Document:

Tax Sharing Agreement

 Exhibit 10.3 

TAX SHARING AGREEMENT 

This Tax Sharing Agreement (this “Agreement”) is entered into as of June 14, 2010 between Pharmaceutical Product
Development, Inc., a North Carolina corporation (“PPD”), and Furiex Pharmaceuticals, Inc., a Delaware corporation that currently is wholly owned subsidiary of PPD (“Furiex” each of PPD and Furiex is a
“Party” and, together are the “Parties”. Terms used in this Agreement and not otherwise defined herein shall have the meanings ascribed to such terms in the Separation and Distribution Agreement, dated as of the
date hereof, by and between PPD and Furiex (the “Separation Agreement”). 
 RECITALS 

WHEREAS, PPD is the common parent corporation of an affiliated group of corporations within the meaning of section 1504(a) of the
Internal Revenue Code of 1986, as amended (the “Code”), which has filed consolidated federal income tax returns; 

WHEREAS, Furiex is a newly formed, wholly owned subsidiary of PPD; 

WHEREAS, pursuant to the Separation Agreement, among other transactions PPD will transfer to Furiex all of the Furiex Assets and Furiex
will issue to PPD shares of Furiex Common Stock (the “Contribution”); 
 WHEREAS, on the Distribution Date at
the Effective Time, PPD will distribute all of the issued and outstanding shares of Furiex Common Stock on a pro rata basis to holders of PPD Common Stock (the “Distribution”); 

WHEREAS, the Parties intend that the Distribution qualify as a non-taxable distribution described in section 355 of the Code (the
“Distribution Tax Treatment”); 
 WHEREAS, the Parties intend that after the Distribution Date Furiex will not
be a member of the PPD Group and will not be includable within PPD’s tax return for federal income tax purposes; 

WHEREAS, the Parties intend that the Contribution, taking into account the Distribution, qualify as a series of tax-free transfers under
the Code (the “Contribution Tax Treatment”); and 
 WHEREAS, the Parties desire to set forth their rights and
obligations with respect to Taxes (as defined herein) due for periods before and after the Distribution Date; 
 NOW, THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows: 

ARTICLE I 

DEFINITIONS 

1.01 General. As used in this Agreement, the following terms shall have the following meanings: 

“Affiliate” shall have the meaning set forth in the Separation Agreement. 

“Agreement” shall have the meaning set forth in the preamble to this Agreement. 

 “Ancillary Agreements” shall mean the Ancillary Agreements as set forth in
the Separation Agreement, together with the Separation Agreement. 
 “Code” shall have the meaning set forth in
the recitals. 
 “Compound Business” shall have the meaning set forth in the Separation Agreement. 

“Contribution” shall have the meaning set forth in the recitals. 

“Contribution Tax Treatment” shall have the meaning set forth in the recitals. 

“Dispute” shall have the meaning set forth in Article VIII. 

“Distribution” shall have the meaning set forth in the recitals. 

“Distribution Date” shall mean the date hereof. 

“Distribution Tax Treatment” shall have the meaning set forth in the recitals. 

“Effective Time” shall mean 11:59 p.m., Wilmington, North Carolina time, on the Distribution Date, at which time the
Distribution is effective. 
 “Final Determination” shall mean a determination within the meaning of section
1313 of the Code or any similar provision of state or local Tax law. 
 “Governmental Authority” shall have the
meaning set forth in the Separation Agreement. 
 “Group” shall have the meaning set forth in the Separation
Agreement. 
 “Liability” shall mean any particular single debt, liability or obligation that is included
within the definition of Liabilities. 
 “Liabilities” shall have the meaning set forth in the Separation
Agreement. 
 “Furiex” shall have the meaning set forth in the preamble to this Agreement. 

“Furiex Assets” shall have the meaning set forth in the Separation Agreement. 

“Furiex Common Stock” shall have the meaning set forth in the Separation Agreement. 

“Furiex Filed Tax Return” shall have the meaning set forth in Section 2.01(b). 

“Furiex Group” shall have the meaning set forth in the Separation Agreement. 

“Furiex Indemnitees” shall have the meaning set forth in Section 4.01(a). 

“Furiex Taxes” shall have the meaning set forth in Section 2.03(a). 

“Party” or “Parties” shall have the meaning set forth in the preamble to this Agreement. 

“Person” shall have the meaning set forth in the Separation Agreement. 

“Post-Distribution Period” shall mean any taxable year or other taxable period beginning after the Distribution Date
and, in the case of any taxable year or other taxable period that begins before and ends after the Distribution Date, that part of the taxable year or other taxable period that begins at the beginning of the day after the Distribution Date.

  

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 “PPD” shall have the meaning set forth in the preamble to this Agreement.

 “PPD Filed Tax Return” shall have the meaning set forth in Section 2.01(a). 

“PPD Group” shall have the meaning set forth in the Separation Agreement. 

“PPD Indemnitees” shall have the meaning set forth in Section 4.01(b). 

“PPD Taxes” shall have the meaning set forth in Section 2.03(b). 

“Pre-Distribution Period” shall mean any taxable year or other taxable period that ends on or before the Distribution
Date and, in the case of any taxable year or other taxable period that begins before and ends after the Distribution Date, that part of the taxable year or other taxable period through the close of the Distribution Date. 

“Separation Agreement” shall have the meaning set forth in the preamble to this Agreement. 

“Subsidiary” shall have the meaning set forth in the Separation Agreement. 

“Tax” or “Taxes” shall mean any and all taxes, charges, fees, duties, levies, imposts, rates or other
assessments or governmental charges of any kind imposed by any federal, state, local or foreign Governmental Authority, including, without limitation, income, gross receipts, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental, custom duties, property, sales, use, license, capital stock, transfer, franchise, registration, payroll, withholding, social security, unemployment, disability, value-added, alternative or add-on minimum or other taxes,
whether disputed or not, and including any interest, penalties, charges or additions attributable thereto, (ii) liability for the payment of any amount of the type described in clause (i) above arising as a result of being (or having been)
a member of any group or being (or having been) included or required to be included in any Tax Return related thereto, and (iii) liability for the payment of any amount of the type described in clauses (i) or (ii) above as a result of
any express or implied obligation to indemnify or otherwise assume or succeed to the liability of any other Person. 

“Tax Advisor” shall have the meaning set forth in Article VIII. 

“Tax Contest” shall have the meaning set forth in Section 5.01. 

“Tax Information Packages” shall mean any information required in order to prepare and file any PPD Filed Tax Return.

 “Tax Return” shall mean any return, report, certificate, form or similar statement or document (including
any related supporting information or schedule attached thereto and any information return, amended tax return, claim for refund or declaration of estimated tax) required to be supplied to, or filed with, a Governmental Authority or any bill for or
notice related to ad valorem or other similar Taxes received from a Governmental Authority, in each case, in connection with the determination, assessment or collection of any Tax or the administration of any laws, regulations or administrative
requirements relating to any Tax. 
  

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 “Transfer Taxes” shall have the meaning set forth in Section 2.03(g).

 1.02 References; Interpretation. References in this Agreement to the singular shall be held to include the plural and
vice versa and words of one gender shall be held to include the other gender as the context requires. The terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed
to refer to this Agreement (or the applicable Ancillary Agreement) as a whole (including all of the Schedules and Exhibits hereto and thereto) and not to any particular provision of this Agreement (or such Ancillary Agreement). Article, Section,
Exhibit, Schedule and Appendix references are to the Articles, Sections, Exhibits, Schedules and Appendices to this Agreement (or the applicable Ancillary Agreement) unless otherwise specified. The word “including” and words of similar
import when used in this Agreement (or the applicable Ancillary Agreement) shall mean “including, without limitation,” unless the context otherwise requires or unless otherwise specified. The word “or” shall not be exclusive. Any
definition of or reference to any statute shall be construed as referring also to any rules and regulations promulgated thereunder. 

ARTICLE II 
 TAX
RETURNS AND TAX PAYMENTS 
 2.01 Obligations to File Tax Returns. 

(a) PPD shall have the sole and exclusive responsibility for the preparation and filing of each Tax Return that (i) includes any
member of the PPD Group or the Furiex Group and is for a Tax year ending on or before the Distribution Date or (ii) includes any member of the PPD Group and is required to be filed after the Distribution Date (each, a “PPD Filed Tax
Return”); provided, however, that (A) all PPD Filed Tax Returns shall be prepared on a basis that is consistent with both the Contribution Tax Treatment and the Distribution Tax Treatment, (B) Furiex shall promptly
prepare and deliver to PPD in a manner consistent with past practices pro forma Tax Returns and Tax Information Packages for any taxable period in which any member of the Furiex Group is included in, or any portion of the Compound Business is
reflected on, a PPD Filed Tax Return, (C) PPD shall provide to Furiex sufficiently in advance of the due date for the filing thereof, and Furiex shall have a reasonable opportunity to review and comment on, any such PPD Filed Tax Return (or the
relevant portion thereof) to the extent that Furiex is responsible for any portion of the Taxes reported on such PPD Filed Tax Return, and (D) in the case of any PPD Filed Tax Return that includes any member of the Furiex Group or the Compound
Business for only the portion of the relevant taxable period that ends on the Distribution Date, Taxes shall be allocated to the portion of such taxable period that ends on the Distribution Date based on an actual or hypothetical closing of the
books at the Effective Time. Each member of the Furiex Group hereby irrevocably authorizes and designates PPD as its agent, coordinator and administrator for the purpose of taking any and all actions necessary or incidental to the filing of any such
PPD Filed Tax Returns and, except as otherwise provided herein, for the purpose of making payments to, or collecting refunds from, any Governmental Authority in respect of a PPD Filed Tax Return. Except as otherwise provided herein, PPD shall have
the exclusive right to file, prosecute, compromise or settle any claim for, or refund of, Taxes in respect of a PPD Filed Tax Return for which PPD bears responsibility hereunder and to determine whether any refunds of Taxes to which the PPD Group
may be entitled shall be received by way of refund or credit against the Tax liability of the PPD Group. 
  

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 (b) Furiex shall have the sole and exclusive responsibility for the preparation and filing
of each Tax Return that (i) is required to be filed after the Distribution Date, (ii) includes any member of the Furiex Group or otherwise relates to the Compound Business and (iii) is not a PPD Filed Tax Return (each, a
“Furiex Filed Tax Return”); provided, however, that, except as otherwise required by law, (A) all Furiex Filed Tax Returns shall be prepared on a basis that is consistent with both the Contribution Tax Treatment
and the Distribution Tax Treatment, (B) Furiex shall provide to PPD sufficiently in advance of the due date for the filing thereof, and PPD shall have a reasonable opportunity to review and comment on, any such Furiex Filed Tax Return (or the
relevant portion thereof) to the extent that PPD is responsible for any portion of the Taxes reported on such Furiex Filed Tax Return, and (C) in the case of any Furiex Filed Tax Return that includes any member of the Furiex Group or the
Compound Business for only the portion of the relevant taxable period that begins after the Distribution Date, Taxes shall be allocated to the portion of such taxable period that begins after the Distribution Date based on an actual or hypothetical
closing of the books at the Effective Time. 
 2.02 Obligation to Remit Taxes. Subject to Section 2.01 and subject
always to the ultimate division of responsibility for Taxes set out in Section 2.03, PPD and Furiex shall each remit or cause to be remitted to the applicable Governmental Authority in a timely manner any Taxes due in respect of any Tax Return
that such Party is required to file (or, in the case of a Tax for which no Tax Return is required to be filed, which is otherwise payable by such Party or a member of such Party’s Group to any Governmental Authority); provided,
however, that in the case of any Tax Return, the Party not required to file such Tax Return shall remit to the Party required to file such Tax Return in immediately available funds the amount of any Taxes reflected on such Tax Return for
which the former Party is responsible hereunder at least two Business Days before payment of the relevant amount is due to a Governmental Authority. 

2.03 Tax Sharing Obligations and Prior Agreements. 

(a) Furiex and the members of the Furiex Group shall be responsible for the payment of (and shall be entitled to any refund of or credit
for) all Taxes (i) that are attributable to any member of the Furiex Group or the Compound Business for any taxable period, in accordance with the principles set forth in clause (D) of the proviso in Section 2.01(a), but applying the
principles or assumptions that (A) the determination of any such Taxes for any Pre-Distribution Period shall be made treating the Furiex Group or the Compound Business, as applicable, as a stand-alone corporation, using methods and conventions
consistent with past practices, (B) such Taxes shall not include any Taxes incurred by any member of any Group in connection with either the Contribution or the Distribution except as required by 2.03(a)(ii), and (C) such Taxes shall be
net of any Tax attributes attributable to the Furiex Group, the Compound Business or the PPD Group that are available (taking into account any Tax liability incurred by any member of the PPD Group in connection with either the Contribution or the
Distribution) to reduce (whether or not they actually reduce) the Tax Liability of any member of any Group for any Pre-Distribution Period or any member of the PPD Group for any Post-Distribution Period, or (ii) resulting from any breach of or
inaccuracy in any representation, covenant or obligation of any member of the Furiex Group under this Agreement (all such taxes described in this subsection (a) are, collectively, “Furiex Taxes”). 

(b) PPD and the members of the PPD Group shall be responsible for the payment of (and shall be entitled to any refund of or credit for)
all Taxes (i) that are attributable 
  

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to any member of the PPD Group, other than Furiex Taxes, or (ii) resulting from any breach of or inaccuracy in any representation, covenant or obligation of any member of the PPD Group under
this Agreement (collectively, “PPD Taxes”). 
 (c) If, prior to the Distribution, a deposit (including a
payment of estimated Taxes) was made with respect to any Tax for which Furiex or the members of the Furiex Group are responsible under this Agreement, such deposit shall be assigned to Furiex, and Furiex shall be liable only for the amount of such
Tax ultimately due in excess of the applicable deposit. To the extent the amount of such deposit exceeds the amount of Tax attributable to such deposit that is ultimately due, PPD shall pay such excess over to Furiex within five days after the
filing of the applicable PPD Filed Tax Return. 
 (d) If one party receives refunds or claims credits with respect to Taxes for
which the other Party or the members of such other Party’s Group are responsible under this Agreement, the receiving or claiming party shall remit payment to such other Party in the amount of such received refund or claimed credit within five
days after the first Party receives such refund or files the Tax Return claiming such credit, as applicable. If and to the extent that any such refund is ultimately returned by the recipient or credit is subsequently reduced as a result of any
adjustment required by any Governmental Authority, such other Party shall pay the amount of such returned refund or reduction to the first Party within five days of receiving notice of such returned refund or reduction from the first Party.

 (e) At Furiex’s request, the PPD Group shall, at Furiex’s expense, use its reasonable commercial efforts to obtain
any refund or credit of a Tax or item included in a PPD Filed Tax Return to which any member of the Furiex Group is entitled pursuant to this Agreement, including through filing appropriate Tax Returns or related forms with the applicable
Governmental Authority; provided, however, that the PPD Group shall not be required to comply with such request if PPD reasonably determines that attempting to obtain such refund or credit will have a material adverse impact on any
member of the PPD Group. 
 (f) Except as set forth in this Agreement, any and all prior Tax sharing or allocation agreements or
practices between any member of the PPD Group and any member of the Furiex Group shall be terminated with respect to the Furiex Group as of the Distribution Date, and no member of the Furiex Group shall have any continuing rights or obligations
thereunder. 
 (g) PPD shall be liable for and shall pay on a timely basis, and pursuant to Article IV shall indemnify, defend
and hold harmless Furiex from and against, all transfer, documentary, sales, use, registration and such other Taxes (excluding any Taxes based on or attributable to income or gains) and related fees (including any penalties, interest, and addition
to Tax) arising out of or incurred in connection with the Contribution or the Distribution (“Transfer Taxes”), provided, however, nothing herein shall require PPD to pay any amounts for which Furiex is required to indemnify PPD
under Section 2.03(a)(ii) hereof. 
 2.04 Amended Returns. 

(a) Furiex shall not, and shall not permit any member of the Furiex Group to, file any amended Tax Return that includes any member of the
PPD Group. 
  

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 (b) PPD shall not, and shall not permit any member of the PPD Group to, file any amended Tax
Return that increases any Furiex Tax or otherwise gives rise to indemnification pursuant to Section 4.01(b). 
 ARTICLE III

 COVENANTS 

3.01 Furiex Covenants. Notwithstanding anything else to the contrary contained in this Agreement or any other agreement, Furiex
(on behalf of itself and all other members of the Furiex Group) hereby confirms and agrees that neither Furiex nor any member of the Furiex Group will take or permit to be taken any action at any time that jeopardizes the Contribution Tax Treatment,
the Distribution Tax Treatment or both. Notwithstanding the foregoing, Furiex may take or permit to be taken any action prohibited by the preceding sentence, subject to, and without limiting or modifying, Furiex’s continuing indemnification
obligation under Section 4.01(b), if (a) Furiex obtains the written consent of PPD (which consent shall not be unreasonably withheld) or (b) Furiex obtains a ruling from the Internal Revenue Service or an opinion of a nationally
recognized firm, in form and substance reasonably satisfactory to PPD, that the taking of such action should not materially adversely affect either the Contribution Tax Treatment or the Distribution Tax Treatment. 

3.02 PPD Covenants. Notwithstanding anything else to the contrary contained in this Agreement or any other agreement, PPD (on
behalf of itself and all other members of the PPD Group) hereby confirms and agrees that neither PPD nor any member of the PPD Group will take or permit to be taken any action at any time that jeopardizes the Contribution Tax Treatment, the
Distribution Tax Treatment or both. Notwithstanding the foregoing, PPD or a member of the PPD Group may take or permit to be taken any action prohibited by the preceding sentence, subject to, and without limiting or modifying, PPD’s continuing
indemnification obligation under Section 4.01(a), if (a) PPD obtains the written consent of Furiex (which consent shall not be unreasonably withheld) or (b) PPD obtains a ruling from the Internal Revenue Service or an opinion of a
nationally recognized firm, in form and substance reasonably satisfactory to Furiex, that the taking of such action should not materially adversely affect either the Contribution Tax Treatment or the Distribution Tax Treatment. 

ARTICLE IV 

INDEMNITY OBLIGATIONS AND PAYMENTS 

4.01 Indemnity Obligations. 

(a) Notwithstanding whether any action is permitted or consented to hereunder and notwithstanding anything else to the contrary contained
herein, PPD shall indemnify and hold harmless Furiex, each member of the Furiex Group and their respective directors, officers and employees (collectively, the “Furiex Indemnitees”) from and against, and will reimburse the Furiex
Indemnitees for, (i) all PPD Taxes, (ii) any Transfer Taxes, and (iii) all Taxes, Liabilities and related costs, expenses and losses arising out of, based upon or relating or attributable to any breach of or inaccuracy in any
representation, covenant or obligation of any member of the PPD Group under this Agreement. 
  

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 (b) Notwithstanding whether any action is permitted or consented to hereunder and
notwithstanding anything else to the contrary contained herein, Furiex shall indemnify and hold harmless PPD, each member of the PPD Group and their respective directors, officers and employees (collectively, the “PPD Indemnitees”)
from and against, and will reimburse the PPD Indemnities, for, (i) all Furiex Taxes and (ii) all Taxes, Liabilities and related costs, expenses and losses arising out of, based upon or relating or attributable to any breach of or
inaccuracy in any representation, covenant or obligation of any member of the Furiex Group under this Agreement. 
 (c) Any
claim for indemnification under this Section 4 shall be governed by, and be subject to, the provisions of Article V of the Separation Agreement, which provisions are hereby incorporated by reference into this Agreement and any references to
“Agreement” in such Article V as incorporated herein shall be deemed to be references to this Agreement. 
 4.02
Notice. The Parties shall give each other prompt written notice of any payment that may be due to the provider of such notice under this Agreement. 

4.03 Treatment Of Payments. The Parties agree that any payment made between the Parties pursuant to this Agreement or any other
Ancillary Agreement with respect to a Pre-Distribution Period or as a result of an event or action occurring in a Pre-Distribution Period shall be treated, to the extent permitted by law, for all Tax purposes as a nontaxable payment (i.e., a
distribution or a capital contribution) made immediately prior to the Distribution as made pursuant to an obligation existing between the Parties as of the Distribution. 

ARTICLE V 
 TAX
CONTESTS 
 5.01 Notice. PPD shall promptly notify Furiex in writing upon receipt by PPD or any member of the PPD Group
of a written communication from any Governmental Authority with respect to any pending or threatened audit, dispute, suit, action, proposed assessment or other proceeding (a “Tax Contest”) concerning any Taxes for which Furiex may
be liable under this Agreement. Furiex shall promptly notify PPD in writing upon receipt by Furiex or any member of the Furiex Group of a written communication from any Governmental Authority with respect to any Tax Contest concerning any Taxes for
which PPD may be liable under this Agreement. 
 5.02 Control of Contests by PPD. PPD shall have the sole responsibility
and control over the handling of any Tax Contest, including the exclusive right to communicate with agents of the Governmental Authority and to control, resolve, settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed
in connection with or as a result of any such Tax Contest, involving (a) any PPD Filed Tax Return, or (b) the Contribution or the Distribution or any transaction associated therewith as described in the Separation Agreement. Subject to
PPD’s control right, upon request by Furiex, Furiex shall, at Furiex’s expense, be allowed to participate in the handling of any such Tax Contest with respect to any item that may affect the liability of Furiex or any member of the Furiex
Group under this Agreement or that relates to the Contribution Tax Treatment or the Distribution Tax Treatment, and PPD shall not settle any such Tax Contest without the consent of Furiex, which consent shall not be unreasonably withheld,
conditioned or delayed. Notwithstanding anything else to the contrary contained herein, in the 
  

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case of any such Tax Contest relating to the Contribution Tax Treatment or the Distribution Tax Treatment, absent a settlement of such Tax Contest pursuant to the preceding sentence, PPD shall be
required to exhaust, at Furiex’s expense, all administrative remedies available with respect to such Tax Contest. 
 5.03
Control of Contests by Furiex. Furiex shall have the full responsibility and control over the handling of any Tax Contest, including the exclusive right to communicate with agents of the Governmental Authority and to control, resolve, settle
or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with or as a result of any such Tax Contest, involving any Furiex Filed Tax Return. Subject to Furiex’s control right, upon request by PPD, PPD shall,
at PPD’s expense, be allowed to participate in the handling of any such Tax Contest with respect to any item that may affect the liability of PPD or any member of the PPD Group under this Agreement, and Furiex shall not settle any such Tax
Contest with respect to any such items without the consent of PPD, which consent shall not be reasonably withheld, conditioned or delayed. 

ARTICLE VI 

COOPERATION 

6.01 General. Each Party shall fully cooperate, and shall cause all members of such Party’s Group to fully cooperate, with
the other Party in connection with the preparation and filing of any Tax Return or the conduct of any Tax Contest (including, where appropriate or necessary, providing a power of attorney) concerning any issues or any other matter contemplated under
this Agreement. Each Party shall make its employees and facilities available on a mutually convenient basis to facilitate such cooperation. 

6.02 Consistent Treatment. Unless and until there has been a Final Determination to the contrary, each Party agrees not to take
any position on any Tax Return in connection with any Tax Contest or otherwise that is inconsistent with (a) the allocation of Taxes between the PPD Group and the Furiex Group as set forth in this Agreement or (b) the Contribution Tax
Treatment and the Distribution Tax Treatment. 
 ARTICLE VII 

RETENTION OF RECORDS; ACCESS 

7.01 Retention of Records; Access. For so long as the contents thereof may become material in the administration of any matter
under applicable Tax law, but in any event until the later of (a) the expiration of any applicable statute of limitation and (b) seven years after the Distribution Date, the Parties shall (i) retain records, documents, accounting data
and other information (including computer data) necessary for the preparation and filing of all Tax Returns in respect of Taxes of any member of either the PPD Group or the Furiex Group for any Pre-Distribution Period or any Post-Distribution Period
or for any Tax Contests relating to such Tax Returns, and (ii) provide to the other Party reasonable access to such records, documents, accounting data and other information (including computer data) and to its personnel (ensuring their
cooperation) and premises, for the purpose of the review or audit of such Tax Returns to the extent relevant to an obligation or liability of the requesting Party under this Agreement or for 

 

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purposes of the preparation or filing of any such Tax Return of the requesting Party, the conduct of any Tax Contest or any other matter reasonably and in good faith related to the Tax affairs of
the requesting Party. At any time thereafter that a Party proposes to destroy such material or information, it shall notify the other Party in writing at least 30 days in advance, and the other Party shall be entitled to receive such materials or
information proposed to be destroyed. 
 ARTICLE VIII 

DISPUTE RESOLUTION 

8.01 Dispute Resolution. The Parties shall attempt in good faith to resolve any disagreement arising under this Agreement,
including any dispute in connection with a claim by a third party (a “Dispute”). Either Party may give the other Party written notice of any Dispute not resolved in the normal course of business. If such a Dispute is not resolved
within 60 days following the date on which one Party gives such notice, the Parties shall jointly retain a nationally recognized law or accounting firm, reasonably acceptable to the Parties (the “Tax Advisor”), to act as an
arbitrator in order to resolve the Dispute. The Tax Advisor’s determination as to any Dispute shall be made in accordance with the terms of this Agreement and shall be final and binding on the Parties and not subject to collateral attack for
any reason (other than manifest error). All fees and expenses of the Tax Advisor shall be shared equally by PPD, on the one hand, and Furiex, on the other hand. 

ARTICLE IX 

MISCELLANEOUS PROVISIONS 

9.01 Governing Law. This Agreement, except as expressly provided herein, shall be governed by and construed and interpreted in
accordance with the laws of the State of North Carolina, irrespective of the choice of laws principles of the State of North Carolina as to all matters, including matters of validity, construction, effect, enforceability, performance and remedies.

 9.02 Application to Present and Future Subsidiaries. This Agreement is being entered into by PPD and Furiex on behalf
of themselves and the members of their respective Groups. This Agreement shall constitute a direct obligation of each such entity. Articles III and VI of this Agreement shall be deemed to have been readopted and affirmed on behalf of any entity that
becomes a Subsidiary of PPD or Furiex in the future. 
 9.03 Further Assurances. Subject to the provisions hereof, the
Parties hereto shall make, execute, acknowledge and deliver such other instruments and documents, and take all such other actions, as reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions
contemplated hereby. 
 9.04 Survival. Notwithstanding any other provision of this Agreement to the contrary, all
representations, covenants and obligations contained in this Agreement shall survive until the expiration of the applicable statute of limitations with respect to any such matter (including extensions thereof). 

 

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 9.05 Addresses and Notices. All notices, consents, requests, instructions, approvals,
statements, reports and other communications provided for herein shall be in writing and shall be deemed to be duly given when (a) delivered in person or (b) deposited in the United States mail or private express mail, postage prepaid,
addressed as follows: 
 If to PPD: 

Pharmaceutical Product Development, Inc. 

929 Front Street 

Wilmington, North Carolina 28401 

Attention: CFO 

Phone: (910) 251-0081 

Facsimile: (910) 762-5280 

With a copy to its General Counsel at the same address. 

If to Furiex: 

Furiex Pharmaceuticals, Inc. 

3900 Paramount Parkway, Suite 150 

Morrisville, North Carolina 27560 

Attention: CFO 

Phone: (919) 456-7800 

Facsimile: (919) 456-7750 

Either Party may, by written notice to the other Party, change the address to which such notices are to be given. Notice delivered
personally shall be deemed delivered when received by the recipient. Notice given by mail as set out above shall be deemed delivered five calendar days after the date the same is mailed. 

9.06 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their successors and
assigns. 
 9.07 Waivers of Default. The failure of either Party to require strict performance by the other Party of any
provision in this Agreement, or to exercise any right or remedy under this Agreement will not waive or diminish such Party’s right to demand strict performance or exercise thereafter of that or any other provision, right or remedy hereof.

 9.08 Invalidity of Provisions. If any provision of this Agreement or the application thereof to any Person or
circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which
it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby or thereby, as the
case may be, is not affected in any manner adverse to any Party. Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to affect the original intent of the Parties.

  

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 9.09 Complete Agreement. This Agreement contains the entire agreement between the
Parties pertaining to the subject matter of this Agreement and supersedes all prior agreements, negotiations, discussions, writings, understanding, commitments and conversations pertaining thereto and there are no agreements or understandings
between the Parties other than those set forth or referred to in this Agreement. In the event of any inconsistency between this Agreement and the Separation Agreement or any other agreements relating to the transactions contemplated by the
Separation Agreement, the provisions of this Agreement shall control. 
 9.10 Construction. The language in all parts of
this Agreement shall in all cases be construed according to its fair meaning and shall not be strictly construed for or against any Party. 

9.11 No Double Recovery. No provision of this Agreement shall be construed to provide an indemnity or other recovery for any
costs, damages or other amounts for which the damaged Party has been fully compensated under any other provision of this Agreement or under any other agreement or action at law or equity. Unless expressly required in this Agreement, a Party shall
not be required to exhaust all remedies available under other agreements or at law or equity before recovering under the remedies provided in this Agreement. 

9.12 Setoff. All payments to be made by any Party under this Agreement may be netted against payments due to such Party under this
Agreement, but otherwise shall be made without setoff, counterclaim or withholding, all of which are hereby expressly waived. 

9.13 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be considered one and the same
agreement, and shall become effective when each counterpart has been signed by each of the Parties and delivered to the other Party. 

9.14 No Third-Party Rights. This Agreement is only intended to allocate the responsibility for certain Taxes between PPD and
Furiex and to address the other Tax matters stated herein. Nothing in this Agreement, express or implied, is intended or shall confer any right, benefit, claim or remedy of any nature whatsoever under or by reason of this Agreement upon any member
of a Party’s Group or Person other than PPD and Furiex. PPD and Furiex acknowledge and agree that the respective rights of the PPD Indemnitees and the Furiex Indemnitees expressly provided under this Agreement may only be enforced by PPD and
Furiex, respectively. 
 9.15 Separation Agreement. To the extent not inconsistent with any specific term of this
Agreement, the provisions of the Separation Agreement shall apply in relevant part to this Agreement, including Article VII (Confidentiality), Sections 9.5 (Limitation of Liability,) 11.1 (Termination), 12.10 (Headings), 12.13 (Specific
Performance), 12.14 (Amendments) and 12.15 (Waiver of Jury Trial) thereof. 
 [Signature Page Follows] 

 

 12 

 IN WITNESS WHEREOF, the Parties have caused this Tax Sharing Agreement to be executed by
their duly authorized representatives as of the day and year first above written. 
  

			
	PHARMACEUTICAL PRODUCT
DEVELOPMENT, INC.
		
	By:	 	 /s/ David L. Grange

	Name:	 	David L. Grange
	Title:	 	Chief Executive Officer

  

			
	FURIEX PHARMACEUTICALS, INC.
		
	By:	 	 /s/ June S. Almenoff

	Name:	 	 June S. Almenoff

	Title:	 	 President and CMO

  

 13Employee Matters Agreement

 Exhibit 10.4 

EMPLOYEE MATTERS AGREEMENT 

by and between 

PHARMACEUTICAL PRODUCT DEVELOPMENT, INC. 

and 
 FURIEX
PHARMACEUTICALS, INC. 
 Dated as of June 14, 2010 

EMPLOYEE MATTERS AGREEMENT 

EMPLOYEE MATTERS AGREEMENT (this “Agreement”), dated as of June 14, 2010, by and between Pharmaceutical Product Development,
Inc., a North Carolina corporation (“PPD”), and Furiex Pharmaceuticals, Inc., a Delaware corporation (“Furiex”). Each of PPD and Furiex is herein referred to as a “Party” and collectively, as the “Parties”.

 RECITALS: 

WHEREAS, PPD, acting through its direct and indirect Subsidiaries, currently conducts a number of businesses, including (i) the PPD
Business and (ii) the Furiex Business; 
 WHEREAS, the Board of Directors of PPD has determined that it is appropriate,
desirable and in the best interests of PPD and its shareholders to separate PPD into two independent companies (the “Separation”), one for each of: (i) the PPD Business, which shall continue to be owned and conducted, directly or
indirectly, by PPD, and (ii) the Furiex Business, which shall be owned and conducted, directly or indirectly, by Furiex; 

WHEREAS, to effect the Separation, the Parties entered into a Separation and Distribution Agreement dated as of even date hereof (as
amended or otherwise modified from time to time, the “Separation Agreement”); and 
 WHEREAS, pursuant to the
Separation Agreement, PPD and Furiex have agreed to enter into this Agreement for the purpose of allocating assets, liabilities and responsibilities with respect to certain employee compensation and benefit plans and programs between them.

 NOW, THEREFORE, in consideration of the foregoing premises, the mutual promises and covenants hereinafter set forth, and
other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows: 

ARTICLE I 

DEFINITIONS AND INTERPRETATION 

Section 1.1 Definitions. The following terms shall have the following meanings: 

“Affiliate” shall mean the definition as set forth in the Separation Agreement. 

“Benefit Plan” shall mean, with respect to an entity, each plan, program, arrangement, agreement or commitment that is
an employment, change in control/severance, consulting, non-competition or deferred compensation agreement, or an executive compensation, incentive bonus or other bonus, employee pension, profit-sharing, savings, retirement, supplemental retirement,
stock option, stock purchase, stock appreciation rights, restricted stock, other equity-based compensation, severance pay, salary continuation, life, health, hospitalization, sick leave, vacation pay, disability or accident insurance plan,
corporate-owned or key-man life insurance or other employee benefit plan, program, arrangement, agreement or commitment, including any “employee benefit plan” (as defined in Section 3(3) of ERISA), sponsored or maintained by such
entity (or to which such entity contributes or is required to contribute). 

