UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN

PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

May 6, 2016

Dear Shareholder:

You are cordially invited to attend the 2016 Annual General Meeting of Shareholders (the “Annual Meeting”) of Aralez Pharmaceuticals Inc. (“Aralez” or the “Company”) on Thursday, June 16, 2016, at 1:00 p.m. Eastern Standard Time at the offices of Stikeman Elliott LLP, 5300 Commerce Court West, 199 Bay Street, Toronto, ON, Canada M5L 1B9. The board of directors (the “Board”) and management of the Company hope that you will be able to attend the Annual Meeting.

The attached Notice of 2016 Annual General Meeting of Shareholders and Proxy Statement describe the business to be conducted at the Annual Meeting, including: (1) receiving the audited consolidated financial statements of the Company and of POZEN Inc. for the fiscal year ended December 31, 2015, together with the auditor’s report thereon; (2) the election of eight directors to the Board, each of whom will serve until the next annual meeting of shareholders of the Company or until their successors are elected or appointed; (3) the approval of the appointment of Ernst & Young LLP, an independent registered public accounting firm, as the Company’s auditors for the fiscal year ending December 31, 2016; (4) a non-binding, advisory vote to approve our approach to the compensation of our named executive officers, as disclosed in the accompanying Proxy Statement; and (5) such other business as may properly be brought before the Annual Meeting.

As a shareholder of the Company, your participation in the affairs of Aralez is important, regardless of the number of shares you hold. Therefore, whether or not you are able to attend in person, please vote your shares as soon as possible by completing and returning the enclosed proxy card, or, if you hold your shares through a bank, broker or other financial intermediary, by following the procedures described in the voting instruction form provided by such firm.

On behalf of the Board, we would like to express our appreciation for your continued interest in the affairs of Aralez.

151 Steeles Avenue, Milton, Ontario, Canada, L9T 1Y1

TEL: (905) 876-1118

http://www.aralez.com

NOTICE OF 2016 ANNUAL GENERAL MEETING OF SHAREHOLDERS

The Board recommends a vote FOR each of the director nominees and a vote FOR each of the other proposals listed in the accompanying Proxy Statement. The accompanying Proxy Statement provides detailed information relating to each of the proposals to be considered at the Annual Meeting and forms part of this Notice of 2016 Annual General Meeting of Shareholders.

Pursuant to applicable securities laws, we have elected to provide access to our proxy materials by delivering to you this full set of proxy materials, including a proxy card, and also notifying you of the availability of our proxy materials on the Internet.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on Thursday, June 16, 2016

This Notice of 2016 Annual General Meeting of Shareholders, the Proxy Statement (including a proxy card) and our 2015 Annual Report to Shareholders are available at

http://ir.aralez.com/phoenix.zhtml?c=254163&p=irol-reportsannual

This website does not use “cookies,” to track the identity of anyone accessing the

website to view the proxy materials, or gather any personal information.

TABLE OF CONTENTS

PROXY STATEMENT

FOR

2016 ANNUAL GENERAL MEETING OF SHAREHOLDERS

NO SECURITIES REGULATORY AUTHORITY HAS PASSED UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS AN OFFENSE.

QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND THE 2016 ANNUAL GENERAL MEETING OF SHAREHOLDERS

Q:                    Why am I receiving these proxy materials?

A:                    The board of directors (the “Board”) of Aralez Pharmaceuticals Inc. (“Aralez,” the “Company,” “we,” “our,” or “us,” as the context requires) is providing this proxy statement (this “Proxy Statement”) and accompanying proxy card to solicit your proxy in connection with Aralez’s 2016 Annual General Meeting of Shareholders (the “Annual Meeting”), which is scheduled to take place on Thursday, June 16, 2016. The Board is requesting your vote on the proposals described in this Proxy Statement. This Proxy Statement, the accompanying proxy card or voting instruction form, as applicable, the Notice of 2016 Annual General Meeting of Shareholders, and the Company’s Annual Report to Shareholders (the “2015 Annual Report”), which contains important financial and other information about our business during our last fiscal year, are being delivered to shareholders on or about May 16, 2016.

Q:                    Who is soliciting the proxies?

A:                    The Board and management of Aralez are soliciting proxies in the form enclosed. We have retained the services of MacKenzie Partners, Inc. to aid in the solicitation of proxies

Q:                    What proposals will be voted on at the Annual Meeting?

A:                    There are three proposals for which a vote is contemplated at the Annual Meeting:

·                  The election of eight directors to the Board, each of whom will serve until the next annual meeting of shareholders or until their successors are elected or appointed (Proposal 1);

·                  The approval of the appointment of Ernst & Young LLP (“E&Y”), an independent registered public accounting firm, as the Company’s auditors for the fiscal year ending December 31, 2016 (Proposal 2); and

·                  A non-binding, advisory vote to approve our approach to the compensation of our named executive officers, as disclosed in this Proxy Statement (“say-on-pay”) (Proposal 3).

Shareholders will also consider and vote upon any other business properly brought before the Annual Meeting or any adjournment or postponement thereof.

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Q:                    What are the Board’s voting recommendations?

A:                    The Board recommends that you vote all of your common shares (“Common Shares”):

·                  FOR the election of each of the eight nominees named herein to the Board (Proposal 1);

·                  FOR the approval of the appointment of E&Y, an independent registered public accounting firm, as the Company’s auditors for the fiscal year ending December 31, 2016 (Proposal 2); and

·                  FOR the approval of a non-binding, advisory say-on-pay vote to approve our approach to the compensation of the Company’s named executive officers, as disclosed in this Proxy Statement (Proposal 3).

Q:                    What shares may I vote?

