Document:

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

(Change of Control)

This Employment Agreement (“Agreement”), dated as of      , is entered into between
Noven Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and      
(the “Executive”).

The Board of Directors of the Company (the “Board”), has determined that it is in the
best interests of the Company and its shareholders to assure that the company will have the
continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a
Change of Control (as defined in Section 2) of the Company. The Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and
risks created by a pending or threatened Change of Control and to encourage the Executive’s full
attention and dedication to the Company currently and in the event of any threatened or pending
Change of Control and to provide the Executive with compensation and benefits arrangements upon a
Change of Control which promote continued service of the Executive to the Company, thereby
potentially enhancing the value received by shareholders in the Change of Control, and which are
competitive with those of other corporations. Therefore, in order to accomplish these objectives,
the Board has caused the Company to enter into this Agreement.

In consideration of the foregoing and the mutual promises contained below, and in
consideration of the Executive’s entry into non-competition covenants under the Confidentiality and
Invention Agreement or any other separate agreement with the Company, Executive and the Company
agree as set forth below.

1. Certain Definitions.

(a) “Effective Date” shall mean the first date during the Change of Control Period (as
defined in Section 1(b)) on which a Change of Control occurs. Anything in this Agreement to the
contrary notwithstanding, if a Change of Control occurs and if the Executive’s employment with the
Company is terminated prior to the date on which the Change of Control occurs, and if it is
reasonably demonstrated by the Executive that such termination of employment (i) was at the request
of a third party who has taken steps reasonably calculated to effect the Change of Control or (ii)
otherwise arose in connection with or in anticipation of the Change of Control, then for all
purposes of this Agreement the “Effective Date” shall mean the date immediately prior to the date
of such termination of employment.

(b) “Change of Control Period” shall mean the period commencing on the date hereof and
ending on the third anniversary of such date; provided, however, that commencing on the date one
year after the date hereof, and on each annual anniversary of such date (such date and each annual
anniversary thereof shall be hereinafter referred to as the “Renewal Date”) the Change of
Control Period may be extended by the Company so as to terminate three years from such Renewal Date
by the Company giving notice to the Executive that the Change of Control Period shall be so
extended.

2. Change of Control. For the purpose of this Agreement, a “Change of
Control” shall mean the occurrence of one of the following events after the date of this
Agreement:

(a) Any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934), (an “Acquiring Person”) shall acquire voting securities
of the Company and immediately thereafter is a beneficial owner (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934) of 40% or more of either (i) the then
outstanding shares of common stock of the Company or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that an
Acquiring Person shall not include the Company, any of its affiliated companies (as defined in
Section 4(b)(i) hereof), any employee benefit plan of the Company or its affiliated companies, or
any person or entity organized, appointed or established by the Company or its affiliated companies
for or pursuant to the terms of any such plan); or

(b) During any period of two consecutive years, individuals who at the beginning of such
period constitute the Board, and any new director (other than a director who is a representative or
nominee of an Acquiring Person) whose election by the Board or nomination for election by the
Company’s shareholders was approved by a vote of at least a majority of the directors then still in
office who either were directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a majority of the Board; or

(c) The shareholders of the Company approve a merger or consolidation of the Company with any
other corporation, and the merger or consolidation has been consummated, other than a merger or
consolidation which would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity or any parent corporation (within the meaning of Section
424(e) of the Internal Revenue Code of 1986, as amended (the “Code”)) of such surviving
entity) at least a majority of the Outstanding Company Voting Securities, such surviving entity or
the parent corporation of such surviving entity outstanding immediately after such merger or
consolidation; or

(d) the shareholders of the Company approve a plan of reorganization (other than a
reorganization under the United States Bankruptcy Code) or complete liquidation of the Company or
an agreement for the sale or disposition by the Company of all or substantially all of the
Company’s assets, and the Company has taken the first substantive step pursuant to the plan of
reorganization or complete liquidation or the sale or disposition has been consummated; provided,
however, that a Change of Control shall not be deemed to have occurred in the event of: (i) a sale
or conveyance in which the Company continues as the ultimate parent holding company of an entity or
entities that conduct all or substantially all of the business or businesses formerly conducted by
the Company, or (ii) any transaction undertaken for the purpose of incorporating the Company under
the laws of another jurisdiction, if such transaction does not materially affect the beneficial
ownership of the Company’s capital stock.

3. Employment Period. The Company hereby agrees to continue the Executive in its
employ, and the Executive hereby agrees to remain in the employ of the Company, in accordance with
the terms and provisions of this Agreement, for the period commencing on the Effective Date and
ending on the second anniversary of such date (the “Employment Period”). The foregoing
notwithstanding, it shall not constitute a breach of this Section 3 for the employment of the
Executive to terminate in accordance with Section 5 prior to the end of the Employment Period.

4. Terms of Employment.

(a) Position and Duties.

(i) During the Employment Period, (A) the Executive’s position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held, exercised and
assigned at any time during the 90-day period immediately preceding the Effective Date and (B) the
Executive’s services shall be performed at the location where the Executive was employed
immediately preceding the Effective Date or any office which is the headquarters of the Company and
is less than 35 miles from such location. For purposes of this Agreement, if Executive has
authority, duties and responsibilities that relate to the Company’s status as a publicly held
company immediately preceding the Effective Date, the Executive’s authority, duties and
responsibilities shall be deemed commensurate only if they continue to relate to the ultimate
parent corporation (whether or not that company is a publicly held company).

(ii) During the Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote substantially full attention and
time during normal business hours to the business and affairs of the Company and, to the extent
necessary to discharge the responsibilities assigned to the Executive hereunder, to use the
Executive’s reasonable best efforts to perform faithfully and efficiently such responsibilities.
During the Employment Period it shall not be a violation of this Agreement for the Executive to (A)
serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill
speaking engagements or teach at educational institutions and (C) manage personal investments, so
long as such activities do not significantly interfere with the performance of the Executive’s
responsibilities as an employee of the Company (or as a director of the Company, if serving as
such), in accordance with this Agreement. It is expressly understood and agreed that to the extent
that any such activities have been conducted by the Executive prior to the Effective Date, the
continued conduct of such activities (or the conduct of activities similar in nature and scope
thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the
performance of the Executive’s responsibilities to the Company.

(b) Compensation.

(i) Base Salary. During the Employment Period, the Executive shall receive an annual
base salary (“Annual Base Salary”), which shall be paid in equal installments on a monthly
or more frequent basis, at least equal to twelve times the highest monthly base salary paid or
payable to the Executive by the Company and its affiliated companies in respect of the twelve-month
period immediately preceding the month in which the Effective Date occurs. During the Employment
Period, the Annual Base Salary shall be reviewed at least annually and shall be increased at any
time and from time to time as shall be substantially consistent with increases in base salary
generally awarded in the ordinary course of business to other Peer Executives (as defined below) of
the Company and its affiliated companies. Any increase in Annual Base Salary shall not serve to
limit or reduce any other obligation to the Executive under this Agreement. Annual Base Salary
shall not be reduced after any such increase and the term Annual Base Salary as utilized in this
Agreement shall refer to Annual Base Salary as so increased. As used in this Agreement, the term
"affiliated companies” shall include any company controlled by, controlling or under common
control with the Company.

	 	(ii)	 	Annual Bonus. In addition to Annual Base Salary, the Executive (A)
shall be awarded, for the fiscal year during which the Change of Control occurred and
the next following fiscal year during the Employment Period, an annual bonus (the
“Annual Bonus”) in cash at least equal to the average annualized (for any
fiscal year consisting of less than twelve full months or with respect to which the
Executive has been employed by the Company for less than twelve full months) bonus
paid or payable, including by reason of any deferral, to the Executive by the Company
and its affiliated companies in respect of the three fiscal years immediately
preceding the fiscal year in which the Effective Date occurs (the “Recent Average
Bonus”), and (B) shall be provided an opportunity to earn an Annual Bonus, for
any fiscal year beginning during the Employment Period after the end of the fiscal
years covered by clause (A), with the following terms:

	 	(a)	 	Target bonus payable for performance at a designated target
level which shall be a percentage of Annual Base Salary not less than the
percentage of Executive’s then annual base salary represented by Executive’s
highest target bonus amount established prior to the Change of Control and
with respect to the year in which the Change of Control occurred or, if no
annual bonus was established for that year, with respect to the immediately
preceding year

	 	(b)	 	Bonus payable at amounts in excess of the target bonus for
performance at designated levels in excess of the designated target level,
consistent with the bonus program as in effect prior to the Change of Control

	 	(c)	 	Minimum bonus payable for performance at a designated
threshold level will equal 50% of target bonus, with bonus amounts payable
interpolated for performance between threshold and target

	 	(d)	 	No bonus will be payable for performance below the designated
threshold level

	 	(e)	 	The Board or its compensation committee shall determine the
performance requirements, but such requirements must be reasonably related to
the Company’s business plan, with the target performance level determined by
the Board or its compensation committee to be reasonably likely to be attained
(taking into account the business plan) and not more difficult to attain than
the target level of performance applicable to annual bonus opportunities of
other senior executives for that fiscal year, and the above-target performance
requirements and threshold performance requirements being specified for the
same type of performance and with levels that vary in difficulty of attainment
from the level of target performance by customary increments based on the most
favorable terms of the Company’s annual bonus program in effect in the three
fiscal years beginning immediately before the Change of Control.

	 	(f)	 	Each such Annual Bonus shall be paid no later than the end
of the third month of the fiscal year next following the fiscal year for which
the Annual Bonus is awarded, unless the Executive shall elect to defer the
receipt of such Annual Bonus.

(iii) Incentive, Savings and Retirement Plans. During the Employment Period, the
Executive shall be entitled to participate in all incentive, savings and retirement plans,
practices, policies and programs applicable generally to other Peer Executives of the Company and
its affiliated companies, but in no event shall such plans, practice, policies and programs provide
the Executive with incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is applicable), savings
opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate,
than the most favorable of those provided by the Company and its affiliated companies for the
Executive under such plans, practices, policies and programs as in effect at any time during the
90-day period immediately preceding the Effective Date or if more favorable to the Executive, those
provided generally at any time after the Effective Date to other Peer Executives of the Company and
its affiliated companies.

(iv) Welfare Benefit Plans. During the Employment Period, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for participation in and shall receive
all benefits under welfare benefit plans, practices, policies and programs provided by the Company
and its affiliated companies (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other Peer Executives of the
Company and its affiliated companies, but in no event shall such plans, practices, policies and
programs provide the Executive with benefits which are less favorable, in the aggregate, than the
most favorable of such plans, practices, policies and programs in effect for the Executive at any
time during the 90-day period immediately preceding the Effective Date or, if more favorable to the
Executive, those provided generally at any time after the Effective Date to other Peer Executives
of the Company and its affiliated companies.

(v) Expenses. During the Employment Period, the Executive shall be entitled to
receive prompt reimbursement for all reasonable employment expenses incurred by the Executive in
accordance with the most favorable policies, practices and procedures of the Company and its
affiliated companies in effect for the Executive at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any
time thereafter with respect to other Peer Executives of the Company and its affiliated companies.

(vi) Fringe Benefits. During the Employment Period, the Executive shall be entitled
to fringe benefits in accordance with the most favorable plans, practices, programs and policies of
the Company and its affiliated companies in effect for the Executive at any time during the 90-day
period immediately preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other Peer Executives of the Company and
its affiliated companies.

(vii) Office and Support Staff. During the Employment Period, the Executive shall be
entitled to an office or offices of a size and with furnishings and other appointments, and to
exclusive personal secretarial and other assistance, at least equal to the most favorable of the
foregoing provided to the Executive by the Company and its affiliated companies at any time during
the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive,
as provided generally at any time thereafter with respect to other Peer Executives of the Company
and its affiliated companies.

(viii) Vacation. During the Employment Period, the Executive shall be entitled to
paid vacation in accordance with the most favorable plans, policies, programs and practices of the
Company and its affiliated companies as in effect for the Executive at any time during the 90-day
period immediately preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other Peer Executives of the Company and
its affiliated companies.

(ix) “Peer Executives.” For purposes of this Agreement, references to “peer
executives of the Company and its affiliated companies” shall refer only to Executives based in the
United States.

5. Termination of Employment.

(a) Death or Disability. The Executive’s employment shall terminate automatically
upon the Executive’s death during the Employment Period. If the Company determines in good faith
that the Disability of the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive written notice in
accordance with Section 12(b) of its intention to terminate the Executive’s employment. In such
event, the Executive’s employment with the Company shall terminate effective on the 30th day after
receipt of such notice by the Executive (the “Disability Effective Date”), provided that,
within the 30 days after such receipt, the Executive shall not have returned to full-time
performance of the Executive’s duties. For purposes of this Agreement, “Disability” shall
mean the absence of the Executive from the Executive’s duties with the Company on a full-time basis
for 180 consecutive business days as a result of incapacity due to mental or physical illness which
is determined to be total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive’s legal representative (such agreement as to
acceptability not to be withheld unreasonably).

(b) Cause. The Company may terminate the Executive’s employment during the Employment
Period for Cause. For purposes of this Agreement,  “Cause” shall only mean (i) any
material act or acts of personal dishonesty taken by Executive which is either (x) at the expense
of the Company, or (y) reasonably likely to bring significant disrepute to the Company, (ii)
subject to the following sentences, any violation by Executive of Executive’s material obligations
under this Agreement (other than as a result of incapacity due to physical or mental illness) which
is demonstrably willful and deliberate on Executive’s part and which is not remedied within ten
business days after receipt of written notice from the Company, (iii) the conviction of Executive
for any criminal act which is a felony or a misdemeanor in each case involving moral turpitude, or
(iv) a material breach of Executive’s Confidentiality and Invention Agreement with the Company.
The requirement of written notice from the Company specifying the breach is mandatory, and shall
provide at least ten days for such breach to be remedied.

