EX-10.5 FORM OF NOTICE OF GRANT OF STOCK OPTION



 





Exhibit 10.5




BIOCRYST PHARMACEUTICALS, INC.

STOCK INCENTIVE PLAN




NOTICE OF GRANT OF STOCK OPTION




     Notice is hereby given of the following stock option grant (the “Option”) to purchase shares
of the Common Stock of BioCryst Pharmaceuticals, Inc. (the “Company”) pursuant to the BioCryst
Pharmaceuticals, Inc. Stock Incentive Plan (the “Plan”):



	 	 	 	 	 
	 

	 	Optionee:	 	 
	 
	 	 	 	 
	 

	 	Grant Date:	 	 
	 
	 	 	 	 
	 

	 	Option Price:	 	 
	 
	 	 	 	 
	 

	 	Number of Optioned Shares:	 	 
	 
	 	 	 	 
	 

	 	Option Expiration Date:	 	 
	 
	 	 	 	 
	 

	 	Type of Option:
	 	                     Incentive Stock Option (ISO)
	 

	 	 	 	(up to tax code limits — any portion
	 

	 	 	 	of the option covering Option Shares in
	 

	 	 	 	excess of tax code limits shall be
	 

	 	 	 	accounted for as a non-qualified stock
	 

	 	 	 	option)
	 

	 	 	 	                     Non-Statutory Stock Option (NSO)






     Exercise Schedule / Vesting Terms:



     Optionee understands that the Option is granted subject to and in accordance with the express
terms and conditions of the Plan and agrees to be bound by and conform to the terms and conditions
of the Plan, the Plan Prospectus, this Notice of Grant of Stock Option and its accompanying Stock
Option Agreement. Optionee acknowledges that copies of the Plan, the Plan Prospectus, and the
Stock Option Agreement are available to Optionee on the Company’s intranet and have been made
available to Optionee.



     No Employment or Service Contract. Nothing in the Option Agreement or the Plan shall
confer upon the Optionee the right to continue in the Service of the Company for any period of
specific duration or interfere with or otherwise restrict in any way the rights of the Company or
the Optionee, which rights are hereby expressly reserved by each, to terminate Optionee’s Service
at any time for any reason whatsoever, with or without cause.



     By my signature below, I hereby acknowledge receipt of this Option granted on the Grant Date
specified above and issued to me under the terms and conditions of the Plan.



	 	 	 	 	 	 	 	 	 
	Optionee:	 	 	 	BIOCRYST PHARMACEUTICALS, INC.	 	 
	 

	 	 

	 	 
	 	 	 	 
	Address:

	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	Dated:

	 	 	 	Title:	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 






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BIOCRYST PHARMACEUTICALS, INC.

STOCK INCENTIVE PLAN




STOCK OPTION AGREEMENT




WITNESSETH:




RECITALS




     A. The Board of Directors of the Company has adopted the Company’s Stock Incentive Plan (the
“Plan”) for the purpose of attracting and retaining the services of selected key employees
(including officers and directors), non-employee Board members and consultants and other
independent contractors who contribute to the financial success of the Company or its parent or
subsidiary corporations.



     B. Optionee is an individual who is to render valuable services to the Company or its parent
or subsidiary corporations, and this Agreement is executed pursuant to, and is intended to carry
out the purposes of, the Plan in connection with the Company’s grant of a stock option to Optionee.



     NOW, THEREFORE, it is hereby agreed as follows:



     1. Grant of Option. Subject to and upon the terms and conditions set forth in this
Agreement, the Company hereby grants to Optionee, as of the grant date (the “Grant Date”)
specified in the accompanying Notice of Grant of Stock Option (the “Grant Notice”), a stock
option to purchase up to that number of shares of the Company’s Common Stock (the “Optioned
Shares”) specified in the Grant Notice. The Optioned Shares shall be purchasable from time to
time during the option term at the option price per share (the “Option Price”) specified in
the Grant Notice.



