Document:

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                                                                    EXHIBIT 10.5

                         EXECUTIVE EMPLOYMENT AGREEMENT

     This EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement"), is entered into as
of July 25, 2001, by and between POZEN Inc. (the "Company"), with offices
located at 6330 Quadrangle Drive, Suite 240, Chapel Hill, North Carolina, and
John E. Barnhardt ("Executive"), whose address is 2213 Hamrick Drive, Raleigh,
North Carolina 27615.

                                   WITNESSETH:

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

     WHEREAS, the Company has employed and wishes to continue to employ
Executive in the position of Vice President, Finance and Administration, and
Executive desires to continue in the 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 engages and employs Executive, and
Executive hereby accepts engagement and employment, as Vice President, Finance
and Administration, of the Company, with such duties and responsibilities as are
normally related to such position in accordance with the standards of the
industry and any additional duties as may be assigned to Executive from time to
time by the Board of Directors of the Company.

     2.   TERM. Executive's employment shall be for a term of two (2) years 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 $132,500, payable in accordance with the 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 to be effective as of January 1 of each year during the Term.

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          (b)  Bonus. Executive shall be eligible to receive an annual cash
               -----
     incentive bonus of up to forty percent (40%) of annual base salary, or such
     greater amount up to eighty percent (80%) of 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. Executive shall be eligible to receive an annual
               -------------
     stock option grant, with the amount of such grant to be determined in the
     sole discretion of the Committee.

          (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.

          (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

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               (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.

          (c)  Obligations upon Certain Terminations. Upon voluntary termination
               -------------------------------------
    of this Agreement, or termination of Executive's employment by the Company
     for Cause (as defined below) 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, 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.
     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 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. At any time
     during the severance period, the Company may elect to pay a lump sum amount
     to Executive which represents the reasonable value of such benefits reduced
     to their present value in lieu of continuing payment of 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

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     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 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

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     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.

     6.   NON-DISCLOSURE, INVENTIONS AND NON COMPETITION. Executive shall
execute and be bound by the terms of the Company's standard non-disclosure,
inventions and non-competition agreement in the form attached hereto as Exhibit
A 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).

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     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. 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 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.  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.

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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 & CEO

                               EMPLOYEE:

                               /s/  John E. Barnhardt
                               ---------------------------------------------
                               John E. Barnhardt

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                                    EXHIBIT A

             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 defined in Section 2 hereof;
Employee agrees further that upon termination of his employment

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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. (s)
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. (s) 101,
such work shall be owned solely by, or assigned or transferred completely and
exclusively to, Employer. Employee agrees to execute any instruments and to do
all other things reasonably requested by Employer (both during and after
Employee's employment with Employer) in order to more fully vest in Employer all
ownership rights in those items thereby transferred by Employee to Employer.
Employee further agrees to disclose immediately to Employer all Proprietary
Information conceived of or developed in whole or in part by him

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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.

     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

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

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

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

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

                   (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.

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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.

                                                                              13

<PAGE>

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

     16.  Effective Date. This Agreement shall be effective as of the date
          --------------
____________, _____.

     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:
--------

     __________________________________

     ______________________________
                                        Date

                                                                              14

<PAGE>

                                   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:
___________.]

                                                                              15

<PAGE>

                         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

                                                                              16<PAGE>

                                                                   EXHIBIT 10.6

  THE BOARD OF DIRECTORS HAS ADOPTED THIS PLAN SUBJECT TO APPROVAL OF THE PLAN
                       BY THE STOCKHOLDERS OF POZEN INC.

                                   POZEN INC.

                          2001 LONG TERM INCENTIVE PLAN

                                    ARTICLE I
                                     Purpose

     1.1 The purpose of the POZEN Inc. Long Term Incentive Plan (the "Plan") is
to provide long-term incentive compensation to Eligible Executives (as defined
below) of POZEN Inc. and/or its subsidiaries (the "Company") who make
substantial contributions to the success of the Company, to provide a means for
such Eligible Executives to participate in such success, and to assist in
attracting and retaining the highest quality individuals in key executive
positions.

