EXHIBIT 10.1

POZEN INC.
 
EMPLOYEE SEVERANCE PLAN
 
AND
 
SUMMARY PLAN DESCRIPTION
 
JUNE 2015

 

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TABLE OF CONTENTS

 Page
 

I.
INTRODUCTION 
1

 
II.
ELIGIBILITY 
1

 
III.
SEVERANCE BENEFITS 
2

 
IV.
CLAIMS PROCEDURE 
3

 
V.
STATEMENT OF RIGHTS UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974
(“ERISA”) 
4

 
VI.
AMENDMENT AND TERMINATION 
6

 
VII.
EMPLOYMENT RIGHTS 
6

 
VIII.
NONALIENATION OF BENEFITS 
6

 
IX.
GOVERNING LAW 
6

 
X.
GENERAL INFORMATION 
6

 

 
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POZEN INC.
EMPLOYEE SEVERANCE PLAN AND SUMMARY PLAN DESCRIPTION
 
I. INTRODUCTION
 
The Board of Directors of POZEN Inc. hereby adopts the POZEN Inc. Employee
Severance Plan and Summary Plan Description (the “Plan”) effective as of June
19, 2015 (the “Effective Date”) to provide severance benefits to eligible
employees of POZEN Inc. (“POZEN”) whose employment is terminated involuntarily
under certain circumstances.  All benefit determinations under the Plan and
interpretation of Plan provisions will be made by POZEN (or its designee) in its
sole discretion as Plan Administrator.  The Plan is described in further detail
below.
 
II. ELIGIBILITY
 
All employees who were employees of POZEN as of March 31, 2015 and who remained
employees as the Effective Date are eligible to participate in the Plan if his
or her employment with POZEN (or a successor) is terminated not for “Cause,”
after the Effective Date PROVIDED THAT each of the following requirements is
met:

1. The termination of employment is involuntary.  The termination is involuntary
if initiated by POZEN.
 
2. The termination is not due to retirement, good reason, death or disability of
the employee.
 
3. The termination of employment is not for “Cause” (as defined
below).  Employment is terminated for Cause if the termination is due to
misconduct or unsatisfactory performance including, but not limited to, the
following:
 
a. the employee’s conviction of any felony, or conviction of a misdemeanor that
involves moral turpitude, or the entry by the employee of a plea of guilty or
nolo contendere with respect to any of the foregoing;
 
b. the employee’s commission of any act, or failure to act, that involves moral
turpitude, dishonesty, theft, destruction of property, fraud, embezzlement or
unethical business conduct, or that is otherwise injurious to POZEN or any of
its subsidiaries or affiliates, whether financially, reputationally, or
otherwise;
 
c. the employee’s violation of any rule or policy of POZEN or any of its
subsidiaries or affiliates that is injurious or reasonably like to be injurious
to POZEN or any of its subsidiaries or affiliates, whether financially,
reputationally, or otherwise;
 
d. the employee’s act of misconduct relating to his or her employment;
 
e. the employee’s failure or refusal to perform his or her job duties to the
satisfaction of POZEN (other than as a result of incapacity due to physical or
mental injury or illness);
 

 
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f. any violation by the employee of any material provision of any other contract
or agreement between the employee and POZEN (or any of its subsidiaries or
affiliates) and the employee, including but not limited to agreements regarding
confidentiality, or
 
g. the employee’s failure to abide by any directive of POZEN, its board of
directors, or an officer or manager to whom the employee reports.
 
The Plan Administrator will, in its sole discretion, determine if a termination
of employment is for “Cause.”
 
4. The employee has not agreed in writing to waive severance benefits under this
Plan or otherwise payable from POZEN.
 
5. The employee has signed a Confidential Separation Agreement and General
Release of All Claims in a form acceptable to POZEN (“Separation Agreement”),
which is effective within 60 days of his or her termination.  The Separation
Agreement will provide for a full, general release of all claims, known and
unknown, suspected and unsuspected, by the eligible employee, as well as
provisions concerning nondisparagement, confidentiality, return of company
property and nonsolicitation of employees.  In the event of breach, the
Separation Agreement will provide for all legal and equitable remedies as well
as recovery of attorneys’ fees and costs.
 
6. The employee has returned all POZEN property and equipment to POZEN on or
before the last day of employment.
 
A terminated employee must satisfy all of the requirements set forth above in
order to receive severance benefits under the Plan.  Eligibility for severance
benefits under the Plan will be determined by the Plan Administrator upon an
eligible employee’s termination of employment.  The Plan Administrator has full
discretionary power and authority to interpret the provisions of the Plan and
render decisions on eligibility for benefits.  If the Plan Administrator
determines that an eligible employee satisfies all of the eligibility conditions
described above, the employee will receive the severance benefits set forth in
Section III below.  The severance benefits will be paid in accordance with the
terms set forth in the Separation Agreement.
 
