What changed in this filing

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Item 9A. Controls and Procedures

2023-03-14 compared with 2022-03-17 · 137 added, 112 removed, 627 unchanged (28% of the section changed)

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ITEM 9B - OTHER INFORMATION

On March 9, 2023, the compensation committee (the "Compensation Committee") of our board of directors approved cash retention payments for the ten employees remaining at the Company as of the date of this report.

In making its decision, the Compensation Committee considered (i) the limited number of employees remaining at the Company and the increase in each employee's responsibilities;

(ii) the impact of the loss of any employee, especially members of management, on our ability to

execute corporate objectives for 2023;

and (iii) the limited number of shares available under our existing equity incentive plans following our 1-for-18 reverse stock split.

After considering the foregoing, the Compensation Committee approved a cash retention plan with the goal of encouraging the retention of employees through milestone events in 2023.

Each of our employees, including David Domzalski, our President and Chief Executive Officer, Tyler Zeronda, our Chief Financial Officer, Iain Stuart, our Chief Scientific Officer, and Mutya Harsch, our General Counsel and Chief Legal Officer, is eligible to receive 100% of their target annual bonus (the "Retention Payment") over a period of time to maintain the continuity of business operations.

Per the approved plan, one-third of the Retention Payment will be paid only upon the achievement of each of the following milestones, subject to the individual's remaining in our continuous service through each payment date:

(i) the receipt of positive results from our Phase 1b clinical trial for VYN201;

and (ii) the achievement of certain financing objectives.

The remaining one-third of the Retention Payment will be paid if the employee has remained in our continuous service through December 31, 2023.

Notwithstanding the foregoing, any then-unpaid portion of the Retention Payment will be paid if an employee experiences a termination of employment in connection with a change of control.

ITEM 9C - DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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Elisabeth Sandoval

(1) Member of the Audit Committee.

(2) Member of the Compensation Committee.

(3) Member of the Nominating and Corporate Governance Committee.

Rex Bright served as a non-employee director until his death on January 11, 2022.

Executive Officers

David Domzalski has served as the Company’s President and Chief Executive Officer and as a director since March 9, 2020, the closing date of the Merger (the "Closing Date").

David Domzalski has served as the Company’s President and Chief Executive Officer and as a director since March 9, 2020, the closing date of the merger between Menlo and Foamix (the "Closing Date").

From July 2017 until the Closing Date, Mr.

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Zeronda previously served as Vice President of Finance of the Company from the Closing Date until his appointment as Interim CFO.

Zeronda joined Foamix in April 2019 and has been responsible for all finance activities related to the commercial operations, financial planning, treasury, risk management and supply chain matters of VYNE.

Zeronda joined Foamix in April 2019 and has

been responsible for all finance activities related to the commercial operations, financial planning, treasury, risk management and supply chain matters of VYNE.

From April 2013 until April 2019, Mr.

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Stuart served as the Chief Scientific Officer of Foamix.

Stuart previously served as Foamix’s Senior Vice President of Research & Development from August 2017 to January 2019 and as Vice President of Clinical Development from

October 2016 to 2017.

Stuart previously served as Foamix’s Senior Vice President of Research & Development from August 2017 to January 2019 and as Vice President of Clinical Development from October 2016 to 2017.

Prior to joining Foamix, Dr.

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Barbari served in various roles of increasing responsibility at Syntex Corporation/Roche Pharmaceuticals.

Barbari currently serves on the board of directors of Agile Therapeutics and the Association of Bioscience Finance Officers.

She previously served on the board of directors of Foamix from January 2019 until the Closing Date, Sonoma Pharmaceuticals and for Phytogen Life Sciences.

Barbari currently serves on the board of directors of Agile Therapeutics.

She previously served on the board of directors of Foamix from January 2019 until the Closing Date, Sonoma Pharmaceuticals, Phytogen Life Sciences and the Association of Bioscience Finance Officers.

Barbari was a recipient of the YWCA Silicon Valley Tribute to Women Awards.

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Steven Basta served as our President and Chief Executive Officer from September 2015 until the Closing Date and has served as a member of our Board since September 2015.

Basta is currently the Chief Executive Officer of Mahana Therapeutics, a privately-held digital therapeutics company, and has served in that capacity since December 2020.

From December 2020 until October 2022, Mr.

Basta served as the Chief Executive Officer of Mahana Therapeutics, a privately-held digital therapeutics company.

From October 2011 until August 2015, Mr.

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Basta served as Chief Executive Officer of BioForm Medical, a publicly listed medical aesthetics company acquired by Merz, and from February 2010 to September 2011 served as Chief Executive Officer of Merz Aesthetics, the successor to BioForm Medical.

Basta is currently a board member of the publicly listed company, Viveve Medical (since September 2018) and serves as Chairman of the Board of Viveve (since January 2019).

Basta previously served on the board of Carbylan Therapeutics from September 2009 to November 2016 when it was acquired by KalVista Pharmaceuticals.

