Document:

Executive Employment Agreement

 EXHIBIT 10.1 
  
 EXECUTIVE EMPLOYMENT AGREEMENT 
  
 This EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”), is entered
into as of August 3, 2004, by and between POZEN Inc. (the “Company”), with offices located at Suite 400, 1414 Raleigh Road, Chapel Hill, North Carolina 27517, and William L. Hodges (“Executive”), whose address is 401 May Court,
Raleigh, North Carolina 27609. 
  
 WITNESSETH: 
  
 WHEREAS, the Company is engaged in certain pharmaceutical research,
development and marketing activities; and 
  
 WHEREAS, the Company
wishes to employ Executive in the position of Senior Vice President, Finance and Administration and Chief Financial Officer, and Executive desires to accept such employment with the Company. 
  
 NOW, THEREFORE, in consideration of the foregoing and the provisions and
mutual promises herein contained and other good and valuable consideration, the parties hereby agree as follows: 
  
 1. EMPLOYMENT. The Company hereby employs Executive, and Executive hereby accepts employment, as Senior Vice President, Finance and Administration and
Chief Financial Officer of the Company, with such duties and responsibilities as are normally related to such position in accordance with the standards of the industry and as specified in Exhibit A, attached hereto and incorporated herein by
reference, and any additional duties as may be assigned to Executive from time to time by the President or the Board of Directors of the Company. 
  
 2. TERM. Executive’s employment shall be for a term of one (1) year from the date of execution of this Agreement (the “Term”), and
thereafter shall be automatically renewed with additional one (1) year terms to follow consecutively, subject to the termination and severance provisions herein later provided, unless amended or modified by mutual agreement of the parties. As used
herein, “Term” shall include the Initial Term and any renewals thereof in accordance with this Agreement. 
  
 3. EXCLUSIVE SERVICE. Executive agrees to devote Executive’s full time and attention to the performance of Executive’s duties and
responsibilities on behalf of the Company and to comply with all policies and regulations of the Company. 
  
 4. COMPENSATION. During the Term of this Agreement, Executive’s compensation shall be determined and paid as follows: 
  
 (a) Base Salary. Executive shall receive an annual
base salary of at least Two Hundred and Thirty Thousand Dollars ($230,000) payable in accordance with the 
  

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 Company’s payroll practices. Annual increases will be made, if any, based upon performance, and in
the sole discretion of the Board of Directors or the Compensation Committee of the Board of Directors (each or collectively, the “Committee”), such increases, if any, to be effective as of January 1 of each year during the Term.

  
 (b) Bonus. Executive shall be eligible
to receive an annual cash incentive bonus of up to forty percent (40%) of Executive’s annual base salary as may be set by the Committee by March 31 of each year. The determination of the actual bonus earned, if any, shall be at the sole
discretion of the Committee and shall be based upon the Committee’s assessment of Executive’s performance and the achievement of certain objectives which shall be set by the Committee from time to time. Executive’s performance shall
be evaluated by the Committee on an annual basis, and the Committee shall adjust Executive’s salary in its sole discretion. Nothing in this section shall be construed as guaranteeing Executive a bonus in any amount. 
  
 (c) Stock Options. Subject to the approval of the
Committee, upon the commencement of Executive’s employment with the Company, Executive shall be granted an option to purchase Eighty Thousand (80,000) shares of the common stock of the Company at a purchase price equal to closing price of the
common stock of the Company as quoted on the NASDAQ Stock Market on the date of grant. Such shares shall vest in accordance with and be governed by the terms of the Company’s 2000 Equity Compensation Plan, as amended and restated, and an
Incentive Stock Option Agreement issued in accordance therewith. 
  
 (d) Benefits. Executive shall be eligible to participate in the Company’s standard employee benefit programs made available to employees of the Company from time to time, subject to appropriate premium
contributions, benefit elections, etc. In addition, Executive shall be entitled to three (3) weeks of paid vacation per year. 
  
 (e) Business Expenses. The Company shall reimburse Executive for all reasonable expenses incurred in the furtherance of the
Company’s business and interests, including travel and entertainment. Executive agrees to comply with the expense reporting policies and procedures of the Company. 
  
 (f) Adequate Office Space. The Company shall provide to Executive adequate office space, facilities,
and administrative support appropriate to Executive’s position. 
  
 5. TERMINATION. This Agreement shall or may be terminated, as the case may be, upon the terms and conditions hereinafter provided. 
  
 (a) Voluntary Termination. This Agreement shall be considered voluntarily terminated by the parties if either party provides
written notice of such party’s intent not to renew this Agreement, provided that such party shall provide at least ninety (90) days’ written notice to the other party prior to the last day of the Initial Term or any renewal term.

  

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

	 	(i)	The death of Executive; 

  

	 	(ii)	Executive becomes permanently disabled; or 

  

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

  
 (c) Obligations upon Certain Terminations. Upon
voluntary termination of this Agreement, or termination of Executive’s employment by the Company for Cause (as defined above) or upon Executive’s death or disability, or termination by Executive for other than Good Reason (as defined
below), the Company shall have no further obligations hereunder other than the payment of all compensation and other benefits payable to Executive through the date of such termination. 
  
 (d) Severance. In the event of termination of Executive’s employment (i) by the Company for
reasons other than Cause or Executive’s death or disability, or (ii) by Executive for Good Reason, and provided Executive executes and delivers a Release and Settlement Agreement in a form acceptable to the Company, Executive shall receive a
severance benefit in an amount equal to one (1) year’s base salary plus the average annual bonus awarded Executive over the previous two (2) years (the “Severance Benefit”). The Severance Benefit will be payable in accordance with the
Company’s normal payroll policies over a period of twelve (12) months from the date of termination. Executive shall also continue to be entitled to receive all Company benefits to which Executive was entitled as of the date of termination,
subject to the terms of all applicable benefit plans and to the extent such benefits can be provided to a non-employee (or to the extent such benefits cannot be provided to non-employees, then the cash equivalent thereof), at the same average level
and on the same terms and conditions which applied immediately prior to the date of Executive’s termination, for the shorter of (i) one year following the date of such termination or (ii) until Executive obtains comparable coverage from another
employer (the “Continuing Benefits”). At any time during the 
  

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 severance period, the Company may elect to pay a lump sum amount to Executive which represents the
reasonable value of the Severance Benefit and/or the Continuing Benefits reduced to their present value in lieu of continuing payment of such benefits. 
  
 (e) Good Reason. For purposes of this Agreement, “Good Reason” shall mean, the occurrence, without the consent of
Executive, of any of the following events, unless, in the case of (i), (ii) and (iii) below, such event is corrected within thirty (30) days after written notification by Executive to the Company of the same: (i) the office from which Executive
performs Executive’s principal duties is moved more that 50 miles from the current location of the Company’s offices in Chapel Hill, North Carolina; (ii) Executive’s duties and responsibilities are substantially reduced or diminished;
(iii) the Company materially breaches its obligations under this Agreement; or (iv) a Change of Control (as defined below) occurs and Executive notifies the Company in writing within sixty (60) days of the consummation of such Change of Control that
Executive intends to terminate Executive’s employment as a result of the Change of Control, in which event such termination shall be effective not less than sixty (60) days after the date of such written notice. 
  
 (f) Tax Gross-Up for Parachute Payments. 

