Document:

FORM OF INCENTIVE COMPENSATION PLAN

 EXHIBIT 10.1 
  
 NEW RIVER PHARMACEUTICALS INC. 
  
 INCENTIVE COMPENSATION PLAN 
  

 Table of Contents 
  

					
	 ARTICLE I DEFINITIONS
	  	1
			
	 1.01
	  	 Administrator
	  	1
	 1.02
	  	 Affiliate and Associate
	  	1
	 1.03
	  	 Agreement
	  	1
	 1.04
	  	 Beneficial Owner
	  	1
	 1.05
	  	 Board
	  	1
	 1.06
	  	 Change in Control
	  	1
	 1.07
	  	 Code
	  	2
	 1.08
	  	 Committee
	  	2
	 1.09
	  	 Common Stock
	  	2
	 1.10
	  	 Company
	  	2
	 1.11
	  	 Continuing Director
	  	2
	 1.12
	  	 Control Change Date
	  	2
	 1.13
	  	 Corresponding SAR
	  	2
	 1.14
	  	 Exchange Act
	  	3
	 1.15
	  	 Fair Market Value
	  	3
	 1.16
	  	 Incentive Award
	  	3
	 1.17
	  	 Option
	  	3
	 1.18
	  	 Participant
	  	3
	 1.19
	  	 Performance Criteria
	  	3
	 1.20
	  	 Person
	  	4
	 1.21
	  	 Plan
	  	4
	 1.22
	  	 Related Entity
	  	4
	 1.23
	  	 SAR
	  	4
	 1.24
	  	 Stock Award
	  	4
	 1.25
	  	 Subsidiary
	  	4
		
	 ARTICLE II PURPOSES
	  	5
		
	 ARTICLE III ADMINISTRATION
	  	6
		
	 ARTICLE IV ELIGIBILITY
	  	7
		
	 ARTICLE V STOCK SUBJECT TO PLAN
	  	8
			
	 5.01
	  	 Shares Issued
	  	8
	 5.02
	  	 Aggregate Limit
	  	8
	 5.03
	  	 Reallocation of Shares
	  	8
		
	 ARTICLE VI OPTIONS
	  	9
			
	 6.01
	  	 Award
	  	9
	 6.02
	  	 Option Price
	  	9
	 6.03
	  	 Maximum Option Period
	  	9

  

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	 6.04
	  	 Nontransferability
	  	9
	 6.05
	  	 Transferable Options
	  	9
	 6.06
	  	 Employee Status
	  	10
	 6.07
	  	 Exercise
	  	10
	 6.08
	  	 Payment
	  	10
	 6.09
	  	 Change in Control
	  	10
	 6.10
	  	 Shareholder Rights
	  	11
	 6.11
	  	 Disposition of Stock
	  	11
		
	 ARTICLE VII SARS
	  	12
			
	 7.01
	  	 Award
	  	12
	 7.02
	  	 Maximum SAR Period
	  	12
	 7.03
	  	 Nontransferability
	  	12
	 7.04
	  	 Transferable SARs
	  	12
	 7.05
	  	 Exercise
	  	13
	 7.06
	  	 Change in Control
	  	13
	 7.07
	  	 Employee Status
	  	13
	 7.08
	  	 Settlement
	  	13
	 7.09
	  	 Shareholder Rights
	  	13
		
	 ARTICLE VIII STOCK AWARDS
	  	14
			
	 8.01
	  	 Award
	  	14
	 8.02
	  	 Vesting
	  	14
	 8.03
	  	 Employee Status
	  	14
	 8.04
	  	 Change in Control
	  	14
	 8.05
	  	 Shareholder Rights
	  	14
		
	 ARTICLE IX INCENTIVE AWARDS
	  	15
			
	 9.01
	  	 Award
	  	15
	 9.02
	  	 Terms and Conditions
	  	15
	 9.03
	  	 Nontransferability
	  	15
	 9.04
	  	 Transferable Incentive Awards
	  	15
	 9.05
	  	 Employee Status
	  	15
	 9.06
	  	 Change in Control
	  	16
	 9.07
	  	 Shareholder Rights
	  	16
		
	 ARTICLE X ADJUSTMENT UPON CHANGE IN COMMON STOCK
	  	17
		
	 ARTICLE XI COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
	  	18
		
	 ARTICLE XII GENERAL PROVISIONS
	  	19
			
	 12.01
	  	 Effect on Employment and Service
	  	19
	 12.02
	  	 Unfunded Plan
	  	19

  

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	 12.03
	  	 Rules of Construction
	  	19
	 12.04
	  	 Tax Withholding
	  	19
		
	 ARTICLE XIII AMENDMENT
	  	20
		
	 ARTICLE XIV DURATION OF PLAN
	  	21
		
	 ARTICLE XV EFFECTIVE DATE OF PLAN
	  	22
		
	 ARTICLE XVI ADOPTION OF PLAN
	  	23

  

 iii 

 ARTICLE I 
 DEFINITIONS 
  

	1.01	Administrator 

  
 Administrator means the Committee and any delegate of the Committee that is appointed in accordance with Article III. 
  

	1.02	Affiliate and Associate 

  
 Affiliate and Associate shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended and as in effect on the date of this Agreement (the “Exchange Act”). 
  

	1.03	Agreement 

  
 Agreement means a written agreement (including any amendment or supplement thereto) between the Company and a Participant specifying the terms and
conditions of a Stock Award, Incentive Award, Option or SAR granted to such Participant. 
  

	1.04	Beneficial Owner 

  
 Beneficial Owner has the meaning set forth in Rule 13d-3 under the Exchange Act, except that a Person shall not be deemed to be the Beneficial Owner of
any securities the holding of which is properly disclosed on a Form 13-G. 
  

	1.05	Board 

  
 Board means the Board of Directors of the Company. 
  

	1.06	Change in Control 

  
 Change in Control means the occurrence of any of the following events: 
  
 (a) any Person or “group,” as defined in section 13(d)(3) of the Securities Exchange Act of 1934 (excluding Randal
J. Kirk, members of his family and any Affiliate of any of them) becomes, directly or indirectly, the Beneficial Owner of 30% or more of the combined voting power of the then outstanding Company securities that are entitled to vote generally for the
election of the Company’s directors (the “Voting Securities”) (other than as a result of an issuance of securities by the Company approved by Continuing Directors, or open market purchases approved by Continuing Directors at the time
the purchases are made); or 
  
 (b) as the direct or indirect
result of, or in connection with, a reorganization, merger, share exchange or consolidation (a “Business Combination”), a contested election of directors, or any combination of these transactions, Continuing Directors cease to constitute a
majority of the Board, or any successor’s board of directors, within two years of the last of such transactions; or 
  

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 (c) the shareholders of the Company approve a Business Combination, unless immediately following such
Business Combination, (a) all or substantially all of the Persons who were the Beneficial Owners of the Voting Securities outstanding immediately prior to such Business Combination beneficially own more than 70% of the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of directors of the Company resulting from such Business Combination (including, without limitation, a company which as a result of such transaction owns the company
through one or more Subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Voting Securities, (b) no Person (excluding Randal J. Kirk, members of his family and any Affiliate of
any of them) beneficially owns 30% or more of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the Company resulting from such Business Combination and (c) at least a
majority of the members of the board of directors of the Company resulting from such Business Combination are Continuing Directors. 
  

