Document:

novn-ex1017_9.htm

 

Exhibit 10.17

NOVAN, INC.

NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

March 14, 2018

Non-employee members of the board of directors (the “Board”) of Novan, Inc. (the “Company”) shall be eligible to receive cash and equity compensation as set forth in this Non-Employee Director Compensation Policy (this “Policy”). The cash and equity compensation described in this Policy shall be paid or be made, as applicable, automatically and without further action of the Board, to each member of the Board who is not an employee of the Company or any parent or subsidiary of the Company (each, a “Non-Employee Director”), who may be eligible to receive such cash or equity compensation, unless such Non-Employee Director declines the receipt of such cash or equity compensation by written notice to the Company. This Policy shall become effective on the date hereof (the “Effective Date”) and shall remain in effect until it is revised or rescinded by further action of the Board. This Policy may be amended, modified or terminated by the Board at any time in its sole discretion. The terms and conditions of this Policy shall supersede any prior cash and/or equity compensation arrangements for service as a member of the Board between the Company and any of its Non-Employee Directors and between any subsidiary of the Company and any of its non-employee directors. No Non-Employee Director shall have any rights hereunder, except with respect to equity awards granted pursuant to the Policy.

1. Cash Compensation.

(a) Annual Retainers. Each Non-Employee Director shall receive an annual retainer of $35,000 for service on the Board.

(b) Additional Annual Retainers. In addition, a Non-Employee Director shall receive the following annual retainers:

(i) Chairman of the Board. A Non-Employee Director serving as Chairman of the Board shall receive an additional annual retainer of $25,000 for such service.

(ii) Lead Independent Director. A Non-Employee Director serving as Lead Independent Director shall receive an additional annual retainer of $20,000 for such service.

(iii) Audit Committee. A Non-Employee Director serving as Chairperson of the Audit Committee shall receive an additional annual retainer of $15,000 for such service. A Non-Employee Director serving as a member of the Audit Committee (other than the Chairperson) shall receive an additional annual retainer of $7,500 for such service.

(iv) Compensation Committee. A Non-Employee Director serving as Chairperson of the Compensation Committee shall receive an additional annual retainer of $15,000 for such service. A Non-Employee Director serving as a member of the Compensation Committee (other than the Chairperson) shall receive an additional annual retainer of $6,250 for such service.

(v) Nominating and Corporate Governance Committee. A Non-Employee Director serving as Chairperson of the Nominating and Corporate Governance Committee shall receive an additional annual retainer of $10,000 for such service. A Non-Employee Director serving as a member of the Nominating and Corporate Governance Committee (other than the Chairperson) shall receive an additional annual retainer of $5,000 for such service.

(vi) Science and Technology Committee.  A Non-Employee Director serving as Chairperson of the Science and Technology Committee shall receive an additional annual retainer of $20,000 for such service.  A Non-Employee Director serving as a member of the Science and Technology Committee (other than the Chairperson) shall receive an additional annual retainer of $6,000 for each service.

(c) Payment of Retainers. The annual retainers described in Sections 1(a) and 1(b) shall be earned on a quarterly basis based on a calendar quarter and shall be paid by the Company in arrears not later than the fifteenth day following the end of each calendar quarter. In the event a Non-Employee Director does not serve as a Non-

 

 

Employee Director, or in the applicable positions described in Section 1(b), for an entire calendar quarter, such Non-Employee Director shall receive a prorated portion of the retainer(s) otherwise payable to such Non-Employee Director for such calendar quarter pursuant to Section 1(b), with such prorated portion determined by multiplying such otherwise payable retainer(s) by a fraction, the numerator of which is the number of days during which the Non-Employee Director serves as a Non-Employee Director or in the applicable positions described in Section 1(b) during the applicable calendar quarter and the denominator of which is the number of days in the applicable calendar quarter.

 2. Equity Compensation. Non-Employee Directors shall be granted the equity awards described below. The awards described below shall be granted under and shall be subject to the terms and provisions of the Company’s 2016 Incentive Award Plan or any other applicable Company equity incentive plan then-maintained by the Company (the “Equity Plan”) and shall be granted subject to the execution and delivery of award agreements, including attached exhibits, in substantially the forms previously approved by the Board. All applicable terms of the Equity Plan apply to this Policy as if fully set forth herein, and all equity grants hereunder are subject in all respects to the terms of the Equity Plan.