     2. Option Term. This option shall expire at the close of business on the Expiration
Date specified in the Grant Notice, unless sooner terminated in accordance with Paragraph 5 , 6 or
19 of this Agreement.



     3. Limited Transferability. During the lifetime of the Optionee, this option (together
with its tandem stock appreciation right), shall be exercisable only by the Optionee and shall not
be assignable or transferable by the Optionee except for a transfer by will or by the laws of
descent and distribution following the Optionee’s death. Notwithstanding the foregoing, this
option may, to the extent it is a non-statutory stock option, in connection with the Optionee’s
estate plan, be assigned in whole or in part during the during Optionee’s lifetime either as (i) as
a gift to one or more members of Optionee’s immediate family, to a trust in which Optionee and/or
one or more such family members hold more than fifty percent (50%) of the beneficial interest or an
entity in which more than fifty percent (50%) of the voting interests are owned by Optionee and/or
one or more such family members, or (ii) pursuant to a domestic relations order. The assigned
portion shall be exercisable only by the person or persons who acquire a proprietary interest in
the option pursuant to such assignment. The terms applicable to the assigned portion shall be the
same as those in effect for this option immediately prior to such assignment and shall be set forth
in such documents issued to the assignee as the Plan Administrator may deem appropriate.



     4. Exercisability. This option shall become exercisable for the Optioned Shares in
installments as is specified in the Grant Notice. As the option becomes exercisable for one or more
installments, the installments shall accumulate and the option shall remain exercisable for the
accumulated installments until the Expiration Date or the sooner termination of the option term
under this Agreement.



     5. Acceleration; Termination. The option term specified in Paragraph 2 shall terminate
(and this option shall cease to be exercisable) prior to the Expiration Date should one of the
following provisions become applicable:



     (a) Except to the extent otherwise provided in subparagraphs (ii) through (v) below, should
optionee cease to remain in Service at any time during the option term, then the period for
exercising this option shall be reduced to a three (3)-month period commencing with the date of
such cessation of Service, but in no event shall this option be exercisable at any time after the
Expiration Date. Upon the expiration of such three (3) month period or (if



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earlier) upon the
Expiration Date, this option shall terminate and cease to be outstanding. However, should Optionee
die during the three (3)-month period following his or her cessation of Service, the personal
representative of the Optionee’s estate or the person or persons to whom this option is transferred
pursuant to the Optionee’s will or in accordance with the laws of descent or distribution shall
have a twelve (12)-month period following the date of the Optionee’s death during which to exercise
this Option.



          (b) Should Optionee, after completing five (5) full years of Service, die while in Service,
then the exercisability of each of his or her outstanding options shall automatically accelerate so
that each such option shall become fully exercisable with respect to the total number of Optioned
Shares at the time subject to such option and may be exercised for all or any portion of such
shares. The personal representative of the Optionee’s estate or the person or persons to whom this
option is transferred pursuant to the Optionee’s will or in accordance with the laws of descent and
distribution shall have a twelve (12)-month period following the date of the Optionee’s death
during which to exercise this option, but in no event shall this option be exercisable at any time
after the Expiration Date.




          (c) Should Optionee die while in Service prior to completing five (5) full years of Service,
then the period for which each outstanding vested option held by the Optionee at the time of death
shall be exercisable by the Optionee’s estate or the person or persons to whom the option is
transferred pursuant to the Optionee’s will shall be limited to the twelve (12)-month period
following the date of the Optionee’s death, but in no event shall this option be exercisable at any
time after the Expiration Date.




          (d) Should Optionee become permanently disabled (as defined in Section 22(e)(3) of the
Internal Revenue Code) and cease by reason thereof to remain in Service at any time during the
option term, then the period for exercising this option shall be reduced to a twelve (12)-month
period commencing with the date of such cessation of Service, but in no event shall this option be
exercisable at any time after the Expiration Date. Upon the expiration of such twelve (12)-month
period or (if earlier) upon the Expiration Date, this option shall terminate and cease to be
outstanding.




