EMPLOYMENT AGREEMENT
Exhibit
10.1
This
Employment Agreement (this “Agreement”) is dated as of May 6, 2010, between Novavax,
Inc., a Delaware corporation having its principal office at 0000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxxxx, XX 00000, and Xxxx X. Xxxxxxxx
(“Executive”).
WHEREAS,
Executive will commence employment with the Company on a date to be determined
pursuant to an offer letter dated May 6, 2010; and
The
Company and Executive hereby agree as follows:
1. Employment. The
Company hereby employs Executive and Executive hereby accepts employment as
Senior Vice President,
Development and Chief Medical 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, Development and Chief
Medical 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 for a period of one year, beginning on a date to be
determined during 2010, but in no event later than June 1, 2010 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, such
agreement not to be unreasonably withheld. The parties acknowledge
that the employment hereunder is employment at will.
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4. Compensation.
(a) Base
Compensation. For all Executive’s services and covenants under
this Agreement, the Company shall pay Executive an annual salary, which is $315,000 as of the date of
this Agreement, established by the Board of Directors or an authorized committee
thereof (in accordance with the management processes) and payable in accordance
with the Company’s payroll policy as constituted from time to
time. The Company may withhold from any amounts payable under this
Agreement all required federal, state, city or other taxes and all other
deductions as may be required pursuant to any law or government regulation or
ruling.
(b) Bonus Program. The
Company agrees to pay the Executive a performance and incentive bonus in respect
of Executive’s employment with the Company each year in an amount determined by
the President and CEO and Board of Directors (or any committee of the Board of
Directors authorized to make that determination) to be appropriate based upon
Executive’s, and the Company’s, achievement of certain specified goals, with a
target bonus of 40%, or
any other percentage determined by the Board of Directors, of Executive’s base
salary during the year to which the bonus relates. Such bonus shall
be payable no later than two and one-half months following the year for which
the bonus applies. The bonus shall be paid out partly in cash and
partly in shares of restricted stock, in the discretion of the Board of
Directors.
(c) Stock
Awards. Subject to approval by the Board of Directors (or any
committee of the Board of Directors authorized to make that determination), the
Company will grant Executive (a) stock options to purchase 200,000 shares of the
Company’s Common Stock ($.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) 25,000
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 the
date of commencement of employment, 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) Subject
to approval by the Board of Directors (or any committee of the Board of
Directors authorized to make that determination), Executive shall be entitled to
participate in the Company’s Change of Control Severance Benefit Plan adopted by
August 10, 2005, as amended and restated on July 26, 2006 and as further amended
on December 31, 2008 (the “Change of Control Severance Benefit
Plan”).
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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, without Cause
(iii)
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;
(iv)
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;
(v)
By the
Executive without Good Reason upon 30 days prior written notice; or
(vi)
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 or 12 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 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.
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(b) Section
8(a) above shall not apply should Executive receive severance benefits under the
Company’s Change in Control Severance Benefit Plan.
(c) “Separation
Pay” shall mean a lump sum amount equal to twelve months of Executive’s
then effective salary.
(d) “Separation
Event” shall mean:
(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.
9. 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 business developed,
earned or carried on by Executive for the Company is and shall be the exclusive
property of the Company, and (where applicable) shall be payable directly to the
Company.
(b) Executive
hereby acknowledges that any plan, method, data, know-how, research,
information, procedure, development, invention, improvement, modification,
discovery, design, process, software and work of authorship, documentation,
formula, technique, trade secret or intellectual property right whatsoever or
any interest therein whether patentable or non-patentable, patents and
applications therefor, trademarks and applications therefor or copyrights and
applications therefor (herein sometimes collectively referred to as
“Intellectual Property”) made, conceived, created, invested, developed, reduced
to practice and/or acquired by Executive solely or jointly with others during
the Term is the sole and exclusive property of the Company, as work for hire,
and that he has no personal right in any such Intellectual
Property. Executive hereby grants to the Company (without any
separate remuneration or compensation other than that received by him from time
to time in the course of his employment) his entire right, title and interest
throughout the world in and to, all Intellectual Property, which is made,
conceived, created, invested, developed, reduced to practice and/or acquired by
him solely or jointly with others during the Term.
