Document:

exv10w4

Exhibit 10.4

ENDOCYTE, INC.

2010 EQUITY INCENTIVE 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.

          The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Restricted
Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units and Performance Shares.

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

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

          (b) “Applicable Laws” means the requirements relating to the administration of
equity-based awards 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 Awards are, or will be, granted under
the Plan.

          (c) “Award” means, individually or collectively, a grant under the Plan of Options,
Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units or
Performance Shares.

          (d) “Award Agreement” means the written or electronic agreement setting forth the
terms and provisions applicable to each Award granted under the Plan. The Award Agreement is
subject to the terms and conditions of the Plan.

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

          (f) “Change in Control” means the occurrence of any of the following events:

               (i) A change in the ownership of the Company which occurs on the date that any one person, or
more than one person acting as a group (“Person”), acquires ownership of the stock of the
Company that, together with the stock held by such Person, constitutes more than fifty percent
(50%) of the total voting power of the stock of the Company; provided, however, that for purposes
of this subsection, the acquisition of additional stock by any one Person, who is considered

 

 

to own more than fifty percent (50%) of the total voting power of the stock of the Company
will not be considered a Change in Control; or

               (ii) A change in the effective control of the Company which occurs on the date that a majority
of members of the Board is replaced during any twelve (12) month period by Directors whose
appointment or election is not endorsed by a majority of the members of the Board prior to the date
of the appointment or election. For purposes of this clause (ii), if any Person is considered to
be in effective control of the Company, the acquisition of additional control of the Company by the
same Person will not be considered a Change in Control; or

               (iii) A change in the ownership of a substantial portion of the Company’s assets which occurs
on the date that any Person acquires (or has acquired during the twelve (12) month period ending on
the date of the most recent acquisition by such person or persons) assets from the Company that
have a total gross fair market value equal to or more than fifty percent (50%) of the total gross
fair market value of all of the assets of the Company immediately prior to such acquisition or
acquisitions; provided, however, that for purposes of this subsection (iii), the following will not
constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a
transfer to an entity that is controlled by the Company’s stockholders immediately after the
transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company
(immediately before the asset transfer) in exchange for or with respect to the Company’s stock, (2)
an entity, fifty percent (50%) or more of the total value or voting power of which is owned,
directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, fifty
percent (50%) or more of the total value or voting power of all the outstanding stock of the
Company, or (4) an entity, at least fifty percent (50%) of the total value or voting power of which
is owned, directly or indirectly, by a Person described in this subsection (iii)(B)(3). For
purposes of this subsection (iii), gross fair market value means the value of the assets of the
Company, or the value of the assets being disposed of, determined without regard to any liabilities
associated with such assets.

               For purposes of this definition, persons will be considered to be acting as a group if they
are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of
stock, or similar business transaction with the Company.

               Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the
transaction qualifies as a change in control event within the meaning of Code Section 409A, as it
has been and may be amended from time to time, and any proposed or final Treasury Regulations and
Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from
time to time.

               Further and for the avoidance of doubt, a transaction will not constitute a Change in Control
if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole
purpose is to create a holding company that will be owned in substantially the same proportions by
the persons who held the Company’s securities immediately before such transaction.

          (g) “Code” means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or regulation thereunder shall include such section or regulation, any
valid regulation promulgated under such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding such section or regulation.

-2-

 

          (h) “Committee” means a committee of Directors or of other individuals satisfying
Applicable Laws appointed by the Board, or a duly authorized committee of the Board, in accordance
with Section 4 hereof.

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

          (j) “Company” means Endocyte, Inc., a Delaware corporation, or any successor thereto.

          (k) “Consultant” means any person, including an advisor, engaged by the Company or a
Parent or Subsidiary to render services to such entity.

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

          (m) “Disability” means total and permanent disability as defined in Section 22(e)(3)
of the Code, provided that in the case of Awards other than Incentive Stock Options, the
Administrator in its discretion may determine whether a permanent and total disability exists in
accordance with uniform and non-discriminatory standards adopted by the Administrator from time to
time.

          (n) “Employee” means any person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a
director’s fee by the Company will be sufficient to constitute “employment” by the Company.

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

          (p) “Exchange Program” means a program under which (i) outstanding Awards 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) Participants
would have the opportunity to transfer any outstanding Awards 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.

          (q) “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 Global Select Market, the NASDAQ Global Market or
the NASDAQ Capital Market of The NASDAQ Stock Market, its Fair Market Value will be the closing
sales price for such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the day 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, the Fair Market Value of a Share will be the mean between

-3-

 

the high bid and low asked prices for the Common Stock on the day of determination, as
reported in The Wall Street Journal or such other source as the Administrator deems reliable;

               (iii) For purposes of any Awards granted on the Registration Date, the Fair Market Value will
be the initial price to the public as set forth in the final prospectus included within the
registration statement in Form S-1 filed with the Securities and Exchange Commission for the
initial public offering of the Company’s Common Stock; or

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

          (r) “Fiscal Year” means the fiscal year of the Company.

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

          (t) “Inside Director” means a Director who is an Employee.

          (u) “Nonstatutory Stock Option” means an Option that by its terms does not qualify or
is not intended to qualify as an Incentive Stock Option.

          (v) “Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

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

          (x) “Outside Director” means a Director who is not an Employee.

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

          (z) “Participant” means the holder of an outstanding Award.

          (aa) “Performance Share” means an Award denominated in Shares which may be earned in
whole or in part upon attainment of performance goals or other vesting criteria as the
Administrator may determine pursuant to Section 10.

          (bb) “Performance Unit” means an Award which may be earned in whole or in part upon
attainment of performance goals or other vesting criteria as the Administrator may determine and
which may be settled for cash, Shares or other securities or a combination of the foregoing
pursuant to Section 10.

          (cc) “Period of Restriction” means the period during which the transfer of Shares of
Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial
risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of
target levels of performance, or the occurrence of other events as determined by the Administrator.

-4-

 

          (dd) “Plan” means this 2010 Equity Incentive Plan.

          (ee) “Registration Date” means the effective date of the first registration statement
that is filed by the Company and declared effective pursuant to Section 12(g) of the Exchange Act,
with respect to any class of the Company’s securities.

          (ff) “Restricted Stock” means Shares issued pursuant to a Restricted Stock award under
Section 7 of the Plan, or issued pursuant to the early exercise of an Option.

          (gg) “Restricted Stock Unit” means a bookkeeping entry representing an amount equal to
the Fair Market Value of one Share, granted pursuant to Section 8. Each Restricted Stock Unit
represents an unfunded and unsecured obligation of the Company.

          (hh) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3,
as in effect when discretion is being exercised with respect to the Plan.

          (ii) “Section 16(b)” means Section 16(b) of the Exchange Act.

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

          (kk) “Share” means a share of the Common Stock, as adjusted in accordance with Section
13 of the Plan.

          (ll) “Stock Appreciation Right” means an Award, granted alone or in connection with an
Option, that pursuant to Section 9 is designated as a Stock Appreciation Right.

          (mm) “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.

          (a) Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan,
the maximum aggregate number of Shares that may be issued under the Plan is 2,500,000 Shares, plus
(i) any Shares that, as of the Registration Date, have been reserved but not issued pursuant to any
awards granted under the Company’s 1997 Stock Plan and 2007 Stock Plan (the “Existing
Plans”) and are not subject to any awards granted thereunder, and (ii) any Shares subject to
stock options or similar awards granted under the Existing Plans that expire or otherwise terminate
without having been exercised in full and Shares issued pursuant to awards granted under the
Existing Plan that are forfeited to or repurchased by the Company, with the maximum number of
Shares to be added to the Plan pursuant to clauses (i) and (ii) equal to 4,750,000 Shares. The
Shares may be authorized, but unissued, or reacquired Common Stock.

          (b) Automatic Share Reserve Increase. The number of Shares available for issuance
under the Plan will be increased on the first day of each Fiscal Year beginning with the 2012
Fiscal Year, in an amount equal to the least of (i) 4,000,000 Shares, (ii) four percent (4%) of the
outstanding Shares on the last day of the immediately preceding Fiscal Year or (iii) such number of
Shares determined by the Board.

