Filed by Bowne Pure Compliance



 







Exhibit 10.1



July 23, 2007



Mr. Stuart Grant


240 Summer Street


Norwell, MA 02061



Dear Mr. Grant:



On behalf of BioCryst Pharmaceuticals, Inc., a Delaware corporation (“BioCryst” or the “Company”), we are very
excited to offer you the position of Senior Vice President and Chief Financial Officer. We, along with the other
members of the Company’s Board of Directors (the “Board”), and the Company’s management team, are all very impressed
with you and what you will bring to the Company. We believe that with your background, you will make significant
contributions to the success of the Company.



This letter agreement (the “Agreement”) will serve to confirm our agreement with respect to the terms and
conditions of your employment.



1. Term of Employment. Subject to the terms and conditions of this Agreement, BioCryst hereby employs Stuart Grant
(the “Employee”), effective August 27, 2007, as Senior Vice President and Chief Financial Officer of BioCryst, and
Employee hereby accepts such employment. Employee shall commence employment at the Company’s Cary, North Carolina
office. 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 August 27, 2007, and shall terminate on August
26, 2010 unless earlier terminated in accordance with the provisions of paragraph 4 hereof. In the event Employee is
retained by the Company as Senior Vice President and Chief Financial Officer past August 26, 2010, the terms of his
employment shall continue to be governed by this Agreement unless otherwise provided by the Board.



2. Basic Full-Time Compensation and Benefits.




(a) As basic compensation for services rendered under this Agreement, Employee shall be entitled to
receive from BioCryst, a salary of $31,250 per month ($375,000 per annum) payable on the first business day of
each month during the term of this Agreement, beginning on September 1, 2007. 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 eligible to earn a
cash bonus, payable as soon as reasonably practicable in the calendar year following each calendar year during
the term of this Agreement, based on the Company’s achievement of performance related goals proposed by
management and approved by the Board for the Company’s applicable fiscal year (the “Fiscal Year”). The bonus
actually earned, if any, shall be based on a target amount equal to 30% of the base compensation earned by
executive during such Fiscal Year (the “Target Amount”), and shall be pro-rated based on the degree to which
the performance goals have been achieved, subject to a minimum level of achievement proposed by management and
approved by the Board. The Target Amount for the 2007 Fiscal Year shall be prorated based on Employee’s base
compensation earned during 2007. The Board may, in its discretion, approve a bonus in excess of the Target
Amount if the performance goals have been exceeded. Employee must be employed through April 1, of the next
succeeding Fiscal Year in order to receive the annual bonus for each Fiscal Year.


 


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(c) In addition to the basic compensation set forth in (a) and (b) 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 (currently 4 weeks), sick leave, medical benefits, life
insurance, and participation in profit sharing or retirement plans.




(d) In addition to the compensation set forth in paragraphs 2(a), (b) and (c) above, 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. Initial Equity Awards. In connection with Employee’s execution of this Agreement, Employee shall be issued initial
equity incentive awards as follows:




(a) The Company shall grant to Employee an option to purchase 200,000 shares of the Company’s common stock
(“Common Stock”), with an exercise price equal to the fair market value of the Common Stock on the date of the
grant, which option shall vest and become exercisable in accordance with paragraph 3(c) below. The option will
be an “incentive stock option” up to the maximum number of shares that may be covered under an incentive stock
option pursuant to the tax code. The Company shall, at its normal grant time following the 2008 Annual
Shareholders meeting, award Employee an additional option grant of not less than 30,000 shares of Common Stock,
at then fair market value.




(b) The award set forth in paragraph 3(a) above will vest, contingent on Employee’s continued provision of
services to the Company on each respective vesting date, over a period of 4 years as follows: one year after
Employee’s start date, 25% of the awards will vest; thereafter, the remaining shares will vest on a monthly
schedule of 1/48 of the total number of shares subject to the grants upon the completion of each month of
service.




(c) The stock option awards set forth in paragraph 3(a) above shall be granted under and subject to the
terms of the BioCryst Pharmaceuticals, Inc. Stock Incentive Plan (the “Stock Incentive Plan”). All awards
shall be subject to the terms of specific award agreements between the Employee and the Company, which Employee
will be required to execute as a condition of the grants.



4. Termination.




(a) If Employee’s employment is terminated as a result of (i) the expiration of the stated term of this
Agreement, (ii) the Employee’s resignation, (iii) the Employee’s death, (iv) by the Company for Cause, or (v)
by the Company as a result of Disability, Employee will receive base salary, as well as any accrued but unused
vacation (if applicable) and other compensation, earned through the effective termination date, and no
additional compensation, except as set forth in Section 4(d) below.




For all purposes under this Agreement, a termination for “Cause” shall mean a determination by the Board
that Employee’s employment be terminated for any of the following reasons: (i) failure or refusal to comply in
any material respect with lawful policies, standards or regulations of Company; (ii) a violation of a federal
or state law or regulation applicable to the business of the Company; (iii) conviction or plea of no contest to
a felony under the laws of the United States or any State; (iv) fraud or misappropriation of property belonging
to the Company or its affiliates; (v) a breach in any material respect of the terms of any confidentiality,
invention assignment or proprietary information agreement with the Company or with a former employer, (vi)
failure to satisfactorily perform Employee’s duties after having received written notice of such failure and at
least thirty (30) days to cure such failure, or (vii) misconduct or gross negligence in connection with the
performance of Employee’s duties.




“Disability” shall mean 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.