He has served on the board of DermBiont, Inc., a privately held pharmaceutical company, since March 2020.

Basta previously served as a board member of Viveve Medical from September 2018 until March 2023, including as Chairman of the Board from January 2019 until March 2023.

Basta also previously served on the board of Carbylan Therapeutics from September 2009 to November 2016 when it was acquired by KalVista Pharmaceuticals.

Basta served on the board of RF Surgical (acquired by Medtronic) from December 2013 to August 2015.

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Bruno also spent 16 years at Warner Lambert, holding several positions of increasing strategic responsibility.

Bruno began his legal career as an associate with Shearman & Sterling.

Bruno began his legal career as an

associate with Shearman & Sterling.

Bruno holds a B.A.

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LePore earned a bachelor’s degree from Villanova University and a Master of Business Administration from Farleigh Dickinson University.

We believe Mr.

LePore is qualified to serve on our Board given his extensive experience as a senior level executive and board member for several companies in the pharmaceutical sector.

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Sandoval began her career in research and development at Johnson & Johnson’s Ethicon division.

Sandoval serves on the board of directors for Alastin Skincare, Satsuma Pharmaceuticals, Intersect ENT and Procept BioRobotics.

Sandoval serves on the board of directors for Satsuma Pharmaceuticals and Procept BioRobotics.

She holds an MBA from Pepperdine University and a B.S.

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Management discusses strategic and operational risks at regular management meetings, and conducts specific strategic planning and review sessions during the year that include a focused discussion and analysis of the risks facing us.

Throughout the year, senior management reviews these risks with the Board at regular Board meetings as part of management presentations that focus on particular business functions, operations or strategies, and presents the steps taken by management to mitigate or eliminate such risks.

Throughout the year, senior management reviews these risks with the Board at regular Board meetings as part of management

presentations that focus on particular business functions, operations or strategies, and presents the steps taken by management to mitigate or eliminate such risks.

Committees of the Board of Directors

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The Compensation Committee may establish compensation and make bonus awards to our chief executive officer directly or may make recommendations to the Board regarding compensation and bonus awards payable to our chief executive officer.

Compensation Committee also reviews director compensation and makes recommendations to the Board regarding director compensation.

Our Compensation Committee also reviews director compensation and makes recommendations to the Board regarding director compensation.

The Compensation Committee also reviews and approves or makes recommendations to our Board regarding the issuance of stock options and other awards under our stock plans.

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The Compensation Committee considers those recommendations in determining base salaries, adjustments to base salaries, annual cash bonus program targets and awards and equity awards, if any, for the executive officers and other members of senior management.

In 2020, the Compensation Committee retained the services of FW Cook to advise the committee on compensation adjustments for the 2020 calendar year as well as adjustments for 2021.

The Compensation Committee has evaluated the independence of its outside advisors, including outside compensation advisor and legal counsel, considering the independence factors specified in the listing requirements of Nasdaq and concluded their work for the Compensation Committee does not raise any conflicts of interest.

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Prohibition on Margin Accounts and Hedging and Similar Transactions

Our employees and directors are subject to an insider trading policy that, among other things, prohibits them from holding Company securities in a margin account or pledging Company securities as collateral for a loan.

Our employees and directors are subject to an insider trading policy that, among other things, prohibits them from holding our securities in a margin account or pledging our securities as collateral for a loan.

In addition, our insider trading policy prohibits employees and directors from engaging in put or call options, short selling, or similar hedging activities involving our stock.

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ITEM 11 - EXECUTIVE COMPENSATION

The following is a discussion of compensation arrangements of our named executive officers, or NEOs.

As an “emerging growth company” as defined in the JOBS Act, we are not required to include a Compensation Discussion and Analysis section and have elected to comply with the scaled disclosure requirements applicable to emerging growth companies.

The following is a discussion of compensation arrangements of our named executive officers ("NEOs").

As an “emerging growth company” as defined in the JOBS Act, we have elected to comply with the scaled disclosure requirements applicable to emerging growth companies.

Our NEOs for the year ended December 31, 2022 were:

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The following table sets forth the compensation information for our NEOs for the years ended December 31, 2022 and 2021.

Stuart was not a named executive officer for the year ended December 31, 2020 and therefore compensation information for that period has been omitted.

Domzalski and Ms.

Harsch were executives of Foamix prior to the Merger and were appointed as executives of the Company as of the Closing Date.

Accordingly, compensation presented for 2020 reflects only compensation paid by the Company from the Closing Date through December 31, 2020.

It does not reflect compensation received by such person prior to the Closing Date which was paid by Foamix.

Name and Principal Position

Non-equity Incentive Compensation ($)(1)

Stock Awards ($)(2)

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2,141,994 (4)

11,600 4,852,925

2022 422,172 143,538 45,750 30,750 12,200 654,410

Chief Legal Officer, General Counsel and Secretary

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11,600 1,312,106

2022 421,811 143,415 45,750 30,750 12,200 653,926

Chief Scientific Officer

Domzalski and Ms.