III. SEVERANCE BENEFITS
 
A.           Payments and Benefits.  The following severance benefits are
payable under this Plan to an eligible employee:
 
1. Severance Pay.  Severance payments equal to twelve (12) months of employee’s
base salary, payable as follows:
 
a. For those employees not covered by an employment agreement as of the
Effective Date, severance payments will be paid in installments in accordance
with the same, regular payroll schedule applicable to the employee immediately
prior to the employee’s termination date commencing within 60 days after the
employee’s termination date, subject to the execution and non-revocation of the
Separation Agreement.
 

 
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b. For those employees covered by an employment agreement as of the Effective
Date, severance payments will be made in installments, which each installment
being paid on the fifth business day of each month commencing with the second
month following the month in which employee’s termination of employment occurs,
subject to the execution and non-revocation of the Separation Agreement.
 
Notwithstanding any provision of this Plan to the contrary, in no event shall
the timing of the employee’s execution of the Separation Agreement, directly or
indirectly, result in employee designating the calendar year of payment, and if
a payment that is subject to execution of the Separation Agreement could be made
in more than one taxable year, payment shall be made in the later taxable
year.  The severance pay shall be based upon the employee’s base salary in
effect immediately before his/her termination of employment.  The base salary
shall be determined without regard to any overtime, bonuses, fringe benefits,
reimbursements or other irregular payments.
 
2. Bonus Payment.  An amount equal to one hundred percent (100%) of employee’s
target bonus for the bonus year in which the involuntary termination of
employment occurs which amount shall be paid in a lump within 90 days following
the employee’s termination but in no event later than March 15th of the year
following the year of termination.
 
3. Group Health Plan Continuation.  Reimbursement of  the premiums for
continuation of group health insurance coverage for a period of twelve (12)
months (or eighteen (18) months for those employees who are covered by an
employment agreement as of the Effective Date); provided that the employee
timely elects and remains eligible for continuation coverage under the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”), less the amount that
the employee was paying with respect to such benefits prior to termination of
employment.
 
4. Options.  Employee shall have until the earlier of (1) a period of two (2)
years from the date of termination (2) the expiration of the term option (if
shorter) to exercise any options that are vested as of the date of termination.
 
B. Exclusive Severance Benefits.  The severance and benefits payable pursuant
this Plan shall be in lieu of and not in addition to any severance pay and
benefits pursuant to any written agreement between Pozen and an eligible
employee.  For avoidance of doubt, this Plan does not apply to any rights
regarding a good reason, death or disability termination (as such terms are
defined in the applicable employment agreement) by an employee covered by an
employment agreement.
 
C. Additional Benefits. POZEN reserves the right to pay benefits in addition to
those required by the Plan based on special circumstances.  Each exception will
be considered unique and not precedent-setting.  Payment of additional amounts
will be subject to such terms and conditions as POZEN may determine.  All such
determinations shall be made by POZEN in its sole and absolute discretion.
 

 
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D. Successors. POZEN will require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) of all or substantially all of
the business and/or assets of POZEN to expressly assume and agree to perform
POZEN’s obligations under the Plan with respect to eligible employees as defined
in the Plan.
 