(c) Good Reason. The Executive’s employment may be terminated during the Employment
Period by the Executive for Good Reason. For purposes of this Agreement, “Good Reason”
shall mean:

(i) the assignment to the Executive of any duties inconsistent in any respect with the
Executive’s position (including status, offices, titles and reporting requirements), authority,
duties or responsibilities as contemplated by Section 4(a) or any other action by the Company which
results in a diminution in such position (including any action which results in a diminution of
status, offices, titles and reporting levels or requirements), authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company promptly after receipt of written notice
thereof given by the Executive;

(ii) any failure by the Company to comply with any of the provisions of Section 4(b), other
than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of written notice thereof given by the Executive;

(iii) the Company’s requiring the Executive to be based at any office or location other than
that described in Section 4(a)(i)(B);

(iv) any purported termination by the Company of the Executive’s employment otherwise than as
expressly permitted by this Agreement; or

(v) any failure by the Company to comply with and satisfy Section 11(c), provided that such
successor has received at least ten days prior written notice from the Company or the Executive of
the requirements of Section 11(c).

For purposes of this Section 5(c), (A) the requirement of written notice from the Executive
specifying the grounds for Good Reason is mandatory in all cases, but Good Reason will exist if the
Company fails to remedy any such grounds for Good Reason within ten days, and (B) any good faith
determination of “Good Reason” made by the Executive shall be conclusive.

(d) Notice of Termination. Any termination by the Company for Cause, or by the
Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto
given in accordance with Section 12(b). For purposes of this Agreement, a “Notice of
Termination” means a written notice which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the Executive’s employment
under the provision so indicated and (iii) if the Date of Termination (as defined below) is other
than the date of receipt of such notice, specifies the termination date (which date shall be not
more than 15 days after the giving of such notice). The failure by the Executive or the Company to
set forth in the Notice of Termination any fact or circumstance which contributes to a showing of
Good Reason or Cause shall not waive any right of the Executive or the Company hereunder or
preclude the Executive or the Company from asserting such fact or circumstance in enforcing the
Executive’s or the Company’s rights hereunder.

(e) Date of Termination. "Date of Termination” means (i) if the Executive’s
employment is terminated by the Company for Cause, or by the Executive for Good Reason, the date of
receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii)
if the Executive’s employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the Executive of such
termination and (iii) if the Executive’s employment is terminated by reason of death or Disability,
the Date of Termination shall be the date of death of the Executive or the Disability Effective
Date, as the case may be.

6. Obligations of the Company Upon Termination.

(a) Good Reason; Other Than for Cause or Disability. If, during the Employment
Period, the Company shall terminate the Executive’s employment other than for Cause or Disability
or the Executive shall terminate employment for Good Reason:

(i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date
of Termination the aggregate of the following amounts:

A. the sum of (1) the Executive’s Annual Base Salary through the Date of Termination to the
extent not theretofore paid, and (2) the product of (x) the greater of (i) the Annual Bonus paid or
payable, including by reason of any deferral, to the Executive (and annualized for any fiscal year
consisting of less than twelve full months or for which the Executive has been employed for less
than twelve full months) for the most recently completed fiscal year during the Employment Period,
if any, and (ii) the Recent Average Bonus (such greater amount shall be hereinafter referred to as
the “Highest Annual Bonus”) and (y) a fraction, the numerator of which is the number of
days in the current fiscal year through the Date of Termination, and the denominator of which is
365, (the sum of the amounts described in clauses (1) and (2) shall be hereinafter referred to as
the “Accrued Obligations”), and payments of deferred compensation pursuant to Section 6(e);
and

B. the amount (such amount shall be hereinafter referred to as the “Severance Amount”)
equal to the product of (1) two and (2) the sum of (x) the Executive’s Annual Base Salary and (y)
the Highest Annual Bonus; and, provided further, that such amount shall be reduced by the present
value (determined as provided in Section 280G(d)(4) of the Code) of any other amount of severance
relating to salary or bonus continuation to be received by the Executive upon termination of
employment of the Executive under any agreement, severance plan, policy or arrangement of the
Company or its subsidiaries or affiliated companies; and

(ii) for the remainder of the Employment Period, or such longer period as any plan, program,
practice or policy may provide, the Company shall continue benefits to the Executive and/or the
Executive’s family at least equal to those which would have been provided to them in accordance
with the plans, programs, practices and policies described in Section 4(b) (iv) and Section
4(b)(vi) if the Executive’s employment had not been terminated in accordance with the most
favorable plans, practices, programs or policies of the Company and its affiliated companies as in
effect and applicable generally to other Peer Executives and their families during the 90-day
period immediately preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other Peer Executives of the Company and
its affiliated companies and their families, (such continuation of such benefits for the applicable
period herein set forth shall be hereinafter referred to as “Welfare Benefit Continuation). If the
Executive becomes re-employed with another employer and is eligible to receive medical or other
welfare benefits under another employer provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under such other plan during such applicable
period of eligibility. For purposes of determining eligibility of the Executive for retiree
benefits pursuant to such plans, practices, programs and policies, the Executive shall be
considered to have remained employed until the end of the Employment Period and to have retired on
the last day of such period; and

(iii) to the extent not theretofore paid or provided, the Company shall timely pay or provide
to the Executive and/or the Executive’s family any other amounts or benefits required to be paid or
provided or which the Executive and/or the Executive’s family is eligible to receive pursuant to
this Agreement and under any plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies as in effect and applicable generally to other Peer Executives
and their families during the 90-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally thereafter with respect to other peer executives
of the Company and its affiliated companies and their families (such other amounts and benefits
shall be hereinafter referred to as the “Other Benefits”).

(iv) Except to the extent this benefit is provided under (ii) or (iii) above, the Company
shall provide Executive with outplacement benefits for a one-year period on terms consistent with
the highest level of such benefits provided under policies and practices in effect in the one year
period before the Change of Control, provided that Executive may elect within 15 days of
termination to receive, in lieu of such benefits, a cash payment equal to the present value of such
benefits.

(v) If any benefit to be provided under (ii) or (iii) above cannot be so provided under the
terms of the plan or program, or legal limitations on such plan or program, in lieu of such benefit
the Company shall pay to Executive an amount in cash equivalent (on an after-tax basis from the
Executive’s point of view) to the Company’s cost of providing such benefit to Executive on an
individual basis, but assuming that any cost to the Executive under the plan or program would have
been borne by the Executive (in an equal dollar amount) under such individual arrangement.

(b) Death. If the Executive’s employment is terminated by reason of the Executive’s
death during the Employment Period, employment under this Agreement shall terminate without further
obligations to the Executive’s legal representatives under this Agreement, other than for (i)
payment of Accrued Obligations (which shall be paid to the Executive’s estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination), payment of deferred
compensation obligations pursuant to Section 6(e), and the timely payment or provision of the
Welfare Benefit Continuation and Other Benefits (excluding, in each case, Death Benefits (as
defined below)) and (ii) payment to the Executive’s estate or beneficiary, as applicable, in a lump
sum in cash within 30 days of the Date of Termination of an amount equal to the present value
(determined as provided in Section 280G(d)(4) of the Code) of any cash amount to be received by the
Executive or the Executive’s family as a death benefit pursuant to the terms of any plan, policy or
arrangement of the Company and its affiliated companies, but not including any proceeds of life
insurance covering the Executive to the extent paid for directly or on a contributory basis by the
Executive (which shall be paid in any event as an Other Benefit) (the benefits included in this
clause (b) shall be hereinafter referred to as the “Death Benefits”).

(c) Disability. If the Executive’s employment is terminated by reason of the
Executive’s Disability during the Employment Period, employment under this Agreement shall
terminate without further obligations to the Executive under this Agreement, other than for (i)
payment of Accrued Obligations (which shall be paid to the Executive in a lump sum in cash within
30 days of the Date of Termination), payments of deferred compensation pursuant to Section 6(e),
and the timely payment or provision of the Welfare Benefit Continuation and Other Benefits
(excluding, in each case, Disability Benefits (as defined below)) and (ii) payment to the Executive
in a lump sum in cash within 30 days of the Date of Termination of an amount equal to the present
value (determined as provided in Section 280G(d)(4) of the Code) of any cash amount to be received
by the Executive as a disability benefit pursuant to the terms of any plan, policy or arrangement
of the Company and its affiliated companies, but not including any proceeds of disability insurance
covering the Executive to the extent paid for directly or on a contributory basis by the Executive
(which shall be paid in any event as an Other Benefit) (the benefits included in this clause (c)
shall be hereinafter referred to as the “Disability Benefits”).

(d) Cause; Other than for Good Reason. If the Executive’s employment shall be
terminated for Cause during the Employment Period, employment under this Agreement shall terminate
without further obligations to the Executive under this Agreement, other than the obligation to pay
to the Executive Annual Base Salary through the Date of Termination and payments of deferred
compensation pursuant to Section 6(e) to the extent theretofore unpaid. If the Executive
terminates employment during the Employment Period, excluding a termination for Good Reason, this
Agreement shall terminate without further obligations to the Executive, other than for Accrued
Obligations and the timely payment or provision of Other Benefits. In such case, all Accrued
Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination.

(e) Deferred Compensation Payouts. Upon any termination of employment, payments shall
be made to the Executive (or to Executive’s legal representatives following death) of vested
deferred compensation at such times as specified under the documents governing the deferred
compensation plan or arrangement, subject to applicable limitations under Code Section 409A to
ensure that no additional taxes apply thereunder.

7. Non-exclusivity of Rights. Except as provided in Sections 6(a)(ii), 6(b), 6(c) and
6(d), nothing in this Agreement shall prevent or limit the Executive’s continuing or future
participation in any plan, program, policy or practice provided by the Company or any of its
affiliated companies and for which the Executive may qualify, nor shall anything herein limit or
otherwise affect such rights as the Executive may have under any contract or agreement with the
Company or any of its affiliated companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company or any of its affiliated companies at or subsequent to the
Date of Termination shall be payable in accordance with such plan, policy, practice or program or
contract or agreement except as explicitly modified by this Agreement.

8. Full Settlement: Resolution of Disputes.

(a) The payment by the Company to the Executive of the amounts required by this Agreement
shall serve as a full settlement of any and all claims which the Executive may have against the
Company arising out of or in connection with the termination of the Executive’s employment by the
Company.

(b) The Company’s obligation to make the payments provided for in this Agreement and otherwise
to perform its obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other employment or take
any other action by way of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and, except as provided in Section 6(a)(ii), such amounts shall not be
reduced whether or not the Executive obtains other employment. The Company agrees to pay promptly
as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive
may reasonably incur as a result of any dispute or contest (regardless of the outcome thereof) by
the Company, the Executive or others of the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance thereof (including as a result of any
dispute or contest by the Executive about the amount of any payment pursuant to this Agreement),
plus in each case interest on any delayed payment at the applicable Federal rate provided for in
Section 7872(f)(2)(A) of the Code.

(c) If there shall be any dispute between the Company and the Executive (i) in the event of
any termination of the Executive’s employment by the Company, whether such termination was for
Cause, or (ii) in the event of any termination of employment by the Executive, whether Good Reason
existed, then, unless and until there is a final, nonappealable judgment by a court of competent
jurisdiction declaring that such termination was for Cause or that the determination by the
Executive of the existence of Good Reason was not made in good faith, the Company shall pay all
amounts, and provide all benefits, to the Executive and/or the Executive’s family or other
beneficiaries, as the case may be, that the Company would be required to pay or provide pursuant to
Section 6(a) as though such termination were by the Company without Cause or by the Executive with
Good Reason; provided, however, that the Company shall not be required to pay any disputed amounts
pursuant to this paragraph except upon receipt of an undertaking by or on behalf of the Executive
to repay all such amounts to which the Executive is ultimately adjudged by such court not to be
entitled.

9. Certain Additional Payments by the Company.

(a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by the Company to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required under this Section 9)
(a “Payment”) would be subject to the excise tax imposed by section 4999 of the Code or any
interest or penalties are incurred by the Executive with respect to such excise tax (such excise
tax, together with any such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax”), then the Executive shall be entitled to receive an additional payment (a
"Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with respect thereto) and
Excise Tax, imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.

(b) Subject to the provisions of Section 9(c), all determinations required to be made under
this Section 9, including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be
made by Deloitte & Touche LLP (the “Accounting Firm”), which shall provide detailed
supporting calculations both to the Company and the Executive within 15 business days of the
receipt of notice from the Executive that there has been a Payment, or such earlier time as is
requested by the Company. In the event that the Accounting Firm is serving as accountant or
auditor for the individual, entity or group effecting the Change of Control, the Executive shall
appoint another nationally recognized accounting firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and
expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 9, shall be paid by the Company to the Executive within five
days of the receipt of the Accounting Firm’s determination. If the Accounting Firm determines that
no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion
that failure to report the Excise Tax on the Executive’s applicable federal income tax return would
not result in the imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been
made by the Company should have been made (“Underpayment”), consistent with the
calculations required to be made hereunder. In the event that the Company exhausts its remedies
pursuant to Section 9(c) and the Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any
such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of the Gross-Up Payment.
Such notification shall be given as soon as practicable but no later than ten business days after
the Executive is informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The Executive shall not pay
such claim prior to the expiration of the 30-day period following the date on which it gives such
notice to the Company (or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive shall: (i) give the
Company any information reasonably requested by the Company relating to such claim, (ii) take such
action in connection with contesting such claim as the Company shall reasonably request in writing
from time to time, including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Company, (iii) cooperate with the Company in
good faith in order effectively to contest such claim, and (iv) permit the Company to participate
in any proceedings relating to such claim; provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and expenses. Without limitation
on the foregoing provisions of this Section 9(c), the Company shall control all proceedings taken
in connection with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing authority in respect
of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and
sue for a refund or contest the claim in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall determine; provided,
however, that if the Company directs the Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the Executive, on an interest-free basis and
shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with respect to such
advance or with respect to any imputed income with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of taxes for the taxable year
of the Executive with respect to which such contested amount is claimed to be due is limited solely
to such contested amount. Furthermore, the Company’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall
be entitled to settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.

