Document:

exv10w1

 

Exhibit 10.1

[Letterhead of Pharmelle, LLC]

July 5, 2006

Rahul Singhvi

President and CEO

Novavax, Inc.

508 Lapp Road

Malvern, Pennsylvania 19355

     Re: Amendment to Purchase Agreement royalty formula for AVC Products

Dear Dr. Singhvi:

The purpose of this letter is to amend that certain Asset Purchase Agreement by and among Novavax,
Inc. (“Novavax”), Fielding Pharmaceutical Company (“Fielding”) and Pharmelle, LLC
(“Pharmelle”) dated September 22, 2005 (the “Purchase Agreement”).

Specifically, Section 1.03(b) of the Purchase Agreement is deleted in its entirety and replaced
with the following:

     ”(b) In addition to the amount set forth in Section 1.03(a)
above, PHARMELLE agrees to pay NOVAVAX royalties on the AVC Products
(as defined in Section 1.09 below), for the five year period
commencing on the Closing Date and ending on the fifth anniversary
thereof, in the amount of 40% of Gross Margin of the AVC Products on
annual Net Sales of AVC Products between $1,175,000 and $2,200,000
and 35% of Gross Margin of AVC Products for annual Net Sales of AVC
Products in excess of $2,200,000.

     “For example, if annual Net Sales for a yearly period are
$2,300,000 and the Gross Margin for those sales was 70%, or
$1,610,000, total payment for the yearly period shall be made in the
amount of $287,000 for the amount of such sales between $1,175,000
and $2,200,000 ($2,200,000 — $1,175,000 = $1,025,000 *.70 *.40 =
$287,000) and $24,500 for the amount in excess of $2,200,000
($2,300,000 — $2,200,000 =$100,000 *.70 *.35 = $24,500), for
aggregate royalty payments to NOVAVAX of $311,500 for such yearly
period. The actual quarterly payment may/could vary based on the
actual quarterly Gross Margin percentage for the AVC Products.

 

 

     “A yearly period will be from October 1st to
September 30th with royalty payments payable quarterly
based on regular calendar quarter-end dates (i.e., December 31,
March 31, June 30 and September 30, provided that the first
quarter for which payments shall be made shall include the stub
period between the Closing Date and October 1, 2005) in arrears,
commencing December 31, 2005, no later than the last day of the
month following the end of a quarter. PHARMELLE shall be obligated
to pay 50% of the amount due for the first quarterly period of each
payment year based on one quarter of the Net Sales targets, 50% of
the amount due for the second quarterly period of each payment year
based on one half of the Net Sales targets, 100% of the amount due
for the third quarterly period of each payment year based on three
fourths of the Net Sales targets, and 100% of the amount due for the
fourth quarterly period of each payment year based on a full yearly
period of the Net Sales targets, along with a true-up at the end of
each such yearly period for any other adjustments from previous
quarters, audits, previous sales price or cost of goods adjustments,
etc. The payment formula per this definition is included as Exhibit
A herein.

For purposes of this Agreement, Net Sales shall mean sales of the AVC Products after
deductions for: discounts and credits for refunds and returns rebates, (which rebates shall
include those related to sales and usage such as Medicaid rebates, forced or mandated
wholesaler/distributor rebates, and rebates to other governmental agencies or purchasing
associations) and wholesaler fees. Gross Margin shall mean Net Sales less the Cost of Goods. For
purposes of this Agreement, Cost of Goods means the per unit cost of obtaining the raw supplies for
the AVC Products and having such raw supplies manufactured into saleable AVC Products. Freight
charges from PHARMELLE’s warehouse or special promotion payments to distributor or other any other
third parties initiated by PHARMELLE shall not be deducted from Net Sales or Gross Margin

* * * *

 

 

This amendment is effective retroactively to the date of the Purchase Agreement.

Please sign below to indicate your agreement with the foregoing on behalf of Novavax and Pharmelle.

Very truly yours,

PHARMELLE

/s/ Joe D. Ducharme

Joe D. Ducharme

President

AGREED TO AND ACKNOWLEDGED

This ___ day of                                         , 2006:

NOVAVAX, INC.:

By: /s/ Rahul Singhvi

Name: Rahul Singhvi

Title: President and CEO

FIELDING PHARMACEUTICAL COMPANY

	 	 	 	 	 
	By:
	 	 /s/ Joe D. Ducharme	 	 
	 

	 	 	 	 
	Name: Joe D. Ducharme	 	 
	Title: Presidentexv10w2

 

Exhibit 10.2

NOVAVAX, INC.

AMENDED AND RESTATED

CHANGE IN CONTROL SEVERANCE BENEFIT PLAN

Section 1. Introduction.

     The Novavax, Inc. Change in Control Severance Benefit Plan (“Plan”) was originally
approved by the Board of Directors (the “Board”) of Novavax, Inc. (the “Company”) and became
effective on August 10, 2005. On July 26, 2006, the Board approved an amendment and restatement of
the Plan as set forth herein. The purpose of the Plan is to provide severance benefits to certain
eligible employees of the Company in the event of their termination of employment in connection
with a Change in Control (as defined herein). This Plan document also is the Summary Plan
Description for the Plan.

