONEE	 	ENDOCYTE, INC.

 	 
	 	 	By:  	 	 
	 	 	 	P. Ron Ellis, President 	 
	 	 	 	 
	 

- 5 -

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