Exhibit 10.4

 

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NOVAVAX, INC.

2015 Stock Incentive Plan

 

Incentive Stock Option Agreement

 

1.           Grant of Option. Novavax, Inc., a Delaware corporation (the
“Company”), hereby grants to [•] (the “Optionee”), as of [•] (the “Date of
Grant”), an option (the “Option”), pursuant to the Company’s 2015 Stock
Incentive Plan, as amended from time to time (the “Plan”), to purchase an
aggregate of [•] shares of Common Stock (“Shares”) of the Company at a price of
$[•] per share, purchasable as set forth in, and subject to the terms and
conditions of, this Incentive Stock Option Agreement (this “Agreement”) and the
Plan. The Option evidenced by this Agreement is intended to be an incentive
stock option under Section 422 of the Code and is granted to the Optionee in
connection with the Optionee’s Service to the Company or Affiliate.

 

2.           Meaning of Certain Terms. Except as otherwise defined herein, all
capitalized terms used herein have the same meaning as in the Plan. The
following terms have the following meanings:

 

(a)          “Affiliate” means a subsidiary of the Company that would be
described in the first sentence of Treas. Regs. § 1.409A-1(b)(5)(iii)(E)(1).

 

(b)          “Beneficiary” means, in the event of the Optionee’s death, the
beneficiary named in the written designation (in form acceptable to the
Administrator) most recently filed with the Administrator by the Optionee prior
to the Optionee’s death and not subsequently revoked, or, if there is no such
designated beneficiary, the executor or administrator of the Optionee’s estate.
An effective beneficiary designation will be treated as having been revoked only
upon receipt by the Administrator, prior to the Optionee’s death, of an
instrument of revocation in form acceptable to the Administrator.

 

(c)          “Option Holder” means the Optionee or, if as of the relevant time
the Option has passed to a Beneficiary, the Beneficiary.

 

(d)          “Service” means the Optionee’s employment or other service
relationship with the Company and its Affiliates. Service will be deemed to
continue, unless the Administrator expressly provides otherwise, so long as the
Optionee is employed by, or otherwise providing services in a capacity described
in Section 3(a) of the Plan to, the Company or an Affiliate. If an Optionee’s
employment or other service relationship is with an Affiliate and that entity
ceases to be an Affiliate, the Optionee’s Service will be deemed to have
terminated when the entity ceases to be an Affiliate unless the Optionee
transfers Service to the Company or its remaining Affiliates.

 

 

 

 

3.           Option Vesting, Exercise and Expiration.

 

(a)          Vesting Schedule. As used herein with respect to the Option or any
portion thereof, the term “vest” means to become exercisable and the term
“vested” as applied to any outstanding portion of the Option means that the
Option is then exercisable, subject in each case to the terms of the Plan.
Unless earlier terminated, forfeited, relinquished or expired, the Option will
vest as to the percentage of the Shares set forth in the table below on the
respective vesting date set forth in the table below (with the number of Shares
that vest on any such date being rounded down to the nearest whole Share and the
Option becoming vested as to 100% of the Shares on the last vesting date),
subject to the Optionee’s continuous Service through each such vesting date.

 

Vesting Date   Percentage of Shares as to which
Option is Vested [•]   [•]

 

(b)          Expiration Date. The latest date on which the Option or any portion
thereof may be exercised will be the 10th anniversary of the Date of Grant (the
“Expiration Date”). Except as provided in Section 5(e) of the Plan, if the
Option is not exercised by the Expiration Date the Option or any remaining
portion thereof will thereupon immediately terminate.

 

(c)          Exercise Procedure. No portion of the Option may be exercised until
such portion vests. Each election to exercise any vested portion of the Option
will be subject to the terms and conditions of the Plan and this Agreement and
shall be in writing (including in electronic form), signed by the Option Holder
(or in such other form as is acceptable to the Administrator). Each such written
exercise election must be received by the Company at its primary office or by
such other party as the Administrator may prescribe and be accompanied by
payment in full as provided in the Plan and Section 3(d) hereof. The Option
Holder may purchase less than the number of Shares covered hereby, provided that
no partial exercise of the Option may be for any fractional Share.