A:                    You may vote all Common Shares that you owned as of the close of business on May 3, 2016 (the “Record Date”). These Common Shares include:

1.                       those Common Shares held in your name as a “Registered Shareholder”; and

2.                       those Common Shares held by you as a “Non-Registered Shareholder” through a bank, broker or other financial intermediary.

Each Common Share is entitled to one vote for each of the proposals to be considered at the Annual Meeting. The Company’s authorized share capital consists of an unlimited number of Common Shares and an unlimited number of preference shares. On the Record Date, there were 64,019,851 Common Shares issued and outstanding. No preference shares are currently issued and outstanding.

The holders of Common Shares are entitled to receive notice of any meeting of shareholders of the Company, and to attend and vote at those meetings, except those meetings at which holders of a specific class of shares are entitled to vote separately as a class under the British Columbia Business Corporations Act (“BCBCA”).

Q:                    What is the difference between holding Common Shares as a Registered Shareholder and as Non-Registered Shareholder?

A:                    Most Aralez shareholders hold their Common Shares through a bank, broker or other financial intermediary, as a Non-Registered Shareholder, rather than in their own name, as a Registered Shareholder. As summarized below, there are some distinctions between Common Shares held by Registered Shareholders and those held by Non-Registered Shareholders.

Registered Shareholders

If your Common Shares are registered in your name with Aralez’s transfer agent, Computershare Investor Services Inc. (the “Transfer Agent”), or if you are registered as the holder of Common Shares in book-entry form, you are considered, with respect to those Common Shares, the Registered Shareholder and we are sending these proxy materials directly to you. As a Registered Shareholder, you have the right to attend the Annual Meeting in person or to grant your proxy directly to the Company or any other person who will appear in person at the Annual Meeting on your behalf. Voting by proxy means that you are giving the person or people named on your proxy form (your proxyholders) the authority to vote your Common Shares for you at the Annual Meeting or any adjournment or postponement thereof. The Board has selected Adrian Adams, Andrew I. Koven and Eric L. Trachtenberg (the “Named Proxies”) to vote all Common Shares for which the Company has been appointed to act as proxy at the Annual Meeting. The Named Proxies will vote any properly executed proxy card, if received in time and not revoked, at the Annual Meeting according to your directions. The Named Proxies will vote any signed proxy that fails to specify a choice on any proposal to be acted upon at the Annual Meeting in accordance with the Board’s voting recommendations (as described below in “What are the Board’s voting recommendations?”), and, in the Named Proxies’ discretion, FOR or AGAINST such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

Registered Shareholders are requested to complete, date, sign and return (in the prepaid envelope provided for that purpose) the enclosed form of proxy for their Common Shares, giving the Company the right to vote your Common Shares for you. Alternatively, if you are a Registered Shareholder, you may also vote your Common Shares by proxy by appointing another person to attend the Annual Meeting on your behalf and vote your Common Shares for you. This person does not have to be a shareholder but must be present at the Annual Meeting to vote your Shares. Write the name of the person you are appointing in the space provided. Complete your voting instructions and date and sign the form.  Make sure that the person you appoint is aware that he or she has been appointed as your proxy and attends the Annual Meeting. At the Annual Meeting, he or she should see a representative of the Transfer Agent.

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To be valid, the form of proxy must be signed and received by the proxy department of the Transfer Agent by mail, on the internet at www.investorvote.com or by telephone at 1-866-732-VOTE (8683) not later than 1:00 p.m. Eastern Standard Time on June 14, 2016, or if the Annual Meeting is adjourned or postponed, not less than two business days before the time of any such adjourned or postponed Annual Meeting. Failure to properly complete or deposit a proxy may result in its invalidation. See “How can I vote my Common Shares without attending the Annual Meeting?” further below.

Non-Registered Shareholders

If you hold your Common Shares through a bank, broker or other financial intermediary, you are considered, with respect to those Common Shares, the Non-Registered Shareholder, and your bank, broker or other financial intermediary is forwarding these proxy materials to you. Your bank, broker or other financial intermediary is considered, with respect to those Common Shares, the Registered Shareholder. As the beneficial owner of the Common Shares, you have the right to direct your bank, broker or other financial intermediary to vote your Common Shares according to your instructions (see “How can I vote my Common Shares without attending the Annual Meeting?” below), but because you are not the Registered Shareholder, you may not vote these Common Shares in person at the Annual Meeting unless you obtain a signed proxy from the Registered Shareholder giving you the right to vote the Common Shares. In most cases, you will receive a voting instruction form from your financial intermediary that allows you to provide your voting instructions by telephone, on the internet or by mail.

The Company will pay for the cost of intermediaries to deliver its proxy-related materials and the voting instruction form to Non-Registered Shareholders (both objecting beneficial owners and non-objecting beneficial owners). The Company will not reimburse shareholders, nominees or agents for the cost incurred in obtaining authorization to execute forms of proxy from their principals or beneficial owners.

Non-Registered Shareholders who receive a voting instruction form in the proxy-related materials should carefully follow the instructions provided to ensure their vote is counted.

Q:                    May I attend the Annual Meeting in person?

A:                    You are invited to attend the Annual Meeting in person and we encourage all shareholders of Aralez to attend the Annual Meeting.

All shareholders attending the Annual Meeting will be asked to present a form of photo identification, such as a driver’s license, in order to be admitted to the meeting. All bags or packages permitted in the meeting room will be subject to inspection. No cameras, computers, recording equipment, other similar electronic devices, signs, placards, briefcases, backpacks, large bags or packages will be permitted in the Annual Meeting. The use of mobile phones, tablets, laptops and similar electronic devices during the Annual Meeting is prohibited, and such devices must be turned off and put away before entering the meeting room.

Q:                    How can I vote my Common Shares in person at the Annual Meeting?