E. Compliance with Internal Revenue Code Section 409A.  It is the intent that
payments and benefits under this Plan comply with, or be exempt from, Section
409A of the Internal Revenue Code of 1986, as amended ("Code Section 409A"),
and, accordingly, to the maximum extent permitted, this Plan shall be
interpreted to be in compliance therewith.  POZEN may make any modifications in
its sole discretion that it determines in good faith are necessary to comply
with, or be exempt from, Code Section 409A; provided, however that any such
modification shall, to the maximum extent reasonably possible, maintain the
original intent and economic benefit to parties of the applicable provision
without violating the provisions of Code Section 409A.  A termination of
employment shall not be deemed to have occurred for purposes of any provision of
this Agreement providing for the payment of any amounts or benefits that are
considered nonqualified deferred compensation under Code Section 409A upon or
following a termination of employment unless such termination is also a
"separation from service" within the meaning of Code Section 409A and, for
purposes of any such provision of this Agreement, references to "termination of
employment" or like terms shall mean "separation from service.  For purposes of
Code Section 409A, except with respect to those employees covered by an
employment agreement as of the Effective Date, the employee’s right to receive
any installment payments pursuant to this Plan shall be treated as a right to
receive a series of separate and distinct payments.  With respect to any
reimbursement of expenses of, or any provision of in-kind benefits to, as
specified under this Plan, such reimbursement of expenses or provision of
in-kind benefits shall be subject to the following conditions: (1) the expenses
eligible for reimbursement or the amount of in-kind benefits provided in one
taxable year shall not affect the expenses eligible for reimbursement or the
amount of in-kind benefits provided in any other taxable year, except for any
medical reimbursement arrangement providing for the reimbursement of expenses
referred to in Section 105(b) of the Code; (2) the reimbursement of an eligible
expense shall be made no later than the end of the year after the year in which
such expense was incurred; and (3) the right to reimbursement or in-kind
benefits shall not be subject to liquidation or exchange for another
benefit.  In the event of a severance payment under the Plan to an eligible
employee who is a “specified employee” as that term is defined in Code
Section 409A(2)(b)(i), no severance payment subject to Section 409A shall be
paid to such employee before the first business date that occurs six (6) months
after the date of employee’s termination of employment, and in such event the
initial payment shall include a catch-up amount covering amounts that would have
otherwise been paid during the such six-month period following the termination
date.  Nothing herein shall be construed as having modified the time and form of
payment of any amounts or payments of “deferred compensation” (as defined under
Treas. Reg. § 1.409A-1(b)(1), after giving effect to the exemptions in Treas.
Reg. §§ 1.409A-1(b)(3) through (b)(12)) that were otherwise payable pursuant to
the terms of any agreement between Company and the employee.
 
F. No Separate Fund.  All severance benefits payable under the Plan are payable
from POZEN’s general assets.  There is no separate trust or fund established for
the payment of severance benefits under the Plan.  All amounts shall be less
applicable federal and state withholding taxes, including any other authorized
deductions.
 

 
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IV. CLAIMS PROCEDURE
 
Severance benefits under this Plan will automatically be provided to employees
who qualify for such benefits.
 
An employee who believes that he or she is entitled to severance benefits under
this Plan who has not been provided should file a claim with the Plan
Administrator.  The claim must be in writing.
 
If the claim is denied, written notice (the “Notice”) of the denial will be
provided to the employee within 60 days of initial receipt of the claim.  Such
notice will include (i) an explanation of the factors (including specific Plan
provisions) on which the denial is based; (ii) what, if any, additional
information is needed to support the claim and an explanation of why such
material is necessary; and (iii) an explanation of the claim review procedure,
including applicable time limits and a statement of the employee’s right to
bring a civil action under ERISA following an adverse benefit determination upon
review.  Further review of the claim may be obtained by filing a written request
for review within 60 days of the mailing of the Notice.  If the employee does
not respond to the Notice within 60 days of mailing, there shall be no further
right of review.
 
In the event that the Notice is insufficient to satisfy the claimant, the
claimant or his/her duly authorized representative, shall submit to the Plan
Administrator, within 60 days of the mailing of the Notice, a written
notification of appeal of the claim denial.  The notification of appeal of the
claim denial shall permit the claimant or his/her duly authorized representative
to utilize the following formal claim review procedures:
 
(a) to review pertinent documents (the claimant will be provided, upon request
and free of charge, copies of all information relevant to the claim); and
 
(b) to submit issues and comments in writing to which the Plan shall respond
(material shall be considered without regard to whether it was submitted or
considered in the initial benefit claim).
 
The Plan Administrator shall furnish a written decision on formal review not
later than 60 days after receipt of the notification of appeal, unless special
circumstances require an extension of the time for processing the appeal.  If
special circumstances requiring an extension are present, the claimant will be
notified of the extension within the first 60-day period.  The notice will
indicate the reason for the extension and the date by which a final decision is
expected.  In no event, however, shall the Plan Administrator communicate the
decision on the claim later than 120 days after a request for a formal
review.  The decision on formal review shall be in writing and shall include
specific reasons for the decision and shall be written in a manner calculated to
be understood by the claimant and contain specific reference to the pertinent
Plan provisions on which the decision is based.  The decision shall also include
a statement explaining that the claimant may request free of charge copies of
all documents relevant to the claim and a statement explaining the claimant’s
right to bring an action under ERISA.
 