     Certain capitalized terms used in the Plan are defined in Section 6.

Section 2. Eligibility For Benefits.

     (a) General Rules.

          (i) Subject to the requirements set forth in this Section 2, the
Company shall grant benefits under the Plan to Eligible Employees. “Eligible
Employees” include those employees of the Company who are approved by the Board
in its sole and absolute discretion and designated as participants in this
Plan. Employees who have been selected to participate by the Board shall be
listed on Exhibit A to this Plan. At any time the Board may select additional
employees to participate in the Plan, but no employee or other service provider
of the Company who has not been specifically approved by the Board shall be
eligible for benefits hereunder.

          (ii) An Eligible Employee shall be eligible for benefits under this
Plan if the Eligible Employee’s employment with the Company terminates due to
an Involuntary Termination without Cause for a reason other than the Eligible
Employee’s death or Disability, or as a result of a Constructive Termination,
which in either case occurs: (x) during the period not to exceed twenty-four
(24) months after the effective date of a Change in Control (where the number
of months for a particular Eligible Employee is equal to period for which he or
she is receiving severance as specified on Exhibit A), or (y) before the
effective date of a Change in Control, but after the first date on which the
Board and/or senior management of the Company has entered into formal
negotiations with a potential acquiror that results in the consummation of a
Change in Control (provided, however, that in no event shall a termination of
employment occurring more than one (1) year before the effective date of a
Change in Control be covered by this Plan).

     (b) Other Requirements.

          (i) In order to be eligible to receive benefits under the Plan, an
Eligible Employee must execute a general waiver and release of all legal claims
against the Company and its Affiliates and their representatives on a form
satisfactory to the Company.

1.

 

          (ii) Any Change in Control that triggers the payment of benefits
under this Plan must occur during the term of this Plan as specified in Section
5(b).

     (c) Exceptions. Notwithstanding the foregoing:

          (i) An Eligible Employee who is eligible for severance benefits
under any other severance plan, policy or program of the Company in effect on
their Termination Date, including under any individually negotiated employment
contract or agreement between the Eligible Employee and the Company that
provides for severance pay or benefits (hereinafter “Other Severance Program”),
shall be eligible to elect as between the receipt of the severance benefits
provided under this Plan, or, alternatively, may elect to receive the severance
pay and benefits under any such Other Severance Program. Such an election must
be made by no later than thirty
(30) days after the Termination Date (or, if earlier, the date on which the
Company becomes obligated to pay severance benefits under the Other
Severance Program), and if an Eligible Employee fails to make a timely
election, he or she shall be deemed to have elected to receive severance
benefits under the Other Severance Program. Notwithstanding the above, in
the case of an Eligible Employee whose Termination Date precedes a Change in
Control, he or she initially may receive severance benefits under any Other
Severance Program. If a Change in Control subsequently becomes effective,
and the Eligible Employee is entitled to severance benefits under this Plan,
he or she may at that time elect to receive the Plan benefits (with any such
election only being effective if made by no later than thirty (30) days
after the effective date of the Change in Control), and, as a condition to
the receipt of those benefits, the Eligible Employee must repay to the
Company in cash, by a date to be determined by the Company, the full amount
of any severance pay or benefits that he or she received pursuant to the
Other Severance Program (net of taxes paid or withheld on behalf of the
Eligible Employee), and including the value of insurance premiums or other
benefits paid by the Company for on or behalf of the Eligible Employee or
his dependents. To the extent an Eligible Employee has received accelerated
vesting of any stock option or other equity under the Other Severance
Program, that shall continue to be given effect even if the Eligible
Employee elects to receive severance pay or benefits under this Plan. An
election is only effective under this Section if made in writing and
delivered to the Plan Administrator on or before the required date.

     If the Eligible Employee chooses to receive severance benefits under any Other Severance
Program (and no repayment occurs within the date determined by the Company, if applicable), the
Employee shall not be eligible for any severance benefits under this Plan, and the Eligible
Employee agrees to forego the severance pay and benefits under such Other Severance Program if they
elect to receive benefits under this Plan.

          (ii) An Eligible Employee whose employment is terminated by the
Company for Cause at any time, who terminates employment voluntarily for a
reason other than a Constructive Termination (including termination of
employment because of the Eligible Employee’s death or Disability), whose
employment terminates for any reason, whether initiated by the Eligible
Employee or the Company, more than twenty-four (24) months after the effective
date of the Change in Control (or, if less, the number of months designated by
the Board on Exhibit A for which the Eligible Employee is entitled to
severance), or before the beginning of formal negotiations with a potential
acquiror of the Company’s business or more than one year before the effective
date of Change in Control (even if formal negotiations with a potential
acquiror have begun), shall not be eligible to receive Change in Control
severance benefits under this Plan (and the Eligible Employee’s participation
in this Plan shall terminate at that time).