(d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to
Section 9(c), the Executive becomes entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Company’s complying with the requirements of Section 9(c)) promptly
pay to the Company the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 9(c), a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.

10. Confidential Information. The Executive shall hold in a fiduciary capacity for
the benefit of the Company all secret or confidential information, knowledge or data relating to
the Company or any of its affiliated companies, and their respective businesses, which shall have
been obtained by the Executive during the Executive’s employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement). After termination
of the Executive’s employment with the Company, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of this Section 10
constitute a basis for deferring or withholding any amounts otherwise payable to the Executive
under this Agreement.

11. Successors.

(a) This Agreement is personal to the Executive and without the prior written consent of the
Company shall not be assignable by the Executive other than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s
legal representatives.

(b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.

(c) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession had taken place. As
used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor
to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.

12. Miscellaneous.

(a) This Agreement shall be governed by and construed in accordance with the laws of the State
of Florida, without reference to principles of conflict of laws. The captions of this Agreement
are not part of the provisions hereof and shall have no force or effect. This Agreement may not be
amended or modified otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives. Notwithstanding the foregoing, the parties hereto
agree without the requirement of further consent that this Agreement will be amended, to the extent
required, to comply with the requirements of section 409A of the Code and applicable regulations.

(b) All notices and other communications hereunder shall be in writing and shall be given by
hand delivery to the other party or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:

If to the Executive:

To the Executive’s most recent address

according to the Company’s records.

If to the Company:

Noven Pharmaceuticals, Inc.

11960 S.W. 144th Street

Miami, Florida 33186

Attention: General Counsel

or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when actually received by the addressee.

(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.

(d) The Company may withhold from any amounts payable under this Agreement such Federal, state
or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e) The Executive’s or the Company’s failure to insist upon strict compliance with any
provision hereof or any other provision of this Agreement or the failure to assert any right the
Executive or the Company may have hereunder, including, without limitation, the right of the
Executive to terminate employment for Good Reason pursuant to Section 5(c)(i)-(v), shall not be
deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

(f) The Executive and the Company acknowledge that, except as may otherwise be provided under
any other written agreement between the Executive and the Company, the employment of the Executive
by the Company is “at will” and, prior to the Effective Date, may be terminated by either the
Executive or the Company at any time. Moreover, if prior to the Effective Date, the Executive’s
employment with the Company terminates, then the Executive shall have no further rights under this
Agreement. From and after the Effective Date, this Agreement shall supersede any prior agreement
between the parties with respect to the subject matter hereof.

(g) This Agreement shall supersede and replace any Employment Agreement (Change in Control)
between the Company and Executive dated prior to the date of this Agreement.

IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the
authorization from its Board, the Company has caused these presents to be executed in its name on
its behalf, all as of the day and year first above written.

Noven Pharmaceuticals, Inc.

     

Robert C. Strauss

President, Chief Executive Officer &

Chairman of the Board

     

ExecutiveEX-10.2

Exhibit 10.2

Noven Pharmaceuticals, Inc.

Nonqualified Deferred Compensation Plan

Master Plan Document

Effective January 1, 2006

Copyright © 2005

By Clark Consulting, Inc.

Executive Benefits Practice

All Rights Reserved

1

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE 1

	 	Definitions
	 	

	 
	 	 	 	 
	ARTICLE 2

	 	Selection, Enrollment, Eligibility
	 	

	 
	 	 	 	 
	2.1

	 	Selection by Committee
	 	

	 
	 	 	 	 
	2.2

	 	Enrollment and Eligibility Requirements;

Commencement of Participation
	 	

	 
	 	 	 	 
	2.3

	 	Termination of a Participant’s Eligibility
	 	

	 
	 	 	 	 
	ARTICLE 3

	 	Deferral Commitments/Company Contribution

Amounts/Company Restoration Matching

Amounts/Restricted Stock Amounts

/Vesting/Crediting/Taxes
	 	

	 
	 	 	 	 
	3.1

	 	Minimum Deferrals
	 	

	 
	 	 	 	 
	3.2

	 	Maximum Deferral
	 	

	 
	 	 	 	 
	3.3

	 	Election to Defer; Effect of Election Form
	 	

	 
	 	 	 	 
	3.4

	 	Withholding and Crediting of Annual Deferral Amounts
	 	

	 
	 	 	 	 
	3.5

	 	Company Contribution Amount
	 	

	 
	 	 	 	 
	3.6

	 	Company Restoration Matching Amount
	 	

	 
	 	 	 	 
	3.7

	 	Restricted Stock Amount
	 	

	 
	 	 	 	 
	3.7

	 	Crediting of Amounts after Benefit Distribution
	 	

	 
	 	 	 	 
	3.9

	 	Vesting
	 	

	 
	 	 	 	 
	3.10

	 	Crediting/Debiting of Account Balances
	 	

	 
	 	 	 	 
	3.11

	 	FICA and Other Taxes
	 	

	 
	 	 	 	 
	ARTICLE 4

	 	Scheduled Distribution; Unforeseeable Financial

Emergencies
	 	

	 
	 	 	 	 
	4.1

	 	Scheduled Distribution
	 	

	 
	 	 	 	 
	4.2

	 	Postponing Scheduled Distributions
	 	

	 
	 	 	 	 
	4.3

	 	Other Benefits Take Precedence Over Scheduled

Distributions
	 	

	 
	 	 	 	 
	4.4

	 	Payout/Suspensions for Unforeseeable Financial

Emergencies
	 	

	 
	 	 	 	 
	ARTICLE 5

	 	Change In Control Benefit
	 	

	 
	 	 	 	 
	5.1

	 	Change in Control Benefit
	 	

	 
	 	 	 	 
	5.2

	 	Payment of Change in Control Benefit
	 	

	 
	 	 	 	 
	ARTICLE 6

	 	Retirement Benefit
	 	

	 
	 	 	 	 
	6.1

	 	Retirement Benefit
	 	

	 
	 	 	 	 
	6.2

	 	Payment of Retirement Benefit
	 	

	 
	 	 	 	 
	ARTICLE 7

	 	Termination Benefit
	 	

	 
	 	 	 	 
	7.1

	 	Termination Benefit
	 	

	 
	 	 	 	 
	7.2

	 	Payment of Termination Benefit
	 	

	 
	 	 	 	 
	ARTICLE 8

	 	Disability Benefit
	 	

	 
	 	 	 	 
	8.1

	 	Disability Benefit
	 	

	 
	 	 	 	 
	8.2

	 	Payment of Disability Benefit
	 	

	 
	 	 	 	 
	ARTICLE 9

	 	Death Benefit
	 	

	 
	 	 	 	 
	9.1

	 	Death Benefit
	 	

	 
	 	 	 	 
	9.2

	 	Payment of Death Benefit
	 	

	 
	 	 	 	 
	ARTICLE 10

	 	Beneficiary Designation
	 	

	 
	 	 	 	 
	10.1

	 	Beneficiary
	 	

	 
	 	 	 	 
	10.2

	 	Beneficiary Designation; Change; Spousal Consent
	 	

	 
	 	 	 	 
	10.3

	 	Acknowledgement
	 	

	 
	 	 	 	 
	10.4

	 	No Beneficiary Designation
	 	

	 
	 	 	 	 
	10.5

	 	Doubt as to Beneficiary
	 	

	 
	 	 	 	 
	10.6

	 	Discharge of Obligations
	 	

	 
	 	 	 	 
	ARTICLE 11

	 	Leave of Absence
	 	

	 
	 	 	 	 
	11.1

	 	Paid Leave of Absence
	 	

	 
	 	 	 	 
	11.2

	 	Unpaid Leave of Absence
	 	

	 
	 	 	 	 
	ARTICLE 12

	 	Termination of Plan, Amendment or Modification
	 	

	 
	 	 	 	 
	12.1

	 	Termination of Plan
	 	

	 
	 	 	 	 
	12.2

	 	Amendment
	 	

	 
	 	 	 	 
	12.3

	 	Plan Agreement
	 	

	 
	 	 	 	 
	12.4

	 	Effect of Payment
	 	

	 
	 	 	 	 
	ARTICLE 13

	 	Administration
	 	

	 
	 	 	 	 
	13.1

	 	Committee Duties
	 	

	 
	 	 	 	 
	13.2

	 	Administration Upon Change In Control
	 	

	 
	 	 	 	 
	13.3

	 	Agents
	 	

	 
	 	 	 	 
	13.4

	 	Binding Effect of Decisions
	 	

	 
	 	 	 	 
	13.5

	 	Indemnity of Committee
	 	

	 
	 	 	 	 
	13.6

	 	Employer Information
	 	

	 
	 	 	 	 
	ARTICLE 14

	 	Other Benefits and Agreements
	 	

	 
	 	 	 	 
	14.1

	 	Coordination with Other Benefits
	 	

	 
	 	 	 	 
	ARTICLE 15

	 	Claims Procedures
	 	

	 
	 	 	 	 
	15.1

	 	Presentation of Claim
	 	

	 
	 	 	 	 
	15.2

	 	Notification of Decision
	 	

	 
	 	 	 	 
	15.3

	 	Review of a Denied Claim
	 	

	 
	 	 	 	 
	15.4

	 	Decision on Review
	 	

	 
	 	 	 	 
	15.5

	 	Legal Action
	 	

	 
	 	 	 	 
	ARTICLE 16

	 	Trust
	 	

	 
	 	 	 	 
	16.1

	 	Establishment of the Trust
	 	

	 
	 	 	 	 
	16.2

	 	Interrelationship of the Plan and the Trust
	 	

	 
	 	 	 	 
	16.3

	 	Distributions From the Trust
	 	

	 
	 	 	 	 
	ARTICLE 17

	 	Miscellaneous
	 	

	 
	 	 	 	 
	17.1

	 	Status of Plan
	 	

	 
	 	 	 	 
	17.2

	 	Unsecured General Creditor
	 	

	 
	 	 	 	 
	17.3

	 	Employer’s Liability
	 	

	 
	 	 	 	 
	17.4

	 	Nonassignability
	 	

	 
	 	 	 	 
	17.5

	 	Not a Contract of Employment
	 	

	 
	 	 	 	 
	17.6

	 	Furnishing Information
	 	

	 
	 	 	 	 
	17.7

	 	Terms
	 	

	 
	 	 	 	 
	17.8

	 	Captions
	 	

	 
	 	 	 	 
	17.9

	 	Governing Law
	 	

	 
	 	 	 	 
	17.10

	 	Notice
	 	

	 
	 	 	 	 
	17.11

	 	Successors
	 	

	 
	 	 	 	 
	17.12

	 	Spouse’s Interest
	 	

	 
	 	 	 	 
	17.13

	 	Validity
	 	

	 
	 	 	 	 
	17.14

	 	Incompetent
	 	

	 
	 	 	 	 
	17.15

	 	Court Order
	 	

	 
	 	 	 	 
	17.16

	 	Insurance
	 	

2

NOVEN PHARMACEUTICALS, INC.

NONQUALIFIED DEFERRED COMPENSATION PLAN

Effective January 1, 2006

Purpose

The purpose of this Plan is to provide specified benefits to Directors and a select group of
management or highly compensated Employees who contribute materially to the continued growth,
development and future business success of Noven Pharmaceuticals, Inc., a Delaware corporation, and
its subsidiaries, if any, that sponsor this Plan. This Plan shall be unfunded for tax purposes and
for purposes of Title I of ERISA.

ARTICLE 1

Definitions

For the purposes of this Plan, unless otherwise clearly apparent from the context, the
following phrases or terms shall have the following indicated meanings:

	 	1.1	 	“Account Balance” shall mean, with respect to a Participant, an entry on the records of the
Employer equal to the sum of (i) the Deferral Account balance, (ii) the Company Contribution
Account balance, (iii) the Company Restoration Matching Account balance, and (iv) the
Restricted Stock Account balance. The Account Balance shall be a bookkeeping entry only and
shall be utilized solely as a device for the measurement and determination of the amounts to
be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.

	 	1.2	 	“Annual Deferral Amount” shall mean that portion of a Participant’s Base Salary, Bonus,
Director Fees and LTIP Amounts that a Participant defers in accordance with Article 3 for any
one Plan Year, without regard to whether such amounts are withheld and credited during such
Plan Year. In the event of a Participant’s Retirement, Disability, death or Termination of
Employment prior to the end of a Plan Year, such year’s Annual Deferral Amount shall be the
actual amount withheld prior to such event.

	 	1.3	 	“Annual Installment Method” shall be an annual installment payment over the number of years
selected by the Participant in accordance with this Plan, calculated as follows: (i) for the
first annual installment, the Participant’s vested Account Balance shall be calculated as of
the close of business on or around the Participant’s Benefit Distribution Date, as determined
by the Committee in its sole discretion, and (ii) for remaining annual installments, the
Participant’s vested Account Balance shall be calculated on every anniversary of such
calculation date, as applicable. Each annual installment shall be calculated by multiplying
this balance by a fraction, the numerator of which is one and the denominator of which is the
remaining number of annual payments due the Participant. By way of example, if the
Participant elects a ten (10) year Annual Installment Method for the Retirement Benefit, the
first payment shall be 1/10 of the vested Account Balance, calculated as described in this
definition. The following year, the payment shall be 1/9 of the vested Account Balance,
calculated as described in this definition. Shares of Stock that shall be distributable from
the Restricted Stock Account shall be distributable in shares of actual Stock in the same
manner previously described. However, the Committee may, in its sole discretion, adjust the
annual installments in order to distribute whole shares of actual Stock.