Harsch, the amounts shown for 2020 reflect base salary that was paid by the Company from the March 9, 2020 (the closing date of the Merger) through December 31, 2020.

It does not reflect base salary that was paid by Foamix from January 1, 2020 through March 9, 2020 as such amounts were not paid by the Company.

The base salary received by Mr.

Domzalski and Ms.

Harsch for the full year ended December 31, 2020, including salary paid by Foamix, was $616,000 and $392,208, respectively.

See "—Retention Awards" for additional discussion regarding retention awards issued in September 2021.

2021 405,576 117,620 345,587 (4)

11,600 1,287,359

The amounts reported in this column reflect cash bonuses awarded pursuant to the achievement of our 2022 and 2021 corporate objectives.

Represents the grant date fair value of the restricted stock units and stock options granted by the Company to our named executive officers during 2022 and 2021as computed in accordance with ASC 718.

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Reflects employer contributions to each individual's 401(k) plan.

For stock and option awards granted in 2021, see "—Retention Compensation" for additional discussion regarding retention awards issued in September 2021.

Non-Equity Incentive Plan Compensation

Domzalski's eligibility to receive his target bonus is based 100% on the achievement of corporate performance objectives.

Seventy-five percent of Ms.

Harsch's and Dr.

Stuart's target bonus is based on the achievement of corporate performance objectives and the remaining 25% is based on the achievement of individual performance objectives.

For the 2022 bonuses, these corporate performance objectives included:

(i) the advancement of our biotech strategy and the development of our pipeline;

(ii) the achievement of certain research and development objectives, including receiving successful results in the Phase 2a trial for FMX114, and the advancement of our BET inhibitor programs;

(iii) the execution of certain business development initiatives;

(iv) and the achievement of certain financial objectives (the "2022 Corporate Assessment").

Based on the 2022 Corporate Assessment, Mr.

Domzalski, Ms.

Harsch and Dr.

Stuart were awarded the bonuses reflected in the table above, which represents 85% of each individual's 2022 target bonus.

Outstanding Equity Awards at Fiscal Year End

The following table sets forth all outstanding equity awards held by each of the named executive officers as of December 31, 2022.

The number of shares and, where applicable, exercise price per share, in the table and narrative that follow reflect the reverse stock split the became effective on February 10, 2023.

Option Awards

Share Awards(1)

Vesting Commencement Date (1)

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11,123 6,672 30.24 9/2/2031 17,795 48,047

3/17/2022 — 17,349 10.98 3/17/2032 17,350 46,845

Mutya Harsch 2/27/2018 1,250 — 254.16 2/27/2028 — —

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2,114 1,266 30.24 9/2/2031 3,381 9,129

3/17/2022 — 4,165 10.98 3/17/2032 4,166 11,248

Iain Stuart 11/15/2016 1,000 — 342.00 11/15/2026 — —

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2,114 1,266 30.24 9/2/2031 3,381 9,129

On April 3, 2020, the equity awards issued to Mr.

Domzalski and Ms.

Harsch prior to the Closing Date in respect of services rendered as executives of Foamix were proportionately adjusted to reflect the final exchange ratio in the Merger, following the conversion of the contingent stock rights.

Accordingly, the number of shares underlying the Foamix options and restricted stock units that were assumed by the Company in the Merger were multiplied by 1.8006, and the exercise price for each Foamix option was divided by 1.8006.

3/17/2022 — 4,166 10.98 3/17/2032 4,166 11,248

Except as set forth in footnote 3 below, these equity awards vest over a four year period, with 25% vesting on the first anniversary of the last day of the quarter in which the grant was made, and 6.25% every quarter thereafter.

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Awards granted pursuant to the Company's retention initiatives in September 2021.

See "—Retention Awards" for additional details, including vesting terms.

Retention Awards

See "—Retention Compensation" for additional details, including vesting terms.

Retention Compensation

September 2021 Retention Awards

In August 2021, the Company announced that it would be divesting its commercial business and transitioning to a biotech strategy focused on drug development.

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Harsch were each awarded 3,381 restricted stock unit awards and employee stock options to purchase 3,381 shares.

All of the shares subject to restricted stock unit awards will vest on September 30, 2023, and 50% of the shares subject to stock option awards will vest on September 30, 2022, with the remaining 50% of the shares vesting thereafter in equal, quarterly installments through September 30, 2023, in each case, subject to the recipient’s continued service to the Company through the vesting date.

All of the shares subject to restricted stock unit awards will vest on September 30, 2023, and 50% of the shares subject to stock option awards vested on September 30, 2022, with the remaining 50% of the shares vesting thereafter in equal, quarterly installments through September 30, 2023, in each case, subject to the recipient’s continued service to the Company through the vesting date.

The exercise price for each stock option granted is $30.24 per share, which represents the closing price for the Company’s common stock on the date of grant.

2023 Retention Payments

On March 9, 2023, the Compensation Committee approved cash retention payments for the ten employees remaining at the Company as of the date of this report.

