Exhibit 10.1
 

EMPLOYMENT AGREEMENT
 
This Employment Agreement (this “Agreement”) is dated as of May 6, 2010, between
Novavax, Inc., a Delaware corporation having its principal office at 9920
Belward Campus Drive, Rockville, MD 20850, and Mark O. Thornton (“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 Jennifer L. Miller, Esq., Ballard Spahr LLP, 1735 Market
Street, 51st Floor, Philadelphia, Pennsylvania 19103, 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/ Rahul Singhvi        Name: Rahul Singhvi        Title:President & Chief
Executive Officer           

 

  EXECUTIVE:          
 
 
/s/ Mark O. Thornton        Mark O. Thornton           

 
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