EXHIBIT 10.11
BIOCRYST PHARMACEUTICALS, INC.
0000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
December 17, l996
Xx. Xxxxxxx X. Xxxx
Chairman and CEO
BioCryst Pharmaceuticals, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Dear Xx. Xxxx:
This letter agreement (the "Agreement") will serve to confirm our agreement
win respect to the terms and corrections of the employment of Xx. Xxxxxxx X.
Xxxx (the "Employee") by BioCryst Pharmaceuticals, Inc., a Delaware corporation
("BioCryst"), after December 31, 1996.
The terms and conditions of such employment are as follows:
1. Term of Employment. Subject to the terms and conditions of this
Agreement, BioCryst hereby employs Employee, effective January 1, 1997, as
Chairman of the Board and Chief Executive Officer of BioCryst, and Employee
hereby accepts such employment. In addition, during the terms of this Agreement,
BioCryst shall use its best efforts to provide that the Employee shall be
elected as a member of the Board of Directors of BioCryst each year. BioCryst
acknowledges and agrees that after December 31, l996 Employee may also hold
positions at the University of Alabama at Birmingham as Professor Emeritus of
Biochemistry, Adjunct Senior Scientist in the Comprehensive Cancer Center,
Adjunct Senior Scientist in the Center for Macromolecular Crystallography, and
such other appointments that might be offered to the Employee from time to time,
and the Employee will be permitted to devote up to ten percent (10%) of his time
to such activities and to research and other activities at the University of
Alabama at Birmingham, if the Employee desires to participate in such
activities. Otherwise, after December 31, l996 the Employee shall devote his
full business time and energies to BioCryst. Except as provided in this
paragraph 1, the Employee shall not during the term of his employment, engage in
any other business activity that would interfere with, or prevent him from
carrying out, his duties and responsibilities under this Agreement. BioCryst
hereby agrees and acknowledges that any compensation which the Employee receives
from participation in such allowable activities shall be outside the scope of
this Agreement and in addition to any compensation received hereunder. The term
of employment of Employee under this Agreement shall commence as January 1, l997
and shall terminate on December 31, 1999, unless earlier terminated in
accordance with the provisions of paragraph 3 hereof.
2. Basic Full-Tine Compensation and Benefits.
(a) As basic yearly compensation for services rendered under this Agreement
for services rendered under paragraph 1 of this Agreement, Employee shall be
entitled to receive from BioCryst, for the term of his full-time employment
under this Agreement, an aggregate salary of $245,000 per year which
remuneration shall be payable in equal monthly installments of $20,416.67 on the
first business day of each month during the term of this Agreement, beginning on
January 1, 1997. This salary will be reviewed annually by the Board of Directors
and may be raised at the discretion of the Board.
(b) In addition to the basic Compensation set forth in (a) above, Employee
shall be entitled to receive such other benefits and perquisites provided to
other executive officers of BioCryst which benefits may include, without
limitation, reasonable vacation, sick leave, medical benefits, life insurance,
and participation in profit sharing or retirement plans.
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December 17, 1996
Page 2
(c) In addition to the basic compensation set forth in paragraphs 2(a) and
(b) above, the Employee shall receive a bonus of $50,000.00 payable on the last
day of each calendar year during the term of this Agreement, commencing with the
calendar year 1997, unless the Board of Directors of BioCryst; determine that on
the basis of the financial condition of BioCryst payment of such bonus would be
imprudent and not in the best interest of BioCryst. The Board of Directors of
BioCryst may from time to time, in its discretion, also grant such other cash or
stock bonuses to the Employee either as an award or as an incentive as it shall
deem desirable or appropriate.
3. Stock Options. BioCryst hereby agrees that it will grant a stock option
to the Employee on December 31 of each year during the term of this Agreement.
beginning with the year 1997, to purchase at least 25,000 shares of Common Stock
of BioCryst, par value $0.01 per share (the "Common Stock"), from the authorized
and unissued stock or treasury stock of BioCryst, based on the performance of
the Employee. The Board of Directors of BioCryst shall determine, in its sole
discretion, based upon the performance of the Employee and the results of
operations of BioCryst for the immediately preceding twelve (12) months, the
number of shares which may be purchased pursuant to each such option, provided
the number of shares shall not in any case be less than 25,000 In addition,
BioCryst shall also grant to the Employee an option to purchase 100,000 shares
of BioCryst Common Stock upon the occurrence of each of the following:
(a) submission by BioCryst to the Food and Drug Administration (the "FDA")
of any new drug application;
(b) final approval of each such new drug application by the FDA.
