EMPLOYMENT AGREEMENT
Exhibit
10.1
This
Employment Agreement (this “Agreement”) is dated as of February 15, 2010, between
Novavax, Inc., a Delaware corporation having its principal office at 0000
Xxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, XX 00000, and Xxxxxxx Xxxx
(“Executive”).
BACKGROUND
A. The
Company is a biopharmaceutical company focused on developing novel vaccines and
is located in Rockville, Maryland.
B. Executive has extensive experience as an
executive and as a director for several vaccine-related companies and has served
as a director of the Company over the past several months.
The
Company and Executive hereby agree as follows:
1. Employment. The
Company hereby employs Executive and Executive hereby accepts employment as
Executive Chairman 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 Executive Chairman of Novavax,
Inc., performing such services, assuming such responsibilities and exercising
such authority as are set forth in Exhibit
A 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. 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 February 15, 2010 and
continuing until February 15,
2011, unless earlier terminated pursuant to Section 7 hereof (the
“Term”). 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
$300,000 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. Executive acknowledges that he will not receive any
additional compensation for his services as a director of the
Company.
(b) Bonus Program. The
Company agrees to pay the Executive a performance and incentive bonus in respect
of Executive’s employment with the Company at the end of the term of this
Agreement 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 (to be established within thirty (30) days of the finalization of the
Company’s corporate goals) (“Executive Goals”). Executive’s target
for such bonus shall be up to 100% of Executive’s base salary during the year to
which the bonus relates based on performance (where 60% of such target shall be
directly tied to the achievement of such Executive Goals and 40% of which shall
be entirely at the discretion of the Board of Directors), or any other
percentage determined by the Board of Directors. Such bonus shall be
payable no later than 45 days after the filing of the Company’s Annual Statement
on Form 10-K for 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. The
Company has granted Executive stock options to purchase 300,000 shares of the
Company’s Common Stock ($0.01 par value) at an exercise price of $2.40 per
share, the closing price of the Company’s Common Stock on the trading day
immediately preceding Executive’s appointment as Executive
Chairman. Of this grant, stock options to purchase 150,000 shares of
Company Common Stock will vest on February 15, 2011 and stock options to
purchase 150,000 shares of Common Stock will vest, in whole or in part, upon the
achievement of certain milestones related to corporate objectives which shall be
determined by the Board of Directors on or prior to May 31,
2010. 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. 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 February 15,
2010, 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.
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(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:
(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 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 here, upon the occurrence of the
applicable Separation Event, as defined below, but in no case later than two and
one-half months following the year in which the Separation Event
occurs. “Separation Pay” shall mean a lump sum amount equal to twelve
(12) months of Executive’s then effective base salary. 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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(a) In
addition to the Separation Pay, if Executive elects to continue participation in
the Company’s medical plans as provided by COBRA, Company will pay 100% of
Executive’s COBRA premiums for twelve(12) months.
(b) Sections
8(a) and 8(b) above shall not apply should Executive receive severance benefits
under the Company’s Change in Control Severance Benefit Plan.
(c) “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.
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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.
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 12 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 successor to the Company or the acquiring person in
such change in control transaction. 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.
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15. Entire
Agreement. This Agreement contains 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. Executive further
acknowledges that the Non-Disclosure, Proprietary Information and Invention
Assignment Agreement he signed upon becoming an employee or thereafter remains
in full force and effect despite the execution of this Agreement and any changes
in his employment status with the Company.
16. Equitable
Relief. Executive recognizes and agrees that the Company’s
remedy at law for any breach of the provisions of Sections 10, 11, 12 or 13
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.
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 11 and 12 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 12 or 13
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.
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21. Resolution of
Disputes. With the exception of proceedings for equitable
relief brought pursuant to Section 17 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 the 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 22 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, advancement of expenses 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.
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.
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NOVAVAX,
INC.
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[SEAL]
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By: /s/ Xxxx
Evans___________________
Name: Xxxx
Xxxxx
Title:Lead
Independent Director
Executive:
/s/ Xxxxxxx X.
Xxxx
Xxxxxxx
X. Xxxx
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