(b) If the Company terminates Employee’s employment without Cause, it shall provide written notice of
termination to Employee, along with any base salary and accrued but unused vacation or other


 


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compensation earned through the effective termination date, and, conditioned on Employee (a) signing and
not revoking a release of any and all claims, in a form prescribed by the Company, and (b) returning to the
Company all of its property and confidential information that is in Employee’s possession, Employee will
receive the following: (i) continuation of base salary for 1 year beyond the effective termination date,
payable in accordance with the regular payroll practices of the Company; (ii) payment of Employee’s target
bonus in effect for the fiscal year of termination, payable in equal installments over the regularly scheduled
payroll periods of the Company for the one year following the effective date of termination; and (iii) if
Employee elects to continue health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended (“COBRA”) following termination of employment, the Company shall pay the monthly premium
under COBRA until the earlier of (x) 6 months following the effective termination date, or (y) the date upon
which Employee commences employment with an entity other than the Company. Employee will notify the Company in
writing within 5 days of your receipt of an offer of employment with any entity other than the Company, and
will accordingly identify the date upon which you will commence employment in such writing.




(c) If, during Employee’s employment with the Company, there is a Change of Control, all equity awards
granted to Employee under paragraph 3 and otherwise shall vest in full. In addition, if the Company terminates
Employee’s employment without Cause or Employee is Constructively Terminated within 6 months of the Change in
Control, then Employee will be eligible to receive the benefits provided in paragraph 4(b), under the terms and
conditions set forth in that paragraph.




“Change of Control” shall be defined as (i) 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; (ii) the sale, transfer or other disposition of all or substantially all of the assets
of the Company in liquidation or dissolution of the Company; (iii) 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 a person or persons different from the
persons holding those securities immediately prior to such merger; (iv) any person or related group of persons
(other than the Company or a person that directly or indirectly controls, is controlled by, or is under common
control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule
13d-3 of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined voting
power of the Company’s outstanding securities pursuant to a tender or exchange offer made directly to the
Company’s stockholders; or (v) a change in the composition of the Board over a period of twenty-four (24)
consecutive months or less such that a majority of the Board members (rounded up to the next whole number)
ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who
either (A) have been Board members continuously since the beginning of such period or (B) have been elected or
nominated for election as Board members during such period by at least two-thirds of the Board members
described in clause (A) who were still in office at the time such election or nomination was approved by the
Board.




“Constructive Termination” shall mean a resignation of employment within 30 days of the occurrence of any
of the following events which occurs within 6 months following a Change of Control: (i) a material reduction in
Employee’s responsibilities; (ii) a material reduction in Employee’s base salary, unless such reduction is
comparable in percentage to, and is part of, a reduction in the base salary of all executive officers of the
Company; or (iii) a relocation of Employee’s principal office to a location more than 50 miles from the
location of Employee’s principal office immediately preceding a Change of Control.




(d) If (i) Employee remains an employee of the Company after the expiration of the three year term of this
Agreement; and (ii) within 6 months thereafter, Employee resigns as a result of a material and adverse change
in the Company’s business, then Employee shall be entitled to receive the severance benefits on the terms and
conditions specified in paragraph 4(b) above.




(e) In the event (i) any payments described in paragraphs 4(b), (c) or (d) above would be “deferred
compensation” subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”); and (ii)
Employee is a “specified employee” (as defined in Code Section 409A(2)(B)(i)), such payments shall, to the
extent required by Code Section 409A, be delayed for the minimum period and in the minimum manner necessary to
avoid the imposition of the tax required by Code Section 409A.


 


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5. Non-Competition; Proprietary Information and Inventions.




(a) Proprietary Information and Inventions Agreement. As a condition precedent to the employment
of Employee by the Company, Employee shall execute the Company’s standard Proprietary Information and
Inventions Agreement, attached hereto as Exhibit A.




(b) Non-Competition Agreement. The Employee agrees that for one (1) year following the
termination of this Agreement by reason of the voluntary termination by the Employee, without cause on the part
of BioCryst, the Employee shall not become the Chief Financial Officer or become a key executive of another
for-profit business enterprise whose activities are at such time directly competitive with BioCryst.




(c) 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
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. Golden Parachute Provisions. If it is determined that any payment or benefit provided by the Company to or for the
benefit of the Employee, whether paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, including, by example and not by way of limitation, acceleration by the Company or otherwise of
the date of vesting or payment under any plan, program, arrangement or agreement of the Company would be subject to the
excise tax imposed by Code section 4999 or any interest or penalties with respect to such excise tax (such excise tax
together with any such interest and penalties, shall be referred to as the “Excise Tax”), then the Company shall first
make a calculation under which such payments or benefits provided to the Employee are reduced to the extent necessary
so that no portion thereof shall be subject to the Excise Tax (the “4999 Limit”). The Company shall then compare (a)
the Employee’s Net After-Tax Benefit (as defined below) assuming application of the 4999 Limit with (b) the Employee’s
Net After-Tax Benefit without application of the 4999 Limit. The Employee shall be entitled to the greater of (a) or
(b). “Net After-Tax Benefit” shall mean the sum of (i) all payments that Employee receives or is entitled to receive
that are contingent on a change in the ownership or effective control of the Company or in the ownership of a
substantial portion of the assets of the Company within the meaning of Code section 280G(b)(2), less (ii) the amount of
federal, state, local, employment, and Excise Tax (if any) imposed with respect to such payments. If the Employee is
required to reduce payments to which he is otherwise entitled such that no portion thereof is subject to the Excise
Tax, the Employee shall choose which payments shall be reduced and the amount of the reduction of each payment.



7. 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.


 


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(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 July 23, 2007.



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/ Jon Stonehouse

      Jon Stonehouse

      Chief Executive Officer





Address:




2190 Parkway Lake Drive


Birmingham, Alabama 35244



AGREED AND ACCEPTED, as of this 23rd day of July, 2007.




/s/ Stuart Grant


	Stuart Grant






Address:



240 Summer Street



Norwell, MA 02061


 


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