Common use of Compensation upon Separation due to Change in Control Clause in Contracts

Compensation upon Separation due to Change in Control. Upon termination of employment by the Company without Cause or upon the nonrenewal by the Company of the Term under Section 1, or by Executive for Good Reason, within six (6) months after a Change in Control, and conditioned upon the existence of an Effective Release and Executive’s continued compliance with the Restrictive Covenants Agreements and the terms thereunder, Executive shall be entitled to, in lieu of any other separation payment or severance benefit available under any plan or otherwise (including but not limited to the severance benefits provided for in Section 6(b) hereof): i. Payment of an amount equal to twelve (12) months of her Base Salary, plus Executive’s Annual Bonus, calculated at 100% achievement of Executive’s annual objectives, minus applicable withholdings required by law or authorized by Executive, to be paid in installments pursuant to the Company’s standard payroll practices and procedures, during the period beginning on the Company’s next regular pay day occurring sixty (60) days following the Separation Date and ending on the twelve (12) month anniversary of the Separation Date; and ii. Accelerated vesting of the remaining unvested portion of any and all granted options to purchase Company common stock on the Separation Date, such options to be subject to the other terms and conditions of the applicable Company incentive award plan(s) and individual award agreement(s). iii. If Executive timely and properly elects health continuation coverage under COBRA, the Company shall reimburse the Executive for the difference between the monthly COBRA premium paid by the Executive for herself and her dependents and the monthly premium amount paid by similarly situated active executives. Such reimbursement shall be paid to Executive on the 10th business day of the month immediately following the month in which the Executive timely remits the premium payment. The Executive shall be eligible to receive such reimbursement until the earliest of: (i) the twelve-month anniversary of the Separation Date; (ii) the date Executive is no longer eligible to receive COBRA continuation coverage; and (iii) the date on which Executive becomes eligible to receives substantially similar coverage from another employer or other source. Notwithstanding the foregoing, if the Company’s making payments under this Section 6(c)(iii) would violate the nondiscrimination rules applicable to non-grandfathered plans under the ACA, or result in the imposition of penalties under the ACA and the related regulations and guidance promulgated thereunder), the parties agree to reform this Section 6(c)(iii) in a manner as is necessary to comply with the ACA.

Compensation upon Separation due to Change in Control. Upon termination of employment by the Company without Cause or upon the nonrenewal by the Company termination of the Term under Section 1, or employment by Executive for Good ReasonReason at the time of, or within six twelve (612) months after a Change in Control, and conditioned upon the existence of an Effective Release and Executive’s continued compliance with the Restrictive Covenants Agreements and the terms thereunder, and subject to Section 8, Executive shall be entitled to, in lieu of any other separation payment or severance benefit available under any plan or otherwise (including but not limited to the severance benefits provided for in Section 6(b) hereof): i. Payment of severance pay in an amount equal to (i) twelve (12) months of her Executive’s current Base Salary, plus Executive’s (ii) an amount equal to the Annual Bonus, Bonus calculated at 100% achievement of Executive’s annual objectives, minus the minimum target level for the calendar year in which the Separation Date occurs (both (i) and (ii) referred to herein collectively as “CIC Severance Pay”). All applicable withholdings required by law or authorized by Executive, to Executive shall be withheld from Severance Pay. Severance Pay shall be paid in equal installments paid over the twelve-month period (the “CIC Severance Period”) following Executive’s Separation Date pursuant to the Company’s standard payroll practices and procedures, during the period beginning procedures applicable to Executive immediately prior to Executive’s separation from service and such payments shall commence on the Company’s next regular pay day occurring sixty (60) days first such payroll date on or following the Separation Date 10th day after the date on which the Effective Release becomes effective and ending on non-revocable, as provided in Section 6(a)(iv); provided, however, that if the twelve (12) month anniversary 60th day following Executive’s termination from employment occurs in the year following the year of Executive’s termination, then the Separation Date; andpayments shall commence no earlier than January 1 of such subsequent year, and the first such installment payment may include any payments missed due to any delay under this Section 6(c)(i); ii. Accelerated vesting of the remaining unvested portion of any and all granted options equity awards issued to purchase Company common stock on Executive as of the Separation Date, such options to be subject to the other terms and conditions of the applicable Company incentive award plan(s) and individual award agreement(s).; iii. If Executive timely and properly elects health continuation coverage under COBRA, the Company shall reimburse Executive during the Executive CIC Severance Period for the difference between the monthly COBRA premium paid by the Executive for herself himself and her his dependents and the monthly premium amount paid by similarly situated active executives. Such reimbursement shall be paid to Executive on the 10th business day of the month immediately following the month in which the Executive timely remits the premium payment. The Executive shall be eligible to receive such reimbursement until the earliest of: (ia) the twelvetwelfth-month anniversary of the Separation Date; (iib) the date Executive is no longer eligible to receive COBRA continuation coverage; and or (iiic) the date on which Executive becomes eligible to receives substantially similar coverage from another employer or other source. Notwithstanding the foregoing, if the Company’s making payments 's reimbursements under this Section 6(c)(iii) would violate the nondiscrimination rules applicable to non-grandfathered plans under the ACA, or result in the imposition of penalties under the ACA and the related regulations and guidance promulgated thereunder), the parties agree to reform this Section 6(c)(iii6(c )(iii) in a manner as is necessary to comply with the ACA.