-5-

 

          (c) Lapsed Awards. If an Award expires or becomes unexercisable without having been
exercised in full, is surrendered pursuant to an Exchange Program, or, with respect to Restricted
Stock, Restricted Stock Units, Performance Units or Performance Shares, is forfeited to or
repurchased by the Company due to failure to vest, the unpurchased Shares (or for Awards other than
Options or Stock Appreciation Rights the forfeited or repurchased Shares), which were subject
thereto will become available for future grant or sale under the Plan (unless the Plan has
terminated). With respect to Stock Appreciation Rights, only Shares actually issued (i.e., the net
Shares issued) pursuant to a Stock Appreciation Right will cease to be available under the Plan;
all remaining Shares under Stock Appreciation Rights will remain available for future grant or sale
under the Plan (unless the Plan has terminated). Shares that have actually been issued under the
Plan under any Award will not be returned to the Plan and will not become available for future
distribution under the Plan; provided, however, that if Shares issued pursuant to Awards of
Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units are repurchased
by the Company or are forfeited to the Company, such Shares will become available for future grant
under the Plan. Shares used to pay the exercise price of an Award or to satisfy the tax
withholding obligations related to an Award will become available for future grant or sale under
the Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash
payment will not result in reducing the number of Shares available for issuance under the Plan.
Notwithstanding the foregoing and, subject to adjustment as provided in Section 13, the maximum
number of Shares that may be issued upon the exercise of Incentive Stock Options will equal the
aggregate Share number stated in Section 3(a), plus, to the extent allowable under Section 422 of
the Code and the Treasury Regulations promulgated thereunder, any Shares that become available for
issuance under the Plan pursuant to Sections 3(b) and 3(c).

          (d) Share Reserve. The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as will be sufficient to satisfy the requirements
of the Plan.

     4. Administration of the Plan.

          (a) Procedure.

               (i) Multiple Administrative Bodies. Different Committees with respect to different
groups of Service Providers may administer the Plan.

               (ii) Section 162(m). To the extent that the Administrator determines it to be
desirable to qualify Awards granted hereunder as “performance-based compensation” within the
meaning of Section 162(m) of the Code, the Plan will be administered by a Committee of two (2) or
more “outside directors” within the meaning of Section 162(m) of the Code.

               (iii) Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt
under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the
requirements for exemption under Rule 16b-3.

               (iv) Other Administration. Other than as provided above, the Plan will be
administered by (A) the Board or (B) a Committee, which committee will be constituted to satisfy
Applicable Laws.

-6-

 

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

               (i) to determine the Fair Market Value;

               (ii) to select the Service Providers to whom Awards may be granted hereunder;

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

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

               (v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any
Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise
price, the time or times when Awards 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 Award or the Shares relating thereto, based in each case on such factors as the
Administrator will determine;

               (vi) to determine the terms and conditions of any, and to institute any Exchange Program;

               (vii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;

               (viii) 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 satisfying applicable
foreign laws or for qualifying for favorable tax treatment under applicable foreign laws;

               (ix) to modify or amend each Award (subject to Section 18 of the Plan), including but not
limited to the discretionary authority to extend the post-termination exercisability period of
Awards and to extend the maximum term of an Option (subject to Section 6(b) of the Plan regarding
Incentive Stock Options);

               (x) to allow Participants to satisfy withholding tax obligations in such manner as prescribed
in Section 14 of the Plan;

               (xi) to authorize any person to execute on behalf of the Company any instrument required to
effect the grant of an Award previously granted by the Administrator;

               (xii) to allow a Participant to defer the receipt of the payment of cash or the delivery of
Shares that would otherwise be due to such Participant under an Award; and

               (xiii) to make all other determinations deemed necessary or advisable for administering the
Plan.

-7-

 

          (c) Effect of Administrator’s Decision. The Administrator’s decisions, determinations
and interpretations will be final and binding on all Participants and any other holders of Awards.

     5. Eligibility. Nonstatutory Stock Options, Stock Appreciation Rights, Restricted
Stock, Restricted Stock Units, Performance Shares and Performance Units may be granted to Service
Providers. Incentive Stock Options may be granted only to Employees.

     6. Stock Options.

          (a) Limitations. Each Option will be designated in the Award 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 Participant during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars
($100,000), such Options will be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options will be taken into account in the order in which they were
granted. The Fair Market Value of the Shares will be determined as of the time the Option with
respect to such Shares is granted.

          (b) Term of Option. The term of each Option will be stated in the Award Agreement.
In the case of an Incentive Stock Option, the term will be ten (10) years from the date of grant or
such shorter term as may be provided in the Award Agreement. Moreover, in the case of an Incentive
Stock Option granted to a Participant who, at the time the Incentive Stock 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 Incentive Stock Option will be
five (5) years from the date of grant or such shorter term as may be provided in the Award
Agreement.

          (c) Option Exercise Price and Consideration.

               (i) Exercise Price. The per share exercise price for the Shares to be issued pursuant
to exercise of an Option will be determined by the Administrator, subject to the following:

                    (1) In the case of an Incentive Stock Option

                         (A) granted to an Employee who, at the time the Incentive Stock 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 per Share exercise price will 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 Employee other than an Employee described in paragraph (A) immediately
above, the per Share exercise price will be no less than one hundred percent (100%) of the Fair
Market Value per Share on the date of grant.

-8-

 

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

                    (3) Notwithstanding the foregoing, Options may be granted with a per Share exercise price of
less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant
pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the
Code.

               (ii) Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator will fix the period within which the Option may be exercised and will determine any
conditions that must be satisfied before the Option may be exercised.

               (iii) Form of Consideration. The Administrator will determine the acceptable form of
consideration for exercising an Option, including the method of payment. In the case of an
Incentive Stock Option, the Administrator will determine the acceptable form of consideration at
the time of grant. Such consideration may consist entirely of: (1) cash; (2) check; (3) promissory
note, to the extent permitted by Applicable Laws, (4) other Shares, provided that such Shares have
a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as
to which such Option will be exercised and provided that accepting such Shares will not result in
any adverse accounting consequences to the Company, as the Administrator determines in its sole
discretion; (5) consideration received by the Company under a broker-assisted (or other) cashless
exercise program (whether through a broker or otherwise) implemented by the Company in connection
with the Plan; (6) by net exercise; (7) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws; or (8) any combination of the
foregoing methods of payment.

          (d) Exercise of Option.

               (i) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder
will be exercisable according to the terms of the Plan and at such times and under such conditions
as determined by the Administrator and set forth in the Award Agreement. An Option may not be
exercised for a fraction of a Share.

                    An Option will be deemed exercised when the Company receives: (i) a notice of exercise (in
such form as the Administrator may specify from time to time) from the person entitled to exercise
the Option, and (ii) full payment for the Shares with respect to which the Option is exercised
(together with applicable withholding taxes). Full payment may consist of any consideration and
method of payment authorized by the Administrator and permitted by the Award Agreement and the
Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or,
if requested by the Participant, in the name of the Participant 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 stockholder will exist with respect to the Shares subject to an Option, notwithstanding
the exercise of the Option. The Company will 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 13 of the
Plan.

-9-

 

               Exercising an Option in any manner will decrease 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.

               (ii) Termination of Relationship as a Service Provider. If a Participant ceases to be
a Service Provider, other than upon the Participant’s termination as the result of the
Participant’s death or Disability, the Participant may exercise his or her Option within such
period of time as is specified in the Award Agreement 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 such Option as
set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the
Option will remain exercisable for three (3) months following the Participant’s termination.
Unless otherwise provided by the Administrator, if on the date of termination the Participant is
not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option
will revert to the Plan. If after termination the Participant does not exercise his or her Option
within the time specified by the Administrator, the Option will terminate, and the Shares covered
by such Option will revert to the Plan.

