EMPLOYMENT AGREEMENT
Exhibit 10.1
This Employment Agreement (this “Agreement”) is dated as of August 6th, 2009,
between Novavax, Inc., a Delaware corporation having its principal office at 0000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxxxx, XX 00000, and Xxxxxxxxx X. Xxxxxxxx (“Executive”).
WHEREAS, Executive will commence employment with the Company on or about August 24, 2009
pursuant to an offer letter dated August 6, 2009; and
The Company and Executive hereby agree as follows:
1. Employment. The Company hereby employs Executive and Executive hereby accepts employment
as Vice President, Chief Financial Officer, and Treasurer 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 Vice President, Chief Financial Officer, and Treasurer 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 the period beginning on August 24, 2009 and
continuing until September 1, 2010, unless earlier terminated pursuant to Section 7 hereof (the
“Term”) 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, unless one of the
Company or the Executive provides notice of termination at least 30 days before the expiration of
the then current 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 an annual salary, which is $275,000 as of this
agreement, established by the Board of Directors or an authorized committee thereof (in
accordance with the management processes) and payable in accordance with the Company’s payroll
policy as constituted from time to time. The Company may withhold from any amounts payable under
this Agreement all required federal, state, city or other taxes and all other deductions as may be
required pursuant to any law or government regulation or ruling.
(b) Bonus Program. The Company agrees to pay the Executive a performance and incentive bonus
in respect of Executive’s employment with the Company each year in an amount determined by the
President and CEO and Board of Directors (or any committee of the Board of Directors authorized to
make that determination) to be appropriate based upon Executive’s, and the Company’s, achievement
of certain specified goals (to be established at the beginning of the bonus period), with a target
bonus of 40%, or any other percentage determined by the Board of Directors, of Executive’s base
salary during the year to which the bonus relates based on performance. Such bonus shall be
payable no later than two and one-half months following the year for which the bonus applies. The
bonus shall be paid out partly in cash and partly in shares of restricted stock, in the discretion
of the Board of Directors.
(c) Stock Awards. Subject to approval by the Board of Directors (or any committee of the
Board of Directors authorized to make that determination), the Company will grant Executive (a)
stock options to purchase 220,000 shares of the Company’s Common Stock ($.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) 10,000 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 August 24, 2009, 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.
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:
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(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 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 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 entitled to receive his fixed compensation for the period
up to the last day of the month in which such death shall have occurred.
(b) Section 8(a) above shall not apply should Executive receive severance benefits under the
Company’s Change in Control Severance Benefit Plan.
9. “Separation Pay” shall mean a lump sum amount equal to twelve months of Executive’s then
effective salary.
(a) “Separation Event” shall mean:
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(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.
10. 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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11. 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.
12. 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
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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.
13. 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.
14. 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 Xxxxxxx & Ingersoll, 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.
15. 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.
16. 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.
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17. 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.
18. 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.
19. 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.
20. 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.
21. 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.
22. 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
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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).
23. 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.
24. 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/ Xxxxxxxxx X. Xxxxxxxx | ||||
| Xxxxxxxxx X. Xxxxxxxx | ||||
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