This Consulting
Agreement (this “ Agreement ”), entered into
this 27th day of April, 2007, effective as of March 7, 2007
(the “ Effective Date ”), is made by and between
Novavax, a Delaware corporation (the “ Company
”), and John Lambert (the “ Consultant
”).
A
. The Company is a biopharmaceutical company focused on
developing novel vaccines and is located in Rockville,
Maryland.
B.
Consultant has extensive experience as an executive and as a
director for several vaccine-related companies and has served as a
consultant to the Company over the past several months.
C.
After several months of discussions between the Company and
Consultant regarding a director position and a broader and longer
term consulting relationship, the Company and Consultant wish to
continue the consulting arrangement under revised terms and agree
to enter into this Consulting Agreement and, on March 7, 2007,
the Board of Directors of the Company have elected Consultant
Executive Chairman of the Board of Directors.
NOW,
THEREFORE , in consideration of the mutual promises set forth
in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as
follows:
1. Term. Unless otherwise terminated or extended as set
forth in this Agreement, the term of this Agreement will commence
on the Effective Date and expire on March 8, 2010 (the “
Term ”). Either Consultant or the Company may
terminate this Agreement at any time, and for any reason or no
reason, with or without cause, upon thirty (30) days
notice.
2. Consulting Services. Pursuant to the terms and
conditions of this Agreement, the Company hereby engages the
Consultant, and the Consultant hereby accepts such engagement, to
perform the consulting services set forth on Exhibit A
attached hereto (the “ Services ”) during the
Term. Consultant shall devote approximately one third of his
business time to the performance of his duties with the Company,
including spending a reasonable amount of time at the
Company’s offices.
(a) In
consideration of the Consultant performing the Services hereunder;
the Company shall pay the Consultant an annual fee of $220,000 (the
“ Fees ”) payable monthly with the first payment
to be made on April 30, 2007 covering the period from the
Effective Date through and including April 30.
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(b) The
Company shall reimburse the Consultant for his reasonable
out-of-pocket expenses incurred in connection with the performance
of the Services hereunder, including travel and telephone. All such
reimbursement will be provided in accordance with the
Company’s expense reimbursement policies in effect from time
to time during the Term.
(c) If
this Agreement is terminated for any reason before the expiration
of the Term, then the Company shall pay Consultant a prorated
portion of the Fees through the effective date of termination and
shall have no other payment obligation or other liability under
this Agreement or otherwise, unless otherwise required by law or as
expressly provided in Section 4 or in a separate
agreement.
(a) If,
in the event of a Change in Control, this Agreement is terminated
as a result of an Involuntary Termination without Cause for a
reason other than Consultant’s death or Disability, or as a
result of a Constructive Termination, which in either case occurs:
(x) during the period not to exceed eighteen (18) months
after the effective date of a Change in Control, or (y) before
the effective date of a Change in Control, but after the first date
on which the Board and/or senior management of the Company has
entered into formal negotiations with a potential acquiror that
results in the consummation of a Change in Control (provided,
however, that in no event shall a termination of this Agreement
occurring more than one (1) year before the effective date of
a Change in Control be covered by this Agreement), Consultant shall
receive a single cash payment in the amount of $375,000.
(b) In
order to be eligible to receive the lump sum payment under this
Section 4, Consultant must execute a general waiver and
release of all legal claims against the Company and its
Affiliates.
(1) “Change
in Control” means (i) a sale, lease, license or other
disposition of all or substantially all of the assets of the
Company, (ii) a consolidation or merger of the Company with or
into any other corporation or other entity or person, or any other
corporate reorganization, in which the shareholders of the Company
immediately prior to such consolidation, merger or reorganization,
own less that fifty percent (50%) of the outstanding voting power
of the surviving entity and its parent following the consolidation,
merger or reorganization, or (iii) any transaction or series
of related transactions involving a person or entity, or a group of
affiliated persons or entities (but excluding any employee benefit
plan or related trust sponsored or maintained by the Company or an
Affiliate) in which such persons or entities that were not
shareholders of the Company immediately prior to their acquisition
of Company securities as part of such transaction become the
owners, directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the combined voting
power of the Company’s then outstanding securities other than
by virtue of a merger, consolidation or similar transaction and
other than as part of a private financing transaction by the
Company, or (iv) a Change in the Incumbent Board. For purposes
of this Plan, a Change in the Incumbent Board shall occur if the
existing members of the Board on
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the date of
this Agreement (the “ Incumbent Board ”)
cease to constitute at least a majority of the members of the
Board, provided , however , that any new Board member
shall be considered a member of the Incumbent Board for this
purpose if the appointment or election (or nomination for such
election) of the new Board member was approved or recommended by a
majority vote of the members of the Incumbent Board who are then
still in office.
(2) “Cause”
means (i) conviction of, a guilty plea with respect to, or a
plea of nolo contendere to a charge that the Consultant has
committed a felony under the laws of the United States, the United
Kingdom or of any state or a crime involving moral turpitude,
including, but not limited to, fraud, theft, embezzlement or any
crime that results in or is intended to result in personal
enrichment at the expense of the Company; (ii) material breach
of any agreement entered into between the Consultant and the
Company that impairs the Company’s interest therein; (iii)
willful misconduct, significant failure to perform the Services, or
gross neglect by the Consultant in connection with the Services; or
(iv) engagement in any activity that constitutes a material
conflict of interest with the Company.
(3) “Constructive
Termination” means a termination initiated by Consultant
because any of the following events or conditions have
occurred:
a. A
material reduction or change in the Consultant’s services or
responsibilities or an obligation to report to any person or body
other than the Board of Directors of the Company which represents
an adverse change from the Consultant’s services or
responsibilities as in effect immediately preceding the effective
date of a Change in Control; the assignment to the Consultant of
any obligations which are inconsistent with the Consultant’s
services or responsibilities as in effect immediately preceding the
effective date of a Change in Control; except in connection with
the termination of this Agreement for Cause or the termination of
this Agreement because of Consultant’s Disability or death,
or except as the result of a voluntary termination by the
Consultant other than as a result of a Constructive
Termination;
b. any
material breach by the Company of any provision of this
Agreement;
c. the
failure of the Company to obtain an agreement, sati
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