DIRECTOR
INDEMNITY AGREEMENT
This Agreement is made and entered
into as of this day of
2005, by and between Novavax,
Inc., a Delaware corporation (the “Company”), and
(“Indemnitee”),
who is currently serving the Company in the capacity of a director
and/or officer thereof.
W I T N E S S E T
H:
WHEREAS, the Company and Indemnitee
recognize that the interpretation of ambiguous statutes,
regulations and court opinions and of the Amended and Restated
Certificate of Incorporation (the “Certificate of
Incorporation”) and Amended and Restated By-laws (the
“By-laws”) of the Company, and the vagaries of public
policy, are too uncertain to provide directors and officers of the
Company with adequate or reliable advance knowledge or guidance
with respect to the legal risks and potential liabilities to which
they become personally exposed as a result of performing their
duties in good faith for the Company; and
WHEREAS, the Company and the
Indemnitee are aware that highly experienced and capable persons
are often reluctant to serve as directors and officers of a
corporation unless they are protected to the fullest extent
permitted by law by comprehensive insurance or indemnification;
and
WHEREAS, the General Corporation Law
of the State of Delaware, which sets forth certain provisions
relating to the mandatory and permissive indemnification of, and
advancement of expenses to, officers and directors of a Delaware
corporation by such corporation, is specifically not exclusive of
other rights to which those indemnified thereunder may be entitled
under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, and, thus, does not by itself limit the
extent to which the Company may indemnify persons serving as its
officers and directors, provided such persons have met the
applicable standard of conduct; and
WHEREAS, the Company desires to have
Indemnitee continue to serve as a director and/or officer of the
Company, and, if applicable, to serve in any other capacity as
agreed by the Company and the Indemnitee, free from undue concern
for unpredictable, inappropriate or unreasonable legal risks and
personal liabilities by reason of his or her acting in good faith
in the performance of his or her duty to the Company; and
Indemnitee desires to continue to serve (provided that he or she is
furnished the indemnity provided for hereinafter) as a director
and/or officer of the Company and, if applicable, to serve in any
other capacity as agreed by the Indemnitee and the Company; and
WHEREAS, after due consideration and
investigation of the terms and provisions of this Agreement and the
various other options available to the Company and the Indemnitee
in lieu thereof, the Board of Directors of the Company has
determined that the following Agreement is reasonable and prudent,
and necessary to obtain or retain Indemnitee’s service to and
on behalf of the Company.
NOW, THEREFORE, in consideration of
the premises and the mutual agreements herein set forth and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company and Indemnitee,
intending to be legally bound, do hereby agree as follows:
1. Agreement to Serve.
Indemnitee agrees to continue to serve as a director and/or officer
of the Company and, as Indemnitee and the Company may agree, in any
other capacity for the Company and/or as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust, or other enterprise, for so long as he or she is
duly elected or appointed and qualified in accordance with the
provisions of the General Corporation Law of the State of Delaware
and the Certificate of Incorporation and By-laws of the Company, or
until such time as he or she tenders a resignation. The Company
acknowledges that the Indemnitee is relying on this Agreement in so
serving.
2. Definitions. As used
in this Agreement:
(a) The term
“Proceeding” shall mean any threatened, pending or
completed action, suit, or proceeding, whether civil, criminal,
administrative, arbitrative or investigative (other than an action
by or in the right of the Company), any appeal in such an action,
suit, or proceeding, and any inquiry or investigation that could
lead to such an action, suit or proceeding. The final disposition
of a Proceeding shall be as determined by a settlement or the
judgment of a court or other investigative or administrative body.
The Board of Directors shall not make a determination as to the
final disposition of a Proceeding.
(b) “Change
in Control” means a change in control of the Company of a
nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A (or in response to
any similar item on any similar schedule or form) promulgated under
the Securities Exchange Act of 1934, as amended (the
“Act”), whether or not the Company is then subject to
such reporting requirement; provided , however ,
that, without limitation, such a Change in Control shall be deemed
to have occurred if (i) any “person” (as such term
is used in Sections 13(d) and 14(d) of the Act), other than a
trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a corporation owned directly or
indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company, is or
becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing 15% or more of the combined
voting power of the Company’s then outstanding securities
without the prior approval of at least a majority of the members of
the Board of Directors of the Company in office immediately prior
to such person attaining such percentage interest; (ii) there
occurs a proxy contest, or the Company is a party to a merger,
consolidation, sale of assets, plan of liquidation or other
reorganization not approved by at least a majority of the members
of the Board of Directors of the Company then in office, as a
consequence of which members of the Board of Directors in office
immediately prior to such transaction or event constitute less than
a majority of the Board of Directors thereafter; or
(iii) during any period of two consecutive years, other than
as a result of an event described in clause (ii) of this
subsection (b), individuals who at the beginning of such period
constituted the Board of Directors of the Company (including for
this purpose any new director whose election or nomination for
election by the Company’s stockholders was approved by a vote
of at least a majority of the directors then still in office who
were directors at the beginning of such period) cease for any
reason to constitute at least a majority of the Board of
Directors.