     1.2 Subject to approval by the stockholders of the Company, the Plan shall
become effective as of July 25, 2001 and shall continue until December 31, 2006,
unless extended by reapproval of the stockholders obtained no later than the
first stockholders' meeting that occurs in the fifth year following the year in
which the stockholders previously approved the Plan or unless earlier terminated
by the Company pursuant to the terms of the Plan. No Awards (as defined below)
shall be made pursuant to the Plan after its termination date, provided that
Awards granted prior to the termination date may extend and be paid beyond that
date.

     1.3 The Plan is intended to secure the full deductibility of incentive
awards payable to the Senior Officers (as defined below) pursuant to the Plan.
All compensation payable under this Plan to Senior Officers is intended to be
deductible by the Company under Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code").

                                   ARTICLE II
                                   Definitions

The following words and phrases shall have the respective meanings set forth
below (unless the context indicates otherwise).

     2.1 "Award" shall mean the stated cash amount(s) to which a Participant
will be entitled upon achievement of targets based on Performance Goals
established at the time the Award is granted.

     2.2 "Change of Control" shall mean the occurrence of any of the following:

         (i) 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

                                        1

<PAGE>

     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) 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.

     2.3 "Committee" shall mean the Compensation Committee of the Company's
Board of Directors, as the same from time to time may be constituted, provided
that the committee shall consist solely of two (2) or more individuals,
appointed by the Board to administer the Plan, who are "outside directors" to
the extent required by and within the meaning of Section 162(m) of the Code, as
amended from time to time.

     2.4 "Disability" shall mean, with respect to an Eligible Executive who is a
Participant in the Plan, that a qualified medical doctor mutually acceptable to
the Company and the Eligible Executive or the Eligible Executive's personal
representative shall have certified in writing that: (i) the Eligible Executive
is unable because of medically determinable physical or mental disability to
perform substantially all of the duties of the Eligible Executive's employment
with the Company 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 the Eligible Executive will be able, within one
hundred eighty (180) calendar days, to resume substantially all business duties
and responsibilities in which the Eligible Executive was previously engaged and
otherwise discharge the Eligible Executive's duties as an employee of the
Company.

     2.5 "Eligible Executive" shall mean an employee of the Company who is
approved by the Committee, from time to time, for participation in the Plan.

     2.6 "Employer"" shall mean the Company or a subsidiary of the Company by
whom the Participant is employed at the time in question.

     2.7 "Senior Officer" shall mean an officer within the meaning of Section
162(m) of the Code or any other officer designated by the Committee for purposes
of exempting distributions under the Plan from Section 162(m)(3) of the Code.

                                        2

<PAGE>

     2.8  "Participant" means any Eligible Executive to whom an Award has been
granted pursuant to this Plan.

     2.9  "Performance Cycle" shall mean the period of time over which
Performance Goals for an Award may be calculated and may consist of a portion of
a year, a single year, a stated number of years, or otherwise, as determined by
the Committee for each Award at the time such Award is granted.

     2.10 "Performance Goals" shall be objectively determinable and shall mean
specified levels of, growth in, or achievement of one or more of the following:
stock price, execution of strategic initiatives, earnings per share, net
earnings, operating earnings, return on assets, stockholder return, return on
equity, growth in assets, unit volume, sales, market share, scientific goals,
pre-clinical or clinical goals, regulatory approvals, or strategic business
criteria consisting of one or more objectives based on meeting specified revenue
goals, market penetration goals, geographic business expansion goals, cost
targets, goals relating to acquisitions or divestitures, or strategic
partnerships.

     2.11 "Performance Ratios" shall mean target levels of performance of
certain Performance Goals specified in an Award. Performance Goals may include a
threshold level of performance below which no payment will be made under the
Award, levels of performance at which specified percentages of the target amount
under the Award will be paid, and a maximum level of performance above which no
additional amount will be paid under the Award.

                                   ARTICLE III
                                   Eligibility

     3.1  Each Eligible Executive who is approved by the Committee, from time to
time, shall be eligible for participation in the Plan.

     3.2  No Participant or other employee of the Company shall at any time have
a right to participate in the Plan, despite having previously participated in
the Plan.

                                   ARTICLE IV
      Selection of Participants, Grant of Awards and Administration of Plan

     4.1  The Committee shall determine, from time to time, those Eligible
Executives who are to be granted Awards pursuant to the Plan.

     4.2  The Plan shall be administered by the Committee, and the Committee
shall (1) construe and interpret the Plan, and (2) make such reasonable rules
and regulations for the administration of the Plan as it deems advisable. Any
determination by the Committee in administering, interpreting or construing the
Plan in accordance with this Article shall be final, binding and conclusive for
all purposes and upon all interested persons.

                                        3

<PAGE>

                                    ARTICLE V
                          Award Determination; Payment

     5.1 Subject to the provisions below, the maximum amount payable under a
single Award granted to a Participant shall not exceed $1,000,000.

     5.2 The Committee shall, in its sole discretion, approve or establish in
writing the objective compensation formula or standard for each Award. The
Committee shall establish in writing (i) the Performance Goals that must be met,
(ii) the Performance Cycle during which the Performance Goals must be met, (iii)
the threshold, target and maximum amounts that may be paid if the Performance
Ratios for a Performance Goal are met, and (iv) any other conditions that the
Committee deems appropriate and consistent with the Plan and Section 162(m) of
the Code. The Performance Goals may relate to the Participant's business unit or
the performance of the Company and its subsidiaries as a whole, or any
combination of the foregoing. The Committee shall establish the Performance
Goals in writing either before the beginning of the Performance Cycle or during
a period ending no later than the earlier of (i) 90 days after the beginning of
the Performance Cycle or (ii) the date on which 25% of the Performance Cycle has
been completed, or such other date as may be required or permitted under
applicable regulations under Section 162(m) of the Code. The Performance Goals
shall satisfy the requirements for "qualified performance-based compensation,"
including the requirement that the achievement of the Performance Goals be
substantially uncertain at the time they are established and that the
Performance Goals be established in such a way that a third party with knowledge
of the relevant facts could determine whether and to what extent the Performance
Goals have been met. The Committee shall have the discretion, as to each
Participant, to reduce the amount of an Award that would otherwise be paid or to
determine that no portion should be paid, but shall not have discretion to
increase the amount that is payable under an Award.

     5.3 If the Committee determines that a change in the business, operations,
corporate structure or capital structure of the Company, or the manner in which
it conducts its business, or other events or circumstances render the
Performance Goals unsuitable, the Committee may in its discretion modify such
Performance Goals or the related minimum Performance Ratio, in whole or in part,
as the Committee deems appropriate and equitable, except where such action would
result in the loss of the otherwise available exemption of the Award under
Section 162(m) of the Code. In the case of an Award to a Senior Officer, in
determining financial results, items whose exclusion from consideration will
increase the Award shall only have their effects excluded if they constitute
"extraordinary" or "unusual" events or items under generally accepted accounting
principles and all such events and items shall be excluded. The Committee shall
also adjust performance calculations to exclude the unanticipated effect on
financial results of changes in the Code, or other tax laws, and the regulations
thereunder.

     5.4 Subject to the provisions of Sections 5.5 and 5.6, a Participant shall
be entitled to receive payment under an Award as soon as practicable after the
end of the Performance Cycle, or if such Performance Cycle extends over a stated
number of years and the Award so provides, as soon as practicable after the
Performance Goal(s) or Performance Ratios (as applicable), as specified in the
Award, have been achieved. The Committee shall certify and announce the results
for each Performance Cycle, or portion thereof (as applicable), to any affected
Participant

                                        4

<PAGE>

promptly following the end of such Performance Cycle or achievement of any
Performance Ratio thereunder, as applicable.

     5.5 Unless otherwise provided herein, each Award granted under the Plan
shall be forfeited and canceled in all respects, and no cash shall be delivered
or paid to the Participant thereof, in the event that the Performance Goal(s)
for such Award are not attained or the Performance Ratio(s) attained for such
Award are not at least equal to the minimum Performance Ratio(s) stated in the
Award.

     5.6 If a Participant ceases to be employed by, or provide service to, the
Company during a Performance Cycle, or if other conditions established by the
Committee are not met, the Participant's Award, to the extent not earned as of
the date of such cessation of employment or service, shall be forfeited. The
Committee may, however, provide for complete or partial exceptions to this
requirement as it deems appropriate. The Committee may provide that an Award
shall be payable, in whole or in part, in the event of the Participant's death
or Disability during the Performance Cycle, or under other circumstances
consistent with the regulations and rulings under Section 162(m) of the Code.

     5.7 Notwithstanding any other provisions of this Plan to the contrary, in
the event that a Participant's employment or engagement with the Company is
terminated for cause, as determined by the Committee, or if the Participant
breaches the terms of any confidentiality, inventions and/or non-competition
agreement between the Participant and the Company, such Participant shall
immediately forfeit all Awards granted to Participant and shall forfeit all
rights whatsoever the Participant may have to receive any payments under Awards
granted under this Plan; provided, however, that such Participant shall not be
required to repay any amounts previously received pursuant to Awards granted
under this Plan.

     5.8 Nothing contained in this Article V or elsewhere in this Plan shall
eliminate, impair or otherwise affect the right of the Employer to terminate or
change the employment of any Eligible Executive at any time, and the grant of an
Award to any such Eligible Executive shall not be deemed to, and shall not,
result in any agreement, expressed or implied, by the Employer to retain such
person in any specific position or in its employ for the duration of the
Performance Cycle with respect to such Award or for any other period.

                                   ARTICLE VI
                        Change in Control of the Company

     Unless the Committee determines otherwise or unless otherwise provided in a
particular Award, upon the occurrence of a Change of Control during any
Performance Cycle, notwithstanding any other provision of this Plan to the
contrary, all Awards (to the extent not previously paid) shall be paid at their
target value, or in such other amounts as the Committee may determine. Such
payment shall be made within sixty (60) days following the consummation of the
transaction constituting the Change of Control.

                                        5

<PAGE>

                                   ARTICLE VII
                           Adjustments to Common Stock

     To the extent that any Awards issued under the Plan are based, in whole or
in part, on the common stock, par value $0.001 per share, of the Company (the
"Common Stock"), the terms of such Awards shall be adjusted by the Committee, to
the extent the Committee determines such adjustments are necessary or
appropriate, to reflect any stock split, stock dividend, recapitalization,
reorganization, merger, consolidation, combination, exchange of shares,
liquidation, spin-off or other similar change in capitalization or event, or any
distribution to holders of shares of the Common Stock other than a normal cash
dividend. Any such adjustments determined by the Committee shall be final,
binding and conclusive.

                                  ARTICLE VIII
                            Nonalienation of Benefits

     Neither the Award nor any other right or benefit under this Plan shall be
subject to anticipation, alienation, sale, assignment, transfer, pledge,
encumbrance or charge, and any attempt to anticipate, alienate, sell, assign,
pledge, encumber or charge the same shall be void and shall not be recognized or
given effect by the Company.

                                   ARTICLE IX
                              Certificates of Award

     The Company shall execute and deliver to each Participant to whom an Award
is granted a certificate, in the form prescribed by the Committee, evidencing
such Award and stating the date thereof and cash amount that is the subject of
the Award.

                                   ARTICLE IX
                  Amendment, Suspension or Termination of Plan

     The Plan shall terminate on December 31, 2006, unless the Plan is
terminated earlier by the Board of Directors of the Company or is extended by
the Board with the approval of the stockholders. Subject to the foregoing, the
Board of Directors of the Company may amend, suspend or terminate this Plan in
whole or in part at any time, provided that, except as expressly provided in
this Plan, no such amendment, suspension or termination shall materially and
adversely affect the rights of the holder of any Award then outstanding unless
such holder consents.

                                    ARTICLE X
                                  Miscellaneous

     10.1 The Plan, and all agreements hereunder, shall be governed by and
construed in accordance with the laws of the State of Delaware.

                                        6

<PAGE>

     10.2 The Company shall have the right to deduct from all payments under the
Plan any Federal, state or local income and employment taxes required by law to
be withheld with respect to such payments.

     10.3 Except where otherwise indicated by the context, any masculine term
used herein also shall include the feminine, the plural shall include the
singular, and the singular shall include the plural.

     10.4 In the event any provision of the Plan shall be held illegal or
invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.

     10.5 All costs of implementing and administering the Plan shall be borne by
the Company.

     10.6 All obligations of the Company under the Plan shall be binding upon
and inure to the benefit of any successor to the Company, whether the existence
of such successor is the result of a direct or indirect purchase, merger,
consolidation, or otherwise, of all or substantially all of the business and/or
assets of the Company.

                                        7

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