 
 (A) If at any time or from time to time it shall be
determined that any payment to Executive pursuant to this Agreement or any other payment or benefit hereunder or under any other plan or agreement or otherwise (“Potential Parachute Payment”) would constitute an “excess parachute
payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and thus would be subject to the excise tax imposed by Section 4999 of the Code, or any similar tax payable under any United
States federal, state, local, foreign or other law (“Excise Tax”), then Executive shall receive and the Company shall pay or cause to be paid a Tax Gross-Up Payment with respect to all Taxes as defined below. The Tax Gross-Up Payment is
intended to compensate Executive for all such excise taxes and federal, state, local, foreign or other income, employment or excise taxes or other taxes (“Taxes”) payable by Executive with respect to the Tax Gross-Up Payment and shall be
in an amount such that after payment of Taxes on such amount there remains a balance sufficient to pay the taxes being reimbursed. For purposes of determining the amount of the Tax Gross-Up Payment, Executive shall be deemed to pay federal income
tax and employment taxes at the highest marginal rate of federal income and employment taxation in the calendar year in which the Tax Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the
state and locality of Executive’s residence (or, if greater, the state and locality in which Executive is required to file a nonresident income tax return with respect to the Potential Parachute Payment), net of the maximum reduction in federal
income taxes that may be obtained from the deduction of such state and local taxes. 
  
 (B) The determinations to be made under this Section 5(f) shall be made by the Company’s independent public accountants (the
“Accounting Firm”), which firm shall provide its determinations and any supporting calculations both to the 
  

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 Company and to Executive. Any such determination by the Accounting Firm shall be binding upon the Company
and Executive. All fees and expenses of the Accounting Firm in performing the determinations referred to in this Section 5(f) shall be borne solely by the Company, and the Company shall indemnify and hold harmless the Accounting Firm of and from any
and all claims, damages and expenses resulting therefrom, except for claims, damages or expenses resulting from the gross negligence or willful misconduct of the Accounting Firm. 
  
 (g) Disability. For purposes of this Agreement, Executive shall be considered permanently disabled
when a qualified medical doctor mutually acceptable to the Company and Executive or Executive’s personal representative shall have certified in writing that: (i) Executive is unable because of medically determinable physical or mental
disability to perform substantially all of Executive’s duties for more than one hundred eighty (180) calendar days measured from the last full day of work; or (ii) by reason of mental or physical disability, it is unlikely that Executive will
be able, within one hundred eighty (180) calendar days, to resume substantially all business duties and responsibilities in which Executive was previously engaged and otherwise discharge Executive’s duties under this Agreement. 
  
 (h) Change of Control. For purposes of this
Agreement, a “Change of Control” shall be deemed to have occurred: 
  
 (i) If any person (as such term is used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other than the Company or any trustee or fiduciary holding
securities under an employee benefit plan of the Company) becomes a beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the voting power of the then
outstanding securities of the Company; provided that a Change of Control shall not be deemed to occur as a result of a transaction in which the Company becomes a subsidiary of another corporation and in which the stockholders of the Company,
immediately prior to the transaction, will beneficially own, immediately after the transaction, shares entitling such stockholders to more than 50% of all votes to which all stockholders of the parent corporation would be entitled in the election of
directors (without consideration of the rights of any class of stock to elect directors by a separate class vote); or 
  
 (ii) Upon the consummation of (A) a merger or consolidation of the Company with another corporation where the stockholders of the Company,
immediately prior to the merger or consolidation, will not beneficially own, immediately after the merger or consolidation, shares entitling such stockholders to more than 50% of all votes to which all stockholders of the surviving corporation would
be entitled in the election of directors (without consideration of the rights of any class of stock to elect directors by a separate class vote), (B) a sale or other disposition of all or substantially all of the assets of the Company, or (C) a
liquidation or dissolution of the Company. 
  

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 6. NON-DISCLOSURE, INVENTIONS AND NON COMPETITION. As a condition to Executive’s employment by the
Company and simultaneously with the execution of this Agreement, Executive shall execute and agrees to be bound by the terms of the Company’s standard non-disclosure, inventions and non-competition agreement in the form attached hereto as
Exhibit B and incorporated herein by reference. 
  
 7.
NOTICES. Any notice required to be given shall be in writing personally delivered by certified mail or registered mail or by facsimile (receipt confirmed) to the address last shown in the Company’s records. 
  
 8. SEVERABILITY. The provisions of this Agreement shall be deemed severable,
and the invalidity or unenforceability of any provision (or part thereof) of this Agreement shall in no way affect the validity or enforceability of any other provision (or remaining part thereof). 
  
 9. GOVERNING LAW. This Agreement shall be governed by and construed according
to the laws of the State of North Carolina, without reference to the choice of law provisions of such laws. 
  
 10. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties relating to the subject matter hereof, and the parties hereto have made
no agreements, representations, or warranties relating to the subject matter of this Agreement which are not set forth herein. In particular, without limiting the foregoing, this Agreement supersedes in its entirety that certain offer letter from
the Company to Executive dated July [21], 2004 and that certain Consulting Agreement by and between the Company and Executive dated July 26, 2004. No modification of this Agreement shall be valid unless made in writing and signed by the parties
hereto. 
  
 11. BENEFIT. This Agreement shall be binding upon and
inure to the benefit of both parties and their respective heirs, representatives, successors and assigns, including any corporation or other entity with which or into which the Company may be merged or which may succeed to its assets or business;
provided, however, that the obligations of Executive are personal and shall not be assigned by Executive. 
  
 12. EXECUTIVE REPRESENTATIONS. 
  
 (a) Executive represents that his performance of this Agreement and as an employee of the Company does not and will not breach any
non-competition or other agreement to keep in confidence proprietary information acquired by Executive in confidence or in trust prior to Executive’s employment by the Company. Executive represents that he has not entered into, and agrees not
to enter into, any agreement that conflicts with or violates this Agreement or would prevent or interfere with the company’s employment of Executive on the terms set forth herein. 
  
 (b) Executive represents that he has not brought and shall not bring with Executive to the Company, or use
in the performance of Executive’s responsibilities for the 
  

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 Company, any materials or documents of a former employer which are not generally available to the public
or which did not belong to Executive prior to his employment with the Company, unless Executive has obtained written authorization from the former employer or other owner for their possession and use and provided the Company with a copy thereof.

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

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

			
	EMPLOYER:
	
	POZEN INC.
		
	By:	 	 /s/ John R. Plachetka

	Name:	 	John R. Plachetka, Pharm.D.
	Title:	 	Chairman, President and CEO
	
	EMPLOYEE:
	
	 /s/ William L. Hodges

	William L. Hodges

  

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 EXHIBIT A 
  

Senior Vice President, Finance and Administration and Chief Financial Officer 
 Responsibility and Tasks List 
  
 Reporting to the President, the Senior Vice President, Finance and Administration and Chief Financial Officer (“CFO”) will assist in developing the strategic direction of the Company and have the skills
necessary to lead in the growth of the Company. The CFO will be responsible for all financial activities and relationships of the Company. Importantly, the CFO will be expected to lead anticipated financing and corporate development transactions
from conceptualization through to implementation and integration. The CFO will assure that the Company maintains the strong financial infrastructure required to support continued rapid growth. This executive will be widely viewed as a key member of
the management team with responsibility for influencing the thinking and decisions behind the Company’s overall strategies, plans, and operations. Specific responsibilities will include, among others, the management of: 
  

	•	Finance – the evaluation, analysis and execution of all capital raising and all other finance related projects. 

  

	•	Corporate Development – manage the analysis, execution and integration of mergers, acquisitions, and contribute significantly to the analysis, execution and integration of
business partnerships, licensing agreements, etc. 

  

	•	Investor Relations - working closely with the CEO and additional senior management as appropriate, leading the effort to interface with the investment community, specifically in
working with institutional investors, research analysts, investment bankers and corporate partners. 

  

	•	Accounting – management of individuals responsible for the implementation and management of the accounting structure, methods, systems, operating procedures and FASB and SEC
requirements. 