	1.07	Code 

  
 Code means the Internal Revenue Code of 1986, and any amendments thereto. 
  

	1.08	Committee 

  
 Committee means the Compensation Committee of the Board. 
  

	1.09	Common Stock 

  
 Common Stock means the common stock of the Company. 
  

	1.10	Company 

  
 Company means New River Pharmaceuticals Inc. 
  

	1.11	Continuing Director 

  
 Continuing Director means any current member of the Board, or whose subsequent nomination for election or election to the Board was recommended or
approved by a majority of the Continuing Directors. 
  

	1.12	Control Change Date 

  
 Control Change Date means the date on which a Change in Control occurs. If a Change in Control occurs on account of a series of transactions, the Control
Change Date is the date of the last of such transactions. 
  

	1.13	Corresponding SAR 

  
 Corresponding SAR means an SAR that is granted in relation to a particular Option and that can be exercised only upon the surrender to the Company,
unexercised, of that portion of the Option to which the SAR relates. 
  

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	1.14	Exchange Act 

  
 Exchange Act means the Securities Exchange Act of 1934, as amended from time to time. 
  

	1.15	Fair Market Value 

  
 Fair Market Value means, on any given date, the reported “closing” price of a share of Common Stock in the New York Stock over-the-counter
market as reported by the National Association of Securities Dealers, Inc. or if the Common Stock was not so traded on such day, then on the next preceding day that the Common Stock was so traded. 
  

	1.16	Incentive Award 

  
 Incentive Award means an award which, subject to such terms and conditions as may be prescribed by the Administrator, entitles the Participant to receive
a payment, in cash or Common Stock or a combination of cash and Common Stock, from the Company or a Related Entity. 
  

	1.17	Option 

  
 Option means a stock option that entitles the holder to purchase from the Company a stated number of shares of Common Stock at the price set forth in an
Agreement. 
  

	1.18	Participant 

  
 Participant means an employee of the Company or a Related Entity or an individual who provides services to the Company or a Related Entity, including a
member of the Board or the board of directors of a Related Entity, who satisfies the requirements of Article IV and is selected by the Administrator to receive a Stock Award, an Incentive Award, an Option, an SAR, or a combination thereof.

  

	1.19	Performance Criteria 

  
 Performance Criteria means one or more of (a) cash flow and/or free cash flow (before or after dividends), (b) earnings per share (including earnings
before interest, taxes, depreciation and amortization) (diluted and basic earnings per share), (c) the price of Common Stock, (d) return on equity, (e) total shareholder return, (f) return on capital (including return on total capital or return on
invested capital), (g) return on assets or net assets, (h) market capitalization, (i) total enterprise value (market capitalization plus debt), (j) economic value added, (k) debt leverage (debt to capital), (l) revenue, (m) income or net income, (n)
operating income, (o) operating profit or net operating profit, (p) operating margin or profit margin, (q) return on operating revenue, (r) cash from operations, (s) operating ratio, (t) commodity or operating revenue, (u) market share, (v)
commencing or completing clinical or other trials, (w) completing a specified filing with the United States Food and Drug Administration, (x) receiving marketing approval of the United States Food and Drug Administration, (y) entering into an
agreement with a research organization or trial site, (z) making specified quantities of a product or product 

  

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candidate, (aa) sales volume or sales growth for one or more products and (bb) filing for or receiving a patent. 
  

	1.20	Person 

  
 Person has the meaning set forth in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) of the Exchange Act except that
such term does not include (a) the Company, its Affiliates or any Related Entity, (b) a trustee or other fiduciary holding securities under an employee benefit plan maintained by the Company or any Related Entity, (c) any underwriter temporarily
holding securities pursuant to any offering of such securities or (d) a company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock in the Company. 
  

	1.21	Plan 

  
 Plan means the New River Pharmaceuticals Inc. Incentive Compensation Plan. 
  

	1.22	Related Entity 

  
 Related Entity means any entity that directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control
with, the Company. 
  

	1.23	SAR 

  
 SAR means a stock appreciation right that entitles the holder to receive, with respect to each share of Common Stock encompassed by the exercise of such
SAR, the lesser of (a) the excess, if any, of the Fair Market Value at the time of exercise over the option price of the related Option or (b) the Fair Market Value on the date of grant. References to “SARs” include both Corresponding SARs
and SARS granted independently of Options, unless the context requires otherwise. 
  

	1.24	Stock Award 

  
 Stock Award means Common Stock awarded to a Participant under Article VIII. 
  

	1.25	Subsidiary 

  
 Subsidiary means, with reference to any Person, any company or other entity of which an amount of voting securities sufficient to elect a majority of the
directors or Persons having similar authority of such company or other entity is beneficially owned, directly or indirectly, by such Person, or otherwise controlled by such Person. 
  

 4 

 ARTICLE II 
 PURPOSES 
  
 The Plan is
intended to assist the Company and Related Entities in recruiting and retaining individuals with ability and initiative by enabling such persons to participate in the future success of the Company and the Related Entities and to associate their
interests with those of the Company and its shareholders. The Plan is intended to permit the grant of both Options qualifying under Code section 422 (“incentive stock options”) and Options not so qualifying, and the grant of SARs, Stock
Awards or Incentive Awards. No Option that is intended to be an incentive stock option shall be invalid for failure to qualify as an incentive stock option. The proceeds received by the Company from the sale of Common Stock pursuant to this Plan
shall be used for general corporate purposes. 
  
 The Plan is an
amendment and restatement of the New River Pharmaceuticals Inc. Stock Option Plan (the “Prior Option Plan”). The Plan supersedes the Lotus Biochemical Corporation 2000 Stock Appreciation Rights Plan (the “Prior SAR Plan”). No
additional options will be granted under the Prior Option Plan and no additional awards will be made under the Prior SAR Plan after the Plan is approved by shareholders in accordance with Article XV. Shares of Common Stock issuable upon the exercise
of options granted under the Prior Option Plan and any shares issuable in connection with the exercise of awards granted under the Prior SAR Plan on and after that date shall be satisfied by the issuance of shares of Common Stock authorized for
issuance under the Plan. Options granted under the Prior Option Plan and awards granted under the Prior SAR Plan otherwise shall remain subject to the terms of those plans, notwithstanding the adoption and approval of the Plan. 
  