2.

 

Section 3. Amount and Type Of Benefits; Limitations and Exceptions.

     Benefits payable under the Plan are as follows and are subject to the following limitations
and exceptions:

     (a) Eligible Employees shall receive the benefits described in the applicable
Benefit Schedule attached hereto.

     (b) All fringe benefits not otherwise covered by this Plan and the attached
Benefits Schedule (such as, but not limited to, pension/retirement, life insurance,
disability coverage and other welfare benefits) shall terminate as of the employee’s
Termination Date (except to the extent that the specific plans or programs provide for
extended coverage or if any conversion privilege is available thereunder).

     (c) Parachute Payments.

          (i) Notwithstanding the above, if any payment or benefit that an
Eligible Employee would receive under this Plan, when combined with any other
payment or benefit he or she receives that is contingent upon a Change in
Control (“Payment”) would (i) constitute a “parachute payment” within the
meaning of Section 280G of the Code, and (ii) but for this sentence, be subject
to the excise tax imposed by Section 4999 of the Code (“Excise Tax”), then such
Payment shall be either (x) the full amount of such Payment or (y) such lesser
amount (with Payments being reduced in the order and priority established by
the Board) as would result in no portion of the Payment being subject to the
Excise Tax, whichever of the foregoing amounts, taking into account the
applicable federal, state and local employment taxes, income taxes, and the
Excise Tax results in the Eligible Employee’s receipt, on an after-tax basis,
of the greater amount of the Payment notwithstanding that all or some portion
of the Payment may be subject to the Excise Tax. The Eligible Employee shall
be solely responsible for the payment of all personal tax liability that is
incurred as a result of the payments and benefits received under this Plan, and
Participant will not be reimbursed by the Company for any such payments.

          (ii) The Company shall attempt to cause its accountants to make all
of the determinations required to be made under Section 3(c)(i), or, in the
event the Company’s accountants will not perform such service, the Company may
select another professional services firm to perform the calculations. The
Company shall request that the accountants or firm provide detailed supporting
calculations both to the Company and Eligible Employee prior to the Change in
Control if administratively feasible or subsequent to the Change in Control if
events occur that result in parachute payments to the Eligible Employee at that
time. For purposes of making the calculations required by Section 3(c), the
accountants or firm may make reasonable assumptions and approximations
concerning applicable taxes and may rely on reasonable, good faith
determinations concerning the application of the Code. The Company and
Eligible Employee shall furnish to the
accountants or firm such information and documents as the accountants or
firm may reasonably request in order to make a determination under this
Section 3(c). The Company shall bear all costs the accountants or firm may
reasonably incur in connection with any calculations contemplated by Section
3(c). Any such determination by the Company’s accountants or other firm
shall be binding upon the Company and Eligible Employee, and the Company
shall have no liability to Eligible Employees for the determinations of its
accountants or other firm.

3.

 

     (d) Any provisions contained in the Company’s stock option or equity plans, or
contained in an Eligible Employee’s individual stock option agreement with the Company,
regarding the accelerated vesting or exercisability of stock options or awards upon a
Change in Control shall continue to apply and may be supplemented by, but shall not be
superseded by, the terms of this Plan.

Section 4. Time Of Payment And Form Of Benefit; Indebtedness.

     (a) Cash benefits under this Plan as described in the attached Benefit Schedule,
less applicable tax withholdings, shall be paid to an Eligible Employee in a lump sum.
The Company reserves the right to determine the timing of such payments, provided,
however, that all payments under this Plan shall be completed within sixty (60) days
after an Eligible Employee’s Termination Date or, in the case where an Eligible
Employee’s Termination Date precedes a Change in Control, sixty (60) days after the
effective date of the Change in Control (subject to the provisions requiring later
payment set forth in Section 4(c) below). Notwithstanding the above, no payment shall
be made under this Plan prior to the last day of any waiting period or revocation
period as required by applicable law in order for the general waiver and release of
legal claims required by Section 2(b)(i) of this Plan to be effective.

     (b) If an Eligible Employee is indebted to the Company at his or her payment date,
the Company reserves the right to offset any payments under the Plan by the amount of
such indebtedness.

     (c) Notwithstanding anything to the contrary herein, in the event the severance
benefits described herein are subject to the provisions regarding deferred compensation
set forth in Section 409A of the Code, then any payments to “key employees,” as defined
in the Code and the applicable regulations, shall not be made until the earliest date
sufficient to avoid the imposition of tax or penalties under Section 409A.
Additionally, to the extent Section 409A is applicable, then the payment of any amounts
or benefits hereunder shall not be accelerated or deferred contrary to the payment
schedule provided for under the Plan except in compliance with the provisions of
Section 409A.

Section 5. Right To Interpret Plan; Amend And Terminate; Other Arrangements; Binding Nature Of
Plan.