Compensation upon Separation due to Change in Control. Upon termination of employment Separation from Service by the Company without Cause or upon the nonrenewal by the Company of the Term under Section 1, or by Executive Employee for Good Reason, Reason within six (6) months after a Change in Control, and conditioned upon the existence of an Effective Release and ExecutiveEmployee’s continued compliance with the Restrictive Covenants Agreements and the terms thereunder, Executive Employee shall be entitled to, in lieu of any other separation payment or severance benefit available under any plan or otherwise (including but not limited to the severance benefits provided for in Section 6(b) hereof): i. Payment of an amount equal to twelve (12) months of her his Base Salary, plus Executive’s Annual Bonus, calculated at 100% achievement of Executive’s annual objectives, minus applicable withholdings required by law or authorized by ExecutiveEmployee, to be paid in installments pursuant to the Company’s standard payroll practices and procedures, procedures during the period beginning on the Company’s next regular pay day occurring sixty (60) days following the Separation Date and ending on the twelve (12) month anniversary of the Separation Date; and ii. Accelerated vesting of the remaining unvested portion of any and all granted options to purchase Company common stock on the Separation Date, such options to be subject requiring exercise within ninety (90) days of the Separation Date and pursuant to the other terms and conditions of the applicable Company incentive award plan(sNovan Inc. 2008 Stock Plan and Employee’s Notice(s) and individual award agreement(s)of Stock Option Grant. iii. If Executive Conditioned on Employee’s proper and timely and properly elects election to continue his health continuation coverage insurance benefits under COBRACOBRA after the Separation Date, reimbursement of Employee’s applicable COBRA premiums for the lesser of eighteen ( 18) months following the Separation Date or until Employee becomes eligible for insurance benefits from another employer; provided, that the Company may discontinue the benefits under this paragraph and make a lump sum payment in lieu thereof to the extent reasonably necessary to avoid any penalty or excise taxes imposed on it in connection with the continued payment of premiums or other amounts by the Company under the Patient Protection and Affordable Care Act of 2010, as amended. Such lump sum payment shall reimburse be equal to the Executive for product of the difference between the monthly current COBRA premium paid by the Executive for herself and her dependents and Company times the monthly premium amount paid by similarly situated active executives. Such reimbursement shall be paid to Executive on number of months remaining in the 10th business day eighteen (18) month period if Employee is not at the time of the month immediately following the month in which the Executive timely remits the premium payment. The Executive shall be lump sum payment eligible to receive such reimbursement until the earliest of: (i) the twelve-month anniversary of the Separation Date; (ii) the date Executive is no longer eligible to receive COBRA continuation coverage; and (iii) the date on which Executive becomes eligible to receives substantially similar coverage for insurance benefits from another employer or other source. Notwithstanding the foregoing, if the Company’s making payments under this Section 6(c)(iii) would violate the nondiscrimination rules applicable to non-grandfathered plans under the ACA, or result in the imposition of penalties under the ACA and the related regulations and guidance promulgated thereunder), the parties agree to reform this Section 6(c)(iii) in a manner as is necessary to comply with the ACAemployer.