 5 

 ARTICLE III 
 ADMINISTRATION 
  
 The Plan
shall be administered by the Administrator. The Administrator shall have authority to grant Stock Awards, Incentive Awards, Options and SARs upon such terms (not inconsistent with the provisions of this Plan), as the Administrator may consider
appropriate. Such terms may include conditions (in addition to those contained in this Plan) on the exercisability of all or any part of an Option or SAR or on the transferability or forfeitability of a Stock Award or an Incentive Award, including
by way of example and not of limitation, requirements that the Participant complete a specified period of employment or service with the Company or a Related Entity, requirements that the Company achieve a specified level of financial performance or
that the Company achieve a specified level of financial return. Notwithstanding any such conditions, the Administrator may, in its discretion, accelerate the time at which any Option or SAR may be exercised, or the time at which a Stock Award may
become transferable or nonforfeitable or both, or the time at which an Incentive Award may be settled. In addition, the Administrator shall have complete authority to interpret all provisions of this Plan; to prescribe the form of Agreements; to
adopt, amend, and rescind rules and regulations pertaining to the administration of the Plan; and to make all other determinations necessary or advisable for the administration of this Plan. The express grant in the Plan of any specific power to the
Administrator shall not be construed as limiting any power or authority of the Administrator. Any decision made, or action taken, by the Administrator in connection with the administration of this Plan shall be final and conclusive. Neither the
Administrator nor any member of the Committee shall be liable for any act done in good faith with respect to this Plan or any Agreement, Option, SAR, Stock Award or Incentive Award. All expenses of administering this Plan shall be borne by the
Company, a Related Entity or a combination thereof. 
  
 The
Committee, in its discretion, may delegate to one or more officers of the Company all or part of the Committee’s authority and duties with respect to grants and awards to individuals who are not subject to the reporting and other provisions of
Section 16 of the Exchange Act. The Committee may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Committee’s delegate or delegates that were consistent with the terms of the
Plan. 
  

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 ARTICLE IV 
 ELIGIBILITY 
  
 Any
employee of the Company or any Related Entity (including a company that becomes a Related Entity after the adoption of this Plan) and any individual who provides services to the Company or a Related Entity (including a company that becomes a Related
Entity after the adoption of this Plan), including a member of the Board of the board of directors of such a Related Entity, is eligible to participate in this Plan if the Administrator, in its sole discretion, determines that such person has
contributed or can be expected to contribute to the profits or growth of the Company or a Related Entity. 
  

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 ARTICLE V 
 STOCK SUBJECT TO PLAN 
  

	5.01	Shares Issued 

  
 Upon the award of shares of Common Stock pursuant to a Stock Award or an Incentive Award, the Company may issue shares of Common Stock from its authorized
but unissued Common Stock. Upon the exercise of any Option or SAR (including an option or stock appreciation right granted under the Prior Option Plan or Prior SAR Plan that is exercised after the Plan is approved by shareholders in accordance with
Article XV), the Company may deliver to the Participant (or the Participant’s broker if the Participant so directs), shares of Common Stock from its authorized but unissued Common Stock. 
  

	5.02	Aggregate Limit 

  
 The maximum aggregate number of shares of Common Stock that may be issued under this Plan, pursuant to the exercise of SARs and Options (including options
and stock appreciation rights granted under the Prior Option Plan or Prior SAR Plan that are exercised after the Plan is approved by shareholders in accordance with Article XV) and the grant of Stock Awards and Incentive Awards, is 1,162,000 shares.
The maximum aggregate number of shares that may be issued under this Plan as Stock Awards is 810,000 shares. The maximum aggregate number of shares that may be issued under this Plan and the maximum number of shares that may be issued as Stock
Awards shall be subject to adjustment as provided in Article X. 
  

	5.03	Reallocation of Shares 

  
 If an Option is terminated, in whole or in part, for any reason other than its exercise or the exercise of a related Corresponding SAR, the number of
shares of Common Stock allocated to the Option or portion thereof may be reallocated to other Options, SARs, Incentive Awards and Stock Awards to be granted under this Plan. If an SAR is terminated, in whole or in part, for any reason other than its
exercise or the exercise of a related Option, the number of shares of Common Stock allocated to the SAR or portion thereof may be reallocated to other Options, SARs, Incentive Awards and Stock Awards to be granted under this Plan. If a Stock Award
is forfeited or terminated, in whole or in part for any reason the number of shares of Common Stock allocated to the Stock Award or portion thereof may be reallocated to other Options, SARs, Incentive Awards and Stock Awards to be granted under this
Plan. If an Incentive Award is forfeited or terminated, in whole or in part for any reason, the number of shares of Common Stock allocated to the Incentive Award or portion thereof may be reallocated to other Options, SARs, Incentive Awards and
Stock Awards to be granted under this Plan. 
  

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 ARTICLE VI 
 OPTIONS 
  

	6.01	Award 

  
 In accordance with the provisions of Article IV, the Administrator will designate each individual to whom an Option is to be granted and will specify the
number of shares of Common Stock covered by each such award; provided, however that no Participant may be granted Options in any calendar year covering more than 100,000 shares of Common Stock. 
  

	6.02	Option Price 

  
 The price per share for Common Stock purchased on the exercise of an Option shall be determined by the Administrator on the date of grant, but shall not
be less than the Fair Market Value on the date the Option is granted. Except for an adjustment authorized under Article XI, the Option price may not be reduced (by amendment or cancellation of the Option or otherwise) after the date of grant unless
such reduction is approved by shareholders in accordance with Article XIII. 
  

	6.03	Maximum Option Period 

  
 The maximum period in which an Option may be exercised shall be determined by the Administrator on the date the Option is granted but in the case of an
incentive stock option cannot be more than ten years from the date such Option was granted. The terms of any Option that is an incentive stock option may provide that it has a term that is less than such maximum period. 
  

	6.04	Nontransferability 

  
 Except as provided in Section 6.05, each Option granted under this Plan shall be nontransferable except by will or by the laws of descent and
distribution. In the event of any transfer of an Option (by the Participant or his transferee), the Option and any Corresponding SAR that relates to such Option must be transferred to the same person or persons or entity or entities. Except as
provided in Section 6.05, during the lifetime of the Participant to whom the Option is granted, the Option may be exercised only by the Participant. No right or interest of a Participant in any Option shall be liable for, or subject to, any lien,
obligation, or liability of such Participant. 
  