 
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V. STATEMENT OF RIGHTS UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974
(“ERISA”)
 
As participants in the Plan, employees are entitled to certain rights and
protections under the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”).  ERISA provides that all participants in the Plan shall be
entitled to:
 
1.  
Receive information about Plan and severance benefits.

 
2.  
Examine, without charge, at POZEN’s offices and at other locations such as work
sites, all documents governing the Plan and a copy of the latest annual report
(Form 5500 series) filed by the Plan with the U.S. Department of Labor and
available at the Public Disclosure Room of the Employee Benefits Security
Administration.

 
3.  
Obtain copies of documents governing the operation of the Plan and the latest
annual report (Form 5500 series) and updated Summary Plan Description upon
written request to POZEN.  POZEN will charge reasonable costs for the copies.

 
In addition to creating rights for participants in the Plan, ERISA imposes
obligations upon the persons who are responsible for the operation of the
Plan.  The persons who operate the Plan, called “fiduciaries” of the Plan, have
a duty to do so prudently and in the interest of you and other Plan participants
and beneficiaries.  No one, including POZEN, the Plan Administrator, or any
other person, may fire an employee or discriminate against an employee in any
way to prevent that employee from obtaining a benefit from the Plan or
exercising his or her rights under ERISA.
 
If an employee’s claim for a benefit is denied or ignored in whole or in part,
the employee must receive a written explanation of the reason for the
denial.  The employee has the right to have the Plan review and reconsider his
or her claim.  Employees have the right to obtain copies of all documents
relating to the decision without charge and to appeal any denial, all within
certain time schedules.
 
Under ERISA, there are steps employees can take to enforce the above
rights.  For instance, if an employee requests a copy of Plan documents or the
latest annual report from the Plan and does not receive the requested documents
within 30 days, the employee may file suit in Federal court.  In such a case,
the court may require the Plan Administrator to provide the materials and pay
the employee up to $110 a day until the employee receives the materials, unless
the materials were not sent because of reasons beyond the control of the Plan
Administrator.  If an employee has a claim for benefits which is denied or
ignored, in whole or in part, the employee may file suit in a Federal or a state
court after he or she has exhausted the Plan’s benefit claims procedure
(described above).  The court will decide who should pay court costs and legal
fees.  If an employee is discriminated against for asserting rights, the
employee may seek assistance from the Department of Labor or the employee may
file suit in a Federal court.  The court will decide who should pay court costs
and fees.  If the employee is successful in a lawsuit, the court may order the
person the employee has sued to pay these costs and fees.  If an employee loses,
the court may order the employee to pay these costs and fees, for example, if it
finds that the employee’s claim is frivolous.
 

 
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Any questions about the Plan should be directed to the Plan Administrator.  For
any questions about this statement, or about rights under ERISA, or if
assistance is needed in obtaining documents from the Plan Administrator,
employees should contact the nearest Area Office of the Employee Benefits
Security Administration, Department of Labor, listed in the telephone directory
or the Division of Technical Assistance and Inquiries, Employee Benefits
Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W.,
Washington, D.C. 20210.  Employees may also obtain certain publications about
their rights and responsibilities under ERISA by calling the publications
hotline of the Employee Benefits Security Administration.
 
VI. AMENDMENT AND TERMINATION
 
POZEN, by action of its Board of Directors or by action of any committee
appointed by the Board to administer the Plan, reserves the right to terminate
or amend the Plan at any time and in any manner in its sole discretion.  No
employee shall have any vested interest in severance benefits payable under this
Plan prior to satisfying all of the terms and conditions for payment of benefits
under this Plan.
 
VII. EMPLOYMENT RIGHTS
 
Nothing in this Plan shall have any effect on POZEN’s right to terminate an
employee, with or without Cause, at any time (subject to the terms of any
written employment contract between the employee and POZEN).  The payment of
severance benefits under this Plan does not extend an employee’s term of
employment.
 
VIII. NONALIENATION OF BENEFITS
 
No benefit under the Plan may be assigned, transferred, pledged as security for
indebtedness or otherwise encumbered by any eligible employee or subject to any
legal process for the payment of any claim against an eligible employee.
 
IX. GOVERNING LAW
 
This Plan shall be governed by and construed in accordance with the laws of the
State of North Carolina to the extent such laws are not preempted by ERISA.
 

 
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X. GENERAL INFORMATION
 
Employer and Plan Administrator Name:
 
POZEN, Inc.
1414 Raleigh Rd
 Suite 400
Chapel Hill, NC 27517
 
Employer Identification Number:
62-1657552
 
Plan Number:
503
 
Type of Plan:
The Plan is an unfunded welfare benefit plan providing severance benefits
 
Agent For Service of Process:
John Barnhardt, VP Finance and Administration
 
Plan Year:
January 1 – December 31

 

 
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