In making its decision, the Compensation Committee considered (i) the limited number of employees remaining at the company and the increase in each employee's responsibilities;

(ii) the impact of the loss of any employee, especially members of management, on our ability to execute corporate objectives for 2023;

and (iii) the limited number of shares available under our existing equity incentive plans following our 1-for-18 reverse stock split.

After considering the foregoing, the Compensation Committee approved a cash retention plan with the goal of encouraging the retention of employees through milestone events in 2023.

Each of our employees, including each of our NEOs, is eligible to receive 100% of their target annual bonus (the "Retention Payment") over a period of time to maintain the continuity of business operations.

(i) the receipt of positive results from our Phase 1b clinical trial for VYN201;

and (ii) the achievement of certain financing objectives.

The remaining one-third of the Retention Payment will be paid if the employee has remained in our continuous service through December 31, 2023.

Notwithstanding the foregoing, any then-unpaid portion of the Retention Payment will be paid if an employee experiences a termination of employment in connection with a change of control.

Compensation Arrangements with Named Executive Officers

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Domzalski’s annualized base salary for 2020 was $616,000, which was increased to $637,560 in February 2021 by the Compensation Committee.

Domzalski's salary will remain the same for 2022.

Domzalski's salary remained unchanged for 2022 and will remain unchanged in 2023.

Domzalski is also eligible to receive an annual cash target bonus of 60% of his base salary, up to the maximum bonus opportunity allowable under the applicable annual bonus plan or program in effect from time to time (such maximum bonus opportunity currently being 200% of the target bonus), subject to the achievement of Company performance criteria determined by the Board or the Compensation Committee.

For 2021, Mr.

Domzalski's eligibility to receive his target bonus was subject to the following key performance criteria, which were modified in September 2021 following the announcement by the Company that it was divesting its commercial business:

(i) the divestiture of the commercial business, (ii) the achievement of certain pipeline objectives, including obtaining Phase 2a trial results for FMX114 and the initiation of certain preclinical activities with respect to VYN201, as well as establishing a Scientific Advisory Board, (iii) expanding the Company's development objectives and executing a license agreement with In4Derm with respect to a selective BET inhibitor, and (iv) the achievement of certain financial objectives, including managing operations within the Board-approved operating plan (collectively, the "2021 Performance Assessment").

Based on the 2021 Performance Assessment, the Compensation Committee approved a cash bonus for Mr.

Domzalski in the amount of $242,910, representing 63% of his target bonus for 2021.

Domzalski's Offer Letter provides that if Mr.

Domzalski’s employment is terminated by the Company without Cause or he resigns for Good Reason (each as defined below), then, subject to his execution and non-revocation of a release of claims, Mr.

Domzalski will be entitled to receive (i) a severance payment equal to 100% of his annual base salary then in effect, (ii) continued participation in medical benefit plans at active employee rates for 12 months following the date of termination and (iii) full accelerated vesting of all of outstanding and unvested stock options and restricted stock units on the date of termination, with such stock options remaining exercisable for 90 days following the date of termination.

Domzalski will be entitled to receive (i) a severance payment equal to 100% of his annual base salary then in effect, (ii) payment of COBRA premiums for healthcare plan continuation at active employee rates for 12 months following the date of termination and (iii) full accelerated vesting of all of outstanding and unvested stock options and restricted stock units on the date of termination, with such stock options remaining exercisable for 90 days following the date of termination.

Domzalski’s employment is terminated by the Company without Cause or he resigns for Good Reason, in each case, within 12 months following a Change in Control (as defined in the 2019 Equity Incentive Plan), then, subject to his execution and non-revocation of a release of claims, Mr.

Domzalski will be entitled to receive (i) a severance payment equal to 1.5 times the sum of his base salary and target bonus for the year of termination, (ii) a prorated target annual bonus payment for the year of termination, (iii) continued participation in medical benefit plans at active employee rates for 18 months following the date of termination and (iv) full accelerated vesting of all of outstanding and unvested stock options and restricted stock units on the date of termination, with such stock options remaining exercisable for 90 days following the date of termination.

Domzalski will be entitled to receive (i) a severance payment equal to 1.5 times the sum of his base salary and target bonus for the year of termination, (ii) a prorated target annual bonus payment for the year of termination, (iii) payment of COBRA premiums for healthcare plan continuation at active employee rates for 18 months following the date of termination and (iv) full accelerated vesting of all of outstanding and unvested stock options and restricted stock units on the date of termination, with such stock options remaining exercisable for 90 days following the date of termination.

For purposes of Mr.

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(3) the executive’s gross negligence or willful misconduct in connection with his employment;

(4) the executive’s willful and continued failure to substantially perform his duties;

(4) the executive’s willful and

continued failure to substantially perform his duties;

(5) the executive’s breach of any of the restrictive covenants;

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(iv) any material breach by the Company of its obligations under this agreement;

or (v) a change in the executive’s primary work location that increases the executive’s commute by more than 50 miles.