 “COBRA” shall mean the continuation coverage requirements for “group
health plans” under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and as codified in Section 4980B of the Code and Sections 601 through 608 of ERISA, together with all regulations and proposed
regulations promulgated thereunder. 
 “Code” shall mean the Internal Revenue Code of 1986, as amended,
including any successor statute, regulation and guidance thereto. 
 “Distribution” shall mean the definition
as set forth in the Separation Agreement. 
 “Distribution Date” shall mean the definition as set forth in the
Separation Agreement. 
 “Effective Time” shall mean the definition as set forth in the Separation Agreement.

 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended. 

“ERISA Affiliate” shall mean with respect to any Person, each business or entity which is a member of a “controlled
group of corporations,” under “common control” or a member of an “affiliated service group” with such Person within the meaning of Sections 414(b), (c) or (m) of the Code, or required to be aggregated with such
Person under Section 414(o) of the Code, or under “common control” with such Person within the meaning of Section 4001(a)(14) of ERISA. 

“Exchange Act” shall mean the definition as set forth in the Separation Agreement. 

“Former Furiex Employee” shall mean the definition as set forth in the Separation Agreement. 

“Former Furiex Employee” shall mean the definition as set forth in the Separation Agreement. 

“Governmental Authority” shall mean the definition as set forth in the Separation Agreement. 

“HIPAA” shall mean the Health Insurance Portability and Accountability Act of 1996, as amended. 

“Initial Furiex Stock Price” shall mean the closing per share trading price of Furiex Common Stock on the day after the
Distribution Date, unless otherwise determined by the PPD Board of Directors or its Compensation Committee in its sole discretion in order to effect an equitable adjustment of a PPD Option in connection with the Distribution and ensure that such PPD
Option is not deemed to have undergone a modification under Section 409A of the Code. 
 “Liabilities”
shall mean the definition as set forth in the Separation Agreement. 
 “Furiex 401(k) Plan” shall mean the
definition as set forth in Section 3 of this Agreement. 
 “Furiex Benefit Plan” shall mean any Benefit
Plan sponsored, maintained or contributed to by any member of the Furiex Group or any ERISA Affiliate thereof immediately following the Effective Time, including the Furiex 401(k) Plan and the Furiex Welfare Plans. 

“Furiex Business” shall mean all of the business and operations of the compound partnering segments of PPD as described
in the Form 10. 
 “Furiex Common Stock” shall mean the common stock, par value $.001 per share, of Furiex.

 “Furiex Employee” shall mean a person listed on Exhibit A to the Separation Agreement. 

“Furiex Group” shall mean the definition as set forth in the Separation Agreement. 

“Furiex Liabilities” shall mean the definition as set forth in the Separation Agreement. 

 

 2 

 “Furiex Participant” shall mean any individual who, immediately following
the Effective Time, is an Furiex Employee, a Former Furiex Employee or a beneficiary, dependent or alternate payee of any of the foregoing. 

“Furiex Welfare Plans” shall mean health and welfare plans maintained by a member of the Furiex Group. 

“Participating Company” shall mean PPD or any Person (other than an individual) participating in a PPD Benefit Plan.

 “Person” shall mean any natural person, firm, individual, corporation, business trust, joint venture,
association, company, limited liability company, partnership, or other organization or entity, whether incorporated or unincorporated, or any governmental entity. 

“Post-Distribution PPD Option” shall mean the definition set forth in Section 5.1(a) of this Agreement. 

“Post-Distribution PPD Stock Price” shall mean the per share trading price of PPD Common Stock either (a) at opening on
the day after the Distribution, or (b) at closing on the day of the Distribution if PPD Common Stock is then trading on an ex-dividend basis, unless otherwise determined by the PPD Board of Directors or its Compensation Committee in its sole
discretion in order to effect an equitable adjustment of a PPD Option in connection with the Distribution and ensure that such PPD Option is not deemed to have undergone a modification under Section 409A of the Code. 

“PPD 401(k) Plan” shall mean the definition as set forth in Section 2.1(a) of this Agreement. 

“PPD Benefit Plan” shall mean any Benefit Plan sponsored, maintained or contributed to by any member of the PPD Group or
any ERISA Affiliate thereof other than Furiex or any member of the Furiex Group. 
 “PPD Business” shall mean
the definition as set forth in the Separation Agreement. 
 “PPD Common Stock” shall mean the definition as set
forth in the Separation Agreement. 
 “PPD Employee” shall mean the definition as set forth in the Separation
Agreement. 
 “PPD Group” shall mean the definition as set forth in the Separation Agreement. 

“PPD Liabilities” shall mean the definition as set forth in the Separation Agreement. 

“PPD Option” shall mean an option to purchase shares of PPD Common Stock granted pursuant to the PPD Stock Plan.

 “PPD Participant” shall mean any individual who, immediately following the Effective Time, is a PPD
Employee, a Former PPD Employee or a beneficiary, dependent or alternate payee of any of the foregoing. 
 “PPD Stock
Plan” shall mean the Pharmaceutical Product Development, Inc. Equity Compensation Plan, as amended. 
 “PPD
Welfare Plans” shall mean, collectively, the health and welfare benefit plans maintained by a member of the PPD Group. 

“Pre-Distribution PPD Stock Price” shall mean either (i) the per share trading price of PPD Common Stock at closing on
the day of the Distribution, or (ii) if PPD Common Stock is then trading on an ex-dividend basis, then the sum of (i) plus the when-issued per share trading price of Furiex Common Stock at closing on the day of the Distribution (adjusted to take
into account the distribution ratio). 
 “Pre-Distribution PPD Option Price” shall mean the per share exercise
price of the PPD Option immediately prior to the Distribution Date. 
 “Subsidiary” shall mean the definition
as set forth in the Separation Agreement. 
 “Third Party” shall mean the definition as set forth in the
Separation Agreement. 
 Section 1.2 References; Interpretation. References in this Agreement to any gender include
references to all genders, and references to the singular include references to the plural and vice versa. Unless the context otherwise requires, the words “include”, “includes” and “including” when used in this
Agreement shall be deemed to be 
  

 3 

 
followed by the phrase “without limitation”. Unless the context otherwise requires, references in this Agreement to Articles, Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to, this Agreement. Unless the context otherwise requires, the words “hereof”, “hereby”, “herein” and “herewith” and words of similar import when used in
this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement. The word “or” shall not be exclusive. 

ARTICLE II 

GENERAL PRINCIPLES 

Section 2.1 Assumption and Retention of Liabilities; Related Assets. 

(a) As of the date hereof and with effect at the Effective Time, except as otherwise expressly provided in this Agreement, PPD shall, or
shall cause one or more members of the PPD Group to, assume or retain, as applicable, and pay, perform, fulfill and discharge, in due course in full (i) all Liabilities under all PPD Benefit Plans (except that PPD shall have no liability with
respect to any assets of the PPD Retirement Savings Plan (the “PPD 401(k) Plan”) to the extent, and as of the date, that such assets are transferred to the Furiex 401(k) Plan pursuant to Section 3.1), (ii) all Liabilities
(excluding Liabilities incurred under a Benefit Plan except as otherwise provided in this Agreement) with respect to the employment, service, termination of employment or termination of service of all PPD Employees, Former PPD Employees and their
dependents and beneficiaries (and any alternate payees in respect thereof) and other service providers (including any individual who is, or was, an independent contractor, temporary employee, temporary service worker, consultant, freelancer, agency
employee, leased employee, on-call worker, incidental worker, or non-payroll worker or in any other employment, non-employment, or retainer arrangement, or relationship with any member of the PPD Group), in each case to the extent arising in
connection with or as a result of employment with or the performance of services for any member of the PPD Group, and (iii) any other Liabilities or obligations expressly assigned to PPD or any of its Affiliates (other than any member of the
Furiex Group) under this Agreement. For purposes of clarification, the Liabilities assumed or retained by the PPD Group as provided for in this Section 2.1(a) or elsewhere in this Agreement are intended to be PPD Liabilities. 