A:                    You may vote Common Shares you hold in your name as the Registered Shareholder in person at the Annual Meeting. If you choose to do so, you do not need to complete or return your proxy card, but you should see a representative of the Transfer Agent at the Annual Meeting. Voting in person at the Annual Meeting will revoke any proxy you completed earlier upon your request.

If you hold your Common Shares through a bank, broker or other financial intermediary as a Non-Registered Shareholder, you may vote the Common Shares in person at the Annual Meeting only if you have obtained a signed proxy from your bank, broker or other financial intermediary (i.e., the Registered Shareholder) giving you the right to vote the Common Shares. Any Non-Registered Shareholder who wishes to vote his or her Common Shares in person at the Annual Meeting, should follow the instructions included in the voting instruction form provided by your bank, broker or other financial intermediary, and see a representative of the Transfer Agent at the Annual Meeting.

Even if you plan to attend the Annual Meeting in person, we recommend that you also submit your proxy as described below so that your vote will be counted if you later decide not to attend the Annual Meeting. Submitting your proxy now will not prevent you from voting your Common Shares in person at the Annual Meeting if you desire to do so, as your proxy is revocable at your option.

Q:                    How can I vote my Common Shares without attending the Annual Meeting?

A:                    Whether you hold Common Shares as a Registered Shareholder or as a Non-Registered Shareholder, you may direct your vote without attending the Annual Meeting. If you hold your Common Shares as a Registered Shareholder, you may vote by granting a proxy. If you hold your Common Shares as a Non-Registered Shareholder, you may submit voting instructions to your bank,

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                                 broker or other financial intermediary. Please refer to the summary instructions below and those included on your proxy card or, for Common Shares held through a bank, broker or other financial intermediary, the voting instruction form provided by such intermediary.

By Mail—You may vote by mail by signing your proxy card or, for Common Shares held through a bank, broker or other financial intermediary, the voting instruction form included by such intermediary, and mailing it in the enclosed, postage prepaid and addressed envelope. If you provide specific voting instructions, your Common Shares will be voted as you instruct at the Annual Meeting. If you sign your proxy card but do not provide instructions, your Common Shares will be voted as described below in “How are votes counted?”

On the Internet—If you hold your Common Shares as a Registered Shareholder, you may vote your Common Shares online at www.investorvote.com, by following the instructions provided in the accompanying proxy card. If you hold your Common Shares through a bank, broker or other financial intermediary and the firm that holds your Common Shares offers Internet voting, your broker voting instruction form will contain instructions on how to vote online.

By Telephone— If you hold your Common Shares as a Registered Shareholder, you may vote your Common Shares over the phone, by dialing 1-866-732-8683 and following the instructions provided in the accompanying proxy card. If you hold your Common Shares through a bank, broker or other financial intermediary and the firm that holds your Common Shares offers voting by telephone, your broker voting instruction form will contain instructions on how to vote by telephone.

Q:                    Can Registered Shareholders revoke their proxy or change their vote?

A:                    A Registered Shareholder may revoke a previously submitted proxy at any time before it has been exercised by:

·                  completing a proxy card that is dated later than the proxy you are revoking, and mailing the new proxy card to the Transfer Agent so that it is received before 1:00 p.m. Eastern Standard Time on June 14, 2016, or if the Annual Meeting is adjourned or postponed, not less than two business days before the time of any such adjourned or postponed Annual Meeting;

·                  sending a revocation notice in writing to the Corporate Secretary of the Company at its registered office, which is located at 666 Burrard Street, Suite 1700, Vancouver, British Columbia, V6C 2X8, so that it is received at any time up to and including the last business day before the date of the Annual Meeting. The notice can be from the shareholder or the attorney of such shareholder, duly authorized in writing; or

·                  attending the Annual Meeting, providing a revocation notice to the chair of the Annual Meeting before any vote in respect of which the proxy has been given, and casting your vote at the Annual Meeting.

Q:                    Can Non-Registered Shareholders change their vote?

A:                    A Non-Registered Shareholder may change or revoke a voting instruction form provided by your bank, broker or other financial intermediary by following the instructions on the voting instruction form provided by such intermediary in sufficient time prior to the Annual Meeting.

Q:                    How are votes counted?

A:                    For Proposal 1 (the election of directors), you may vote “FOR” or “WITHHOLD” for each of the nominees to the Board.

For Proposal 2 (the approval of E&Y, an independent registered public accounting firm, as the Company’s auditors for the fiscal year ending December 31, 2016), you may vote “FOR” or “WITHHOLD”.

For Proposal 3 (the non-binding, advisory say-on-pay vote), you may vote “FOR”, “AGAINST” or “ABSTAIN”. For abstentions, see “What happens if I abstain from voting on Proposal 3” below.

If you are a Registered Shareholder and you sign your proxy card with no further instructions, the Named Proxies will vote your Common Shares in accordance with the Board’s recommendation on each of the proposals.

If you hold your Common Shares as a Non-Registered Shareholder and you have not provided voting instructions to your bank, broker or other financial intermediary, such firm will not have discretionary authority to vote your Common Shares in the election of directors (Proposal 1) or in the non-binding, advisory say-on-pay vote (Proposal 3), resulting in a “broker-non-vote” with respect to these matters. However, most intermediaries do have the authority to exercise discretion to vote your Common Shares with respect to the approval of E&Y, an independent registered public accounting firm, as the Company’s auditors for the fiscal year ending December 31, 2016 (Proposal 2). See “What is a broker non-vote?” for more information.

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Q:                    What is the quorum requirement for the Annual Meeting?

A:                    Business may only be transacted at the Annual Meeting if a quorum is present.  Under the Company’s Articles, two persons who are, or who represent by proxy, shareholders who in the aggregate hold at least fifty percent (50%) of the issued and outstanding Common Shares entitled to vote at a meeting of shareholders constitute a quorum. Abstentions and “broker non-votes” (described below) will be counted as present and entitled to vote for purposes of determining a quorum.

Q:                    What is the voting requirement to approve each of the proposals?

A:                    A plurality of the votes duly cast in person or by proxy by the shareholders at the Annual Meeting with respect to each director is required for the election of each director. However, pursuant to the Company’s Majority Voting Policy, if any of the nominees for director named in this Proxy Statement do not receive at least a majority of the votes cast (including votes cast FOR and votes cast WITHHOLD), such director will be required to promptly tender his resignation for consideration by the Board. The Company’s Majority Voting Policy is described in more detail under the heading “Proposal 1—Election of Directors.”

Proposal 2 (the approval of E&Y, an independent registered public accounting firm, as the Company’s auditors for the fiscal year ending December 31, 2016) is considered an ordinary resolution. Ordinary resolutions are passed by a simple majority of votes, such that if more than half of the votes that are cast are cast in favor, the resolution passes.

Due to the non-binding, advisory nature of the say-on-pay vote (Proposal 3), there is no minimum vote requirement. However, the proposal will be considered to have passed with the affirmative vote of a majority of the votes cast by the shareholders that are present or represented by proxy at the Annual Meeting and entitled to vote.

Q:                    What happens if I abstain from voting on Proposal 3?

A:                    If an executed proxy card is returned and the shareholder has explicitly abstained from voting on Proposal 3, the Common Shares represented by the proxy will be considered present at the Annual Meeting for the purpose of determining a quorum. Abstentions will not be counted as votes cast and therefore they will have no effect on the outcome of any proposal.

Q:                    What is a “broker non-vote”?

A:                    A “broker non-vote” occurs when a bank, broker or other financial intermediary submits a proxy that does not indicate a vote for one or more of the proposals because the broker has not received instructions from the beneficial owner of the Common Shares on how to vote on such proposals and does not have discretionary authority to vote in the absence of instructions.

Intermediaries typically do not have discretionary authority to vote on “non-routine” matters. Under certain rules of the New York Stock Exchange (the “NYSE Rules”) that apply to all NYSE-licensed intermediaries who have record ownership of listed company stock (including stock such as our Common Shares that are listed on NASDAQ), these NYSE-licensed intermediaries have discretionary authority to vote on “routine” matters when they have not received timely voting instructions from the beneficial owner. Proposal 2 (the approval of E&Y, an independent registered public accounting firm, as the Company’s auditors for the fiscal year ending December 31, 2016) is considered a “routine” matter under the NYSE Rules. Proposal 1 (election of directors) and Proposal 3 (the non-binding, advisory say on pay vote) are considered “non-routine” matters on which the intermediaries do not have discretionary authority to vote, resulting in a “broker non-vote” in the event these NYSE-licensed intermediaries have not received timely voting instructions from the beneficial owner.

Broker non-votes will be counted for the purposes of determining whether a quorum exists at the Annual Meeting, but because they are not votes that are cast, they will have no effect on the outcome of Proposals 1 or 3.

Q:                    Will I have rights of dissent?

A:                    No rights of dissent are available under the laws of the Province of British Columbia, Canada or our Articles to any shareholder with respect to any of the proposals.

Q:                    What does it mean if I receive more than one proxy or voting instruction form?

A:                    It means your Common Shares are registered differently or are held in more than one account. Please provide voting instructions for all proxy cards and voting instruction forms you receive.

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Q:                    Who will bear the cost of soliciting votes for the Annual Meeting?

A:                    Aralez will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials. However, if you choose to vote over the Internet, you will bear the expenses for your Internet access. In addition to the mailing of these proxy materials, the solicitation of proxies or votes may be made in person, by telephone or by electronic communication by our directors, officers, and employees, who will not receive any additional compensation for such solicitation activities. We have retained the services of MacKenzie Partners, Inc. to aid in the solicitation of proxies for a fee of $12,500 plus expenses payable by the Company. MacKenzie Partners, Inc. expects that approximately 12 of its employees will assist in the solicitation. We will also reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to shareholders.

Q:                    Where can I find the voting results of the Annual Meeting?

A:                    We will announce preliminary voting results at the Annual Meeting and publish final voting results in a press release following the Annual Meeting and also in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) and a Voting Results Report pursuant to, and in accordance with, Section 11.3 of National Instrument 51-102 — Continuous Disclosure Obligations following the Annual Meeting.

Additional Q&A information regarding the Annual Meeting and shareholder proposals may be found on page 78.

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EXPLANATORY NOTE

On June 8, 2015, POZEN Inc., a Delaware corporation (“Pozen”), entered into an Agreement and Plan of Merger and Arrangement (the “Merger Agreement”), among Tribute Pharmaceuticals Canada Inc., a corporation incorporated under the laws of the Province of Ontario, Canada (“Tribute”), Aguono Limited (which was renamed Aralez Pharmaceuticals Limited and subsequently renamed Aralez Pharmaceuticals plc in connection with its re-registration as a public limited company), a limited company incorporated in Ireland (“Former Parent”), Trafwell Limited, a private limited company incorporated in Ireland, ARLZ US Acquisition Corp., a corporation incorporated under the laws of the State of Delaware and a wholly-owned subsidiary of Former Parent, and ARLZ CA Acquisition Corp., a corporation incorporated under the laws of the Province of Ontario and a wholly-owned subsidiary of Former Parent (“Can Merger Sub”) in order to effectuate the merger of Pozen and Tribute.  On December 7, 2015, the Merger Agreement was amended, pursuant to which, among other things, (i) Aralez replaced Former Parent as a party to the Merger Agreement, whereby, after giving effect to the merger transactions, Aralez would be the ultimate parent company of the combined companies, (ii) ARLZ US Acquisition II Corp., a corporation formed under the laws of the State of Delaware, would be merged with and into Pozen, with Pozen continuing as the surviving corporation and an indirect wholly-owned subsidiary of Aralez, and (iii) Can Merger Sub and Tribute would amalgamate, with the separate legal existence of Can Merger Sub ceasing and Tribute and Can Merger Sub continuing as one corporation and as a wholly-owned subsidiary of Aralez.

