Document:

Exhibit 10

EXHIBIT 10.19

____________, 200_

US $___________

INTELLIGENT LIVING CORP.

6% SUBORDINATED CONVERTIBLE DEBENTURE

SCD-______

Intelligent Living Corp., a Nevada corporation (the "Company"), for value received, promises to pay to____________________ (the "Purchaser"), or registered assigns, the principal sum of 

______________________Thousand Dollars ($_____________), on _____________, 20__, and to accrue simple interest monthly on the principal sum hereof, subject to the provisions of Section 6 hereof, at the rate of six percent (6%) per annum. The principal hereof, and the accrued interest hereon, shall be payable by mail to the registered address of the owner hereof.

The following is a statement of the rights of the holder of this Debenture and the terms and conditions to which this Debenture is subject, to which the holder hereof, by the acceptance of this Debenture, assents:

1.

Definitions.  As used in this Debenture, the following terms, unless the context otherwise requires, have the following meanings:

1.1

"Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Debenture.

1.2

"Common Stock" when used with reference to shares of the Company means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and shares of any other class into which those shares may hereafter be changed.

1.3

"Debentureholder", "holder of this Debenture", "holder", or similar terms, when the context refers to a holder of this Debenture, shall mean any person who shall at the time be the registered holder of this Debenture.

1.4

"Subsidiary" shall mean a corporation of which at least 50% of the voting securities having ordinary voting power to elect a majority of the directors not dependent upon a default is owned directly or indirectly by the Company or by one or more of its other subsidiaries or by the Company in conjunction with one or more of its other subsidiaries.

2.

Transferability Restrictions.  This Debenture and each certificate representing the Common Stock issued on the conversion of this Debenture are subject to the following restrictions.  The holder of this Debenture may transfer this Debenture and any shares of Common Stock issued upon the conversion hereof to any person or entity provided such transfer will not violate the Securities Act of 1933, as amended (the "Act"), and such transfer is permissible under the terms of this Agreement.  Any transfer permitted by the preceding sentence shall not be effected until the transferor has first given written notice to the Company describing briefly the manner of any such proposed transfer and until: (a) the Company has received from the transferor's counsel an opinion, satisfactory to counsel for the Company, that such transfer can be made without compliance with the registration provisions of the Act 

or applicable state securities laws; or (b) the Company and the transferor shall have complied with Rule 144 promulgated under the Act; or (c) a registration statement with respect to the securities being transferred is filed by the Company and declared effective by the Securities and Exchange Commission or steps necessary to perfect an exemption from registration are completed.

3.

Conversion.  Subject to the requirement that no conversion hereof may be made if it would result in the violation of any applicable law or the Company being in violation of any applicable law:

(a)  The Holder of this Debenture is entitled, at its option, at any time immediately following execution of this Agreement and delivery of the Debenture hereof, to convert all or any amount over $1,000 of the principal face amount of this Debenture then outstanding into  shares of common stock of the Company ("Common Stock"), at a conversion price ("Conversion Price") for each share of Common Stock equal to the lowest closing price of the Common Stock as reported on the NASD Over the Counter Bulletin Board or any other recognized exchange on which the Company’s shares are traded ("Exchange") for any trading day on which a Notice of Conversion is received by the Company, provided such Notice of Conversion is delivered by fax to the Company between the hours of 4 P.M. Eastern Standard or Daylight Savings Time and 7 P.M. Eastern Standard or Daylight Savings Time, or for any of the 20 consecutive trading days immediately preceding the date of receipt by the Company of each Notice of Conversion ("Conversion Shares").  If the number of resultant Conversion Shares would as a matter of law or pursuant to regulatory authority require the Company to seek shareholder approval of such issuance, the Company shall, as soon as practicable, take the necessary steps to seek such approval.  Such conversion shall be effectuated, by the Company delivering the Conversion Shares to the Holder within 5 business days of receipt by the Company of the Notice of Conversion.  Once the Holder has received such Conversion Shares, the Holder shall surrender the Debentures to be converted to the Company, executed by the Holder of this Debenture evidencing such Holder's intention to convert this Debenture or a specified portion hereof, and accompanied by proper assignment hereof in blank.  Accrued but unpaid interest shall be subject to conversion.  No fractional shares or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded up to the nearest whole share.

(b)

Interest at the rate of 6% per annum shall be paid by issuing Common Stock of the Company. The Company shall issue to the Holder shares of Common Stock in an amount equal to the total monthly interest accrued and due divided by the Market Price ("Interest Shares").  Market Price shall mean the per share price of Common Stock based on the lowest closing price of the Common Stock as reported on the Exchange on the date calculations are made for Interest Shares or for any of the 20 consecutive trading days immediately preceding this date.

4.

Issuance of Shares of Common Stock on Conversion.  As soon as practicable after full or partial conversion of this Debenture, the Company at its expense will cause to be issued in the name of and delivered to the holder of this Debenture (a) a certificate or certificates for the number of shares of Common Stock to which that holder shall be entitled on such conversion, together with any other securities and property to which the holder is entitled on such conversion under the terms of this Debenture, and (b) if any principal amount of this Debenture remains unpaid after such conversion, a new Debenture, substantially in the form of this Debenture, dated the date to which interest has been paid on the Debenture surrendered for conversion, in an aggregate principal amount equal to such unpaid principal amount, and specifying the portion of such unpaid principal amount, if any, which may be converted into shares of Common Stock.  Such conversion shall be deemed to have been made immediately prior to the close of business on the date that this Debenture shall have been surrendered for conversion, accompanied by written notice of conversion, so that the rights of the holder of this Debenture as a Debentureholder with respect to the principal amount of the Debenture so converted 

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shall cease at such time and the person or persons entitled to receive the shares of Common Stock upon conversion of this Debenture shall be treated for all purposes as having become the record holder or holders of such shares of Common Stock at such time and such conversion shall be at the Conversion Price in effect at such time; provided, however, that no such surrender on any date when the stock transfer books of the Company shall be closed shall be effective to constitute the person or persons entitled to receive the shares of Common Stock upon such conversion as the record holder or holders of such shares of Common Stock on such date, but such surrender shall be effective to constitute the person or persons entitled to receive such shares of Common Stock the record holder or holders thereof for all purposes at the close of business on the next succeeding day on which such stock transfer books are open and such conversion shall be at the Conversion Price in effect on the date that this Debenture shall have been surrendered for conversion.  If the last day for the exercise of the conversion rights shall be a Sunday or shall be in Vancouver, British Columbia, a legal holiday or a day on which banking institutions are authorized by law to close, then such conversion right may be exercised on the next succeeding day not in Vancouver, British Columbia, a legal holiday or a day on which banking institutions are authorized by law to close.  The Company shall pay all interest on this Debenture or portion thereof surrendered for conversion accrued to the date of surrender and any and all taxes in respect of the certificates for the shares of Common Stock issued upon any conversion of this Debenture.  No fractional shares will be issued on conversion of this Debenture.  If on any conversion of this Debenture a fraction of a share of Common Stock results, the Company will pay the cash value of that fractional share of Common Stock, calculated on the basis of the market price of the Common Stock (or book value, if the Common Stock is not publicly traded) as of the close of business on the date that this Debenture shall have been surrendered for conversion.

