[Five Prime letterhead]
April [__], 2021
Re: Certain Payments
As you know, Five Prime Therapeutics, Inc. (the Company) has entered into an Agreement and Plan of Merger, dated as of March 4, 2021 (the Merger Agreement), with Amgen Inc. (Parent) and Franklin Acquisition Sub, Inc., a wholly owned subsidiary of Parent. All capitalized terms used but not defined in this letter agreement shall have the meanings set forth in the Merger Agreement.
In consideration of your services to the Company, subject to and contingent upon the Effective Time, the Compensation Committee of the Board of Directors of the Company has approved the Gross-Up Payment (defined below) to be made to you on the terms and conditions described in this letter agreement between you and the Company (this Agreement). This Agreement and the Gross-Up Payment provided for herein shall replace and supersede any other agreements and promises made to you by the Company, whether written or oral, with respect to the subject matter herein. If the Effective Time does not occur, the Merger Agreement terminates pursuant to its terms or your employment with the Company terminates for any reason prior to the Effective Time, this Agreement will terminate and be of no force or effect and you will not receive a Gross-Up Payment.
Indemnification for Golden Parachute Excise Taxes
If any payment or benefit you would receive in connection with the Merger, including upon a termination of service or in connection with post-Merger services, from the Company, Parent or otherwise (determined by the Company or Parent, as applicable, in its reasonable discretion, without regard to any additional payments pursuant to this Agreement) (the Payments), would (i) constitute a parachute payment within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the Code), and the treasury regulations and guidance thereunder, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the Excise Tax), then the Company shall pay and you shall be entitled to receive an additional payment (which, for this purpose, includes withholding and remittance of taxes by the Company on your behalf) (the Gross-Up Payment) in an amount such that, after the timely payment by you of all taxes (including, without limitation, (i) any income or employment taxes, (ii) any interest or penalties imposed with respect to such taxes, and (iii) any additional excise tax imposed by Section 4999 of the Code) on the Gross-Up Payment, you shall retain, in addition to the Payments, an amount equal to the Excise Tax. The Company shall pay you any Gross-Up Payment due within sixty (60) days of your receipt of any Payment with respect to which such Gross-Up Payment is due.
Calculation and Payment of the Gross-Up Payment
All determinations required to be made under this Agreement, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by Golden Parachute Tax Solutions LLP (the Calculation Firm) in consultation with counsel for the Company and Parent.