Compensation upon Separation due to Change in Control. Upon termination of employment Separation from Service by the Company without Cause or upon the nonrenewal by the Company of the Term under Section 1, or by Executive Employee for Good Reason, Reason within six (6) months after a Change in Control, and conditioned upon the existence of an Effective Release and Executive’s Employee's continued compliance with the Restrictive Covenants Agreements and the terms thereunder, Executive Employee shall be entitled to, in lieu of any other separation payment or severance benefit available under any plan or otherwise (including but not limited to the severance benefits provided for in Section 6(b) hereof): i. Payment of an amount equal to twelve (12) months of her Base Salary, plus Executive’s Annual Bonus, calculated at 100% achievement of Executive’s annual objectives, minus applicable withholdings required by law or authorized by ExecutiveEmployee, to be paid in installments pursuant to the Company’s standard payroll practices and procedures, procedures during the period beginning on the Company’s next regular pay day occurring sixty (60) days following the Separation Date and ending on the twelve (12) month anniversary of the Separation Date; and; ii. Accelerated vesting of the remaining unvested portion of any and all granted options to purchase Company common stock on the Separation Date, such options to be subject requiring exercise within ninety (90) days of the Separation Date and pursuant to the other terms and conditions of the applicable Company incentive award plan(sNovan Inc. 2008 Stock Plan and Employee’s Notice(s) and individual award agreement(s).of Stock Option Grant; and iii. If Executive Conditioned on Employee’s proper and timely and properly elects election to continue her health continuation coverage insurance benefits under COBRACOBRA after the Separation Date, reimbursement of Employee’s applicable COBRA premiums for the lesser of eighteen ( 18) months following the Separation Date or until Employee becomes eligible for insurance benefits from another employer; provided, that the Company may discontinue the benefits under this paragraph and make a lump sum payment in lieu thereof to the extent reasonably necessary to avoid any penalty or excise taxes imposed on it in connection with the continued payment of premiums or other amounts by the Company under the Patient Protection and Affordable Care Act of 2010, as amended. Such lump sum payment shall reimburse be equal to the Executive for product of the difference between the monthly current COBRA premium paid by the Executive for herself and her dependents and Company times the monthly premium amount paid by similarly situated active executives. Such reimbursement shall be paid to Executive on number of months remaining in the 10th business day eighteen (18) month period if Employee is not at the time of the month immediately following the month in which the Executive timely remits the premium payment. The Executive shall be lump sum payment eligible to receive such reimbursement until the earliest of: (i) the twelve-month anniversary of the Separation Date; (ii) the date Executive is no longer eligible to receive COBRA continuation coverage; and (iii) the date on which Executive becomes eligible to receives substantially similar coverage for insurance benefits from another employer or other source. Notwithstanding the foregoing, if the Company’s making payments under this Section 6(c)(iii) would violate the nondiscrimination rules applicable to non-grandfathered plans under the ACA, or result in the imposition of penalties under the ACA and the related regulations and guidance promulgated thereunder), the parties agree to reform this Section 6(c)(iii) in a manner as is necessary to comply with the ACAemployer.