  

	•	Planning/Forecasting – management of corporate-wide financial planning, procedures, measures, budgeting and forecasting, project specific financial analysis and general risk
analysis. 

  

	•	Reporting and Analysis – responsible for the timely and accurate reporting and analysis, both written and oral, of financial and associated business information to internal,
external, and regulatory constituencies. 

  
 The CFO will be a
partner with the rest of the senior management team and get involved in a variety of strategic and business challenges that go beyond the financial function. Skills in oral and written communication, strategic thinking, combined with a personal
sense of flexibility and humor, will lead to a successful integration of the new CFO into the Company’s culture. Additionally, the CFO will be expected to: 
  

	 	•	Supervise corporate communications and all aspects of investor relations. 

  

	 	•	Possess an entrepreneurial, can do attitude. 

  

	 	•	Possess excellent communication skills and has experience delivering company presentations at investment conferences. 

  

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	 	•	Be a team player with a pleasant, engaging personality. 

  

	 	•	Possess excellent managerial skills. 

  

	 	•	Demonstrate a track record of unquestioned integrity and honesty. 

  

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 EXHIBIT B 
  

NON-DISCLOSURE, INVENTION AND NON-COMPETITION AGREEMENT 
  

THIS NON-DISCLOSURE, INVENTION AND NON-COMPETITION AGREEMENT (the “Agreement”) is effective for all purposes and in all respects, by and
between POZEN Inc., a Delaware corporation (hereinafter referred to as “Employer”), and                         
(hereinafter referred to as “Employee”). 
  
 WHEREAS,
Employer is about to employ Employee in a position of trust and confidence to aid Employer in its business; and 
  
 WHEREAS, Employer desires to receive from Employee a covenant not to disclose certain information relating to Employer’s business and certain other
covenants; and 
  
 WHEREAS, as a material inducement to Employer
to employ Employee and to pay to Employee compensation for such services, Employee has agreed to such covenants; and 
  
 WHEREAS, Employer and Employee desire to set forth in writing the terms and conditions of their agreements and understandings. 
  
 NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
herein contained, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending legally to be bound, hereby agree as follows: 
  
 1. Disclosure of Information. Employee acknowledges that, in and as a
result of his employment by Employer, he will be making use of, acquiring and/or adding to confidential information of a special and unique nature and value, including, without limitation, Employer’s trade secrets, products, systems, programs,
procedures, manuals, guides (as periodically updated or supplemented), confidential reports and communications (including, without limitation, customer site information, technical information on the performance and reliability of Employer’s
products and the development or acquisition of future products or product enhancements by Employer) and lists of customers, as well as the nature and type of the services rendered by Employer and the fees paid by Employer’s customers. Employee
further acknowledges that any information and materials received by Employer from third parties in confidence (or subject to non-disclosure covenants) shall be deemed to be and shall be confidential information within the meaning of this Section 1.
As a material inducement to Employer to employ Employee and to pay to Employee compensation for such services to be rendered to Employer by Employee (it being understood and agreed by the parties hereto that such compensation shall also be paid and
received in consideration hereof), Employee covenants and agrees that he shall not, except with the prior written consent of the Board of Directors of Employer, at any time during or following the term of his employment with Employer, directly or
indirectly, divulge, reveal, report, publish, transfer or disclose, for any purpose whatsoever, any of such confidential information which has been obtained by or disclosed to him as a result of his employment with Employer, including, without
limitation, any Proprietary Information, as 
  

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 defined in Section 2 hereof; Employee agrees further that upon termination of his employment with Employer for any
reason, he shall sign the Employee Termination Statement, a form of which is attached hereto. The aforementioned obligation of confidentiality and non-disclosure shall not apply when: 
  
 (a) Public Domain. The information disclosed to Employee was in the public domain at the time of disclosure, or at
any time after disclosure has become a part of the public domain by publication or otherwise through sources other than Employee, directly or indirectly, and without fault on the part of Employee in failing to keep such information confidential; or

  
 (b) Requirement of Law or Order. Disclosure is required
by law or court order, provided Employee gives Employer prior written notice of any such disclosure; or 
  
 (c) Agreement. Disclosure is made with the prior written agreement of the Board of Directors of Employer; or 
  
 (d) Prior Information. The information is encompassed by the ideas and
inventions listed on Schedule A hereto or was in Employee’s possession at the time of disclosure, as shown by written records in existence prior to such time, and such information has not been transferred to Employer, and was not
acquired, directly or indirectly, from the Employer; or 
  
 (e)
Third Party Disclosure. The information is lawfully disclosed to Employee after the termination of his employment by a third party who is under no obligation of confidentiality to Employer with respect to such information; or 
  
 (f) Independently Developed. Such information is independently
developed by Employee subsequent to the termination of his active participation in the business of Employer, as demonstrated by written records of Employee which are contemporaneously maintained. 
  
 2. Definition of Proprietary Information. For purposes of this
Agreement, the term “Proprietary Information” shall mean all of the following materials and information (whether or not reduced to writing and whether or not patentable or protectable by copyright) which Employee receives, receives access
to, conceives of or develops, in whole or in part, as a direct or indirect result of his employment with Employer, in the course of his employment with Employer (in any capacity, whether executive, managerial, planning, technical, sales, research,
development, manufacturing, engineering or otherwise) or through the use of any of Employer’s facilities or resources: 
  
 (i) Manufactured products, assembled or unassembled, and any related goods or systems and any and all future products, software or systems developed or
derived therefrom; 
  
 (ii) With respect to the items described
in Section 2(i) above, all hardware and software relating to design or manufacture; all source and object codes to such hardware and software; all specifications, design concepts, documents and manuals; all security systems relating to the product
or procedures, including, without limitation, software security systems; 
  

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 (iii) Trade secrets, production processes, marketing techniques, mailing lists, purchasing information,
price lists, pricing policies, quoting procedures, financial information, customer and prospect names and requirements, customer data, customer site information and other materials or information relating to the manner in which Employer does
business; 
  
 (iv) Discoveries, concepts and ideas, whether or
not patentable or protectable by copyright, including, without limitation, the nature and results of research and development activities, technical information on product or program performance and reliability, processes, formulas, techniques,
“know-how”, source codes, object codes, designs, drawings and specifications; 
  
 (v) Any other material or information related to the business or activities of Employer which is not generally known to others engaged in similar businesses or activities; 
  
 (vi) Any other material or information that has been created, discovered or
developed, or otherwise becomes known to Employer which has commercial value in the business in which Employer is engaged; and 
  
 (vii) All ideas which are derived from or relate to Employee’s access to or knowledge of any of the above-enumerated materials and information.

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

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

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

4. Injunctive Relief. Employee understands and agrees that Employer will suffer irreparable harm in the event that Employee breaches any of his
obligations under this Agreement and that monetary damages will be inadequate to compensate Employer for such breach. Accordingly, Employee agrees that, in the event of a breach or threatened breach by Employee of any of the provisions of this
Agreement, Employer, in addition to and not in limitation of any other rights, remedies or damages available to Employer at law or in equity, shall be entitled to a permanent injunction in order to prevent or to restrain any such breach by Employee,
or any of employee’s partners, agents, representatives, servants, employers, employees and/or any and all persons directly or indirectly acting for or with him. 
  
 5. Records. All notes, data, tapes, reference materials, sketches, drawings, memoranda, models and records in any way
relating to any of the information referred to in Sections 1, 2 and 3 hereof (including, without limitation, any Proprietary Information) or to Employer’s business shall belong exclusively to Employer, and Employee agrees to turn over to
Employer all such materials and all copies of such materials in his possession or then under his control at the request of Employer or, in the absence of such a request, upon the termination of Employee’s employment with Employer. 

 

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 6. Accounting for Profits. Employee covenants and agrees that, if he shall violate any of his
covenants or agreements under this Agreement, Employer shall be entitled to an accounting and repayment of all profits, compensation, commissions, remunerations or benefits which Employee directly or indirectly has realized and/or may realize as a
result of, growing out of or in connection with any such violation; such remedy shall be in addition to and not in limitation of any injunctive relief or other rights or remedies to which Employer is or may be entitled at law, in equity or under
this Agreement. 
  
 7. Covenant Not to Compete. It is
recognized and understood by the parties hereto that Employee, through Employee’s association with Employer as an employee, shall acquire a considerable amount of knowledge and goodwill with respect to the business of Employer, which knowledge
and goodwill are extremely valuable to Employer and which would be extremely detrimental to Employer if used by Employee to compete with Employer. It is, therefore, understood and agreed by the parties hereto that, because of the nature of the
business of Employer, it is necessary to afford fair protection to Employer from such competition by Employee. Consequently, as a material inducement to employ Employee in the aforementioned positions, Employee covenants and agrees to the following:

  
 (a) Except as otherwise approved in writing by Employer,
Employee agrees: 
  
 (i) that Employee will not, directly or
indirectly, with or through any family member or former director, officer or employee of Employer, or acting alone or as a member of a partnership or as an officer, holder of or investor in as much as 5% of any security of any class, director,
employee, consultant or representative of any corporation or other business entity: 
  
 (1) at any time while engaged as an employee of Employer and for a period of two (2) years following termination as an employee, interfere with, or seek to interfere with, the relationship between Employer or any
affiliate of Employer and the following: (a) any of the employees of such entities; (b) any of the customers of such entities then existing or existing at any time within three (3) years prior to termination of Employee’s employment by
Employer; or (c) any of the suppliers of such entities then existing or existing at any time within three (3) years prior to termination of Employee’s employment by Employer. 
  
 (b) The parties hereto agree that in the event that either the length of time or the geographic area set forth in paragraph
(a) is deemed too restrictive in any court proceeding, that the court may reduce such restrictions to those which it deems reasonable under the circumstances. 
  

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

 5 

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

  
 (b) In the event that, notwithstanding the foregoing, any part
of the covenants set forth in Sections 1 through 7 hereof shall be held to be invalid and unenforceable, the court so deciding may reduce or limit the terms of such provision to allow such provision to be enforced. 
  
 9. Burden and Benefit. This Agreement shall be binding upon, and shall
inure to the benefit of, Employer and Employee, and their respective heirs, personal and legal representatives, and, in the case of Employer, its successors and assigns. 
  
 10. Governing Law. In view of the fact that the principal office of Employer is located in the State of North
Carolina, it is understood and agreed that the construction and interpretation of this Agreement shall at all times and in all respects be governed by the laws of the State of North Carolina. 
  
 11. Severability. The provisions of this Agreement shall be deemed
severable, and the invalidity or unenforceability of any one or more of the provisions hereof shall not affect the validity or enforceability of the other provisions hereof. 
  
 12. Employer. As used herein, the term “Employer” shall also include any corporation which is at any time
the parent or a subsidiary of Employer, or any corporation or entity which is an affiliate of Employer by virtue of common (although not identical) ownership, and for which Employee is providing services in any form during his employment with
Employer or any such other corporation or entity. 
  
 13.
Notices. Any notice required to be given hereunder shall be sufficient if in writing, and sent by certified or registered mail, return receipt requested, first-class postage prepaid, in the case of Employee, to his address as shown on
Employer’s records, and in the case of Employer, to its principal office in the State of North Carolina. 
  
 14. Entire Agreement. This Agreement contains the entire agreement and understandings by and between Employer and Employee with respect to the
covenants herein described, and no representations, promises, agreements or understandings, written or oral, not herein contained shall be of any force or effect. Nothing contained in this Agreement shall be deemed or construed to constitute an
agreement by Employer to employ or continue to employ Employee. No change or modification hereof shall be valid or binding unless the same is in writing and signed by the parties hereto. No waiver of any provision of this Agreement shall be valid
unless the same is in writing and signed by the party against whom such waiver is sought to be enforced; moreover, no valid waiver of any provision of this Agreement at any time shall be deemed a waiver of any other provision of this Agreement at
such time nor will it be deemed a valid waiver of such provision at any other time. 
  

 6 

 15. Headings. The headings and other captions in this Agreement are for convenience and reference
only and shall not be used in interpreting, construing or enforcing any of the provisions of this Agreement. 
  
 16. Effective Date. This Agreement shall be effective as of             , 2004.

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

			
	POZEN Inc.
		
	By:	 	  

	Name:	 	John R. Plachetka, Pharm.D.
	Title:	 	President and Chief Executive Officer
	
	 EMPLOYEE:

		
	 	 	  

	 	 	  

  

 7 

 SCHEDULE A 
  
 Inventions, Ideas, Products, Etc. Not Covered in Section 3(i) of the Agreement 
  
 [Note: If Employee has no such items to disclose, write “NONE” on this line:
            .] 
  

 8 

 EMPLOYEE TERMINATION STATEMENT 
  
 1. I am cognizant of my legal obligations, as stated in that certain Non-Disclosure, Invention and Non-Competition
Agreement, dated             ,             , which I signed at the commencement of my employment with respect to
confidential information of POZEN Inc. (the “Company”), and hereby specifically reaffirm all of the provisions stated therein. 
  
 2. I understand that my obligation not to use or disclose Company confidential information remains in effect after the termination of my employment with
the Company and that if, at any time in the future, I wish to utilize, disclose or publish any Company confidential information, or if I should be in doubt as to whether any such information may be confidential to the Company, I will, prior to such
use or disclosure, obtain the written consent of the Company to do so. I further understand that such consent may be refused where Company confidential information is involved. 
  
 3. I understand that, to the extent permitted by law, any idea, invention, discovery, computer software program or other
computer-related equipment or technology, conceived or developed by me in whole or in part, or in which I may have aided in its development during my employment with the Company, belongs exclusively to the Company. I hereby certify that I have made
full disclosure in writing to the Company or have discussed with my supervisor at the Company all of such ideas, inventions, discoveries, computer programs and computer-related equipment or technology. I further understand that I still have an
obligation subsequent to termination of my employment with the Company to execute such papers as the Company may reasonably request to more fully vest in the Company all ownership rights in the items referenced in this paragraph. 
  
 4. I hereby certify that all materials related directly or indirectly to my
employment with the Company and all copies thereof, have been returned to my supervisor at the Company. I further certify that no computer listings, programs, object codes, source codes, product development guides, flow-charts or other documents
owned by the Company or provided to or used by me in connection with my employment at the Company, whether in machine-readable form or otherwise, have been retained by me or given to any other third person or entity in anticipation of my employment
termination or for any other reason, and further certify that none of the aforementioned will be removed from the Company’s premises by me. 
  
 ACCEPTED: 
  
 POZEN Inc. 
  

							
	 By:
	 	  

	 	 	 	  

			
	  

	 	 	 	  

	 Date
	 	 	 	Date

  

 9Beverage Can Supply Letter Agreement, as most recently amended April 1, 2003

 Exhibit 10.8 
 

 
  
 Portions hereof have been
omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment in accordance with Rule 406. 
  
  
 4805 Second
Street,                     Muscle Shoals, AL 35681-1282 
 phone /
688.817.8502                                 fax / 256-386-6047 
  
 CONFIDENTIAL 
  
 April 1, 2003 
  
 Mr. Robert G. Grenfell 
 Director, Aluminum
Purchasing 
 BALL CORPORATION 
 Packaging Operations 

9300 West 108th Circle 
 Broomfield, CO 80021-3682 
  
 Dear Bob: 
  
 We agreed to the following amendments to our supply contract during our meeting at your offices last week: 
  

	 	•	These amendments to our supply contract apply to calendar years 2004 through 2007. 

  

	 	•	Base product mix and volumes shall be: 

  

					
	 ·
	 	D&I Body Stock	 	***** Million Pounds per Year
	 ·
	 	Coated End Stock	 	***** Million Pounds per Year
	 ·
	 	Tab Stock	 	***** Million Pounds per Year
	 	 	TOTAL	 	***** Million Pounds per Year

  

	 	•	Coated End Stock - All soft drink and beer coated end stock conversion prices will be ***** as follows: 

  

					
	 ·
	 	 *****, 2004 -
	  	 *****

	 ·
	 	 *****, 2005 -
	  	 *****

	 	 	 Total ***** = *****.

  

	 	•	Body Stock Conversion Prices will be ***** per pound *****, 2004 via an *****. This brings the conversion price ***** to ***** reference prices. 

	*****	Portions hereof have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 406. 

	 	•	Conversion Prices are to be adjusted each April 1st by ***** of year-to-year changes in the PPI Index *****. 

  

	 	•	Additionally, you agreed to make formal introductions to Ball licensees in ***** and *****. We wish to work to establish supply positions with some of these prospective customers
starting in 2004. 

  

	 	•	We plan to be capable of qualifying ***** Body Stock ***** and supplying production quantities starting *****. 

  
 Yours truly, 
  

	
	 /s/ Don Farrington

	Don A. Farrington
	Vice President Sales & Marketing

  

			
	Copy:	 	John Cameron
	 	 	Sam Glasscock
	 	 	John Martin - BALL

  

 -2- 

 

 
  
 CHICAGO SALES OFFICE 
  
 1117 S. MILWAUKEE AVENUE Suite D-3 
  
 LIBERTYVILLE IL 60048 
  
 phone / 988.817.8602 fax / 847.816.8281 
  
 CONFIDENTIAL 
  
 July 6, 2001 
  
 Mr. Robert C, Greenfell 
 BALL CORPORATION 
 300 WEST 108th Circle 
 Broomfield, CO 80021-3682 
  
 Dear Bob:

  
 This letter confirms our agreement last week to adjust the annual aluminum
volumes in our contract for 2001 as follows: 
  

			
	 D&l Can Body Stock
	  	***** million pounds
	 Coated Can End Stock
	  	***** million pounds
	 Can Tab Stock
	  	***** million pounds
	 	  	

	 TOTAL
	  	***** million pounds

  
 According to my records our current
position relative to these volumes is shown below: 
  

											
	 Product

	  	Net Shipments
Thru 8/30/01

	  	 July
 Bookings

	  	 August
 Bookings

	  	 2001 Balance
 To Ship

	  	Average Month
Sept. - Dec.

	 D&l Body Stock
	  	*****	  	*****	  	*****	  	*****	  	*****
	 Coated End Stock
	  	*****	  	*****	  	*****	  	*****	  	*****
	 Tab Stock
	  	*****	  	*****	  	*****	  	*****	  	*****
	 	  	
	  	
	  	
	  	
	  	

	 TOTAL
	  	*****	  	*****	  	*****	  	*****	  	*****

  
 millions of pounds

  
 We recognize the hazards in the perspective of “average months,” and
we recognize you will likely require some month-to-month flexibility in your orders. Please work directly with Regan Ragland to redefine the requirement earn the volume rebate for level loading based upon these revised annual volumes. 
  
 We sincerely enjoy working with you in the best interest of our partnership. Thank you for
your support and for business. 
  

	
	Yours truly,
	
	 /s/ Don A. Farrington

	 Don A. Farrington

	 Vice President Sales & Marketing

  

			
	 Copy:
	 	John Martin - Ball POC
	 	 	John Cameron
	 	 	Sam Glasscock
	 	 	Martha Neese
	 	 	Regan Ragland
	 	 	Eva Witte

  

 

 
  
 4805 SECOND
STREET, MUSCLE SHOALS, AL 35661-1282 
  
 phone /
256.386.6000 
  
 November 20, 2000 
  
 Mr. John Martin 
 Vice President, Purchasing 
 Packaging Operations 
 Ball Metal Beverage Container Corp. 
 9300 West 108th Circle 
 Broomfield, Colorado 80021-3682 
  
 Dear John: 
  
 As promised, we are pleased to offer the following amendment to our Supply Program Agreement dated August 10, 1998, as previously amended
(collectively, the “Supply Contract”) for your consideration: 
  

									
	 Rigid Container Sheet Product

	  	Quantity (Annual)

	  	 Price (in ¢ per lb.)

	 	  	2001

	  	2002

	  	2003

	  	 
	 D&l for Body Stock
	  	***** million
lbs.	  	***** million
lbs.	  	***** million
lbs.	  	*****
	 End Stock
	  	***** million
lbs	  	***** million
lbs.	  	***** million
lbs.	  	*****
	 Tab Stock
	  	***** million
lbs.	  	***** million
lbs.	  	***** million
lbs.	  	*****
	 Grand Totals
	  	***** million
lbs.	  	***** million
lbs.	  	***** million
lbs.	  	 

  
 The price(s) noted
above will be increased by *****% of the difference between the price list $***** in effect in 1997 less the adjustment made for the PPI and the July 2000 price list. 
  

 - 2 - 

	15.	Wise aggress that ***** million pounds of the cansheet to be provided by Wise to Ball during 2001 will be sold at an underlying P1020 price of $***** per pound and will be delivered
in accordance with the following monthly schedule (all amounts are in millions of pounds): 

  

																	
	 Jan.
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 Feb.
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 Mar.
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 Apr.
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 May
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 June
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 July
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 Aug.
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 Sept.
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 Nov.
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 Dec.
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 

  
  
 Ball will not remit on the basis of $***** per pound and will remit an additional $***** per pound in respect of each of the pounds referred to in the
column above for January, February, March and April. This additional $***** per pound shall constitute an advance payment in respect of the ***** million pounds of cansheet referred to in Section 1(a)(ii) of the Metal Supply Contract Amendment,
Assignment and Assumption Agreement and Administrative Services Agreement dated as of September 1, 2000, and Ball shall withhold $***** per pound (i.e. $***** per week commencing April 15, 2001 and terminating December 31, 2001) from payments due in
respect of the said ***** million pounds until such withholdings aggregate an amount equal to the total amount of the advance payments (i.e. $*****). In the event that, after March 31, 2001, Wise fails to deliver any of the remainder of the said
***** million pounds of cansheet in accordance with an underlying P1020 price of $***** per pound, the full amount of the difference between $***** and Ball’s total withholdings at the time of such failure shall be immediately due and payable
by Wise to Ball. Ball shall be entitled to offset any such amount which may become owing to Ball by Wise against any amounts owing by Ball to Wise or any affiliate of Wise, whether under the Supply Contract or otherwise. 
  

 - 3 - 

 We appreciate the opportunity to present our proposal to you and look forward to many mutually beneficial years of
business between our respective organizations. If the foregoing is acceptable, please sign where indicated below and return a copy to me. Thank you for your consideration. 
  

					
	 Sincerely,
	 	 	 	 Accepted by,

			
	 /s/ John J. Cameron
	 	 	 	 /s/ John Martin

	 John J. Cameron
	 	 	 	 John Martin

	 President
	 	 	 	 Vice President, Purchasing

	 Wise Alloys LLC
	 	 	 	 Packaging Operations

	 	 	 	 	 Ball Metal Beverage Container Corp.