          (e) Should (1) the Optionee’s Service be terminated for misconduct (including, but not limited
to, any act of dishonesty, willful misconduct, fraud or embezzlement) or (2) the Optionee make any
unauthorized use or disclosure of confidential information or trade secrets of the Company or its
parent or subsidiary corporations, then in any such event this option shall terminate immediately
and cease to be exercisable.




          (f) During the limited period of exercisability applicable in accordance with subparagraphs
(a) through (d) above, this option may not be exercised for more than the number of the Optioned
Shares (if any) for which this option is, at the time of the Optionee’s cessation of Service,
exercisable in accordance with the exercise provisions specified in this Agreement and the Grant
Notice.




          (g) For purposes of this Paragraph 5 and for all other purposes under this Agreement, the
following definitional provisions shall be in effect:




               (1) The Optionee shall be deemed to remain in Service for so long as the Optionee continues to
render periodic services to the Company or any parent or subsidiary corporation, whether as an
Employee, a non-employee member of the Company’s Board of Directors or an independent consultant or
advisor.



               (2) The Optionee shall be deemed to be an Employee and to continue in the Company’s employ
for
so long as the Optionee remains in the employ of the Company or one or more of its parent or
subsidiary corporations, subject to the control and direction of the employer entity as to both the
work to be performed and the manner and method of performance.



               (3) A corporation shall be considered to be a subsidiary corporation of the Company if it is a
member of an unbroken chain of corporations beginning with the Company, provided each such
corporation in the chain (other than the last corporation) owns, at the time of determination,
stock possessing 50% or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.



               (4) A corporation shall be considered to be a parent corporation of the Company if it is a
member of an unbroken chain ending with the Company, provided each such corporation in the chain
(other than the



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Company) owns, at the time of determination, stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations in such chain.



     6. Corporate Transaction.



          (a) In the event of one or more of the following transactions (a “Corporate Transaction”):




               (1) a merger or consolidation in which the Company is not the surviving entity, except for a
transaction the principal purpose of which is to change the State of the Company’s incorporation,



               (2) the sale, transfer or other disposition of all or substantially all of the assets of the
Company in liquidation or dissolution of the Company, or



               (3) any reverse merger in which the Company is the surviving entity but in which securities
possessing more than fifty percent (50%) of the total combined voting power of the Company’s
outstanding securities are transferred to holders different from those who held such securities
immediately prior to such merger,


then the exercisability of this option (if outstanding at the time) shall automatically accelerate
so that such option shall, immediately prior to the specified effective date for the Corporate
Transaction, become fully exercisable for all of the Optioned Shares and may be exercised for all
or any portion of such shares. No such acceleration of this option, however, shall occur if and to
the extent: (i) the option is, in connection with the Corporate Transaction, either to be assumed
by the successor corporation or parent thereof or be replaced with a comparable option to purchase
shares of the capital stock of the successor corporation or parent thereof or (ii) the option is to
be replaced by a comparable cash incentive program of the successor corporation based on the option
spread (the excess of the fair market value of the shares of Common Stock at the time subject to
the option over the Option Price payable for such shares) at the time of the Corporate Transaction.
The determination of comparability under clause (i) or (ii) of the preceding sentence shall be made
by the Plan Administrator and its determination shall be final, binding and conclusive.




          (b) This option, to the extent not previously exercised, shall terminate upon the consummation
of the Corporate Transaction and cease to be exercisable, unless it is expressly assumed by the
successor corporation or parent thereof. The Plan Administrator shall have complete discretion to
provide, on such terms and conditions as it sees fit, for a cash payment to be made to Optionee on
account of such termination of this option, in an amount equal to the excess (if any) of (A) the
Fair Market Value (as defined below) of the Optioned Shares subject to this option as of the date
of the Corporate Transaction, over (B) the Option Price for such shares.




