NOVAVAX INC

Executive Officers and Compensation

ELEMENTS OF COMPENSATION

The Compensation Committee believes the most effective executive compensation program is one that:

•provides a competitive base salary

•rewards the achievement of established goals and objectives

•provides an incentive for retention

•aligns compensation with the interest of stockholders

For this reason, the executive compensation program is comprised of three primary elements:

(i)base salary — the base salary provides recognition of an individual’s role, responsibility, and experience

(ii)an incentive cash bonus program — variable pay designed to reward achievement of objectives and overall business performance

(iii)equity awards — variable compensation that promotes a culture of ownership and aligns the interests of the executive with those of the stockholders

The Compensation Committee believes these three elements provide an effective way to motivate and retain executive officers. Equity-based compensation is the most significant portion of compensation for our Named Executive Officers.

The Compensation Committee has not adopted any formal guidelines for allocating total compensation between equity compensation and cash compensation, but generally seeks to provide an overall executive compensation package designed to attract and retain appropriately qualified and industry experienced executive officers, align their compensation with competitive market practices, align their interests with the interests of our stockholders, and reward them for meeting the strategic goals and objectives of the Company, as well as strong individual performance.