	 	1.4	 	“Base Salary” shall mean the annual cash compensation relating to services performed during
any calendar year, excluding distributions from nonqualified deferred compensation plans,
bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive
payments, non-monetary awards, director fees and other fees, and automobile and other
allowances paid to a Participant for employment services rendered (whether or not such
allowances are included in the Employee’s gross income). Base Salary shall be calculated
before reduction for compensation voluntarily deferred or contributed by the Participant
pursuant to all qualified or nonqualified plans of any Employer and shall be calculated to
include amounts not otherwise included in the Participant’s gross income under Code Sections
125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by any Employer; provided,
however, that all such amounts will be included in compensation only to the extent that had
there been no such plan, the amount would have been payable in cash to the Employee.

	 	1.5	 	“Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated
in accordance with Article 10, that are entitled to receive benefits under this Plan upon the
death of a Participant.

	 	1.6	 	“Beneficiary Designation Form” shall mean the form established from time to time by the
Committee that a Participant completes, signs and returns to the Committee to designate one or
more Beneficiaries.

	 	1.7	 	“Benefit Distribution Date” shall mean the date that triggers distribution of a Participant’s
vested Account Balance. A Participant’s Benefit Distribution Date shall be determined upon
the occurrence of any one of the following:

	 	(a)	 	If the Participant Retires, his or her Benefit Distribution Date shall be

	 	(i)	 	the last day of the six-month period immediately following the
date on which the Participant Retires if the Participant is a Key Employee, and

	 	(ii)	 	for all other Participants, the date on which the Participant
Retires;

	 	(iii)	 	provided, however, in the event the Participant changes
his or her Retirement Benefit election in accordance with Section 6.2(b), his or
her Benefit Distribution Date shall be postponed in accordance with Section
6.2(b); or

	 	(b)	 	If the Participant experiences a Termination of Employment, his or her Benefit
Distribution Date shall be

	 	(i)	 	the last day of the six-month period immediately following the
date on which the Participant experiences a Termination of Employment if the
Participant is a Key Employee, and

	 	(ii)	 	for all other Participants, the date on which the Participant
experiences a Termination of Employment;

	 	(iii)	 	provided, however, in the event the Participant changes
his or her Termination Benefit election in accordance with Section 7.2(b), his
or her Benefit Distribution Date shall be postponed in accordance with Section
7.2(b); or

	 	(c)	 	The date on which the Committee is provided with proof that is satisfactory to
the Committee of the Participant’s death, if the Participant dies prior to the complete
distribution of his or her vested Account Balance; or

	 	(d)	 	The date on which the Participant becomes Disabled; or

	 	(e)	 	The date on which the Company experiences a Change in Control, as determined by
the Committee in its sole discretion, if (i) the Participant has elected to receive a
Change in Control Benefit, as set forth in Section 5.1 below, and (ii) if a Change in
Control occurs prior to the Participant’s Termination of Employment, Retirement, death
or Disability.

	 	1.8	 	“Board” shall mean the board of directors of the Company.

	 	1.9	 	“Bonus” shall mean any compensation, in addition to Base Salary and LTIP Amounts, earned by a
Participant for services rendered during a Plan Year, under any Employer’s annual bonus and
cash incentive plans, or other arrangement designated by the Committee, as further specified
on an Election Form.

	 	1.10	 	“Change in Control” shall mean any “change in control event” as defined in accordance with
Treasury guidance and Regulations related to Code Section 409A, including but not limited to
Notice 2005-1 and such other Treasury guidance or Regulations issued after the effective date
of this Plan.

	 	1.11	 	“Change in Control Benefit” shall have the meaning set forth in Article 5.

	 	1.12	 	“Claimant” shall have the meaning set forth in Section 15.1.

	 	1.13	 	“Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.

	 	1.14	 	“Committee” shall mean the committee described in Article 13.

	 	1.15	 	“Company” shall mean Noven Pharmaceuticals, Inc., a Delaware corporation, and any successor
to all or substantially all of the Company’s assets or business.

	 	1.16	 	“Company Contribution Account” shall mean (i) the sum of the Participant’s Company
Contribution Amounts, plus (ii) amounts credited or debited to the Participant’s Company
Contribution Account in accordance with this Plan, less (iii) all distributions made to the
Participant or his or her Beneficiary pursuant to this Plan that relate to the Participant’s
Company Contribution Account.

	 	1.17	 	“Company Contribution Amount” shall mean, for any one Plan Year, the amount determined in
accordance with Section 3.5.

	 	1.18	 	“Company Restoration Matching Account” shall mean (i) the sum of all of a Participant’s
Company Restoration Matching Amounts, plus (ii) amounts credited or debited to the
Participant’s Company Restoration Matching Account in accordance with this Plan, less (iii)
all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that
relate to the Participant’s Company Restoration Matching Account.

	 	1.19	 	“Company Restoration Matching Amount” shall mean, for any one Plan Year, the amount
determined in accordance with Section 3.6.

	 	1.20	 	“Death Benefit” shall mean the benefit set forth in Article 9.

	 	1.21	 	“Deferral Account” shall mean (i) the sum of all of a Participant’s Annual Deferral Amounts,
plus (ii) amounts credited or debited to the Participant’s Deferral Account in accordance with
this Plan, less (iii) all distributions made to the Participant or his or her Beneficiary
pursuant to this Plan that relate to his or her Deferral Account.

	 	1.22	 	“Director” shall mean any elected or appointed member of the board of directors of any
Employer.

	 	1.23	 	“Director Fees” shall mean the annual fees payable in cash that are earned by a Director from
any Employer, including retainer fees and meetings fees, as compensation for serving on the
board of directors.

	 	1.24	 	“Disability” or “Disabled” shall mean that a Participant is (i) unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, or (ii) by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, receiving income replacement benefits
for a period of not less than 3 months under an accident or health plan covering employees of
the Participant’s Employer.

	 	1.25	 	“Disability Benefit” shall mean the benefit set forth in Article 8.

	 	1.26	 	“Election Form” shall mean the form, which may be in electronic format, established from time
to time by the Committee that a Participant completes, signs and returns to the Committee to
make an election under the Plan.

	 	1.27	 	“Employee” shall mean a person who is an employee of any Employer.

	 	1.28	 	“Employer(s)” shall mean the Company and/or any of its subsidiaries (now in existence or
hereafter formed or acquired) that have been selected by the Board to participate in the Plan
and have adopted the Plan as a sponsor.

	 	1.29	 	“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended
from time to time.

	 	1.30	 	“401(k) Plan” shall mean, with respect to an Employer, a plan qualified under Code Section
401(a) that contains a cash or deferral arrangement described in Code Section 401(k), adopted
by the Employer, as it may be amended from time to time, or any successor thereto.

	 	1.31	 	“Key Employee” shall mean any Participant who is a “key employee” (as defined in Code Section
416(i) without regard to paragraph (5) thereof) of any Employer which is a corporation whose
stock is publicly traded on an established securities market or otherwise, as determined by
the Committee in accordance with Code Section 409A and related Treasury guidance and
Regulations.

	 	1.32	 	“LTIP Amounts” shall mean any portion of the cash compensation attributable to a Plan Year
that is earned by a Participant as an Employee under any Employer’s long-term incentive plan
or any other long-term incentive arrangement designated by the Committee.

	 	1.33	 	“Participant” shall mean any Employee or Director (i) who is selected to participate in the
Plan, (ii) who submits an executed Plan Agreement, Election Form and Beneficiary Designation
Form, which are accepted by the Committee, and (iii) whose Plan Agreement has not terminated.

	 	1.34	 	“Plan” shall mean the Noven Pharmaceuticals, Inc. Nonqualified Deferred Compensation Plan,
which shall be evidenced by this instrument and by each Plan Agreement, as they may be amended
from time to time.

	 	1.35	 	“Plan Agreement” shall mean a written agreement, as may be amended from time to time, which
is entered into by and between an Employer and a Participant. Each Plan Agreement executed by
a Participant and the Participant’s Employer shall provide for the entire benefit to which
such Participant is entitled under the Plan; should there be more than one Plan Agreement, the
Plan Agreement bearing the latest date of acceptance by the Employer shall supersede all
previous Plan Agreements in their entirety and shall govern such entitlement. The terms of
any Plan Agreement may be different for any Participant, and any Plan Agreement may provide
additional benefits not set forth in the Plan or limit the benefits otherwise provided under
the Plan; provided, however, that any such additional benefits or benefit limitations must be
agreed to by both the Employer and the Participant.

	 	1.36	 	“Plan Year” shall mean a period beginning on January 1 of each calendar year and continuing
through December 31 of such calendar year.

	 	1.37	 	“Restricted Stock” shall mean rights to receive unvested shares of restricted stock selected
by the Committee in its sole discretion and awarded to the Participant under any Noven
Pharmaceuticals, Inc. stock incentive plan or director compensation program.

	 	1.38	 	“Restricted Stock Account” shall mean the aggregate value, measured on any given date, of (i)
the number of shares of Restricted Stock deferred by a Participant as a result of all
Restricted Stock Amounts, plus (ii) the number of additional shares credited to a
Participant’s Restricted Stock Account as a result of the deemed reinvestment of dividends in
accordance with this Plan, less (iii) the number of shares of Restricted Stock previously
distributed to the Participant or his or her Beneficiary pursuant to this Plan, subject in
each case to any adjustments to the number of such shares determined by the Committee with
respect to the Noven Pharmaceuticals, Inc. Stock Unit Fund pursuant to Section 3.10. This
portion of the Participant’s Account Balance shall only be distributable in actual shares of
Stock.

	 	1.39	 	“Restricted Stock Amount” shall mean, with respect to a Participant for any one Plan Year,
the amount of Restricted Stock deferred in accordance with Section 3.7 of this Plan,
calculated using the closing price of Stock at the end of the business day closest to the date
such Restricted Stock would otherwise vest (and/or all restrictions on such Restricted Stock
would have lapsed), but for the election to defer. In the event of a Participant’s
Retirement, Termination of Employment, Disability, or death prior to the end of a Plan Year,
such year’s Restricted Stock Amount shall be the actual amount withheld prior to such event.

	 	1.40	 	“Retirement”, “Retire(s)” or “Retired” shall mean, with respect to an Employee, separation
from service with all Employers for any reason other than a leave of absence, death or
Disability, as determined in accordance with Code Section 409A and related Treasury guidance
and Regulations, on or after the earlier of the attainment of (a) age sixty-five (65) or (b)
age fifty-five (55) with five (5) Years of Service; and shall mean with respect to a Director
who is not an Employee, separation from service as a Director with all Employers. If a
Participant is both an Employee and a Director, Retirement shall not occur until he or she
Retires as both an Employee and a Director.

	 	1.41	 	“Retirement Benefit” shall mean the benefit set forth in Article 6.

	 	1.42	 	“Scheduled Distribution” shall mean the distribution set forth in Section 4.1.

	 	1.43	 	“Stock” shall mean Noven Pharmaceuticals, Inc. common stock, $0.0001 par value, or any other
equity securities of the Company designated by the Committee.

	 	1.44	 	“Terminate the Plan”, “Termination of the Plan” shall mean a determination by an Employer’s
board of directors that (i) all of its Participants shall no longer be eligible to
participate in the Plan, (ii) all deferral elections for such Participants shall terminate,
and (iii) such Participants shall no longer be eligible to receive company contributions under
this Plan.

	 	1.45	 	“Termination Benefit” shall mean the benefit set forth in Article 7.

	 	1.46	 	“Termination of Employment” shall mean the separation from service with all Employers,
voluntarily or involuntarily, for any reason other than Retirement, Disability, death or an
authorized leave of absence, as determined in accordance with Code Section 409A and related
Treasury guidance and Regulations. If a Participant is both an Employee and a Director, a
Termination of Employment shall occur only upon the termination of the last position held. A
Participant will not have a Termination of Employment unless the Participant is not employed
by the Company, a Subsidiary, or any other member of the Controlled Group of Corporations as
defined under Code Section 414(b) (dealing with controlled groups of corporations) and Code
Section 414(c), regardless of the reason for the termination of employment.

	 	1.47	 	“Trust” shall mean one or more trusts established by the Company in accordance with Article
16.

	 	1.48	 	“Unforeseeable Financial Emergency” shall mean an unforeseeable emergency that is caused by
an event beyond the control of the Participant that would result in severe financial hardship
to the Participant resulting from (i) a sudden and unexpected illness or accident of the
Participant, the Participant’s spouse, or a dependent (as defined in Code Section 152(a)) of
the Participant, (ii) a loss of the Participant’s property due to casualty, or (iii) such
other similar extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant, all as determined in the sole discretion of the
Committee.

	 	1.49	 	“Years of Service” shall mean the total number of full years in which a Participant has been
employed by one or more Employers. For purposes of this definition, a year of employment
shall be a 365 day period (or 366 day period in the case of a leap year) that, for the first
year of employment, commences on the Employee’s date of hiring and that, for any subsequent
year, commences on an anniversary of that hiring date. The Committee shall make a
determination as to whether any partial year of employment shall be counted as a Year of
Service.

ARTICLE 2

Selection, Enrollment, Eligibility

	 	2.1	 	Selection by Committee. Participation in the Plan shall be limited to Directors and,
as determined by the Committee in its sole discretion, a select group of management or highly
compensated Employees. From that group, the Committee shall select, in its sole discretion,
those individuals who may actually participate in this Plan.

	 	2.2	 	Enrollment and Eligibility Requirements; Commencement of Participation.

	 	(a)	 	As a condition to participation, each Director or selected Employee who is
eligible to participate in the Plan effective as of the first day of a Plan Year shall
complete, execute and return to the Committee a Plan Agreement, an Election Form and a
Beneficiary Designation Form, prior to the first day of such Plan Year, or such other
earlier deadline as may be established by the Committee in its sole discretion. In
addition, the Committee shall establish from time to time such other enrollment
requirements as it determines, in its sole discretion, are necessary.