(c) Executive
shall cooperate fully with the Company, both during and after his employment
with or engagement by the Company, with respect to the procurement, maintenance
and enforcement of copyrights, patents and other intellectual property rights
(both in the United States and foreign countries) relating to Intellectual
Property. Without limiting the foregoing, Executive agrees that to
the extent copyrightable, any such original works of authorship shall be deemed
to be "works for hire" and that the Company shall be deemed the author thereof
under the U.S. Copyright Act, provided that in the event and to the extent such
works are determined not to constitute "works for hire" as a matter of law,
Executive hereby irrevocably assigns and transfers to the Company all right,
title and interest in such works, including but not limited to copyrights
thereof. Executive shall sign all papers, including, without
limitation, copyright applications, patent applications, declarations, oaths,
formal assignments, assignments of priority rights and powers of attorney, which
the Company may deem necessary or desirable in order to protect its rights and
interests in any Intellectual Property (at the Company’s expense) and agrees
that these obligations are binding upon his assigns, executors, administrators
and other legal representatives. To that end, Executive shall provide
current contact information to the Company including, but not limited to, home
address, telephone number and email address, and shall update his contact
information whenever necessary.
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10. Confidentiality. Executive
acknowledges his obligation of confidentiality with respect to all proprietary,
confidential and non-public information of the Company, including all
Intellectual Property. By way of illustration, but not limitation,
confidential and proprietary information shall be deemed to include any plan,
method, data, know-how, research, information, procedure, development,
invention, improvement, modification, discovery, process, work of authorship,
documentation, formula, technique, product, idea, concept, design, drawing,
specification, technique, trade secret or intellectual property right whatsoever
or any interest therein whether patentable or non-patentable, patents and
applications therefor, trademarks and applications therefor or copyrights and
applications therefor, personnel data, records, marketing techniques and
materials, marketing and development plans, customer names and other information
related to customers, including prospective customers and contacts at customers,
price lists, pricing policies and supplier lists of the Company, in each case
coming into Executive’s possession, or which Executive learns, or to which
Executive has access, or which Executive may discover or develop (whether or not
related to the business of the Company at the time this Agreement is signed or
any information Executive originates, discovers or develops, in whole or in
part) as a result of Executive’s employment by (either full-time or part-time),
or retention as a consultant of, the Company. Executive shall not,
either during the Term or for a period of ten (10) years thereafter, use for any
purpose other than the furtherance of the Company’s business, or disclose to any
person other than a person with a need to know such confidential, proprietary or
non-public information for the furtherance of the Company’s business who is
obligated to maintain the confidentiality of such information, any information
concerning any Intellectual Property, or other confidential, proprietary or
non-public information of the Company, whether Executive has such information in
his memory or such information is embodied in writing, electronic or other
tangible form.
All
originals and copies of any of the foregoing, however and whenever produced,
shall be the sole property of the Company. All files, letters,
memoranda, reports, records, data, sketches, drawings, program listings, or
other written, photographic, or other tangible or electronic material containing
confidential or proprietary information or Intellectual Property, whether
created by me or others, which shall come into Executive’s custody or
possession, shall be and are the exclusive property of the Company to be used by
Executive only in the performance of his duties for the Company. All
electronic material containing confidential or proprietary information or
Intellectual Property will be stored on a computer supplied to Executive by the
Company and, under no circumstances, will it be transferred to a personal
computer. Executive will promptly deliver to the Company and/or a
person or entity identified by the Company all such materials or copies of such
materials and all tangible property of the Company in Executive’s custody or
possession, upon the earlier of (i) a request by the Company or (ii) termination
of employment or engagement by the Company. After such delivery,
Executive will not retain any such materials or copies or any such tangible
property or any summaries or memoranda regarding same.