Executive shall provide notice of the existence of the Good Reason condition within 30 days of the date executive learns of the condition, and the Company shall have a period of thirty 30 days during which it may remedy the condition, and in case of full remedy such condition shall not be deemed to constitute Good Reason.

or (v) a change in the executive’s primary work location that increases the executive’s commute by more than 50 miles, in each case subject to certain notice and cure periods.

The Company must provide Mr.

Domzalski with 30 days’ notice prior to a termination without Cause, and he must provide the Company 30 days’ notice prior to any resignation.

Mutya Harsch, Chief Legal Officer, General Counsel and Secretary

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Harsch’s employment are governed by her Offer Letter, dated as of April 7, 2021.

Harsch’s annualized base salary for 2020 was $392,208, which was increased to $405,935 in February 2021 by the Compensation Committee.

Harsch's salary will be increased by 4% for 2022.

In March, Ms.

Harsch’s base salary for 2022 was $422,172 and will be unchanged for 2023.

Harsch is also eligible to receive an annual target bonus of 40% of her annual base salary.

Her eligibility for such annual target bonus, and the amount of such annual target bonus, will be subject to her achievement of performance targets and milestone criteria, as determined by the Chief Executive Officer, in accordance with our current general bonus plan.

Based on the 2021 Performance Assessment, the Compensation Committee approved a cash bonus for Ms.

Harsch in the amount of $142,007, representing 87% of her target bonus for 2021.

Her eligibility for such annual target bonus, and the amount of such annual target bonus, is subject to the achievement of corporate performance goals and her achievement of performance targets and milestone criteria, as determined by the Chief Executive Officer, in accordance with our current general bonus plan.

The Offer Letter provides that, in the event of a termination of her employment without Cause (as defined in the 2019 Equity Incentive Plan), subject to Ms.

Harsch’s execution of a release of claims, Ms.

Harsch will receive (i) a lump sum severance payment equal to 75% of her base salary then in effect and (ii) continued healthcare plan coverage at active employee rates for nine (9) months following the date of termination, provided that the Company’s obligation under clause (ii) shall terminate on the earlier of (x) the date on which she enrolls in a group health plan offered by another employer and (y) the date on which she is no longer eligible for continuation coverage under COBRA.

Harsch will receive (i) a lump sum severance payment equal to 75% of her base salary then in effect and (ii) payment of COBRA premiums for healthcare plan continuation at active employee rates for nine (9) months following the date of termination, provided that the Company’s obligation under clause (ii) shall terminate on the earlier of (x) the date on which she enrolls in a group health plan offered by another employer and (y) the date on which she is no longer eligible for continuation coverage under COBRA.

In addition, if Ms.

Harsch's employment is terminated by the Company without Cause or she terminates her employment with Good Reason within the twelve month period after a Change of Control (as defined in the 2019 Equity Incentive Plan), she will be entitled to receive a change of control payment equal to (i) one times (1.0x) the sum of her then current base salary plus her target bonus, (ii) her pro rata target bonus for the year of termination, and (iii) continued healthcare plan coverage at active employee rates for twelve (12) months following the date of termination, provided that the Company’s obligation under clause (iii) shall terminate on the earlier of (x) the date on which she enrolls in a group health plan offered by another employer and (y) the date on which she is no longer eligible for continuation coverage under COBRA.

Harsch's employment is terminated by the Company without Cause or she terminates her employment with Good Reason within the twelve month period after a Change of Control (as defined in the 2019 Equity Incentive Plan), she will be entitled to receive a change of control payment equal to (i) one times (1.0x) the sum of her then current base salary plus her target bonus, (ii) her pro rata target bonus for the year of termination, and (iii) payment of COBRA premiums for healthcare plan continuation at active employee rates for twelve (12) months following the date of termination, provided that the Company’s obligation under clause (iii) shall terminate on the earlier of (x) the date on which she enrolls in a group health plan offered by another employer and (y) the date on which she is no longer eligible for continuation coverage under COBRA.

In addition, in the event of such a termination, all of Ms.

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or (iv) an adverse change in position, including title, reporting relationship(s), authority, duties or responsibilities;

all of the above without consent.

all of the above without consent., in each case subject to certain notice and cure periods.

The Company must provide Ms.

Harsch with 30 days’ notice prior to a termination without Cause, and she must provide the Company 30 days’ notice prior to any resignation.

Harsch’s Offer Letter also contains customary confidentiality, non-competition and non-solicitation covenants.

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Stuart’s employment are governed by his Offer Letter, dated as of March 7, 2022.

Stuart's base salary for 2021 was $405,576.

Stuart's salary will be increased by 4% for 2022.

Stuart's base salary for 2022 was $421,811 and will be unchanged for 2023.

Stuart is also eligible to receive an annual target bonus of 40% of his annual base salary.

His eligibility for such annual target bonus, and the amount of such annual target bonus, will be subject to his achievement of performance targets and milestone criteria, as determined by the Chief Executive Officer, in accordance with our current general bonus plan.

