Document:

Exhibit 10.5

 

AGREEMENT

 

THIS AGREEMENT (“Agreement”)
is made and entered into as of the           day of December, 2007, by and between
EagleBank, a Maryland chartered commercial bank (the “Bank”), and Robert P.
Pincus (“Pincus”).

 

RECITALS:

 

WHEREAS, Eagle Bancorp, Inc.
(“Bancorp”), the parent corporation of the Bank, and Fidelity and Trust
Financial Corporation (“F&T”) have entered into an Agreement and Plan of
Merger of even date herewith (the “Merger Agreement”) pursuant to which F&T
will be merged with and into Bancorp (the “Merger”);

 

WHEREAS, in connection
with the Merger Agreement, the Bank and Fidelity and Trust Bank, the wholly
owned subsidiary of F&T (“F&T Bank”), have entered into a Plan and
Agreement of Merger pursuant to which F&T Bank will be merged with and into
the Bank (the “Bank Merger”);

 

WHEREAS, Pincus has been
serving as the Chairman of the Board of F&T Bank and as a Director of
F&T;

 

WHEREAS, the Bank
believes that the Bank’s retention of Pincus from and after the closing of the
Merger and the Bank Merger is important to the success of the Bank’s business;
and

 

WHEREAS, the Bank has
offered to retain Pincus, and Pincus has agreed to accept such retention, on
the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration
of the premises and the mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:

 

1.                                      Retention As Independent Contractor

 

1.1           The Bank agrees to  retain Pincus as Vice Chairman of the Board
and Pincus agrees to be retained as Vice Chairman of the Board, subject to the
terms and provisions of this Agreement.

 

1.2           Pincus and the Bank expressly
acknowledge that (i) no employment, partnership or joint venture
relationship is created by this Agreement and hereby agree that Pincus shall
act at all times as an independent contractor hereunder, is responsible for the
conduct of his business, including the time and manner in which his services
are performed, and, subject to compliance with his obligations under this
Agreement (including but not limited to Sections 4 and 8), Pincus shall be
permitted to engage in and pursue such simultaneous business, charitable and
civic activities and interests as he may desire; and (ii) Pincus shall not
be considered an employee of the Bank and the Bank shall not be liable for
withholding taxes respecting Pincus.

 

2.                                       Certain Definitions. As used in this Agreement, the following
terms have the meanings set forth below:

 

2.1                                 “Affiliate” means, with respect to any
Person, (i) any Person directly or indirectly controlling, controlled by
or under common control with such Person, (ii) any Person owning or
controlling fifty percent (50%) or more of the outstanding voting interests of
such Person, (iii) any officer, director, general partner, managing
member, or trustee of, or Person serving in a similar capacity with respect to,
such Person, or (iv) any Person who is an officer, director, general
partner, member, trustee, or holder of fifty percent (50%) or more of the
voting interests of any Person described in clauses (i), (ii), or (iii) of
this sentence. For purposes of this definition, the terms “controlling,” “controlled
by,” or “under common control with” shall mean the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.

 

2.2                                 “Bank” is defined in the Recitals.  If the Bank is merged into any other Entity,
or transfers substantially all of its business operations or assets to another
Entity, the term “Bank” shall be deemed to include such successor Entity for
purposes of applying Articles 8 and 9 of this Agreement.

 

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2.3           “Bank Entities” means and includes
any of the Bank, Bancorp, F&T, F&T Bank and their Affiliates.

 

2.4           “Bank Regulatory Agency” means any
governmental authority, regulatory agency, ministry, department, statutory
corporation, central bank or other body of the United States or of any other
country or of any state or other political subdivision of any of them having
jurisdiction over the Bank or any transaction contemplated, undertaken or
proposed to be undertaken by the Bank, including, but not necessarily be
limited to:

 

(a)           the Federal Deposit Insurance
Corporation or any other federal or state depository insurance organization or
fund;

 

(b)           the Federal Reserve System, the
Maryland Division of Financial Institutions, or any other federal or state bank
regulatory or commissioner’s office;

 

(c)           any Person established, organized,
owned (in whole or in part) or controlled by any of the foregoing; and

 

(d)           any predecessor, successor or
assignee of any of the foregoing.

 

2.5           “Board” means the Board of Directors
of the Bank.

 

2.6           “Code” means the Internal Revenue
Code of 1986, as amended.

 

2.7           “Commencement Date” means the
Effective Time of the Merger under the Merger Agreement.

 

2.8           “Competitive Business” means the
banking and financial services business, which includes, without limitation,
consumer savings, commercial banking, the insurance and trust business, the
savings and loan business and mortgage lending, or any other business in which
any of the Bank Entities is engaged or has invested significant resources
within the prior six (6) month period in preparation for becoming actively
engaged.

 

2.9           “Competitive Products or Services”
means, as of any time, those products or services of the type that any of the
Bank Entities is providing, or is actively preparing to provide, to its
customers.

 

2.10         “Disability” means a mental or physical
condition which, in the good faith opinion of the Board, renders Pincus, with
reasonable accommodation, unable or incompetent to carry out the material job
responsibilities which Pincus held or the material duties to which Pincus was
assigned at the time the disability was incurred, which has existed for at
least three (3) months and which in the opinion of a physician mutually
agreed upon by the Bank and Pincus (provided that
neither party shall unreasonably withhold such agreement) is expected to be
permanent or to last for an indefinite duration or a duration in excess of nine
(9) months.

 

2.11         “Expiration Date” means the date three (3) years
after the Commencement Date.

 

2.12         “Person” means any individual or
Entity.

 

2.13         “Section 409A” means Section 409A of the Code and the
regulations and administrative guidance
promulgated thereunder.”

 

2.14         Termination Date” means the Expiration
Date or such earlier date on which the Term expires pursuant to Section 3.1
or is terminated pursuant to Section 7.2, 7.3, 7.4, 7.5, 9.2 or 9.3, as
applicable.

 

Other terms are defined throughout this Agreement and
have the meanings so given them.

 

3.             Term; Position.

 

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3.1           Term. Pincus’ retention
hereunder shall commence with the Commencement Date and continue until the
Expiration Date, unless sooner terminated in accordance with the provisions of
this Agreement (the “Term”).

 

3.2           Position. The Bank shall
retain Pincus to serve as Vice Chairman of the Board.

 

3.3           No Restrictions.  Pincus represents and warrants to the Bank
that he is not subject to any legal obligations or restrictions that would
prevent or limit his entering into this Agreement and performing his
responsibilities hereunder.