               (iii) Disability of Participant. If a Participant ceases to be a Service Provider as
a result of the Participant’s Disability, the Participant may exercise his or her Option within
such period of time as is specified in the Award 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 Award Agreement). In the absence of a specified time in the Award Agreement, the
Option will remain exercisable for twelve (12) months following the Participant’s termination.
Unless otherwise provided by the Administrator, if on the date of termination the Participant is
not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option
will revert to the Plan. If after termination the Participant does not exercise his or her Option
within the time specified herein, the Option will terminate, and the Shares covered by such Option
will revert to the Plan.

               (iv) Death of Participant. If a Participant dies while a Service Provider, the Option
may be exercised following the Participant’s death within such period of time as is specified in
the Award Agreement to the extent that the Option is vested on the date of death (but in no event
may the option be exercised later than the expiration of the term of such Option as set forth in
the Award Agreement), by the Participant’s designated beneficiary, provided such beneficiary has
been designated prior to Participant’s death in a form acceptable to the Administrator. If no such
beneficiary has been designated by the Participant, then such Option may be exercised by the
personal representative of the Participant’s estate or by the person(s) to whom the Option is
transferred pursuant to the Participant’s will or in accordance with the laws of descent and
distribution. In the absence of a specified time in the Award Agreement, the Option will remain
exercisable for twelve (12) months following Participant’s death. Unless otherwise provided by the
Administrator, if at the time of death Participant is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option will immediately revert to the Plan. If
the Option is not so exercised within the time specified herein, the Option will terminate, and the
Shares covered by such Option will revert to the Plan.

-10-

 

     7. Restricted Stock.

          (a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the
Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service
Providers in such amounts as the Administrator, in its sole discretion, will determine.

          (b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by
an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and
such other terms and conditions as the Administrator, in its sole discretion, will determine.
Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of
Restricted Stock until the restrictions on such Shares have lapsed.

          (c) Transferability. Except as provided in this Section 7 or the Award Agreement,
Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated until the end of the applicable Period of Restriction.

          (d) Other Restrictions. The Administrator, in its sole discretion, may impose such
other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.

          (e) Removal of Restrictions. Except as otherwise provided in this Section 7, Shares
of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released
from escrow as soon as practicable after the last day of the Period of Restriction or at such other
time as the Administrator may determine. The Administrator, in its discretion, may accelerate the
time at which any restrictions will lapse or be removed.

          (f) Voting Rights. During the Period of Restriction, Service Providers holding Shares
of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares,
unless the Administrator determines otherwise.

          (g) Dividends and Other Distributions. During the Period of Restriction, Service
Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other
distributions paid with respect to such Shares, unless the Administrator provides otherwise. If
any such dividends or distributions are paid in Shares, the Shares will be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect
to which they were paid.

          (h) Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company
and again will become available for grant under the Plan.

-11-

 

     8. Restricted Stock Units.

          (a) Grant. Restricted Stock Units may be granted at any time and from time to time as
determined by the Administrator. After the Administrator determines that it will grant Restricted
Stock Units under the Plan, it will advise the Participant in an Award Agreement of the terms,
conditions, and restrictions related to the grant, including the number of Restricted Stock Units.

          (b) Vesting Criteria and Other Terms. The Administrator will set vesting criteria in
its discretion, which, depending on the extent to which the criteria are met, will determine the
number of Restricted Stock Units that will be paid out to the Participant. The Administrator may
set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals
(including, but not limited to, continued employment), or any other basis determined by the
Administrator in its discretion.

          (c) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the
Participant will be entitled to receive a payout as determined by the Administrator.
Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the
Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to
receive a payout.

          (d) Form and Timing of Payment. Payment of earned Restricted Stock Units will be made
as soon as practicable after the date(s) determined by the Administrator and set forth in the Award
Agreement. The Administrator, in its sole discretion, may only settle earned Restricted Stock
Units in cash, Shares, or a combination of both.

          (e) Cancellation. On the date set forth in the Award Agreement, all unearned
Restricted Stock Units will be forfeited to the Company.

     9. Stock Appreciation Rights.

          (a) Grant of Stock Appreciation Rights. Subject to the terms and conditions of the
Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to
time as will be determined by the Administrator, in its sole discretion.

          (b) Number of Shares. The Administrator will have complete discretion to determine
the number of Stock Appreciation Rights granted to any Service Provider.

          (c) Exercise Price and Other Terms. The per share exercise price for the Shares to be
issued pursuant to exercise of a Stock Appreciation Right will be determined by the Administrator
and will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date
of grant. Otherwise, the Administrator, subject to the provisions of the Plan, will have complete
discretion to determine the terms and conditions of Stock Appreciation Rights granted under the
Plan.

          (d) Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will be
evidenced by an Award Agreement that will specify the exercise price, the term of the Stock

-12-

 

Appreciation Right, the conditions of exercise, and such other terms and conditions as the
Administrator, in its sole discretion, will determine.

          (e) Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted under
the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set
forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 6(b) relating to
the maximum term and Section 6(d) relating to exercise also will apply to Stock Appreciation
Rights.

          (f) Payment of Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation
Right, a Participant will be entitled to receive payment from the Company in an amount determined
by multiplying:

               (i) The difference between the Fair Market Value of a Share on the date of exercise over the
exercise price; times

               (ii) The number of Shares with respect to which the Stock Appreciation Right is exercised.

     At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may
be in cash, in Shares of equivalent value, or in some combination thereof.

     10. Performance Units and Performance Shares.

          (a) Grant of Performance Units/Shares. Performance Units and Performance Shares may
be granted to Service Providers at any time and from time to time, as will be determined by the
Administrator, in its sole discretion. The Administrator will have complete discretion in
determining the number of Performance Units and Performance Shares granted to each Participant.

          (b) Value of Performance Units/Shares. Each Performance Unit will have an initial
value that is established by the Administrator on or before the date of grant. Each Performance
Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.

          (c) Performance Objectives and Other Terms. The Administrator will set performance
objectives or other vesting provisions (including, without limitation, continued status as a
Service Provider) in its discretion which, depending on the extent to which they are met, will
determine the number or value of Performance Units/Shares that will be paid out to the Service
Providers. The time period during which the performance objectives or other vesting provisions
must be met will be called the “Performance Period.” Each Award of Performance Units/Shares will
be evidenced by an Award Agreement that will specify the Performance Period, and such other terms
and conditions as the Administrator, in its sole discretion, will determine. The Administrator may
set performance objectives based upon the achievement of Company-wide, divisional, or individual
goals, applicable federal or state securities laws, or any other basis determined by the
Administrator in its discretion.

          (d) Earning of Performance Units/Shares. After the applicable Performance Period has
ended, the holder of Performance Units/Shares will be entitled to receive a payout of the

-13-

 

number of Performance Units/Shares earned by the Participant over the Performance Period, to
be determined as a function of the extent to which the corresponding performance objectives or
other vesting provisions have been achieved. After the grant of a Performance Unit/Share, the
Administrator, in its sole discretion, may reduce or waive any performance objectives or other
vesting provisions for such Performance Unit/Share.

          (e) Form and Timing of Payment of Performance Units/Shares. Payment of earned
Performance Units/Shares will be made as soon as practicable after the expiration of the applicable
Performance Period. The Administrator, in its sole discretion, may pay earned Performance
Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the
value of the earned Performance Units/Shares at the close of the applicable Performance Period) or
in a combination thereof.

          (f) Cancellation of Performance Units/Shares. On the date set forth in the Award
Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and
again will be available for grant under the Plan.

     11. Leaves of Absence/Transfer Between Locations. Unless the Administrator provides
otherwise, vesting of Awards granted hereunder will be suspended during any unpaid leave of
absence. A Participant will 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, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed
three (3) months, 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, then six (6) months following the first (1st) day of such leave any
Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock
Option and will be treated for tax purposes as a Nonstatutory Stock Option.

     12. Transferability of Awards. Unless determined otherwise by the Administrator, an
Award 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 Participant, only by the Participant. If the Administrator makes an Award
transferable, such Award will contain such additional terms and conditions as the Administrator
deems appropriate.

     13. Adjustments; Dissolution or Liquidation; Merger or Change in Control.

          (a) Adjustments. In the event that any dividend or other distribution (whether in the
form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or
exchange of Shares or other securities of the Company, or other change in the corporate structure
of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or
enlargement of the benefits or potential benefits intended to be made available under the Plan,
will adjust the number and class of Shares that may be delivered under the Plan and/or the number,
class, and price of Shares covered by each outstanding Award, and the numerical Share limits in
Section 3 of the Plan.