  

 - 4 - 

 *****STRICTLY CONFIDENTIAL***** 
  
 BALL AND REYNOLDS SUPPLY PROGRAM AGREEMENT 
  
 Ball Metal Beverage Container Corp., including its subsidiaries and affiliates (“Ball”), and Reynolds Metals
Company (“Reynolds”) shall treat any information relating to this Supply Program as confidential and each party shall use the same degree of care regarding the use and disclosure of such information to third parties as it would for its own
information. Neither party shall disclose the terms of this Agreement or the extent of the parties’ relationship without the prior written consent of the other party or unless required to do so; provided, that Reynolds and Ball may provide a
copy of this Agreement to a potential assignee subject to execution of an appropriate confidentiality agreement. 
  

	1.	Term of Agreement - From date of closing of the sale of the Reynolds’ Business, as defined in the Asset Purchase Agreement dated April 22, 1998, to Ball (hereinafter referred
to as the “Sale”) through the end of the 30th month following the date of the Sale, provided the term shall not extend beyond December 31, 2000, subject to the provisions of Section 15. 

  

	2.	During the term of this Agreement, Ball shall purchase from Reynolds and Reynolds shall supply to Ball one hundred percent (100%) of Ball’s Reynolds Plant Requirements (as
hereinafter defined) for aluminum body stock, end stock and tab stock (collectively hereinafter referred to as “Can Stock”). “Reynolds Plant Requirements” means the total quantity of Can Stock purchased by Ball in the production
of aluminum cans and ends during the relevant period in its United States can and end manufacturing plants (including the can manufacturing plants located in Hawaii and Puerto Rico) that Ball purchased from Reynolds pursuant to the Sale
(collectively hereinafter referred to as “Can Plants”), less any quantities of Can Stock that were under contract between Reynolds and any other unrelated party at the time of Sale, which contractual obligations were assumed by Ball;
provided, however, Ball shall have the option to have manufacturers other than Reynolds supply aluminum body stock to the can manufacturing plants located in Hawaii and Puerto Rico, and, if Ball exercises such option, Ball shall purchase from
Reynolds the annual requirements for aluminum body stock for such plants, currently, ***** million pounds each, for use at Ball’s other North American can manufacturing plants. Aluminum body stock, aluminum end stock and aluminum tab stock
supplied hereunder shall comply with Reynolds’ standards and specifications set forth in Exhibit 1, 2, and 3, respectively (hereinafter “Body Stock”, “End Stock” and “Tab Stock”). The Body Stock component, or the
End Stock and Tab Stock components, of Reynolds Plant Requirements may be decreased, at Ball’s option, during a year and for any year thereafter due to the closure, sale or curtailment of any of the Can Plants, as the case may be, by the amount
no longer required by or for such Can Plants after the date of Sale only if, and to the same proportionate extent as, Ball’s total can or end production in North America for such year (hereinafter “North American Requirements”), as
the case may be, has decreased from the level of such production as of the date of Sale. For example, as of the date of sale, if Ball’s purchases of Can Stock for its North American Requirements and the Reynolds Plant Requirements are 1 billion
pounds and 480 million pounds, respectively, and, on January 1, 1999, Ball curtails can and end production at the Reidsville, North Carolina plant, thereby reducing such plant’s annual requirements for Can Stock by 20 million pounds, the amount
of such Can Stock reduction that Ball would still be obligated to purchase annually from Reynolds for use at its other facilities (hereinafter “Ball’s Obligation to Reynolds”) would be calculated as follows: 480 million pounds/I
billion pounds X 20 million pounds = 9.6 million pounds pro rata reduction. Thus, 20 million pounds - 9.6 million pounds = Ball’s Obligation to Reynolds or 10.4 million pounds. Attached hereto as Exhibit 4 is a list which sets forth Ball’s
approximate North American annual Can Stock usages purchased by Ball for each plant as of the date hereof. Subject to the fourth sentence of this paragraph, the North American Requirements shall not include increases in the Can Stock used by the
Ball system through the inclusion of any can or end manufacturing plant built or acquired, either directly or indirectly, by Ball after the commencement date of this Agreement. 

  

	3.	Based upon Reynolds disclosures before the Sale, the parties currently expect that Ball will purchase from Reynolds at least the minimum annual volume of Can Stock (***** million
pounds) during each of years 1998 through 2000 and substantially in the approximate product mixes set forth below (annual volume and product mixes to be prorated for 1998): 

  

 - 5 - 

 APPROXIMATE PRODUCT MIXES 
  

			
	 	 	 (in millions of pounds)

	Body Stock	 	*****
	End Stock	 	*****
	Tab Stock	 	*****
	Total	 	*****

  
 (a)
The aforesaid minimum annual volume and relative product mixes are based on Ball’s good faith estimate of its future requirements at the time it executes this Agreement***** 
  
 (b) During each calendar year during the term of this Agreement (to be prorated for 1998), Ball shall sell
to Reynolds and Reynolds shall purchase from Ball, at market prices, an aggregate quantity of P1020 ingot, shreds and class scrap equal to ***** of the quantity (in pounds) of Can Stock purchased by Ball hereunder in each such calendar year. *****
UBC’s may be tolled by Reynolds at the conversion prices stated in this Agreement (plus an appropriate charge for converting the UBC’s into sheet ingot) for Can Stock volume in addition to the volume of Can Stock to be supplied by Reynolds
under this Agreement. 
  
 (c) Reynolds shall
permit Ball’s can and end customers to purchase Can Stock directly from Reynolds under this Agreement for subsequent tolling into cans and ends by Ball. 
  

	4.	The delivery terms for Can Stock to be supplied hereunder to the Can Plants shall be *****; provided, however, the delivery terms for the Can Plants in ***** shall be ***** port of
exit and ***** shall be ***** port of exit, and any additional packaging costs for export shipments will be borne by Ball. All products are to be scheduled and delivered in approximate ***** monthly shipments; provided, however, if ***** impact can
production, a ***** to *****% for the ***** and/or ***** is acceptable with an ***** in the ***** and *****. Further, if ***** impact can production in the ***** and/or *****, a ***** to *****% is acceptable with ***** in the ***** and *****. All
orders are accepted on a make and ship basis. 

  

	5.	The price of the Can Stock to be supplied hereunder shall be the sum of the aluminum metal component and the conversion fee for the product in question. 

  
 (a) Aluminum Metal Component. 
  
 (1) During the term of this Agreement, the aluminum metal
component shall be established on a semi-annual basis. The price of this component shall be the average daily U.S. Transaction price for high grade aluminum as reported in Platt’s Metals Week for the six (6) months prior to the date of price
setting with a one month lag period *****, as set forth in the following table; provided, however, that during the period beginning October 1, 1998 through March 31, 1999 (hereinafter referred to as the “No Floor Period”), the aluminum
metal component for the first ***** million pounds shall not exceed $***** per pound and have no floor, and during the remaining term of this Agreement and for any amount in excess of ***** million pounds during the No Floor Period, the aluminum
metal component shall not exceed $***** per pound nor fall below $***** per pound; provided, further, that beginning April 1, 1999 and on each April 1 thereafter during the term of this Agreement, such maximum and minimum levels shall be subject to
an adjustment 

  

 - 6 - 

 
(upward or downward, as applicable) based upon one-half (1/2) of the year over year change in the PPI. Examples of annual adjustment calculations are shown
in Attachment A hereto. 
  