 

4.             Duties
of Pincus.

 

4.1           Nature and Substance. Pincus
shall report directly to and shall be under the direction of the Chairman of
the Board. The specific powers and duties of Pincus shall be established,
determined and modified by and within the discretion of the Board.

 

4.2           Performance of Services.
Pincus agrees to devote appropriate attention, skill and efforts to the
performance of his duties and responsibilities under this Agreement, and shall
use his best efforts and discharge his duties to the best of his ability for
and on behalf of the Bank and toward its successful operation.  Pincus agrees that, without the prior written
consent of the Chairman of the Board, he will not during the Term, directly or
indirectly, perform services for or obtain a financial or ownership interest in
any other Entity (an “Outside Arrangement”) if such Outside Arrangement would
interfere with the satisfactory performance of his duties to the Bank, present
a conflict of interest with the Bank and/or Bancorp, breach his duty of loyalty
or fiduciary duties to the Bank and/or Bancorp, or otherwise conflict with the
provisions of this Agreement.  Pincus
represents that it is his good faith belief that as of the Commencement Date he
has not, directly or indirectly, performed services for or obtained a financial
or ownership interest in any Outside Arrangement that would violate the
preceding sentence. Except for such Outside Interests for which, directly or
indirectly, he performs services or in which he has obtained a financial or
ownership interest as of the Commencement Date, Pincus shall promptly notify
the Chairman of the Board of any Outside Arrangement for which, directly or
indirectly, he performs services or in which he obtains a financial ownership
interest, provide the Chairman with any written agreement in connection
therewith and respond fully and promptly to any questions that the Chairman may
ask with respect to any Outside Arrangement. 
If the Chairman determines that Pincus’ participation in an Outside
Arrangement would interfere with his satisfactory performance of his duties to
the Bank, present a conflict of interest with the Bank and/or Bancorp, breach
his duty of loyalty or fiduciary duties to the Bank and/or Bancorp, or
otherwise conflict with the provisions of this Agreement, Pincus shall not
undertake, or shall cease, such Outside Arrangement as soon feasible after the
Chairman notifies him of such determination. 
Notwithstanding any provision hereof to the contrary, this Section 4.2
does not restrict Pincus’ right to (i) own securities of any Entity that
files periodic reports with the Securities and Exchange Commission under Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended.

 

4.3           Compliance with Law.  Pincus shall comply with all laws, statutes,
ordinances, rules and regulations relating to his retention and duties.

 

5.             Compensation;  As full compensation for all services rendered
pursuant to this Agreement and the covenants contained herein, the Bank shall
pay to Pincus the following:

 

5.1           Retainer Compensation.
Beginning on the Commencement Date and continuing through the end of the Term, Pincus
shall be paid a retainer (“Retainer Compensation”) of Two Hundred Twenty
Thousand Dollars ($220,000) on an annualized basis.  The Bank shall pay Pincus’ Retainer
Compensation in equal installments in accordance with the Bank’s regular
payroll periods as may be set by the Bank from time to time.  Pincus may also be entitled to certain
incentive bonus payments as determined by Board approved incentive plans.  The Board will review Pincus’ performance and
increase Pincus’ Retainer Compensation periodically, and, at a minimum, to
reflect any increase in the Consumer Price Index. In making any such
adjustment, the Consumer Price Index for the last day of the calendar quarter
preceding the Commencement Date will be compared to the Consumer Price Index
for the last day of the same calendar quarter preceding each anniversary of the
Commencement Date. As used in this Agreement, the Consumer Price Index is the
U.S. Department of Labor Consumer Price Index, All Urban

 

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Consumers,
Washington-Baltimore All Items (1996+100), or, if this index is no longer
available, any comparable successor index selected by the Board in its
reasonable business judgment.

 

5.2                                Car Allowance. 
During the Term, the Bank will pay Pincus a car allowance of One
Thousand Two Hundred Fifty Dollars ($1,250) per month.

 

5.3                                Expenses. The Bank shall, promptly upon presentation of proper
expense reports therefor, pay or reimburse Pincus, in accordance with the
policies and procedures established from time to time by the Bank for its
officers, for all reasonable and customary travel (other than local use of an
automobile for which Pincus is being 
provided the car allowance) and other out-of-pocket expenses incurred by
Pincus in the performance of his duties and responsibilities under this
Agreement and promoting the business of the Bank, including approved membership
fees, dues and the cost of business related attending seminars, meetings and
conventions.

 

5.4                                Taxation; Employee Benefits.

 

5.4.1        Pincus acknowledges and agrees that he
shall not receive any employee benefits of any kind from the Bank.  Except as otherwise provided in this Section 5,
Pincus expressly waives any and all rights, if any, to participation in any
fringe benefit or employee benefit plans or programs maintained by the Bank for
its employees, including, but not limited to, stock purchase or stock option
plans, health, sickness, accident or dental coverage, life insurance,
disability benefits, severance, accidental death and dismemberment coverage,
unemployment insurance coverage, workers’ compensation coverage, and pension or
401(k) benefits.  Such waiver shall
apply even if Pincus is ultimately determined to be an employee, rather than an
independent contractor, by any court or governmental or administrative agency,
or by subsequent agreement of the parties.

 

5.4.2        Pincus agrees that he will be treated by
the Bank as an independent contractor for purposes of all taxes (local, state
and federal). As an independent contractor, Pincus acknowledges that he will
not be entitled to receive unemployment benefits in the event this Agreement
terminates, or workers’ compensation benefits in the event that he is injured
in any manner while performing obligations under this Agreement.  Pincus will be solely responsible to pay any
and all local, state and/or federal income and social security and unemployment
taxes.  Pincus will reimburse the Bank
for fifty percent (50%) of any tax amounts or penalties it may become obligated
to pay in respect of amounts paid to him, in the event Pincus is ultimately
determined to be an employee, rather than an independent contractor, by any
court or governmental or administrative agency.

 

5.5                                Life Insurance. The Bank may, at its
cost, obtain and maintain “key-man” life insurance and/or Bank-owned life
insurance on Pincus in such amount as determined by the Board from time to
time. Pincus agrees to cooperate fully and to take all actions reasonably
required by the Bank in connection with such insurance

 

6.                                      Conditions Subsequent to Continued
Operation and Effect of Agreement.

 

6.1                                Continued Approval by Bank Regulatory
Agencies. This
Agreement and all of its terms and conditions, and the continued operation and
effect of this Agreement and the Bank’s continuing obligations hereunder, shall
at all times be subject to the continuing approval of any and all Bank
Regulatory Agencies whose approval is a necessary prerequisite to the continued
operation of the Bank. Should any term or condition of this Agreement, upon review
by any Bank Regulatory Agency, be found to violate or not be in compliance with
any then-applicable statute or any rule, regulation, order or understanding
promulgated by any Bank Regulatory Agency, or should any term or condition
required to be included herein by any such Bank Regulatory Agency be absent,
this Agreement may be rescinded and terminated by the Bank if the parties
hereto cannot in good faith agree upon such additions, deletions or
modifications as may be deemed necessary or appropriate to bring this Agreement
into compliance.