 

(d)          Payment of Exercise Price. The exercise price may be paid by cash
or check made to the order of the Company in an amount equal to the aggregate
exercise price of the portion of the Option being exercised or through a
broker-assisted exercise program acceptable to the Administrator or, to the
extent legally permissible and acceptable to the Administrator, (i) by delivery
to the Company of shares of Common Stock already owned by the Optionee having a
Fair Market Value equal in amount to the aggregate exercise price of the portion
of the Option being exercised, (ii) through the withholding of shares of Common
Stock otherwise to be delivered upon exercise of the Option having a Fair Market
Value equal to the aggregate exercise price of the portion of the Option being
exercised, or (iii) by any other means approved by the Administrator. Fractional
shares of Common Stock of the Company will not be accepted in payment of the
purchase price of Shares acquired upon exercise of the Option. In the event that
the Option is exercised by a person other than the Optionee, the Company will be
under no obligation to deliver Shares hereunder unless and until it is satisfied
as to the authority of the Option Holder to exercise the Option and compliance
with applicable securities laws.

 

(e)          Treatment of the Option upon Cessation of Service. If the
Optionee’s Service ceases, the Option, to the extent not already vested, will be
immediately forfeited, and any vested portion of the Option that is then
outstanding will be treated as follows:

 

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(i)          Subject to clauses (ii) and (iii) below and Section 4 of this
Agreement, the Option, to the extent vested immediately prior to the cessation
of the Optionee’s Service, will remain exercisable until the earlier of (A) the
date that is three months following the date of such cessation of Service, or
(B) the Expiration Date, and except to the extent previously exercised as
permitted by this Section 3(e)(i) will thereupon immediately terminate.

 

(ii)         Subject to clause (iii) below and Section 4 of this Agreement, the
Option, to the extent vested immediately prior to (A) the cessation of the
Optionee’s Service due to death or disability (within the meaning of Section
22(e)(3) of the Code or any successor provision thereto), or (B) the Optionee’s
death within three months following the Optionee’s termination of Service, will
remain exercisable until the earlier of (x) the first anniversary of the date of
the Optionee’s death or of the date of the termination of the Optionee’s Service
due to disability, as applicable, or (y) the Expiration Date, and except to the
extent previously exercised as permitted by this Section 3(e)(ii) will thereupon
immediately terminate.

 

(iii)        If the Optionee’s Service is terminated by the Company and its
subsidiaries in connection with an act or failure to act constituting Cause (as
the Administrator, in its sole discretion, may determine), the Option (whether
or not vested) will immediately terminate and be forfeited upon such
termination.

 

Upon a cessation of the Optionee’s employment with the Company and its
subsidiaries that is not a cessation of Service, the Option will cease to be an
incentive stock option and will become a Non-Statutory Option if the Option, to
the extent exercisable, is not exercised within the periods set forth in the
Treasury Regulations applicable to incentive stock options.

 

4.           Forfeiture; Recovery of Compensation.

 

(a)          The Administrator may cancel, rescind, withhold or otherwise limit
or restrict the Option at any time if the Optionee is not in compliance with all
applicable provisions of this Agreement and the Plan.

 

(b)          By accepting the Option, the Optionee expressly acknowledges and
agrees that his or her rights, and those of any permitted transferee of the
Option, under the Option, including to any Common Stock acquired under the
Option or proceeds from the disposition thereof, are subject to Section 8(e) of
the Plan (including any successor provision). Nothing in the preceding sentence
shall be construed as limiting the general application of Section 9 of this
Agreement.

 

5.           Transfer of Option. The Option may not be transferred except as
expressly permitted under Section 8(b) of the Plan.

 

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6.           Taxes.