	6.05	Transferable Options 

  
 Section 6.04 to the contrary notwithstanding, if the Agreement provides, an Option that is not an incentive stock option may be transferred by a
Participant to the Participant’s children, grandchildren, spouse, one or more trusts for the benefit of such family members or a partnership in which such family members are the only partners, on such terms and conditions as may be permitted
under Securities Exchange Commission Rule 16b-3 as in effect from time to time. The holder of an Option transferred pursuant to this section shall be bound by the same terms and conditions that governed the Option during the period that it was held
by the Participant; 

  

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provided, however, that such transferee may not transfer the Option except by will or the laws of descent and distribution. In the event of any transfer of
an Option (by the Participant or his transferee), the Option and any Corresponding SAR that relates to such Option must be transferred to the same person or persons or entity or entities. 
  

	6.06	Employee Status 

  
 For purposes of determining the applicability of Code section 422 (relating to incentive stock options), or if the terms of any Option provide that it may
be exercised only during employment or continued service or within a specified period of time after termination of employment or service, the Administrator may decide to what extent leaves of absence for governmental or military service, illness,
temporary disability, or other reasons shall not be deemed interruptions of continuous employment or service. 
  

	6.07	Exercise 

  
 Subject to the provisions of this Plan and the applicable Agreement, an Option may be exercised in whole at any time or in part from time to time at such
times and in compliance with such requirements as the Administrator shall determine; provided, however, that incentive stock options (granted under the Plan and all plans of the Company and its Related Entities) may not be first exercisable in a
calendar year for stock having a Fair Market Value (determined as of the date an Option is granted) exceeding the limit prescribed by Code section 422(d). An Option granted under this Plan may be exercised with respect to any number of whole shares
less than the full number for which the Option could be exercised. A partial exercise of an Option shall not affect the right to exercise the Option from time to time in accordance with this Plan and the applicable Agreement with respect to the
remaining shares subject to the Option. The exercise of an Option shall result in the termination of any Corresponding SAR that is related to the Option to the extent of the number of shares with respect to which the Option is exercised. 

 

	6.08	Payment 

  
 Unless otherwise provided by the Agreement, payment of the Option price shall be made in cash or a cash equivalent acceptable to the Administrator.
Subject to rules established by the Administrator, payment of all or part of the Option price may be made with shares of Common Stock which have been owned by the Participant for at least six months and which have not been used for another Option
exercise during the prior six months. If Common Stock is used to pay all or part of the Option price, the sum of the cash and cash equivalent and the Fair Market Value (determined as of the day preceding the date of exercise) of the shares
surrendered must not be less than the Option price of the shares for which the Option is being exercised. 
  

	6.09	Change in Control 

  
 Section 6.07 to the contrary notwithstanding, each outstanding Option shall be fully exercisable on and after a Control Change Date in accordance with the
terms of the applicable Agreement. 
  

 10 

	6.10	Shareholder Rights 

  
 No Participant shall have any rights as a shareholder with respect to shares subject to his Option until the date of exercise of such Option. 

 

	6.11	Disposition of Stock 

  
 A Participant shall notify the Company of any sale or other disposition of Common Stock acquired pursuant to an Option that was an incentive stock option
if such sale or disposition occurs (a) within two years of the grant of an Option or (b) within one year of the issuance of the Common Stock to the Participant. Such notice shall be in writing and directed to the Secretary of the Company.

  

 11 

 ARTICLE VII 
 SARS 
  

	7.01	Award 

  
 In accordance with the provisions of Article IV, the Administrator will designate each individual to whom SARs are to be granted and will specify the
number of shares covered by each such award; provided, however, no Participant may be granted SARs in any calendar year covering more than 100,000 shares of Common Stock. For purposes of the foregoing limit, an Option and a Corresponding SAR that
relates to the Option shall be treated as a single award. In addition, no Participant may be granted Corresponding SARs (under all incentive stock option plans of the Company and its Affiliates) that are related to incentive stock options which are
first exercisable in any calendar year for stock having an aggregate Fair Market Value (determined as of the date the related Option is granted) that exceeds the limit prescribed by Code section 422(d). 
  

	7.02	Maximum SAR Period 

  
 The period in which an SAR may be exercised shall be determined by the Administrator on the date the SAR is granted but in the case of a Corresponding SAR
the period cannot be longer than the term of the related Option. 
  

	7.03	Nontransferability 

  
 Except as provided in Section 7.04, each SAR granted under this Plan shall be nontransferable except by will or by the laws of descent and distribution.
In the event of any such transfer, a Corresponding SAR and the related Option must be transferred to the same person or persons or entity or entities. Except as provided in Section 7.04, during the lifetime of the Participant to whom the SAR is
granted, the SAR may be exercised only by the Participant. No right or interest of a Participant in any SAR shall be liable for, or subject to, any lien, obligation, or liability of such Participant. 
  

	7.04	Transferable SARs 

  
 Section 7.03 to the contrary notwithstanding, if the Agreement provides, an SAR, other than a Corresponding SAR that is related to an incentive stock
option, may be transferred by a Participant to the Participant’s children, grandchildren, spouse, one or more trusts for the benefit of such family members or a partnership in which such family members are the only partners, on such terms and
conditions as may be permitted under Securities Exchange Commission Rule 16b-3 as in effect from time to time. The holder of an SAR transferred pursuant to this section shall be bound by the same terms and conditions that governed the SAR during the
period that it was held by the Participant; provided, however, that such transferee may not transfer the SAR except by will or the laws of descent and distribution. In the event of any transfer of a Corresponding SAR (by the Participant or his
transferee), the Corresponding SAR and the related Option must be transferred to the same person or persons or entity or entities. 
  

 12 

	7.05	Exercise 

  
 Subject to the provisions of this Plan and the applicable Agreement, an SAR may be exercised in whole at any time or in part from time to time at such
times and in compliance with such requirements as the Administrator shall determine; provided, however, that a Corresponding SAR may be exercised only to the extent that the related Option may be exercised and provided further that a Corresponding
SAR that is related to an incentive stock option may be exercised only when the Fair Market Value exceeds the option price of the related Option. An SAR granted under this Plan may be exercised with respect to any number of whole shares less than
the full number for which the SAR could be exercised. A partial exercise of an SAR shall not affect the right to exercise the SAR from time to time in accordance with this Plan and the applicable Agreement with respect to the remaining shares
subject to the SAR. The exercise of a Corresponding SAR shall result in the termination of the related Option to the extent of the number of shares with respect to which the Corresponding SAR is exercised. 
  

	7.06	Change in Control 

  
 Section 7.05 to the contrary notwithstanding, each outstanding SAR shall be fully exercisable on and after a Control Change Date in accordance with the
applicable Agreement. 
  

	7.07	Employee Status 

  
 If the terms of any SAR provide that it may be exercised only during employment or continued service or within a specified period of time after
termination of employment or service, the Administrator may decide to what extent leaves of absence for governmental or military service, illness, temporary disability or other reasons shall not be deemed interruptions of continuous employment or
service. 
  