          (c) In the event of a Change in Control (as defined in the Plan), the exercisability of this
option (if outstanding at the time) shall automatically accelerate so that such option shall,
immediately prior to the specified effective date for the Change in Control, become fully
exercisable for all of the Optioned Shares and may be exercised for all or any portion of such
shares.




          (d) The exercisability of this option as an incentive stock option under the Federal tax laws
(if designated as such in the Grant Notice) shall, in connection with any such Corporate
Transaction or Change in Control, be subject to the applicable dollar limitation of Paragraph 17.




          (e) This Agreement shall not in any way affect the right of the Company to adjust, reclassify,
reorganize or otherwise make changes in its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or assets.




     7. Adjustment in Optioned Shares.



          (a) In the event any change is made to the Common Stock issuable under the Plan by reason of
any stock split, stock dividend, recapitalization, combination of shares, exchange of shares, or
other change affecting the outstanding Common Stock as a class without receipt of consideration,
then appropriate adjustments shall be made to (i) the total number and/or class of Optioned Shares
subject to this option and (ii) the Option Price payable per share in order to reflect such change
and thereby preclude a dilution or enlargement of benefits hereunder.




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          (b) If this option is to be assumed or is otherwise to remain outstanding after a Corporate
Transaction, then this option shall be appropriately adjusted to apply and pertain to the number
and class of securities which would have been issuable to the Optionee in the consummation of such
Corporate Transaction had the option been exercised immediately prior to such Corporate
Transaction, and appropriate adjustments shall also be made to the Option Price payable per share,
provided the aggregate Option Price payable hereunder shall remain the same.




     8. Privilege of Stock Ownership. The holder of this option shall not have any
shareholder rights with respect to the Optioned Shares until such individual shall have exercised
the option and paid the Option Price.



     9. Manner of Exercising Option.



          (a) In order to exercise this option with respect to all or any part of the Optioned Shares
for which this option is at the time exercisable, Optionee (or in the case of exercise after
Optionee’s death, the Optionee’s executor, administrator, heir or legatee, as the case may be) must
take the following actions:





               (1) Provide the Plan Administrator (or its designee) with written notice of the
option
exercise (the “Exercise Notice”) specifying the number of Optioned Shares for which the option is
being exercised.




               (2) Pay the aggregate Option Price for the purchased shares in one of the following
alternative forms:




                    (A) full payment in cash or check payable to the
Company’s order;




                    (B) full payment in shares of Common Stock held by
Optionee for the requisite period necessary
to avoid a charge to the Company’s reported earnings and valued at Fair Market Value on the
Exercise Date;




                    (C) full payment in a combination of shares of Common
Stock held for the requisite period
necessary to avoid a charge to the Company’s earnings and valued at Fair Market Value on the
Exercise Date and cash or check drawn to the Company’s order; or




                    (D) If the Company’s outstanding Common Stock is
registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended (the “1934 Act”), at the time this option is exercised,
then payment of the Option Price may also be effected through a broker-dealer sale and remittance
procedure pursuant to which Optionee (i) shall provide irrevocable written instructions to a
designated brokerage firm to effect the immediate sale of the purchased shares and remit to the
Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the
aggregate Option Price payable for the purchased shares plus all applicable Federal and state
income and employment taxes required to be withheld by the Company by reason of such purchase and
(ii) shall provide written directives to the Company to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the sale.




               (3) Furnish to the Company appropriate documentation that the person or persons
exercising the
option (if other than Optionee) have the right to exercise this option.




          (b) For purposes of subparagraph (a) above and for all other valuation purposes under this
Agreement, the Fair Market Value per share of Common Stock on any relevant date shall be determined
in accordance with the following provisions:




               (1) If the Common Stock is not at the time listed or admitted to trading on any
national
securities exchange but is traded in the over-the-counter market, the Fair Market Value shall be
the mean between the highest bid and lowest asked prices (or, if such information is available, the
closing selling price) per share of Common Stock on the date in question in the over-the-counter
market, as such prices are reported by the National Association of Securities Dealers through the
Nasdaq system or any successor system. If there are no reported bid and asked prices (or closing
selling price) for the Common Stock on the date in question, then the mean between the highest bid
price and lowest asked price (or the closing selling price) on the last preceding date for which
such quotations exist shall be determinative of Fair Market Value.