-14-

 

          (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator will notify each Participant as soon as practicable
prior to the effective date of such proposed transaction. To the extent it has not been previously
exercised, an Award will terminate immediately prior to the consummation of such proposed action.

          (c) Change in Control. In the event of a merger or Change in Control, each
outstanding Award will be treated as the Administrator determines, including, without limitation,
that each Award be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. The Administrator will not be
required to treat all Awards similarly in the transaction.

          In the event that the successor corporation does not assume or substitute for the Award, the
Participant will fully vest in and have the right to exercise all of his or her outstanding Options
and Stock Appreciation Rights, including Shares as to which such Awards would not otherwise be
vested or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse,
and, with respect to Awards with performance-based vesting, all performance goals or other vesting
criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms
and conditions met. In addition, if an Option or Stock Appreciation Right is not assumed or
substituted in the event of a Change in Control, the Administrator will notify the Participant in
writing or electronically that the Option or Stock Appreciation Right will be exercisable for a
period of time determined by the Administrator in its sole discretion, and the Option or Stock
Appreciation Right will terminate upon the expiration of such period.

          For the purposes of this subsection (c), an Award will be considered assumed if, following the
Change in Control, the Award confers the right to purchase or receive, for each Share subject to
the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or
other securities or property) received in the Change in Control 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 Change in Control 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 an Option or Stock Appreciation Right or upon the payout of a Restricted Stock Unit,
Performance Unit or Performance Share, for each Share subject to such Award, 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 Change in Control.

          Notwithstanding anything in this Section 13(c) to the contrary, an Award that vests, is earned
or paid-out upon the satisfaction of one or more performance goals will not be considered assumed
if the Company or its successor modifies any of such performance goals without the Participant’s
consent; provided, however, a modification to such performance goals only to reflect the successor
corporation’s post-Change in Control corporate structure will not be deemed to invalidate an
otherwise valid Award assumption.

          (d) Outside Director Awards. With respect to Awards granted to an Outside Director
that are assumed or substituted for, if on the date of or following such assumption or substitution
the Participant’s status as a Director or a director of the successor corporation, as

-15-

 

applicable, is terminated other than upon a voluntary resignation by the Participant (unless
such resignation is at the request of the acquirer), then the Participant will fully vest in and
have the right to exercise Options and/or Stock Appreciation Rights as to all of the Shares
underlying such Award, including those Shares which would not otherwise be vested or exercisable,
all restrictions on Restricted Stock and Restricted Stock Units will lapse, and, with respect to
Performance Units and Performance Shares, all performance goals or other vesting criteria will be
deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions
met.

     14. Tax.

          (a) Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to
an Award (or exercise thereof), the Company will have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy
federal, state, local, foreign or other taxes (including the Participant’s FICA obligation)
required to be withheld with respect to such Award (or exercise thereof).

          (b) Withholding Arrangements. The Administrator, in its sole discretion and pursuant
to such procedures as it may specify from time to time, may permit a Participant to satisfy such
tax withholding obligation, in whole or in part by (without limitation) (a) paying cash, (b)
electing to have the Company withhold otherwise deliverable cash or Shares having a Fair Market
Value equal to the minimum statutory amount required to be withheld, or (c) delivering to the
Company already-owned Shares having a Fair Market Value equal to the minimum statutory amount
required to be withheld. The Fair Market Value of the Shares to be withheld or delivered will be
determined as of the date that the taxes are required to be withheld.

          (c) Compliance With Code Section 409A. Awards will be designed and operated in such a
manner that they are either exempt from the application of, or comply with, the requirements of
Code Section 409A such that the grant, payment, settlement or deferral will not be subject to the
additional tax or interest applicable under Code Section 409A, except as otherwise determined in
the sole discretion of the Administrator. The Plan and each Award Agreement under the Plan is
intended to meet the requirements of Code Section 409A and will be construed and interpreted in
accordance with such intent, except as otherwise determined in the sole discretion of the
Administrator. To the extent that an Award or payment, or the settlement or deferral thereof, is
subject to Code Section 409A the Award will be granted, paid, settled or deferred in a manner that
will meet the requirements of Code Section 409A, such that the grant, payment, settlement or
deferral will not be subject to the additional tax or interest applicable under Code Section 409A.

     15. No Effect on Employment or Service. Neither the Plan nor any Award will confer
upon a Participant any right with respect to continuing the Participant’s relationship as a Service
Provider with the Company, nor will they interfere in any way with the Participant’s right or the
Company’s right to terminate such relationship at any time, with or without cause, to the extent
permitted by Applicable Laws.

     16. Date of Grant. The date of grant of an Award will be, for all purposes, the date
on which the Administrator makes the determination granting such Award, or such other later date as
is determined by the Administrator. Notice of the determination will be provided to each
Participant within a reasonable time after the date of such grant.

-16-

 

     17. Term of Plan. Subject to Section 21 of the Plan, the Plan will become effective
upon the later to occur of (i) its adoption by the Board or (ii) immediately prior to the
Registration Date. It will continue in effect for a term of ten (10) years from the date adopted
by the Board, unless terminated earlier under Section 18 of the Plan.

     18. Amendment and Termination of the Plan.

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

          (b) Stockholder Approval. The Company will obtain stockholder 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 will impair the rights of any Participant, unless mutually agreed otherwise
between the Participant and the Administrator, which agreement must be in writing and signed by the
Participant and the Company. Termination of the Plan will not affect the Administrator’s ability
to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior
to the date of such termination.

     19. Conditions Upon Issuance of Shares.

          (a) Legal Compliance. Shares will not be issued pursuant to the exercise of an Award
unless the exercise of such Award and the issuance and delivery of such Shares will comply with
Applicable Laws and will 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 Award, the
Company may require the person exercising such Award 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.

     20. 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, will relieve the Company of
any liability in respect of the failure to issue or sell such Shares as to which such requisite
authority will not have been obtained.

     21. Stockholder Approval. The Plan will be subject to approval by the stockholders of
the Company within twelve (12) months after the date the Plan is adopted by the Board. Such
stockholder approval will be obtained in the manner and to the degree required under Applicable
Laws.

-17-exv10w5

Exhibit 10.5

ENDOCYTE, INC.

2010 EMPLOYEE STOCK PURCHASE PLAN

     1. Purpose. The purpose of the Plan is to provide employees of the Company and its
Designated Subsidiaries with an opportunity to purchase Common Stock through accumulated
Contributions (as defined in Section 2(j) below). The Company’s intention is to have Plan qualify
as an “employee stock purchase plan” under Section 423 of the Code. The provisions of the Plan,
accordingly, will be construed so as to extend and limit Plan participation in a uniform and
nondiscriminatory basis consistent with the requirements of Section 423 of the Code.

     2. Definitions.

          (a) “Administrator” means the Board or any Committee designated by the Board to
administer the Plan pursuant to Section 14.

          (b) “Applicable Laws” means the requirements relating to the administration of
equity-based awards 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 are, or will be, granted under
the Plan.