Based on the 2021 Performance Assessment, the Compensation Committee approved a cash bonus for Dr.

Stuart in the amount of $117,620, representing 72% of his target bonus for 2021.

In the event of a termination of his employment without Cause (as defined in the 2019 Equity Incentive Plan), subject to Dr.

His eligibility for such annual target bonus, and the amount of such annual target bonus, is subject to his achievement of performance targets and milestone criteria, as determined by the Chief Executive Officer, in accordance with our current general bonus plan.

In the event of a termination of his employment without Cause (as defined in the 2019 Equity Incentive Plan) or if he resigns for Good Reason, subject to Dr.

Stuart’s execution of a release of claims, Dr.

Stuart will receive (i) a lump sum severance payment equal to 75% of his base salary then in effect and (ii) continued healthcare plan coverage at active employee rates for nine (9) months following the date of termination, provided that the Company’s obligation under clause (ii) shall terminate on the earlier of (x) the date on which he enrolls in a group health plan offered by another employer and (y) the date on which he is no longer eligible for continuation coverage under COBRA.

Stuart will receive (i) a lump sum severance payment equal to 75% of his base salary then in effect and (ii) payment of COBRA premiums for healthcare plan continuation at active employee rates for nine (9) months following the date of termination, provided that the Company’s obligation under clause (ii) shall terminate on the earlier of (x) the date on which he enrolls in a group health plan offered by another employer and (y) the date on which he is no longer eligible for continuation coverage under COBRA.

In addition, if Dr.

Stuart's employment is terminated by the Company without Cause or he terminates her employment with Good Reason within the twelve month period after a Change of Control (as defined in the 2019 Equity Incentive Plan), he will be entitled to receive a change of control payment equal to (i) one times (1.0x) the sum of his then current base salary plus his target bonus, (ii) his pro rata target bonus for the year of termination, and (iii) continued healthcare plan coverage at active employee rates for twelve (12) months following the date of termination, provided that the Company’s obligation under clause (iii) shall terminate on the earlier of (x) the date on which he enrolls in a group health plan offered by another employer and (y) the date on which he is no longer eligible for continuation coverage under COBRA.

Stuart's employment is terminated by the Company without Cause or if he terminates his employment with Good Reason within the twelve month period after a Change of Control, he will be entitled to receive a change of control payment equal to (i) one times (1.0x) the sum of his then current base salary plus his target bonus, (ii) his pro rata target bonus for the year of termination, and (iii) payment of COBRA premiums for healthcare plan continuation at active employee rates for twelve (12) months following the date of termination, provided that the Company’s obligation under clause (iii) shall terminate on the earlier of (x) the date on which he enrolls in a group health plan offered by another employer and (y) the date on which he is no longer eligible for continuation coverage under COBRA.

In addition, in the event of such a termination, all of Dr.

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or (iv) an adverse change in position, including title, reporting relationship(s), authority, duties or responsibilities;

all of the above without consent.

all of the above without consent, in each case subject to certain notice and cure periods.

The Company must provide Dr.

Stuart with 30 days’ notice prior to a termination without Cause, and he must provide the Company 30 days’ notice prior to any resignation.

Stuart’s Offer Letter also contains customary confidentiality, non-competition and non-solicitation covenants.

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Eligible employees are able to defer eligible compensation subject to applicable annual Internal Revenue Code (the “Code”) limits.

Currently, we match each eligible employee’s contributions up to 4% of total eligible compensation.

Employees’ pre‑tax contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions.

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Set forth below is a summary of the compensation paid to the non-executive members of the Board during 2022.

In addition, our Compensation Committee approved adjustments to our director compensation program for 2021.

A summary of these changes is set forth below.

Initial Equity Grants.

In February 2021, our Compensation Committee approved an adjustment to our director compensation program to increase the equity awards for director compensation such that each non-employee director who joins the Board will receive, upon appointment, options to purchase 41,000 shares of our common stock, representing two times (2x) the annual grant described below.

The options will vest and become exercisable as to 1/3rd of the shares on each anniversary of the date of grant, subject to the director's continued service to the Company through each applicable vesting date.

Each non-employee director who joins the Board will receive, upon appointment, options to purchase 2,278 shares of our common stock, representing two times (2x) the annual grant described below.

The options will vest and become exercisable as to 1/3rd of the shares on each anniversary of the date of grant, subject to the director's continued service through each applicable vesting date.

Annual Retainers.

Each of our non-employee directors receives an annual cash retainer of $40,000, payable quarterly.

During 2020, each non-employee director who had served as a director on our Board or on the Board of Foamix for at least six months received an annual retainer for service in such capacity, consisting of options to purchase common stock, which vest quarterly over one year.

In February 2021, our Compensation Committee approved an adjustment to our director compensation program such that each non-executive director who has served as a director on our Board for at least six months will be granted options to purchase 20,500 shares of our common stock on the date of our annual meeting of stockholders.

