EXHIBIT 10.3

 

POZEN INC.

 

2000 EQUITY COMPENSATION PLAN, AS AMENDED AND RESTATED

 

NONQUALIFIED STOCK OPTION GRANT

 

This STOCK OPTION GRANT, dated as of                      (the “Date of Grant”),
is delivered by POZEN Inc. (the “Company”) to                      (the
“Grantee”).

 

RECITALS

 

The POZEN Inc. 2000 Equity Compensation Plan, as amended and restated (the
“Plan”), provides for the grant of options to purchase shares of common stock of
the Company. The Compensation Committee (the “Committee”) of the Board of
Directors has decided to make a stock option grant as an inducement for the
Grantee to promote the best interests of the Company and its stockholders. A
copy of the Plan is attached.

 

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound
hereby, agree as follows:

 

1. Grant of Option. Subject to the terms and conditions set forth in this
Agreement and in the Plan, the Company hereby grants to the Grantee a
nonqualified stock option (the “Option”) to purchase              shares of
common stock of the Company (“Shares”) at an exercise price of $             per
Share. The Option shall become exercisable according to Paragraph 2 below.

 

2. Exercisability of Option. The Option shall become exercisable on the
following dates, if the Grantee is employed by, or providing service to, the
Company (as defined in the Plan) on the applicable date:

 

Date

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Shares for Which the Option is Exercisable

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The exercisability of the Option is cumulative.

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3. Term of Option.

 

(a) The Option shall have a term of ten years from the Date of Grant and shall
terminate at the expiration of that period, unless it is terminated at an
earlier date pursuant to the provisions of this Agreement or the Plan.

 

(b) The Option shall automatically terminate upon the happening of the first of
the following events:

 

(i) The expiration of the 90-day period after the Grantee ceases to be employed
by, or provide service to, the Company, if the termination is for any reason
other than Disability (as defined in the Plan), death or Cause (as defined in
the Plan).

 

(ii) The expiration of the one-year period after the Grantee ceases to be
employed by, or provide service to, the Company on account of the Grantee’s
Disability.

 

(iii) The expiration of the one-year period after the Grantee ceases to be
employed by, or provide service to, the Company, if the Grantee dies while
employed by, or providing service to, the Company or within 90 days after the
Grantee ceases to be so employed or provide such services on account of a
termination described in subparagraph (i) above.

 

(iv) The date on which the Grantee ceases to be employed by, or provide service
to, the Company for Cause. In addition, notwithstanding the prior provisions of
this Paragraph 3, if the Grantee engages in conduct that constitutes Cause after
the Grantee’s employment or service terminates, the Option shall immediately
terminate.

 

Notwithstanding the foregoing, in no event may the Option be exercised after the
date that is ten years from the Date of Grant. Any portion of the Option that is
not exercisable at the time the Grantee ceases to be employed by, or provide
service to, the Company shall immediately terminate.

 

4. Exercise Procedures.

 

(a) Subject to the provisions of Paragraphs 2 and 3 above, the Grantee may
exercise part or all of the exercisable Option by giving the Company written
notice of intent to exercise in the manner provided in this Agreement,
specifying the number of Shares as to which the Option is to be exercised. On
the delivery date, the Grantee shall pay the exercise price (i) in cash, (ii)
with the approval of the Committee, by delivering Shares of the Company which
shall be valued at their fair market value on the date of delivery, (iii)
payment through a broker in accordance with procedures permitted by Regulation T
of the Federal Reserve Board, or (iv) by such other method as the Committee may
approve. The Committee may impose from time to time such limitations as it deems
appropriate on the use of Shares of the Company to exercise the Option.

 

(b) The obligation of the Company to deliver Shares upon exercise of the Option
shall be subject to all applicable laws, rules, and regulations and such
approvals by governmental agencies as may be deemed appropriate by the
Committee, including such actions as Company

 

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counsel shall deem necessary or appropriate to comply with relevant securities
laws and regulations. The Company may require that the Grantee (or other person
exercising the Option after the Grantee’s death) represent that the Grantee is
purchasing Shares for the Grantee’s own account and not with a view to or for
sale in connection with any distribution of the Shares, or such other
representation as the Committee deems appropriate. All obligations of the
Company under this Agreement shall be subject to the rights of the Company as
set forth in the Plan to withhold amounts required to be withheld for any taxes,
if applicable. Subject to Committee approval, the Grantee may elect to satisfy
any income tax withholding obligation of the Company with respect to the Option
by having Shares withheld up to an amount that does not exceed the minimum
applicable withholding tax rate for federal (including FICA), state and local
tax liabilities.