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

          (d) “Change in Control” means the occurrence of any of the following events:

               (i) A change in the ownership of the Company which occurs on the date that any one person, or
more than one person acting as a group (“Person”), acquires ownership of the stock of the
Company that, together with the stock held by such Person, constitutes more than fifty percent
(50%) of the total voting power of the stock of the Company; provided, however, that for purposes
of this subsection, the acquisition of additional stock by any one Person, who is considered to own
more than fifty percent (50%) of the total voting power of the stock of the Company will not be
considered a Change in Control; or

               (ii) If the Company has a class of securities registered pursuant to Section 12 of the
Exchange Act, a change in the effective control of the Company which occurs on the date that a
majority of members of the Board is replaced during any twelve (12) month period by Directors whose
appointment or election is not endorsed by a majority of the members of the Board prior to the date
of the appointment or election. For purposes of this clause (ii), if any Person is considered to
be in effective control of the Company, the acquisition of additional control of the Company by the
same Person will not be considered a Change in Control; or

               (iii) A change in the ownership of a substantial portion of the Company’s assets which occurs
on the date that any Person acquires (or has acquired during the twelve (12) month period ending on
the date of the most recent acquisition by such person or persons) assets from the Company that
have a total gross fair market value equal to or more than 50% of the total gross fair market value
of all of the assets of the Company immediately prior to such acquisition or

 

 

acquisitions; provided, however, that for purposes of this subsection, the following will not
constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a
transfer to an entity that is controlled by the Company’s stockholders immediately after the
transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company
(immediately before the asset transfer) in exchange for or with respect to the Company’s stock, (2)
an entity, fifty percent (50%) or more of the total value or voting power of which is owned,
directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, fifty
percent (50%) or more of the total value or voting power of all the outstanding stock of the
Company, or (4) an entity, at least fifty percent (50%) of the total value or voting power of which
is owned, directly or indirectly, by a Person described in this subsection (iii)(B)(3). For
purposes of this subsection, gross fair market value means the value of the assets of the Company,
or the value of the assets being disposed of, determined without regard to any liabilities
associated with such assets.

          For purposes of this definition, persons will be considered to be acting as a group if they
are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of
stock, or similar business transaction with the Company.

          Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the
transaction qualifies as a change in control event within the meaning of Code Section 409A, as it
has been and may be amended from time to time, and any proposed or final Treasury Regulations and
Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from
time to time.

          Further and for the avoidance of doubt, a transaction will not constitute a Change in Control
if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole
purpose is to create a holding company that will be owned in substantially the same proportions by
the persons who held the Company’s securities immediately before such transaction.

          (e) “Code” means the U.S. Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or Treasury Regulation thereunder will include such section or
regulation, any valid regulation or other official applicable guidance promulgated under such
section, and any comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.

          (f) “Committee” means a committee of the Board appointed in accordance with Section 14
hereof.

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

          (h) “Company” means Endocyte, Inc., a Delaware corporation, or any successor thereto.

          (i) “Compensation” means an Eligible Employee’s base straight time gross earnings,
commissions (to the extent such commissions are an integral, recurring part of compensation),
payments for overtime and shift premium, but exclusive of payments for incentive compensation,
bonuses and other similar compensation. The Administrator, in its discretion, may, on a uniform
and nondiscriminatory basis, establish a different definition of Compensation for a subsequent
Offering Period.

2

 

          (j) “Contributions” means the payroll deductions and other additional payments that
the Company may permit to be made by a Participant to fund the exercise of options granted pursuant
to the Plan.

          (k) “Designated Subsidiary” means any Subsidiary that has been designated by the
Administrator from time to time in its sole discretion as eligible to participate in the Plan.

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

          (m) “Eligible Employee” means any individual who is a common law employee of the
Company or a Designated Subsidiary and is customarily employed for at least twenty (20) hours per
week and more than five (5) months in any calendar year by the Employer, or any lesser number of
hours per week and/or number of months in any calendar year established by the Administrator (if
required under applicable local law) for purposes of any separate Offering. For purposes of the
Plan, the employment relationship will be treated as continuing intact while the individual is on
sick leave or other leave of absence that the Employer approves. Where the period of leave exceeds
three (3) months and the individual’s right to reemployment is not guaranteed either by statute or
by contract, the employment relationship will be deemed to have terminated three (3) months and one
(1) day following the commencement of such leave. The Administrator, in its discretion, from time
to time may, prior to an Enrollment Date for all options to be granted on such Enrollment Date,
determine (on a uniform and nondiscriminatory basis) that the definition of Eligible Employee will
or will not include an individual if he or she: (i) has not completed at least two (2) years of
service since his or her last hire date (or such lesser period of time as may be determined by the
Administrator in its discretion), (ii) customarily works not more than twenty (20) hours per week
(or such lesser period of time as may be determined by the Administrator in its discretion), (iii)
customarily works not more than five (5) months per calendar year (or such lesser period of time as
may be determined by the Administrator in its discretion), (iv) is a highly compensated employee
within the meaning of Section 414(q) of the Code with compensation above a certain level or is an
officer or subject to the disclosure requirements of Section 16(a) of the Exchange Act, provided
the exclusion is applied with respect to each Offering in an identical manner to all highly
compensated individuals of the Employer whose Employees are participating in that Offering.

          (n) “Employer” means the employer of the applicable Eligible Employee(s).

          (o) “Enrollment Date” means the first Trading Day of each Offering Period.

          (p) “Exchange Act” means the Securities Exchange Act of 1934, as amended, including
the rules and regulations promulgated thereunder.

          (q) “Exercise Date” means such dates on which each outstanding option granted under
the Plan will be exercised (except if the Plan has been terminated), as may be determined by the
Administrator, in its discretion and on a uniform and nondiscriminatory basis from time to time
prior to an Enrollment Date for all options to be granted on such Enrollment Date.

          (r) “Fair Market Value” means, as of any date and unless the Administrator determines
otherwise, the value of Common Stock determined as follows:

3

 

               (i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the NASDAQ Global Select Market, the NASDAQ Global Market or
the NASDAQ Capital Market of The NASDAQ Stock Market, its Fair Market Value will be the closing
sales price for such stock as quoted on such exchange or system on the date of determination (or
the closing bid, if no sales were reported), 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 will be the mean between the high bid and low asked
prices for the Common Stock on the date of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;

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

               (iv) For purposes of the Enrollment Date of the first Offering Period under the Plan, the Fair
Market Value will be the initial price to the public as set forth in the final prospectus included
within the registration statement on Form S-1 filed with the Securities and Exchange Commission for
the initial public offering of the Common Stock (the “Registration Statement”).

          (s) “Fiscal Year” means the fiscal year of the Company.

          (t) “New Exercise Date” means a new Exercise Date if the Administrator shortens any
Offering Period then in progress.

          (u) “Offering” means an offer under the Plan of an option that may be exercised during
an Offering Period as further described in Section 4. For purposes of the Plan, the Administrator
may designate separate Offerings under the Plan (the terms of which need not be identical) in which
Employees of one or more Employers will participate, even if the dates of the applicable Offering
Periods of each such Offering are identical.

          (v) “Offering Periods” means the period beginning on such date as may be determined by
the Administrator, in its discretion and on a uniform and nondiscriminatory basis, and ending on an
Exercise Date. The duration and timing of Offering Periods may be changed pursuant to Sections 4
and 20.

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

          (x) “Participant” means an Eligible Employee that participates in the Plan.

          (y) “Plan” means this Endocyte, Inc. 2010 Employee Stock Purchase Plan.

          (z) “Purchase Period” means the period, as determined by the Administrator in its
discretion on a uniform and nondiscriminatory basis, commencing on the Enrollment Date and ending
with the next Exercise Date, except that if the Administrator determines that more than one
Purchase Period should occur within an Offering Period, subsequent Purchase Periods within such

4

 

Offering Period commence after one Exercise Date and end with the next Exercise Date at such
time or times as the Administrator determines prior to the commencement of the applicable Offering
Period.

          (aa) “Purchase Price” means the price per Share of the Shares purchased under any
option granted under the Plan as determined by the Administrator from time to time, in its
discretion and on a uniform and nondiscriminatory basis for all options to be granted on an
Enrollment Date. However, in no event will the Purchase Price be less than eighty-five percent
(85%) of the lower of the Fair Market Value of a share of Common Stock on the Enrollment Date or
the Fair Market Value of a share of Common Stock on the Exercise Date and at all times in
compliance with Section 423 of the Code.

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

          (cc) “Trading Day” means a day on which the national stock exchange upon which the
Common Stock is listed is open for trading.

     3. Eligibility.

          (a) Offering Periods. Any Eligible Employee on a given Enrollment Date will be
eligible to participate in the Plan, subject to the requirements of Section 5.

          (b) Non-U.S. Employees. Employees who are citizens or residents of a non-U.S.
jurisdiction may be excluded from participation in the Plan or an Offering if the participation of
such Employees is prohibited under the laws of the applicable jurisdiction or if complying with the
laws of the applicable jurisdiction would cause the Plan or an Offering to violate Section 423 of
the Code.