11. Non-Competition
Covenant. As the Executive has been granted options to
purchase stock in the Company and as such has a financial interest in the
success of the Company’s business and as Executive recognizes that the Company
would be substantially injured by Executive competing with the Company,
Executive agrees and warrants that within the United States, he will not, unless
acting with the Company’s express prior written consent, directly or indirectly,
while an employee of the Company and during the Non-Competition Period, as
defined below, own, operate, join, control, participate in, or be connected as
an officer, director, employee, partner, stockholder, consultant or otherwise,
with any business or entity which competes with the business of the Company (or
its successors or assigns) as such business is now constituted or as it may be
constituted at any time during the Term of this Agreement; provided, however,
that Executive may own, and exercise rights with respect to, less than one
percent of the equity of a publicly traded company. The
“Non-Competition Period” shall be a period of twelve months following
termination of employment.
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Executive
and the Company are of the belief that the period of time and the area herein
specified are reasonable in view of the nature of the business in which the
Company is engaged and proposes to engage, the state of its business development
and Executive’s knowledge of this business; however, if such period or such area
should be adjudged unreasonable in any judicial proceeding, then the period of
time shall be reduced by such number of months or such area shall be reduced by
elimination of such portion of such area, or both, as are deemed unreasonable,
so that this covenant may be enforced in such area and during such period of
time as is adjudged to be reasonable.
12. Non-Solicitation
Agreement. Executive agrees and covenants that he will not,
unless acting with the Company’s express written consent, directly or
indirectly, during the Term of this Agreement or during the Non-Competition
Period (as defined in Section 11 above) solicit, entice or attempt to entice
away or interfere in any manner with the Company’s relationships or proposed
relationships with any customer, officer, employee, consultant, proposed
customer, vendor, supplier, proposed vendor or supplier or person or entity or
person providing or proposed to provide research and/or development services to,
on behalf of or with the Company.
13. Notices. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been given on actual receipt after having been delivered by hand,
mailed by first class mail, postage prepaid, or sent by Federal Express or
similar overnight delivery services, as follows: (a) if to Executive, at the
address shown at the head of this Agreement, or to such other person(s) or
address(es) as Executive shall have furnished to the Company in writing and, if
to the Company, to it at the address set forth in the preamble hereto with a
copy to Xxxxxxxx X. Xxxxxx, Esq., Xxxxxxx Xxxxx LLP, 0000 Xxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, or to such other person(s) or address(es) as
the Company shall have furnished to Executive in writing.
14. Assignability. In
the event of a change of control (as defined in the Company’s Change of Control
Severance Benefit Plan), the terms of this Agreement shall inure to the benefit
of, and be assumed by, the acquiring person (as defined in the Company’s Change
of Control Severance Benefit Plan). This Agreement shall not be
assignable by Executive, but it shall be binding upon, and to the extent
provided in Section 8 shall inure to the benefit of, his heirs, executors,
administrators and legal representatives.
15. Entire
Agreement. This Agreement and the Non-Disclosure, Proprietary
Information and Invention Assignment Agreement contain the entire agreement
between the Company and Executive with respect to the subject matter hereof and
there have been no oral or other prior agreements of any kind whatsoever as a
condition precedent or inducement to the signing of this Agreement or otherwise
concerning this Agreement or the subject matter
hereof. Notwithstanding the foregoing, Executive acknowledges that he
is required as a condition to continued employment, to comply at all times, with
the Company’s policies affecting employees, including the Company’s published
Code of Ethics, as in effect from time to time.
16. Equitable
Relief. Executive recognizes and agrees that the Company’s
remedy at law for any breach of the provisions of Sections 9, 10, 11 or 12
hereof would be inadequate, and he agrees that for breach of such provisions,
the Company shall, in addition to such other remedies as may be available to it
at law or in equity or as provided in this Agreement, be entitled to injunctive
relief and to enforce its rights by an action for specific performance.
