EMPLOYMENT
AGREEMENT
This Employment Agreement (this
“Agreement”) is dated as of November 9, 2005,
between Novavax, Inc., a Delaware corporation having its principal
office at 508 Lapp Road, Malvern, PA 19355, and Rahul Singhvi, an
individual with a mailing address of 1131 Pebble Spring Drive,
Berwyn PA 19312 (“Executive”).
The Company and Executive hereby
agree as follows:
1. Employment . The
Company hereby employs Executive and Executive hereby accepts
employment as President and Chief Executive Officer 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 President and Chief
Executive Officer 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 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. Executive shall be based at the Company’s
headquarters, currently in Malvern Pennsylvania, and he also will
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 a period beginning on August 10, 2005
and continuing until September 1, 2009, unless earlier
terminated pursuant to Section 7 hereof (the
“Term”) and shall be renewable on the terms set forth
herein upon agreement of the Company and Executive of the term of
such renewal and the initial base compensation applicable to the
renewal term. The parties acknowledge that the employment hereunder
is employment at will.
4. Compensation .
(a) Base Compensation .
For all Executive’s services and covenants under this
Agreement, the Company shall pay Executive at a rate of $300,000
annually, commencing on November 1, 2005. Commencing when
salaries are reviewed after the completion of the audit with
respect to fiscal year 2005, the Board of Directors will annually
review Executive’s and the Company’s performance and
consider increases in Executive’s base compensation.
Executive’s salary and benefits will be 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, payable the following year when bonuses are generally
paid to executives, in an amount determined by the 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, with a maximum bonus of 60% of Executive’s
base salary during the year to which the bonus relates. 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 .
Executive will be eligible for additional stock awards based upon
performance subject to the approval of 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.
6. Benefits .
(a) Executive shall be entitled to five weeks of paid vacation
time per year starting from January 1, 2006, 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 adopted August 10, 2005.
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:
(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;
and
(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 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 as defined in Section 8(b) below, upon the occurrence of the
applicable Separation Event, as defined in Section 8(c) below.
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