          (c) Limitations. Any provisions of the Plan to the contrary notwithstanding, no
Eligible Employee will be granted an option under the Plan (i) to the extent that, immediately
after the grant, such Eligible Employee (or any other person whose stock would be attributed to
such Eligible Employee pursuant to Section 424(d) of the Code) would own capital stock of the
Company or any Parent or Subsidiary of the Company and/or hold outstanding options to purchase such
stock possessing five percent (5%) or more of the total combined voting power or value of all
classes of the capital stock of the Company or of any Parent or Subsidiary of the Company, or (ii)
to the extent that his or her rights to purchase stock under all employee stock purchase plans (as
defined in Section 423 of the Code) of the Company or any Parent or Subsidiary of the Company
accrues at a rate, which exceeds twenty-five thousand dollars ($25,000) worth of stock (determined
at the Fair Market Value of the stock at the time such option is granted) for each calendar year in
which such option is outstanding at any time, as determined in accordance with Section 423 of the
Code and the regulations thereunder.

     4. Offering Periods. Offering Periods will expire on the earliest to occur of (a) the
completion of the purchase of Shares on the last Exercise Date occurring within 27 months of the
applicable Enrollment Date on which the option to purchase Shares was granted, or (b) such shorter
period as may be established by the Administrator from time to time, in its discretion and on a
uniform and nondiscriminatory basis, prior to an Enrollment Date for all options to be granted on
such Enrollment Date.

5

 

     5. Participation. An Eligible Employee may participate in the Plan by (i) submitting
to the Company’s stock administration office (or its designee), on or before a date determined by
the Administrator prior to an applicable Enrollment Date, a properly completed subscription
agreement authorizing Contributions in the form provided by the Administrator for such purpose, or
(ii) following an electronic or other enrollment procedure determined by the Administrator.

     6. Contributions.

          (a) At the time a Participant enrolls in the Plan pursuant to Section 5, he or she will elect
to have payroll deductions made on each pay day or other Contributions (to the extent permitted by
the Administrator) made during the Offering Period in an amount that the Administrator may
establish from time to time, in its discretion and on a uniform and nondiscriminatory basis, for
all options to be granted on any Enrollment Date, which he or she receives on each pay day during
the Offering Period; provided, however, that should a pay day occur on an Exercise Date, a
Participant will have any payroll deductions made on such day applied to his or her account under
the subsequent Purchase Period or Offering Period. The Administrator, in its sole discretion, may
permit all Participants in a specified Offering to contribute amounts to the Plan through payment
by cash, check or other means set forth in the subscription agreement prior to each Exercise Date
of each Offering Period, provided that payment through means other than payroll deductions shall be
permitted only if the Participant has not already had the maximum permitted amount withheld through
payroll deductions during the Purchase Period or Offering Period. A Participant’s subscription
agreement will remain in effect for successive Offering Periods unless terminated as provided in
Section 10 hereof.

          (b) Payroll deductions for a Participant will commence on the first pay day following the
Enrollment Date and will end on the last pay day prior to the Exercise Date of such Offering Period
to which such authorization is applicable, unless sooner terminated by the Participant as provided
in Section 10 hereof; provided, however, that for the first Offering Period, payroll deductions
will commence on the first pay day on or following the end of the Enrollment Window.

          (c) All Contributions made for a Participant will be credited to his or her account under the
Plan and payroll deductions will be made in whole percentages only. A Participant may not make any
additional payments into such account.

          (d) A Participant may discontinue his or her participation in the Plan as provided in Section
10. If permitted by the Administrator, as determined in its sole discretion, for an Offering
Period, a Participant may increase or decrease the rate of his or her Contributions during the
Offering Period by (i) properly completing and submitting to the Company’s stock administration
office (or its designee), on or before a date determined by the Administrator prior to an
applicable Exercise Date, a new subscription agreement authorizing the change in Contribution rate
in the form provided by the Administrator for such purpose, or (ii) following an electronic or
other procedure prescribed by the Administrator. If a Participant has not followed such procedures
to change the rate of Contributions, the rate of his or her Contributions will continue at the
originally elected rate throughout the Offering Period and future Offering Periods (unless
terminated as provided in Section 10). The Administrator may, in its sole discretion, limit the
nature and/or number of Contribution rate changes that may be made by Participants during any
Offering Period, and may establish such

6

 

other conditions or limitations as it deems appropriate for Plan administration. Any change
in payroll deduction rate made pursuant to this Section 6(d) will be effective as of the first full
payroll period following five (5) business days after the date on which the change is made by the
Participant (unless the Administrator, in its sole discretion, elects to process a given change in
payroll deduction rate more quickly).

          (e) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of
the Code and Section 3(b), a Participant’s Contributions may be decreased to zero percent (0%) at
any time during an Offering Period. Subject to Section 423(b)(8) of the Code and Section 3(b)
hereof, Contributions will recommence at the rate originally elected by the Participant effective
as of the beginning of the first Purchase Period or Offering Period scheduled to end in the
following calendar year, unless terminated by the Participant as provided in Section 10.

          (f) Notwithstanding any provisions to the contrary in the Plan, the Administrator may allow
Eligible Employees to participate in the Plan via cash contributions instead of payroll deductions
if (i) payroll deductions are not permitted under applicable local law, and (ii) the Administrator
determines that cash contributions are permissible under Section 423 of the Code.

          (g) At the time the option is exercised, in whole or in part, or at the time some or all of
the Common Stock issued under the Plan is disposed of (or any other time that a taxable event
related to the Plan occurs), the Participant must make adequate provision for the Company’s or
Employer’s federal, state, local or any other tax liability payable to any authority including
taxes imposed by jurisdictions outside of the U.S., national insurance, social security or other
tax withholding obligations, if any, which arise upon the exercise of the option or the disposition
of the Common Stock (or any other time that a taxable event related to the Plan occurs). At any
time, the Company or the Employer may, but will not be obligated to, withhold from the
Participant’s Compensation the amount necessary for the Company or the Employer to meet applicable
withholding obligations, including any withholding required to make available to the Company or the
Employer any tax deductions or benefits attributable to sale or early disposition of Common Stock
by the Eligible Employee. In addition, the Company or the Employer may, but will not be obligated
to, withhold from the proceeds of the sale of Common Stock or any other method of withholding the
Company or the Employer deems appropriate to the extent permitted by U.S. Treasury Regulation
Section 1.423-2(f).

     7. Grant of Option. On the Enrollment Date of each Offering Period, each Eligible
Employee participating in such Offering Period will be granted an option to purchase on each
Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of
shares of Common Stock determined by dividing such Eligible Employee’s Contributions accumulated
prior to such Exercise Date and retained in the Eligible Employee’s account as of the Exercise Date
by the applicable Purchase Price; provided that, unless and until otherwise determined by the
Administrator, in no event will an Eligible Employee be permitted to purchase on any given Exercise
Date more than 5,000 shares of the Company’s Common Stock (subject to any adjustment pursuant to
Section 19) and provided further that such purchase will be subject to the limitations set forth in
Sections 3(c) and 13. The Eligible Employee may accept the grant of such option (i) with respect
to the first Offering Period by submitting a properly completed subscription agreement in
accordance with the requirements of Section 5 on or before the last day of the Enrollment Window,
and (ii) with respect to any subsequent Offering Period under the Plan, by electing to participate
in

7

 

the Plan in accordance with the requirements of Section 5. The Administrator may, for future
Offering Periods, increase or decrease, in its absolute discretion, the maximum number of shares of
Common Stock that an Eligible Employee may purchase during each Purchase Period of an Offering
Period. Exercise of the option will occur as provided in Section 8, unless the Participant has
withdrawn pursuant to Section 10. The option will expire on the last day of the Offering Period.