	 	(b)	 	A Director or selected Employee who first becomes eligible to participate in
this Plan after the first day of a Plan Year must complete these requirements within
thirty (30) days after he or she first becomes eligible to participate in the Plan, or
within such other earlier deadline as may be established by the Committee, in its sole
discretion, in order to participate for that Plan Year. In such event, such person’s
participation in this Plan shall not commence earlier than the date determined by the
Committee pursuant to Section 2.2(c) and such person shall not be permitted to defer
under this Plan any portion of his or her Base Salary, Bonus, LTIP Amounts, Restricted
Stock Amounts and/or Director Fees that are paid with respect to services performed
prior to his or her participation commencement date, except to the extent permissible
under Code Section 409A and related Treasury guidance or Regulations.

	 	(c)	 	Each Director or selected Employee who is eligible to participate in the Plan
shall commence participation in the Plan on the date that the Committee determines, in
its sole discretion, that the Director or Employee has met all enrollment requirements
set forth in this Plan and required by the Committee, including returning all required
documents to the Committee within the specified time period. Notwithstanding the
foregoing, the Committee shall process such Participant’s deferral election as soon as
administratively practicable after such deferral election is submitted to and accepted
by the Committee.

	 	(d)	 	If a Director or an Employee fails to meet all requirements contained in this
Section 2.2 within the period required, that Director or Employee shall not be eligible
to participate in the Plan during such Plan Year.

	 	2.3	 	Termination of a Participant’s Eligibility. If the Committee determines that an
Employee Participant no longer qualifies as a member of a select group of management or highly
compensated employees, as membership in such group is determined in accordance with Sections
201(2), 301(a)(3) and 401(a)(1) of ERISA, or that the inclusion of Directors in this Plan
could jeopardize the status of this Plan as a plan intended to be “unfunded” and “maintained
by an employer primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees” within the meaning of ERISA Sections 201(2),
301(a)(3) and 401(a)(1), the Committee shall have the right, in its sole discretion, to (i)
terminate any deferral election the Participant has made for the remainder of the Plan Year in
which the Committee makes such determination, (ii) prevent the Participant from making future
deferral elections, and/or (iii) take further action that the Committee deems appropriate.
Notwithstanding the foregoing, in the event of a Termination of the Plan, the termination of
the affected Participants’ eligibility for participation in the Plan shall not be governed by
this Section 2.3, but rather shall be governed by Section 12.1. In the event that a
Participant is no longer eligible to defer compensation under this Plan, the Participant’s
Account Balance shall continue to be governed by the terms of this Plan until such time as the
Participant’s Account Balance is paid in accordance with the terms of this Plan.

ARTICLE 3

Deferral Commitments/Company Contribution Amounts/

Company Restoration Matching Amounts/Restricted Stock Amounts/ Vesting/Crediting/Taxes

	 	3.1	 	Minimum Deferrals.

	 	(a)	 	Annual Deferral Amount. For each Plan Year, a Participant may elect to
defer, as his or her Annual Deferral Amount, Base Salary, Bonus, LTIP Amounts and/or
Director Fees in the following minimum amounts for each deferral elected:

3

	 	 	 	 	 
	Deferral	 	Minimum Amount
	Base Salary, Bonus
and/or LTIP Amounts
	 	$4,000 aggregate
	Director Fees
	 	$	4,000	 

If the Committee determines, in its sole discretion, prior to the beginning of a Plan
Year that a Participant has made an election for less than the stated minimum
amounts, or if no election is made, the amount deferred shall be zero. If the
Committee determines, in its sole discretion, at any time after the beginning of a
Plan Year that a Participant has deferred less than the stated minimum amounts for
that Plan Year, any amount credited to the Participant’s Account Balance as the
Annual Deferral Amount for that Plan Year shall be distributed to the Participant
within sixty (60) days after the last day of the Plan Year in which the Committee
determination was made.

	 	(b)	 	Restricted Stock Amount. For each grant of Restricted Stock, a
Participant may elect to defer, as his or her Restricted Stock Amount, Restricted Stock
in the following minimum percentage:

	 	 	 	 	 
	Deferral	 	Minimum Percentage
	Restricted Stock
	 	 	0	%

If no election is made, the percentage deferred shall be zero.

	 	(c)	 	Short Plan Year. Notwithstanding the foregoing, if a Participant first
becomes a Participant after the first day of a Plan Year, the minimum Annual Deferral
Amount shall be an amount equal to the minimum set forth above, multiplied by a
fraction, the numerator of which is the number of complete months remaining in the Plan
Year and the denominator of which is 12.

	 	3.2	 	Maximum Deferral.

	 	(a)	 	Annual Deferral Amount. For each Plan Year, a Participant may elect to
defer, as his or her Annual Deferral Amount, Base Salary, Bonus, LTIP Amounts and/or
Director Fees up to the following maximum percentages for each deferral elected:

	 	 	 	 	 
	Deferral	 	Maximum Percentage
	Base Salary
	 	 	75	%
	Bonus
	 	 	100	%
	LTIP Amounts
	 	 	100	%
	Director Fees
	 	 	100	%

	 	(b)	 	Restricted Stock Amount. For each grant of Restricted Stock, a
Participant may elect to defer, as his or her Restricted Stock Amount, Restricted Stock
in the following maximum percentage:

	 	 	 	 	 
	Deferral	 	Maximum Percentage
	Restricted Stock
	 	 	100	%

	 	(c)	 	Short Plan Year. Notwithstanding the foregoing, if a Participant first
becomes a Participant after the first day of a Plan Year, the maximum Annual Deferral
Amount shall be limited to the amount of compensation not yet earned by the Participant
as of the date the Participant submits a Plan Agreement and Election Form to the
Committee for acceptance, except to the extent permissible under Code Section 409A and
related Treasury guidance or Regulations.

	 	3.3	 	Election to Defer; Effect of Election Form.

	 	(a)	 	First Plan Year. In connection with a Participant’s commencement of
participation in the Plan, the Participant shall make an irrevocable deferral election
for the Plan Year in which the Participant commences participation in the Plan, along
with such other elections as the Committee deems necessary or desirable under the Plan.
For these elections to be valid, the Election Form must be completed and signed by the
Participant, timely delivered to the Committee (in accordance with Section 2.2 above)
and accepted by the Committee.

	 	(b)	 	Subsequent Plan Years. For each succeeding Plan Year, an irrevocable
deferral election for that Plan Year, and such other elections as the Committee deems
necessary or desirable under the Plan, shall be made by timely delivering a new
Election Form to the Committee, in accordance with its rules and procedures, before the
end of the Plan Year preceding the Plan Year for which the election is made. If no
such Election Form is timely delivered for a Plan Year, the Annual Deferral Amount
shall be zero for that Plan Year.

	 	(c)	 	Restricted Stock Deferral. For an election to defer Restricted Stock
to be valid: (i) an Election Form must be completed and signed by the Participant with
respect to such Restricted Stock, and (ii) such Election Form must be timely delivered
to the Committee and accepted by the Committee no later than the end of the calendar
year preceding the Plan Year during which such Restricted Stock may be initially
granted to the Participant under the terms of the applicable Noven Pharmaceuticals,
Inc. stock incentive plan or director compensation program.

	 	(d)	 	Performance-Based Compensation. Notwithstanding the foregoing, the
Committee may, in its sole discretion, determine that an irrevocable deferral election
pertaining to performance-based compensation may be made by timely delivering an
Election Form to the Committee, in accordance with its rules and procedures, no later
than six (6) months before the end of the performance service period.
“Performance-based compensation” shall be compensation based on services performed over
a period of at least twelve (12) months, in accordance with Code Section 409A and
related Treasury guidance or Regulations. Until such time as Treasury guidance
provides the requirements for an amount to qualify as “performance-based compensation”
under Code Section 409A, the Committee may utilize the definition of “bonus
compensation” provided in Treasury Notice 2005-1 in determining which amounts may be
deferred by delivering an Election Form to the Committee, in accordance with its rules
and procedures, no later than six (6) months before the end of the performance service
period.

	 	3.4	 	Withholding and Crediting of Annual Deferral Amounts.

	 	(a)	 	For each Plan Year, the Base Salary portion of the Annual Deferral Amount shall
be withheld from each regularly scheduled Base Salary payroll in equal amounts, as
adjusted from time to time for increases and decreases in Base Salary. The Bonus, LTIP
Amounts and/or Director Fees portion of the Annual Deferral Amount shall be withheld at
the time the Bonus, LTIP Amounts or Director Fees are or otherwise would be paid to the
Participant, whether or not this occurs during the Plan Year itself. Annual Deferral
Amounts shall be credited to a Participant’s Deferral Account at the time such amounts
would otherwise have been paid to the Participant.

	 	(b)	 	Notwithstanding any provision or election under this Plan to the contrary, if
necessary to comply with Code Section 409A or to facilitate administration of the
Company’s payroll system, the Committee, in its sole discretion, may choose to either
(i) not withhold Base Salary during any payroll period in which any portion of such
Base Salary relates to services performed in a prior Plan Year, or (ii) withhold Base
Salary during any payroll period in which any portion of such Base Salary relates to
services performed in a prior Plan Year in accordance with the Participant’s deferral
election submitted for the prior Plan Year. Accordingly, in order to carry out the
intent of this provision, the Committee may adjust a Participant’s Base Salary deferral
election submitted pursuant to this Article 3.

	 	3.5	 	Company Contribution Amount.

	 	(a)	 	For each Plan Year, an Employer may be required to credit amounts to a
Participant’s Company Contribution Account in accordance with employment or other
agreements entered into between the Participant and the Employer. Such amounts shall
be credited on the date or dates prescribed by such agreements.

	 	(b)	 	For each Plan Year, an Employer, in its sole discretion, may, but is not
required to, credit any amount it desires to any Participant’s Company Contribution
Account under this Plan, which amount shall be for that Participant the Company
Contribution Amount for that Plan Year. The amount so credited to a Participant may be
smaller or larger than the amount credited to any other Participant, and the amount
credited to any Participant for a Plan Year may be zero, even though one or more other
Participants receive a Company Contribution Amount for that Plan Year. The Company
Contribution Amount described in this Section 3.5(b), if any, shall be credited on a
date or dates to be determined by the Committee, in its sole discretion.

	 	3.6	 	Company Restoration Matching Amount. A Participant’s Company Restoration Matching
Amount for any Plan Year shall be an amount determined by the Committee, in its sole
discretion, to make up for certain limits applicable to the 401(k) Plan or other qualified
plan for such Plan Year, as identified by the Committee, or for such other purposes as
determined by the Committee in its sole discretion. The amount so credited to a Participant
under this Plan for any Plan Year (i) may be smaller or larger than the amount credited to any
other Participant, and (ii) may differ from the amount credited to such Participant in the
preceding Plan Year. The Participant’s Company Restoration Matching Amount, if any, shall be
credited on a date or dates to be determined by the Committee, in its sole discretion.

	 	3.7	 	Restricted Stock Amounts. Subject to any terms and conditions imposed by the
Committee, a Participant may elect to defer Restricted Stock under the Plan, which amount
shall be for that Participant the Restricted Stock Amount for that Plan Year. The portion of
any Restricted Stock deferred shall, at the time the Restricted Stock would otherwise vest
(and/or all restrictions on such Restricted Stock would have lapsed) under the terms of the
applicable Noven Pharmaceuticals, Inc. stock incentive plan or director compensation program,
but for the election to defer, be reflected on the books of the Company as an unfunded,
unsecured promise to deliver to the Participant a specific number of actual shares of Stock in
the future.

	 	3.8	 	Crediting of Amounts after Benefit Distribution. Notwithstanding any provision in
this Plan to the contrary, should the complete distribution of a Participant’s vested Account
Balance occur prior to the date on which any portion of (i) the Annual Deferral Amount that a
Participant has elected to defer in accordance with Section 3.3, (ii) the Company Contribution
Amount, (iii) the Company Restoration Matching Amount, or (iv) the Restricted Stock Amount,
would otherwise be credited to the Participant’s Account Balance, such amounts shall not be
credited to the Participant’s Account Balance, but shall be paid to the Participant in a
manner determined by the Committee, in its sole discretion.

	 	3.9	 	Vesting.

	 	(a)	 	A Participant shall at all times be 100% vested in his or her Deferral Account
and Restricted Stock Account.

	 	(b)	 	A Participant shall be vested in his or her Company Contribution Account in
accordance with the vesting schedule(s) set forth in his or her Plan Agreement,
employment agreement or any other agreement entered into between the Participant and
his or her Employer. If not addressed in such agreements, a Participant shall vest in
his or her Company Contribution Account in accordance with a vesting schedule declared
by the Committee in its sole discretion.

	 	(c)	 	A Participant shall be vested in his or her Company Restoration Matching
Account only to the extent that the Participant would be vested in such amounts under
the provisions of the 401(k) Plan, as determined by the Committee in its sole
discretion.

	 	(d)	 	Notwithstanding anything to the contrary contained in this Section 3.3, in the
event of a Change in Control, or upon a Participant’s Retirement, death while employed
by an Employer, or Disability, a Participant’s Company Contribution Account and Company
Restoration Matching Account shall immediately become 100% vested (if it is not already
vested in accordance with the above vesting schedules).

	 	(e)	 	Notwithstanding subsection 3.9(d) above, the vesting schedule for a
Participant’s Company Contribution Account and Company Restoration Matching Account
shall not be accelerated upon a Change in Control to the extent that the Committee
determines that such acceleration would cause the deduction limitations of Section 280G
of the Code to become effective. In the event that all of a Participant’s Company
Contribution Account and/or Company Restoration Matching Account is not vested pursuant
to such a determination, the Participant may request independent verification of the
Committee’s calculations with respect to the application of Section 280G. In such
case, the Committee must provide to the Participant within ninety (90) days of such a
request an opinion from a nationally recognized accounting firm selected by the
Participant (the “Accounting Firm”). The opinion shall state the Accounting Firm’s
opinion that any limitation in the vested percentage hereunder is necessary to avoid
the limits of Section 280G and contain supporting calculations. The cost of such
opinion shall be paid for by the Company.