 (a) Annual Awards. A Non-Employee Director who (i) serves on the Board as of the date of any annual meeting of the Company’s stockholders (an “Annual Meeting”) after the Effective Date and (ii) will continue to serve as a Non-Employee Director immediately following such Annual Meeting shall be automatically granted, on the date of such Annual Meeting, an option to purchase the number of shares of the Company’s common stock (at a per-share exercise price equal to the closing price per share of the Company’s common stock on the date of such annual meeting (or on the last preceding trading day if the date of the annual meeting is not a trading day) that have an aggregate fair value on the date of grant of $100,000 (as determined in accordance with ASC 718) (with the number of shares of Common Stock underlying each such award subject to adjustment as provided in the Equity Plan). The awards described in this Section 2(a) shall be referred to as the “Annual Awards.” Notwithstanding the foregoing, the Board in its sole discretion may determine that the Annual Awards for any year be granted in the form of restricted stock units with equivalent value on the date of grant (with the number of shares of Common Stock underlying each such award subject to adjustment as provided in the Equity Plan). For the avoidance of doubt, a Non-Employee Director elected for the first time to the Board at an Annual Meeting shall only receive an Annual Award in connection with such election and shall not receive any Initial Award (as defined below) on the date of such Annual Meeting as well.

(b) Initial Awards. Except as otherwise determined by the Board, each Non-Employee Director who is initially elected or appointed to the Board on any date other than the date of an Annual Meeting shall be automatically granted, on the date of such Non-Employee Director’s initial election or appointment (such Non-Employee Director’s “Start Date”), an option to purchase shares of the Company’s common stock (at a per-share exercise price equal to the closing price per share of the Company’s common stock on the date of such election or appointment (or on the last preceding trading day if such date is not a trading day) that have an aggregate fair value on such Non-Employee Director’s Start Date equal to the product of (i) $100,000 (as determined in accordance with ASC 718), and (ii) a fraction, the numerator of which is (x) 365 minus (y) the number of days in the period beginning on the date of the Annual Meeting immediately preceding such Non-Employee Director’s Start Date and ending on such Non-Employee Director’s Start Date and the denominator of which is 365 (with the number of shares of Common Stock underlying each such award subject to adjustment as provided in the Equity Plan). The awards described in this Section 2(b) shall be referred to as “Initial Awards.” Notwithstanding the foregoing, the Board in its sole discretion may determine that the Initial Award for any Non-Employee Director be granted in the form of restricted stock units with equivalent value on the date of grant (with the number of shares of Common Stock underlying each such award subject to adjustment as provided in the Equity Plan). For the avoidance of doubt, no Non-Employee Director shall be granted more than one Initial Award.

 

(c) Termination of Service of Employee Directors. Members of the Board who are employees of the Company or any parent or subsidiary of the Company who subsequently terminate their service with the Company and any parent or subsidiary of the Company and remain on the Board will not receive an Initial Award pursuant to Section 2(b) above, but to the extent that they are otherwise eligible, will be eligible to receive, after termination from service with the Company and any parent or subsidiary of the Company, Annual Awards as described in Section 2(a) above.

 

	
Novan, Inc.
	
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(d) Vesting of Awards Granted to Non-Employee Directors. Each Annual Award and Initial Award shall vest and become exercisable in four equal quarterly installments, such that each such award shall be fully vested and exercisable on the first anniversary of the date of grant, subject to the Non-Employee Director’s continued service on the Board as a Non-Employee Director through each applicable vesting date. No portion of an Annual Award or Initial Award that is unvested or unexercisable at the time of a Non-Employee Director’s termination of service on the Board as a Non-Employee Director shall become vested and exercisable thereafter. All of a Non-Employee Director’s Annual Awards and Initial Awards shall vest in full immediately prior to the occurrence of a Change in Control (as defined in the Equity Plan), to the extent outstanding at such time.

* * * * *

 

 

 

 

	
Novan, Inc.
	
3novn-ex1021_15.htm

Exhibit 10.21

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

Execution Copy

 

FIRST AMENDMENT TO UNC SUBLICENSE AGREEMENT

THIS FIRST AMENDMENT TO UNC SUBLICENSE AGREEMENT (this “First Amendment”) is made as of October 13, 2017 (the “Amendment Effective Date”) by and between Novan, Inc., a Delaware corporation with a principal place of business at 4105 Hopson Road, Morrisville, North Carolina 27560 (“Novan”), and KNOW Bio, LLC, a North Carolina limited liability company with a principal place of business at 4222 Emperor Blvd. Suite 470, Durham, NC 27703 (“Licensee”).  Novan and Licensee may each be referred to as a “Party,” and together as the “Parties.” 

RECITALS

WHEREAS, Novan and Licensee entered into that certain UNC Sublicense Agreement dated December 29, 2015 (the “UNC Sublicense Agreement”); 

WHEREAS, Novan and Licensee entered into that certain Novan Patent and Know-How License Agreement dated December 29, 2015; 

WHEREAS, contemporaneously with this First Amendment, Novan and Licensee are entering into a First Amendment to Novan Patent and Know-How License Agreement, whereby Novan and Licensee are amending the terms of such Novan Patent and Know-How License Agreement to (a) enable Novan to have exclusivity for certain oncovirus-related applications within the Novan Retained Field (as defined therein) and to grant an option to Novan to add other oncovirus-related applications to the Novan Retained Field, (b) allocate exclusivity between the Parties for certain new chemical entities, and (c) clarify the scope of the non-compete provisions applicable to the Parties; and

WHEREAS, Novan and Licensee desire to amend the terms of the UNC Sublicense Agreement to enable Novan to have exclusivity for certain oncovirus-related applications within the Novan Retained Field.