Should Executive engage in any activities prohibited by this Agreement, he
agrees to pay over to the Company all compensation, remuneration or monies or
property of any sort received in connection with such activities; such payment
shall not impair any rights or remedies of the Company or obligations or
liabilities of Executive which such parties may have under this Agreement or
applicable law.
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17. Amendments. This
Agreement may not be amended, nor shall any change, waiver, modification,
consent or discharge be effected except by written instrument executed by the
Company and Executive.
18. Severability. If
any part of any term or provision of this Agreement shall be held or deemed to
be invalid, inoperative or unenforceable to any extent by a court of competent
jurisdiction, such circumstances shall in no way affect any other term or
provision of this Agreement, the application of such term or provision in any
other circumstances, or the validity or enforceability of this
Agreement. Executive agrees that the restrictions set forth in
Sections 10 and 11 above (including, but not limited to, the geographical scope
and time period of restrictions) are fair and reasonable and are reasonably
required for the protection of the interests of the Company and its
affiliates. In the event that any provision of Section 11 or 12
relating to time period and/or areas of restriction shall be declared by a court
of competent jurisdiction to exceed the maximum time period or areas such court
deems reasonable and enforceable, said time period and/or areas of restriction
shall be deemed to become and thereafter be the maximum time period and/or areas
which such court deems reasonable and enforceable.
19. Paragraph
Headings. The paragraph headings used in this Agreement are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation hereof.
20. Governing Law. This
Agreement shall be governed by and construed and enforced in accordance with the
law of the State of Maryland, without regard to the principles of conflict of
laws thereof.
21. Resolution of Disputes. With
the exception of proceedings for equitable relief brought pursuant to
Section 16 of this Agreement, any disputes arising under or in connection
with this Agreement including, without limitation, any assertion by any party
hereto that the other party has breached any provision of this Agreement, shall
be resolved by arbitration, to be conducted in Baltimore, Maryland, in
accordance with the rules and procedures of the American Arbitration
Association. The parties shall bear equally the cost of such arbitration,
excluding attorneys’ fees and disbursements which shall be borne solely by the
party incurring the same; provided, however, that if the arbitrator rules in
favor of Executive on at least one material component of the dispute, Company
shall be solely responsible for the payment of all costs, fees and expenses
(including without limitation Executive’s reasonable attorney’s fees and
disbursements) of such arbitration. The Company shall reimburse Executive for
any such fees and expenses incurred by Executive in any calendar year within a
reasonable time following Executive’s submission of a request for such
reimbursement, which in no case shall be later than the end of the calendar year
following the calendar year in which such expenses were incurred. Executive
shall submit any such reimbursement request no later than the June 30th next
following the calendar year in which the fees and expenses are incurred. In the
event the arbitrator rules against Executive, Executive shall repay the Company
the amount of such reimbursed expenses no later than 180 days following the
date as of which such arbitrator’s decision becomes final. The provisions of
this Section 21 shall survive the termination for any reason of the Term
(whether such termination is by the Company, by Executive or upon the expiration
of the Term).
22. Indemnification;
Insurance. The Executive shall be entitled to liability and
expense indemnification and reimbursement to the fullest extent permitted by the
Company’s current By-laws and Certificate of Incorporation, whether or not the
same are subsequently amended. During the Term, the Company will use
commercially reasonable efforts to maintain in effect directors’ and officers’
liability insurance no less favorable to Executive than that in effect as of the
date of this Agreement.
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23. Survival. Sections
8 through 23 shall survive the expiration or earlier termination of this
Agreement, for the period and to the extent specified therein.
IN
WITNESS WHEREOF, the parties have executed or caused to be executed under seal
this Agreement as of the date first above written.
| NOVAVAX, INC. | |||
| [SEAL] | |||
|
|
By:
|
/s/ Xxxxx Xxxxxxx | |
| Name: Xxxxx Xxxxxxx | |||
| Title:President & Chief Executive Officer | |||
| EXECUTIVE: | |||
|
|
|
/s/ Xxxx X. Xxxxxxxx | |
| Xxxx X. Xxxxxxxx | |||
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