 

7.                                      Termination of Agreement. Prior to the Expiration Date, the Term
of this Agreement may be terminated as provided below in this Article 7.

 

7.1                                Definition of Cause. For purposes of this Agreement, “Cause”
means:

 

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(a) any act
of theft, fraud, intentional misrepresentation, personal dishonesty or breach of fiduciary duty involving personal
gain or similar conduct by Pincus with respect to the Bank Entities or
the services to be rendered by him under this Agreement;

 

(b) any
failure of this Agreement to comply with any Bank Regulatory Agency requirement
which is not cured in accordance with Section 6.1 within a reasonable
period of time after written notice thereof;

 

(c) any Bank
Regulatory Agency action or proceeding against Pincus as a result of his
negligence, fraud, malfeasance or misconduct;

 

(d) indictment
of Pincus, or Pincus’ conviction or plea of nolo  contndere at the trial court level, of a felony, or any
crime of moral turpitude, or involving dishonesty, deception or breach of
trust;

 

(e) any of
the following conduct on the part of Pincus that Pincus has not been corrected
or cured within thirty (30) days after having received written notice from the
Bank detailing and describing such conduct (provided, however, that the Bank
shall not be required to provide Pincus with notice and opportunity to cure
more than two (2) times in any twelve (12) month period):

 

(i)            habitual absenteeism, or the failure
by or the inability of Pincus to devote appropirate attention, skill and
efforts to the performance of Pincus’ duties pursuant to this Agreement (other
than by reason of his death or Disability);

 

(ii)           intentional material failure by
Pincus to carry out the explicit lawful and reasonable directions,
instructions, policies, rules, regulations or decisions of the Board which are
consistent with his position;

 

(iii)          willful or intentional misconduct on
the part of Pincus that results, or that the Board in good faith determines may
result, in substantial injury to the Bank or any of its Affiliates; or

 

(iv)          any action (including any failure to
act) or conduct by Pincus in violation of a material provision of this
Agreement (including but not limited to the provisions of Article 8
hereof, which shall be deemed to be material); or

 

(f)                                   the use of drugs, alcohol or other
substances by Pincus to an extent which materially interferes with or prevents
Pincus from performing his duties under this Agreement;

 

(g)                                the determination by the Board, in the
exercise of its reasonable judgment and in good faith, that Pincus’ job
performance is substantially unsatisfactory and that he has failed to cure such
performance within a reasonable period (but in no event more than (30) days)
after written notice specifying in reasonable detail the nature of the
unsatisfactory performance; or

 

(h)                                Pincus’ commission of unethical business
practices, acts of moral turpitude, financial impropriety, fraud or dishonesty
in any material matter which the Board in good faith determines could adversely
affect the reputation, standing or financial prospects of the Bank or its
Affiliates.

 

7.2                                Termination by the Bank for Cause. 
After the occurrence of any of the conditions specified in Section 7.1,
the Bank shall have the right to terminate the Term for Cause immediately on
written notice to Pincus.

 

7.3                                Termination by the Bank without Cause. The Bank shall have the right to
terminate the Term at any time on written notice without Cause, for any or no
reason, such termination to be effective on the date on which the Bank gives
such notice given to Pincus or such later date as may be specified in such
notice.

 

7.4                                Termination for Death or Disability. 
The Term shall automatically terminate upon the death of Pincus or upon
the Board’s determination that Pincus is suffering from a Disability.

 

5

 

7.5                                 Termination by Pincus. Pincus shall have the right to terminate
the Term at any time, such termination to be effective on the date ninety (90)
days after the date on which Pincus gives such notice to the Bank unless Pincus
and the Bank agree in writing to a later date on which such termination is to
be effective.  After receiving notice of
termination, the Bank may require Pincus to devote his good faith energies to
transitioning his duties to his successor and to otherwise helping to minimize
the adverse impact of his resignation upon the operations of the Bank.  If Pincus fails or refuses to fully cooperate
with such transition, the Bank may immediately terminate Pincus, in which case
it shall no longer have any obligation to pay any Retainer Compensation or
provide any benefits to him, but solely for purposes of Sections 8.5 and 8.6
below, the Termination Date shall be the date ninety (90) days after the date
on which Pincus gives notice of termination to the Bank pursuant to the first
sentence of this Section 7.5, or the later date referred to therein,
whichever is later.

 

7.6                                 Pre-Termination Retainer Compensation and
Expenses.  Without regard to the reason for, or the
timing of, the termination or expiration of the Term:  (a) the Bank shall pay Pincus any unpaid
Retainer Compensation due for the period prior to the Termination Date; and
(b), following submission of proper expense reports by Pincus, the Bank shall
reimburse Pincus for all expenses incurred prior to the Termination Date and
subject to reimbursement pursuant to Section 5.8 hereof.  These payments shall be made promptly upon
termination and within the period of time mandated by law.

 

7.7                                 Severance if Termination by the Bank
without Cause or Due to Death or Disability.  Except as set
forth below, if the Term is terminated by the Bank without Cause or due to
Pincus’ death or disability, the Bank shall, through the Expiration Date (i) continue
to pay Pincus, in the manner set forth below, Pincus’ Retainer Compensation,
and (ii) continue to pay Pincus the monthly car allowance pursuant to Section 5.2,
provided, however, that Pincus shall not be entitled to any such payments of
Retainer Compensation or the car allowance pursuant to this Section 7.7 if
he is otherwise entitled to payments pursuant to Section 9.4 in relation
to a Change in Control.  (In the event
the Term is terminated due to Pincus’ death, references to “Pincus” in this Section 7.7
shall be to his estate).  Any payments
due Pincus pursuant to this Section 7.7 shall be paid to Pincus in
installments on the same schedule as Pincus was paid Retainer Compensation and
the car allowance immediately prior to the Termination Date, each installment
to be the same amount Pincus would have been paid under this Agreement if he
had not been terminated.  In the event
Pincus breaches any provision of Article 8 of this Agreement after
termination, Pincus’ entitlement to any payments pursuant to this Section 7.7
shall terminate as of the date of such breach, with Pincus having the
obligation to repay to the Bank any payments that were paid to him pursuant to
this Section 7.7 with respect to the period after such breach occurred and
before such breach became known to the Bank. 
Furthermore, if termination was initially not for Cause but the Bank
thereafter determines in good faith that that, during the Term, Pincus had
engaged in conduct that would have constituted Cause, Pincus’ entitlement to
any payments pursuant to this Section 7.7 shall terminate retroactively to
the Termination Date, with Pincus having the obligation to repay to the Bank
all payments that were paid to him pursuant to this Section 7.7.  Notwithstanding
anything to the contrary in this Section 7.7, any payment pursuant to this
Section shall be subject to any delay in payment required by Section 9.5
hereof.

