Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Change of Principal Accounting Officer
On April 6, 2023, the Company's board of directors determined that the principal
accounting officer role would transition from Andrew J. Novak, who has served in
the position since April 2018, to John M. Gay, the Company's Chief Financial
Officer and principal financial officer, effective April 7, 2023. Mr. Novak will
continue to serve as Vice President, Accounting and Business Operations for the
Company, and the decision to transition the role of principal accounting officer
to Mr. Gay is not the result of any disagreement between Mr. Novak and the
Company on any matter relating to the Company's financials, operations, policies
or practices.
Biographical and other information regarding Mr. Gay is set forth in Part III of
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2022, filed with the Securities and Exchange Commission on March 30, 2023 ,
under the section "Executive Officers," and such information is incorporated by
reference herein. There are no arrangements or understandings between Mr. Gay
and any other person requiring disclosure under Item 401(b) of Regulation S-K
and no transactions with related persons requiring disclosure under Item 404(a)
of Regulation S-K. Mr. Gay will not receive any additional compensation in
connection with assuming the responsibilities of the principal accounting
officer of the Company.
Entry into Bonus Agreement with Certain Executive Officers
On April 7, 2023, Novan, Inc. (the "Company") entered into a bonus agreement
with each of Paula Brown Stafford, the Company's President and Chief Executive
Officer, and John M. Gay, the Company's Chief Financial Officer, establishing
short-term performance bonuses to be paid upon achievement of certain financial
objectives related to the Company's cash position at the end of the third
quarter of 2023 and at the end of the fourth quarter of 2023, provided that the
executive remains employed as of the date of payment of each bonus. If all
performance metrics are achieved, as determined at the sole discretion of the
Company's Board of Directors, the aggregate amount to be paid to each executive
would be $250,000. In the event either executive's employment is terminated by
the Company without "cause," by the executive for "good reason," or upon a
"change in control," each as defined in the respective executive's employment
agreement, or in the event of certain significant corporate transactions, in
each case prior to the relevant payment date, then the bonuses will be paid in
full in connection with such event.
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