On February 5, 2016, pursuant to the Merger Agreement, Aralez completed the acquisition of Tribute by way of a court approved plan of arrangement in a share transaction with an estimated purchase price of $138 million made up of (i) $115 million related to Tribute common shares, equity awards and certain warrants outstanding and (ii) $23 million in repayments of Tribute indebtedness.  In connection with the transaction, Pozen and Tribute were combined under and became subsidiaries of Aralez, with Pozen treated as the acquiring company for accounting purposes (the “Tribute Transaction”).  As a result of the merger, each share of Pozen common stock outstanding immediately prior to the effective time of the merger was converted into one Aralez Common Share. Pursuant to the arrangement, each outstanding Tribute common share was exchanged for 0.1455 of an Aralez Common Share. Pursuant to Rule 12g-3(a) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Aralez is the successor issuer to Pozen.

Unless we specify otherwise, all references in this Proxy Statement to “we,” “our,” “us,” “the Company” and “our company” refer to Aralez Pharmaceuticals Inc. and/or our predecessor, Pozen, prior to the Tribute Transaction, as the context requires.

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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

The Board in General

The Board is currently comprised of eight directors, each of whose current term of office as a director expires at the Annual Meeting. The Board is responsible for nominating directors for election to the Board and for filling vacancies on the Board that may occur between annual meetings of shareholders.

Pursuant to the terms of the Merger Agreement, Mr. Adams retained his position as a director on the Board, and all of the members of the board of directors of Pozen (the “Pozen Board”) prior to the Tribute Transaction (Messrs. Fowler, Kirsch and Lee and Dr. Rudnick) and two of the members of the board of directors of Tribute (Messrs. Harris and Thrasher) became members of the Board of Aralez.  Mr. Aryeh was appointed to the Board pursuant to the terms of that certain Amended and Restated Share Subscription Agreement, dated December 7, 2015, by and among the Company, Aralez Pharmaceuticals plc, Tribute, Pozen, QLT Inc. (“QLT”) and certain other co-investors identified therein, pursuant to which QLT and the investors provided capital to the Company in support of the Tribute Transaction.

Biographical information for each of our directors is provided below. There are no familial relationships among any of the executive officers and directors of the Company.

Adrian Adams has been our Chief Executive Officer since February 5, 2016, and has been a director of the Company since December 11, 2015.  From May 2015 through February 5, 2016, Mr. Adams was the Chief Executive Officer and a director of Pozen, and served as a consultant to Pozen from April 2015 to May 2015. Previously, Mr. Adams served as Chief Executive Officer and President and as a director of Auxilium Pharmaceuticals Inc., a specialty biopharmaceutical company, from December 2011 until January 2015, when it was acquired by Endo International plc. Mr. Adams served as the Chairman and Chief Executive Officer of and a director of Neurologix, Inc. (“Neurologix”), a company focused on the development of multiple innovative gene therapy development programs, from September 2011 to November 2011. Before Neurologix, Mr. Adams served as President, Chief Executive Officer and a director of Inspire Pharmaceuticals, Inc., a specialty pharmaceutical company, from February 2010 until May 2011, when it was acquired by Merck & Co., Inc. Previously, Mr. Adams served as President and Chief Executive Officer of Sepracor Inc., a specialty pharmaceutical company, from March 2007 and May 2007, respectively, until February 2010, when Sepracor was acquired by Dainippon Sumitomo Pharma Co., Ltd. Prior to his appointment as Chief Executive Officer of Sepracor, Mr. Adams served as its Chief Operating Officer. Prior to joining Sepracor, Mr. Adams served as the President and Chief Executive Officer of Kos Pharmaceuticals, Inc., a specialty pharmaceutical company, from 2002 until its acquisition by Abbott Laboratories in December 2006. Mr. Adams has also held general management and senior international and national marketing positions at SmithKline Beecham, Novartis and ICI (now part of AstraZeneca). Mr. Adams has served as Chairman of the board of directors of AcelRx Pharmaceuticals, Inc. since February 2013 and served on the board of directors of Amylin Pharmaceuticals, Inc. from October 2007 to August 2012. Mr. Adams graduated from the Royal Institute of Chemistry at Salford University in the U.K.

Mr. Adams is a highly qualified pharmaceutical executive who brings to the Board over 30 years of experience in the industry. Mr. Adams has extensive national and international experience and has been instrumental in launching major global brands in addition to driving successful corporate development activities encapsulating financing, product and company acquisitions, in-licensing and company M&A activities.