     (a) Exclusive Discretion. The Plan Administrator (defined below) shall have the
exclusive discretion and authority to establish rules, forms, and procedures for the
administration of the Plan, and to construe and interpret the Plan and to decide any
and all questions of fact, interpretation, definition, computation or administration
arising in connection with the operation of the Plan, including, but not limited to,
the eligibility to participate in the Plan and the amount of benefits paid under the
Plan. The rules, interpretations, computations and other actions of the Plan
Administrator shall be binding and conclusive on all persons.

4.

 

     (b) Term Of Plan; Amendment Or Termination.

          (i) The Board reserves the right to amend or modify the terms of
the Plan or the benefits provided hereunder at any time, provided, however,
that any such amendment or modification that diminishes or otherwise adversely
affects the rights or benefits of an Eligible Employee under the Plan shall
only become effective upon the written consent of any such affected Eligible
Employee. The Board may terminate the Plan at any time with the written
consent of the Eligible Employees, or may terminate a particular Eligible
Employee’s participation in the Plan or entitlement to benefits with the
written consent of such Eligible Employee. Notwithstanding the above, the Plan
may be terminated by the Board in its discretion, without the consent of any
Eligible Employee, at any time after the date that is twelve (12) months after
a Change in Control event (or twenty-four months in the case of the Chief
Executive Officer), provided that all unpaid severance benefits related to such
Change in Control have been paid to Eligible Employees whose Termination Date
occurred prior to the termination of the Plan.

          (ii) Eligible Employees shall have the right to be promptly notified
that any action amending or terminating the Plan has been taken.

     (c) Other Change in Control Severance Arrangements. The Company reserves the right
to make other arrangements regarding Change in Control severance benefits in special
circumstances.

     (d) Binding Effect On Successor To Company. This Plan shall be binding upon any
successor or assignee, whether direct or indirect, by purchase, merger, consolidation
or otherwise, to all or substantially all the business or assets of the Company, or
upon any successor to the Company as the result of a Change in Control, and any such
successor or assignee shall be required to perform the Company’s obligations under the
Plan, in the same manner and to the same extent that the Company would be required to
perform if no such succession or assignment or Change in Control had taken place. In
such event, the term “Company,” as used in the Plan, shall mean the Company as
hereinafter defined
and any successor or assignee as described above which by reason hereof becomes
bound by the terms and provisions of this Plan, and the term “Board” shall refer to
the Board of Directors of any such surviving or continuing entity.

Section 6. Definitions.

     Capitalized terms used in this Plan, unless defined elsewhere in this Plan, shall have the
following meanings:

     (a) Accrued Compensation means an amount which includes all amounts earned or
accrued through the Termination Date but not paid as of the Termination Date, including
(i) Pay, (ii) reimbursement for reasonable and necessary expenses incurred by the
Eligible Employee on behalf of the Company during the period ending on the Termination
Date, (iii) unused vacation pay, and (iv) any earned and accrued bonuses and incentive
compensation as of the Termination Date (but not including any pro rata portion of the
Bonus Amount).

5.

 

     (b) Affiliate means any parent corporation or subsidiary corporation of the
Company, whether now or hereafter existing, as those terms as defined in Sections
424(e) and (f), respectively, of the Code.

     (c) Bonus Amount means one hundred percent (100%) of the target annual performance
bonus amount that an Eligible Employee is eligible to receive for the period that
includes the Termination Date. If an Eligible Employee’s bonus is calculated on a
monthly or quarterly basis, the maximum bonus award for these purposes shall be the
amount determined by annualizing the maximum monthly or quarterly payment.

     (d) Cause means (i) conviction of, a guilty plea with respect to, or a plea of nolo
contendere to a charge that the Eligible Employee has committed a felony under the laws
of the United States or of any state or a crime involving moral turpitude, including,
but not limited to, fraud, theft, embezzlement or any crime that results in or is
intended to result in personal enrichment at the expense of the Company; (ii) material
breach of any agreement entered into between the Eligible Employee and the Company that
impairs the Company’s interest therein; (iii) willful misconduct, significant failure
to perform the Eligible Employee’s duties, or gross neglect by the Eligible Employee of
the Eligible Employee’s duties; or (iv) engagement in any activity that constitutes a
material conflict of interest with the Company.

     (e) Change in Control means (i) a sale, lease, license or other disposition of all
or substantially all of the assets of the Company, (ii) a consolidation or merger of
the Company with or into any other corporation or other entity or person, or any other
corporate reorganization, in which the shareholders of the Company immediately prior to
such consolidation, merger or reorganization, own less that fifty percent (50%) of the
outstanding voting power of the surviving entity and its parent following the
consolidation, merger or reorganization, or (iii) any transaction or series of related
transactions involving a person or entity, or a group of affiliated
persons or entities (but excluding any employee benefit plan or related trust
sponsored or maintained by the Company or an Affiliate) in which such persons or
entities that were not shareholders of the Company immediately prior to their
acquisition of Company securities as part of such transaction become the owners,
directly or indirectly, of securities of the Company representing more than fifty
percent (50%) of the combined voting power of the Company’s then outstanding
securities other than by virtue of a merger, consolidation or similar transaction
and other than as part of a private financing transaction by the Company, or (iv) a
Change in the Incumbent Board. For purposes of this Plan, a Change in the Incumbent
Board shall occur if the existing members of the Board on the date this Plan is
initially adopted by the Board (the “Incumbent Board”) cease to constitute at least
a majority of the members of the Board, provided, however, that any
new Board member shall be considered a member of the Incumbent Board for this
purpose if the appointment or election (or nomination for such election) of the new
Board member was approved or recommended by a majority vote of the members of the
Incumbent Board who are then still in office.