Each non-executive director who has served as a director on our Board for at least six months will be granted options to purchase

1,138 shares of our common stock on the date of our annual meeting of stockholders.

The options vest over a 12 month period in equal, monthly installments.

In addition to the annual cash retainer set forth above, each of our non-employee directors receive fees for their service as a member or chair of a committee of our Board as set forth in the table below:

In addition to the annual cash retainer set forth above, each of our non-employee directors receives fees for their service as a member or chair of a committee of our Board as set forth in the table below:

Additional annual retainer fees for service as a member or chair of the following committees (with chair fees inclusive of fees for service as a member)

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$ 5,000 $ 10,000

In addition, if a non-employee director is appointed to serve in a leadership position on the Board, he or she will be entitled to receive additional annual cash compensation of $40,000 for a non-employee chair or $25,000 for a lead independent director.

In February 2021, Mr.

LePore was appointed to serve as the Company’s lead independent director and received an additional annual cash retainer of $25,000 for his service.

In addition, if a non-employee director is appointed to serve in a leadership position on the Board, such non-employee director will be entitled to receive additional annual cash compensation of $40,000 for a non-employee chair or $25,000 for a lead independent director.

The exercise price per share of each option granted under this policy will be equal to the per share fair market value of our stock on the date of grant.

Each such option will have a term of ten years from the date of grant, subject to earlier termination in connection with a termination of the non-employee director’s service with us.

In the event of a change of control transaction, any unvested portion of an equity award granted under this policy will fully vest and become exercisable immediately prior to

the effective date of such transaction, subject to the non-employee director’s continuous service with us on the effective date of such transaction.

In the event of a change of control transaction, any unvested portion of an equity award granted under this policy will fully vest and become exercisable immediately prior to the effective date of such transaction, subject to the non-employee director’s continuous service with us on the effective date of such transaction.

Cash retainers will be paid on a quarterly basis in arrears, pro-rated based on the days served in the applicable fiscal quarter.

In addition, none of our non-employee directors shall in any event be permitted to receive cash and equity-based compensation (calculated based on grant date fair value) exceeding, in the aggregate, $500,000 in any calendar year.

Our director compensation policy was adopted by our Compensation Committee in consideration of a number of factors, including its assessment of a director compensation report from FW Cook, which our Compensation Committee engaged to prepare a competitive assessment of non-employee director compensation.

The FW Cook report delivered to our Compensation Committee in February 2021 recommended a director compensation program based on the median of a comparator group.

The vesting of each stock option held by our non-employee directors will accelerate in full upon a change in control.

We also reimburse all of our non-employee directors for all reasonable and customary business expenses in accordance with company policy.

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40,000 4,100 44,100

$ 65,000 34,645 99,645

Anthony Bruno

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The assumptions used in calculating the grant date fair value are set forth in Note 12 to the financial statements included in this report.

(2) Each of our non-employee directors was granted an option to purchase 1,138 shares of our common stock on August 10, 2022 at an exercise price of $5.62.

As of December 31, 2022, our non-employee directors held the following equity awards:

Shares Underlying Outstanding Options

Shares Underlying Outstanding RSUs

Sharon Barbari

Rex Bright(1)

Anthony Bruno

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Elisabeth Sandoval

Served on the Board until his death on January 11, 2022.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

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Shares of our common stock that a person has the right to acquire within 60 days after February 15, 2023 are deemed outstanding for purposes of computing the percentage ownership of the person holding such rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person, except with respect to the percentage ownership of all directors and executive officers as a group.

Unless otherwise indicated below, the address for each beneficial owner listed is c/o VYNE Therapeutics Inc., 520 U.S.

Highway 22, Suite 204, Bridgewater, NJ 08807.

Unless otherwise indicated below, the address for each beneficial owner listed is c/o VYNE Therapeutics Inc., 685 Route 202/206 N., Suite 301, Bridgewater, NJ 08807.

Name of Beneficial Owner Number of

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The following table contains information about our equity compensation plans as of December 31, 2022.

As of December 31, 2021, we had three equity compensation plans, our 2018 Omnibus Incentive Plan, our 2019 Equity Incentive Plan and our 2019 Employee Share Purchase Plan.

Equity Compensation Plan Information

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(3) Includes 8,197 shares under the 2018 Omnibus Incentive Plan, 54,433 shares under the 2019 Equity Incentive Plan and 124,012 shares available under the 2019 ESPP.

An additional 750,000 shares were added to the 2018 Omnibus Incentive Plan pursuant to the evergreen provision contained therein, effective as of January 1, 2022.

As of January 1, 2023, 41,666 shares have been added to the 2018 Omnibus Inventive Plan pursuant to the terms thereof.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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In connection with the prepayment of the Company's indebtedness, Perceptive received $18.3 million, representing their portion of the principal amount, interest and prepayment premium.

In addition, for the year ended December 31, 2020, the Company paid approximately $3.9 million in interest payments to the lenders under the Credit Agreement, including approximately $2.0 million to Perceptive.

Perceptive received an additional $1.1 million in interest payments from January 1, 2021 through July 2021.