 

7.8                                 Termination After Change in Control. 
Sections 9.2 and 9.3 set out provisions applicable to certain circumstances
in which the Term may be terminated after Change in Control.

 

8                                          Confidentiality; Non-Competition;
Non-Interference.

 

8.1                                 Confidential Information. 
Pincus, during retention by the Bank and his prior service to F&T,
will have, and has had, access to and become familiar with various confidential
and proprietary information of the Bank Entities and/or relating to the
business of the Bank Entities (“Confidential Information”), including, but not
limited to: business plans; operating results; financial statements and
financial information; contracts; mailing lists; purchasing information;
customer data (including lists, names and requirements); feasibility studies;
personnel related information (including compensation, compensation plans, and
staffing plans); internal working documents and communications; and other
materials related to the businesses or activities of the Bank Entities which is
made available only to employees with a need to know or which is not generally
made available to the public. Failure to mark any Confidential Information as
confidential, proprietary or protected information shall not affect its status
as part of the Confidential Information subject to the terms of this Agreement.

 

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8.2                                Nondisclosure. Pincus hereby covenants and agrees that he shall not, directly or indirectly, disclose or
use, or authorize any Person to disclose or use, any Confidential Information
(whether or not any of the Confidential Information is novel or known by any
other Person); provided however, that this restriction shall not apply to the
use or disclosure of Confidential Information (i) to any governmental
entity to the extent required by law, (ii) which is or becomes publicly
known and available through no wrongful act of Pincus or any Affiliate of
Pincus or (iii) in connection with the performance of Pincus’ duties under
this Agreement.

 

8.3                                Nondisclosure of this Agreement: 
The terms, conditions and fact of this Agreement are strictly
confidential.  From and after the date of
execution of this Agreement, Pincus agrees not to disclose, directly or
indirectly, the existence of this Agreement or any of the terms and conditions
herein to any Person except that Pincus may disclose the existence of this Agreement
or the terms and conditions herein to Pincus’ immediate family, tax, financial
or legal advisers, prospective employers (with whom Pincus’ employment is not
prohibited by Section 8.5), any taxing authority, or as required by
law.  If Pincus is asked about the
existence and/or terms and conditions of this Agreement, Pincus is permitted to
state only that “the terms of my retention are a confidential matter that I am
not able to disclose.”  Pincus
acknowledges that the terms of this Section 8.3 are a material inducement
for the Bank to enter into this Agreement. 
Notwithstanding the foregoing, Pincus may disclose such information
regarding this Agreement as may be disclosed by the Bank Entities in any
document filed with the Securities and Exchange Commission

 

8.4                                Documents. All files, papers, records, documents, compilations,
summaries, lists, reports, notes, databases, tapes, sketches, drawings,
memoranda, and similar items (collectively, “Documents”), whether prepared by
Pincus, or otherwise provided to or coming into the possession of Pincus, that
contain any proprietary information about or pertaining or relating to the Bank
Entities (the “Bank Information”) shall at all times remain the exclusive
property of the Bank Entities. Promptly after a request by the Bank or the
Termination Date, Pincus shall take reasonable efforts to (i) return to
the Bank all Documents in any tangible form (whether originals, copies or
reproductions) and all computer disks or other media containing or embodying
any Document or Bank Information and (ii) purge and destroy all Documents
and Bank Information in any intangible form (including computerized, digital or
other electronic format) as may be requested in writing by the Chief Executive
Officer  of the Bank or Chairman of the
Board of the Bank, and Pincus shall not retain in any form any such Document or
any summary, compilation, synopsis or abstract of any Document or Bank
Information.

 

8.5           Non-Competition.  Pincus hereby acknowledges and agrees that,
during the course of retention by the Bank Entities, Pincus has become, and
will become, familiar with and involved in all aspects of the business and
operations of the Bank Entities. Pincus hereby covenants and agrees that from
the Commencement Date until  the date
eighteen (18) months after the Termination Date (the “Restricted Period”),  Pincus will not at any time (except for the
Bank Entities), directly or indirectly, in any capacity (whether as a
proprietor, owner, agent, officer, director, shareholder, organizer, partner,
principal, manager, member, employee, contractor, consultant or otherwise)
provide any advice, assistance or services to any Competitive Business (as
defined below) or to any Person that is attempting to form or acquire a
Competitive Business if such Competitive Business operates, or is planning to
operate, any office, branch or other facility (in any case, a “Branch”) that is
(or is proposed to be) located within a thirty-five (35) mile radius of the
Bank’s headquarters or any Branch of the Bank Entities.  Notwithstanding any provision hereof to the
contrary, this Section 8.5.1 does not restrict Pincus’ right to (i) own
securities of any Entity that files periodic reports with the Securities and
Exchange Commission under Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended.

 

8.6                                Non-Interference. Pincus hereby covenants and agrees that
during the Restricted Period , he will not, directly or indirectly, for himself
or any other Person (whether as a proprietor, owner, agent, officer, director,
shareholder, organizer, partner, principal, member, manager, employee,
contractor, consultant or any other capacity):

 

(a)           induce or attempt to induce any
customer, supplier, officer, director, employee, contractor, consultant, agent
or representative of, or any other Person that has a business relationship with
any Bank Entity, to discontinue, terminate or reduce the extent of its, his or
her relationship with any Bank Entity or to take any action that would disrupt
or otherwise be disadvantageous to any such relationship;

 

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(b)           solicit any customer of any of the
Bank Entities for the purpose of providing any Competitive Products or Services
to such customer (other than any solicitation to the general public that is not
disproportionately directed at Bank customers); or

 

(c)           solicit any employee of any of the
Bank Entities to commence employment with, become a consultant or independent
contractor to or otherwise provide services for the benefit of any other
Competitive Business

 

In applying this Section 8.6:

 

