EXHIBIT 10.12
BIOCRYST PHARMACEUTICALS, INC.
2190 Parkway Lake Drive
Birmingham, Alabama 35244
December 18, 1996
J. Claude Bennett, M.D.
President
The University of Alabama at Birmingham
1070 Administration Building
701 20th Street South
Birmingham, Alabama 35294-0110
Dear Dr. Bennett:
This letter agreement (the "Agreement") will serve to confirm our
agreement with respect to the terms and conditions of the employment of Dr.
J. Claude Bennett (the "Employee") by BioCryst Pharmaceuticals, Inc., a
Delaware corporation ("BioCryst"), on and 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 the commencement of
business on December 31, 1996, as President and Chief Operating Officer of
BioCryst, and Employee hereby accepts such employment. Employee shall report
to the Chief Executive Officer and the Board of Directors, and shall be
responsible for the research of BioCryst and such other operations as the
Chief Executive Officer or the Board of Directors may from time to time
determine. 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 30, 1996 Employee may also hold positions at
the University of Alabama at Birmingham as Distinguished University Professor
Emeritus, 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. Further, Employee may continue his
editorship of Cecil's Textbook of Medicine and other scholarly journals.
Otherwise, after December 30, 1996 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 of
the commencement of business on December 31, 1996 and shall terminate on the
close of business on December 31, 1999, unless earlier terminated in
accordance with the provisions of paragraph 3 hereof.
2. Basic Full-Time 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 $800 for December 31,
1996, and thereafter $220,000 per year which remuneration shall be payable in
equal monthly installments of $18,333.33 on the first business day of each
month 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.
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(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.
3. Stock Options. BioCryst hereby agrees that it will grant a stock
option to the Employee on December 31, 1996, to purchase 100,000 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.
The exercise price per share for each share of BioCryst Common Stock
subject to such option shall be the fair market value thereof on December 31,
1996.
The parties intend for the option granted pursuant to this Agreement (the
"Option") to qualify, to the extent possible, as "incentive stock options,"
as that term is defined in Section 422 of the Internal Revenue Code of 1986,
as amended ("Section 422"). Employee understands that at this time BioCryst
has less than 100,000 shares available in its incentive stock option pool,
but BioCryst agrees to use its best efforts, if need be to assure incentive
stock option treatments to increase such pool as may be reasonably practical.
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 Option
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:
(a) The Option shall be 25% exercisable December 31, 1997, and the
remaining seventy-five percent (75%) shall vest and become exercisable at the
rate of 1/48th per month, commencing with the month of January, 1998 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 (c)
or (d) below, the entire amount of the Option shall become immediately
exercisable.
(b) 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.
(c) 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 the 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
(c), the Employee shall not have the right to transfer any Option.
(d) Subject to paragraphs 3(b) and (c) above, the Option may, in the
Employee's 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 the Option will not affect the exercisability of the
remainder of the Option.
(e) In no event shall the period for exercising the Option exceed ten
(10) years from the date such Option is granted.
(f) For purposes of this Agreement, the term "Change of Control or
Structure" shall mean:
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(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.
(g) In the event the employment of the Employee is terminated for any
reason other than as set forth in subparagraph (b) or (c) above, the Employee
may, within three (3) months following the date of such termination, exercise
the Option to the full extent that it was exercisable immediately prior to
the date of such termination, subject, however, to the limitation set forth
in subparagraph (e) above.
(h) 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.
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
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 Chief Operating
Officer or become a key executive of another for-profit business enterprise
whose activities are at such time directly competitive with BioCryst.
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(b) Equitable Remedies. Employee acknowledges and recognizes that a
violation of this paragraph by Employee may cause irreparable and substantial
damage and harm to BioCryst or its affiliates, could Dr. 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,
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 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 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 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 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
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 18, 1996.
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.
Yours very truly,
BIOCRYST PHARMACEUTICALS, INC.
By: /s/Charles E. Bugg
Its: Chairman & CEO
Address:
2190 Parkway Lake Drive
Birmingham. Alabama 35244
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AGREED AND ACCEPTED, as of this 18th day of December, 1996.
/s/ J. Claude Bennett
Address:
The University of Alabama at Birmingham
1070 Administration Building
701 20th Street South
Birmingham, Alabama 35294-0110
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