5.

Adjustments to Conversion Price.

5.1 

Stock Dividends, Subdivisions and Distributions.

If at any time prior to the maturity, or earlier prepayment or conversion, hereof the Company shall declare any dividend, or make any other distribution, on or in respect of any stock of the Company of any class, which dividend is payable or paid in Common Stock or other securities of the Company, or if the Company shall at any time prior to the maturity, or earlier prepayment or conversion, hereof subdivide its outstanding shares of Common Stock, the Conversion Price shall, concurrently with the effectiveness of such declaration, distribution or subdivision, be proportionately decreased.

5.2

Adjustments for Combinations or Consolidation of Common Stock.  In the event that prior to the maturity, or prepayment or conversion, hereof the outstanding shares of Common Stock shall be combined or consolidated, by reclassification or otherwise, into a lesser number of shares of Common Stock, the applicable Conversion Price in Section 3 shall, concurrently with the effectiveness of such combination or consolidation, be proportionately increased.

5.3

No Impairment.  The Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company but will at all times in good faith assist in the carrying out of all the provisions of this Section 5 and in the taking of all such action as may be necessary or appropriate in order to protect against dilution or impairment of the rights set forth in Section 5 of the holder of this Debenture.

5.4

Certificate as to Adjustments.  Upon the occurrence of each adjustment of the Conversion Price pursuant to this Section 5, the Company at its expense shall promptly compute such adjustment in 

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accordance with the terms hereof and furnish to the holder of this Debenture a certificate setting forth such adjustment and showing in detail the facts upon which such adjustment is based.  The Company shall, upon the written request at any time of the holder of this Debenture, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and (ii) the Conversion Price formula at the time in effect.

5.5

Common Stock Reserved.  The Company shall reserve and keep available out of its authorized but unissued Common Stock such number of shares of Common Stock as shall from time to time be sufficient to effect conversion of this Debenture.

5.6

Reclassification, Exchange and Substitution.  In case of any reclassification or change of outstanding shares of Common Stock issuable upon conversion of this Debenture (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or in case of any sale or conveyance to another corporation of the property of the Company as an entirety or substantially as an entirety, the Company, or such successor or purchasing corporation, as the case may be, shall execute with the holder of this Debenture a supplemental agreement providing that the holder hereof shall have the right thereafter to convert this Debenture into the kind and amount of shares of stock and other securities and property receivable upon such reclassification, change, sale or conveyance by a holder of the number of shares of Common Stock into which such Debenture might have been converted immediately prior to such reclassification, change, sale or conveyance.  Such supplemental agreement shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5.

5.7

No Change Necessary.  The form of this Debenture need not be changed because of any adjustment in the Conversion Price formula in Section 3.  A Debenture issued after any adjustment on any partial conversion or upon replacement may continue to express the same Conversion Price as is stated in this Debenture as initially issued, and the Conversion Price formula shall be considered to have been so changed as of the close of business on the date or dates of adjustment.

6.

Subordination.  The indebtedness evidenced by this Debenture is hereby expressly subordinated, to the extent and in the manner hereinafter set forth, in right of payment to the prior payment in full of all the Company's Senior Indebtedness (as defined in paragraph 6.3).

6.1

Rights of Debenture Holders.  Upon any receivership, insolvency, assignment for the benefit of creditors, bankruptcy, reorganization, sale of all or substantially all of the assets dissolution, liquidation, or any other marshalling of the assets and liabilities of the Company or in the event this Debenture shall be declared due and payable upon the occurrence of any event of default (as specified in Section 9), (i) no amount shall be paid by the Company in respect of the principal of or interest on this Debenture at the time outstanding, unless and until the principal of and interest on the Senior Indebtedness then outstanding shall be paid in full, except for any securities or other property receivable by the holder of this Debenture pursuant to any decree, order or judgment in any such proceeding, and (ii) no claim or proof of claim shall be filed with the Company by or on behalf of the holder of this Debenture which shall assert any right to receive any payment in respect of the principal of and interest on this Debenture except subject to the payment in full of the principal of and interest on all of the Senior Indebtedness then outstanding.

6.2

Default in Senior Indebtedness.  In the event of an event of default in the payment of any principal, premium, sinking fund or interest with respect to any Senior Indebtedness, as defined herein, or in the instrument under which it is outstanding, permitting the holder to accelerate the maturity thereof, then, unless and until such event of default shall have been cured or waived or shall have ceased 

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to exist, or that Senior Indebtedness shall have been paid in full, no payment shall be made in respect of the principal of or interest on this Debenture, although interest otherwise payable shall continue to accrue hereon.

6.3 

"Senior Indebtedness" shall mean the principal of (and premium, if any) and unpaid interest on, (i) indebtedness of the Company, or with respect to which the Company is a guarantor, whether outstanding on the date hereof or hereafter created, to banks or other domestic or international lending institutions or investors, which is for money borrowed by the Company or a subsidiary of the Company, whether or not secured, and which is not subordinated to other debt of the Company, and (ii) any deferrals, renewals or extensions of any such indebtedness or any debentures, notes or other evidences of indebtedness issued in exchange for such Senior Indebtedness.

6.4

Subrogation.  Subject to the payment in full of all Senior Indebtedness at the time outstanding, the holder of this Debenture shall be subrogated to the rights of the holders of Senior Indebtedness to receive payments or distributions of assets of the Company applicable to the Senior Indebtedness until the principal of, premium, if any, and interest on this Debenture shall be paid in full.  No such payments or distributions applicable to Senior Indebtedness shall, as between the Company, its creditors other than the holders of Senior Indebtedness, and the holder of this Debenture be deemed a payment by the Company to or on account of this Debenture.

6.5

Obligations of the Company.  The provisions of this Section 6 are for the purpose of defining the rights of the holder of this Debenture on the one hand and the holders of Senior Indebtedness, on the other hand, and nothing contained in this Section 6, or elsewhere in this Debenture, is intended to or shall (a) impair, as between the Company, its creditors other than the holders of Senior Indebtedness, and the holder of this Debenture, the obligation of the Company, which is unconditional and absolute, to pay to the holder of this Debenture the principal of, premium, if any, and interest on this Debenture, as and when the same shall become due and payable in accordance with the terms of this Debenture or (b) affect the rights of the holders of this Debenture relative to creditors of the Company other than the holders of Senior Indebtedness.