(i)            the term “customer” shall be deemed
to include, at any time, any Person to which any of the Bank Entities had,
during the six (6) month period immediately prior to such time, (A) sold
any products or provided any services or (B) submitted, or been in the
process of submitting or negotiating, a proposal for the sale of any product or
the provision of any services;

 

(ii)           the term “supplier” shall be deemed
to include, at any time, any Person which, during the six (6) month period
immediately prior to such time, (A) had sold any products or services to
any of the Bank Entities or (B) had submitted to any of the Bank Entities
a proposal for the sale of any products 
or services;

 

(iii)          for purposes of clause (c), the term “employee”
shall be deemed to include, at any time, any Person who was employed by any of
the Bank Entities within the prior six (6) month period (thereby
prohibiting Pincus from soliciting any Person who had been employed by any of the
Bank Entities until six (6) months after the date on which such Person
ceased to be so employed); and

 

(iv)          If during the Restricted Period any
employee of any of the Bank Entities accepts employment with or is otherwise
retained by any Competitive Business of which Pincus is an owner, director,
officer, manager, member, employee, partner or employee, or to which Pincus
provides material services, it shall be presumed that such employee was hired
in violation of the restriction set forth in clause (c) of this Section 8.6,
with such presumption to be overcome only upon Pincus’ showing by a
preponderance of the evidence that he was not directly or indirectly involved
in the hiring, soliciting or encouraging such employee to leave employment with
the Bank Entities.

 

8.7           Injunction. In the event of
any breach or threatened or attempted breach of any provision of this Article 8
by Pincus, the Bank shall, in addition to and not to the exclusion of any other
rights and remedies at law or in equity, be entitled to seek and receive from
any court of competent jurisdiction (i) full temporary and permanent
injunctive relief enjoining and restraining Pincus and each and every other
Person concerned therein from the continuation of such violative acts and (ii) a
decree for specific performance of the applicable provisions of this Agreement,
without being required to furnish any bond or other security.

 

8.8           Reasonableness.

 

8.8.1 Pincus has
carefully read and considered the provisions of this Article 8 and, having
done so, agrees that the restrictions and agreements set forth in this Article 8
are fair and reasonable and are reasonably required for the protection of the
interests of the Bank and its business, shareholders, directors, officers and
employees. Pincus further agrees that the restrictions set forth in this
Agreement will not impair or unreasonably restrain his ability to earn a
livelihood.

 

8.8.2 If any court
of competent jurisdiction should determine that the duration, geographical area
or scope of any provision or restriction set forth in this Article 8
exceeds the maximum duration, geographic area or scope that is reasonable and
enforceable under applicable law, the parties agree that said provision shall
automatically be modified and shall be deemed to extend only over the maximum
duration, geographical area and/or scope as to which such provision or
restriction said court determines to be valid and enforceable under applicable
law, which determination the parties direct the court to make, and the parties
agree to be bound by such modified provision or restriction.

 

8

 

9.             Change
in Control.

 

9.1                                                                                 Definition.  “Change in
Control” means and shall be deemed to have occurred if:

 

(a) 
there shall be consummated (i) any consolidation, merger, share exchange,
or similar transaction relating to Bancorp, or pursuant to which shares of
Bancorp’s capital stock are converted into cash, securities of another Entity
and/or other property, other than a transaction in which the holders of Bancorp’s
voting stock immediately before such transaction shall, upon consummation of
such transaction, own at least fifty percent (50%) of the voting power of the
surviving Entity, or (ii) any sale of all or substantially all of the
assets of Bancorp, other than a transfer of assets to a related Person which is
not treated as a change in control event under §1.409A-3(i)(5)(vii)(B) of
the U.S. Treasury Regulations;

 

(b) 
any person, entity or group (each within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) shall become the beneficial owner (within the meaning of Rules 13d-3
and 13d-5 under the Exchange Act), directly or indirectly, of securities of
Bancorp representing more than fifty percent (50%) of the voting power of all
outstanding securities of Bancorp entitled to vote generally in the election of
directors of Bancorp (including, without limitation, any securities of Bancorp
that any such Person has the right to acquire pursuant to any agreement, or
upon exercise of conversion rights, warrants or options, or otherwise, which
shall be deemed beneficially owned by such Person); or

 

(c) 
where over a twelve (12) month period, a majority of the members of the Board
of Directors of Bancorp (the “Bancorp Board”) are replaced by directors whose
appointment or election was not endorsed by a majority of the members of the
Bancorp Board in office prior to such appointment or election.

 

Notwithstanding
the foregoing, if the event purportedly constituting a Change in Control under Section 9.1(a),
Section 9.1(b), or Section 9.1(c) does not also constitutes a “change
in ownership” of Bancorp, a “change in effective control” of Bancorp, or a “change
in the ownership of a substantial portion of the assets” of Bancorp within the
meaning of Section 409A, then such event shall not constitute a “Change in
Control” hereunder.

 

9.2           Change in Control Termination.  For purposes of this Agreement, a “Change in
Control Termination” means that while this Agreement is in effect:

 

(a)           Pincus’ retention by the Bank is
terminated without Cause (i) within one hundred twenty (120) days
immediately prior to and in conjunction with a Change in Control or (ii) within
twelve (12) months following consummation of a Change in Control; or

 

(b)           Within twelve (12) months following
consummation of a Change in Control, Pincus’ title, duties and or position have
been materially reduced such that Pincus is not in a comparable position (with
materially comparable compensation, benefits and responsibilities and is
located within twenty-five (25) miles of Pincus’ primary worksite) to the
position he held immediately prior to the Change in Control, and within thirty
(30) days after notification of such reduction he notifies the Bank that he is
terminating his retention  due to such
change in his retention unless such change is cured within thirty (30) days of
such notice by providing him with a comparable position (including materially
comparable compensation and benefits and is located within twenty-five (25)
miles of Pincus’ primary worksite).  If
Pincus’ retention is terminated under this Section, his last day of retention
shall be mutually agreed to by Pincus and the Bank, but shall be not more than
sixty (60) days after such notice is given by Pincus.

 

9.3           Window Period Resignation After
Change in Control.  If at the
expiration of the twelve (12) month period following consummation of a Change
in Control (the “Action Period”), Pincus retention by the Bank has not been
terminated, Pincus may, by giving written notice to the Bank within the thirty
(30) day period immediately following the last day of the Action Period, elect
to terminate the Term, in which event his last day of retention will be as
mutually agreed to by the Bank and Pincus but which shall be not more than
sixty (60) days after such notice is given by Pincus.