(b) As of the date hereof and with effect at the Effective Time, except as otherwise expressly provided in this Agreement, Furiex shall,
or shall cause one or more members of the Furiex Group to, assume or retain, as applicable, and pay, perform, fulfill and discharge, in due course in full (i) all Liabilities under all Furiex Benefit Plans, (ii) all Liabilities (excluding
Liabilities incurred under a Benefit Plan except as otherwise provided in this Agreement) with respect to the employment, service, termination of employment or termination of service of all Furiex Employees, Former Furiex Employees and their
dependents and beneficiaries (and any alternate payees in respect thereof) and other service providers (including any individual who is, or was, an independent contractor, temporary employee, temporary service worker, consultant, freelancer, agency
employee, leased employee, on-call worker, incidental worker, or non-payroll worker or in any other employment, non-employment, or retainer arrangement, or relationship with any member of the PPD Group or Furiex Group), in each case to the extent
arising in connection with or as a result of employment with or the performance of services for any member of the Furiex Group, or in the case of Former Furiex Employees, the PPD Group, and (iii) any other Liabilities or obligations expressly
assigned to Furiex or any of its Affiliates (other than any member of the PPD Group), under this Agreement. For purposes of clarification, the Liabilities assumed or retained by the Furiex Group as provided for in this Section 2.1(b) or
elsewhere in this Agreement are intended to be Furiex Liabilities as such term is defined in the Separation Agreement. 
 (c)
From time to time after the Distribution Date, the Parties shall promptly reimburse one another, upon written request of the Party requesting reimbursement and the presentation by such Party of such substantiating documentation as the other Party
shall reasonably request, for the reasonable cost of any obligations or Liabilities satisfied or assumed by the Party requesting reimbursement or its Affiliates that are, or that have been made pursuant to this Agreement, the responsibility of the
other Party or any of its Affiliates. Any such request for reimbursement must be made not later than the first anniversary of the Distribution Date. 

(d) PPD shall retain responsibility for all employee-related regulatory filings for reporting periods through the Distribution Date
except for Equal Employment Opportunity Commission EEO-1 reports and affirmative action program (AAP) reports and responses to Office of Federal Contract Compliance Programs (OFCCP) submissions or other Governmental Authority inquiries, for which
PPD will provide data and information (to the extent permitted by applicable Laws and consistent with Section 8.1) to Furiex, who will be responsible for making such filings in respect of Furiex Employees. 

 

 4 

 Section 2.2 Participation in PPD Benefit Plans. Except as otherwise expressly
provided for in this Agreement or as otherwise expressly agreed to in writing between or among the affected Parties, (i) effective as of the Effective Time, Furiex and each member of the Furiex Group shall cease to be a Participating Company in
any PPD Benefit Plan, and (ii) each Furiex Participant and any other service providers (including any individual who is, or was, an independent contractor, temporary employee, temporary service worker, consultant, freelancer, agency employee,
leased employee, on-call worker, incidental worker, or nonpayroll worker of any member of the Furiex Group or in any other employment, non-employment, or retainer arrangement, or relationship with any member of the Furiex Group), effective as of the
Effective Time, shall cease to participate in, be covered by, accrue benefits under, be eligible to contribute to or have any rights under any PPD Benefit Plan (except to the extent of obligations that accrued on or before the Effective Time,
including benefits that are not otherwise addressed herein), and Furiex and PPD shall take all necessary action to effectuate each such cessation. 

Section 2.3 Service Recognition. Furiex shall give each Furiex Participant full credit for purposes of eligibility, vesting,
determination of level of benefits, and, to the extent applicable, benefit accruals under any Furiex Benefit Plan, respectively, for such Furiex Participant’s service with any member of the PPD Group through the Distribution Date to the same
extent such service was recognized by the applicable PPD Benefit Plans as of the Distribution Date; provided, that, such service shall not be recognized to the extent that such recognition would result in the duplication of benefits. 

ARTICLE III 

QUALIFIED DEFINED CONTRIBUTION PLAN 

Section 3.1 Furiex 401(k) Plan. 

(a) Establishment of the Furiex 401(k) Plan. Effective as of the Distribution Date, Furiex shall, or shall have
caused one of its Affiliates to, establish a defined contribution plan and trust for the benefit of Furiex Participants (the “Furiex 401(k) Plan”). Furiex shall be responsible for taking all necessary, reasonable and appropriate action to
establish, maintain and administer the Furiex 401(k) Plan so that it is qualified under Section 401(a) of the Code and that the related trust thereunder is exempt from Federal income tax under Section 501(a) of the Code. Furiex (acting
directly or through its Affiliates) shall be responsible for any and all Liabilities and other obligations with respect to the Furiex 401(k) Plan. 

(b) Transfer of Savings Plan Assets. Not later than ninety (90) days following the Distribution Date (or such later time as
mutually agreed by PPD and Furiex), PPD shall cause the accounts (including any outstanding loan balances) in the PPD 401(k) Plan attributable to Furiex Participants and all of the assets in the PPD 401(k) Plan related thereto, to be transferred to
the Furiex 401(k) Plan and Furiex shall cause the Furiex 401(k) Plan to accept such transfer of accounts and underlying assets and, effective as of the date of such transfer, to assume and to fully perform, pay and discharge, all obligations of the
PPD 401(k) Plan relating to the accounts of Furiex Participants (to the extent the assets related to those accounts are actually transferred from the PPD 401(k) Plan to the Furiex 401(k) Plan). Any transfer of assets pursuant to this
Section 3.1(b) shall be conducted in accordance with Section 414(l) of the Code, Treasury Regulation Section 1.414(1)-1, and Section 208 of ERISA. 

(c) Form 5310-A. No later than thirty (30) days prior to the date of any transfer of assets and liabilities pursuant to
Section 3.1(b), PPD and Furiex (each acting directly or through their respective Affiliates) shall, to the extent necessary, file Internal Revenue Service Form 5310-A regarding the transfer of assets and liabilities from the PPD 401(k) Plan to
the Furiex 401(k) Plan as described in this Section 3.1. 
 (d) Contributions as of the Distribution Date. All
contributions payable to the PPD 401(k) Plan with respect to employee deferrals and contributions, matching contributions and other contributions for Furiex Participants through the Distribution Date, determined in accordance with the terms and
provisions of the PPD 401(k) Plan, ERISA and the Code, shall be paid by PPD to the PPD 401(k) Plan prior to the date of the asset transfer described in subsection (b), above. 

 

 5 

 ARTICLE IV 

HEALTH AND WELFARE PLANS 

Section 4.1 Health and Welfare Plans Maintained By PPD through the Distribution Date. 

(a) Establishment of Welfare Plans. PPD or one or more of its Affiliates maintain the PPD Welfare Plans for the benefit of
eligible PPD Participants and Furiex Participants. Effective as of the day following the Distribution Date, Furiex shall, or shall cause a Furiex Affiliate to, adopt, for the benefit of eligible Furiex Participants, Furiex Welfare Plans on terms and
conditions determined by Furiex. 
 (b) Employees on Leave. Notwithstanding any other provision of this Agreement to the
contrary, Furiex shall assume Liability for payment of any salary continuation, short term disability or health and welfare coverage with respect to Furiex Employees and PPD shall have no further responsibility for such disabled Furiex Employees or
Furiex Employees on approved leave after the Distribution Date. 
 (c) COBRA and HIPAA. Effective as of the Effective
Time, PPD shall retain responsibility for compliance with the health care continuation coverage requirements of COBRA with respect to Furiex Participants who, as of the Distribution Date, were covered under a PPD Welfare Plan and had a qualifying
event within the meaning of Code § 4980B(f)(3) before the Effective Time. PPD (acting directly or through its Affiliates) shall be responsible for administering compliance with any certificate of creditable coverage requirements of HIPAA or
Medicare applicable to the PPD Welfare Plans with respect to Furiex Participants. 
 (d) Liabilities. 

(i) Insured Benefits. With respect to employee welfare and fringe benefits that are provided through the purchase of insurance
(including, without limitation, health, disability and workers’ compensation benefits), PPD shall timely pay all premiums in respect of coverage of Furiex Participants in respect of the period through the Distribution Date and shall retain all
claims incurred by the Furiex Participants through the Distribution Date, and Furiex shall cause PPD not to have any liability in respect of any and all claims of Furiex Participants that are incurred under the Furiex Welfare Plans. 

(ii) Incurred Claim Definition. For purposes of this Section 4.1(e), a claim or Liability is deemed to be incurred
(A) with respect to medical, dental, vision and/or prescription drug benefits, upon the rendering of health services giving rise to such claim or Liability; (B) with respect to life insurance, accidental death and dismemberment and
business travel accident insurance, upon the occurrence of the event giving rise to such claim or Liability; and (C) with respect to disability benefits, upon the date of an individual’s disability, as determined by the disability benefit
insurance carrier or claim administrator, giving rise to such claim or Liability. 
 Section 4.2 Time-Off Benefits.
Furiex shall credit each Furiex Participant with the amount of accrued but unused paid time-off benefits as such Furiex Participant had with the PPD Group as of the Distribution Date. 

ARTICLE V 

STOCK OPTIONS 

Section 5.1 Treatment of Outstanding PPD Options. 