Compensation upon Separation due to Change in Control. Upon termination of employment by the Company without Cause or upon the nonrenewal by the Company termination of the Term under Section 1, or employment by Executive for Good ReasonReason at the time of, or within six twelve (612) months after a Change in Control, and conditioned upon the existence of an Effective Release and Executive’s continued substantial and material compliance with the Restrictive Covenants Agreements Agreement and the terms thereunder, and subject to Section 7(c) and Section 8, Executive shall be entitled to, in lieu of any other separation payment or severance benefit available under any plan or otherwise (including but not limited to the severance benefits provided for in Section 6(b) hereof): i. Payment of severance pay in an amount equal to (i) twelve (12) months of her Executive’s current Base Salary, plus Executive’s (ii) an amount equal to the Annual Bonus, Bonus calculated at 100% achievement of Executive’s annual objectives, minus the minimum target level for the calendar year in which the Separation Date occurs (both (i) and (ii) referred to herein collectively as “CIC Severance Pay”). All applicable withholdings required by law or authorized by Executive, to Executive shall be withheld from Severance Pay. Severance Pay shall be paid in equal installments paid over the twelve-month period (the “CIC Severance Period”) following Executive’s Separation Date pursuant to the Company’s standard payroll practices and procedures, during the period beginning procedures applicable to Executive immediately prior to Executive’s separation from service and such payments shall commence on the Company’s next regular pay day occurring sixty (60) days first such payroll date on or following the Separation Date 10th day after the date on which the Effective Release becomes effective and ending non-revocable, as provided in Section 6(a)(iv); provided, however, that if the 60th day following Executive’s termination from employment occurs in the year following the year of Executive’s termination, then the payments shall commence no earlier than January 1 of such subsequent year, and the first such installment payment may include any payments missed due to any delay under this Section 6(c)(i); ii. Payment of the amount of any unpaid Annual Bonus for the prior calendar year, if any, to be paid when Annual Bonuses are paid to other executives at Executive’s level or on the twelve (12) month anniversary same date as the first installment of the Separation Date; andCIC Severance Pay is made, whichever date is later; iiiii. Accelerated vesting of the remaining unvested portion of any and all granted options to purchase Company common stock on the Separation Date, such options to be subject to the other terms and conditions of the applicable Company incentive award plan(s) and individual award agreement(s). iii. If Executive timely and properly elects health continuation coverage under COBRA, the Company shall reimburse the Executive for the difference between the monthly COBRA premium paid by the Executive for herself and her dependents and the monthly premium amount paid by similarly situated active executives. Such reimbursement shall be paid equity awards issued to Executive on the 10th business day of the month immediately following the month in which the Executive timely remits the premium payment. The Executive shall be eligible to receive such reimbursement until the earliest of: (i) the twelve-month anniversary as of the Separation Date; (ii) the date Executive is no longer eligible to receive ; iv. The COBRA continuation coverage; and (iii) the date on which Executive becomes eligible to receives substantially similar coverage from another employer or other source. Notwithstanding the foregoing, if the Company’s making payments benefit described under this Section 6(c)(iii) would violate the nondiscrimination rules applicable to non-grandfathered plans under the ACA, or result in the imposition of penalties under the ACA and the related regulations and guidance promulgated thereunder6(b)(iv), the parties agree to reform this Section 6(c)(iii) in a manner as is necessary to comply with the ACA.

Compensation upon Separation due to Change in Control. Upon termination of employment Separation from Service by the Company without Cause or upon the nonrenewal by the Company of the Term under Section 1, or by Executive Employee for Good Reason, Reason within six (6) months after a Change in Control, and conditioned upon the existence of an Effective Release and ExecutiveEmployee’s continued compliance with the Restrictive Covenants Agreements and the terms thereunder, Executive Employee shall be entitled to, in lieu of any other separation payment or severance benefit available under any plan or otherwise (including but not limited to the severance benefits provided for in Section 6(b) hereof): i. Payment of an amount equal to twelve (12) months of her his Base Salary, plus ExecutiveEmployee’s Annual Bonus, calculated at 100% achievement of ExecutiveEmployee’s annual objectives, minus applicable withholdings required by law or authorized by ExecutiveEmployee, to be paid in installments pursuant to the Company’s standard payroll practices and procedures, during the period beginning on the Company’s next regular pay day occurring sixty (60) days following the Separation Date and ending on the twelve (12) month anniversary of the Separation Date; and ii. Accelerated vesting of the remaining unvested portion of any and all granted options to purchase Company common stock on the Separation Date, such options to be subject requiring exercise within ninety (90) days of the Separation Date and pursuant to the other terms and conditions of the applicable Company incentive award plan(sNovan Inc. 2008 Stock Plan and Employee’s Notice(s) and individual award agreement(s)of Stock Option Grant. iii. If Executive Conditioned on Employee’s proper and timely and properly elects election to continue his health continuation coverage insurance benefits under COBRACOBRA after the Separation Date, reimbursement of Employee’s applicable COBRA premiums for the lesser of eighteen (18) months following the Separation Date or until Employee becomes eligible for insurance benefits from another employer; provided, that the Company may discontinue the benefits under this paragraph and make a lump sum payment in lieu thereof to the extent reasonably necessary to avoid any penalty or excise taxes imposed on it in connection with the continued payment of premiums or other amounts by the Company under the Patient Protection and Affordable Care Act of 2010, as amended. Such lump sum payment shall reimburse be equal to the Executive for product of the difference between the monthly current COBRA premium paid by the Executive for herself and her dependents and Company times the monthly premium amount paid by similarly situated active executives. Such reimbursement shall be paid to Executive on number of months remaining in the 10th business day eighteen (18) month period if Employee is not at the time of the month immediately following the month in which the Executive timely remits the premium payment. The Executive shall be lump sum payment eligible to receive such reimbursement until the earliest of: (i) the twelve-month anniversary of the Separation Date; (ii) the date Executive is no longer eligible to receive COBRA continuation coverage; and (iii) the date on which Executive becomes eligible to receives substantially similar coverage for insurance benefits from another employer or other source. Notwithstanding the foregoing, if the Company’s making payments under this Section 6(c)(iii) would violate the nondiscrimination rules applicable to non-grandfathered plans under the ACA, or result in the imposition of penalties under the ACA and the related regulations and guidance promulgated thereunder), the parties agree to reform this Section 6(c)(iii) in a manner as is necessary to comply with the ACAemployer.