Jason M. Aryeh has been a director of the Company and Chairman of the Transaction Committee since February 5, 2016.  He is the Founder and Managing General Partner of JALAA Equities, LP, a private hedge fund focused on the biotechnology and

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specialty pharmaceutical sector, and has served in such capacity since 1997. Mr. Aryeh has served on the board of directors of QLT since 2012 and is currently the Chairman of the board of directors of QLT, a biotechnology company, chairman of QLT’s corporate governance and nominating committee and chairman of QLT’s strategic action committee. Mr. Aryeh has also served on the board of directors of Ligand Pharmaceuticals Incorporated (“Ligand”), a public biotechnology company, since 2006, and is currently chairman of the nominating and governance committee and a member of the compensation committee of Ligand. Mr. Aralez has also served on the board of directors of CorMatrix Cardiovascular, a medical device company, since 2010, and is currently chairman of the audit committee and a member of the compensation committee and the nominating and governance committee, and on the Cystic Fibrosis Foundation’s Therapeutics board of directors since 2011. Previously, Mr. Aryeh served as a director of both Nabi Biopharmaceuticals, prior to its merger with Biota Pharmaceuticals, Inc. in November 2012, and of Myrexis, Inc., until January 2013, both of which were public biotechnology companies. Mr. Aryeh earned a B.A. in economics, with honors, from Colgate University, and is a member of the Omnicron Delta Epsilon Honor Society in economics.

Mr. Aryeh brings to the Board his extensive background in the biotechnology industry through his current and former positions as a director of multiple life science companies, as well as valuable capital markets experience, including through his service as managing general partner of a hedge fund focused on the life sciences sector.

Neal F. Fowler has been a director of the Company since February 5, 2016, and was previously a director of Pozen from 2011 through February 5, 2016. Mr. Fowler is Chief Executive Officer of Liquidia Technologies Inc. (“Liquidia”), a biomedicines company, and has served in that capacity since 2008. Mr. Fowler is also a co-founder of Envisia Therapeutics Inc. (“Envisia”), an ophthalmology spin-out of Liquidia, and concurrently served as Chief Executive Officer of Envisia from its launch in 2013 through 2015. Mr. Fowler joined Liquidia in 2008 after seven years at Johnson & Johnson. While at Johnson & Johnson, he served as President of Centocor, Inc. (“Centocor”), a multi-billion dollar subsidiary focused on development and commercialization of industry leading biomedicines used in the treatment of chronic inflammatory diseases. Prior to Centocor, Mr. Fowler was President of Ortho-McNeil Neurologics Inc. and Vice President of the central nervous system franchise at Ortho-McNeil Pharmaceuticals. Mr. Fowler joined Johnson & Johnson after a 13-year career at Eli Lilly and Company where he held a variety of sales, marketing and business development roles with increasing responsibilities in both the pharmaceutical and medical device divisions. Mr. Fowler is a native of Raleigh, NC and received a Bachelor of Science degree in Pharmacy and Masters of Business Administration from the University of North Carolina at Chapel Hill (UNC-CH).

Mr. Fowler brings to the Board his extensive background in the pharmaceutical industry acquired through a variety of senior positions at several large pharmaceutical companies. He is currently chief executive officer at Liquidia Technologies, Inc. and Envisia Technologies, positions which have provided him with experience in running an emerging growth company.

Rob Harris has been a director of the Company since February 5, 2016.  He previously served as President, Chief Executive Officer and a director of Tribute from December 1, 2011 to February 2016. Mr. Harris founded Tribute Pharma, which later became Tribute Pharma Canada Inc. and Tribute Pharmaceuticals Canada Ltd. in November 2005. Tribute acquired both Tribute Pharma Canada Inc. and Tribute Pharmaceuticals Canada Ltd. on December 1, 2011. Mr. Harris was formerly the President and CEO of Legacy Pharmaceuticals Inc. from September 2004 to October 2005. As the VP of Business Development at Biovail Corporation from October 1997 to September 2004, Mr. Harris was involved in, led and successfully concluded numerous business development transactions, including the licensing of new chemical entities, the acquisition of mature products, the completion of co-promotion deals, distribution agreements, product development and reformulation transactions. Mr. Harris joined Biovail in 1997 as the GM of Biovail Pharmaceuticals Canada at a time when the company experienced rapid growth in the Canadian division. Before Biovail, Mr. Harris worked in various senior commercial management positions during his twenty-year tenure at Wyeth (Ayerst) from 1977 to 1997 and has been involved in numerous product launches during his career.

Mr. Harris brings to the Board over 35 years of pharmaceutical industry experience in both Canada and the United States in sales, marketing, business development and general management.

Arthur S. Kirsch has been a director of the Company, Chairman of the Board, and Chairman of the Audit Committee since February 5, 2016.  Previously, he was a director of Pozen from 2004 through February 5, 2016.  Mr. Kirsch has been Senior Advisor, GCA Savvian, LLC (formerly Perseus Group, LLC), an investment bank, since June 2005. Mr. Kirsch is a founding member and Managing Director of Vector Securities, LLC, an investment and merchant banking firm, from 2001 to May 2005. He was a Managing Director and Head of Healthcare Research and Capital Markets of Prudential Vector Healthcare Group, a unit of Prudential Securities, Inc., a full-service brokerage firm, from 1999 to 2001. Mr. Kirsch was the Director, Equity Research of Vector Securities International, Inc., an investment banking firm, from 1995 to 1999. He has served as a director of Immunomedics, Inc., a publicly-traded biopharmaceutical company, since August 2015, and is a member of the audit committee and nominating committee. He has also served as a director of PhysioSonics, Inc., a privately held company developing noninvasive neurological products, since April 2010.

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Mr. Kirsch has over 25 years of experience working in equity capital markets and has extensive knowledge of the healthcare and life sciences field. Mr. Kirsch, who has spent the majority of his career in investment banking with a focus on the healthcare industry, brings both financial and industry expertise to the Board.