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               (2) If the Common Stock is at the time listed or admitted to trading on any
national
securities exchange, then the Fair Market Value shall be the closing selling price per share of
Common Stock on the date in question on the securities exchange determined by the Plan
Administrator to be the primary market for the Common Stock, as such price is officially quoted in
the composite tape of transactions on such exchange. If there is no reported sale of Common Stock
on such exchange on the date in question, then the Fair Market Value shall be the closing selling
price on the exchange on the last preceding date for which such quotation exists.




               (3) If the Common Stock is on the date in question neither listed or admitted to
trading on
any stock exchange nor traded in the over-the-counter market, then the fair market value shall be
determined by the Plan Administrator after taking into account such factors as the Plan
Administrator shall deem appropriate.



          (c) The Exercise Date shall be the date on which the Exercise Notice is delivered to the Plan
Administrator. Except to the extent the sale and remittance procedure specified above is utilized
for the exercise of the option, payment of the Option Price for the purchased shares must accompany
such notice.




          (d) As soon as practical after the Exercise Date, the Company shall issue to or on behalf of
Optionee (or other person or persons exercising this option) the Purchased Options Shares via
electronic means or through delivery of a certificate or certificates representing the purchased
Optioned Shares.




          (e) In no event may this option be exercised for any fractional share.




     10. Compliance with Laws and Regulations.



          (a) The exercise of this option (or of its tandem stock appreciation right) and the issuance
of Common Stock hereunder shall be subject to compliance by the Company and the Optionee with all
applicable requirements of law relating thereto and with all applicable regulations of any stock
exchange or over-the-counter market on which shares of the Company’s Common Stock may be listed or
traded at the time of such exercise and issuance.




          (b) In connection with the exercise of this option (or its tandem stock appreciation right),
Optionee shall execute and deliver to the Company such representations in writing as may be
requested by the Company in order for it to comply with the applicable requirements of federal and
state securities laws.




     11. Successors and Assigns. Except to the extent otherwise provided in Paragraph 3 or
6, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the
successors, administrators, heirs, legal representatives and assigns of Optionee and the successors
and assigns of the Company.



     12. Liability of Company.



          (a) If the Optioned Shares covered by this Agreement exceed, as of the Grant Date, the number
of shares of Common Stock which may without shareholder approval be issued under the Plan, then
this option shall be void with respect to such excess shares unless shareholder approval of an
amendment sufficiently increasing the number of shares of Common Stock issuable under the Plan is
obtained in accordance with the provisions of the Plan.




          (b) The inability of the Company to obtain approval from any regulatory body having authority
deemed by the Company to be necessary to the lawful issuance and sale of any Common Stock pursuant
to this Agreement shall relieve the Company of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained. The Company,
however, shall use its best efforts to obtain all such approvals.




     13. No Employment or Service Contract. Nothing in this Agreement or in the Plan shall
confer upon the Optionee any right to continue in the Service of the Company (or any parent or
subsidiary corporation of the Company employing or retaining Optionee) for any period of time or
interfere with or otherwise restrict in any way the rights of the Company (or any parent or
subsidiary corporation of the Company employing or retaining Optionee) or the Optionee, which
rights are hereby expressly reserved by each, to terminate the Optionee’s Service at any time for
any reason whatsoever, with or without cause.



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     14. Notices. Any notice required to be given or delivered to the Company under the
terms of this Agreement shall be in writing and addressed to the Company in care of the Corporate
Secretary at its principal corporate offices. Any notice required to be given or delivered to
Optionee shall be in writing and addressed to Optionee at the address indicated below Optionee’s
signature line on the Grant Notice. All notices shall be deemed to have been given or delivered
upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to
the party to be notified.