(a) Each PPD Option that is outstanding on the Distribution Date shall, as of the Distribution Date, be adjusted in the following manner
(as adjusted, a “Post-Distribution PPD Option”): 
 (i) The number of shares subject to the
Post-Distribution PPD Option shall be equal to the number of shares subject to the PPD Option immediately prior to the Distribution Date. The per share exercise price of the Post-Distribution PPD Option shall be equal to the product of (1) the
Pre-Distribution PPD Option Price multiplied by (2) a fraction, the numerator of which shall be the Post-Distribution PPD 

 

 6 

 
Stock Price and the denominator of which shall be the Pre-Distribution PPD Stock Price. Following the adjustment to the per share exercise price of the Post-Distribution PPD Option, the number of
shares subject to the Post-Distribution PPD Option shall be adjusted, if necessary, to ensure that the intrinsic value of each Post-Distribution PPD Option is the same on the day immediately after the Distribution Date as it is on the Distribution
Date. With respect to each Post-Distribution PPD Option, the aggregate spread of such option shall not exceed the aggregate spread of the relevant PPD Option on which it was based, and the ratio of the exercise price to the fair market value of the
shares subject to the Post-Distribution PPD Option, immediately after the adjustment shall not be greater than the ratio of the exercise price to the fair market value of the shares subject to the relevant PPD Option immediately before the
adjustment and all other requirements of Section 409A shall be met in order to ensure that no modification is deemed to occur under Section 409A with respect to any Post-Distribution PPD Option. 

(ii) Each unvested PPD Option held by a Furiex Employee immediately before the Distribution Date shall automatically
terminate as of the Distribution Date. 
 (iii) Each vested PPD Option held by a Furiex Employee immediately
after the Distribution Date shall thereafter be a Post-Distribution PPD Option. Any Post-Distribution PPD Option held by a Furiex Employee must be exercised prior to the earlier of (A) the termination of the Furiex Employee’s employment
with Furiex for any reason (provided that the Furiex Employee will be allowed to exercise during any post-termination period provided by the relevant PPD Option on which the Post-Distribution PPD Option was based) or (B) the expiration date of
the relevant PPD Option on which the Post-Distribution PPD Option was based. 
 (iv) Prior to the Distribution
Date, PPD shall take all actions necessary to provide that, effective as of the Distribution Date, for purposes of the Post-Distribution PPD Options (including in determining exercisability and the post-termination exercise period), a Furiex
Employee’s continuous service with the Furiex Group (including applicable successors) following the Distribution Date shall be deemed continuous service with PPD. 

(v) Upon the exercise of a Post-Distribution PPD Option, regardless of the holder thereof, the exercise price shall be
paid to (or otherwise satisfied to the satisfaction of) PPD in accordance with the terms of the Post-Distribution PPD Option, and PPD shall be solely responsible for the issuance of PPD Common Stock, for ensuring the collection of the employee
portion of all applicable withholding tax on behalf of the employing entity of such holder and for ensuring the remittance of such withholding taxes to the employing entity of such holder. 

(b) Except as otherwise provided herein, the Post-Distribution PPD Options shall remain subject to the terms and conditions of the
underlying PPD Options as in effect immediately prior to the Distribution Date (taking into account changes in the identity of the employer, including for purposes of determining whether a change in control has occurred). 

Section 5.2 Cooperation and Special Award Terms. PPD shall establish an appropriate administration system in order to handle,
in an orderly manner, exercises of Post-Distribution PPD Options. Each of the Parties will work together to unify and consolidate all indicative data and payroll and employment information on regular timetables and make certain that each applicable
entity’s data and records in respect of such awards are correct and updated on a timely basis. The foregoing shall include employment status and information required for tax withholding/remittance, compliance with trading windows and compliance
with the requirements of the Exchange Act and other applicable Laws. Each of the Parties shall honor the terms of any written agreement entered into on or before the Distribution Date with any employee of another Party insofar as such written
agreement provides for accelerated vesting or the extension of the term of any PPD Options. 
 Section 5.3 SEC
Registration. The Parties mutually agree to use reasonable best efforts to maintain effective registration statements with the SEC with respect to the Post-Distribution PPD Options. 

 

 7 

 ARTICLE VI 

ADDITIONAL COMPENSATION MATTERS 

Section 6.1 Workers’ Compensation Liabilities. Except as provided in Section 4.1(e)(i), all workers’
compensation Liabilities relating to, arising out of, or resulting from any claim that results from an accident, incident or event occurring, or from an occupational disease which becomes manifest, at, before or after the Distribution Date by
(i) any PPD Employee or Former PPD Employee shall be retained by PPD, and (ii) by any Furiex Employee or Former Furiex Employee shall be assumed by Furiex. 

Section 6.2 Director Programs; Director Fees. PPD shall retain responsibility for the payment of any fees payable in respect
of service on the PPD Board of Directors that are payable but not yet paid as of the Distribution Date, and Furiex shall not have any responsibility for any such payments. After the Distribution Date, PPD and Furiex will each be responsible for the
fees and expenses of their respective Boards of Directors. 
 Section 6.3 Certain Payroll Matters. In the case of an
individual who transfers employment on the Distribution Date from PPD to Furiex, Furiex shall be responsible for paying the entire payroll amount due to such individual for the first payroll cycle ending after the Distribution Date and for
satisfying all applicable tax reporting and withholding requirements in respect of such payment; provided, that, PPD shall reimburse Furiex for the gross amount of the payroll payment (i.e., including any applicable deductions) and for all tax
withholdings remitted in respect of such portion of the payroll period ending on the Distribution Date. PPD shall be entitled to the benefit of any tax deduction in respect of its payment (by reimbursement to Furiex) for the portion of the payroll
period ending on the Distribution Date. 
 ARTICLE VII 

INDEMNIFICATION 

Section 7.1 Indemnification by Furiex. Furiex hereby agrees to indemnify, defend and hold harmless PPD from and against any
and all claims, losses, demands, liabilities, costs and expenses (including reasonable attorneys’ fees and costs and expenses related thereto) suffered or incurred by PPD as a result of, or in connection with, a breach of this Agreement by
Furiex. 
 Section 7.2 Indemnification by PPD. PPD hereby agrees to indemnify, defend and hold harmless Furiex from
and against any and all claims, losses, demands, liabilities, costs and expenses (including reasonable attorney’s fees and costs and expenses related thereto) suffered or incurred by Furiex as a result of, or in connection with, a breach of
this Agreement by PPD. 
 Section 7.3 Procedures. Any claim for indemnification under this Section 7 shall be
governed by, and be subject to, the provisions of Article V of the Separation Agreement, which provisions are hereby incorporated by reference into this Agreement and any references to “Agreement” in such Article V as incorporated herein
shall be deemed to be references to this Agreement. 
 ARTICLE VIII 

GENERAL AND ADMINISTRATIVE 

Section 8.1 Sharing Of Information. PPD and Furiex (acting directly or through their respective Affiliates) shall provide to
each other and their respective agents and vendors all information as the other may reasonably request to enable the requesting Party to administer efficiently and accurately each of its Benefit Plans, to timely and accurately comply with and report
under Section 14 of the Exchange Act and to determine the scope of, as well as fulfill, its obligations under this Agreement. Such information shall, to the extent reasonably practicable, be provided in the format and at the times and places
requested, but in no event shall the Party providing such information be obligated to incur any out-of-pocket expenses not reimbursed by the Party making such request or make such information available outside of its normal business hours and
premises. Any information shared or 
  

 8 

 
exchanged pursuant to this Agreement shall be subject to the confidentiality requirements set forth in the Separation Agreement. The Parties also hereby agree to enter into any business associate
agreements that may be required for the sharing of any information pursuant to this Agreement to comply with the requirements of HIPAA. 

Section 8.2 Reasonable Efforts/Cooperation. Each of the Parties hereto will use its reasonable best efforts to promptly take,
or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws and regulations to consummate the transactions contemplated by this Agreement, including adopting plans or plan
amendments. Each of the Parties hereto shall cooperate fully on any issue relating to the transactions contemplated by this Agreement for which the other Party seeks a determination letter or private letter ruling from the Internal Revenue Service,
an advisory opinion from the Department of Labor or any other filing, consent or governmental approval. 
 Section 8.3
Employer Rights. Nothing in this Agreement shall prohibit any Party or any of their respective Affiliates from amending, modifying or terminating any of their respective Benefit Plans at any time within their sole discretion. 