 

(a)          Withholding. If at the time the Option is exercised the Company
determines that under applicable law and regulations it could be liable for the
withholding of any federal, state or local tax upon such exercise or with
respect to a disposition of any Common Stock acquired upon such exercise, the
Optionee by signing this Agreement (and any other Option Holder by exercising
all or any part of the Option) expressly acknowledges and agrees that the Option
Holder’s rights hereunder, including the right to be issued Shares upon
exercise, are subject to the Option Holder promptly paying to the Company in
cash (or by such other means as may be acceptable to the Administrator in its
discretion) all taxes required to be withheld. No Shares will be transferred
pursuant to the exercise of the Option unless and until the person exercising
the Option has remitted to the Company an amount in cash sufficient to satisfy
any federal, state, or local withholding tax requirements, or has made other
arrangements satisfactory to the Company with respect to such taxes. The
Optionee by signing this Agreement (and any other Option Holder by exercising
all or any part of the Option) authorizes the Company and its subsidiaries to
withhold such amount from any amounts otherwise owed to the Option Holder, but
nothing in this sentence shall be construed as relieving the Option Holder of
any liability for satisfying his or her obligation under the preceding
provisions of this Section.

 

(b)          Disqualifying Disposition. If the Optionee disposes of the Shares
acquired upon exercise of the Option within two years from the Date of Grant or
one year after such Shares were acquired pursuant to the exercise of the Option,
the Optionee shall notify the Company in writing of such disposition within 15
days of such disposition.

 

(c)          Annual Limit for Incentive Stock Options. To the extent that the
aggregate fair market value (determined at the time of grant) of the shares of
Stock subject to the Option and all other incentive stock options the Optionee
holds that are exercisable for the first time during any calendar year (under
all plans of the Company and its related corporations) exceeds $100,000, the
options held by the Optionee or portions thereof that exceed such limit
(according to the order in which they were granted in accordance with the
regulations under Section 422 of the Code) shall be treated as Non-Statutory
Options.

 

(d)          Limitation on Liability. The Optionee acknowledges and agrees that
the Company or the Administrator may take any action permitted under the Plan
without regard to the effect such action may have on the status of the Option as
an incentive stock option under Section 422 of the Code and that such actions
may cause the Option to fail to be treated as an incentive stock option under
Section 422 of the Code. The Optionee further acknowledges and agrees that
neither the Company, nor any of its affiliates, nor the Administrator, nor any
person acting on behalf of the Company, any of its affiliates, or the
Administrator, will be liable to the Optionee or to the estate or beneficiary of
the Optionee or to any other person by reason of the failure of the Option to
satisfy the requirements of Section 422 of the Code.

 

7.           Effect on Service. Neither the grant of the Option, nor the
issuance of Shares upon exercise of the Option, will give the Optionee any right
to be retained in the employ or service of the Company or any of its affiliates,
affect the right of the Company or any of its affiliates to discharge or
discipline such Optionee at any time, or affect any right of such Optionee to
terminate his or her employment or service at any time.

 

8.           Rights as a Stockholder. The Option Holder shall have no rights as
a stockholder with respect to any Shares that may be purchased by exercise of
the Option (including, without limitation, any rights to receive dividends or
non-cash distributions with respect to such Shares) except as to shares of
Common Stock actually issued under the Plan. No adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
shares of Common Stock are issued.

 

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9.           Provisions of the Plan. This Agreement is subject in its entirety
to the provisions of the Plan, which are incorporated herein by reference. A
copy of the Plan as in effect on the Date of Grant has been furnished to the
Optionee. By exercising all or any part of the Option, the Option Holder agrees
to be bound by the terms of the Plan and this Agreement. In the event of any
conflict between the terms of this Agreement and the Plan, the terms of the Plan
shall control.

 

10.           Acknowledgements. The Optionee acknowledges and agrees that (i)
this Agreement may be executed in two or more counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument and (ii) this agreement may be executed and exchanged using
facsimile, portable document format (PDF) or electronic signature, which, in
each case, shall constitute an original signature for all purposes hereunder.

 

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Date of Grant: [•] NOVAVAX, INC.         By:     Barclay A. Phillips     SVP,
Chief Financial Officer

 

OPTIONEE’S ACCEPTANCE

 

The undersigned hereby accepts the Option and agrees to the terms and conditions
of this Agreement and the Plan. The undersigned hereby acknowledges receipt of a
copy of the Plan.

 

  OPTIONEE   PRINT NAME   SIGN NAME   PRINT ADDRESS

 

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