7.

Prepayment.  The Company may, at its own option, prepay this Debenture in whole, or in part, without premium, at any time, by payment to the holder of this Debenture of an amount equal to the principal amount of this Debenture, or portion thereof to be prepaid, plus accrued interest on the outstanding principal amount to be prepaid to the date of payment.

7.1

Notice.  Notice of prepayment shall be given by mail not less than 15 days prior to the date fixed for the redemption to the registered holder of this Debenture at the address appearing on the registry books of the Company.

7.2

Partial Prepayment.  In case of the prepayment of only part of this Debenture, the notice shall specify the portion of the face amount being prepaid.  Upon payment of the portion prepaid, this Debenture shall be cancelled and a new Debenture issued for the unpaid balance.

7.3

Interest.  If this Debenture or part thereof shall be called for prepayment and notice of prepayment shall be given as aforesaid, interest shall cease to accrue from and after the prepayment date on this Debenture or the part thereof so called for prepayment (unless default shall be made in the payment of the prepayment price) .

8.

Exchange and Transfer.  On surrender of this Debenture for exchange, properly endorsed on a form of assignment which will be provided by the Company, and subject to the provisions of this Debenture regarding compliance with the Act, the Company at its expense will issue to or on the order 

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of the holder of this Debenture a new Debenture or Debentures of like tenor, in the name of that holder or as that holder (on payment by that holder of any applicable transfer taxes) may direct.

9.

Events of Default.  If any of the following events shall occur herein (individually referred to as an "Event of Default"), the holder of this Debenture may declare the entire unpaid principal and accrued interest on the Debenture immediately due and payable, by a notice in writing to the Company:

9.1

Default in the payment of any installment of interest on this Debenture when it becomes payable and continuation of such default for a period of 10 days; or

9.2

Default in the payment of the principal of the Debenture when the same shall have become due and payable, whether at maturity or at a date fixed for prepayment by declaration or otherwise; or

9.3

If the Company shall default in the performance of or compliance with any material non-monetary term contained herein and, following such written notice by the holder of this Debenture, the Company shall have not commenced and continued to take reasonable curative action to remedy such default; or

9.4

If any representation or warranty made in writing by or on behalf of the Company herein shall prove to have been false or incorrect in any material respect on the date as of which made; or

9.5

If, within 60 days after the commencement of an action against the Company or any Subsidiary seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such action shall not have been dismissed or all orders or proceedings thereunder affecting the operations or the business of the Company stayed, or if the stay of any such order or proceedings shall thereafter be set aside, or if, within 60 days after the appointment without the consent or

acquiescence of the Company or such Subsidiary of any trustee, receiver or liquidator of the Company or any Subsidiary or of all or any substantial part of the properties of the Company or any Subsidiary, such appointment shall not have been vacated; or

9.6

The entry of an order, judgment or decree by a court of competent jurisdiction, without the consent of the Company, adjudging the Company a bankrupt or insolvent, or appointing a receiver of the Company or of the whole or any substantial part of its properties, or approving a petition filed against the Company seeking reorganization, arrangement or winding-up of the Company under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any state thereof or any other country or jurisdiction; or

9.7

The institution by the Company of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to institution of bankruptcy or insolvency proceedings against it or the filing by it of a petition or answer or consent seeking reorganization or release under the Federal Bankruptcy Act, or any other applicable federal or state law, or similar law of any other country, or the consent by it to the filing of any such petition or the appointment of a receiver, liquidator, assignee, trustee, or other similar official, of the Company, or of any substantial part of its property or the properties of its Subsidiaries, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due or the taking of corporate action by the Company in furtherance of any such action.

10.

Registration. The Company shall keep at its principal office a register in which the Company shall provide for the registration of this Debenture and of Debentures issued in exchange herefor and 

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upon the transfer hereof.  Upon compliance with all provisions of this Debenture, the holder of this Debenture may, at its option and either in person or by duly authorized attorney, surrender the same for registration of transfer at the office of the Company and, without expense to the holder (other than transfer taxes, if any), receive in exchange therefore a printed Debenture or Debentures, each in the principal amount of $10,000 or any integral multiple thereof, for the same aggregate unpaid principal amount as the Debenture or Debentures so surrendered for transfer or exchange and each payable to such person or persons as may be designated by such holder.  Every Debenture presented or surrendered for registration of transfer shall be duly endorsed, or shall be accompanied by a written instrument of transfer duly executed by the holder of such Debenture or his attorney duly authorized in writing.  Every Debenture so made and delivered in exchange for this Debenture shall in all other respects be in the same form and have the same terms as this Debenture.  No transfer or exchange of any Debenture shall be valid unless made in such manner at such office.  Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Debenture and, in the case of any such loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Debenture, the Company will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Debenture, a new Debenture of like tenor and unpaid principal amount and dated as of the date from which unpaid interest has then accrued on the Debenture so lost, stolen, destroyed or mutilated.  The Company may deem and treat the person in whose name this Debenture shall be registered as the absolute owner of such Debenture for the purpose of receiving payment of principal and interest and for all other purposes and the Company shall not be affected by any notice to the contrary.

11.

Negotiability.  Subject to the provisions of this Debenture with respect to restrictions on transferability, title to this Debenture may be transferred by endorsement and delivery in the same manner as a negotiable instrument transferable by endorsement and delivery.

12.

Modification.  This Debenture and any of its terms may be changed, waived, or terminated only by a written instrument signed by the party against which enforcement of that change, waiver, or termination is sought.

13.

Governing Law.  This Debenture shall be governed by and construed and enforced in accordance with the laws of the State of Nevada.

IN WITNESS WHEREOF, the Company has caused this Debenture to be signed in its name by its duly authorized officer under its corporate seal, attested by its duly authorized officer, as of the date first written above.

INTELLIGENT LIVING CORP.

By:

_____________________

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NOTICE OF CONVERSION

(To be Executed by the Registered Holder in order to Convert the Debenture)

The undersigned hereby irrevocably elects to convert $ ________________ of the principal amount of Debenture SCD_____ dated ____________, 20__ into Shares of Class A Common Stock of Intelligent Living Corp.  (the "Company") according to the conditions hereof, as of the date written below.  After giving effect to the conversion requested hereby, the outstanding principal amount of such debenture is 

$____________________ subject to confirmation by the Company endorsed below.

Conversion Date*

Applicable Conversion Price 

Signature

[Name]

Address:

 

  ___________________________________________________________________________

* This original Debenture must be received by the Company or its Transfer Agent by the fifth business date following the Conversion Date.

The Company hereby confirms that $ ___________ in principal amount is outstanding under the above Debenture after giving effect to the conversion requested hereby.

INTELLIGENT LIVING CORP.