 

9.4           Change in Control Payment.  If there is a Change in Control Termination
pursuant to Section 9.2 or Pincus resigns after the Action Period pursuant
to Section 9.3, Pincus shall be paid a lump-sum cash payment (the “Change
Payment”) equal to 2.99 times Pincus’ Retainer Compensation at the highest rate
in effect during the twelve (12) month period immediately preceding his
Termination Date, such Change Payment to be made to Pincus 

 

9

 

within forty-five
(45) days after the later of (i) his Termination Date or (ii) the
date of the Change in Control, the exact date of payment to be determined in
the sole discretion of the Bank. Notwithstanding the foregoing, in accordance
with Section 9.6 below the date on which the Change Payment shall be paid
to Pincus shall be delayed in order to ensure that such payment is not subject
to excise tax under Section 409A.

 

9.5           Adjustment.

 

(a)           Notwithstanding anything in this
Agreement to the contrary, if the Determining Firm (as defined in Section 9.5(b))
determines that any portion of the Change Payment and/or the portions, if any,
of other payments or  distributions in
the nature of compensation by the Bank to or for the benefit of Pincus
(including, but not limited to, the value of the acceleration in vesting of
restricted stock, options or any other stock-based compensation) whether or not
paid or payable or distributed or distributable pursuant to the terms of this
Agreement (collectively with the Change Payment, the “Aggregate Payment”),
would cause any portion of the Aggregate Payment to be subject to the excise
tax imposed by Code Section 4999 or would be nondeductible by the Bank
pursuant to Code Section 280G of the Code (such portion subject to the
excise tax or being nondeductible, the “Parachute Payment”), the Aggregate
Payment will be reduced, beginning with the Change Payment, to an amount which
will not cause any portion of the Aggregate Payment to constitute a Parachute
Payment.

 

(b)           All determinations required to be
made under this Section 9.5, will be made by a reputable law or accounting
firm (the “Determining Firm”) selected by the Bank.  All fees and expenses of the Determining Firm
will be obligations solely of the Bank. 
The determination of the Determining Firm will be binding upon the Bank
and Pincus.

 

9.6           Construction; Compliance with
409A, Delay in Payment.

 

(a)           It is the intention of the parties
hereto that this Agreement and the payments provided for hereunder shall be in
accordance with Section 409A, if applicable, and thus avoid the imposition
of any excise tax and interest on Pincus pursuant to Section 409A(a)(1)(B) of
the Code, and this Agreement shall be interpreted and construed consistent with
this intent.  Pincus acknowledges and
agrees that he shall be solely responsible for the payment of any excise tax or
penalty which may be imposed or to which he may become subject as a result of
the payment of any amounts under this Agreement.

 

(b)           Notwithstanding anything to the
contrary contained herein, any payment hereunder that is considered “nonqualified
deferred compensation” that is to be made to Pincus as a “specified employee”,
in each case as defined and determined for purposes of Section 409A,
within six (6) months following Pincus’ “separation from service” (as
determined in accordance with Section 409A), then to the extent that such
payment is not otherwise permitted under Section 409A such that it would
be exempt from the excise tax thereunder, such payment shall be delayed and
shall be paid on the first business day of the seventh calendar month following
Pincus’ separation from service, or, if earlier upon Pincus’ death.  To the extent that any payment to Pincus
which is payable in installments is required to be deferred pursuant to this Section 9.6(b),
such deferred installments shall be paid on the first business day of the
seventh month following Pincus’ separation from service, or, if earlier upon Pincus’
death, and any remaining installments shall be paid as scheduled.  For purposes of this Agreement any payment to
Pincus which is payable in installments represents the right to a series of
separate payments.

 

(c)           The parties hereto agree that they shall
take such actions as may be necessary and permissible under applicable law,
regulation and guidance to amend or revise this Agreement in order to fully
comply with Section 409A.

 

10.           Assignability.  Pincus shall have no right to assign this
Agreement or any of his rights or obligations hereunder to another party or
parties.  The Bank may assign this
Agreement to any of its Affiliates or to any Person that acquires a substantial
portion of the operating assets of the Bank. 
Upon any such assignment by the Bank, references in this Agreement to
the Bank shall automatically be deemed to refer to such assignee instead of, or
in addition to, the Bank, as appropriate in the context.

 

11.           Governing
Law; Venue. This Agreement shall be governed by and construed in accordance
with the laws of the State of Maryland applicable to contracts executed and to
be performed therein, without giving effect

 

10

 

to the choice of law rules thereof. Any action to enforce any provision of this Agreement may be brought
only in a court of the State of Maryland or in the United States District Court
for the District of Maryland. 
Accordingly, each party (a) agrees to submit to the jurisdiction of
such courts and to accept service of process at its address for notices and in
the manner provided in Section 12 for the giving of notices in any such
action or proceeding brought in any such court and (b) irrevocably waives
any objection to the laying of venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient or inappropriate forum.

 

12.           Notices. All notices,
requests, demands and other communications required to be given or permitted to
be given under this Agreement shall be in writing and shall be conclusively
deemed to have been given  as follows: (a) when
hand delivered to the other party; (b) when received by facsimile at the
facsimile number set forth below, provided, however, that any notice given by
facsimile shall not be effective unless either (i) a duplicate copy of
such facsimile notice is promptly given by depositing the same in a United
States post office first-class postage prepaid and addressed to the applicable
party as set forth below or (ii) the receiving party delivers a written
confirmation of receipt for such notice either by facsimile or by any other
method permitted under this section;; or (c) deposited in a United States
post office with first-class certified mail, return receipt requested, postage
prepaid and addressed to the applicable party as set forth below; or (d) deposited
with a national overnight delivery service reasonably approved by the parties
(Federal Express and DHL WorldWide Express being deemed approved by the parties),
postage prepaid, addressed to the applicable party as set forth below with
next-business-day delivery guaranteed; provided that the sending party receives
a confirmation of delivery from the delivery service provider. Any notice given
by facsimile shall be deemed received on the date on which notice is received
except that if such notice is received after 5:00 p.m. (recipient’s time)
or on a non-business day, notice shall be deemed given the next business
day).  Any notice sent by Untied States
mail shall be deemed given three (3) business days after the same has been
deposited in the United States mail.  Any
notice given by national overnight delivery service shall be deemed given on
the first business day following deposit with such delivery service.  For purposes of this Agreement, the term “business
day” shall mean any day other than a Saturday, Sunday or day that is a legal
holiday in Montgomery County, Maryland. 
The address of a party set forth below may be changed by that party by
written notice to the other from time to time pursuant to this Article.

