PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
Novavax, Inc.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Committee to Save Novavax
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
-2-
PROXY STATEMENT
OF
COMMITTEE TO SAVE NOVAVAX
IN OPPOSITION TO THE BOARD OF DIRECTORS
OF NOVAVAX, INC.
---------------
ANNUAL MEETING OF STOCKHOLDERS OF
NOVAVAX, INC.
TO BE HELD MAY 4, 2005
AT
NOVAVAX, INC.
508 LAPP ROAD
MALVERN, PA
---------------
This Proxy Statement and the enclosed GREEN proxy card are being
furnished in connection with the solicitation of proxies by the Committee to
Save Novavax (the "Committee"). The proxies will be voted at the annual
meeting of Novavax, Inc. (the "Company") to be held at 9:00 a.m. (local
time) on May 4, 2005, and at any adjournments or postponements of the
meeting. This proxy statement and form of proxy are first being sent to
Shareholders approximately March ___, 2005.
We are soliciting proxies to obtain representation on the Company's
Board of Directors. Our goal is to elect two new and independent directors
who will seek to guide the Board in its efforts to reverse the negative
trends experienced by the Company and grow shareholder value.
The Company currently has nine directors divided into three classes
of three members each. At each annual meeting of stockholders, one class of
three directors is elected to hold office for a term of three years. The
terms of the following directors will expire at the 2005 annual meeting:
Denis O'Donnell, the Company's Chairman of the Board, Nelson Sims, the
Company's President and Chief Executive Officer, and Ronald Walker the
retired former Chairman of the Board of the Company. The Company announced
in its preliminary proxy statement filed with the Securities and Exchange
Commission March 10, 2005 that the Nominating Committee of the Board has
nominated Chairman O'Donnell and CEO Sims for reelection and that Mr. Walker
will retire as a director at the 2005 annual meeting. The Company also
announced that the Board of Directors has acted to reduce the size of the
Board such that only two directors would be elected at the 2005 annual
meeting.
The Committee believes that the Board and the shareholders'
interests would be best served if instead of reelecting Chairman O'Donnell
and CEO Sims, independent directors with significant experience and
expertise in growing early-stage companies were elected to the Board.
-3-
Accordingly, the Committee intends to nominate the following individuals for
the class of directors whose term expires at the 2005 annual meeting:
o J. Carter Williams
o John T. Preston
Our nominees are highly qualified candidates who possess the requisite
experience and who are committed to reversing the trend of decline in the
Company's business and financial condition and increasing value for all of
the Company's stockholders.
The Committee recommends that you vote to elect each of our
nominees.
We are also soliciting proxies in connection with three proposals
that the Company has announced will be presented to stockholders at the
annual meeting.
The Company has announced that the 2005 annual meeting will be held
at 9:00 a.m. local time on May 4, 2005 and that the record date for
determining stockholders entitled to notice of and to vote at the 2005
annual meeting is March 11, 2005. The Company has also stated that on the
record date, there were 39,553,876 shares of common stock outstanding and
entitled to be voted at the meeting.
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES OF
COMMON STOCK YOU OWN. THE COMMITTEE URGES YOU TO MARK, SIGN, DATE AND RETURN
THE ENCLOSED GREEN PROXY CARD PROMPTLY IN ACCORDANCE WITH THE INSTRUCTIONS
SET FORTH BELOW. PLEASE DO NOT SIGN ANY PROXY CARD YOU MAY RECEIVE FROM THE
COMPANY. ADDITIONAL MATERIAL MAY BE OBTAINED BY VISITING www.savenovavax.com.
IF YOU SIGN MORE THAN ONE CARD, YOUR LAST DATED CARD WILL BE THE ONE THAT IS
USED.
You are urged to mark, sign and date the enclosed GREEN proxy card
and return it in the enclosed envelope whether or not you plan to attend the
2005 annual meeting.
------------------------------------------------------------------------------
If you have questions or need assistance in
voting your shares, please call:
[Georgeson Shareholder logo]
17 State Street, 10th Floor
New York, NY 10004
(800) 676-0151 (Toll Free)
Banks and Brokerage Firms please call:
(212) 440-9800
------------------------------------------------------------------------------
-4-
BACKGROUND
We are the Committee to Save Novavax. The Committee members Melissa
Georges and William Georges, are shareholders with expertise in growing
early stage technology companies. They are the entrepreneurs who
successfully built Fielding Pharmaceutical Company and sold it to Novavax in
December 2000. After the sale of Fielding to Novavax, Ms. Georges served as
President of Fielding until December 2003, and Mr. Georges served as a
director of Novavax for one year and as Fielding's Senior Vice President of
Operations until December 2003.
It is our belief that Novavax is an early stage company with a great
technology foundation, exciting products, and the opportunity to create
value for shareholders. The members of the Committee and the Committee
nominees have started venture-backed companies, have held executive
positions with successful public companies and sit on numerous Boards of
early stage companies. Based on that experience, we believe the current
Novavax Board and management has failed to define and execute a successful
business strategy. Furthermore, their track record of operating the Company
as if it were a late stage business with infinite capital resources is
damaging Novavax's long-term viability as a going concern. We believe the
Board needs change.