					
	 Purchase Period:

	 	 Reference Period:

	 	 Price Setting Date:

	 Q2/Q3, 1998
	 	9/1997 - 2/1998	 	April 1, 1998
	 Q4, 1998/Q1, 1999
	 	3/1998 - 8/1998	 	October 1, 1998
	 Q2/Q3, 1999
	 	9/1998 - 2/1999	 	April 1, 1999
	 Q4, 1999/Q1, 2000
	 	3/1999 - 8/1999	 	October 1, 1999
	 Q2/Q3, 2000
	 	9/1999 - 2/2000	 	April 1, 2000
	 Q4, 2000
	 	3/2000 - 8/2000	 	October 1, 2000
	 Qi, 2001
	 	3/2000 - 8/2000	 	October 1, 2000 (if extended)

  
 (2)
Ball acquires no right, title or interest in any aluminum metal contract which Reynolds may enter into, on the London Metal Exchange or otherwise, in connection with this Agreement. 
  
 (b) Conversion Fee. 
  
 Subject to the provisions of Section 7, during the term of this Agreement, the conversion fee for each
product shall be at Reynolds’ 1997 published conversion fee for such product as stated in the attached Exhibit 5 (with discounts, if applicable, as set forth in Section 5(c)), as adjusted ***** forth in Attachment A hereto. 
  
 (c) Subject to Section 5(b), conversion fee pricing for the
products to be provided hereunder shall be at either *****: 
  
 Soft Drink End Stock: *****; Beer End Stock: *****; and Tab Stock: *****. 
  
 (d) For purposes of determining conversion fee pricing for the Can Stock to be provided hereunder, there shall be no price ***** by
Reynolds to Ball for producing and selling to Ball ***** Stock, ***** Stock or ***** Body Stock. 
  

	6.	Payment terms shall be as set forth in Section 11(c). 

  

	7.	(a) In the event Reynolds’ orders for shipments of Body Stock, End Stock and Tab Stock (including orders received from Ball) exceed in the aggregate ***** million pounds
(hereinafter “Threshold Amount”) in any calendar year hereunder and subsequent orders for shipments of Body Stock, End Stock or Tab Stock in that calendar year are priced at conversion fees which are lower than the conversion fees stated
in Section 5(b) of this Agreement, Reynolds agrees to extend to Ball such lower conversion fees for a like volume. For example, if by September 1, 1999, Reynolds’ orders for shipments of Body Stock, End Stock and Tab Stock for calendar year
1999 exceed the Threshold Amount, and Reynolds subsequently contracts to ship another customer ***** million pounds of Body Stock for delivery in the fourth calendar quarter, 1999, at a conversion fee which is lower than the conversion fee stated in
Section 5(b), Reynolds would be obligated to offer such lower conversion fee to Ball for ***** million pounds of the quantity of Body Stock purchased from Reynolds by Ball in 1999. Orders are to be taken into account for purposes of this clause in
the order in which they are booked. 

  
 (b) Reynolds shall advise Ball within***** days of the ***** of any ***** made by Reynolds to any ***** that reflects a ***** than the ***** otherwise ***** hereunder and which is required to be ***** to Ball pursuant to Section 7 above and
shall ***** Ball’s ***** for the ***** volume. 
  
 (c) Exclusions from Conversion Fee Determination. For purposes of determining whether conversion fees *****, the following shall be excluded from consideration: 
  
 (1) savings by a North American Can Stock customer of Reynolds from any systems savings programs;

  
 * Examples/Clarification 
  

	 	•	A customer/supplier ***** whereby both parties cooperate in improving the management of *****. 

  

	 	•	A customer/supplier order ***** standard business documents). 

  

	 	•	Any effort around ***** until and unless such effort becomes standard industry practice. 

  
 (2) any ***** prices or ***** fees in connection with ***** products; and 
  
 * Examples/Clarification 
  

	 	•	Reynolds may develop a ***** and to provide *****, Reynolds may offer a *****. 

  

	 	•	Ball or Reynolds, or Reynolds and other canmakers, may develop a ***** and to provide ***** Ball and Reynolds, or Reynolds and other canmakers, may cooperate in the development of
*****. 

  
 (3) ***** arrangements.

  
 * Examples/Clarification 
  

	 	•	Reynolds may offer a ***** would be excluded from consideration. 

  

	8.	At its expense, Ball shall have the right, through Ball’s external auditors or an independent third party mutually agreeable to Ball and Reynolds, to verify the ***** or lack
thereof, by Reynolds under Section 7. 

  

 - 7 - 

	9.	Delivery or receipt of the Can Stock which is delayed or prevented by “force majeure” affecting either Reynolds or Ball shall not impose liability on either party.
“Force majeure” is any event beyond the reasonable control of the affected party such as, but not limited to, acts of God, wars, civil commotion, governmental action, fire, storm, flood, earthquake, explosion, strikes, lockouts, or other
industrial disturbance, acts, regulations or other requirements of the federal, state, territorial or local governments, including without limitation, acts, regulations or other requirements making it unlawful or commercially impracticable to
package beverages in metal cans, or any cause, whether of the same or different nature, beyond the reasonable control of the party affected. The party affected by any such event of force majeure shall promptly advise the other of the extent and
probable duration and coordinate efforts to minimize the impact of force majeure on both parties. 

  

 - 8 - 

 The parties recognize that Ball must have Can Stock to continue to operate the Reynolds Can Plants in the
event Reynolds is prevented by force majeure events from delivering Can Stock to Ball. Therefore, Reynolds and Ball agree that in the event Reynolds does not make deliveries of Can Stock to Ball by reason of force majeure events, Ball shall be
entitled to purchase Can Stock from others in amounts which Ball believes in good faith is needed to minimize or avoid disruption of production and sales of cans and ends. Ball’s purchases of Can Stock from others as a result of force majeure
events shall not constitute a breach of this Agreement by Ball, and Ball shall be released from its obligation to purchase such quantities from Reynolds under this Agreement. 
  

	10.	Reynolds warrants that the Can Stock supplied hereunder will conform to the applicable specifications, that it will convey good title thereto, that such Can Stock will be delivered
free from any lawful security interest or any other lien or encumbrance and will be free from claims of infringement or the like, will not render the beverages within the containers made from the Can Stock unfit for human consumption or render the
beverages within the containers made from the Can Stock misbranded or adulterated under the Food, Drug and Cosmetic Act, as amended, or any similar state, territorial or local law, or change or impair the flavor, taste or odor of the beverages
contained within the containers made from the Can Stock; provided, however, this warranty shall not apply to off-taste claims caused by Ball’s failure to apply properly an interior coating to the cans and ends. In the event the Can Stock does
not conform to the applicable specifications or is not merchantable or fit for its intended use, Ball shall promptly notify Reynolds of such non-conformance, followed by appropriate documentation. Reynolds shall then promptly investigate the claim
and replace any non-conforming material or refund the full purchase price for such material less a reasonable scrap allowance, if applicable. REYNOLDS MAKES NO WARRANTY, EXPRESS OR IMPLIED, EXCEPT SUCH AS IS EXPRESSLY SET FORTH HEREIN. In no
event, however, shall Reynolds be liable for lost profits incurred by Ball as a result of any non-conforming Can Stock supplied in breach of the warranties stated in this Section 10. Provided, however, nothing contained in this Agreement shall limit
or otherwise affect any of the rights or remedies available to Ball pursuant to Section 11(f). 

  

	11.	Based on the orders provided by Ball in accordance with Section 11(b), it is expressly Reynolds’ responsibility to monitor, manage and maintain daily between ***** and *****
(as specified by Ball) ***** (hereinafter referred to as “*****”) of ***** on the ***** at the ***** served by Reynolds. It is Ball’s express responsibility to identify, update and communicate the ***** for ***** for the ***** as
agreed upon between Ball and Reynolds. Together, Ball and Reynolds will share the same information regarding ***** net of ***** for ***** (hereinafter referred to as “*****”), ***** and other *****. This ***** will have the following
elements: 

  
 (a) By ***** of each
calendar year, Ball will advise Reynolds in writing of the specifications, ***** and Can Plant ***** for between ***** and ***** for each Can Plant. 
  