	 	(f)	 	Section 3.9(e) shall not prevent the acceleration of the vesting schedule
applicable to a Participant’s Company Contribution Account and/or Company Restoration
Matching Account if such Participant is entitled to a “gross-up” payment, to eliminate
the effect of the Code section 4999 excise tax, pursuant to his or her employment
agreement or other agreement entered into between such Participant and the Employer.

	 	3.10	 	Crediting/Debiting of Account Balances. In accordance with, and subject to, the rules
and procedures that are established from time to time by the Committee, in its sole
discretion, amounts shall be credited or debited to a Participant’s Account Balance in
accordance with the following rules:

	 	(a)	 	Measurement Funds. Subject to the restrictions found in Section
3.10(c) below, the Participant may elect one or more of the measurement funds selected
by the Committee, in its sole discretion, which are based on certain mutual funds (the
“Measurement Funds”), for the purpose of crediting or debiting additional amounts to
his or her Account Balance. As necessary, the Committee may, in its sole discretion,
discontinue, substitute or add a Measurement Fund. Each such action will take effect
as of the first day of the first calendar quarter that begins at least thirty (30) days
after the day on which the Committee gives Participants advance written notice of such
change.

	 	(b)	 	Election of Measurement Funds. Subject to the restrictions found in
Section 3.10(c) below, a Participant in connection with his or her initial deferral
election in accordance with Section 3.3(a) above, shall elect, on the Election Form,
one or more Measurement Fund(s) (as described in Section 3.10(a) above) to be used as a
guide for the Committee to determine the amounts to be credited or debited to his or
her Account Balance. If a Participant does not elect any of the Measurement Funds
described in the previous sentence, the Participant’s Account Balance shall be credited
or debited using the lowest-risk Measurement Fund, as determined by the Committee, in
its sole discretion. Subject to the restrictions found in Section 3.10(c) below, the
Participant may (but is not required to) elect, by submitting an Election Form to the
Committee that is accepted by the Committee, to add or delete one or more Measurement
Fund(s) to be used to determine the amounts to be credited or debited to his or her
Account Balance, or to change the portion of his or her Account Balance that is tied to
each previously or newly elected Measurement Fund. If an election is made in
accordance with the previous sentence, it shall apply as of the first business day
deemed reasonably practicable by the Committee, in its sole discretion, and shall
continue thereafter for each subsequent day in which the Participant participates in
the foregoing, the Committee, in its sole discretion, may impose limitations on the
frequency with which one or more of the Measurement Funds elected in accordance with
this Section may be added or deleted by such Participant; furthermore, the Committee in
its sole discretion, may impose limitations on the frequency with which the Participant
may change the portion of his or her Account Balance tied to each previously or newly
elected Measurement Fund. In accordance with Section 3.10(f), no amounts from a
Participant’s Account balance are invested in the Measurement Fund selected by a
Participant, but merely used as a guide for the Committee to debit or credit earnings
for each Participant’s Account Balance.

	 	(c)	 	Noven Pharmaceuticals, Inc. Stock Unit Fund.

	 	(i)	 	A Participant’s Restricted Stock Account will be automatically
and irrevocably allocated to the Noven Pharmaceuticals, Inc. Stock Unit Fund
Measurement Fund. Participants may not select any other Measurement Fund to be
used to determine the amounts to be credited or debited to their Restricted
Stock Account. Furthermore, no other portion of the Participant’s Account
Balance can be either initially allocated or re-allocated to the Noven
Pharmaceuticals, Inc. Stock Unit Fund. Amounts allocated to the Noven
Pharmaceuticals, Inc. Stock Unit Fund shall only be distributable in actual
 shares of Stock.

	 	(ii)	 	Any stock dividends, cash dividends or other non-cash dividends
that would have been payable on the Stock credited to a Participant’s Account
Balance shall be credited to the Participant’s Account Balance in the form of
additional shares of Stock and shall automatically and irrevocably be deemed to
be re-invested in the Noven Pharmaceuticals, Inc. Stock Unit Fund until such
amounts are distributed to the Participant. The number of shares credited to
the Participant for a particular stock dividend shall be equal to (a) the number
of shares of Stock credited to the Participant’s Account Balance as of the
payment date for such dividend in respect of each share of Stock, multiplied by
(b) the number of additional or fractional shares of Stock actually paid as a
dividend in respect of each share of Stock. The number of shares credited to
the Participant for a particular cash dividend or other non-cash dividend shall
be equal to (a) the number of shares of Stock credited to the Participant’s
Account Balance as of the payment date for such dividend in respect of each
share of Stock, multiplied by (b) the fair market value of the dividend, divided
by (c) the “fair market value” of the Stock on the payment date for such
dividend.

	 	(iii)	 	The number of shares of Stock credited to the Participant’s
Account Balance may be adjusted by the Committee, in its sole discretion, to
prevent dilution or enlargement of Participants’ rights with respect to the
portion of his or her Account Balance allocated to the Noven Pharmaceuticals,
Inc. Stock Unit Fund in the event of any reorganization, reclassification, stock
split, or other unusual corporate transaction or event which affects the value
of the Stock, provided that any such adjustment shall be made taking into
account any crediting of shares of Stock to the Participant under Section 3.10.

	 	(iv)	 	For purposes of this Section 3.10(c), the fair market value of
the Stock shall be, in the event the Stock is traded on a recognized securities
exchange or quoted by the National Association of Securities Dealers Automated
Quotations on National Market Issues, an amount equal to the closing price of
the Stock on such exchange or such quotation on the date set for valuation or,
if no sales of Stock were made on said exchange or so quoted on that date, the
closing price of the Stock on the next preceding day on which sales were made on
such exchange or quotations; or, if the Stock is not so traded or quoted, that
value determined, in its sole discretion, by the Committee in compliance with
Section 409A.

	 	(d)	 	Proportionate Allocation. In making any election described in Section
3.10(b) above, the Participant shall specify on the Election Form, in increments of one
percent (1%), the percentage of his or her Account Balance or Measurement Fund, as
applicable, to be allocated/reallocated.

	 	(e)	 	Crediting or Debiting Method. The performance of each Measurement Fund
(either positive or negative) will be determined on a daily basis based on the manner
in which such Participant’s Account Balance has been hypothetically allocated among the
Measurement Funds by the Participant.

	 	(f)	 	No Actual Investment. Notwithstanding any other provision of this Plan
that may be interpreted to the contrary, the Measurement Funds are to be used for
measurement purposes only, and a Participant’s election of any such Measurement Fund,
the allocation of his or her Account Balance thereto, the calculation of additional
amounts and the crediting or debiting of such amounts to a Participant’s Account
Balance shall not be considered or construed in any manner as an actual
investment of his or her Account Balance in any such Measurement Fund. In the event
that the Company or the Trustee (as that term is defined in the Trust), in its own
discretion, decides to invest funds in any or all of the investments on which the
Measurement Funds are based, no Participant shall have any rights in or to such
investments themselves. Without limiting the foregoing, a Participant’s Account
Balance shall at all times be a bookkeeping entry only and shall not represent any
investment made on his or her behalf by the Company or the Trust; the Participant shall
at all times remain an unsecured creditor of the Company.

	 	3.11	 	FICA and Other Taxes.

	 	(a)	 	Annual Deferral Amounts. For each Plan Year in which an Annual
Deferral Amount is being withheld from a Participant, the Participant’s Employer(s)
shall withhold from that portion of the Participant’s Base Salary, Bonus and/or LTIP
Amounts that is not being deferred, in a manner determined by the Employer(s), the
Participant’s share of FICA and other employment taxes on such Annual Deferral Amount.
If necessary, the Committee may reduce the Annual Deferral Amount in order to comply
with this Section 3.11.

	 	(b)	 	Company Restoration Matching Account and Company Contribution Account.
When a Participant becomes vested in a portion of his or her Company Restoration
Matching Account and/or Company Contribution Account, the Participant’s Employer(s)
shall withhold from that portion of the Participant’s Base Salary, Bonus and/or LTIP
Amounts that is not deferred, in a manner determined by the Employer(s), the
Participant’s share of FICA and other employment taxes on such Company Restoration
Matching Amount and/or Company Contribution Amount. If necessary, the Committee may
reduce the vested portion of the Participant’s Company Restoration Matching Account or
Company Contribution Account, as applicable, in order to comply with this Section 3.11.

	 	(c)	 	Restricted Stock Amounts. For each Plan Year in which a Restricted
Stock Amount is being first withheld from an Employee Participant, the Participant’s
Employer(s) shall withhold from that portion of the Participant’s Base Salary, Bonus,
LTIP Amounts and/or Restricted Stock that are not being deferred, in a manner
determined by the Employer(s), the Participant’s share of FICA and other employment
taxes on such Restricted Stock Amount. If necessary, the Committee may reduce the
Restricted Stock Amount in order to comply with this Section 3.11.

	 	(d)	 	Distributions. The Participant’s Employer(s), or the trustee of the
Trust, shall withhold from any payments made to a Participant under this Plan all
federal, state and local income, employment and other taxes required to be withheld by
the Employer(s), or the trustee of the Trust, in connection with such payments, in
amounts and in a manner to be determined in the sole discretion of the Employer(s) and
the trustee of the Trust.

ARTICLE 4

 Scheduled Distribution; Unforeseeable Financial Emergencies 

	 	4.1	 	Scheduled Distribution. In connection with each election to defer an Annual Deferral
Amount, a Participant may irrevocably elect to receive a Scheduled Distribution, in the form
of a lump sum payment, from the Plan with respect to all or a portion of the Annual Deferral
Amount. The Scheduled Distribution shall be a lump sum payment in an amount that is equal to
the portion of the Annual Deferral Amount the Participant elected to have distributed as a
Scheduled Distribution, plus amounts credited or debited in the manner provided in Section
3.10 above on that amount, calculated as of the close of business on or around the date on
which the Scheduled Distribution becomes payable, as determined by the Committee in its sole
discretion. Subject to the other terms and conditions of this Plan, each Scheduled
Distribution elected shall be paid out during a sixty (60) day period commencing immediately
after the first day of any Plan Year designated by the Participant (the “Scheduled
Distribution Date”). The Plan Year designated by the Participant must be at least two (2)
Plan Years after the end of the Plan Year to which the Participant’s deferral election
described in Section 3.3 relates. By way of example, if a Scheduled Distribution is elected
for Annual Deferral Amounts that are earned in the Plan Year commencing January 1, 2006, the
earliest Scheduled Distribution Date that may be designated by a Participant would be January
1, 2009, and the Scheduled Distribution would become payable during the sixty (60) day period
commencing immediately after such Scheduled Distribution Date.

	 	4.2	 	Postponing Scheduled Distributions. A Participant may elect to postpone a Scheduled
Distribution described in Section 4.1 above, and have such amount paid out during a sixty (60)
day period commencing immediately after an allowable alternative distribution date designated
by the Participant in accordance with this Section 4.2. In order to make this election, the
Participant must submit a new Scheduled Distribution Election Form to the Committee in
accordance with the following criteria:

	 	(a)	 	Such Scheduled Distribution Election Form must be submitted to and accepted by
the Committee in its sole discretion at least twelve (12) months prior to the
Participant’s previously designated Scheduled Distribution Date;

	 	(b)	 	The new Scheduled Distribution Date selected by the Participant must be the
first day of a Plan Year, and must be at least five years after the previously
designated Scheduled Distribution Date; and

	 	(c)	 	The election of the new Scheduled Distribution Date shall have no effect until
at least twelve (12) months after the date on which the election is made.

	 	4.3	 	Other Benefits Take Precedence Over Scheduled Distributions. Should a Benefit
Distribution Date occur that triggers a benefit under Articles 5, 6, 7, 8, or 9, any Annual
Deferral Amount that is subject to a Scheduled Distribution election under Section 4.1 shall
not be paid in accordance with Section 4.1, but shall be paid in accordance with the other
applicable Article. Notwithstanding the foregoing, the Committee shall interpret this Section
4.3 in a manner that is consistent with Code Section 409A and other applicable tax law,
including but not limited to Treasury guidance and Regulations issued after the effective date
of this Plan.

	 	4.4	 	Payout/Suspensions for Unforeseeable Financial Emergencies.

	 	(a)	 	If the Participant experiences an Unforeseeable Financial Emergency, the
Participant may petition the Committee to suspend deferrals of Base Salary, Bonus,
Director Fees, Restricted Stock Amounts and LTIP Amounts to the extent deemed necessary
by the Committee to satisfy the Unforeseeable Financial Emergency. If suspension of
deferrals is not sufficient to satisfy the Participant’s Unforeseeable Financial
Emergency, or if suspension of deferrals is not required under Code Section 409A and
other applicable tax law, the Participant may further petition the Committee to receive
a partial or full payout from the Plan. The Participant shall only receive a payout
from the Plan to the extent such payout is deemed necessary by the Committee to satisfy
the Participant’s Unforeseeable Financial Emergency, plus amounts necessary to pay
taxes reasonably anticipated as a result of the distribution.

	 	(b)	 	The payout shall not exceed the lesser of (i) the Participant’s vested Account
Balance, excluding the portion of the Account Balance attributable to the Restricted
Stock Account, calculated as of the close of business on or around the date on which
the amount becomes payable, as determined by the Committee in its sole discretion, or
(ii) the amount necessary to satisfy the Unforeseeable Financial Emergency, plus
amounts necessary to pay taxes reasonably anticipated as a result of the distribution.
Notwithstanding the foregoing, a Participant may not receive a payout from the Plan to
the extent that the Unforeseeable Financial Emergency is or may be relieved (A) through
reimbursement or compensation by insurance or otherwise, (B) by liquidation of the
Participant’s assets, to the extent the liquidation of such assets would not itself
cause severe financial hardship or (C) by suspension of deferrals under this Plan, if
the Committee, in its sole discretion, determines that suspension is required by Code
Section 409A and other applicable tax law.