As concerned shareholders of Novavax, the Committee has had
discussions about the Company's products, operations and business plan with
current and past employees, securities analysts, physicians and pharmacists,
as well as the Board and existing management. This research has provided a
solid, independent understanding of the steps needed to reverse the decline
that has occurred under the current Board's management and deliver increased
shareholder value.
The immediate issues are clear. Shareholder value is disintegrating.
O'Donnell, the Chairman of the Board, has presided over the Board while the
Company's value has declined substantially and has caused the Company to
engage in transactions for his own personal benefit at the Company's
expense. Under the chairmanship of O'Donnell, the Board has failed
repeatedly to hold management accountable for failure or to demand any risk
management despite continued lack of goal attainment. CEO Sims' team has
failed to successfully launch the Company's flagship product ESTRASORB(TM)
and to appropriately manage limited corporate resources.
By soliciting your proxy, we ask that you help elect the Committee's
nominees. Our nominees are committed to initiating the steps we believe are
required to stabilize the financial condition of the Company and lay the
groundwork for share price growth by dramatically improving ESTRASORB(TM)
sales, executing additional licensing agreements, leveraging the MNP
technology and assuring resources are used efficiently and economically.
CURRENT MANAGEMENT'S RECORD OF FAILURE REQUIRES IMMEDIATE CHANGE
The current management has put the Company on a path that will
result in a total loss of the shareholders' investment unless immediate
change is implemented. The facts are as follows:
-5-
o For the year ended December 31, 2004 the Company's net
loss ballooned to $25.9 million, or $.70 per share on
sales of only $6.4 million, reflecting a significant
deterioration from the loss of $17.3 million or $.58 per
share on sales of $10.6 million in 2003.
o Ernst & Young LLP, the Company's outside auditors, have
indicated that there is substantial doubt about Novavax's
ability to continue as a "going concern."
o The Company's chief financial officer, said in a recent
investor conference call that without a major new
partnering agreement, the Company will run out of money in
the third quarter of 2005 and will need to raise
additional funds: "In sum, from capital resources
viewpoint, if we complete an ESTRASORB(TM) partnership
along with our financial management target, we should have
sufficient funds to take us well into, if not through
2006. In the absence of partnership, we will probably need
to raise capital in the Q3 timeframe."
o The Company spent $23.6 million in selling and marketing
expenses to achieve a paltry $1.8 million in ESTRASORB(TM)
sales in 2004. (The product was launched in June 2004.)
o Concurrent with declining revenue and skyrocketing losses,
the Company's share price has continued to decline and now
trades significantly below $2.00 per share, while the
stock has recently been downgraded by a securities analyst.
CHAIRMAN O'DONNELL'S FAILED LEADERSHIP HAS HURT SHAREHOLDER VALUE
The Company's deteriorating results and financial condition require a
change of leadership, starting with the replacement of Chairman O'Donnell.
Evidence of Chairman O'Donnell's failure and blatant disregard for
shareholder interests includes:
o Chairman O'Donnell led the Company's recruitment and
hiring of CEO Sims who came to the Company from "Big
Pharma" without a background of successfully growing
small, early stage companies such as Novavax. Chairman
O'Donnell caused the Company to execute an employment
agreement with Sims that binds Novavax to pay above-market
salary and bonus and overly generous severance that the
Company cannot afford.
o Chairman O'Donnell was instrumental in negotiating and
obtaining Board approval of the original ESTRASORB(TM)
co-promotion agreement with King Pharmaceuticals. This
agreement was so unfavorable to Novavax that in July 2004
CEO Sims publicly stated that the termination of the
agreement was "a positive and transformational event for
Novavax."
o Chairman O'Donnell prevailed on the existing Board to
cause the Company to use its financial resources for his
personal benefit. The Board extended to him a personal
loan of over $1 million to enable him to exercise Novavax
stock options and approved the Company's guarantee of
$500,000 of Chairman O'Donnell's debt from a margin
account
-6-
with a stock brokerage. As a result of these transactions,
Chairman O'Donnell stands to benefit if the Company's stock
price appreciates while the Company bears the financial risk
of loss if the price declines.
o In addition to his failed leadership as executive chairman
of Novavax, Chairman O'Donnell is a director, and in some
cases an executive with significant responsibilities at
various other companies. In such roles, he has faced
issues such as delisting of listed stock, missed
disclosure filings and declining stock prices.
o Novavax stock is currently trading near its all-time low.
If you had invested $100 in Novavax when Chairman
O'Donnell became Chairman of the Board, your investment
would be worth $37 today. After the announcement of 2004
results, Novavax stock has traded well below $2.00 per
share.
RESULTS PROVE THAT CEO SIMS LACKS RELEVANT EXPERIENCE TO LEAD COMPANY
o Under CEO Sims's leadership Novavax did not enter the
final phase for commercial launch of ESTRASORB(TM)
immediately after FDA approval but delayed for eight
critical months. Sims statement that "It is clear that our
efforts to commercialize ESTRASORB(TM) have not met our
initial sales expectations" is the height of
understatement considering the substantial sales and
marketing investment made by his team. In a recent
investor conference call, CEO Sims indicated that the
Company now needs the resources of a large pharmaceutical
company to properly launch the product. Over the last 19
months, CEO Sims told investors he had an effective plan.
