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 Raymond J. Hage,
Jr., an individual with a mailing address of 115 Applegate Drive,
West Chester, PA 19355 (“Executive”).
The Company and Executive hereby
agree as follows:
1. Employment . The
Company hereby employs Executive and Executive hereby accepts
employment as Senior Vice President and Chief Operating 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 Senior Vice
President and Chief Operating 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 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 a period beginning on August 10, 2005
and continuing until September 1, 2008, 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 an annual rate of
$220,000, subject to review by the CEO of the Company and the Board
of Directors when compensation is reviewed after the completion of
the audit with respect to the 2005 fiscal year (in accordance with
the management processes), and each fiscal year thereafter 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, payable the following year when bonuses are generally
paid to executives, 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, with a maximum bonus of 40% 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 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.
6. Benefits .
(a) Executive shall be entitled to four 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;
(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, or Change of Control Separation Pay, as
applicable and as defined in Section 8(b) below, upon the
occurrence of the applicable Separation Event, as defined in
Section 8(c) below. Separation Pay, Change of Control 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 c