 

	
  To:

  	
  Robert P. Pincus

  	
   

  
	
   

  	
  2411 California Street,
  N.W.

  	
   

  
	
   

  	
  Washington, DC 20008

  	
   

  
	
   

  	
  Fax
  No. 202-332-8178

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  cc:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Ronald D. Abramson,
  Esquire

  	
   

  
	
   

  	
   

  	
  Buchanan
  Ingersoll & Rooney PC

  	
   

  
	
   

  	
   

  	
  1700 K Street, N.W.

  	
   

  
	
   

  	
   

  	
  Suite 300

  	
   

  
	
   

  	
   

  	
  Washington, DC 20006

  	
   

  
	
   

  	
   

  	
  Fax
  No. 202-452-6049

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  To:

  	
  EagleBank

  	
   

  
	
   

  	
  c/o Ronald D. Paul

  	
   

  
	
   

  	
  7815 Woodmont Ave.

  	
   

  
	
   

  	
  Bethesda, MD 20814

  	
   

  
	
   

  	
  Fax No.:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  cc:

  	
  Fred Sommer, Esquire

  	
   

  
	
   

  	
   

  	
  Shulman, Rogers,
  Gandal, Pordy & Ecker, P.A.

  	
   

  
	
   

  	
   

  	
  11921 Rockville Pike, 3rd
  Floor

  	
   

  
	
   

  	
   

  	
  Rockville, Maryland
  20852

  	
   

  
	
   

  	
   

  	
  Fax No.: 301.230-2891

  	
   

  
					

 

11

 

13.           Entire Agreement. This
Agreement contains all of the agreements and understandings between the parties
hereto with respect to the retention of Pincus by the Bank, and supersedes all
prior agreements, arrangements and understandings related to the subject matter
hereof.  No oral agreements or written
correspondence shall be held to affect the provisions hereof. No
representation, promise, inducement or statement of intention has been made by
either party that is not set forth in this Agreement, and neither party shall
be bound by or liable for any alleged representation, promise, inducement or
statement of intention not so set forth.

 

14.           Headings. The Article and
Section headings contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.

 

15.           Severability.  Should any part of this Agreement for any
reason be declared or held illegal, invalid or unenforceable, such
determination shall not affect the legality, validity or enforceability of any
remaining portion or provision of this Agreement, which remaining portions and
provisions shall remain in force and effect as if this Agreement has been
executed with the illegal, invalid or unenforceable portion thereof eliminated.

 

16.           Amendment; Waiver. Neither
this Agreement nor any provision hereof may be amended, modified, changed, waived,
discharged or terminated except by an instrument in writing signed by the party
against which enforcement of the amendment, modification, change, waiver,
discharge or termination is sought. The failure of either party at any time or
times to require performance of any provision hereof shall not in any manner
affect the right at a later time to enforce the same. No waiver by either party
of the breach of any term, provision or covenant contained in this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed
to be, or construed as, a further or continuing waiver of any such breach, or a
waiver of the breach of any other term, provision or covenant contained in this
Agreement.

 

17.           Gender and Number. As used in
this Agreement, the masculine, feminine and neuter gender, and the singular or
plural number, shall each be deemed to include the other or others whenever the
context so indicates.

 

18.           Binding Effect. This Agreement
is and shall be binding upon, and inures to the benefit of, the Bank, its
successors and assigns, and Pincus and his heirs, executors, administrators,
and personal and legal representatives.

 

IN WITNESS
WHEREOF, the parties have executed this Agreement as of the date first written
above.

 

	
   

  	
  EAGLEBANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Ronald D. Paul

  
	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ROBERT P. PINCUS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

12exhibit10_1.htm

    Exhibit
10.1

    

    

    SECOND
AMENDED AND RESTATED

    POZEN
INC. 2000 EQUITY COMPENSATION PLAN

    

    NONQUALIFIED STOCK OPTION
GRANT

    

    This
STOCK OPTION GRANT, dated as of May 6, 2008 (the “Date of Grant”), is delivered
by POZEN Inc. (the “Company”) to _____________ (the “Grantee”).

    

    RECITALS

    

    The
Second Amended and Restated POZEN Inc. 2000 Equity Compensation Plan (the
“Plan”), provides for the grant of options to purchase shares of common stock of
the Company.  The Compensation Committee (the “Committee”) of the
Board of Directors has decided to make a stock option grant as an inducement for
the Grantee to promote the best interests of the Company and its
stockholders.  A copy of the Plan is attached.

    

    NOW,
THEREFORE, the parties to this Agreement, intending to be legally bound hereby,
agree as follows:

    

    1.           Grant of
Option.  Subject to the terms and conditions set forth in this
Agreement and in the Plan, the Company hereby grants to the Grantee a
nonqualified stock option (the “Option”) to purchase ______ shares of common
stock of the Company (“Shares”) at an exercise price of $____ per Share, which
represents the Fair Market Value (as defined in the Plan) of the underlying
common stock of the Company on the Date of Grant.  The Option shall
become exercisable according to Paragraph 2 below.

    

    2.           Exercisability of
Option.  The Option shall become exercisable as set forth
below, if the Grantee is employed by, or providing services to, the Company (as
defined in the Plan):

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    Twenty-five percent (25%) of the shares
underlying the options granted will vest upon the acceptance by the U.S. Food
and Drug Administration (FDA) of the New Drug Application (NDA) for PN 400, a
proprietary fixed dose combination of the PPI esomeprazole magnesium with the
NSAID naproxen in a single tablet being developed by the Company with
AstraZeneca AB for the management of pain and inflammation associated with
conditions such as osteoarthritis and rheumatoid arthritis in patients who are
at risk for developing NSAID-associated gastric ulcers if the Grantee has
received a received a “meets or exceeds expectations” or “exceptional” rating
with respect to all of Grantee’s performance reviews beginning with the year in
which the Date of Grant occurs and for each year prior to the date on which such
partial vesting occurs.  The remaining seventy-five (75%) of the
options granted will vest upon the receipt by the Company of an action letter
from the FDA indicating approval of the NDA for PN 400 if the Grantee has
received a received a “meets or exceeds expectations” or “exceptional” rating
with respect to all of Grantee’s performance reviews beginning with the year in
which the Date of Grant occurs and for each year prior to the date on which such
full vesting occurs.  The Company’s determination of a Grantee’s
performance ratings shall be made in its sole discretion and shall be binding
upon the Company and the Grantee.

    

    
      	
              3.

            	
              Term of
      Option.

            

    

    

    (a)           The
Option shall have a term of ten years from the Date of Grant and shall terminate
at the expiration of that period, unless it is terminated at an earlier date
pursuant to the provisions of this Agreement or the Plan.