The exercise price per share for each share of BioCryst Common Stock subject
to each such option shall be the fair market value thereof on the date such
additional option is granted.
The parties intend for the options granted pursuant to this Agreement (the
"Options") to qualify as "incentive stock options," as that term is defined in
Section 422 of the Internal Revenue Code of 1986, as amended ("Section 422").
The parties understand that the portion of any Option, together with the portion
of any other incentive stock option granted by BioCryst and its parent and
subsidiary corporations, if any, which may become exercisable in any year in
excess of an aggregate of $100,000 fair market value, determined as of the date
such Option or other option, as the case may be, was granted, may not be treated
as an incentive stock option under Section 422. The Options may be exercised and
the Common Stock may be purchased by the Employee as a result of such exercise
only within the periods and to the extent hereinafter set forth:
(c) Each Option shall be 25% exercisable one year after the date it was
granted, and the remaining seventy-five percent (75%) shall vest and become
exercisable at the rate of 1/48th per month, commencing with the thirteenth
(13th) month after the date such Option was granted, and continuing to vest for
the succeeding months until fully vested and exercisable. Notwithstanding the
foregoing, in the event of a Change in Control or Structure, as defined below,
or as set forth in subparagraphs (d) or (e) below, the entire amount of each
Option shall become immediately exercisable.
(d) If the Employee suffers a period of permanent disability, as defined in
paragraph 4(b) below, the entire amount of the Option may be exercised at any
time after termination for such disability and before the earlier of twenty-four
(24) months or the expiration date of the Option.
(e) In the event of the death of the Employee, the executor or administrator
of the estate of the Employee, or other reliable transferee, shall have the
right to exercise each Option, in its entirety, within the earlier of
twenty-four (24) months after the Employee's death or before the original
expiration of the Option. Except as provided in this subparagraph (e), the
Employee shall not have the right to transfer any Option.
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December 17, 1996
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(f) Subject to paragraphs 3c), d), and e) above, each Option may, in the
Employees sole discretion, be exercised in full at one time as to the total
number of shares of Common Stock then exercisable, or in part from time to
time as to a specific number of shares of Common Stock then exercisable. A
partial exercise of an Option will not affect the exercisability of the
remainder of the Option.
(g) In no event shall the period for exercising the Option exceed ten (10)
years from the date such Option is granted.
(h) For purposes of this Agreement, the term "Change of Control or
Structure" shall mean:
(i) The acquisition by any person, entity or "group," within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the
"Exchange Act") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than fifty percent (50%) of the
then outstanding shares of Common Stock at the time of such event or the
combined voting power of BioCryst's then outstanding voting securities
generally entitled to vote in the election of directors, or
(ii) any merger, consolidation or business combination of BioCryst with or
into any other entity, or
(iii) any transaction effected by a sale of substantially all the assets
of BioCryst.
(i) In the event the employment of the Employee is terminated for any reason
other than as set forth in subparagraph (d) or (e) above, the Employee may,
within three (3) months following the date of such termination, exercise each
Option to the full extent that they were exercisable immediately prior to the
date of such termination, subject, however, to the limitation set forth in
subparagraph (g) above.
(j) All numbers of shares subject to any Option or Additional Options and
all option prices, shall be subject to appropriate anti-dilution adjustment to
take account of stock splits, stock dividends, merger, consolidation,
reclassification or the like.
4. Termination. Notwithstanding the provisions of paragraph 1 hereof, the
employment of the Employee under this Agreement may be terminated in the
following circumstances:
(a) BioCryst may terminate the employment of Employee hereunder immediately
for "Cause" and without payment. "Cause" for termination of Employee's
employment hereunder shall exist if Employee
(i) shall confess to committing or shall be convicted of any felony or
any crime involving moral turpitude, or
(ii) shall have engaged in gross and willful misconduct which is
materially injurious to the business of BioCryst.