     (f) Code means the Internal Revenue Code of 1986, as amended.

     (g) Company means Novavax, Inc., a Delaware corporation, and any successor as
provided in Section 5(d) hereof.

6.

 

     (h) Constructive Termination means a termination initiated by an Eligible Employee
because any of the following events or conditions have occurred:

          (i) a change in the Eligible Employee’s status, title, position or
responsibilities (including reporting responsibilities) which represents an
adverse change from the Eligible Employee’s status, title, position or
responsibilities as in effect immediately preceding the effective date of a
Change in Control or at any time thereafter; the assignment to the Eligible
Employee of any duties or responsibilities which are inconsistent with the
Eligible Employee’s status, title, position or responsibilities as in effect
immediately preceding the effective date of a Change in Control or at any time
thereafter; except in connection with the termination of the Eligible
Employee’s employment for Cause or the termination of an Eligible Employee’s
employment because of an Eligible Employee’s Disability or death, or except as
the result of a voluntary termination by the Eligible Employee other than as a
result of a Constructive Termination;

          (ii) a reduction in the Eligible Employee’s Pay or any failure to
pay the Eligible Employee any compensation or benefits to which the Eligible
Employee is entitled within five (5) days of the date due;

          (iii) the Company’s requiring the Eligible Employee to relocate his
principal worksite to any place outside a thirty (30) mile radius of the
Eligible Employee’s current worksite, except for reasonably required travel on
the
business of the Company or its Affiliates which is not materially greater
than such travel requirements prior to the Change in Control;

          (iv) the failure by the Company to (A) continue in effect (without
reduction in benefit level and/or reward opportunities) any material
compensation or employee benefit plan in which the Eligible Employee was
participating immediately preceding the effective date of a Change in Control
or at any time thereafter, unless such plan is replaced with a plan that
provides substantially equivalent compensation or benefits to the Eligible
Employee, or (B) provide the Eligible Employee with compensation and benefits,
in the aggregate, at least equal (in terms of benefit levels and/or reward
opportunities) to those provided for under each other employee benefit plan,
program and practice in which the Eligible Employee was participating
immediately preceding the date of a Change in Control or at any time
thereafter;

          (v) the insolvency or the filing (by any party, including the
Company) of a petition for bankruptcy of the Company, which petition is not
dismissed within sixty (60) days;

          (vi) any material breach by the Company of any provision of this
Plan;

          (vii) the failure of the Company to obtain an agreement,
satisfactory to the Eligible Employee, from any successors and assigns to
assume and agree to perform the obligations created under this Plan as a result
of a Change in Control, as contemplated in Section 5 hereof.

     (i) Disability means the permanent and total disability of a person within the
meaning of Section 22(e)(3) of the Code.

7.

 

     (j) Eligible Employee means an individual specified in Section 2(a) who is eligible
to participate in the Plan.

     (k) Involuntary Termination without Cause means the termination of an Eligible
Employee’s employment which is initiated by the Company for a reason other than Cause.

     (l) Pay means the Eligible Employee’s base pay (excluding incentive pay, premium
pay, commissions, overtime, bonuses and other forms of supplemental or variable
compensation) at the rate in effect during the regularly scheduled payroll period
coincident with the Change in Control or with the Termination Date, whichever is
greater.

     (m) Plan means this Novavax, Inc. Change in Control Severance Benefit Plan.

     (n) Termination Date means the last date on which the Eligible Employee is in
active pay status as an employee with the Company. A holiday cannot constitute
a Termination Date unless the Eligible Employee actively provided services for the
Company on such holiday.

Section 7. No Implied Employment Contract.

     The Plan shall not be deemed (i) to give any employee or other person any right to be retained
in the employ of the Company, or (ii) to interfere with the right of the Company to discharge any
employee or other person at any time and for any reason, which right is hereby reserved.

Section 8. Legal Construction.

     This Plan is intended to be governed by and shall be construed in accordance with the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”) and, to the extent not preempted by
ERISA, the laws of the State of Pennsylvania.

Section 9. Claims, Inquiries And Appeals. 

     (a) Claims for Benefits and Inquiries. Any claim for benefits, inquiries about the
Plan or inquiries about present or future rights under the Plan must be submitted to
the Plan Administrator in writing by an Eligible Employee (or his or her authorized
representative). The Plan Administrator is the Compensation Committee of the Board, or
its designee, and claims and inquiries should be directed to:

Novavax, Inc.

508 Lapp Road

Malvern, PA 19355

Attn: Vice President of Human Resources, the Chief Executive Officer, or the Chairman of the Compensation Committee of the Board

     (b) Denial of Claims. In the event that any claim for benefits is denied in whole
or in part, the Plan Administrator must provide the claimant with written or electronic
notice of the denial of the claim, and of the claimant’s right to review the denial.
Any electronic notice will comply with the regulations of the U.S. Department of Labor.
The notice of denial will be set forth in a manner designed to be understood by the
claimant and will include the following:

8.

 

          (i) the specific reason or reasons for the denial;

          (ii) references to the specific Plan provisions upon which the
denial is based;

          (iii) a description of any additional information or material that
the Plan Administrator needs to complete the review and an explanation of why
such information or material is necessary; and

          (iv) an explanation of the Plan’s review procedures and the time
limits applicable to such procedures, including a statement of the applicant’s
right to bring a civil action under Section 502(a) of ERISA following a
denial on review of the claim, as described in Section 9(d) below.

     This notice of denial will be given to the claimant within ninety (90) days after the Plan
Administrator receives the claim, unless special circumstances require an extension of time, in
which case, the Plan Administrator has up to an additional ninety (90) days for processing the
claim. If an extension of time for processing is required, written notice of the extension will be
furnished to the claimant before the end of the initial ninety (90) day period.

     This notice of extension will describe the special circumstances necessitating the additional
time and the date by which the Plan Administrator is to render its decision on the claim.

     (c) Request for a Review. Any person (or that person’s authorized representative)
for whom a claim for benefits is denied, in whole or in part, may appeal the denial by
submitting a request for a review to the Plan Administrator within sixty (60) days
after the claim is denied. A request for a review shall be in writing and shall be
addressed to:

Novavax, Inc.

508 Lapp Road

Malvern, PA 19355

Attn: Vice President of Human Resources, the Chief Executive Officer, or the Chairman of the Compensation Committee of the Board

A request for review must set forth all of the grounds on which it is based, all facts in support
of the request and any other matters that the claimant feels are pertinent. The claimant (or his
or her representative) shall have the opportunity to submit (or the Plan Administrator may require
the claimant to submit) written comments, documents, records, and other information relating to his
or her claim. The claimant (or his or her representative) shall be provided, upon request and free
of charge, reasonable access to, and copies of, all documents, records and other information
relevant to his or her claim. The review shall take into account all comments, documents, records
and other information submitted by the claimant (or his or her representative) relating to the
claim, without regard to whether such information was submitted or considered in the initial
benefit determination.

9.

 

     (d) Decision on Review. The Plan Administrator will act on each request for review
within sixty (60) days after receipt of the request, unless special circumstances
require an extension of time (not to exceed an additional sixty (60) days), for
processing the request for a review. If an extension for review is required, written
notice of the extension will be furnished to the claimant within the initial sixty (60)
day period. This notice of extension will describe the special circumstances
necessitating the additional time and the date by which the Plan Administrator is to
render its decision on the review. The Plan Administrator will give prompt, written or
electronic notice of its decision to the claimant. Any electronic notice will comply
with the regulations of the U.S. Department of Labor. In the event that the Plan
Administrator confirms the denial of the claimant for benefits in
whole or in part, the notice will set forth, in a manner calculated to be understood
by the applicant, the following:

          (i) the specific reason or reasons for the denial;

          (ii) references to the specific Plan provisions upon which the
denial is based;

          (iii) a statement that the claimant is entitled to receive, upon
request and free of charge, reasonable access to, and copies of, all documents,
records and other information relevant to his or her claim; and

          (iv) a statement of the claimant’s right to bring a civil action
under Section 502(a) of ERISA.

     (e) Rules and Procedures. The Plan Administrator will establish rules and
procedures, consistent with the Plan and with ERISA, as necessary and appropriate in
carrying out its responsibilities in reviewing benefit claims. The Plan Administrator
may require a claimant who wishes to submit additional information in connection with
an appeal from the denial of benefits to do so at the claimant’s own expense.

     (f) Exhaustion of Remedies. No legal action for benefits under the Plan may be
brought until the claimant (i) has submitted a written claim for benefits in accordance
with the procedures described by Section 9(a) above, (ii) has been notified by the Plan
Administrator that the claim is denied, (iii) has filed a written request for a review
of the claim in accordance with the appeal procedure described in Section 9(c) above,
and (iv) has been notified that the Plan Administrator has denied the appeal.
Notwithstanding the foregoing, if the Plan Administrator does not respond to a
Participant’s claim or appeal within the relevant time limits specified in this Section
9, the Participant may bring legal action for benefits under the Plan pursuant to
Section 502(a) of ERISA.

Section 10. Basis Of Payments To And From Plan.

     All benefits under the Plan shall be paid by the Company. The Plan shall be unfunded, and
benefits hereunder shall be paid only from the general assets of the Company.

Section 11. Other Plan Information.