     8. Exercise of Option.

          (a) Unless a Participant withdraws from the Plan as provided in Section 10, his or her option
for the purchase of shares of Common Stock will be exercised automatically on the Exercise Date,
and the maximum number of full shares subject to the option will be purchased for such Participant
at the applicable Purchase Price with the accumulated Contributions from his or her account. No
fractional shares of Common Stock will be purchased; any Contributions accumulated in a
Participant’s account, which are not sufficient to purchase a full share will be retained in the
Participant’s account for the subsequent Purchase Period or Offering Period, subject to earlier
withdrawal by the Participant as provided in Section 10. Any other funds left over in a
Participant’s account after the Exercise Date will be returned to the Participant. During a
Participant’s lifetime, a Participant’s option to purchase shares hereunder is exercisable only by
him or her.

          (b) If the Administrator determines that, on a given Exercise Date, the number of shares of
Common Stock with respect to which options are to be exercised may exceed (i) the number of shares
of Common Stock that were available for sale under the Plan on the Enrollment Date of the
applicable Offering Period, or (ii) the number of shares of Common Stock available for sale under
the Plan on such Exercise Date, the Administrator may in its sole discretion (x) provide that the
Company will make a pro rata allocation of the shares of Common Stock available for purchase on
such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as will be practicable
and as it will determine in its sole discretion to be equitable among all Participants exercising
options to purchase Common Stock on such Exercise Date, and continue all Offering Periods then in
effect or (y) provide that the Company will make a pro rata allocation of the shares available for
purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as will be
practicable and as it will determine in its sole discretion to be equitable among all participants
exercising options to purchase Common Stock on such Exercise Date, and terminate any or all
Offering Periods then in effect pursuant to Section 20. The Company may make a pro rata allocation
of the shares available on the Enrollment Date of any applicable Offering Period pursuant to the
preceding sentence, notwithstanding any authorization of additional shares for issuance under the
Plan by the Company’s stockholders subsequent to such Enrollment Date.

     9. Delivery. As soon as reasonably practicable after each Exercise Date on which a
purchase of shares of Common Stock occurs, the Company will arrange the delivery to each
Participant of the shares purchased upon exercise of his or her option in a form determined by the
Administrator (in its sole discretion) and pursuant to rules established by the Administrator. The
Company may permit or require that shares be deposited directly with a broker designated by the
Company or to a designated agent of the Company, and the Company may utilize electronic or
automated methods of share transfer. The Company may require that shares be retained with such
broker or agent for a designated period of time and/or may establish other procedures to permit
tracking of disqualifying dispositions of such shares. No Participant will have any voting,
dividend, or other stockholder rights with respect to shares of Common Stock subject to any option
granted

8

 

under the Plan until such shares have been purchased and delivered to the Participant as
provided in this Section 9.

     10. Withdrawal.

          (a) A Participant may withdraw all but not less than all the Contributions credited to his or
her account and not yet used to exercise his or her option under the Plan at any time by (i)
submitting to the Company’s stock administration office (or its designee) a written notice of
withdrawal in the form determined by the Administrator for such purpose, or (ii) following an
electronic or other withdrawal procedure determined by the Administrator. All of the Participant’s
Contributions credited to his or her account will be paid to such Participant promptly after
receipt of notice of withdrawal and such Participant’s option for the Offering Period will be
automatically terminated, and no further Contributions for the purchase of shares will be made for
such Offering Period. If a Participant withdraws from an Offering Period, Contributions will not
resume at the beginning of the succeeding Offering Period, unless the Participant re-enrolls in the
Plan in accordance with the provisions of Section 5.

          (b) A Participant’s withdrawal from an Offering Period will not have any effect upon his or
her eligibility to participate in any similar plan that may hereafter be adopted by the Company or
in succeeding Offering Periods that commence after the termination of the Offering Period from
which the Participant withdraws.

     11. Termination of Employment. Upon a Participant’s ceasing to be an Eligible
Employee, for any reason, he or she will be deemed to have elected to withdraw from the Plan and
the Contributions credited to such Participant’s account during the Offering Period but not yet
used to purchase shares of Common Stock under the Plan will be returned to such Participant or, in
the case of his or her death, to the person or persons entitled thereto under Section 15, and such
Participant’s option will be automatically terminated.

     12. Interest. No interest will accrue on the Contributions of a participant in the
Plan, except as may be required by applicable law, as determined by the Company, and if so required
by the laws of a particular jurisdiction, shall apply to all Participants in the relevant Offering
except to the extent otherwise permitted by U.S. Treasury Regulation Section 1.423-2(f).

     13. Stock.

          (a) Subject to adjustment upon changes in capitalization of the Company as provided in Section
19 hereof, the maximum number of shares of Common Stock that will be made available for sale under
the Plan will be 500,000 shares of Common Stock, plus an annual increase to be added on the first
day of each Fiscal Year beginning with the 2012 Fiscal Year equal to the least of (i) 1,000,000
shares of Common Stock, (ii) one percent (1%) of the outstanding shares of Common Stock on such
date, or (iii) an amount determined by the Administrator.

          (b) 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), a Participant will only have the
rights of an unsecured creditor with respect to such shares, and no right to vote or receive
dividends or any other rights as a stockholder will exist with respect to such shares.

9

 

          (c) Shares of Common Stock to be delivered to a Participant under the Plan will be registered
in the name of the Participant or in the name of the Participant and his or her spouse.

     14. Administration. The Plan will be administered by the Board or a Committee
appointed by the Board, which Committee will be constituted to comply with Applicable Laws. The
Administrator will have full and exclusive discretionary authority to construe, interpret and apply
the terms of the Plan, to designate separate Offerings under the Plan, to determine eligibility, to
adjudicate all disputed claims filed under the Plan and to establish such procedures that it deems
necessary for the administration of the Plan (including, without limitation, to adopt such
procedures and sub-plans as are necessary or appropriate to permit the participation in the Plan by
employees who are foreign nationals or employed outside the U.S.). Unless otherwise determined by
the Administrator, the Employees eligible to participate in each sub-plan will participate in a
separate Offering. Without limiting the generality of the foregoing, the Administrator is
specifically authorized to adopt rules and procedures regarding eligibility to participate, the
definition of Compensation, handling of Contributions, making of Contributions to the Plan
(including, without limitation, in forms other than payroll deductions), establishment of bank or
trust accounts to hold Contributions, payment of interest, conversion of local currency,
obligations to pay payroll tax, determination of beneficiary designation requirements, withholding
procedures and handling of stock certificates that vary with applicable local requirements. Every
finding, decision and determination made by the Administrator will, to the full extent permitted by
law, be final and binding upon all parties.

     15. Designation of Beneficiary.

          (a) If permitted by the Administrator, a Participant may file a designation of a beneficiary
who is to receive any shares of Common Stock and cash, if any, from the Participant’s account under
the Plan in the event of such Participant’s death subsequent to an Exercise Date on which the
option is exercised but prior to delivery to such Participant of such shares and cash. In
addition, if permitted by the Administrator, a Participant may file a designation of a beneficiary
who is to receive any cash from the Participant’s account under the Plan in the event of such
Participant’s
death prior to exercise of the option. If a Participant is married and the designated
beneficiary is not the spouse, spousal consent will be required for such designation to be
effective.

          (b) Such designation of beneficiary may be changed by the Participant at any time by notice in
a form determined by the Administrator. In the event of the death of a Participant and in the
absence of a beneficiary validly designated under the Plan who is living at the time of such
Participant’s death, the Company will deliver such shares and/or cash to the executor or
administrator of the estate of the Participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such
shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant,
or if no spouse, dependent or relative is known to the Company, then to such other person as the
Company may designate.

          (c) All beneficiary designations will be in such form and manner as the Administrator may
designate from time to time. Notwithstanding Sections 15(a) and (b) above, the Company and/or the
Administrator may decide not to permit such designations by Participants in non-U.S. jurisdictions
to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f).

10

 

     16. Transferability. Neither Contributions credited to a Participant’s account nor
any rights with regard to the exercise of an option or to receive shares of Common Stock under the
Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will,
the laws of descent and distribution or as provided in Section 15 hereof) by the Participant. Any
such attempt at assignment, transfer, pledge or other disposition will be without effect, except
that the Company may treat such act as an election to withdraw funds from an Offering Period in
accordance with Section 10 hereof.