(c)
“Disinterested Director” means a director of the
Company who is not and was not a party to the Proceeding in respect
of which indemnification is sought by Indemnitee.
(d) The term
“Expenses” includes, without limitation, all reasonable
attorneys’ fees, retainers, court costs, transcript costs,
fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery
service fees and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, or being or
preparing to be a witness in a Proceeding. Expenses also shall
include Expenses incurred in connection with any appeal resulting
from any Proceeding, including, without limitation, the premium,
security for, and other costs relating to any cost bond,
supersedeas bond, or other appeal bond or its equivalent.
(e)
“Independent Counsel” means a law firm, or a member of
a law firm, that is experienced in matters of corporation law and
neither presently is, nor in the past five years has been, retained
to represent: (i) the Company or Indemnitee in any matter
material to either such party (other than with respect to matters
concerning the Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) any
other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement. The Company agrees
to pay the reasonable fees and expenses of the Independent Counsel
referred to above and to fully indemnify such counsel against any
and all Expenses, claims, liabilities and damages arising out of or
relating to this Agreement or its engagement pursuant hereto.
(f) References to “other enterprise” shall include
employee benefit plans; references to “fines” shall
include any (i) excise taxes assessed with respect to any
employee benefit plan and (ii) penalties; references to
“serving at the request of the Company” shall include
any service as a director, officer, employee or agent of the
Company which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee
benefit plan, its participants or beneficiaries; and a person who
acts in good faith and in a manner he or she reasonably believed to
be in the interest of the participants and beneficiaries of an
employee benefit plan shall be deemed to have acted in a manner
“not opposed to the best interests of the Company” as
referred to in this Agreement.
3. Indemnity in Third Party
Proceedings. Subject to Sections 8 and 9, the Company
shall indemnify, defend and hold harmless Indemnitee to the fullest
extent permitted or required by the laws of the State of Delaware
in effect as of the date hereof or as such laws may from time to
time hereafter be amended to increase the scope of such permitted
indemnification, if Indemnitee was or is a party or is threatened
to be made a party to any Proceeding (other than a Proceeding by or
in the right of the Company) by reason of the fact that Indemnitee
is or was a director and/or officer of the Company, or is or was
serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against all Expenses,
judgments, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee (or on his or her behalf) in
connection with such Proceeding or any claim, issue or matter
therein, provided the Indemnitee acted in good faith and in
a manner which he or she reasonably believed to be in or not
opposed to the best interests of the Company and, in the case of a
criminal Proceeding, had no reasonable cause to believe that
Indemnitee’s conduct was unlawful. Indemnitee shall have the
right to employ Indemnitee’s own legal counsel in any
Proceeding for which indemnification is available under this
Section 3, subject to Section 8 below.
4. Indemnity in Proceedings
By or In the Right of the Company. Subject to Sections 8
and 9, the Company shall indemnify, defend and hold harmless
Indemnitee to the fullest extent permitted or required by the laws
of the State of Delaware in effect as of the date hereof or as such
laws may from time to time hereafter be amended to increase the
scope of such permitted indemnification, if Indemnitee was or is a
party or is threatened to be made a party to any Proceeding by or
in the right of the Company to procure a judgment in its favor by
reason of the fact that Indemnitee is or was a director and/or
officer of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, or other
enterprise, against all Expenses actually and reasonably incurred
by Indemnitee (or on his or her behalf) in connection with the
defense or settlement of such Proceeding or any claim, issue or
matter therein, provided the Indemnitee acted in good faith
and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the Company and, in the case of a
criminal Proceeding, had no reasonable cause to believe that
Indemnitee’s conduct was unlawful, and except that no
indemnification shall be made under this Section 4 in respect
of any claim, issue or matter as to which Indemnitee shall have
been adjudged to be liable to the Company unless and only to the
extent that the Delaware Court of Chancery or other court in which
such Proceeding was brought or is pending, shall determine upon
application that, despite the adjudication of liability but in view
of all the circumstances of the case, Indemnitee is fairly and
reasonably entitled to indemnity for such Expenses as the Delaware
Court of Chancery or other court in such Proceeding shall deem
proper. Indemnitee shall have the right to employ
Indemnitee’s own legal counsel in any Proceeding for which
indemnification is available under this Section 4, subject to
Section 8 below.
5.
1
Reimbursement for Expenses of a
Witness. Notwithstanding any other provision of this Agreement,
to the extent that Indemnitee is, by reason of the fact that
Indemnitee is or was a director and/or officer of the Company, or
is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust, or other enterprise, a witness at the
Company’s request in any Proceeding to which Indemnitee is
not a party, he or she shall be reimbursed against all Expenses
actually and reasonably incurred by Indemnitee (or on his or her
behalf) in connection therewith upon Indemnitee’s written
request therefor.