Kenneth B. Lee, Jr. has been a director of the Company and Chairman of the Compensation Committee since February 5, 2016.  Previously, he was a director of Pozen from 2002 to February 5, 2016, and from 2002 was also Pozen’s lead Independent Director. Since June 2002 he has been an independent consultant and general partner of Hatteras Venture Partners (formerly Hatteras BioCapital. LLC and BioVista Capital, LLC), and the general partner of Hatteras BioCapital Fund, L.P., a venture capital fund focusing on life sciences companies, since 2003. Mr. Lee was President of A.M. Pappas & Associates, a venture capital firm, between January 2002 and June 2002.  He was a Partner of Ernst & Young LLP from 1982 through 2000, and a Partner of Ernst & Young Corporate Finance LLC from 2000 to 2001. Prior to that, Mr. Lee was the Managing Director of Ernst & Young’s Health Sciences Corporate Finance Group from 2000 to 2001. Mr. Lee has served on the board of directors of Biocryst Pharmaceuticals, Inc., a public company, since 2011, and is currently chairman of the audit committee and chairman of the finance committee. He is also a director of Clinipace Worldwide, a privately held company. Previously, he served on the boards of directors of Clinverse, Inc., a privately held company, CV Therapeutics, Inc., for which he served as lead independent director and chair of the audit committee and a member of the compensation committee, Abgenix, Inc., for which he served on the audit committee and the compensation committee, OSI Pharmaceuticals, for which he served as a member of the audit committee, Inspire Pharmaceuticals Inc., for which he served as chairman of the board of directors, and chair of the audit committee, and Maxygen, Inc., for which he served as chairman of the audit committee and a member of the nominating/governance committee and the compensation committee. Mr. Lee served as a member of the executive committee of the board of directors of the North Carolina Biotechnology Industry Organization and as a member of the board of directors of Ibiliti, a nonprofit organization dedicated to building and expanding networks of resources for advanced medical technology companies.

Mr. Lee brings his extensive accounting and financial background to the Board, as well as expertise in the life sciences industry from his experience as a general partner of several venture capital funds specializing in life sciences. He has also served and is serving on the boards and audit committees of several public pharmaceutical companies similar in size to the Company, including serving as Chairman of the board of directors of Inspire Pharmaceuticals, Inc.

Seth A. Rudnick, M.D. has been a director of the Company and Chairman of the Nominating/Corporate Governance Committee since February 5, 2016.  Previously, he was a director of Pozen from 2001 through February 5, 2016.  Dr. Rudnick was a venture partner and previously general partner at Canaan Partners, a venture capital firm from 1998 to December 2014. Formerly, Dr. Rudnick was the Chief Executive Officer and Chairman of CytoTherapeutics Inc., a company developing stem cell-based therapies, from 1991 to 1998. He helped found and served as the Head of Research and Development for Ortho Biotech, a division of Johnson & Johnson focusing on cancer and chronic illnesses from 1986 to 1991. He currently serves on the boards of directors of the following privately held biotechnology companies: Chimerix, Inc., Meryx Pharmaceuticals, for which he serves as Chairman, Liquidia Technologies, Inc., for which he serves as Chairman, and G1 Therapeutics, for which he serves as Executive Chairman. Dr. Rudnick also served on the board of directors of Square 1 Financial, Inc., a public financial services company, from 2012 to October 2015. Currently he is a Clinical Adjunct Professor of Medicine at University of North Carolina, Chapel Hill.

Dr. Rudnick brings to the Board deep operational experience in the pharmaceutical and biotechnology industries acquired through a variety of senior research and development positions in several large and mid-size pharmaceutical companies and as Chief Executive Officer, and Chairman of CytoTherapeutics, Inc., Chairman of Liquidia Technologies, Inc., Executive Chairman of GI Therapeutics, and Chairman of Meryx Pharmaceuticals. Dr. Rudnick retired from Canaan Partners, a global venture capital firm with significant investments in the healthcare sector, where he served as general and now a venture partner since 1998, which has provided him with significant experience in and insight into life sciences investments.

F. Martin Thrasher has been a director of the Company since February 5, 2016.  Previously, he was a director of Tribute from 2009 to February 2016. Mr. Thrasher is a seasoned international executive. After graduating from the Richard Ivey School of Business in London, Ontario, Mr. Thrasher spent over 30 years working around the globe for companies such as General Foods from 1973 to 1977, McCormick & Co from 1977 to 1988, Campbell Soup Co. from 1988 to 2001 and ConAgra Foods Inc. from 2001 to 2004. He has served as President of FMT Consultants LLC since 2004. Mr. Thrasher has lived and worked in Canada, Australia, Belgium and the U.S. His responsibilities with Campbell Soup Co. included positions as President, International Grocery and President, North America Grocery. At ConAgra Foods Inc., he was President of the Retail Products Co, a $9 billion business with over 30,000 employees. Mr. Thrasher has been President of FMT Consulting, a boutique advisory and consulting firm since August 2004.

Mr. Thrasher brings to the Board extensive international business experience acquired from his time serving at several Fortune 500 companies. He is also an experienced director having served on a variety of public and private company boards.

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Corporate Governance Overview

As discussed above, the Tribute Transaction was completed on February 5, 2016, and the combined entity now operates as Aralez. The combined company provides the former shareholders of Pozen and Tribute with significant strategic and financial benefits, as the combined company is a more diversified provider of specialty healthcare products with a focus on cardiovascular and pain indications and a multi-country footprint, and is better positioned to meet the challenges of the expected future landscape in the pharmaceutical industry.

In addition to the significant strategic and financial benefits provided by our combined company, we have adopted policies and procedures that we believe will be of value to our shareholders and will positively aid in the governance of the Company going forward. In addition to the compensation-related actions we have taken which are described in the “Compensation Discussion and Analysis” section of this Proxy Statement, we have adopted corporate governance practices, which we believe are beneficial to our shareholders, including, without limitation, annual director elections, robust corporate governance guidelines, a diversity policy, and a majority voting policy.  We have also elected not to adopt a shareholder rights plan at this time.