	7.08	Settlement 

  
 At the Administrator’s discretion, the amount payable as a result of the exercise of an SAR may be settled in cash, Common Stock, or a combination of
cash and Common Stock. No fractional share will be deliverable upon the exercise of an SAR but a cash payment will be made in lieu thereof. 
  

	7.09	Shareholder Rights 

  
 No Participant shall, as a result of receiving an SAR, have any rights as a shareholder of the Company until the date that the SAR is exercised and then
only to the extent that the SAR is settled by the issuance of Common Stock. 
  

 13 

 ARTICLE VIII 
 STOCK AWARDS 
  

	8.01	Award 

  
 In accordance with the provisions of Article IV, the Administrator will designate each individual to whom a Stock Award is to be made and will specify the
number of shares of Common Stock covered by each such award; provided, however, that no Participant may receive Stock Awards in any calendar year for more than 37,500 shares of Common Stock. 
  

	8.02	Vesting 

  
 The Administrator, on the date of the award, may prescribe that a Participant’s rights in a Stock Award shall be forfeitable or otherwise restricted
for a period of time or subject to such conditions as may be set forth in the Agreement. By way of example and not of limitation, the restrictions may postpone transferability of the shares or may provide that the shares will be forfeited if the
Participant separates from the service of the Company and its Related Entities before the expiration of a stated period or if the Company, a Related Entity, the Company and its Related Entities or the Participant fails to achieve stated performance
objectives, including performance objectives stated with reference to Performance Criteria. If a Stock Award is not immediately vested and transferable, the period that the shares are restricted shall be at least three years; provided, however, that
the period that the shares are restricted shall be at least one year if the transferability, vesting or both is subject to the satisfaction of performance objectives stated with reference to Performance Criteria. 
  

	8.03	Employee Status 

  
 If the terms of any Stock Award provide that shares may become transferable and nonforfeitable thereunder only after completion of a specified period of
employment or service, the Administrator may decide in each case to what extent leaves of absence for governmental or military service, illness, temporary disability, or other reasons shall not be deemed interruptions of continuous employment or
service. 
  

	8.04	Change in Control 

  
 Sections 8.02 and 8.03 to the contrary notwithstanding, each outstanding Stock Award shall be transferable and nonforfeitable on and after a Control
Change Date in accordance with the applicable Agreement 
  

	8.05	Shareholder Rights 

  
 Prior to their forfeiture (in accordance with the applicable Agreement and while the shares of Common Stock granted pursuant to the Stock Award may be
forfeited or are nontransferable), a Participant will have all the rights of a shareholder with respect to a Stock Award, including the right to receive dividends and vote the shares; provided, however, that during such period (a) a Participant may
not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of shares of Common Stock granted pursuant to a Stock Award, (b) the Company shall retain custody of the certificates evidencing shares of Common Stock granted pursuant to a
Stock Award, and (c) the Participant will deliver to the Company a stock power, endorsed in blank, with respect to each Stock Award. The limitations set forth in the preceding sentence shall not apply after the shares of Common Stock granted under
the Stock Award are transferable and are no longer forfeitable. 
  

 14 

 ARTICLE IX 
 INCENTIVE AWARDS 
  

	9.01	Award 

  
 The Administrator will designate Participants to whom Incentive Awards are made. All Incentive Awards shall be finally determined exclusively by the
Administrator under the procedures established by the Administrator. With respect to an Incentive Award based on a performance period of one year, no Participant may receive an Incentive Award payment in any calendar year that exceeds $1,000,000.

  

	9.02	Terms and Conditions 

  
 The Administrator, at the time an Incentive Award is made, shall specify the terms and conditions which govern the award. Such terms and conditions shall
prescribe that the Incentive Award shall be earned only upon, and to the extent that, performance objectives are satisfied during a performance period of at least one year after the grant of the Incentive Award. By way of example and not of
limitation, the performance objectives may provide that the Incentive Award will be earned only if the Company, a Related Entity or the Company and its Related Entities achieve stated objectives, including objectives stated with reference to
Performance Criteria. The Administrator, at the time an Incentive Award is made, shall also specify when amounts shall be payable under the Incentive Award and whether amounts shall be payable in the event of the Participant’s death,
disability, or retirement. 
  

	9.03	Nontransferability 

  
 Except as provided in Section 9.04, Incentive Awards granted under this Plan shall be nontransferable except by will or by the laws of descent and
distribution. No right or interest of a Participant in an Incentive Award shall be liable for, or subject to, any lien, obligation, or liability of such Participant. 
  

	9.04	Transferable Incentive Awards 

  
 Section 9.03 to the contrary notwithstanding, if provided in an Agreement, an Incentive Award may be transferred by a Participant to the
Participant’s children, grandchildren, spouse, one or more trusts for the benefit of such family members or to a partnership in which such family members are the only partners, on such terms and conditions as may be permitted by Rule 16b-3
under the Exchange Act as in effect from time to time. The holder of an Incentive Award transferred pursuant to this Section shall be bound by the same terms and conditions that governed the Incentive Award during the period that it was held by the
Participant; provided, however, that such transferee may not transfer the Incentive Award except by will or the laws of descent and distribution. 
  

	9.05	Employee Status 

  
 If the terms of an Incentive Award provide that a payment will be made thereunder only if the Participant completes a stated period of employment or
service, the Administrator may 

  

 15 

 
decide to what extent leaves of absence for governmental or military service, illness, temporary disability or other reasons shall not be deemed
interruptions of continuous employment or service. 
  

	9.06	Change in Control 

  
 Section 9.02 to the contrary notwithstanding, each outstanding Incentive Award shall be earned in its entirety as of a Control Change Date in accordance
with the applicable Agreement. 
  

	9.07	Shareholder Rights 

  
 No Participant shall, as a result of receiving an Incentive Award, have any rights as a shareholder of the Company or any Related Entity on account of
such award until, and except to the extent that, the Incentive Award is earned and settled in shares of Common Stock. 
  

 16 

 ARTICLE X 
 ADJUSTMENT UPON CHANGE IN COMMON STOCK 
  
 The maximum number of shares as to which Options, SARs, Incentive Awards and Stock Awards may be granted under this Plan; and the terms of outstanding Stock Awards, Options, Performance Shares, Incentive Awards and
SARs; and the per individual limitations on the number of shares of Common Stock for which Options, SARs and Stock Awards may be granted shall be adjusted as the Committee shall determine to be equitably required in the event that (a) the Company
(i) effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or (ii) engages in a transaction to which Code section 424 applies, (b) there occurs any other event which, in the judgment of the Committee
necessitates such action or (c) there is a Change in Control. Any determination made under this Article X by the Committee shall be final and conclusive. 
  
 The issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for
labor or services, either upon direct sale or upon the exercise of rights or warrants to subscribe therefore, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the maximum number of shares as to which Options, SARs, Incentive Awards and Stock Awards may be granted, the per individual limitations on the number of shares of Common Stock for which
Options, SARs, Stock Awards may be granted or the terms of outstanding Stock Awards, Options, Incentive Awards or SARs. 
  