He raised capital to execute the plan. Now, he is
essentially telling stockholders that after spending $23
million his plan was not good enough and he needs even
more resources--which the Company currently does not have.
Additionally, this management team has sat idle while 2004
revenue from the legacy products fell more than $5.5
million from 2003 levels.
o CEO Sims oversaw the hiring of a sales and marketing team which
included former employees of Eli Lilly and Company whom we
believe were ill-equipped to successfully manage costs within
the context of an early-stage bio-pharmaceutical company such
as Novavax. Despite Novavax's exponentially increasing costs for
sales and marking and its precipitous decline in sales, CEO Sims
has characterized his team as "successful." His excuse for
the late launch and abysmal sales of ESTRASORB(TM) is to
point to actions of executives who preceded his 19-month
tenure. The inability of CEO Sims's sales and marketing team
to develop and execute a sales plan resulted in the failed
launch of ESTRASORB(TM).
o Key aspects of the patent for micellullar nanoparticles
(MNPs) drug delivery technology expire in 2014. Given that
it takes several years to achieve drug approval, and more
years to achieve a return on investment for a drug, the
window of opportunity to start MNP platform trials is
rapidly closing. We believe a significant element of
Novavax's valuation is tied to its MNP drug delivery
platform. Fundamental to the value of the MNP technology
is proving in the market place that consumers prefer to
receive drugs via a lotion-like delivery system rather
than by pill, transdermal patch, or other means. Once
preference is proven, Novavax will have a valid business
case for other products
-7-
delivered with MNP technology. CEO Sims has failed to build a
business case that demonstrates consumer preference for MNP
delivery systems. Despite the lab-based work CEO Sims (and
Chairman O'Donnell) promote to shareholders, the failure to
achieve consumer validation brings into question whether this
investment in R&D will ever deliver a return to shareholders.
COMMITTEE'S EFFORTS TO RESOLVE SHAREHOLDER CONCERNS
Committee members have discussed their concerns with the Company's
directors and managers. By their actions we see that management and the
Board are reluctant to address the issues. It is typical in these
conversations for them to say, "We agree with your plan, but we should wait
a year."
We expressed our view that the Board needs directors skilled in the
arena of science, early stage business and medical affairs. However, in the
last 19 months only one new Board member has been seated: Susan Bayh, a
former Eli Lilly attorney and colleague of CEO Sims. Only as a result of
expressing a willingness to undertake a proxy fight did we see the
retirement of Mr. Walker. During these same 19 months, CEO Sims' team has
spent millions on the failed ESTRASORB(TM) launch. This Board under Chairman
O'Donnell's leadership, has failed to control spending, has failed to
restrain the negative behavior of its Chairman, has failed to set
accountable goals and failed to replace ineffective managers. This
collective legacy of failure, left unchanged, will lead the Company to
insolvency. The shareholders deserve a Board that includes members with
demonstrated success growing early stage bio-pharmaceutical companies.
A PLAN FOR CHANGE
Though we can achieve only a minority of Board seats in this proxy
solicitation, based on our discussions with other directors and the
experience and expertise of the Committee's members, we believe that the
force of our argument and the support of the shareholders will compel the
Board to take appropriate action. Indeed, the Company's recently filed
preliminary proxy discloses certain preliminary steps that we believe have
been taken as a result of our efforts to date and our expressed willingness
to undertake a proxy fight, including the retirement of Mr. Walker, the
adoption of a 10-year term limit and an age limit of 75 for director
nominees, the initiation of the search for board members with pharmaceutical
experience, the phasing of the position of Chairman of the Board to a
non-executive position, and the elimination of loans to Board members for
option exercises. We view these steps as a concession that change is
required. By electing our slate of directors you will initiate a process
thoughtfully designed to achieve the following:
o Steady increase in sales
o Validation of consumer preference for MNP lotion-like products
o Additional revenues from new MNP products
o Recruitment of growth-oriented directors with experience in
early stage bio-pharmaceutical companies
-8-
o New managers with a demonstrated ability to manage cash
flow and resources, and who have achieved success in early
stage companies
o A system of accountability that forces senior management
to replace under-performing personnel and manage cash
o Compensation structure that rewards increased shareholder
value and ethical behavior
o Active engagement with key shareholders to encourage their
continued investment and support
SUMMARY
o Novavax has valuable products and technologies
o Current Board leadership has no effective strategy to
stabilize the Company or create value for shareholders.
o Chairman O'Donnell has destroyed shareholder value
o CEO Sims has failed to effectively launch ESTRASORB(TM)
and demonstrated poor cash management skills
o The Novavax Board has failed to hire effective managers or
manage cash
o The Committee has a plan which it believes will save the
Company and create value
o Your vote for the Committee's nominees is the first step
in implementing that plan
PROPOSAL NO. 1: ELECTION OF THE COMMITTEE NOMINEES
THE COMMITTEE'S NOMINEES AND THEIR EXPERIENCE
J. CARTER WILLIAMS, age 38. Since 2004, Mr. Williams has been a
------------------
private investor. He is currently an advisor to several early stage
companies, including Avchem, Realadi, and Anzode. Over his career he has
overseen more than $1 billion of investment in multiple early stage
technologies and companies. Prior to 2004, Mr. Williams was a director with
Boeing Ventures and founder of the Chairman's Innovation Initiative, a $200
million internal venture fund. In this role, he built Boeing's internal new
business incubator. He oversaw the review of more than 1,000 new business
opportunities and led development of several venture backed spin-offs,
licensing transactions, complex partnering agreements and new internal
businesses. He was held accountable for all investments, budgets and their
returns. Prior to 2000, while working for Boeing's Chief Technology Officer,
Mr. Williams led Boeing's investment process, resulting in increased
productivity and a $40 million annual savings. He served as a key advisor to
Fielding Pharmaceutical Corporation assisting in its growth strategy and
negotiating material aspects of the merger with Novavax. Mr. Williams led
several successful engineering, government R&D, and manufacturing activities
at McDonnell Douglas. In this role he built the team and lead the
development of a technology that saved several billion dollars on key
military programs. As an active alumnus of the Massachusetts Institute of
Technology (MIT), he has been active in the MIT 50K competition, teaching,
sponsoring internships and as founder of the MIT Entrepreneurship Society.
He was president and is founder of the MIT Corporate Venturing Consortium, a
working group of Intel, HP, Motorola, and others. He has an MBA from the MIT
Sloan School and a Bachelors of Science from Rensselaer Polytechnic
Institute. Mr. Williams is a director of the following privately-held
companies: Tsunami Research, Viamorph and
-9-
Procelerate Technologies. Mr. Williams business address is 950 Tirrill Farms
Road, St. Louis, MO 63124.
JOHN T. PRESTON, age 54. Since 1999, Mr. Preston has been President
---------------
and Chief Executive Officer of Atomic Ordered Materials LLC. (AOM) and a
Senior Lecturer at MIT in the field of entrepreneurship. Before joining AOM,
Mr. Preston was the Director of Technology Development (and Licensing) at
MIT, where he was responsible for the commercialization of intellectual
property developed at MIT. In this capacity he oversaw activities that led to
the creation of over 250 new technology-based companies as well as the
negotiation of thousands of licenses with existing companies in the fields
of materials, bio-tech, information technologies, among others. Mr. Preston
worked with notable venture capitalists to arrange funding for many of these
start-ups. Thousands of new jobs resulted from these license agreements Mr.
Preston served in director or advisory positions for the Governor of
Massachusetts, the U.S. Department of Defense, the National Aeronautics and
Space Administration, the National Science and Technology Board of Singapore
and several others. Mr. Preston has testified seven times before the U.S.
Congress on issues related to technology commercialization and has chaired
meetings on this subject for President George H. W. Bush and H.R.H. Prince
Charles among others. Mr. Preston received a Bachelors of Science in physics
from the University of Wisconsin and a Masters of Business Administration
from Northwestern University. He is the recipient of numerous awards and
honors, including the Thomas Jefferson Award, given to the leading American
in technology transfer and the Renaissance Engineering and Science Award
from Stevens Institute of Technology. President Mitterrand awarded Mr.
Preston the rank of "Knight of the National Order of Merit" of France. Mr.
Preston is also Honorary Alum of the Massachusetts Institute of Technology.
Mr. Preston, in 1999, received the "Hammer Award" from Vice President Gore
for reinventing Government. Mr. Preston has spent his entire career
supporting and leading early stage companies, building the management team
and moving innovative products to the market. He has a deep understanding of
the qualities and processes required to build a high growth business. Mr.
Preston is a Director of Clean Harbors Corporation, EZEM and Boston Life
Sciences, as well as several privately owned companies. Mr. Preston's
business address is 421 Currant Road, Fall River, MA 02720.
ADDITIONAL INFORMATION ABOUT THE NOMINEES
Each of the Committee nominees has consented to being named in this
Proxy Statement as a nominee or director of the Company and has agreed to
stand for election and to serve as a director if elected. Neither has ever
owned any shares of Company stock. Neither holds any position or office with
Novavax.
Mr. Williams is the husband of Melissa Georges, a member of the
Committee. As of March 11, 2005, Ms. Georges beneficially owned 351,554
shares of the Company's common stock which were acquired in 2000 in
connection with the sale of Fielding Pharmaceutical Corporation to the
Company.
William Georges, the other member of the Committee, is Ms. Georges'
brother and Mr. Williams' brother-in-law. As of March 11, 2005, Mr. Georges
beneficially owned 20,100 shares
-10-
of the Company's common stock held by WEG Partners, a partnership among Mr.
Georges and members of his immediate family.
Additional information about Melissa Georges and William Georges is
contained in Exhibit A.
THE COMMITTEE STRONGLY RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF
THE COMMITTEE NOMINEES.
COMPANY PROPOSALS AND OTHER MATTERS
In the Company's Proxy Statement for the 2005 annual meeting, the
Company presents three proposals that will come before the stockholders at the
meeting. Stockholders are referred to the Company's Proxy Statement for
additional information on the three proposals, which are listed below. You
may direct the proxies designated on the enclosed Green proxy card how to
vote your shares on the Company proposals. If no instructions are given as
to voting on any proposal, the designated proxies intend to vote in favor of
such proposal.
o PROPOSAL NO. 2 APPROVAL OF THE NOVAVAX, INC. 2005 STOCK
INCENTIVE PLAN;
o PROPOSAL NO. 3 APPROVAL OF THE ISSUANCE OF THE SHARES
COMMON STOCK, $.01 PAR VALUE OF THE COMPANY ISSUABLE WITH
RESPECT TO SENIOR CONVERTIBLE NOTES IN THE AGGREGATE
PRINCIPAL AMOUNT OF $35,000,000 ISSUED TO CERTAIN
QUALIFIED INSTITUTIONAL BUYERS AND ACCREDITED INVESTORS
o PROPOSAL NO. 4 RATIFICATION OF THE APPOINTMENT OF ERNST &
YOUNG LLP AS INDEPENDENT AUDITOR OF THE COMPANY FOR THE
CURRENT FISCAL YEAR ENDING DECEMBER 31, 2005.
This proxy solicitation is being made by the Committee and not on
behalf of the Board of Directors or management of the Company. The Committee
is not aware of any other matters to be brought before the Company's 2005
annual meeting, except as set forth herein and in the Company's Proxy
Statement. Should other matters be brought before the 2005 annual meeting,
by having signed and returned the enclosed GREEN proxy card, you will have
authorized the persons named as proxies in the enclosed GREEN proxy card to
vote on all such matters in their discretion.
The Company's Proxy Statement relating to the 2005 annual meeting
contains information regarding: (1) securities ownership of certain
beneficial owners and management of the Company; (2) the committees of the
board of directors; (3) the meetings of the board of directors and all
committees thereof; (4) the business background and employment biographies
of the Company's nominees for election to the board of directors; (5) the
compensation and remuneration paid and payable to the Company's directors
and management; (6) the Company's stock price performance in relation to an
assumed group of "peers" or market-based indices, and (7) information
regarding the three Company proposals to be voted on at the annual meeting.
-11-
Pursuant to Rule 14a-5(c), stockholders are referred to the Company's Proxy
Statement relating to the 2005 annual meeting.
STOCKHOLDER PROPOSALS FOR 2006 ANNUAL MEETING
The Company's proxy statement with respect to the 2005 annual
meeting indicates that proposals of the Company's stockholders intended to
be presented at the Company's 2006 annual meeting must be received by the
Company no later than November 21, 2005 in order for them to be considered
for inclusion in the Company's proxy statement in connection with the 2006
annual meeting.
The Company's bylaws contain advance notice provisions under which
a stockholder proposal will be considered untimely unless it is delivered or
mailed by first class U.S. mail, postage prepaid, and received at the
Company's principal executive office no less than 60 days and no more than
90 days prior to the date of the meeting. However, if less than 70 days'
prior notice or prior public disclosure of the date of the meeting is given
or made to stockholders, notice will be considered timely if it is received
no later than the close of business on the 10th day following the date on
which the notice was mailed or public disclosure made of the meeting date
(whichever occurs first).
INFORMATION REGARDING THE COMPANY
The information concerning the Company contained in this Proxy
Statement has been taken from or is based upon documents and records on file
with the SEC and other publicly available information. The Committee has no
knowledge that would indicate that statements relating to the Company
contained in this Proxy Statement in reliance upon publicly available
information are inaccurate or incomplete. The Shareholder Committee,
however, has not been given access to the books and records of the Company,
was not involved in the preparation of such information and statements, and
is not in a position to verify, or make any representation with respect to
the accuracy or completeness of, any such information or statements.
INFORMATION REGARDING THIS SOLICITATION
The Committee has retained Georgeson to act as an advisor in
connection with the proxy solicitation. In connection with its retention by
the Committee, Georgeson has agreed to provide consulting and analytic
services and solicitation services with respect to banks, brokers
institutional investors and individual stockholders. The Committee has
agreed to pay Georgeson a fee for its services estimated to be not more than
$60,000 and to reimburse Georgeson for its reasonable out-of-pocket
expenses. The Committee has also agreed to indemnify Georgeson against
certain liabilities and expenses in connection with this Proxy Solicitation,
including liabilities under the federal securities laws. Proxies may be
solicited by mail, advertisement telephone, facsimile or in person.
Solicitations may be made by persons employed by or affiliated with the
members of the Committee. However, no person will receive additional
compensation for such solicitation other than Georgeson. Approximately 15
Georgeson employees will solicit stockholders.
-12-
Banks, brokerage houses and other custodians, nominees and
fiduciaries will be requested to forward the proxy materials to the
beneficial owners of shares of common stock for which they hold of record
and the Committee will reimburse them for their reasonable out-of-pocket
expenses.
The expenses related directly to this proxy solicitation are
expected to aggregate approximately $150,000 and will be borne at least
initially by the Committee. However, the purpose of the proposals in this
Proxy Statement is to advance the interests of all the Company's
stockholders. Therefore, the Committee believes that its expenses related to
this Proxy Solicitation should be reimbursed by the Company and intends to
seek the reimbursement of such expenses from the Company, regardless of
whether this Proxy Solicitation is successful. The question of reimbursement
by the Company is not being presented to stockholders for a vote.
VOTING PROCEDURES
Who is entitled to vote?
If the Company's stock records show that you are a stockholder as
of the close of business on the record date for the 2005 annual meeting, you
are entitled to vote the shares of common stock that you held on such date.
Even if you sell your shares after the record date for the 2005 annual
meeting, you will retain the right to execute a proxy in connection with the
2005 annual meeting. Each outstanding share of common stock entitles its
holder to cast one vote for each matter to be voted upon.
Can I attend the meeting?
All stockholders of record of the Company's common stock at the
close of business on March 11, 2005, the record date for the 2005 annual
meeting, or their designated proxies, are authorized to attend the 2005
annual meeting. If your shares are held of record by a bank, broker or other
nominee, you will need to obtain a "legal proxy" form from your bank or
broker if you wish to vote at the 2005 annual meeting.
What constitutes a quorum? How will abstentions and broker non-votes be
counted?
The holders of a majority of the Company's common stock outstanding
and entitled to vote, present in person or represented by proxy, will
constitute a quorum at the 2005 annual meeting.
Shares held by nominees for beneficial owners will be counted for
purposes of determining whether a quorum is present if the nominee has the
discretion to vote on at least one of the matters presented at the 2005
annual meeting even if the nominee may not exercise discretionary voting
power with respect to other matters and voting instructions have not been
received from the beneficial owner (a "broker non-vote"). Broker non-votes
will not be counted as votes for, nor the withholding of authority for, the
election of directors, nor will they be
-13-
counted on any of the proposals. Accordingly, broker non-votes will have no
effect on the election of directors or on the approval of any of the
proposals.
How do I vote?
Voting by proxy for holders of shares registered in the name of a
brokerage firm or bank. If your shares are held by a broker, bank or other
nominee (i.e., in "street name"), only your bank or broker can give a proxy
with respect to your shares. You should receive a proxy card from your bank
or broker which you must return in the envelope provided in order to have
your shares voted. If you have not received a proxy card from your bank or
broker, you may contact it directly to provide it with instructions on how
you wish to vote. If you need assistance in dealing with your bank or
broker, please contact Georgeson at (800) 676-0151 or collect at (212)
440-9800.
Voting by proxy for holders of shares registered directly in the
name of the stockholder. If you hold your shares in your own name as a
holder of record, you may vote your shares by marking, signing, dating and
mailing the GREEN proxy card in the postage-paid envelope that has been
provided to you by the Shareholder Committee. To vote your shares in
accordance with your instructions at the 2005 annual meeting, we must
receive your proxy as soon as possible but, in any event, prior to the 2005
annual meeting.
Vote in person. If you are a registered stockholder and attend the
2005 annual meeting you may deliver your completed GREEN proxy card in
person. "Street name" stockholders who wish to vote at the 2005 annual
meeting will need to obtain a "legal proxy" form from the broker, bank or
other nominee that holds their shares of record and must bring that document
to the meeting in order to vote in person at the 2005 annual meeting. If you
need assistance, please contact Georgeson at (800) 676-0151 or collect at
(212) 440-9800.
What should I do if I receive a proxy card that is not GREEN?
If you submit a proxy to us by signing and returning the enclosed
GREEN proxy card, do NOT sign or return the proxy card or follow any voting
instructions provided by the Company's board of directors unless you intend
to change your vote, because only your latest-dated proxy will be counted.
Can I revoke my proxy instructions?
You may revoke your proxy at any time before it has been exercised by:
o submitting a written revocation with the Corporate
Secretary of the Company or Georgeson;
o submitting a duly executed proxy bearing a later date with
the Corporate Secretary of the Company or Georgeson; or
o appearing in person and voting by ballot at the 2005
annual meeting as described above under "How do I vote -
Vote in Person."
-14-
Any stockholder of record as of the record date of the 2005 annual
meeting attending the 2005 annual meeting may vote in person whether or not
a proxy has been previously given, but the presence (without further action)
of a stockholder at the 2005 annual meeting will NOT constitute revocation
of a previously given proxy.
If you choose to revoke a proxy by giving written notice or a
later-dated proxy to the Corporate Secretary of the Company, although you
are not legally obligated to do so, we would appreciate it if you would
assist us in representing the interests of stockholders on an informed basis
by sending us a copy of your revocation or proxy or by calling Georgeson, at
(800) 676-0151 or collect at (212) 440-9800. Remember, your latest-dated
proxy is the only one that counts.
Will other matters be voted on at the annual meeting?
We are not now aware of any matters to be presented at the 2005
annual meeting other than the election of directors and the Company
proposals described in this proxy statement. If any other matters not
described in the proxy statement are properly presented at the 2005 annual
meeting, including matters incidental to the conduct of the 2005 annual
meeting, proxies will be voted in accordance with the best judgment of the
proxy holders.
If I plan to attend the annual meeting, should I still submit a proxy?
Whether you plan to attend the 2005 annual meeting or not, we urge
you to submit a proxy. Returning the enclosed GREEN proxy card will not
affect your right to attend the 2005 annual meeting.
How will my shares be voted?
I you give a proxy on the accompanying GREEN proxy card, your
shares will be voted as you direct. If you submit a proxy to us without
instructions, our representatives will vote your shares in favor of each of
the proposals. Submitting a GREEN proxy card will entitle our
representatives to vote your shares in accordance with their discretion on
matters not described in this Proxy Statement that may arise at the 2005
annual meeting, including matters incident to the conduct of the 2005 annual
meeting. Unless a proxy specifies otherwise, it will be presumed to relate
to all shares held of record on the record date for the 2005 annual meeting
by the person who submitted it.
YOUR VOTE IS IMPORTANT. No matter how many or how few shares you own, please
vote to elect the Committee Nominees by marking, signing, dating and mailing
the enclosed GREEN proxy card promptly.
THE COMMITTEE TO SAVE NOVAVAX
March ___, 2005
-15-
------------------------------------------------------------------------------
If you have questions or need assistance in
voting your shares, please call:
[Georgeson Shareholder logo]
17 State Street, 10th Floor
New York, NY 10004
(800) 676-0151 (Toll Free)
Banks and Brokerage Firms please call:
(212) 440-9800
------------------------------------------------------------------------------
-16-
Exhibit A
INFORMATION ABOUT PARTICIPANTS IN THIS SOLICITATION
The following table sets forth information regarding the
participants in this solicitation, including information with respect to the
ownership of and all sales of common stock of the Company by the individual
members of the Committee during the past two years. Except as set forth
below, to the knowledge of the Committee, no participant in this
solicitation has purchased or sold securities of the Company within the past
two years.
------------------------------------------------------------------------------------------------------------------
NAME AND BUSINESS ADDRESS OF PRINCIPAL OCCUPATION SHARES OF COMPANY PURCHASES (SALES) OF
PARTICIPANTS (1) COMMON STOCK HELD (2) COMMON STOCK
------------------------------------------------------------------------------------------------------------------
DATE NO. OF
SHARES
----------------------------------
Melissa Georges Private Investor since 351,554 ----------------------------------
950 Tirrill Farms Rd. December 2003. Prior to 3/15/2005 (10,000)
St. Louis, MO 63124 December 2003 Ms. Georges ----------------------------------
was the President of 2/14/2005 (10,000)
Fielding Pharmaceutical ----------------------------------
Company, which Novavax 12/22/2004 (19,150)
acquired in December ----------------------------------
2000. 4/1/2004 (2,000)
----------------------------------
2/26/2004 (4,500)
----------------------------------
2/18/2004 (2,500)
----------------------------------
1/27/2004 (5,000)
----------------------------------
1/9/2004 (5,000)
----------------------------------
1/6/2004 (2,500)
----------------------------------
12/19/2003 (2,000)
----------------------------------
12/18/2003 (18,000)
----------------------------------
12/11/2003 (9,000)
----------------------------------
12/10/2003 (11,000)
----------------------------------
12/9/2003 (6,700)
----------------------------------
12/8/2003 (6,600)
----------------------------------
12/5/2003 (10,527)
----------------------------------
12/4/2003 (11,373)
----------------------------------
12/3/2003 (4,800)
----------------------------------
11/25/2003 (6,100)
----------------------------------
11/24/2003 (13,900)
----------------------------------
11/18/2003 (7,300)
----------------------------------
10/22/2003 (3,400)
----------------------------------
10/21/2003 (6,661)
----------------------------------
10/20/2003 (10,000)
------------------------------------------------------------------------------------------------------------------
DATE NO. OF
SHARES
----------------------------------
William Georges Private Investor since 20,100 (3) 3/15/2005 (10,000)
133 Bryn Wyck Place December 2003. Prior to ----------------------------------
St. Louis, MO 63141 December 2003, Mr. Georges 2/14/2005 (10,000)
was the Senior Vice ----------------------------------
President of Operations 12/30/2003 50,000 (4)
for Fielding ----------------------------------
Pharmaceutical Company. 12/23/2003 (7,500) (5)
----------------------------------
12/19/2003 (2,500) (5)
----------------------------------
12/16/2003 (10,000) (5)
----------------------------------
12/15/2003 (16,200) (5)
------------------------------------------------------------------------------------------------------------------
-17-
------------------------------------------------------------------------------------------------------------------
12/12/2003 (13,800) (5)
----------------------------------
12/11/2003 (16,600)
----------------------------------
12/10/2003 (19,300)
----------------------------------
12/9/2003 (27,943)
----------------------------------
12/8/2003 (2,800)
----------------------------------
12/8/2003 (6,700)
----------------------------------
12/5/2003 (10,196)
----------------------------------
12/4/2003 (17,604)
----------------------------------
12/3/2003 (16,522)
----------------------------------
12/2/2003 (29,178)
----------------------------------
12/1/2003 (88,450)
----------------------------------
11/28/2003 (11,700)
----------------------------------
11/26/2003 (35,400)
----------------------------------
11/25/2003 (25,000)
----------------------------------
11/24/2003 (20,000)
----------------------------------
11/19/2003 (6,559)
----------------------------------
11/18/2003 (20,000)
----------------------------------
11/17/2003 (30,000)
----------------------------------
11/14/2003 (30,000)
----------------------------------
10/23/2003 (7,700)
----------------------------------
10/22/2003 (15,000)
----------------------------------
10/21/2003 (9,991)
----------------------------------
10/20/2003 (20,000)
------------------------------------------------------------------------------------------------------------------
(1) The members of the Committee are Melissa Georges and William
Georges, who are brother and sister. As director nominees, Mr. Williams and
Mr. Preston are also deemed to be participants in the solicitation. Neither
Mr. Williams nor Mr. Preston has ever owned any securities of the Company.