     15. Construction. This Agreement and the option evidenced hereby are made and granted
pursuant to the Plan and are in all respects limited by and subject to the express terms and
provisions of the Plan. All decisions of the Plan Administrator with respect to any question or
issue arising under the Plan or this Agreement shall be conclusive and binding on all persons
having an interest in this option.



     16. Governing Law. The interpretation, performance, and enforcement of this Agreement
shall be governed by the laws of the State of Alabama without resort to that State’s
conflict-of-laws rules.



     17. Additional Terms Applicable to an Incentive Stock Option. In the event this option
is designated as an incentive stock option in the Grant Notice, the following terms and conditions
shall also apply to the grant:




          (a) This option shall cease to qualify for favorable tax treatment as an incentive stock
option under the federal tax laws if (and to the extent) this option is exercised for one or more
Optioned Shares: (i) more than three (3) months after the date the Optionee ceases to be an
Employee for any reason other than death or permanent disability (as defined in Paragraph 5) or
(ii) more than one (1) year after the date the Optionee ceases to be an Employee by reason of
permanent disability.




          (b) No installment under this option (whether annual or monthly) shall qualify for favorable
tax treatment as an incentive stock option under the Federal tax laws if (and to the extent) the
aggregate fair market value (determined at the Grant Date) of the Common Stock for which such
installment first becomes exercisable hereunder will, when added to the aggregate fair market value
(determined as of the respective date or dates of grant) of any earlier installments of Common
Stock for which this option or one or more other incentive stock options granted to the Optionee
prior to the Grant Date (whether under the Plan or any other option plan of the Company or any
Parent or Subsidiary corporations) first become exercisable during the same calendar year, exceed
One Hundred Thousand Dollars ($100,000) in the aggregate.




          (c) Should the exercisability of this option be accelerated upon a Corporate Transaction or a
Change in Control, then this option shall quality for favorable tax treatment as an incentive stock
option under the Federal tax laws only to the extent the aggregate Fair Market Value (determined at
the Grant Date) of the Common Stock for which this option first becomes exercisable in the calendar
year in which the Corporate Transaction or Change in Control occurs does not, when added to the
aggregate Fair Market Value (determined as of the respective date or dates of grant) of any earlier
installments of Common Stock for which this option or one or more other incentive stock options
granted to the Optionee prior to the Grant Date (whether under the Plan or any other option plan of
the Company or any Parent or Subsidiary corporations) first become exercisable during the same
calendar year, exceed One Hundred Thousand Dollars ($100,000) in the aggregate.




          (d) To the extent this option should fail to qualify as an incentive stock option under the
Federal tax laws, the Optionee will recognize compensation income in connection with the
acquisition of one or more Optioned Shares hereunder, and the Optionee must make appropriate
arrangements for the satisfaction of all Federal, State or local income tax withholding
requirements and Federal social security employee tax requirements applicable to such compensation
income.



     18. Additional Terms Applicable to a Non-Statutory Stock Option. In the event this
option is designated as a non-statutory stock option in the Grant Notice, Optionee hereby agrees to
make appropriate arrangements with the Company or parent or subsidiary corporation employing
Optionee for the satisfaction of any federal, state or local income tax withholding requirements
and federal social security employee tax requirements applicable to the exercise of this option.



     19. Tandem Stock Appreciation Right. Optionee is hereby granted a tandem stock
appreciation right,



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which entitles Optionee to surrender all or part of this option with respect to Optioned
Shares for which it is then vested and exercisable, for a distribution from the Company in an
amount equal to the excess of (A) the Fair Market Value (on the option surrender date) of the
Optioned Shares for which the option is surrendered, over (B) the Option Price for such Optioned
Shares. The distribution may be made in cash, or partly in shares and partly in cash, as the Plan
Administrator determines in its sole discretion. Any portion of this option that is surrendered in
accordance with this Paragraph shall cease to be outstanding and shall no longer be exercisable by
Optionee.




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