	 	(c)	 	If the Committee, in its sole discretion, approves a Participant’s petition for
suspension, the Participant’s deferrals under this Plan shall be suspended as of the
date of such approval. If the Committee, in its sole discretion, approves a
Participant’s petition for suspension and payout, the Participant’s deferrals under
this Plan shall be suspended as of the date of such approval and the Participant shall
receive a payout from the Plan within sixty (60) days of the date of such approval.

	 	(d)	 	Notwithstanding the foregoing, the Committee shall interpret all provisions
relating to suspension and/or payout under this Section 4.4 in a manner that is
consistent with Code Section 409A and other applicable tax law, including but not
limited to Treasury guidance and Regulations issued after the effective date of this
Plan.

ARTICLE 5

Change in Control Benefit 

	 	5.1	 	Change in Control Benefit. A Participant, in connection with his or her commencement
of participation in the Plan, shall irrevocably elect on an Election Form whether to (i)
receive a Change in Control Benefit upon the occurrence of a Change in Control, which shall be
equal to the Participant’s vested Account Balance, calculated as of the close of business on
or around the Participant’s Benefit Distribution Date, as determined by the Committee in its
sole discretion, or (ii) to have his or her Account Balance remain in the Plan upon the
occurrence of a Change in Control and to have his or her Account Balance remain subject to the
terms and conditions of the Plan. If a Participant does not make any election with respect to
the payment of the Change in Control Benefit, then such Participant’s Account Balance shall
remain in the Plan upon a Change in Control and shall be subject to the terms and conditions
of the Plan.

	 	5.2	 	Payment of Change in Control Benefit. The Change in Control Benefit, if any, shall
be paid to the Participant in a lump sum no later than sixty (60) days after the Participant’s
Benefit Distribution Date. Notwithstanding the foregoing, the Committee shall interpret all
provisions in this Plan relating to a Change in Control Benefit in a manner that is consistent
with Code Section 409A and other applicable tax law, including but not limited to guidance
issued after the effective date of this Plan.

ARTICLE 6

Retirement Benefit

	 	6.1	 	Retirement Benefit. A Participant who Retires shall receive, as a Retirement
Benefit, his or her vested Account Balance, calculated as of the close of business on or
around the Participant’s Benefit Distribution Date, as determined by the Committee in its sole
discretion.

	 	6.2	 	Payment of Retirement Benefit.

	 	(a)	 	A Participant, in connection with his or her commencement of participation in
the Plan, shall elect on an Election Form to receive the Retirement Benefit in a lump
sum or pursuant to an Annual Installment Method of up to ten (10) years. If a
Participant does not make any election with respect to the payment of the Retirement
Benefit, then such Participant shall be deemed to have elected to receive the
Retirement Benefit in a lump sum.

	 	(b)	 	A Participant may change the form of payment of the Retirement Benefit by
submitting an Election Form to the Committee in accordance with the following criteria:

	 	(i)	 	The election to modify the Retirement Benefit shall have no
effect until at least twelve (12) months after the date on which the election is
made; and

	 	(ii)	 	The first Retirement Benefit payment shall be delayed at least
five (5) years from the Participant’s originally scheduled Benefit Distribution
Date described in Section 1.7(a).

Notwithstanding the foregoing, the Committee shall interpret all provisions relating
to changing the Retirement Benefit election under this Section 6.2 in a manner that
is consistent with Code Section 409A and other applicable tax law, including but not
limited to Treasury guidance or Regulations issued after the effective date of this
Plan. Accordingly, if a Participant’s subsequent Retirement Benefit distribution
election would result in the shortening of the length of the Retirement Benefit
payment period (e.g., a Participant changes an existing distribution election from
annual installments to a lump sum payment; from 10 annual installments to 5 annual
installments, etc.), and the Committee determines such election to be inconsistent
with Code Section 409A or other applicable tax law, the election shall not be
effective.

The Election Form most recently accepted by the Committee shall govern the payout of
the Retirement Benefit.

	 	(c)	 	The lump sum payment shall be made, or installment payments shall commence, no
later than sixty (60) days after the Participant’s Benefit Distribution Date.
Remaining installments, if any, shall be paid no later than sixty (60) days after each
anniversary of the Participant’s Benefit Distribution Date.

ARTICLE 7

Termination Benefit

	 	7.1	 	Termination Benefit. A Participant who experiences a Termination of Employment shall
receive, as a Termination Benefit, his or her vested Account Balance, calculated as of the
close of business on or around the Participant’s Benefit Distribution Date, as determined by
the Committee in its sole discretion.

	 	7.2	 	Payment of Termination Benefit.

	 	(a)	 	A Participant, in connection with his or her commencement of participation in
the Plan, shall elect on an Election Form to receive the Termination Benefit in a lump
sum or pursuant to an Annual Installment Method of up to three (3) years. If a
Participant does not make any election with respect to the payment of the Termination
Benefit, then such Participant shall be deemed to have elected to receive the
Termination Benefit in a lump sum.

	 	(b)	 	A Participant may change the form of payment of the Termination Benefit by
submitting an Election Form to the Committee in accordance with the following criteria:

	 	(i)	 	The election to modify the Termination Benefit shall have no
effect until at least twelve (12) months after the date on which the election is
made; and

	 	(ii)	 	The first Termination Benefit payment is delayed at least five
(5) years from the Participant’s originally scheduled Benefit Distribution Date
described in Section 1.7(b).

Notwithstanding the foregoing, the Committee shall interpret all provisions relating
to changing the Termination Benefit election under this Section 7.2 in a manner that
is consistent with Code Section 409A and other applicable tax law, including but not
limited to Treasury guidance or Regulations issued after the effective date of this
Plan. Accordingly, if a Participant’s subsequent Termination Benefit distribution
election would result in the shortening of the length of the Termination Benefit
payment period (e.g., a Participant changes an existing distribution election from
annual installments to a lump sum payment; from 3 annual installments to 2 annual
installments, etc.), and the Committee determines such election to be inconsistent
with Code Section 409A and other applicable tax law, the election shall not be
effective.

The Election Form most recently accepted by the Committee shall govern the payout of
the Termination Benefit.

	 	(c)	 	Notwithstanding the foregoing, in the event a Participant’s vested Account
Balance at the time of his or her Benefit Distribution Date is less than $100,000, the
Participant’s entire vested Account Balance shall be paid to the Participant in a lump
sum.

	 	(d)	 	The lump sum payment shall be made, or installment payments shall commence, no
later than sixty (60) days after the Participant’s Benefit Distribution Date.
Remaining installments, if any, shall be paid no later than sixty (60) days after each
anniversary of the Participant’s Benefit Distribution Date.

ARTICLE 8

Disability Benefit

	 	8.1	 	Disability Benefit. Upon a Participant’s Disability, the Participant shall receive a
Disability Benefit, which shall be equal to the Participant’s vested Account Balance,
calculated as of the close of business on or around the Participant’s Benefit Distribution
Date, as selected by the Committee in its sole discretion.

	 	8.2	 	Payment of Disability Benefit. The Disability Benefit shall be paid to the
Participant in a lump sum payment no later than sixty (60) days after the Participant’s
Benefit Distribution Date.

ARTICLE 9

Death Benefit

	 	9.1	 	Death Benefit. The Participant’s Beneficiary(ies) shall receive a Death Benefit upon
the Participant’s death which will be equal to the Participant’s vested Account Balance,
calculated as of the close of business on or around the Participant’s Benefit Distribution
Date, as selected by the Committee in its sole discretion.

	 	9.2	 	Payment of Death Benefit. The Death Benefit shall be paid to the Participant’s
Beneficiary(ies) in a lump sum payment no later than sixty (60) days after the Participant’s
Benefit Distribution Date.

ARTICLE 10

Beneficiary Designation

	 	10.1	 	Beneficiary. Each Participant shall have the right, at any time, to designate his or
her Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable
under the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated
under this Plan may be the same as or different from the Beneficiary designation under any
other plan of an Employer in which the Participant participates.

	 	10.2	 	Beneficiary Designation; Change; Spousal Consent. A Participant shall designate his
or her Beneficiary by completing and signing the Beneficiary Designation Form, and returning
it to the Committee or its designated agent. A Participant shall have the right to change a
Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary
Designation Form and the Committee’s rules and procedures, as in effect from time to time. If
the Participant names someone other than his or her spouse as a Beneficiary, the Committee
may, in its sole discretion, determine that spousal consent is required to be provided in a
form designated by the Committee, executed by such Participant’s spouse and returned to the
Committee. Upon the acceptance by the Committee of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be canceled. The Committee shall be entitled
to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the
Committee prior to his or her death.

	 	10.3	 	Acknowledgment. No designation or change in designation of a Beneficiary shall be
effective until received and acknowledged in writing by the Committee or its designated agent.

	 	10.4	 	No Beneficiary Designation. If a Participant fails to designate a Beneficiary as
provided in Sections 10.1, 10.2 and 10.3 above or, if all designated Beneficiaries predecease
the Participant or die prior to complete distribution of the Participant’s benefits, then the
Participant’s designated Beneficiary shall be deemed to be his or her surviving spouse. If
the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a
Beneficiary shall be payable to the executor or personal representative of the Participant’s
estate.

	 	10.5	 	Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiary
to receive payments pursuant to this Plan, the Committee shall have the right, exercisable in
its discretion, to cause the Participant’s Employer to withhold such payments until this
matter is resolved to the Committee’s satisfaction.

	 	10.6	 	Discharge of Obligations. The payment of benefits under the Plan to a Beneficiary
shall fully and completely discharge all Employers and the Committee from all further
obligations under this Plan with respect to the Participant, and that Participant’s Plan
Agreement shall terminate upon such full payment of benefits.

ARTICLE 11

Leave of Absence

	 	11.1	 	Paid Leave of Absence. If a Participant is authorized by the Participant’s Employer
to take a paid leave of absence from the employment of the Employer, (i) the Participant shall
continue to be considered eligible for the benefits provided in Articles 4, 5, 6, 7, 8, or 9
in accordance with the provisions of those Articles, and (ii) the Annual Deferral Amount shall
continue to be withheld during such paid leave of absence in accordance with Section 3.3.

	 	11.2	 	Unpaid Leave of Absence. If a Participant is authorized by the Participant’s
Employer to take an unpaid leave of absence from the employment of the Employer for any
reason, such Participant shall continue to be eligible for the benefits provided in Articles
4, 5, 6, 7, 8, or 9 in accordance with the provisions of those Articles. However, the
Participant shall be excused from fulfilling his or her Annual Deferral Amount commitment that
would otherwise have been withheld during the remainder of the Plan Year in which the unpaid
leave of absence is taken. During the unpaid leave of absence, the Participant shall not be
allowed to make any additional deferral elections. However, if the Participant returns to
employment, the Participant may elect to defer an Annual Deferral Amount for the Plan Year
following his or her return to employment and for every Plan Year thereafter while a
Participant in the Plan, provided such deferral elections are otherwise allowed and an
Election Form is delivered to and accepted by the Committee for each such election in
accordance with Section 3.3 above.

ARTICLE 12

Termination of Plan, Amendment or Modification

	 	12.1	 	Termination of Plan. Although each Employer anticipates that it will continue the
Plan for an indefinite period of time, there is no guarantee that any Employer will continue
the Plan or will not terminate the Plan at any time in the future. Accordingly, each Employer
reserves the right to Terminate the Plan. In the event of a Termination of the Plan, the
Measurement Funds available to Participants following the Termination of the Plan shall be
comparable in number and type to those Measurement Funds available to Participants in the Plan
Year preceding the Plan Year in which the Termination of the Plan is effective. Following a
Termination of the Plan, Participant Account Balances shall remain in the Plan until the
Participant becomes eligible for the benefits provided in Articles 4, 5, 6, 7, 8 or 9 in
accordance with the provisions of those Articles. The Termination of the Plan shall not
adversely affect any Participant or Beneficiary who has become entitled to the payment of any
benefits under the Plan as of the date of termination. Notwithstanding the foregoing, to the
extent permissible under Code Section 409A and other applicable tax law, including but not
limited to Notice 2005-1 and such other Treasury guidance or Regulations issued after the
effective date of this Plan, following a Change in Control the Employer shall be permitted to
(i) terminate the Plan by action of its board of directors, and (ii) distribute the vested
Account Balances to Participants in a lump sum no later than twelve (12) months after the
Change in Control.

	 	12.2	 	Amendment.

	 	(a)	 	Any Employer may, at any time, amend or modify the Plan in whole or in part
with respect to that Employer. Notwithstanding the foregoing, (i) no amendment or
modification shall be effective to decrease the value of a Participant’s vested Account
Balance in existence at the time the amendment or modification is made, and (ii) no
amendment or modification of this Section 12.2 or Section 13.2 of the Plan shall be
effective.

	 	(b)	 	Notwithstanding any provision of the Plan to the contrary, in the event that
the Company determines that any provision of the Plan may cause amounts deferred under
the Plan to become immediately taxable to any Participant under Code Section 409A, and
related Treasury guidance or Regulations, the Company may (i) adopt such amendments to
the Plan and appropriate policies and procedures, including amendments and policies
with retroactive effect, that the Company determines necessary or appropriate to
preserve the intended tax treatment of the Plan benefits provided by the Plan and/or
(ii) take such other actions as the Company determines necessary or appropriate to
comply with the requirements of Code Section 409A, and related Treasury guidance or
Regulations.

	 	12.3	 	Plan Agreement. Despite the provisions of Sections 12.1 and 12.2 above, if a
Participant’s Plan Agreement contains benefits or limitations that are not in this Plan
document, the Employer may only amend or terminate such provisions with the written consent of
the Participant.

	 	12.4	 	Effect of Payment. The full payment of the Participant’s vested Account Balance
under Articles 4, 5, 6, 7, 8, or 9 of the Plan shall completely discharge all obligations to a
Participant and his or her designated Beneficiaries under this Plan, and the Participant’s
Plan Agreement shall terminate.