By:_______________________________________

__________________________________________

(Print Name)

__________________________________________

(Title)

8exhibit10_1.htm

 

EXHIBIT 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”), is entered into effective as of September 14, 2009 (the Effective Date”), by and between POZEN Inc. (the “Company”), with offices located at Suite 400, 1414 Raleigh Road, Chapel Hill, North Carolina 27517, and Elizabeth A. Cermak. (“Executive”),
whose address is 7 Railsedge Road, Hillsborough, New Jersey 08844.

WITNESSETH:

WHEREAS, the Company is engaged in certain pharmaceutical research, development and marketing activities; and

WHEREAS, the Company wishes to employ Executive in the position of Executive Vice President, Chief Commercial Officer, and Executive wishes to accept such employment with the Company.

NOW, THEREFORE, in consideration of the foregoing and the provisions and mutual promises herein contained and other good and valuable consideration, the parties hereby agree as follows:

1. EMPLOYMENT.  The Company hereby employs Executive, and Executive hereby accepts employment, as Executive Vice President, Chief Commercial Officer of the Company, with such duties and responsibilities as are normally related
to such position in accordance with the standards of the industry and as specified in Exhibit A, attached hereto and incorporated herein by reference, and such additional duties as may be assigned to Executive from time to time by the President or the Board of Directors of the Company.

2. TERM.  Executive’s employment shall be for a term of one (1) year from the date of execution of this Agreement (the “Initial Term”), and thereafter shall be automatically renewed with additional one (1)
year terms to follow consecutively, subject to the termination and severance provisions herein later provided, unless amended or modified by mutual agreement of the parties.  As used herein, “Term” shall include the Initial Term and any renewals thereof in accordance with this Agreement.

3. EXCLUSIVE SERVICE.  Executive agrees to devote Executive’s full time and attention to the performance of Executive’s duties and responsibilities on behalf of the Company.  Executive shall comply with
all policies and regulations of the Company and all applicable government laws, rules and regulations that are now or hereafter in effect.

4. COMPENSATION.  During the Term of this Agreement, Executive’s compensation shall be determined and paid as follows:

  

  

(a) Base Salary.  Executive shall receive an annual base salary of two hundred and ninety thousand dollars ($290,000.00) payable in accordance with the Company’s
standard payroll practices and subject to applicable withholdings.  Annual increases will be made, if any, based upon performance, and in the sole discretion of the Company. The Compensation Committee of the Board of Directors of the Company (the “Committee”) shall determine whether Executive shall receive an annual increase in salary, if any, by March 31 of each calendar year during the Term.

(b) Bonus.  Executive shall be eligible to receive an annual cash bonus at a target bonus level of up to forty percent (40%) of Executive’s eligible annual
base salary as may be set by the Company by March 31 of each year.  The determination of the actual bonus earned, if any, shall be at the sole discretion of the Company and shall be based upon the Company’s assessment of Executive’s performance and the achievement of certain objectives which shall be set by the Company from time to time. Executive’s performance shall be evaluated by the Company on an annual basis, and the Company shall adjust Executive’s compensation in its sole
discretion.  Nothing in this section shall be construed as guaranteeing Executive a bonus in any amount.  If an annual bonus is awarded, it shall be paid in the year following the year in which such bonus was earned, on or before March 15 of such year.  Executive will be eligible to receive a prorated bonus for the fiscal year ended December 31, 2009, the determination of which shall be made in accordance with this subsection 4(b).

(c) Stock Options.  Subject to the approval of the Compensation Committee or the Board of Directors, upon the commencement of Executive’s employment with
the Company, Executive shall be granted an option to purchase one hundred thousand (100,000) shares of the common stock of the Company at an exercise price equal to the closing price of the common stock of the Company as quoted on the NASDAQ Stock Market on the date of grant, and vesting twenty-five percent (25%) annually over four years with the initial vesting date occurring on the one-year anniversary of the date of grant.  The option shall be governed by the terms of the Company’s 2000 Equity
Compensation Plan, as amended and restated, and a stock option agreement issued in accordance therewith.  Subject to the approval of the Compensation Committee or the Board of Directors, Executive shall also be eligible to receive an annual stock option or other incentive award, with the amount and form of any such award being determined in the sole discretion of the Company.

(d) Benefits.  If Executive elects not to participate in the Company’s medical and prescription drug plans, the Company will pay Executive, as additional
base salary, an amount equal to the then current Company subsidy available to Company employees for employee and spouse coverage under the Company’s medical and prescription drug plans (the “Medical Coverage Subsidy”) which Executive may use to continue her existing coverage under the Johnson & Johnson medical and prescription insurance plans.  Executive shall be eligible to participate in the Company’s standard employee benefit programs made available to employees of the
Company from time to time, subject to appropriate premium contributions, benefit elections, etc. and provided that Executive meets the eligibility requirements thereof.  In addition, Executive shall be entitled to three (3) weeks of paid vacation per year.  Upon the termination of Executive’s employment for any reason, the Company shall pay Executive for all accrued and unused vacation.

  

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(e) Business Expenses.  The Company shall reimburse Executive for all reasonable expenses incurred in the furtherance of the Company’s business and interests,
including travel and entertainment, provided that Executive complies with the expense reporting policies and procedures of the Company.

(f) Adequate Office Space.  The Company shall provide to Executive adequate office space, facilities, and administrative support appropriate to Executive’s
position.

5. TERMINATION.  This Agreement shall or may be terminated, as the case may be, upon the terms and conditions hereinafter provided.

(a) Voluntary Termination.  This Agreement shall be considered voluntarily terminated by the parties if either party provides written notice of such party’s
intent not to renew this Agreement, provided that such party shall provide at least ninety (90) days’ written notice to the other party prior to the last day of the Initial Term or any renewal term.

(b) Involuntary Termination. The Company may terminate this Agreement upon written notice to Executive (or Executive’s representative) in any of the following events:

(i)           The death of Executive;

(ii) Executive becomes permanently disabled (as defined in Section 5(g) below); or

(iii) For Cause, immediately upon written notice to Executive.  “Cause” shall be determined by the Board of Directors and shall mean:  (A) breach by Executive of the terms of this Agreement; (B) breach
of the Nondisclosure, Inventions and Non-Competition Agreement (described in Section 6 below); (C) material failure by Executive to comply with the policies or directives of the Company or the Board of Directors; (D) any illegal or dishonest action that is materially detrimental to the Company; or (E) Executive’s failure to faithfully carry out the duties of Executive’s position, provided that Executive shall be given a period of thirty (30) days after receipt of written notice of such failure during
which to correct such failure; and (F) Executive’s violation of the Company’s policies regarding harassment or unlawful discrimination.

