**EXHIBIT
      10.3**








SECOND
      AMENDED AND RESTATED


POZEN
      INC. 2000 EQUITY COMPENSATION PLAN





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
      Second Amended and Restated POZEN Inc. 2000 Equity Compensation Plan (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, which
      represents the Fair Market Value (as defined in the Plan) of the underlying
      common stock of the Company on the Date of Grant.  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                                           Shares
      for Which the Option is Exercisable








***[INSERT
      VESTING DATES/SCHEDULE]***











The
      exercisability of the Option is cumulative.  If the foregoing schedule
      would produce fractional shares, the number of Shares as to which the Option
      shall become exercisable shall be rounded down to the nearest whole Share,
      with
      all Shares being exercisable on **[*****insert final
      vesting date from Paragraph 2
      above*****]**.


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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 one-year period after the Grantee ceases to be employed by,
      or
      provide service to, the Company (as defined in the Plan), if the termination
      is
      for any reason, including Disability (as defined in the Plan) or death, but
      other than Cause (as defined in the Plan).





(ii)           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 but while the Option
      otherwise remains exercisable, 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.


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(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 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.


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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.





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.














***[Remainder
      of page intentionally left blank]***




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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:Its:Accepted:[Grantee]





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