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, the Parties agree as follows:

1.Except as otherwise defined in this First Amendment, capitalized terms shall have the meanings ascribed to them in the UNC Sublicense Agreement.

 

2.Section 1.10 of the UNC Sublicense Agreement is hereby amended by deleting such Section in its entirety and inserting in lieu thereof the following: 

 

“1.10“Novan Retained Field” means: (a) all diagnostic, therapeutic, prophylactic and palliative uses for any disease, condition or disorder of the skin, nails, hair or scalp in humans or animals, including [***], as well as any other dermatological diseases, conditions or disorders (including [***]); (b) all cosmetic uses for the skin, nails, hair or scalp; (c) the Oncovirus Field; 

 

 

and (d) all diagnostic, therapeutic, prophylactic and palliative uses for any Exclusive NCE of Novan. Notwithstanding the foregoing, the Novan Retained Field does not include: (i) wound (i.e., [***]) care by use of pharmaceutical products formulated specifically to treat chronic wounds, thermal burns, radiation injury, accidental injury, surgical sites or scars; (ii) therapeutic uses for any form of cancer, excluding (x) basal cell carcinoma, squamous cell carcinoma, (y) any forms of precancerous skin lesions or precancerous skin conditions, including actinic keratosis, actinic cheilitis, cutaneous horn, Bowen disease, radiation dermatosis, and dysplastic nevi, and (z) the Oncovirus Field (for clarity, all of x, y and z are within the Novan Retained Field); or (iii) any diagnostic, therapeutic, prophylactic or palliative use for any Exclusive NCE of Licensee.”

3.Article 1 of the UNC Sublicense Agreement is hereby amended to add the following Sections and defined terms: 

 

“1.24“Exclusive NCE” of a Party means an active chemical compound, molecular entity or moiety that is an “Exclusive NCE” of such Party pursuant to Sections 1.30 and 2.11 of the License Agreement, for so long as such status continues in accordance with the terms of the License Agreement. 

 

1.25“License Agreement” means that certain Novan Patent and Know-How License Agreement between the Parties dated December 29, 2015, as amended.

 

1.26“Oncovirus Field” means the “Oncovirus Field” as defined in the License Agreement, including as such term may be modified pursuant to Section 2.12 of the License Agreement.” 

 

4.Section 3.3(c) of the UNC Sublicense Agreement is hereby amended by adding the following sentence at the end of such Section:

 

“Licensee shall not have any right to enforce any UNC Patent against an infringer with respect to an Exclusive NCE of Novan under this Section 3.3(c).”

 

5.Section 8.6 of the UNC Sublicense Agreement is hereby amended by deleting the notice addresses for the Parties set forth therein and inserting in lieu thereof the following:

 

“Novan, Inc.

4105 Hopson Road

Morrisville, NC 27560

Attn:  Chief Executive Officer”

 

“KNOW Bio, LLC

4222 Emperor Blvd. Suite 470

Durham, NC 27703

Attn:  Legal Department”

Confidential Information

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[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

 

6.Any questions, claims, disputes, or litigation concerning or arising from this First Amendment shall be governed by the laws of the State of North Carolina without giving effect to the conflicts of laws principles of that state or other country.  All disputes with respect to this First Amendment shall be governed by Section 8.2 and Section 8.3 of the UNC Sublicense Agreement.   

 

7.This First Amendment is limited as specified and shall not constitute a modification, amendment or waiver of any other provision of the UNC Sublicense Agreement.  Except as amended by this First Amendment, the UNC Sublicense Agreement shall remain in full force and effect.

 

8.This First Amendment may be executed in counterparts (by facsimile transmission or in Adobe Portable Document Format (PDF) sent by electronic mail), each of which will be considered an original, but all of which together will constitute one and the same instrument.

 

Signature Page to Follow

 

Confidential Information

3

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

 

 

 

IN WITNESS WHEREOF, the Parties have caused this First Amendment to be executed by their duly authorized representatives.

 

										
	
Novan, Inc.
	
 
	
KNOW Bio, LLC

	
 
	
 
	
 
	
 

	
By:
	
/s/ G. Kelly Martin
	
 
	
By:
	
/s/ Anne Whitaker

	
Name:
	
G. Kelly Martin
	
 
	
Name:
	
Anne Whitaker

	
Title:
	
Chief Executive Officer
	
 
	
Title:
	
  President & CEO

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

 

 

 

	
 
	
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