     17. Use of Funds. The Company may use all Contributions received or held by it under
the Plan for any corporate purpose, and the Company will not be obligated to segregate such
Contributions except under Offerings in which applicable local law requires that Contributions to
the Plan by Participants be segregated from the Company’s general corporate funds and/or deposited
with an independent third party for Participants in non-U.S. jurisdictions. Until shares of Common
Stock are issued, Participants will only have the rights of an unsecured creditor with respect to
such shares.

     18. Reports. Individual accounts will be maintained for each Participant in the Plan.
Statements of account will be given to participating Eligible Employees at least annually, which
statements will set forth the amounts of Contributions, the Purchase Price, the number of shares of
Common Stock purchased and the remaining cash balance, if any.

     19. Adjustments, Dissolution, Liquidation, Merger or Change in Control.

          (a) Adjustments. In the event that any dividend or other distribution (whether in the
form of cash, Common Stock, other securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Common Stock or other securities of the Company, or other change in the
corporate structure of the Company affecting the Common Stock occurs, the Administrator, in order
to prevent dilution or enlargement of the benefits or potential benefits intended to be made
available under the Plan, will, in such manner as it may deem equitable, adjust the number and
class of Common Stock that may be delivered under the Plan, the Purchase Price per share and the
number of shares of Common Stock covered by each option under the Plan that has not yet been
exercised, and the numerical limits of Sections 7 and 13.

          (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, any Offering Period then in progress will be shortened by setting a New
Exercise Date, and will terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Administrator. The New Exercise Date
will be before the date of the Company’s proposed dissolution or liquidation. The Administrator
will notify each Participant in writing or electronically, at least ten (10) business days prior to
the New Exercise Date, that the Exercise Date for the Participant’s option has been changed to the
New Exercise Date and that the Participant’s option will be exercised automatically on the New
Exercise Date, unless prior to such date the Participant has withdrawn from the Offering Period as
provided in Section 10 hereof.

          (c) Merger or Change in Control. In the event of a merger or Change in Control, each
outstanding option will be assumed or an equivalent option substituted by the successor

11

 

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, the Offering Period with respect to
which such option relates will be shortened by setting a New Exercise Date on which such Offering
Period shall end. The New Exercise Date will occur before the date of the Company’s proposed
merger or Change in Control. The Administrator will notify each Participant in writing or
electronically prior to the New Exercise Date, that the Exercise Date for the Participant’s option
has been changed to the New Exercise Date and that the Participant’s option will be exercised
automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn
from the Offering Period as provided in Section 10 hereof.

     20. Amendment or Termination.

          (a) The Administrator, in its sole discretion, may amend, suspend, or terminate the Plan, or
any part thereof, at any time and for any reason. If the Plan is terminated, the Administrator, in
its discretion, may elect to terminate all outstanding Offering Periods either immediately or upon
completion of the purchase of shares of Common Stock on the next Exercise Date (which may be sooner
than originally scheduled, if determined by the Administrator in its discretion), or may elect to
permit Offering Periods to expire in accordance with their terms (and subject to any adjustment
pursuant to Section 19). If the Offering Periods are terminated prior to expiration, all amounts
then credited to Participants’ accounts that have not been used to purchase shares of Common Stock
will be returned to the Participants (without interest thereon, except as otherwise required under
local laws, as further set forth in Section 12 hereof) as soon as administratively practicable.

          (b) Without stockholder consent and without limiting Section 20(a), the Administrator will be
entitled to change the Purchase Periods or Offering Periods, designate separate Offerings, limit
the frequency and/or number of changes in the amount withheld during an Offering Period, establish
the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit
payroll withholding in excess of the amount designated by a Participant in order to adjust for
delays or mistakes in the Company’s processing of properly completed withholding elections,
establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to
ensure that amounts applied toward the purchase of Common Stock for each Participant properly
correspond with Contribution amounts, and establish such other limitations or procedures as the
Administrator determines in its sole discretion advisable that are consistent with the Plan.

          (c) In the event the Administrator determines that the ongoing operation of the Plan may
result in unfavorable financial accounting consequences, the Administrator may, in its discretion
and, to the extent necessary or desirable, modify, amend or terminate the Plan to reduce or
eliminate such accounting consequence including, but not limited to:

               (i) amending the Plan to conform with the safe harbor definition under the Financial
Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto),
including with respect to an Offering Period underway at the time;

12

 

               (ii) altering the Purchase Price for any Purchase Period or Offering Period including a
Purchase Period or Offering Period underway at the time of the change in Purchase Price;

               (iii) shortening any Purchase Period or Offering Period by setting a New Exercise Date,
including a Purchase Period or Offering Period underway at the time of the Administrator action;

               (iv) reducing the maximum percentage of Compensation a Participant may elect to set aside as
Contributions; and

               (v) reducing the maximum number of Shares a Participant may purchase during any Purchase
Period or Offering Period.

Such modifications or amendments will not require stockholder approval or the consent of any Plan
Participants.

     21. Notices. All notices or other communications by a Participant to the Company
under or in connection with the Plan will be deemed to have been duly given when received in the
form and manner specified by the Company at the location, or by the person, designated by the
Company for the receipt thereof.

     22. Conditions Upon Issuance of Shares. Shares of Common Stock will not be issued
with respect to an option unless the exercise of such option and the issuance and delivery of such
shares pursuant thereto will comply with all applicable provisions of law, domestic or foreign,
including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules
and regulations promulgated thereunder, and the requirements of any stock exchange upon which the
shares may then be listed, and will be further subject to the approval of counsel for the Company
with respect to such compliance.

     As a condition to the exercise of an option, the Company 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 by any of the
aforementioned applicable provisions of law.

     23. Code Section 409A. The Plan is exempt from the application of Code Section 409A.
In furtherance of the foregoing and notwithstanding any provision in the Plan to the contrary, if
the Administrator determines that an option granted under the Plan may be subject to Code Section
409A or that any provision in the Plan would cause an option under the Plan to be subject to Code
Section 409A, the Administrator may amend the terms of the Plan and/or of an outstanding option
granted under the Plan, or take such other action the Administrator determines is necessary or
appropriate, in each case, without the Participant’s consent, to exempt any outstanding option or
future option that may be granted under the Plan from or to allow any such options to comply with
Code Section 409A, but only to the extent any such amendments or action by the Administrator would
not violate Code Section 409A. Notwithstanding the foregoing, the Company shall have no liability
to a Participant or any other party if the option to purchase Common
Stock under the Plan that is intended to be exempt from or compliant with Code Section 409A is
not so exempt or

13

 

compliant or for any action taken by the Administrator with respect thereto. The
Company makes no representation that the option to purchase Common Stock under the Plan is
compliant with Code Section 409A.

     24. Term of Plan. The Plan will become effective upon the earlier to occur of its
adoption by the Board or its approval by the stockholders of the Company. It will continue in
effect for a term of twenty (20) years, unless sooner terminated under Section 20.

     25. Stockholder Approval. The Plan will be subject to approval by the stockholders of
the Company within twelve (12) months after the date the Plan is adopted by the Board. Such
stockholder approval will be obtained in the manner and to the degree required under Applicable
Laws.

     26. Governing Law. The Plan shall be governed by, and construed in accordance with,
the laws of the State of Indiana (except its choice-of-law provisions).

     27. Severability. If any provision of the Plan is or becomes or is deemed to be
invalid, illegal, or unenforceable for any reason in any jurisdiction or as to any Participant,
such invalidity, illegality or unenforceability shall not affect the remaining parts of the Plan,
and the Plan shall be construed and enforced as to such jurisdiction or Participant as if the
invalid, illegal or unenforceable provision had not been included.

     28. Automatic Transfer to Low Price Offering Period. To the extent permitted by
Applicable Laws, if the Fair Market Value of the Common Stock on any Exercise Date in an Offering
Period is lower than the Fair Market Value of the Common Stock on the Enrollment Date of such
Offering Period, then all participants in such Offering Period will be automatically withdrawn from
such Offering Period immediately after the exercise of their option on such Exercise Date and
automatically re-enrolled in the immediately following Offering Period as of the first day thereof.

14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}]]