ARTICLE 13

Administration

	 	13.1	 	Committee Duties. Except as otherwise provided in this Article 13, this Plan shall
be administered by a Committee, which shall consist of the Employee Benefits Committee of the
Company, as designated by the Compensation Committee of the Board, or such other committee as
the Board shall appoint. Members of the Committee may be Participants under this Plan. The
Committee shall also have the discretion and authority to (i) make, amend, interpret, and
enforce all appropriate rules and regulations for the administration of this Plan, and (ii)
decide or resolve any and all questions, including benefit entitlement determinations and
interpretations of this Plan, as may arise in connection with the Plan. Any individual
serving on the Committee who is a Participant shall not vote or act on any matter relating
solely to himself or herself. When making a determination or calculation, the Committee shall
be entitled to rely on information furnished by a Participant or the Company.

	 	13.2	 	Administration Upon Change In Control. Within one hundred and twenty (120) days
following a Change in Control, the individuals who comprised the Committee immediately prior
to the Change in Control (whether or not such individuals are members of the Committee
following the Change in Control) may, by written consent of the majority of such individuals,
appoint an independent third party administrator (the “Administrator”) to perform any or all
of the Committee’s duties described in Section 13.1 above, including without limitation, the
power to determine any questions arising in connection with the administration or
interpretation of the Plan, and the power to make benefit entitlement determinations. Upon
and after the effective date of such appointment, (i) the Company must pay all reasonable
administrative expenses and fees of the Administrator, and (ii) the Administrator may only be
terminated with the written consent of the majority of Participants with an Account Balance in
the Plan as of the date of such proposed termination.

	 	13.3	 	Agents. In the administration of this Plan, the Committee or the Administrator, as
applicable, may, from time to time, employ agents and delegate to them such administrative
duties as it sees fit (including acting through a duly appointed representative) and may from
time to time consult with counsel.

	 	13.4	 	Binding Effect of Decisions. The decision or action of the Committee or
Administrator, as applicable, with respect to any question arising out of or in connection
with the administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final and conclusive and binding upon all persons
having any interest in the Plan.

	 	13.5	 	Indemnity of Committee. All Employers shall indemnify and hold harmless the members
of the Committee, any Employee to whom the duties of the Committee may be delegated, and the
Administrator against any and all claims, losses, damages, expenses or liabilities arising
from any action or failure to act with respect to this Plan, except in the case of willful
misconduct by the Committee, any of its members, any such Employee or the Administrator.

	 	13.6	 	Employer Information. To enable the Committee and/or Administrator to perform its
functions, the Company and each Employer shall supply full and timely information to the
Committee and/or Administrator, as the case may be, on all matters relating to the Plan, the
Trust, the Participants and their Beneficiaries, the Account Balances of the Participants, the
compensation of its Participants, the date and circumstances of the Retirement, Disability,
death or Termination of Employment of its Participants, and such other pertinent information
as the Committee or Administrator may reasonably require.

ARTICLE 14

Other Benefits and Agreements

	 	14.1	 	Coordination with Other Benefits. The benefits provided for a Participant and
Participant’s Beneficiary under the Plan are in addition to any other benefits available to
such Participant under any other plan or program for employees of the Participant’s Employer.
The Plan shall supplement and shall not supersede, modify or amend any other such plan or
program except as may otherwise be expressly provided.

ARTICLE 15

Claims Procedures

	 	15.1	 	Presentation of Claim. Any Participant or Beneficiary of a deceased Participant
(such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the
Committee a written claim for a determination with respect to the amounts distributable to
such Claimant from the Plan. If such a claim relates to the contents of a notice received by
the Claimant, the claim must be made within sixty (60) days after such notice was received by
the Claimant. All other claims must be made within 180 days of the date on which the event
that caused the claim to arise occurred. The claim must state with particularity the
determination desired by the Claimant.

	 	15.2	 	Notification of Decision. The Committee shall consider a Claimant’s claim within a
reasonable time, but no later than ninety (90) days after receiving the claim. If the
Committee determines that special circumstances require an extension of time for processing
the claim, written notice of the extension shall be furnished to the Claimant prior to the
termination of the initial ninety (90) day period. In no event shall such extension exceed a
period of ninety (90) days from the end of the initial period. The extension notice shall
indicate the special circumstances requiring an extension of time and the date by which the
Committee expects to render the benefit determination. The Committee shall notify the
Claimant in writing:

	 	(a)	 	that the Claimant’s requested determination has been made, and that the claim
has been allowed in full; or

	 	(b)	 	that the Committee has reached a conclusion contrary, in whole or in part, to
the Claimant’s requested determination, and such notice must set forth in a manner
calculated to be understood by the Claimant:

	 	(i)	 	the specific reason(s) for the denial of the claim, or any part
of it;

	 	(ii)	 	specific reference(s) to pertinent provisions of the Plan upon
which such denial was based;

	 	(iii)	 	a description of any additional material or information
necessary for the Claimant to perfect the claim, and an explanation of why such
material or information is necessary;

	 	(iv)	 	an explanation of the claim review procedure set forth in Section
15.3 below; and

	 	(v)	 	a statement of the Claimant’s right to bring a civil action under
ERISA Section 502(a) following an adverse benefit determination on review.

	 	15.3	 	Review of a Denied Claim. On or before sixty (60) days after receiving a notice from
the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s
duly authorized representative) may file with the Committee a written request for a review of
the denial of the claim. The Claimant (or the Claimant’s duly authorized representative):

	 	(a)	 	may, upon request and free of charge, have reasonable access to, and copies of,
all documents, records and other information relevant (as defined in applicable ERISA
regulations) to the claim for benefits;

	 	(b)	 	may submit written comments or other documents; and/or

	 	(c)	 	may request a hearing, which the Committee, in its sole discretion, may grant.

	 	15.4	 	Decision on Review. The Committee shall render its decision on review promptly, and
no later than sixty (60) days after the Committee receives the Claimant’s written request for
a review of the denial of the claim. If the Committee determines that special circumstances
require an extension of time for processing the claim, written notice of the extension shall
be furnished to the Claimant prior to the termination of the initial sixty (60) day period.
In no event shall such extension exceed a period of sixty (60) days from the end of the
initial period. The extension notice shall indicate the special circumstances requiring an
extension of time and the date by which the Committee expects to render the benefit
determination. In rendering its decision, the Committee shall take into account all comments,
documents, records and other information submitted by the Claimant relating to the claim,
without regard to whether such information was submitted or considered in the initial benefit
determination. The decision must be written in a manner calculated to be understood by the
Claimant, and it must contain:

	 	(a)	 	specific reasons for the decision;

	 	(b)	 	specific reference(s) to the pertinent Plan provisions upon which the decision
was based;

	 	(c)	 	a statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to and copies of, all documents, records and other
information relevant (as defined in applicable ERISA regulations) to the Claimant’s
claim for benefits; and

	 	(d)	 	a statement of the Claimant’s right to bring a civil action under ERISA Section
502(a).

	 	15.5	 	Legal Action. A Claimant’s compliance with the foregoing provisions of this Article
15 is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect
to any claim for benefits under this Plan. 

ARTICLE 16

Trust

	 	16.1	 	Establishment of the Trust. In order to provide assets from which to fulfill the
obligations of the Participants and their beneficiaries under the Plan, the Company may
establish a trust by a trust agreement with a third party, the trustee, to which each Employer
may, in its discretion, contribute cash or other property, including securities issued by the
Company, to provide for the benefit payments under the Plan, (the “Trust”).

	 	16.2	 	Interrelationship of the Plan and the Trust. The provisions of the Plan and the Plan
Agreement shall govern the rights of a Participant to receive distributions pursuant to the
Plan. The provisions of the Trust shall govern the rights of the Employers, Participants and
the creditors of the Employers to the assets transferred to the Trust. Each Employer shall at
all times remain liable to carry out its obligations under the Plan.

	 	16.3	 	Distributions From the Trust. Each Employer’s obligations under the Plan may be
satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such
distribution shall reduce the Employer’s obligations under this Plan.

ARTICLE 17

Miscellaneous

	 	17.1	 	Status of Plan. The Plan is intended to be a plan that is not qualified within the
meaning of Code Section 401(a) and that “is unfunded and is maintained by an employer
primarily for the purpose of providing deferred compensation for a select group of management
or highly compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and
401(a)(1). The Plan shall be administered and interpreted (i) in a manner consistent with
that intent, and (ii) in accordance with Code Section 409A and related Treasury guidance and
Regulations.

	 	17.2	 	Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors
and assigns shall have no legal or equitable rights, interests or claims in any property or
assets of an Employer. For purposes of the payment of benefits under this Plan, any and all
of an Employer’s assets shall be, and remain, the general, unpledged unrestricted assets of
the Employer. An Employer’s obligation under the Plan shall be merely that of an unfunded and
unsecured promise to pay money in the future.

	 	17.3	 	Employer’s Liability. An Employer’s liability for the payment of benefits shall be
defined only by the Plan and the Plan Agreement, as entered into between the Employer and a
Participant. An Employer shall have no obligation to a Participant under the Plan except as
expressly provided in the Plan and his or her Plan Agreement.

	 	17.4	 	Nonassignability. Neither a Participant nor any other person shall have any right to
commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are expressly declared to
be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure, attachment, garnishment or sequestration for the payment of
any debts, judgments, alimony or separate maintenance owed by a Participant or any other
person, be transferable by operation of law in the event of a Participant’s or any other
person’s bankruptcy or insolvency or be transferable to a spouse as a result of a property
settlement or otherwise.

	 	17.5	 	Not a Contract of Employment. The terms and conditions of this Plan shall not be
deemed to constitute a contract of employment between any Employer and the Participant. Such
employment is hereby acknowledged to be an “at will” employment relationship that can be
terminated at any time for any reason, or no reason, with or without cause, and with or
without notice, unless expressly provided in a written employment agreement. Nothing in this
Plan shall be deemed to give a Participant the right to be retained in the service of any
Employer, either as an Employee or a Director, or to interfere with the right of any Employer
to discipline or discharge the Participant at any time.

	 	17.6	 	Furnishing Information. A Participant or his or her Beneficiary will cooperate with
the Committee by furnishing any and all information requested by the Committee and take such
other actions as may be requested in order to facilitate the administration of the Plan and
the payments of benefits hereunder, including but not limited to taking such physical
examinations as the Committee may deem necessary.

	 	17.7	 	Terms. Whenever any words are used herein in the masculine, they shall be construed
as though they were in the feminine in all cases where they would so apply; and whenever any
words are used herein in the singular or in the plural, they shall be construed as though they
were used in the plural or the singular, as the case may be, in all cases where they would so
apply.

	 	17.8	 	Captions. The captions of the articles, sections and paragraphs of this Plan are for
convenience only and shall not control or affect the meaning or construction of any of its
provisions.

	 	17.9	 	Governing Law. Subject to ERISA, the provisions of this Plan shall be construed and
interpreted according to the internal laws of the State of Florida without regard to its
conflicts of laws principles.

	 	17.10	 	Notice. Any notice or filing required or permitted to be given to the Committee
under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or
certified mail, to the address below:

	 
	 

	Noven Pharmaceuticals, Inc.

	 

	Attn: Vice President, Human Resources

	 

	11960 SW 144th Street

	 

	Miami, Florida 33186

Such notice shall be deemed given as of the date of delivery or, if delivery is made by
mail, as of the date shown on the postmark on the receipt for registration or certification.

Any notice or filing required or permitted to be given to a Participant under this Plan
shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known
address of the Participant.

	 	17.11	 	Successors. The provisions of this Plan shall bind and inure to the benefit of the
Participant’s Employer and its successors and assigns and the Participant and the
Participant’s designated Beneficiaries.

	 	17.12	 	Spouse’s Interest. The interest in the benefits hereunder of a spouse of a
Participant who has predeceased the Participant shall automatically pass to the Participant
and shall not be transferable by such spouse in any manner, including but not limited to such
spouse’s will, nor shall such interest pass under the laws of intestate succession.

	 	17.13	 	Validity. In case any provision of this Plan shall be illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts hereof, but this
Plan shall be construed and enforced as if such illegal or invalid provision had never been
inserted herein.

	 	17.14	 	Incompetent. If the Committee determines in its discretion that a benefit under
this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of
handling the disposition of that person’s property, the Committee may direct payment of such
benefit to the guardian, legal representative or person having the care and custody of such
minor, incompetent or incapable person. The Committee may require proof of minority,
incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of
the benefit. Any payment of a benefit shall be a payment for the account of the Participant
and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of
any liability under the Plan for such payment amount.

	 	17.15	 	Court Order. The Committee is authorized to comply with any court order in any
action in which the Plan or the Committee has been named as a party, including any action
involving a determination of the rights or interests in a Participant’s benefits under the
Plan. Notwithstanding the foregoing, the Committee shall interpret this provision in a manner
that is consistent with Code Section 409A and other applicable tax law, including but not
limited to guidance issued after the effective date of this Plan.

	 	17.16	 	Insurance. The Employers, on their own behalf or on behalf of the trustee of the
Trust, and, in their sole discretion, may apply for and procure insurance on the life of the
Participant, in such amounts and in such forms as the Trust may choose. The Employers or the
trustee of the Trust, as the case may be, shall be the sole owner and beneficiary of any such
insurance. The Participant shall have no interest whatsoever in any such policy or policies,
and at the request of the Employers shall submit to medical examinations and supply such
information and execute such documents as may be required by the insurance company or
companies to whom the Employers have applied for insurance.

IN WITNESS WHEREOF, the Company has signed this Plan document as of November 16, 2005.

“Company”

Noven Pharmaceuticals, Inc.,

a Delaware corporation

By: /s/ Robert C. Strauss  

Title: President and Chief Executive Officer

4

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