     (a) Employer and Plan Identification Numbers. The Employer Identification Number
assigned to the Company (which is the “Plan Sponsor” as that term is used in ERISA) by
the Internal Revenue Service is 22-2816046. The Plan Number assigned to the Plan by
the Plan Sponsor pursuant to the instructions of the Internal Revenue Service is 550.

10.

 

     (b) Ending Date for Plan’s Fiscal Year. The date of the end of the fiscal year for
the purpose of maintaining the Plan’s records is December 31.

     (c) Agent for the Service of Legal Process. The agent for the service of legal
process with respect to the Plan is:

Novavax, Inc.

508 Lapp Road

Malvern, PA 19355

Attn: Vice President of Human Resources, the Chief Executive Officer, or the Chairman of the Compensation Committee of the Board

     (d) Plan Sponsor and Administrator. The “Plan Sponsor” is the Company and the
“Plan Administrator” of the Plan is the Compensation Committee of the Board, or its
designee. Any correspondence should be directed to:

Novavax, Inc.

508 Lapp Road

Malvern, PA 19355

Attn: Vice President of Human Resources, the Chief Executive Officer, or the Chairman of the Compensation Committee of the Board

     The Plan Sponsor’s and Plan Administrator’s telephone number is 484-913-1200. The Plan
Administrator is the named fiduciary charged with the responsibility for administering the Plan.

Section 12. Statement Of ERISA Rights.

     Participants in this Plan (which is a welfare benefit plan sponsored by Novavax, Inc.) are
entitled to certain rights and protections under ERISA. If you are an Eligible Employee, you are
considered a participant in the Plan and, under ERISA, you are entitled to:

          Receive Information About Your Plan and Benefits

     (a) Examine, without charge, at the Plan Administrator’s office and at other
specified locations, such as worksites, all documents governing the Plan and a copy of
the latest annual report (Form 5500 Series) filed by the Plan, if required, with the
U.S. Department of Labor and available at the Public Disclosure Room of the Employee
Benefits Security Administration;

     (b) Obtain, upon written request to the Plan Administrator, copies of documents
governing the operation of the Plan and copies of the latest annual report (Form 5500
Series), if required, and an updated (as necessary) Summary Plan Description. The
Administrator may make a reasonable charge for the copies; and

11.

 

     (c) Receive a summary of the Plan’s annual financial report. The Plan
Administrator is required by law to furnish each participant with a copy of this
summary annual report.

Prudent Actions by Plan Fiduciaries

          In addition to creating rights for Plan participants, ERISA imposes duties upon the people who
are responsible for the operation of the employee benefit plan. The people who operate the Plan,
called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and
other Plan participants and beneficiaries. No one, including your employer, your union or any
other person, may fire you or otherwise discriminate against you in any way to prevent you from
obtaining a Plan benefit or exercising your rights under ERISA.

Enforce Your Rights

          If your claim for a Plan benefit is denied or ignored, in whole or in part, you have a right
to know why this was done, to obtain copies of documents relating to the decision without charge,
and to appeal any denial, all within certain time schedules.

          Under ERISA, there are steps you can take to enforce the above rights. For instance, if you
request a copy of Plan documents or the latest annual report from the Plan (note: the Plan
currently is not subject to the requirement of filing such an annual report) and do not receive
them within 30 days, you may file suit in a Federal court. In such a case, the court may require
the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the
materials, unless the materials were not sent because of reasons beyond the control of the
Administrator.

          If you have a claim for benefits which is denied or ignored, in whole or in part, you may file
suit in a state or Federal court. In addition, if you disagree with the Plan’s decision or lack
thereof concerning the qualified status of a domestic relations order or a medical child support
order, you may file suit in Federal court.

          If it should happen that Plan fiduciaries misuse the Plan’s money, or if you are discriminated
against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or
you may file suit in a Federal court. The court will decide who should pay court costs and legal
fees. If you are successful, the court may order the person you have sued to pay these costs and
fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds
your claim is frivolous.

Assistance with Your Questions

          If you have any questions about the Plan, you should contact the Plan Administrator. If you
have any questions about this statement or about your rights under ERISA, or if you need assistance
in obtaining documents from the Plan Administrator, you should contact the nearest office of the
Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone
directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security
Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.
You may also obtain certain publications about your rights and responsibilities under ERISA by
calling the publications hotline of the Employee Benefits Security Administration.

12.

 

Section 13. Execution.

     To record the adoption of this Plan, as amended and restated, effective as of July 26, 2006,
Novavax, Inc. has caused its duly authorized officer to execute the same this ___ day of
                    , 2006.

	 	 	 	 	 	 	 
	 	 	Novavax, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Rahul Singhvi	 	 
	 

	 	 	 	 

	 	 
	 	 	Title: Chief Executive Officer	 	 

13.

 

Benefits Schedule

For (Name of Participant)

Under The

Novavax, Inc.

Change In Control Severance Benefit Plan

     The benefits payable under this Plan to an Eligible Employee who qualifies for benefits under
the terms of the Plan are as follows:

1. All Accrued Compensation and the Bonus Amount.

2. In a single payment, an amount in cash not to exceed twenty-four (24) months of such Eligible
Employee’s Pay, less applicable tax withholding and deductions.

3. For a period not to exceed twenty-four (24) months (the “Continuation Period”), as determined by
the Company, the Company shall, at its expense, continue on behalf of the Eligible Employee and the
Employee’s dependents and beneficiaries the following insurance benefits: any medical, dental,
vision and hospitalization benefits provided to the Eligible Employee immediately prior to the
Termination Date; provided, however, that the Company’s obligation to provide continuation coverage
shall arise under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), and shall
apply only if the Eligible Employee timely elects COBRA coverage and the Eligible Employee and his
or her dependents are otherwise eligible for benefits under COBRA. Accordingly, in the case of an
Eligible Employee whose Termination Date precedes the effective date of the Change in Control and
who did not timely elect COBRA coverage prior to becoming eligible for benefits under this Plan, no
reimbursements or payments for health care continuation will be made by the Company under this
Section (unless such Eligible Employee has received COBRA benefits following their Termination
Date, and/or is currently receiving those benefits at the time of a Change in Control, in which
case the Company will reimburse any past COBRA premium costs and will pay for future coverage) in
accordance with the terms of this Section for the period specified above.

     The coverage and benefits (including deductibles and costs) provided hereunder during the
Continuation Period shall be no less favorable to the Eligible Employee and the Employee’s
dependents and beneficiaries, than the coverage and benefits made available immediately prior to
the Termination Date. The Company’s obligation hereunder with respect to the foregoing benefits
shall be limited to the extent that the Eligible Employee obtains any such benefits pursuant to a
subsequent employer’s benefit plans, in which case the Company may reduce the coverage of any
benefits it is required to provide the Eligible Employee hereunder as long as the aggregate
coverages and benefits of the combined benefit plans are no less favorable to the Employee than the
coverages and benefits required to be provided hereunder.

 

 

4. With respect to any stock option held by an Eligible Employee that is outstanding under any
Company stock option or equity incentive plan at the time the Employee becomes eligible for
benefits under this Plan (either at the Termination Date or upon the Change in Control if
termination has already occurred), the Company agrees that, at the time of the Termination Date or
Change in Control, as applicable, it will make an offer to the Eligible Employee to provide, if
the Eligible Employee so elects, that the Eligible Employee shall be given a period of one (1) year
following his or her Termination Date in which to exercise the options to the extent such options
are otherwise vested and exercisable as of the Termination Date under the terms of the applicable
stock option agreement(s) and plan(s), but provided that no exercise may occur later than the
expiration date of the option as set forth is the applicable option agreement or plan.
Notwithstanding the above, this Section 4 shall not apply to stock options that have expired
(including after any post-termination exercise period) at the time an Eligible Employee becomes
eligible for benefits under the Plan. The foregoing agreement to make an offer shall not apply to
any stock options that already have a one year or greater post-termination exercise period. The
Eligible Employee acknowledges that, by agreeing to an offer to extend the exercise period in this
manner, their stock options may be converted from an incentive stock option into a non-statutory
stock option, and, additionally, the option may become subject to Section 409A of the Code.
However, on the effective date of this Plan, all outstanding stock options held by Eligible
Employees have exercise prices below the market value of the Company’s common stock. The Eligible
Employee agrees to be responsible for the payment of any taxes or penalties under Section 409A, if
applicable.

5. This Section 5 applies only to stock options issued to an Eligible Employee under any Company
stock option or equity incentive plan after the effective date of the amended and restated version
of this Plan (“New Option Grants”). With respect to any New Option Grants that are outstanding at
the time an Eligible Employee becomes eligible for benefits under this Plan, the vesting and
exercisability of such New Option Grants shall be accelerated in full, and the Option shall be
considered 100% vested, as of the date the Eligible Employee becomes entitled to benefits
hereunder. This provision shall not apply to any stock option that contains a more favorable
vesting provision under the applicable stock option agreement or any individually negotiated
agreement (such as 100% “single trigger” vesting upon a Change in Control). It is possible that an
Eligible Employee may terminate employment, and his or her stock options may have expired (without
being exercised) before a subsequent Change in Control transaction (although the Employee may still
be entitled to benefits under this Plan in that instance). In that case, no accelerated vesting
shall occur under this provision as to an already expired stock option.

CIRCULAR 230 DISCLAIMER. THE FOLLOWING DISCLAIMER IS PROVIDED IN ACCORDANCE WITH THE
INTERNAL REVENUE SERVICE’S CIRCULAR 230 (21 CFR PART 10). THIS ADVICE IS NOT INTENDED OR WRITTEN TO
BE USED, AND IT CANNOT BE USED BY YOU FOR THE PURPOSE OF AVOIDING ANY PENALTIES THAT MAY BE IMPOSED
ON YOU. YOU SHOULD SEEK ADVICE BASED ON YOUR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX
ADVISOR.

2.

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