(c)           Obligations upon Certain Terminations.  Upon voluntary termination of this Agreement, or termination of Executive’s employment by the Company for Cause (as defined above) or upon Executive’s
death or disability, or termination by Executive for other than Good Reason (as defined below), the Company shall have no further obligations hereunder other than the payment of all compensation and other benefits payable to Executive through the date of such termination. Such amounts shall be paid on the Company’s next regularly scheduled payroll date unless any such amount is not then calculable, in which case payment of such amount shall be made on the first regularly scheduled payroll date after the
amount is calculable but no later than March 15 of the year following the year in which the Executive’s employment terminated.

  

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(d)           Severance.

(i)           In the event of termination of Executive’s employment (A) by the Company for reasons other than Cause or Executive’s death or disability, or (B) by Executive for Good Reason, and provided Executive executes and does not revoke a release and settlement agreement
(the “Release”) in a form acceptable to the Company, Executive shall receive a severance benefit, subject to any applicable taxes and withholdings, in an amount equal to one (1) year’s base salary (the “Salary Benefit”) plus the average annual bonus awarded Executive over the previous two (2) years (the Bonus,”) and, together with the Salary Benefit, the “Severance Benefit”); provided however, if Executive is terminated at any time during the first two years of
the Term, the amount of the Bonus shall be equal to the average of her target bonuses for the first two years of her employment. Subject to Section 5(d)(ii) below, the Company shall pay the Salary Benefit, in monthly installments, on the fifth business day of each month commencing with the second month following the month in which Executive’s termination of employment occurred. The Company shall pay the Bonus in a lump sum payment within ninety (90) days of the date of termination of Executive’s employment
(the “Termination Date”), but in no event later than March 15 of the year following the year in which such termination of employment occurred, or in the event of termination pursuant to Section 5(e)(iv), no later than March 15 of the year following the year in which the Change of Control occurred.  Executive shall also continue to be entitled to receive (i) the Medical Coverage Subsidy, and all Company other nontaxable employee benefits to which Executive was entitled as of the Termination
Date, subject to the terms of all applicable benefit plans and to the extent such benefits can be provided to non-employees (or to the extent such benefits cannot be provided to non-employees, then the amount the Company was paying for those benefits immediately prior to the Termination Date), at the same average level and on the same terms and conditions which applied immediately prior to the Termination Date, for the shorter of (i) one year following the date of such Termination Date or (ii) until Executive
obtains comparable coverage from another employer (the “Continuing Benefits”).

(ii)           Notwithstanding the foregoing, if Executive is on the termination date a “specified employee” (as defined in Section 409A of the Internal Revenue Code, as amended (the “Code”) and the regulations promulgated under such Section 409A (“Code
Section 409A”) and as determined in accordance with the permissible method then in use by the Company, or, if none, in accordance with the applicable default provisions of Code Section 409A, relating to “specified employees”), then if and to the extent required in order to avoid the imposition on Executive of any excise tax under Code Section 409A, the payment of any Severance Benefit, Continuing Benefits or other payments under this Section 5 shall not commence until, and shall be made on,
the first business day after the date that is six (6) months following the Termination Date, and in such event the initial payment shall include a catch-up amount covering amounts that would otherwise have been paid during the six-month period following the Termination Date.

  

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(e)           Good Reason.  For purposes of this Agreement, “Good Reason” shall mean, the occurrence, without the consent of Executive, of any of the following events, unless, in the case of (i),
(ii) and (iii) below, such event is corrected within thirty (30) days after written notification by Executive to the Company of the same: (i) the office from which Executive performs Executive’s principal duties is moved more than fifty (50) miles from the current location of the Company’s offices in Chapel Hill, North Carolina; (ii) Executive’s duties and responsibilities are substantially reduced or diminished; (iii) the Company materially breaches its obligations under this Agreement; or
(iv) a Change of Control (as defined below) occurs and Executive notifies the Company in writing within sixty (60) days of the consummation of such Change of Control that Executive intends to terminate Executive’s employment as a result of the Change of Control, in which event such termination shall be effective not less than sixty (60) days after the date of such written notice.

 

(f)           Disability.  For purposes of this Agreement, Executive shall be considered permanently disabled when a qualified medical doctor mutually acceptable to the Company and Executive or Executive’s
personal representative shall have certified in writing that:  (i) Executive is unable because of medically determinable physical or mental disability to perform substantially all of Executive’s duties for more than one hundred eighty (180) calendar days measured from the last full day of work; or (ii) by reason of mental or physical disability, it is unlikely that Executive will be able, within one hundred eighty (180) calendar days, to resume substantially all business duties and responsibilities
in which Executive was previously engaged and otherwise discharge Executive’s duties under this Agreement.

(g)           Change of Control.  For purposes of this Agreement, a “Change of Control” shall be deemed to have occurred:

(i)           If any person (as such term is used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other than the Company or any trustee or fiduciary holding securities under an employee benefit plan of the Company)
becomes a beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the voting power of the then outstanding securities of the Company; provided that a Change of Control shall not be deemed to occur as a result of a transaction in which the Company becomes a subsidiary of another corporation and in which the stockholders of the Company, immediately prior to the transaction, will beneficially own, immediately after the
transaction, shares entitling such stockholders to more than 50% of all votes to which all stockholders of the parent corporation would be entitled in the election of directors (without consideration of the rights of any class of stock to elect directors by a separate class vote); or

(ii)           Upon the consummation of (A) a merger or consolidation of the Company with another corporation where the stockholders of the Company, immediately prior to the merger or consolidation, will not beneficially own, immediately after the merger or consolidation, shares entitling
such stockholders to more than 50% of all votes to which all stockholders of the surviving corporation would be entitled in the election of directors (without consideration of the rights of any class of stock to elect directors by a separate class vote), or (B) a sale or other disposition of all or substantially all of the assets of the Company.

  

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6. NON-DISCLOSURE, INVENTIONS AND NON COMPETITION.  Executive acknowledges that Executive will be bound by the terms of the Company’s standard non-disclosure, inventions and non-competition agreement in the form attached
hereto as Exhibit B and that such terms are incorporated herein by reference and made a material part of this Agreement (the “Nondisclosure Agreement”).

7. NOTICES.  Any notice required to be given shall be in writing personally delivered by certified mail or registered mail or by nationally recognized over night courier (receipt confirmed) to the address last shown in the Company’s
records.

8. SEVERABILITY.  The provisions of this Agreement shall be deemed severable, and the invalidity or unenforceability of any provision (or part thereof) of this Agreement shall in no way affect the validity or enforceability
of any other provision (or remaining part thereof).

9. GOVERNING LAW.  This Agreement shall be governed by and construed according to the laws of the State of North Carolina, without reference to the choice of law provisions of such laws.