 The Committee may make Stock Awards and may grant Options, SARs and Incentive Awards in substitution for phantom shares, stock awards, stock options,
stock appreciation rights, or similar awards held by an individual who becomes an employee of the Company or a Related Entity in connection with a transaction or event described in the first paragraph of this Article X. Notwithstanding any provision
of the Plan (other than the limitation of Section 5.02), the terms of such substituted Stock Awards or Options, or SARs shall be as the Committee, in its discretion, determines is appropriate. 
  

 17 

 ARTICLE XI 
 COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES 
  
 No Option or SAR shall be exercisable, no Common Stock shall be issued, no certificates for shares of Common Stock shall be delivered, and no payment shall be made under this Plan except in compliance with all
applicable federal and state laws and regulations (including, without limitation, withholding tax requirements), any listing agreement to which the Company is a party, and the rules of all domestic stock exchanges on which the Company’s shares
may be listed. The Company shall have the right to rely on an opinion of its counsel as to such compliance. Any share certificate issued to evidence Common Stock when a Stock Award is granted, an Incentive Award is settled or for which an Option or
SAR is exercised may bear such legends and statements as the Administrator may deem advisable to assure compliance with federal and state laws and regulations. No Option or SAR shall be exercisable, no Stock Award shall be granted, no Common Stock
shall be issued, no certificate for shares shall be delivered, and no payment shall be made under this Plan until the Company has obtained such consent or approval as the Administrator may deem advisable from regulatory bodies having jurisdiction
over such matters. 
  

 18 

 ARTICLE XII 
 GENERAL PROVISIONS 
  

	12.01 	Effect on Employment and Service 

  
 Neither the adoption of this Plan, its operation, nor any documents describing or referring to this Plan (or any part thereof), shall confer upon any
individual any right to continue in the employ or service of the Company or a Related Entity or in any way affect any right or power of the Company or a Related Entity to terminate the employment or service of any individual at any time with or
without assigning a reason therefore. 
  

	12.02 	Unfunded Plan 

  
 The Plan, insofar as it provides for grants, shall be unfunded, and the Company shall not be required to segregate any assets that may at any time be
represented by grants under this Plan. Any liability of the Company to any person with respect to any grant under this Plan shall be based solely upon any contractual obligations that may be created pursuant to this Plan. No such obligation of the
Company shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company. 
  

	12.03 	Rules of Construction 

  
 Headings are given to the articles and sections of this Plan solely as a convenience to facilitate reference. The reference to any statute, regulation, or
other provision of law shall be construed to refer to any amendment to or successor of such provision of law. 
  

	12.04 	Tax Withholding 

  
 Each Participant shall be responsible for satisfying any income and employment tax withholding obligation attributable to participation in this Plan. In
accordance with procedures established by the Administrator, a Participant may surrender shares of Common Stock, or receive fewer shares of Common Stock than otherwise would be issuable, in satisfaction of all or part of that obligation. 

 

 19 

 ARTICLE XIII 
 AMENDMENT 
  
 The Board may
amend or terminate this Plan from time to time; provided, however, that no amendment may become effective until shareholder approval is obtained if (a) the amendment increases the aggregate number of shares of Common Stock that may be issued under
the Plan (other than an adjustment pursuant to Article X), (b) the amendment changes the class of individuals eligible to become Participants or (c) the amendment reduces the option price of an outstanding Option (other than an adjustment pursuant
to Article X). No amendment shall, without a Participant’s consent, adversely affect any rights of such Participant under any Stock Award, Incentive Award, Option or SAR outstanding at the time such amendment is made. 
  

 20 

 ARTICLE XIV 
 DURATION OF PLAN 
  
 No
Stock Award, Incentive Award, Option or SAR may be granted under this Plan more than ten years after the earlier of the date the Plan is adopted by the Board or the date that the Plan is approved in accordance with Article XV. Stock Awards,
Incentive Awards, Options and SARs granted before that date shall remain valid in accordance with their terms. 
  

 21 

 ARTICLE XV 
 EFFECTIVE DATE OF PLAN 
  
 Options, SARs and Incentive Awards may be granted under this Plan upon its adoption by the Board, provided that no Option, SAR, or Incentive Award shall be effective or exercisable unless this Plan is approved by a majority of the votes
cast by the Company’s shareholders, voting either in person or by proxy, at a duly held shareholders’ meeting at which a quorum is present or by unanimous consent. Stock Awards may be granted under this Plan, upon the later of its adoption
by the Board or its approval by shareholders in accordance with the preceding sentence. 
  

 22 

 ARTICLE XVI 
 ADOPTION OF PLAN 
  
 As evidence of its
adoption of the Plan herein constituted, New River Pharmaceuticals Inc. has caused this instrument to be signed by its duly authorized officer this
                     day of
                    , 2004. 
  

			
	NEW RIVER PHARMACEUTICALS INC.
		
	 By:
	 	 

  

 23ADMINISTRATIVE SERVICE AGREEMENT

 EXHIBIT 10.2 
  
 SERVICES AGREEMENT 
  
 THIS SERVICES AGREEMENT (this “Agreement”) is made and entered into as of the
             day of                     , 2004 by and between Third
Security, LLC, a Virginia limited liability company (“THIRD SECURITY”), and New River Pharmaceuticals Inc., a Virginia corporation, including all of its now or hereafter existing subsidiaries (“NEW RIVER”). 
  
 WHEREAS, NEW RIVER intends to pursue an underwritten initial public
offering (the closing of which is hereafter referred to as the “Offering”); 
  
 WHEREAS, historically THIRD SECURITY has provided certain corporate and administrative services to its affiliates, including NEW RIVER; and 
  
 WHEREAS, THIRD SECURITY and NEW RIVER desire that THIRD SECURITY continue to provide certain services to NEW RIVER
through and following the Offering pursuant to the terms and conditions of this Agreement. 
  
 NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to
this Agreement, intending to be bound hereby, agree as follows: 
  
 1.
Services. Following the Offering, THIRD SECURITY will provide or cause to be provided to NEW RIVER, those corporate and administrative services described in Exhibit A hereto (the “Services”), as requested by NEW
RIVER from time to time. The scope of the Services may be adjusted by the mutual agreement of the parties hereto. 
  
 2. Charges for Services. As consideration for the Services provided hereunder, NEW RIVER agrees to pay the following fees and expenses to THIRD SECURITY:

  
 (a) Fees for Services performed for NEW RIVER
by a vendor, contractor or similar third party (other than THIRD SECURITY) shall be equal to the final invoiced costs charged by such third party to THIRD SECURITY for the performance of such Services. 
  