Compensation upon Separation due to Change in Control. Upon termination of employment Separation from Service by the Company without Cause or upon the nonrenewal by the Company of the Term under Section 1, or by Executive Employee for Good Reason, Reason within six (6) months after a Change in Control, and conditioned upon the existence of an Effective Release and Executive’s Employee's continued compliance with the Restrictive Covenants Agreements and the terms thereunder, Executive Employee shall be entitled to, in lieu of any other separation payment or severance benefit available under any plan or otherwise (including but not limited to the severance benefits provided for in Section 6(b) hereof): i. Payment of an amount equal to twelve (12) months of her his Base Salary, plus Executive’s Annual Bonus, calculated at 100% achievement of Executive’s annual objectives, minus applicable withholdings required by law or authorized by ExecutiveEmployee, to be paid in installments pursuant to the Company’s standard payroll practices and procedures, procedures during the period beginning on the Company’s next regular pay day occurring sixty (60) days following the Separation Date and ending on the twelve (12) month anniversary of the Separation Date; and; ii. Accelerated vesting of the remaining unvested portion of any and all granted options to purchase Company common stock on the Separation Date, such options to be subject requiring exercise within ninety (90) days of the Separation Date and pursuant to the other terms Novan, Inc. 6 and conditions of the applicable Company incentive award plan(sNovan Inc. 2008 Stock Plan and Employee’s Notice(s) and individual award agreement(s).of Stock Option Grant; and iii. If Executive Conditioned on Employee’s proper and timely and properly elects election to continue his health continuation coverage insurance benefits under COBRACOBRA after the Separation Date, reimbursement of Employee’s applicable COBRA premiums for the lesser of eighteen ( 18) months following the Separation Date or until Employee becomes eligible for insurance benefits from another employer; provided, that the Company may discontinue the benefits under this paragraph and make a lump sum payment in lieu thereof to the extent reasonably necessary to avoid any penalty or excise taxes imposed on it in connection with the continued payment of premiums or other amounts by the Company under the Patient Protection and Affordable Care Act of 2010, as amended. Such lump sum payment shall reimburse be equal to the Executive for product of the difference between the monthly current COBRA premium paid by the Executive for herself and her dependents and Company times the monthly premium amount paid by similarly situated active executives. Such reimbursement shall be paid to Executive on number of months remaining in the 10th business day eighteen (18) month period if Employee is not at the time of the month immediately following the month in which the Executive timely remits the premium payment. The Executive shall be lump sum payment eligible to receive such reimbursement until the earliest of: (i) the twelve-month anniversary of the Separation Date; (ii) the date Executive is no longer eligible to receive COBRA continuation coverage; and (iii) the date on which Executive becomes eligible to receives substantially similar coverage for insurance benefits from another employer or other source. Notwithstanding the foregoing, if the Company’s making payments under this Section 6(c)(iii) would violate the nondiscrimination rules applicable to non-grandfathered plans under the ACA, or result in the imposition of penalties under the ACA and the related regulations and guidance promulgated thereunder), the parties agree to reform this Section 6(c)(iii) in a manner as is necessary to comply with the ACAemployer.