(b) BioCryst may terminate the employment of the Employee hereunder upon
thirty (30) days written notice if the Employee shall have suffered a period of
permanent disability, which shall for purposes of this Agreement be defined as
the inability of Employee to perform his duties hereunder by reason of physical
or mental incapacity for ninety (90) days, whether consecutive or not, during
any consecutive twelve (12) month period.
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Xx. Xxxxxxx X. Xxxx
December 17, 1996
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Upon such termination of employment, all rights of Employee to receive any
future payments under paragraph 2 above shall cease.
5. Non-Competition.
(a) Non-Competition Agreement. The Employee agrees that for one (1) year
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following the termination of this Employment Agreement by reason of the
voluntary termination by the Employee, without cause on the part of BioCryst,
the Employee shall not become the Chief Executive Officer or become a key
executive of another for-profit business enterprise whose activities are at such
time directly competitive with BioCryst.
(b) Equitable Remedies. Employee acknowledges and recognizes that a
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violation of this paragraph by Employee may cause irreparable and substantial
damage and harm to BioCryst or its affiliates, could constitute a failure of
consideration, and that money damages will not provide a full remedy for
BioCryst for such violations. Employee agrees that in the event of his breach of
this paragraph, BioCryst will be entitled, if it so elects, to institute and
prosecute proceedings at law or in equity to obtain damages with respect to such
breach, to enforce the specific performance of this paragraph by Employee, and
to enjoin Employee from engaging in any activity in violation hereof.
6. Miscellaneous.
(a) Entire Agreement. This Agreement, including the exhibits hereto,
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constitutes the entire agreement between the parties relating to the
employment of the Employee by BioCryst and there are no terms relating to
such employment other than those contained in this Agreement. No modification
or variation hereof shall be deemed valid unless in writing and signed by the
parties hereto. No waiver by either party of any provision or condition of
this Agreement shall be deemed a waiver of similar or dissimilar provisions
or conditions at any time.
(b) Assignability. This Agreement may not be assigned without prior written
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consent of the parties hereto. To the extent allowable pursuant to this
Agreement, this Agreement shall be binding upon and shall inure to the benefit
of each of the parties hereto and their respective executors, administrators,
personal representatives, heirs, successors and assigns.
(c) Notices. Any notice or other communication given or rendered hereunder
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by any party hereto shall be in writing and delivered personally or sent by
registered or certified mail, postage prepaid, at the respective addresses of
the parties hereto as set forth below.
(d) Captions. The section headings contained herein are inserted only as a
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matter of convenience and reference and in no way define, limit or describe the
scope of this Agreement or the intent of any provision hereof.
(e) Taxes. All amounts to be paid to Employee hereunder are in the nature of
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compensation for Employee's employment by BioCryst, and shall be subject to
withholding, income, occupation and payroll taxes and other charges applicable
to such compensation.
(f) Governing Law. This Agreement is made and shall be governed by and
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construed in accordance with the laws of the State of Alabama without respect to
its conflicts of law principles.
(g) Date. This Agreement is dated as of December 17, 1996.
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If the foregoing correctly sets forth our understanding, please signify your
acceptance of such terms by executing this Agreement, thereby signifying your
assent, as indicated below.
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Xx. Xxxxxxx X. Xxxx
December 17, 1996
Page 5
YOURS VERY TRULY,
BIOCRYST PHARMACEUTICALS, INC.
By: /s/Xxxxxxx X. Xxxxxxxxxxxxx
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Its:Chairman of the Compensation Committee
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Address:
0000 Xxxxxxx Xxxx Xxxxx
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Xxxxxxxxxx, Xxxxxxx 00000
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AGREED AND ACCEPTED, as of this 20th day of December, 1996.
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/s/Xxxxxxx X. Xxxx
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Address:
0000 Xxxxx Xxxx
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Xxxxxxxxxx, Xxxxxxx 00000
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