 (b) With respect to all other Services provided by THIRD
SECURITY employees, NEW RIVER will pay to THIRD SECURITY an hourly rate calculated as follows for each THIRD SECURITY employee providing Services in a given invoice period under this Agreement: such hourly rate shall equal [the annual salary of the
THIRD SECURITY employee performing the given Services plus a thirty percent (30%) markup to cover the cost of fringe benefits provided to such THIRD SECURITY employee] divided by 2,080 hours. In addition, NEW RIVER will pay reasonable travel and
other out-of-pocket expenses incurred in connection therewith. 
  
 (c) All travel and out-of-pocket expenses of THIRD SECURITY made in accordance with the then effective policies of THIRD SECURITY governing such expenses will be deemed reasonable and may not be subject to any
dispute. 
  

 3. Payments. 
  
 (a) THIRD SECURITY shall submit to NEW RIVER by the fifteenth (15th) day of each month an invoice for all charges associated with Services provided during the preceding month, including any other amounts payable in respect of
prior invoice periods. All invoices shall reference the Services provided and the charges associated therewith, any related adjustments and any other amounts that are payable. Except as provided in subparagraph (b) below, NEW RIVER shall remit
payment in full for all charges invoiced on or before the last business day of the month in which the invoice is received. Payment of all invoices shall be made by check or electronic funds transfer of immediately available funds to an account or
accounts designated by THIRD SECURITY. Any late payment shall bear interest at the rate of one half percent (0.5%) per month or fraction thereof until paid. 
  
 (b) In the event of a dispute as to an invoiced amount, NEW RIVER shall promptly pay all undisputed amounts, but shall be entitled to
withhold amounts in dispute, and shall promptly notify THIRD SECURITY of such dispute and the basis therefor. The parties agree to provide each other with sufficient records and information to resolve such dispute and, without limiting the rights
and remedies of the parties hereunder, to negotiate in good faith a resolution thereto. Notwithstanding this clause (b), the late payment interest provision in Section 3(a) shall apply to all such withheld amounts that are ultimately determined to
be due and payable, which amounts, including any interest, shall be promptly remitted to THIRD SECURITY in the manner provided herein. 
  
 4. Term of Agreement. The term of this Agreement shall commence immediately upon the date hereof and continue for a period of
             months unless terminated by agreement of the parties hereto (except with respect to the services identified in Paragraph 7 of Exhibit A, which shall be provided until
December 31,                 ). Notwithstanding the foregoing this Agreement shall become terminable at any time by NEW RIVER upon delivery of written notice to
THIRD SECURITY with respect to any Services or any part thereof. Termination under this Section 4 or otherwise shall have no effect on the obligations of the parties to provide Services prior to the effective date of such termination or to make
payments in respect of charges incurred in connection therewith or which relate to events occurring prior to such date. 
  
 5. Performance of Services. 
  
 (a) THIRD SECURITY shall perform the Services or cause the Services to be performed with the same degree of care, skill, timeliness and
prudence customarily exercised with respect to its own operations. It is understood and agreed that the Services will be substantially identical in nature and quality to the Services performed by THIRD SECURITY for NEW RIVER during the year prior to
the commencement of the term of this Agreement, except with respect to such services required to effect the Offering. 
  
 (b) Each party acknowledges that the Services will be provided only with respect to NEW RIVER’s business. Services will not be
requested for the benefit of any entity other than NEW RIVER. NEW RIVER agrees that it will use the Services only in accordance with all applicable federal, state and local laws, and regulations and in accordance with the reasonable conditions,
rules, regulations and specifications which are or may be set forth in any manuals, materials, documents or instructions of THIRD SECURITY. THIRD SECURITY reserves the right to take all actions, including the termination of any Services or part
thereof, in order to ensure that the Services are provided in accordance with any applicable laws and regulations. 
  
 (c) Any input or information needed by either party to perform or utilize the Services pursuant to the provisions of this Agreement shall
be provided by the other party in a manner consistent with the practices employed by the parties during the year prior to the date of this Agreement. Should the failure by NEW RIVER to provide such input or information render the performance of the
Services 

  

 Page 2 

 
impossible or unreasonably difficult, THIRD SECURITY may, upon reasonable notice, refuse to provide such Services. 
  
 6. Liability and Indemnification. Except as provided below, THIRD SECURITY and
all of its managing directors, officers, agents and employees shall have no liability, whether direct or indirect, in contract, tort or otherwise, under this Agreement for any damage, loss or other harm (including, without limitation, out-of-pocket
expenses and fees and disbursements of counsel) of any type suffered by NEW RIVER or any third party in connection with the performance or non-performance of this Agreement or the Services contemplated hereby or any action or in-action of any of the
indemnified parties in connection with the foregoing, except for any such damage, loss or other harm directly caused by or directly resulting from the gross negligence or willful misconduct of THIRD SECURITY in connection with the performance or
non-performance of this Agreement or the Services contemplated hereby or the action or inaction of any of the indemnified parties in connection with the foregoing. In the event of a third party claim, NEW RIVER, including its successors and assigns,
for itself and on behalf of all of its subsidiaries, shall indemnify, defend and hold harmless THIRD SECURITY and all of its managing directors, officers, agents and employees from and against any and all such damages, losses and other harms
(including, without limitation, out-of-pocket expenses and fees, counsel fees and disbursements of counsel) caused by or arising out of the performance or non-performance of this Agreement or the Services contemplated hereby or the actions or
in-actions of any of the indemnified parties in connection with the foregoing other than any such damage, loss or other harm directly caused by or directly resulting from the gross negligence or willful misconduct of THIRD SECURITY in connection
with the performance or non-performance of this Agreement or the Services contemplated hereby or the actions or in-actions of any of the indemnified parties in connection with the foregoing. The total liability of THIRD SECURITY under this Section 6
will not under any circumstances exceed the aggregate amount of actual fees paid to THIRD SECURITY by NEW RIVER pursuant to this Agreement. Notwithstanding any other provision of this Agreement, THIRD SECURITY shall have no liability for (i) any
lost profits or any incidental, consequential, special, indirect or similar damages of any kind or nature whatsoever of NEW RIVER or any third party (including the fees and expenses of counsel) or (ii) the acts or omissions of any third party (other
than THIRD SECURITY) that provides Services hereunder. This Section 6 shall survive the termination of this Agreement until such time as the obligations of the parties (including their respective successors and assigns) set forth in this Section 6
have been fully satisfied. 
  