(2) The Proxy Statement filed by the Company reflects that as of
March 11, 2005, there were 39,553,876 shares of Company common stock, no par
value, outstanding. Accordingly, neither Ms. Georges nor Mr. Georges owns
more than 1% of the outstanding shares.
(3) Mr. Georges' shares are held by WEG Partners, a partnership
among Mr. Georges and members of his immediate family.
(4) Purchase made to cover short sales listed below.
(5) Sales of shares not owned by Mr. Georges at the time of the sale
(short-sales) arranged through Credit Suisse First Boston.
-18-
Attachment 1
FORM OF PROXY SOLICITED ON BEHALF OF
THE SHAREHOLDER COMMITTEE
The undersigned stockholder of Novavax, Inc., a Delaware
corporation (the "Company"), on March 11, 2005 (the "record date"), hereby
appoints J. Carter Williams or Melissa Georges or either of them, each with
full power of substitution to act as proxies for the undersigned, and to
vote all shares of common stock, without par value, of the Company, which
the undersigned would be entitled to vote if personally present at the 2005
Annual Meeting of the Stockholders of the Company to be held on May 4, 2005,
and at any and all postponements and adjournments thereof as indicated on
this proxy.
IF YOU SIGN, DATE AND RETURN THIS CARD WITHOUT INDICATING YOUR VOTE
ON THE FOLLOWING PROPOSALS, YOU WILL BE DEEMED TO HAVE VOTED IN FAVOR OF
EACH OF SUCH PROPOSALS. IF YOU VOTE OR ABSTAIN WITH RESPECT TO ONE OR MORE
OF THE FOLLOWING PROPOSALS, THIS PROXY CARD WILL REVOKE ANY PREVIOUSLY
EXECUTED REVOCATION OR PROXY WITH RESPECT TO SUCH PROPOSALS.
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.
THE COMMITTEE RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR OF EACH OF
THE PROPOSALS.
Proposal No. 1 - Election of J. Carter Williams and John T. Preston
FOR ALL NOMINEES [ ]
WITHHOLD AUTHORITY FOR ALL NOMINEES [ ]
(IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ONE OF THE CANDIDATES,
CROSS THROUGH THAT CANDIDATE'S NAME)
Proposal No. 2 - Approval of the Novavax, Inc. 2005 Stock Incentive
Plan
FOR [ ] AGAINST [ ] ABSTAINS [ ]
Proposal No. 3 - Approval of the issuance of the shares Common
Stock, $.01 par value of the Company issuable with respect to senior
convertible notes in the aggregate principal amount of $35,000,000 issued to
certain qualified institutional buyers and accredited investors
FOR [ ] AGAINST [ ] ABSTAINS [ ]
-19-
Proposal No. 4 - Ratification of the appointment of Ernst & Young
LLP as independent auditor of the Company for the current fiscal year ending
December 31, 2005.
FOR [ ] AGAINST [ ] ABSTAINS [ ]
And in the discretion of the proxies appointed hereunder, on such
other business as may properly come before the meeting.
Dated:
-------------------------------------
-------------------------------------
Signature:
-------------------------------------
Signature (if held jointly):
-------------------------------------
Title of Authority
Please sign exactly as name appears hereon. If shares are registered in more
than one name, the signature of all such persons should be provided. A
corporation should sign in its full corporate name by a duly authorized
officer, stating his or her title. Trustees, guardians, executors and
administrators should sign in their official capacity, giving their full
title as such. If a partnership, please sign in the partnership name by an
authorized person. The proxy card votes all shares in all capacities.
PLEASE MARK, SIGN AND DATE THIS PROXY BEFORE MAILING THE PROXY IN THE
ENCLOSED ENVELOPE.
------------------------------------------------------------------------------
If you have questions or need assistance in
voting your shares, please call:
[Georgeson Shareholder logo]
17 State Street, 10th Floor
New York, NY 10004
(800) 676-0151 (Toll Free)
Banks and Brokerage Firms please call:
(212) 440-9800
------------------------------------------------------------------------------
-20-