Novan, Inc. (NASDAQ:NOVN) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Item 5.02.

Effective June 4, 2017, Nathan Stasko, formerly the President and
Chief Executive Officer of Novan, Inc. (the Company) has
transitioned to the role of President and Chief Scientific
Officer of the Company, and G. Kelly Martin, currently serving on
the Companys Board of Directors (the Board), has been appointed
to serve as the Companys Chief Executive Officer on an interim
basis. Additional information about Mr. Martin can be found in
the Companys definitive proxy statement, filed with the
Securities and Exchange Commission on April 17, 2017. Effective
with this transition, Mr. Martin has stepped down from the
Compensation Committee of the Board.

In connection with the transition, the Company and Dr. Stasko
have entered into an amendment (the Amendment) to the Amended and
Restated Employment Agreement, dated April 13, 2016, between the
Company and Dr. Stasko (the Agreement). The Amendment provides
that Dr. Stasko will receive a base salary equal to his current
base salary of $400,000 and, subject to approval of the Board, a
grant of options to purchase up to 80,000 shares of the Companys
common stock, which shares will vest in accordance with
performance terms to be established by Board. The establishment
of performance criteria and the grant will be completed by June
30, 2017. Following the appointment of a Chief Executive Officer
of the Company (subsequent to Mr. Martins appointment as Chief
Executive Officer on an interim basis) and upon request of the
Board, Dr. Stasko has agreed to resign from his positions as
either President or as a director of the Company, or both, as
requested. Upon termination without cause or for good reason, Dr.
Stasko, in addition to the other items outlined in the Agreement,
will receive (i) vesting of any time-based options that would
have vested during the calendar year but for the termination,
provided that they are exercised within 90 days of the
termination date and (ii) payment of any bonus earned from a
prior calendar year but not yet paid, to be paid in a lump sum,
less applicable withholdings. Dr. Stasko has agreed that the
changes in position and duties addressed in the Amendment,
including future resignation as president or a director will not
trigger Good Reason under the Agreement.

The foregoing description of the Amendment does not purport to be
complete and is qualified in its entirety by reference to the
full text of the Amendment, a copy of which is filed as Exhibit
10.1 to this Current Report on Form 8-K and is incorporated
herein by reference.

On June 5, 2017, the Company announced certain changes to its
executive leadership structure. The full text of this press
release is furnished herewith as Exhibit 99.1 to this Current
Report and incorporated herein by reference.

The information in this Item 7.01, including Exhibit 99.1, shall
not be deemed filed for the purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject
to the liability of that section. Furthermore, the information in
this report shall not be deemed incorporated by reference into
the filings of the Company under the Securities Act of 1933, as
amended.

See the Exhibit Index which follows the page of this Current
Report on Form 8-K, which is incorporated herein by reference.

About Novan, Inc. (NASDAQ:NOVN)

Novan, Inc. is a late-stage pharmaceutical company. The Company is engaged in the development and commercialization of therapies using its nitric oxide platform. The Company develops product candidates using its Nitricil technology, which enables the Company to engineer tunable new chemical entities (NCEs). The Company’s formulation science enables it to further tune the release of nitric oxide when applied to the skin by using the combinations of inactive ingredients. It is developing SB204 for the treatment of acne vulgaris in Phase III. The Company is developing its product candidate, SB206, for the treatment of external genital and perianal warts in Phase II. It is developing SB208, an investigational topical anti-fungal for the treatment of fungal infections of the skin and nails. It is developing SB204 for the treatment of inflammatory skin diseases. Its pipeline also includes SB414, a topical cream product candidate.