10. ENTIRE AGREEMENT.  This Agreement and the Nondisclosure Agreement (including any exhibits or schedules hereto or thereto) contain the entire agreement of the parties relating to the subject matter hereof, and the parties
hereto have made no agreements, representations, or warranties relating to the subject matter of this Agreement which are not set forth herein or therein.  In particular, without limiting the foregoing, this Agreement supersedes that certain offer letter from the Company to Executive dated August 19, 2009 with respect to the matters set forth in this Agreement.  No modification of this Agreement shall be valid unless made in writing and signed by the parties hereto.

11.           BENEFIT.  This Agreement shall be binding upon and inure to the benefit of both parties and their respective heirs, representatives, successors and assigns, including any corporation or other entity with which or into which the Company may be merged or which
may succeed to its assets or business; provided, however, that the obligations of Executive are personal and shall not be assigned by Executive.

12.           EXECUTIVE REPRESENTATIONS.

(a)           Executive represents that her performance of this Agreement and as an employee of the Company does not and will not breach any employment, non-competition or other agreement to keep confidential any confidential or proprietary
information acquired by Executive in confidence or in trust prior to Executive’s employment by the Company.  Executive represents that she has not entered into, and agrees not to enter into, any agreement that conflicts with or violates this Agreement or would prevent or interfere with the Company’s employment of Executive on the terms set forth herein.

  

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(b)           Executive represents that he has not brought and shall not use in the performance of Executive's responsibilities for the Company, any materials or documents of a former employer which are not generally available to the
public or which did not belong to Executive prior to Executive’s employment with the Company, unless Executive has obtained written authorization from the former employer or other owner for their possession and use and provided the Company with a copy thereof.

13.           INJUNCTIVE RELIEF.  Executive understands and agrees that the Company will suffer irreparable harm in the event that Executive breaches any of Executive’s obligations under this Agreement and that monetary damages will be inadequate to compensate the Company
for such breach.  Accordingly, Executive agrees that, in the event of a breach or threatened breach by Executive of any of the provisions of this Agreement, the Company, in addition to and not in limitation of any other rights, remedies, or damages available to the Company at law or in equity, shall be entitled to a permanent injunction in order to prevent or to restrain any such breach by Executive, or by Executive’s partners, agents, representatives, servants, employers, employees and/or any
and all persons directly or indirectly acting for or with Executive; provided such injunction shall not affect Executive’s ownership rights in the Company or compensation earned or due Executive.

[Signature page follows]

  

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IN WITNESS WHEREOF, the parties hereto have executed this Executive Employment Agreement and affixed their seals as of the day and year first above written.

EMPLOYER:

POZEN INC.

By: /s/ John R. Plachetka, Pharm.D.

Name:           John R. Plachetka, Pharm.D.

Title:           Chairman, President and CEO

EMPLOYEE:

/s/ Elizabeth A. Cermak

Elizabeth A. Cermak

  

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EXHIBIT A

 

Key Responsibilities

Executive Vice President, Chief Commercial Officer

POZEN Inc.

KEY POSITION RESPONSIBILITIES

	
·  
	
Develop, present and, upon approval, execute a new commercial strategy for POZEN

	
·  
	
Direct the activities of the Business Development, Licensing, and all commercial functions within POZEN

	
·  
	
Participate as a member of the POZEN Executive Committee

	
·  
	
Interact with investors, analysts, and the investment community and make appropriate presentations, respond to information requests from media, etc.

	
·  
	
Participate in product development activities by providing commercial advice and guidance to the clinical development and medical affairs staff.

	
·  
	
Additional duties as assigned

  

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EXHIBIT B

NON-DISCLOSURE, INVENTION AND NON-COMPETITION AGREEMENT

THIS NON-DISCLOSURE, INVENTION AND NON-COMPETITION AGREEMENT (the "Agreement") is effective for all purposes and in all respects, by and between POZEN Inc., a Delaware corporation (hereinafter referred to as "Employer"), and Elizabeth A. Cermak (hereinafter referred to as "Employee").

WHEREAS, Employer is about to employ Employee in a position of trust and confidence to aid Employer in its business; and

WHEREAS, Employer desires to receive from Employee a covenant not to disclose certain information relating to Employer's business and certain other covenants; and

WHEREAS, as a material inducement to Employer to employ Employee and to pay to Employee compensation for such services, Employee has agreed to such covenants; and

WHEREAS, Employer and Employee desire to set forth in writing the terms and conditions of their agreements and understandings.

NOW, THEREFORE, in consideration of the foregoing, of the mutual promises herein contained, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending legally to be bound, hereby agree as follows:

  

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1.           Disclosure of Information.  Employee acknowledges that, in and as a result of his employment by Employer, he will be making use of, acquiring and/or
adding to confidential information of a special and unique nature and value, including, without limitation, Employer's trade secrets, products, systems, programs, procedures, manuals, guides (as periodically updated or supplemented), confidential reports and communications (including, without limitation, customer site information, technical information on the performance and reliability of Employer's products and the development or acquisition of future products or product enhancements by Employer) and lists
of customers, as well as the nature and type of the services rendered by Employer and the fees paid by Employer's customers.  Employee further acknowledges that any information and materials received by Employer from third parties in confidence (or subject to non-disclosure covenants) shall be deemed to be and shall be confidential information within the meaning of this Section 1.  As a material inducement to Employer to employ Employee and to pay to Employee compensation for such services
to be rendered to Employer by Employee (it being understood and agreed by the parties hereto that such compensation shall also be paid and received in consideration hereof), Employee covenants and agrees that he shall not, except with the prior written consent of the Board of Directors of Employer, at any time during or following the term of his employment with Employer, directly or indirectly, divulge, reveal, report, publish, transfer or disclose, for any purpose whatsoever, any of such confidential information
which has been obtained by or disclosed to him as a result of his employment with Employer, including, without limitation, any Proprietary Information, as defined in Section 2 hereof; Employee agrees further that upon termination of his employment with Employer for any reason, he shall sign the Employee Termination Statement, a form of which is attached hereto. The aforementioned obligation of confidentiality and non-disclosure shall not apply when:

(a)           Public Domain. The information disclosed to Employee was in the public domain at the time of disclosure, or at any time after disclosure has become a part of
the public domain by publication or otherwise through sources other than Employee, directly or indirectly, and without fault on the part of Employee in failing to keep such information confi­dential; or

(b)           Requirement of Law or Order.  Disclosure is required by law or court order, provided Employee gives Employer prior written notice of any such disclosure;
or

(c)           Agreement. Disclosure is made with the prior written agreement of the Board of Directors of Employer; or

(d)           Prior Information.  The information is encompassed by the ideas and inventions listed on Schedule
A hereto or was in Employee’s possession at the time of disclosure, as shown by written records in existence prior to such time, and such information has not been transferred to Employer, and was not acquired, directly or indirectly, from the Employer; or

(e)           Third Party Disclosure.  The information is lawfully disclosed to Employee after the termination of his employment by a third party who is under no
obligation of confidentiality to Employer with respect to such information; or

  

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(f)           Independently Developed.  Such information is independently developed by Employee subsequent to the termination of his active participation in the business
of Employer, as demonstrated by written records of Employee which are contemporaneously maintained.