6. Indemnification for
Expenses of Successful Party. Notwithstanding any other
provision of this Agreement to the contrary, to the extent that
Indemnitee has been successful on the merits or otherwise (whether
partially or in full) in defense of any Proceeding referred to in
Sections 3 and/or 4 of this Agreement, or in defense of any
claim, issue or matter therein, Indemnitee shall be indemnified
against all Expenses actually and reasonably incurred by Indemnitee
(or on his or her behalf) in connection therewith. For purposes of
this Section 6, and without limitation, the termination of any
claim, issue or matter in any Proceeding referred to in
Sections 3 and/or 4 of this Agreement by dismissal shall be
deemed to be a successful result as to such claim, issue or
matter.
7. Advances of Expenses.
Indemnitee shall have the right to advancement by the Company prior
to the final disposition of any Proceeding or any claim, issue or
other matter therein of any and all Expenses incurred by Indemnitee
in defense of such Proceeding or any claim, issue or other matter
therein. Without limiting the generality or effect of the
foregoing, within 10 business days after any request by Indemnitee,
the Company shall, in accordance with such request, (a) pay
such Expenses on behalf of Indemnitee, (b) advance to
Indemnitee funds in an amount sufficient to pay such Expenses or
(c) reimburse Indemnitee for such Expenses; provided
that Indemnitee shall repay any amounts actually advanced to
Indemnitee that, at the final disposition of the Proceeding to
which the advance related, were in excess of amounts paid or
payable by Indemnitee in respect of Expenses relating to, arising
out of or resulting from such Proceeding; and provided
further the Company receives an undertaking by or on behalf
of Indemnitee (“Indemnitee Undertaking”) to repay such
amount paid, advanced or reimbursed to the extent that it is
ultimately determined that Indemnitee is not entitled to be
indemnified by the Company. The Indemnitee Undertaking shall be
substantially on the form of Exhibit A to this Agreement and
shall be accepted without reference to the financial ability of the
Indemnitee to make such repayment.
8. Notice and Defense of a
Proceeding.
As a condition precedent to the right
to be indemnified or receive advancement of Expenses, the
Indemnitee must notify the Company in writing as soon as
practicable of any Proceeding for which indemnity will or could be
sought. With respect to any such Proceeding of which the Company is
so notified, the Company will be entitled to participate therein at
its own expense and/or to assume the defense thereof at its own
expense, with legal counsel reasonably acceptable to the
Indemnitee. After notice from the Company to the Indemnitee of its
election so to assume such defense, the Company shall not be liable
to the Indemnitee for any legal or other Expenses subsequently
incurred by the Indemnitee in connection with such Proceeding,
other than as provided in this Section 8. The Indemnitee shall
have the right to employ his or her own counsel in connection with
such Proceeding, but the fees and expenses of such counsel incurred
after notice from the Company of its assumption of the defense
thereof shall be at the expense of the Indemnitee unless
(i) the employment of counsel by the Indemnitee has been
authorized by the Company, (ii) counsel to the Indemnitee shall
have reasonably concluded that there may be a conflict of interest
or position on any significant issue between the Company and the
Indemnitee in the conduct of the defense of such Proceeding, or
(iii) the Company shall not in fact have employed counsel to
assume the defense of such action, in each of which cases the fees
and other Expenses of counsel for the Indemnitee shall be at the
expense of and borne by the Company, except as otherwise expressly
provided by this Agreement, and in no event shall the Company be
required to bear the expense of more than one counsel for all
Indemnitees with respect to a Proceeding. The Company shall not be
entitled, without the consent of the Indemnitee, to assume the
defense of any Proceeding brought by or in the right of the Company
or as to which counsel for the Indemnitee shall have reasonably
made the conclusion provided for in clause (ii) above.
9. Procedure for
Determination of Entitlement to Indemnification.
(a) To
obtain indemnification or advancement of Expenses under this
Agreement, Indemnitee shall submit to the Company a written request
therefor, including in such request such documentation and
information as is reasonably available to the Indemnitee and is
reasonably necessary to determine whether and to what extent the
Indemnitee is entitled to indemnification or advancement of
Expenses.
(b) It is
the express intention of the parties that the Indemnitee be
entitled to indemnification hereunder to the fullest extent
permitted by Delaware law. Without limiting the generality or
effect of the immediately preceding sentence, and without excluding
any other basis upon which Indemnitee may be found to be entitled
to indemnification hereunder, the Indemnitee shall be entitled to
indemnification hereunder if (i) Indemnitee acted in good
faith and in a manner which he or she reasonably believed to be in
or not opposed to the best interests of the Company and, in the
case of a criminal Proceeding, had no reasonable cause to believe
that Indemnitee’s conduct was unlawful, or