Section 8.4 Effect on Employment. Except as expressly provided in this Agreement, the occurrence of the Distribution alone
shall not cause any employee to be deemed to have incurred a termination of employment, which entitles such individual to the commencement of benefits under any of the PPD Benefit Plans. Furthermore, nothing in this Agreement is intended to confer
upon any employee or former employee of PPD, Furiex or any of their respective Affiliates any right to continued employment, or any recall or similar rights to an individual on layoff or any type of approved leave. 

Section 8.5 Consent of Third Parties. If any provision of this Agreement is dependent on the consent of any Third Party and
such consent is withheld, the Parties hereto shall use their reasonable best efforts to implement the applicable provisions of this Agreement to the fullest extent practicable. If any provision of this Agreement cannot be implemented due to the
failure of such Third Party to consent, the Parties hereto shall negotiate in good faith to implement the provision (as applicable) in a mutually satisfactory manner. 

Section 8.6 Access to Employees. Following the Distribution Date, PPD and Furiex shall, or shall cause each of their
respective Affiliates to, make available to each other those of their employees who may reasonably be needed in order to defend or prosecute any legal or administrative action (other than a legal action between or among any of the Parties) to which
any employee, director or Benefit Plan of the PPD Group or Furiex Group is a party and which relates to their respective Benefit Plans prior to the Distribution. The Party to whom an employee is made available in accordance with this
Section 8.6 shall pay or reimburse the other Party for all reasonable expenses which may be incurred by such employee in connection therewith, including all reasonable travel, lodging, and meal expenses, but excluding any amount for such
employee’s time spent in connection herewith. Any such reimbursement by one Party to the other shall be made within 90 days of the date on which the Party seeking reimbursement provides the reimbursing Party with documentation of such expenses
that is reasonably acceptable to the reimbursing Party. 
 Section 8.7 Beneficiary Designation/Release of
Information/Right to Reimbursement. To the extent permitted by applicable law, including, without limitation, the privacy and security requirements of HIPAA, and except as otherwise provided for in this Agreement, all beneficiary designations,
authorizations for the release of information and rights to reimbursement made by or relating to Furiex Participants under PPD Benefit Plans shall be transferred to and be in full force and effect under the corresponding Furiex Benefit Plans and PPD
Benefit Plans until such beneficiary designations, authorizations or rights are replaced or revoked by, or no longer apply, to the relevant Furiex Participant. 

ARTICLE IX 

MISCELLANEOUS 

Section 9.1 Effect If Certain Events Do Not Occur. Notwithstanding anything in this Agreement to the contrary, if the
Separation Agreement is terminated prior to the Effective Time, then all actions and events that are, under this Agreement, to be taken or occur effective prior to, as of or following the Distribution Date, or otherwise in connection with the
Separation, shall not be taken or occur except to the extent specifically agreed to in writing by PPD on the one hand and Furiex on the other hand and no Party shall have any Liability or further obligation to any other Party under this Agreement.

  

 9 

 Section 9.2 Relationship of Parties. Nothing in this Agreement shall be deemed
or construed by the Parties or any Third Party as creating the relationship of principal and agent, partnership or joint venture between or among the Parties, it being understood and agreed that no provision contained herein, and no act of the
Parties, shall be deemed to create any relationship between or among the Parties other than the relationship set forth herein. 

Section 9.3 Subsidiaries. Each of the Parties shall cause to be performed all actions, agreements and obligations set forth
herein to be performed by any Subsidiary or Affiliate of such Party or by any entity that becomes a Subsidiary or Affiliate of such Party on and after the Distribution Date. The Parties acknowledge that certain actions, agreements and obligations
that certain of their Affiliates and Subsidiaries may be required to perform in connection with the performance of the Parties obligations under this Agreement may require governmental approval under applicable law, and therefore agree that
performance of such actions, agreements and obligations is subject to the receipt of all such necessary governmental approvals, which governmental approvals each Party shall, and shall cause the members of its respective Group to, use its reasonable
best efforts to obtain. 
 Section 9.4 Notices. All notices, requests, claims, demands and other communications
under this Agreement shall be in writing and shall be deemed to be duly given when (a) delivered in person or (b) deposited in the United States mail or private express mail, postage prepaid, addressed as follows: 

To PPD: 
 Pharmaceutical Product Development,
Inc. 
 929 North Front Street 

Wilmington, North Carolina 28401 
 Attn: Chief
Executive Officer 
 Facsimile: 910-762-5820 

With copy to General Counsel 
 To Furiex:

 Furiex Pharmaceuticals, Inc. 
 3900
Paramount Parkway, Suite 150 
 Morrisville, North Carolina 27560 

Attn: Principal Executive Officer 
 Facsimile:
919-456-7750 
 Either Party may, by notice to the other Party, change the address to which such notices are to be given.

 Section 9.5 Entire Agreement. This Agreement, the Separation Agreement, and all other agreements, instruments,
understandings, assignments or other arrangements entered into between the Parties in connection with the Separation, including the exhibits and schedules thereto, contain the entire agreement between the Parties with respect to the subject matter
hereof and shall supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter and there are no agreements or understandings between the Parties other than
those set forth or referred to herein or therein. In the event of any conflict between the terms and conditions of this Agreement and the terms and conditions of the Separation Agreement, the terms and conditions of this Agreement (including
amendments thereto) shall control. 
 Section 9.6 Waivers. The failure of any Party to require strict performance by
the other Party of any provision in this Agreement will not waive or diminish that Party’s right to demand strict performance thereafter of that or any other provision hereof. 

Section 9.7 Governing Law. This Agreement shall be governed by and construed and interpreted in accordance with the laws of
the State of North Carolina, irrespective of the choice of laws principles of the State of North Carolina as to all matters, including matters of validity, construction, effect, enforceability, performance and remedies. 

 

 10 

 Section 9.8 Counterparts. This Agreement may be executed in more than one
counterparts, each of which shall be considered one and the same agreement, and shall become effective when each counterpart has been signed by each of the Parties and delivered to the other Parties. Execution of this Agreement or any other
documents pursuant to this Agreement by facsimile or other electronic copy of a signature shall be deemed to be, and shall have the same effect as, executed by an original signature. 

Section 9.9 Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force
and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby or thereby, as the case may be, is not affected in any manner adverse to any Party. Upon
such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to affect the original intent of the Parties. 

Section 9.10 Force Majeure. No Party (or any Person acting on its behalf) shall have any liability or responsibility for
failure to fulfill any obligation (other than a payment obligation) under this Agreement so long as and to the extent to which the fulfillment of such obligation is prevented, frustrated, hindered or delayed as a consequence of circumstances of
force majeure. A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such event: (a) notify the other Party of the nature and extent of any such force majeure condition and
(b) use due diligence to remove any such causes and resume performance under this Agreement as soon as reasonably practicable. 

Section 9.11 Authorization. Each of the Parties hereby represents and warrants that it has the power and authority to
execute, deliver and perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such Party, that this Agreement constitutes a legal, valid and binding obligation of each such Party and that
the execution, delivery and performance of this Agreement by such Party does not contravene or conflict with any provision of law or of its charter or bylaws or any material agreement, instrument or order binding on such Party. 

Section 9.12 No Third Party Beneficiaries. The provisions of this Agreement are solely for the benefit of the Parties and are
not intended to confer upon any Person except the Parties any rights or remedies hereunder. There are no Third Party beneficiaries of this Agreement and this Agreement shall not provide any Third Party, including, without limitation, any current or
former employee or director of either Party, with any remedy, claim, liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement. 

Section 9.13 Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. This
Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted. 

Section 9.14 Separation Agreement. To the extent not inconsistent with any specific term of this Agreement, the provisions of
the Separation Agreement shall apply in relevant part to this Agreement, including Article VII (Confidentiality), Article IX (Dispute Resolution), Sections 9.5 (Limitation of Liability), 11.1 (Termination), 12.4 (Assignability), 12.10 (Headings),
12.13 (Specific Performance), 12.14 (Amendments) and 12.15 (Waiver of Jury Trial) thereof. 
 [Remainder of this page
intentionally left blank.] 
  

 11 

 IN WITNESS WHEREOF, the Parties have caused this Employee Matters Agreement to be duly
executed as of the day and year first above written. 
  

			
	 PHARMACEUTICAL PRODUCT

DEVELOPMENT, INC.

		
	By:	 	 /s/ David L. Grange

	Name:	 	 David L. Grange

	Title:	 	 Chief Executive Officer

 

			
	FURIEX PHARMACEUTICALS, INC.
		
	By:	 	 /s/ June S. Almenoff

	Name:	 	 June S. Almenoff

	Title:	 	 President and CMO

[Signature page to Employee Matters Agreement] 
  

 12

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