 (b) ***** days prior to the month of usage, Ball will advise Reynolds in writing of the specifications, Can Stock ***** and Can Plant
***** for between ***** and ***** (hereinafter referred to as the “*****”) for each Can Plant. Reynolds ***** will be based upon each such *****. 
  
 (c) *****, Ball will provide Reynolds the *****. This ***** will identify each ***** by *****, ***** number, ***** and *****, net of
*****, ***** and ***** for the relevant Ball reporting period. This ***** will be transmitted electronically to Reynolds by the close of business ***** days after ***** end. Reynolds will immediately invoice Ball electronically based upon the *****
in the *****, and payment will be transmitted electronically by Ball to Reynolds by the ***** day of the month in which the invoice is received. 
  
 (d) When a coil is set aside under ***** procedures, the Can Plant will record the weight used from the coil as ***** for that given
*****. At Reynolds’ request, Ball will consider in good faith ***** the ***** coils to determine disposition. 
  
 (e) Any coil (excluding ***** coils and coils not ***** stated in Section 10) on a plant’s floor in excess of ***** days will be
deemed ***** and included in the *****. Ball and Reynolds must agree that said coil was ***** by and/or ***** to be used by the Can Plant. 
  
 (f) In the event Reynolds does not maintain the ***** and *****, as specified by Ball ***** the Can Plant *****, Ball shall be entitled to
***** from other ***** the ***** of ***** Ball in good faith believes is necessary to ***** a ***** of Can Stock. Ball’s purchases of Can Stock from ***** to ***** a ***** of Can Stock shall not constitute a breach of this Agreement by Ball,
and Ball shall be released from its obligation to ***** such ***** from Reynolds under this Agreement. 
  
 (g) Timely delivery and availability of Can Stock meeting the requirements of this Agreement is vital to Ball. 
  

 - 9 - 

	12.	[INTENTIONALLY OMITTED] 

  

	13.	Upon execution, this Agreement shall constitute our entire agreement with respect to the subject matter hereof and will, as of the date of Sale, supersede and cancel any prior
agreements between us with respect thereto, including the Supply Program Agreement signed by Ball on September 12, 1995, as amended on October 9, 1995 and January 2, 1997, except for product warranty claims by Ball in respect of Body Stock, End
Stock and Tab Stock delivered under the Supply Program Agreement dated September 12, 1995, as amended. 

  

	14.	This Agreement is not assignable, nor may any of a party’s rights or obligations be transferred or delegated, in whole or in part, without the prior written consent of the
other party, which consent shall not be unreasonably withheld. 

  

	15.	Ball shall have the option to extend the term of this Agreement for an additional three (3) months beyond the term specified in Section 1. Ball shall exercise its option to extend
the term of this Agreement by an additional three (3) months by providing written notice to Reynolds no later than September 1, 1999. If Ball exercises its option, this Agreement shall be extended for an additional three (3) month period.

  

	16.	Amendment and Modification. This Agreement may be amended, modified and supplemented only by written agreement of Ball and Reynolds. 

  

	17.	Waiver of Compliance. Any failure of Reynolds; on the one hand, or Ball; on the other, to comply with any obligation, covenant, agreement or condition herein may be expressly waived
in writing by an authorized representative of Ball or Reynolds, respectively, but such waiver or failure to insist upon compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to,
any subsequent or other failure. 

  

	18.	Default. If either party fails to perform under any material provision of this Agreement, and the failure is not corrected within thirty (30) days after the other party gives
written notice thereof, then the other party may decline to make or accept, as the case may be, further deliveries until the default is corrected. 

  

	19.	Notices. All notices, requests, demands and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand
or sent by overnight courier or telecopy (and promptly confirmed by certified mail, return receipt requested): 

  
 (a) if to Reynolds, to: 
  
 Reynolds Metals Company 
 6601 West Broad Street 
 Richmond, Virginia 23230 
 Attention: Corporate Secretary’s Office 
 Telecopier: (804) 281-3740 
  
 or to such other person or address as Reynolds shall furnish to Ball in writing. 
  

 - 10 - 

 (b) if to Ball, to: 
  
 Ball Metal Beverage Container Corp. 
 10 Long Peaks Drive 
 Broomfield, Colorado 80021-2510 
 Attention: General Counsel 
 Telecopier: (303) 460 -2691 
  
 or to such other person or address as Ball shall furnish to Reynolds in writing. 
  

	20.	Governing Law. This Agreement and the legal relations among the parties shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to
its conflicts of law doctrine. 

  

	21.	Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one
and the same instrument. 

  

	22.	Headings. The headings of the Sections of this Agreement are inserted for convenience only and shall not constitute a part hereof or affect in any way the meaning or interpretation
of this Agreement. 

  

	23.	Third Parties. Except as specifically referred to herein, nothing herein shall be construed to give to any person other than the parties and their successors or assigns, any rights
or remedies under or by reason of this Agreement. 

  

	24.	Taxes. In addition to the price, the amount of any present or future tax applicable to the sale, delivery, use, and/or other handling of the Can Stock shall be paid by Ball.

  

	25.	Severability. If any provision of this Agreement, whether a section, paragraph, sentence or any portion thereof, is determined to be null and void or unenforceable, the remaining
provisions of this Agreement shall remain in full force and effect. 

  

	26.	Interpretation. When used in this Agreement, the singular form shall include the plural and vice versa, and the use of any gender shall include all genders, as appropriate. The
terms “herein”, “hereinbefore”, “hereinafter”, “hereunder”, and “hereof’ shall refer to the entirety of this Agreement and shall not be limited in applicability to the section in which they appear.

  

	27.	Precedence. In the event of any conflict or inconsistency between the provisions in this Agreement and the provisions in Exhibits 1-5 and Attachment A to this Agreement, the
provisions in this Agreement shall prevail. 

  

 - 11 - 

	28.	The Dispute Resolution procedures under the Asset Purchase Agreement shall not be applicable to this Agreement. 

  
 Please indicate your agreement hereto and acceptance hereof by executing and
returning the duplicate thereof. 
  

			
	REYNOLDS METALS COMPANY
		
	By	 	 /s/ D. Michael Jones

	 Its
	 	 Senior Vice President and General Counsel

	 Date
	 	 8/10/98

  

			
	AGREED AND ACCEPTED:
	
	BALL METAL BEVERAGE CONTAINER CORP.
		
	By	 	 /s/ F. Midgett

	 Its
	 	 President

	 Date
	 	 8/10/98

  

 - 12 - 

 ATTACHMENT A 
  
  
 Examples of Annual PPI Adjustments 

 
  
 ***** 
  
  

	*****	Portions hereof (1 page) have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 406.

 EXHIBIT 1 
  

Reynolds Metals Company 
 Can Division

 Direct Material Specification - D&I Can Body Stock 
  
  
 ***** 
  
  

	*****	Portions hereof (7 pages) have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 406.

  

 EXHIBIT 2 
  

Reynolds Metals Company 
 Can Division

 Direct Material Specification - End Stock 
  
  
 ***** 
  
  

	*****	Portions hereof (13 pages) have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 406.

  

 EXHIBIT 3 
  

Reynolds Metals Company 
 Can Division

 Direct Material Specification - Tab Stock 
  
  
 ***** 
  
  

	*****	Portions hereof (18 pages) have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 406.

  

 EXHIBIT 5 
  

Reynolds’ Current Price List 
 for Can
and Sheet Products 
  
  
 ***** 
  
  

	*****	Portions hereof (15 pages) have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 406.

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