 

5. Change of Control. The provisions of the Plan applicable to a Change of
Control shall apply to the Option, and, in the event of a Change of Control, the
Committee may take such actions as it deems appropriate pursuant to the Plan.

 

6. Restrictions on Exercise. Only the Grantee may exercise the Option during the
Grantee’s lifetime and, after the Grantee’s death, the Option shall be
exercisable (subject to the limitations specified in the Plan) solely by the
legal representatives of the Grantee, or by the person who acquires the right to
exercise the Option by will or by the laws of descent and distribution, to the
extent that the Option is exercisable pursuant to this Agreement.

 

7. Grant Subject to Plan Provisions. This grant is made pursuant to the Plan,
the terms of which are incorporated herein by reference, and in all respects
shall be interpreted in accordance with the Plan. The grant and exercise of the
Option are subject to the provisions of the Plan and to interpretations,
regulations and determinations concerning the Plan established from time to time
by the Committee in accordance with the provisions of the Plan, including, but
not limited to, provisions pertaining to (i) rights and obligations with respect
to withholding taxes, (ii) the registration, qualification or listing of the
Shares, (iii) changes in capitalization of the Company, and (iv) other
requirements of applicable law. The Committee shall have the authority to
interpret and construe the Option pursuant to the terms of the Plan, and its
decisions shall be conclusive as to any questions arising hereunder.

 

8. No Employment or Other Rights. The grant of the Option shall not confer upon
the Grantee any right to be retained by or in the employ or service of the
Company and shall not interfere in any way with the right of the Company to
terminate the Grantee’s employment or service at any time. The right of the
Company to terminate at will the Grantee’s employment or service at any time for
any reason is specifically reserved.

 

9. No Stockholder Rights. Neither the Grantee, nor any person entitled to
exercise the Grantee’s rights in the event of the Grantee’s death, shall have
any of the rights and privileges of a stockholder with respect to the Shares
subject to the Option, until certificates for Shares have been issued upon the
exercise of the Option.

 

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10. Assignment and Transfers. The rights and interests of the Grantee under this
Agreement may not be sold, assigned, encumbered or otherwise transferred except,
in the event of the death of the Grantee, by will or by the laws of descent and
distribution. In the event of any attempt by the Grantee to alienate, assign,
pledge, hypothecate, or otherwise dispose of the Option or any right hereunder,
except as provided for in this Agreement, or in the event of the levy or any
attachment, execution or similar process upon the rights or interests hereby
conferred, the Company may terminate the Option by notice to the Grantee, and
the Option and all rights hereunder shall thereupon become null and void. The
rights and protections of the Company hereunder shall extend to any successors
or assigns of the Company and to the Company’s parents, subsidiaries, and
affiliates. This Agreement may be assigned by the Company without the Grantee’s
consent.

 

11. Applicable Law. The validity, construction, interpretation and effect of
this instrument shall be governed by and construed in accordance with the laws
of the State of Delaware, without giving effect to the conflicts of laws
provisions thereof.

 

12. Notice. Any notice to the Company provided for in this instrument shall be
addressed to the Company in care of the President at 1414 Raleigh Road, Suite
400, Chapel Hill, N.C. 27517, and any notice to the Grantee shall be addressed
to such Grantee at the current address shown on the payroll of the Company, or
to such other address as the Grantee may designate to the Company in writing.
Any notice shall be delivered by hand, sent by telecopy or enclosed in a
properly sealed envelope addressed as stated above, registered and deposited,
postage prepaid, in a post office regularly maintained by the United States
Postal Service.

 

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IN WITNESS WHEREOF, the Company has caused its duly authorized officer to
execute this Agreement, and the Grantee has executed this Agreement, effective
as of the Date of Grant.

 

POZEN INC.

By:

 

 

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Its:

 

 

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Accepted:

 

 

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    [Grantee]

 

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