    

    (b)           The
Option shall automatically terminate upon the happening of the first of the
following events:

    

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

    

    (ii)           The
date on which the Grantee ceases to be employed by, or provide service to, the
Company for Cause.  In addition, notwithstanding the prior provisions
of this Paragraph 3, if the Grantee engages in conduct that constitutes Cause
after the Grantee’s employment or service terminates but while the Option
otherwise remains exercisable, the Option shall immediately
terminate.

    

    (iii)           The
date the Grantee receives a performance review from the Company which does not
have a “meets or exceeds expectations” or “exceptional” rating.

    

    Notwithstanding
the foregoing, in no event may the Option be exercised after the date that is
ten years from the Date of Grant.  Any portion of the Option that is
not exercisable at the time the Grantee ceases to be employed by, or provide
service to, the Company shall immediately terminate.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    4.           Exercise
Procedures.

    

    (a)           Subject
to the provisions of Paragraphs 2 and 3 above, the Grantee may exercise part or
all of the exercisable Option by giving the Company written notice of intent to
exercise in the manner provided in this Agreement, specifying the number of
Shares as to which the Option is to be exercised.  On the delivery
date, the Grantee shall pay the exercise price (i) in cash, (ii) with the
approval of the Committee, by delivering Shares of the Company which shall be
valued at their fair market value on the date of delivery, (iii) payment through
a broker in accordance with procedures permitted by Regulation T of the Federal
Reserve Board, or (iv) by such other method as the Committee may
approve.  The Committee may impose from time to time such limitations
as it deems appropriate on the use of Shares of the Company to exercise the
Option.

    

    (b)           The
obligation of the Company to deliver Shares upon exercise of the Option shall be
subject to all applicable laws, rules, and regulations and such approvals by
governmental agencies as may be deemed appropriate by the Committee, including
such actions as Company counsel shall deem necessary or appropriate to comply
with relevant securities laws and regulations.  The Company may
require that the Grantee (or other person exercising the Option after the
Grantee’s death) represent that the Grantee is purchasing Shares for the
Grantee’s own account and not with a view to or for sale in connection with any
distribution of the Shares, or such other representation as the Committee deems
appropriate.  All obligations of the Company under this Agreement
shall be subject to the rights of the Company as set forth in the Plan to
withhold amounts required to be withheld for any taxes, if
applicable.  Subject to Committee approval, the Grantee may elect to
satisfy any income tax withholding obligation of the Company with respect to the
Option by having Shares withheld up to an amount that does not exceed the
minimum applicable withholding tax rate for federal (including FICA), state and
local tax liabilities.

    

    5.           Change of
Control.  The provisions of the Plan applicable to a Change of
Control shall apply to the Option, and, in the event of a Change of Control, the
Committee may take such actions as it deems appropriate pursuant to the
Plan.

    

    6.           Restrictions on
Exercise.  Only the Grantee may exercise the Option during the
Grantee’s lifetime and, after the Grantee’s death, the Option shall be
exercisable (subject to the limitations specified in the Plan) solely by the
legal representatives of the Grantee, or by the person who acquires the right to
exercise the Option by will or by the laws of descent and distribution, to the
extent that the Option is exercisable pursuant to this Agreement.

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    7.           Grant Subject to Plan
Provisions.  This grant is made pursuant to the Plan, the terms
of which are incorporated herein by reference, and in all respects shall be
interpreted in accordance with the Plan.  The grant and exercise of
the Option are subject to the provisions of the Plan and to interpretations,
regulations and determinations concerning the Plan established from time to time
by the Committee in accordance with the provisions of the Plan, including, but
not limited to, provisions pertaining to (i) rights and obligations with respect
to withholding taxes, (ii) the registration, qualification or listing of the
Shares, (iii) changes in capitalization of the Company, and (iv) other
requirements of applicable law.  The Committee shall have the
authority to interpret and construe the Option pursuant to the terms of the
Plan, and its decisions shall be conclusive as to any questions arising
hereunder.

    

    8.           No Employment or Other
Rights.  The grant of the Option shall not confer upon the
Grantee any right to be retained by or in the employ or service of the Company
and shall not interfere in any way with the right of the Company to terminate
the Grantee’s employment or service at any time.  The right of the
Company to terminate at will the Grantee’s employment or service at any time for
any reason is specifically reserved.

    

    9.           No Stockholder
Rights.  Neither the Grantee, nor any person entitled to
exercise the Grantee’s rights in the event of the Grantee's death, shall have
any of the rights and privileges of a stockholder with respect to the Shares
subject to the Option, until certificates for Shares have been issued upon the
exercise of the Option.

    

    10.           Assignment and
Transfers.  The rights and interests of the Grantee under this
Agreement may not be sold, assigned, encumbered or otherwise transferred except,
in the event of the death of the Grantee, by will or by the laws of descent and
distribution.  In the event of any attempt by the Grantee to alienate,
assign, pledge, hypothecate, or otherwise dispose of the Option or any right
hereunder, except as provided for in this Agreement, or in the event of the levy
or any attachment, execution or similar process upon the rights or interests
hereby conferred, the Company may terminate the Option by notice to the Grantee,
and the Option and all rights hereunder shall thereupon become null and
void.  The rights and protections of the Company hereunder shall
extend to any successors or assigns of the Company and to the Company’s parents,
subsidiaries, and affiliates.  This Agreement may be assigned by the
Company without the Grantee’s consent.

    

    11.           Applicable
Law.  The validity, construction, interpretation and effect of
this instrument shall be governed by and construed in accordance with the laws
of the State of Delaware, without giving effect to the conflicts of laws
provisions thereof.

    

    12.           Notice.  Any
notice to the Company provided for in this instrument shall be addressed to the
Company in care of the President at 1414 Raleigh Road, Suite 400, Chapel Hill,
N.C. 27517, and any notice to the Grantee shall be addressed to such Grantee at
the current address shown on the payroll of the Company, or to such other
address as the Grantee may designate to the Company in writing.  Any
notice shall be delivered by hand, sent by telecopy or enclosed in a properly
sealed envelope addressed as stated above, registered and deposited, postage
prepaid, in a post office regularly maintained by the United States Postal
Service.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    IN
WITNESS WHEREOF, the Company has caused its duly authorized officer to execute
this Agreement, and the Grantee has executed this Agreement, effective as of the
Date of Grant.

    

    

    

    
      	 
      	
              POZEN
      INC.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	
              Its:

            	 
      
	 
      	 
      	 
      
	 
      	
              Accepted:

            	 
      
	 
      	 
      	
              [Grantee]

            

    

    

    

    
      
         

      

      
        5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}]]