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In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors or any other board committee:

(1) accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries;

directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries;

or (2) be an affiliated person of the listed company or any of its subsidiaries.

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ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

PricewaterhouseCoopers LLP served as our principal independent registered public accounting firm for the years ended December 31, 2021 and 2020.

The following table provides information regarding fees paid by us to PwC for all services, for the years ended December 31, 2021 and 2020:

PricewaterhouseCoopers LLP ("PwC") served as our principal independent registered public accounting firm for the year ended December 31, 2021.

Baker Tilly US, LLP was appointed as our independent registered public accounting firm for the year ended December 31, 2022 in April 2022.

The following table provides information regarding fees paid by us to PwC and Baker Tilly for the years ended December 31, 2022 and 2021:

Fiscal year ended December 31,

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$ 409 $ 1,050

Audit-related fees — 5

All other fees — 4

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(1) Includes professional services rendered in connection with the audit of our annual financial statements, the review of our interim financial statements and fees for registration statements and comfort letters.

(2) Includes professional services rendered in connection with assistance in preparation of applications to the Israel Tax Authorities.

Our audit committee’s specific responsibilities in carrying out its oversight of the quality and integrity of the accounting, auditing and reporting practices of the Company include the approval of audit and non-audit services to be provided by the external auditor.

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Exhibit Filing Date Filed Herewith

2.1* Agreement and Plan of Merger, dated as of November 10, 2019, by and among Foamix Pharmaceuticals Ltd., Menlo Therapeutics Inc.

and Giants Merger Subsidiary Ltd.

8-K 001-38356 2.1 November 12, 2019

2.2 Amendment No.

1 to the Agreement and Plan of Merger, dated as of December 4, 2019, by and among Foamix Pharmaceuticals Ltd., Menlo Therapeutics Inc.

and Giants Merger Subsidiary Ltd.

8-K 001-38356 2.1 December 4, 2019

2.3* Asset Purchase Agreement, dated as of January 12, 2022, by and between VYNE Therapeutics Inc.

and Journey Medical Corporation.

3.1(a) Amended and Restated Certificate of Incorporation

10-K 001-38356 3.1 March 17, 2022

3.1(b) Certificate of Designation of Preferences, Rights, and Limitations of Series A Convertible Preferred Stock.

10-Q 001-38356 3.1(b) November 14, 2022

3.1(c) Certificate of Elimination of Series A Convertible Preferred Stock.

8-K 001-38356 3.1 January 17, 2023

3.1 Amended and Restated Certificate of Incorporation

3.2 Amended and Restated Bylaws

8-K 001-38356 3.2 September 8, 2020

10-Q 001-38356 3.2 November 14, 2022

4.1 Description of Securities Registered Under Section 12 of the Securities Exchange Act of 1934

4.2 Second Amended and Restated Warrant, by and among Menlo Therapeutics Inc.

4.2 Second Amended and Restated Warrant, by and among VYNE Therapeutics Inc.

and Perceptive Credit Holdings II, LP.

10-Q 001-38356 4.1 May 11, 2020

4.3 Second Amended and Restated Warrant, by and among Menlo Therapeutics Inc.

4.3 Second Amended and Restated Warrant, by and among VYNE Therapeutics Inc.

and Orbimed Royalty & Credit Opportunities III, LP.

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10-Q 001-38356 10.2 November, 10, 2021

10.2(a)* Letter Agreement, dated as of June 15, 2022, by and between Tay Therapeutics and VYNE Therapeutics Inc.

10-Q 001-38356 10.1 August 12, 2022

10.3 Controlled Equity Offering Sales Agreement SM , dated August 12, 2021, by and between VYNE Therapeutics Inc.

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and Iain Stuart.

10-K 001-38356 10.12 March 17, 2022

10.13# Offer Letter, dated as of March 15, 2022, by and between VYNE Pharmaceuticals Inc.

and Tyler Zeronda

10-K 001-38356 10.13 March 17, 2022

10.14 Purchase Agreement, dated as of March 15, 2022, by and between VYNE Therapeutics Inc.

and Lincoln Park Capital Fund, LLC.

8-K 001-38356 10.1 March 15, 2022

10.15 Registration Rights Agreement, dated as of March 15, 2022, by and between VYNE Therapeutics Inc.

and Lincoln Park Capital Funds, LLC.

8-K 001-38356 10.2 March 15, 2022

16.1 Letter from PricewaterhouseCoopers LLP, dated April 6, 2022.

8-K 001-38356 16.1 April 7, 2022

21.1 List of Subsidiaries of VYNE Therapeutics Inc.

23.1 Consent of independent registered public accounting firm.

23.2 Consent of former independent registered public accounting firm.

31.1 Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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** These certifications are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing.

The agreements and other documents filed as exhibits to this Annual Report on Form 10-K are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose.

In particular, any representations and warranties made by us in these agreements or

other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

ITEM 16 - FORM 10-K SUMMARY

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures