This Employment
Agreement (this “Agreement”) is dated as of August
6 th , 2009 , between Novavax, Inc., a Delaware corporation
having its principal office at 9920 Belward Campus Drive,
Rockville, MD 20850, and Frederick W. Driscoll
(“Executive”).
WHEREAS, Executive
will commence employment with the Company on or about
August 24, 2009 pursuant to an offer letter dated
August 6, 2009; and
The Company and
Executive hereby agree as follows:
1.
Employment . The Company hereby employs Executive and
Executive hereby accepts employment as Vice President, Chief
Financial Officer, and Treasurer upon the terms and conditions
hereinafter set forth. As used throughout this Agreement,
“Company” shall mean and include any and all of its
present and future subsidiaries and any and all subsidiaries of a
subsidiary. Executive warrants and represents that he is free to
enter into and perform this Agreement and is not subject to any
employment, confidentiality, non-competition or other agreement
which prohibits, restricts, or would be breached by either his
acceptance or his performance of this Agreement.
2.
Duties . During the Term (as hereinafter defined), Executive
shall devote his full business time to the performance of services
as Vice President, Chief Financial Officer, and Treasurer of
Novavax, Inc., performing such services, assuming such
responsibilities and exercising such authority as are set forth in
the Bylaws of the Company for such offices and assuming such other
duties and responsibilities as prescribed by the President and CEO
and Board of Directors. During the Term, Executive’s services
shall be completely exclusive to the Company and he shall devote
his entire business time, attention and energies to the business of
the Company and the duties which the Company shall assign to him
from time to time. Executive agrees to perform his services
faithfully and to the best of his ability and to carry out the
policies and directives of the Company. Notwithstanding the
foregoing, it shall not be a violation of this Agreement for the
Executive to serve as a director of any company whose products do
not compete with those of the Company and to serve as a director,
trustee, officer, or consultant to a charitable or non-profit
entity; provided that such service does not adversely affect
Executive’s ability to perform his obligations hereunder.
Executive agrees to take no action which is in bad faith and
prejudicial to the interests of the Company during his employment
hereunder. Notwithstanding the location where Executive shall be
based, as set forth in this Agreement, he also may be required from
time to time to perform duties hereunder for reasonably short
periods of time outside of said area.
3.
Term . The term of this Agreement shall be for the
period beginning on August 24, 2009 and continuing
until September 1, 2010 , unless earlier terminated
pursuant to Section 7 hereof (the “Term”) and
shall be renewed automatically for additional twelve-month periods
on the terms set forth herein, as they may be modified from time to
time by mutual agreement, unless one of the Company or the
Executive provides notice of termination at least 30 days
before the expiration of the then current term. The parties
acknowledge that the employment hereunder is employment at
will.
(a)
Base Compensation . For all Executive’s services and
covenants under this Agreement, the Company shall pay Executive an
annual salary, which is $ 275,000 as of this
agreement,
established by the Board of Directors or an authorized committee
thereof (in accordance with the management processes) and payable
in accordance with the Company’s payroll policy as
constituted from time to time. The Company may withhold from any
amounts payable under this Agreement all required federal, state,
city or other taxes and all other deductions as may be required
pursuant to any law or government regulation or ruling.
(b)
Bonus Program . The Company agrees to pay the Executive a
performance and incentive bonus in respect of Executive’s
employment with the Company each year in an amount determined by
the President and CEO and Board of Directors (or any committee of
the Board of Directors authorized to make that determination) to be
appropriate based upon Executive’s, and the Company’s,
achievement of certain specified goals (to be established at the
beginning of the bonus period), with a target bonus of 40% ,
or any other percentage determined by the Board of Directors, of
Executive’s base salary during the year to which the bonus
relates based on performance. Such bonus shall be payable no later
than two and one-half months following the year for which the bonus
applies. The bonus shall be paid out partly in cash and partly in
shares of restricted stock, in the discretion of the Board of
Directors.
(c)
Stock Awards . Subject to approval by the Board of Directors
(or any committee of the Board of Directors authorized to make that
determination), the Company will grant Executive (a) stock options
to purchase 220,000 shares of the Company’s Common Stock
($.01 par value) at an exercise price equal to the closing price of
the Company’s Common Stock on the later date of
Executive’s date of hire or the date of such Board of
Directors’ approval and (b) 10,000 shares of restricted
stock. Each of these awards will vest as to one-third of the award
on each of the first three (3) anniversaries of
Executive’s date of employment.
Executive will
be eligible for additional stock awards based upon performance
subject to the approval of the President and Chief Executive
Officer and the Board of Directors.
5.
Reimbursable Expenses . Executive shall be entitled to
reimbursement for reasonable expenses incurred by him in connection
with the performance of his duties hereunder in accordance with
such procedures and policies for executive officers as the Company
has heretofore or may hereafter establish. The amount of expenses
eligible for reimbursement during any calendar year shall not
affect the expenses eligible for reimbursement in any other
calendar year, and the reimbursement of an eligible expense shall
be made as soon as practicable after Executive submits the request
for reimbursement, but not later than December 31 following
the calendar year in which the expense was incurred.
6.
Benefits . (a) Executive shall be entitled to four
weeks of paid vacation time per year starting from
August 24, 2009 , calculated and administered in
accordance with Company policies for executive officers in effect
from time to time. The Executive shall be entitled to all other
benefits associated with normal full time employment in accordance
with Company policies.
(b) Executive
shall be entitled to participate in the Company’s Change of
Control Severance Benefit Plan.
7.
Termination of Employment .
(a) Notwithstanding
any other provision of this Agreement, Executive’s employment
may be terminated, without such action constituting a breach of
this Agreement:
2
(i) By
the Company, for “Cause,” as defined in Section 7(b)
below;
(ii) By
the Company, upon 30 days’ notice to Executive, if he
should be prevented by illness, accident or other disability
(mental or physical) from discharging his duties hereunder for one
or more periods totaling three consecutive months during any
twelve-month period;
(iii) By
the Executive with “Good Reason”, as defined in Section
7(c) below, within 30 days of the occurrence or commencement
of such Good Reason;
(iv) By
the event of Executive’s death during the Term.
(b)
“Cause” shall mean (i) Executive’s willful
failure or refusal to perform in all material respects the services
required of him hereby, (ii) Executive’s willful failure
or refusal to carry out any proper and material direction by the
President and CEO or Board of Directors with respect to the
services to be rendered by him hereunder or the manner of rendering
such services, (iii) Executive’s willful misconduct in the
performance of his duties hereunder, (iv) Executive’s
commission of an act of fraud, embezzlement or theft or a felony
involving moral turpitude, (v) Executive’s use or disclosure
of Confidential Information (as defined in Section 10 of this
Agreement), other than for the benefit of the Company in the course
of rendering services to the Company or (vi) Executive’s
engagement in any activity prohibited by Section 11 of this
Agreement. For purposes of this Section 7, the Company shall
be required to provide Executive a specific written warning with
regard to any occurrence of subsections (b)(i), (ii) and
(iii) above, which warning shall include a statement of
corrective actions and a 30 day period for the Executive to
respond to and implement such actions, prior to any termination of
employment by the Company pursuant to Section 7(a)(i)
above.
(c)
“Good Reason” shall mean the Company’s material
reduction or diminution of Executive’s responsibilities and
authority, other than for Cause, without his consent.
8.
Separation Pay . (a) Subject to Executive’s
execution and delivery to the company of the Company’s
standard form of Separation and Release Agreement, the Company
shall pay Executive an amount equal to the Separation Pay upon the
occurrence of the applicable Separation Event but in no case later
than two and one-half months following the year in which the
Separation Event occurs. Separation Pay shall each be payable in
accordance with the Company’s payroll policy as constituted
from time to time, and shall be subject to withholding of all
applicable federal, state and local taxes and any other deductions
required by applicable law. In the event of Executive’s
death, the Company’s obligation to pay further compensation
hereunder shall cease forthwith, except that Executive’s
legal representative shall be entitled to receive his fixed
compensation for the period up to the last day of the month in
which such death shall have occurred.
(b) Section 8(a)
above shall not apply should Executive receive severance benefits
under the Company’s Change in Control Severance Benefit
Plan.
9. “Separation
Pay” shall mean a lump sum amount equal to twelve
months of Executive’s then effective salary.
(a)
“Separation Event” shall mean:
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(i) the
Company’s termination of Executive’s employment by the
Company without Cause, during the Term; or
(ii) the
termination of Executive’s employment by the Executive for
Good Reason.
10. All
Business to be Property of the Company; Assignment of Intellectual
Property .
(a) Executive
agrees that any and all presently existing business of the Company
and all business developed by him or any other employee of the
Company including without limitation all contracts, fees,
commissions, compensation, records, customer or client lists,
agreements and any other incident of any busin
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