 7. Confidentiality. The parties each
agree to hold in trust and maintain confidential, and, except as required by law or applicable rules and regulations promulgated thereunder or by court order or other legal process, not to disclose to others without first obtaining the prior written
approval of the other party, any information received by it from the other party or developed or otherwise obtained by it under this Agreement, including all information resulting from the provision or utilization of the Services hereunder
(collectively, the “Information”). At the time of termination of this Agreement in whole or in part, each party shall, within 90 days after the effective date of such termination, return to each other all written Information that it
obtained and shall not retain or allow any third party to retain photocopies or other reproductions of such Information, provided that (i) the parties may retain any Information to the extent reasonably needed to comply with applicable tax,
accounting or financial reporting requirements or to resolve any legal issues identified at the time of termination, and (ii) in the case of a partial termination of this Agreement, the parties may retain any Information required to perform or
utilize any remaining Services covered by this Agreement. Alternatively, each party may, upon receipt of the written consent of the other party, destroy such Information instead of returning the same pursuant to the foregoing sentence. The
obligations set forth in this Section 7 shall not apply to any Information that is shown by either party to be or have become knowledge generally available to the public other than through the acts or omissions of such party. 
  

 Page 3 

 8. Assignment. Neither party shall assign or transfer any of its rights or delegate any of its obligations
under this Agreement without first obtaining the prior written consent of the other party, which consent may be withheld by such other party in its sole discretion; provided that THIRD SECURITY shall be permitted to cause any Services to be provided
or caused to be provided by THIRD SECURITY through one or more third parties selected by THIRD SECURITY; and provided further that the selection of any third party by THIRD SECURITY shall be subject to the prior written consent of NEW RIVER (which
shall not be unreasonably withheld or delayed) unless such third party shall have provided the same or similar Services to THIRD SECURITY at any time during the twelve (12) months immediately preceding the date of this Agreement. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their successors and permitted assigns. 
  
 9. Notices. All notices and other communications hereunder shall be in writing and shall be delivered in person, by United States mail, certified, return
receipt requested, postage prepaid, by express mail by a nationally recognized carrier, or by facsimile transmission (provided, if sent by facsimile transmission, such notice shall also be sent by one of the other methods provided under this section
within 24 hours after initially sent by facsimile transmission) to the following: 
  
 Third Security, LLC 
 Attn: Legal Department 
 The Governor Tyler 
 1881 Grove Ave

 Radford, VA 24141 
 Fax No.:
540-633-7939 
  
 New River Pharmaceuticals Inc. 
 Attn: Secretary 
 The Governor Tyler

 1881 Grove Ave 
 Radford, VA
24141 
 Fax No.: 540-633-7939 
  
 or to such other addresses as either party may designate from time to time in writing. The date of any notice so sent will be deemed to be the date of receipt (or
refusal), in the case of United States mail, the following business day, in the case of overnight express mail, and, in the case of facsimile transmission, upon receipt if received during the recipient’s normal business hours, or at the
beginning of the recipient’s next business day if not received during the recipient’s normal business hours. 
  
 10. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without giving effect to
the principles of conflicts of laws thereof. 
  
 11. Counterparts.
This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed an original but all of which shall together constitute but one and the same instrument. 
  
 12. Headings. The headings and captions set forth in this Agreement are for
convenience of reference only and shall not affect the construction or interpretation hereof. 
  
 13. Severability. The provisions of this Agreement are severable and should any provisions hereof be void, voidable or unenforceable under any applicable law, such provision shall not affect or
invalidate any other provision of this Agreement, which shall continue to govern the relative rights and duties of the parties as though such void, voidable or unenforceable provision were not a part hereof. 
  

 Page 4 

 14. Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, oral or written, with respect thereto. This Agreement may not be amended or otherwise modified or supplemented except by a written instrument duly
executed by both parties. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. 
  
 IN WITNESS
WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written. 
  

									
	THIRD SECURITY, LLC	 	 	 	NEW RIVER PHARMACEUTICALS INC.
					
	By:	 	 	 	 	 	By:	 	 
					
	Name:	 	 	 	 	 	Name:	 	 
					
	Title:	 	 	 	 	 	Title:	 	 

  

 Page 5 

 EXHIBIT A 
 TO 
 SERVICES AGREEMENT 
  
 DESCRIPTION OF SERVICES 
  
 1. Compensation Plans—THIRD SECURITY will provide advice and respond to general inquiries to NEW RIVER with respect to the design and implementation of its
stock and executive compensation plans. Notwithstanding the foregoing or anything set forth in this Agreement, THIRD SECURITY will not perform any of the functions that are normally performed by the compensation or similar committee of a company
required to submit filings to the SEC pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934, as amended. 
  
 2. Insurance—THIRD SECURITY will provide advice with respect to the structure and terms of the property and liability insurance programs of NEW RIVER.

  
 3. Legal—THIRD SECURITY will coordinate with NEW RIVER’s
outside counsel and respond to inquiries from NEW RIVER with respect to matters customarily handled by THIRD SECURITY ‘s legal department. THIRD SECURITY will review or participate in the preparation of NEW RIVER’s filings with the SEC
before and after the Offering, but it will not provide to NEW RIVER any legal advice, assistance or services, which are of the nature that a reasonable attorney would only provide such services with an adequate professional liability insurance
policy in full force and effect. 
  
 4. External Relations—THIRD
SECURITY will provide assistance and advice to NEW RIVER with respect to political action committees and lobbying and legislative matters at the Federal Congressional and Executive levels. In connection with the provision of such services by THIRD
SECURITY’s employees, THIRD SECURITY shall have the sole authority and discretion to determine whether such services will be provided by THIRD SECURITY. 
  
 5. Proxy Statement—Upon request, THIRD SECURITY will provide NEW RIVER with data and information maintained by THIRD SECURITY required to calculate certain
components of compensation administered by THIRD SECURITY prior to the date of this Agreement that after the Offering must be reported in the Proxy Statement of NEW RIVER to the extent that either or both of NEW RIVER and their independent auditor
do not already have such data and information. Notwithstanding the foregoing or anything set forth in this Agreement, NEW RIVER shall be solely responsible for verifying such data with its employees and any other third parties maintaining
information regarding the assets or compensation of any of its employees. 
  
 6.
Benefits and 401-K Plan—THIRD SECURITY will continue to administer and respond to inquiries from NEW RIVER regarding the operation by THIRD SECURITY of its health and dental insurance, disability insurance, and 401-K plan until such
separate carve-out plans shall have been established by NEW RIVER for NEW RIVER’s employees. 
  
 7. Taxation—THIRD SECURITY will coordinate with NEW RIVER’s outside accountants and auditors and respond to inquiries from NEW RIVER with respect to matters customarily handled by THIRD SECURITY
‘s tax department. THIRD SECURITY will prepare drafts of corporate tax returns and other related filings and correspondence for approval and filing by NEW RIVER and/or NEW RIVER’s outside accountants. THIRD SECURITY will provide NEW RIVER
with such historical data maintained by THIRD SECURITY that may be necessary for the preparation of tax returns and related filings and correspondence to the extent that NEW RIVER or their independent accountants/auditors do not already have such
historical data. 
  

 Page 1

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