2.           Definition of Proprietary Information.  For purposes of this Agreement, the term "Proprietary Information" shall mean all of the following materials
and information (whether or not reduced to writing and whether or not patentable or protectable by copyright) which Employee receives, receives access to, conceives of or develops, in whole or in part, as a direct or indirect result of his employment with Employer, in the course of his employment with Employer (in any capacity, whether executive, managerial, planning, technical, sales, research, development, manufacturing, engineering or otherwise) or through the use of any of Employer's facilities or resources:

(i)           Manufactured products, assembled or unassembled, and any related goods or systems and any and all future products, software or systems developed or derived therefrom;

(ii)           With respect to the items described in Section 2(i) above, all hardware and software relating to design or manufacture; all source and object codes to such hardware and software; all specifications, design concepts, documents
and manuals; all security systems relating to the product or procedures, including, without limitation, software security systems;

(iii)           Trade secrets, production processes, marketing techniques, mailing lists, purchasing information, price lists, pricing policies, quoting procedures, financial information, customer and prospect names and requirements, customer
data, customer site information and other materials or information relating to the manner in which Employer does business;

(iv)           Discoveries, concepts and ideas, whether or not patentable or protectable by copyright, including, without limitation, the nature and results of research and development activities, technical information on product or program
performance and reliability, processes, formulas, techniques, "know-how", source codes, object codes, designs, drawings and specifications;

(v)           Any other material or information related to the business or activities of Employer which is not generally known to others engaged in similar businesses or activities;

(vi)           Any other material or information that has been created, discovered or developed, or otherwise becomes known to Employer which has commercial value in the business in which Employer is engaged; and

(vii)           All ideas which are derived from or relate to Employee's access to or knowledge of any of the above-enumerated materials and information.

  

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Failure to mark any of the Proprietary Information as confidential shall not affect its status as part of the Proprietary Information under the terms of this Agreement.

3.           Ownership of Information.

(i)           Employee hereby assigns to Employer all of Employee's right, title and interest in any idea (whether or not patentable or protectable by copyright), product, invention, discovery, computer software program or other computer-related
equipment or technology, conceived or developed in whole or in part, or in which Employee may have aided in its development, while employed by Employer, including, without limitation, any Proprietary Information.  If any one or more of the aforementioned are deemed in any way to fall within the definition of "work made for hire", as such term is defined in 17 U.S.C. § 101, such work shall be considered "work made for hire", the copyright of which shall be owned solely, completely and exclusively
by Employer.  If any of the aforementioned are considered to be work not included in the categories of work covered by the "work made for hire" definition contained in 17 U.S.C. § 101, such work shall be owned solely by, or assigned or transferred completely and exclusively to, Employer.  Employee agrees to execute any instruments and to do all other things reasonably requested by Employer (both during and after Employee's employment with Employer) in order to more fully vest in
Employer all ownership rights in those items thereby transferred by Employee to Employer.  Employee further agrees to disclose immediately to Employer all Proprietary Information conceived of or developed in whole or in part by him during the term of his employment with Employer and to assign to Employer any right, title or interest he may have in such Proprietary Information.

(ii)           Employee hereby represents and warrants that Employee has fully disclosed to Employer on Schedule A hereto any idea, invention, product, improvement, computer
software program or other equipment or technology related to therapeutic pharmaceuticals (an “Invention”) not covered in Section 3(i) above which, prior to his employment with Employer, Employee conceived of or developed, wholly or in part, and in which Employee has any right, title or proprietary interest and which directly relate to Employer's business, but which has not been published or filed with the United States Patent or Copyright Offices or assigned or transferred to Employer.  If
there is no such list of Schedule A, Employee represents that Employee has made no such Inventions at the time of signing this Agreement or Employee hereby assigns such Inventions to Employer.

(iii)  Notwithstanding anything in this Agreement to the contrary, the obligation of Employee to assign or offer to assign his rights in an Invention to Employer shall not extend or apply to an Invention that Employee developed entirely on his own time without using Employer's equipment,
supplies, facility or trade secret information unless such Invention (a) relates to Employer's business or actual or demonstrably anticipated research or development, or (b) results from any work performed by Employee for Employer.  Employee shall bear the burden of proof in establishing that his Invention qualifies for exclusion under this Section 3(iii).  With respect to Section 3(iii), it is agreed and acknowledged that during Employee’s employment, Employer may enter other lines
of business, which are related or unrelated to its current lines of business, in which case this Agreement would be expanded to cover such new lines of business.

  

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4.           Injunctive Relief.  Employee understands and agrees that Employer will suffer irreparable harm in the event that Employee breaches any of his obligations
under this Agreement and that monetary damages will be inadequate to compensate Employer for such breach.  Accordingly, Employee agrees that, in the event of a breach or threatened breach by Employee of any of the provisions of this Agreement, Employer, in addition to and not in limitation of any other rights, remedies or damages available to Employer at law or in equity, shall be entitled to a permanent injunction in order to prevent or to restrain any such breach by Employee, or any of employee's
partners, agents, representatives, servants, employers, employees and/or any and all persons directly or indirectly acting for or with him.

5.           Records.  All notes, data, tapes, reference materials, sketches, drawings, memoranda, models and records in any way relating to any of the information
referred to in Sections 1, 2 and 3 hereof (including, without limitation, any Proprietary Information) or to Employer's business shall belong exclusively to Employer, and Employee agrees to turn over to Employer all such materials and all copies of such materials in his possession or then under his control at the request of Employer or, in the absence of such a request, upon the termination of Employee's employment with Employer.

6.           Accounting for Profits.  Employee covenants and agrees that, if he shall violate any of his covenants or agreements under this Agreement, Employer shall
be entitled to an accounting and repayment of all profits, compensation, commissions, remunerations or benefits which Employee directly or indirectly has realized and/or may realize as a result of, growing out of or in connection with any such violation; such remedy shall be in addition to and not in limitation of any injunctive relief or other rights or remedies to which Employer is or may be entitled at law, in equity or under this Agreement.

