Exhibit 10.1
 
EMPLOYMENT AGREEMENT
 
This Employment Agreement (this “Agreement”) is dated as of February 15, 2010,
between Novavax, Inc., a Delaware corporation having its principal office at
9920 Belward Campus Drive, Rockville, MD 20850, and Stanley Erck (“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 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 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.
 
 
NOVAVAX, INC.

 
[SEAL]
 
 
By:  /s/ Gary Evans___________________
Name: Gary Evans
Title:Lead Independent Director
 
 
 
Executive:
 
 
 
/s/ Stanley C. Erck                                              
Stanley C. Erck

 

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