7.           Covenant Not to Compete.  It is recognized and understood by the parties hereto that Employee, through Employee's association with Employer as an employee,
shall acquire a considerable amount of knowledge and goodwill with respect to the business of Employer, which knowledge and goodwill are extremely valuable to Employer and which would be extremely detrimental to Employer if used by Employee to compete with Employer.  It is, therefore, understood and agreed by the parties hereto that, because of the nature of the business of Employer, it is necessary to afford fair protection to Employer from such competition by Employee.  Consequently, as
a material inducement to employ Employee in the aforementioned positions, Employee covenants and agrees to the following:

(a)           Except as otherwise approved in writing by Employer, Employee agrees:

(i)           that Employee will not, directly or indirectly, with or through any family member or former director, officer or employee of Employer, or acting along or as a member of a partnership or as an officer, holder of or investor
in as much as 5% of any security of any class, director, employee, consultant or representative of any corporation or other business entity:

  

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(1) at any time while engaged as an employee of Employer and for a period of two (2) years following termination as an employee, interfere with, or seek to interfere with, the relationship between Employer or any affiliate of Employer and the following: (a) any of the employees of such entities;
(b) any of the custom­ers of such entities then existing or existing at any time within three (3) years prior to termination of Employee’s employ­ment by Employer; or (c) any of the suppliers of such entities then existing or existing at any time within three (3) years prior to termination of Employee’s employment by Employer.

(b)           The parties hereto agree that in the event that either the length of time or the geographic area set forth in paragraph (a) is deemed too restrictive in any court proceeding, that the court may reduce such restrictions to those
which it deems reasonable under the circumstances.

(c)           Employee agrees and acknowledges that Employer does not have any adequate remedy at law for the breach or threatened breach by him of this covenant and agrees that Employer may in addition to the other remedies which may be
available to it under this Agreement, file a suit in equity to enjoin Employee from such breach or threatened breach.

8.           Reasonableness of Restrictions.

(a)           Employee has carefully read and considered the provisions of Sections 1 through 7 hereof and, having done so, agrees that the restrictions set forth therein are fair and reasonable and are reasonably required for the protection
of the interests of Employer, its officers, directors, stockholders and employees.

(b)           In the event that, notwithstanding the foregoing, any part of the covenants set forth in Sections 1 through 7 hereof shall be held to be invalid and unenforceable, the court so deciding may reduce or limit the terms of such
provision to allow such provision to be enforced.

9.           Burden and Benefit.  This Agreement shall be binding upon, and shall inure to the benefit of, Employer and Employee, and their respective heirs, personal
and legal representatives, and, in the case of Employer, its successors and assigns.

10.           Governing Law.  In view of the fact that the principal office of Employer is located in the State of North Carolina, it is understood and agreed that
the construction and interpretation of this Agreement shall at all times and in all respects be governed by the laws of the State of North Carolina.

11.           Severability.  The provisions of this Agreement shall be deemed severable, and the invalidity or unenforceability of any one or more of the provisions
hereof shall not affect the validity or enforceability of the other provisions hereof.

  

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12.           Employer.  As used herein, the term "Employer" shall also include any corporation which is at any time the parent or a subsidiary of Employer, or any
corporation or entity which is an affiliate of Employer by virtue of common (although not identical) ownership, and for which Employee is providing services in any form during his employment with Employer or any such other corporation or entity.

13.           Notices.  Any notice required to be given hereunder shall be sufficient if in writing, and sent by certified or registered mail, return receipt requested,
first-class postage prepaid, in the case of Employee, to his address as shown on Employer's records, and in the case of Employer, to its principal office in the State of North Carolina.

14.           Entire Agreement.  This Agreement contains the entire agreement and understandings by and between Employer and Employee with respect to the covenants
herein described, and no representations, promises, agreements or understandings, written or oral, not herein contained shall be of any force or effect.  Nothing contained in this Agreement shall be deemed or construed to constitute an agreement by Employer to employ or continue to employ Employee.  No change or modification hereof shall be valid or binding unless the same is in writing and signed by the parties hereto.  No waiver of any provision of this Agreement shall be valid
unless the same is in writing and signed by the party against whom such waiver is sought to be enforced; moreover, no valid waiver of any provision of this Agreement at any time shall be deemed a waiver of any other provision of this Agreement at such time nor will it be deemed a valid waiver of such provision at any other time.

15.           Headings.  The headings and other captions in this Agreement are for convenience and reference only and shall not be used in interpreting, construing
or enforcing any of the provisions of this Agreement.

16.           Effective Date.  This Agreement shall be effective as of the date August 11, 2009.

IN WITNESS WHEREOF, Employer and Employee have duly executed this Agreement as of the day and year first above written.

EMPLOYER:

POZEN Inc.

By: /s/ John E. Barnhardt

Name:           John E. Barnhardt

Title:           Vice President, Finance and Administration

EMPLOYEE:

/s/ Elizabeth A. Cermak                                                                09/14/2009

Elizabeth A. Cermak                                                                           Date

  

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SCHEDULE A

Inventions, Ideas, Products, Etc. Not Covered in Section 3(i) of the Agreement

[Note:  If Employee has no such items to disclose, write "NONE" on this line:  ___________.]

  

- 17 -

  

EMPLOYEE TERMINATION STATEMENT

1.            I am cognizant of my legal obligations, as stated in that certain Non-Disclosure, Invention and Non-Competition Agreement, dated _________, 2___, which I signed at the commencement of my employment with respect to confidential
information of POZEN Inc. (the "Company"), and hereby specifically reaffirm all of the provisions stated therein.

2.           I understand that my obligation not to use or disclose Company confidential information remains in effect after the termination of my employment with the Company and that if, at any time in the future, I wish to utilize,
disclose or publish any Company confidential information, or if I should be in doubt as to whether any such information may be confidential to the Company, I will, prior to such use or disclosure, obtain the written consent of the Company to do so.  I further understand that such consent may be refused where Company confidential information is involved.

3.           I understand that, to the extent permitted by law, any idea, invention, discovery, computer software program or other computer-related equipment or technology, conceived or developed by me in whole or in part, or in which
I may have aided in its development during my employment with the Company, belongs exclusively to the Company.  I hereby certify that I have made full disclosure in writing to the Company or have discussed with my supervisor at the Company all of such ideas, inventions, discoveries, computer programs and computer-related equipment or technology.  I further understand that I still have an obligation subsequent to termination of my employment with the Company to execute such papers as the Company
may reasonably request to more fully vest in the Company all ownership rights in the items referenced in this paragraph.

4.           I hereby certify that all materials related directly or indirectly to my employment with the Company and all copies thereof, have been returned to my supervisor at the Company.  I further certify that no computer
listings, programs, object codes, source codes, product development guides, flow-charts or other documents owned by the Company or provided to or used by me in connection with my employment at the Company, whether in machine-readable form or otherwise, have been retained by me or given to any other third person or entity in anticipation of my employment termination or for any other reason, and further certify that none of the aforementioned will be removed from the Company's premises by me.

ACCEPTED:

POZEN Inc.

By: ______________________________                                                                       ______________________________

_________________________________                                                                       ______________________________

Date                                                                                          Date

  

- 18 -

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