Corporate Governance Guidelines

As described in the Company’s Corporate Governance Guidelines, the Board is responsible for supervising the management of the Company’s business and affairs. The Board’s key responsibilities relate to the stewardship of management, generally through the Chief Executive Officer, to pursue the best interests of the Company, and include the following, among others:

·                              review and approval of the adoption of the strategic plan and, in relation thereto, approval of annual business and capital plans and policies and processes generated by management relating to the authorization of major investments and significant allocations of capital;

·                              supervision of senior management and succession planning, including the appointment of the Chief Executive Officer and the Chairman of the Board, and ensuring that other executives are in place for sound management;

·                              ensuring that the Company has policies in accordance with the guidance set out under applicable U.S. and Canadian securities laws;

·                              ensuring that the Company has risk management systems in place and also ensuring that the appropriate internal controls and corporate governance policies are in place;

·                              ensuring a business ethics, compliance and corporate governance mindset and creation of a culture of integrity throughout the organization; and

·                              review of the Company’s Code of Business Conduct and Ethics (the “Code of Conduct”) from time to time and the implementation procedures to ensure compliance with the Code of Conduct.

The Board is entitled to engage outside advisers, at the Company’s expense, where, in the view of the Board, additional expertise or advice is required.

For a complete description of the Corporate Governance Guidelines, which function as the mandate for the Board, shareholders should refer to Annex A to this Proxy Statement.

Board Leadership Structure

The Company maintains separate Chairman of the Board and Chief Executive Officer positions, which allows the Board to be more effective in overseeing the Company’s affairs and holding management accountable for the Company’s activities. Having an independent Chairman fosters strong leadership and healthy discussion and avoids the potential for any conflict of interest. However, the Board believes that the Company and its shareholders are best served by maintaining flexibility to have any director serve as Chairman and therefore believes that a permanent policy on whether the Chairman and Chief Executive Officer positions should be separated or combined is not appropriate.

The Board has adopted a written position description for the Chairman setting out the Chairman’s responsibilities, including leadership and governance of the Board, the promotion of corporate social responsibility, the facilitation of shareholder meetings, and the oversight of committees of the Board. The primary functions of the Chief Executive Officer are to lead the management of the Company’s business and affairs, and to lead the implementation of the resolutions and the policies of the Board. As set out in the

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Chief Executive Officer’s position description approved by the Board, the duties and responsibilities of the Chief Executive Officer include leadership and governance, strategic planning, business organization and development, and risk management and disclosure, among others.

As discussed below, the Board has adopted charters for each of its committees. These charters set out, among other things, the duties and responsibilities of the respective committees. The Board has also adopted written position descriptions for the chairman of each of the respective committees of the Board.

Board Oversight of Risk

The Board carries out its risk oversight function both as a whole and through delegation of certain risk management oversight responsibilities to the committees of the Board, which report regularly to the Board. The Audit Committee has primary responsibility for overseeing enterprise risk management; however, the other committees of the Board also consider risk within their areas of responsibility. For example, the Nominating/Corporate Governance Committee monitors legal and regulatory compliance risks as they relate to corporate governance structure and processes, and the Compensation Committee reviews compensation programs and arrangements to assure that they do not encourage excessive risk taking for compensation purposes. The committee chairs regularly apprise the Board of significant risks and management’s response to those risks. While the Board and its committees oversee risk management strategy, management is responsible for implementing and supervising day-to-day risk management processes and reporting to the Board and its committees on such matters.

Director Independence

The Board has determined that six of the eight current and incumbent directors (or 75% of the Board) have no material relationship with the Company, either directly or indirectly, and are “independent” within the meaning of the applicable NASDAQ listing standards and National Instrument 58-101 — Disclosure of Corporate Governance Practices (“NI 58-101”) (such directors, the “Independent Directors”). Specifically, the Board has identified each of the members of the Board, with the exception of Mr. Adams, who serves as our Chief Executive Officer, and Mr. Harris, who previously served as President and Chief Executive Officer of Tribute, as independent for the purposes of NI 58-101 and as Independent Directors as such term is defined by the applicable NASDAQ listing standards.

The Independent Directors have the opportunity to meet in-camera at each quarterly meeting or more frequently as they deem necessary. These executive sessions of the Independent Directors are currently presided over by the Chairman of the Board.

Director Compensation

The directors’ compensation program is designed to attract and retain qualified individuals to serve on the Board. See “Executive and Director Compensation—Director Compensation” below for details regarding the Company’s director compensation program.

Committees of the Board

The Board has the following four committees: (1) Audit Committee, (2) Compensation Committee, (3) Nominating/Corporate Governance Committee, and (4) Transaction Committee. The Board has adopted a written charter for each of these committees. The committee charters are posted on our corporate website at www.aralez.com.

Each of the charters of the committees of the Board generally provides that the committee will be granted unrestricted access to all information regarding the Company that is necessary or desirable to fulfill its duties and all directors, officers and employees of the Company will be directed to cooperate as requested by the members of the committee. In addition, each committee has the authority to retain, at the Company’s expense, independent legal, financial and other advisors, consultants and experts, to assist the committee in fulfilling its duties and responsibilities, including authority to retain and to approve any such firm’s fees and other retention terms.

Below is a description of the duties and composition of each standing committee of the Board.

Audit Committee

The Company has a separately designated standing audit committee established in accordance with section 3(a)(58)(A) of the Exchange Act and National Instrument 52-110 — Audit Committees (“NI 52-110”). The current members of the Audit Committee are Mr. Kirsch, who serves as Chairman, Mr. Lee and Mr. Thrasher. The Board has determined that each of the members of the Audit Committee is independent as defined by the applicable NASDAQ listing standards, the SEC rules applicable to audit committee

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members and within the meaning of NI 52-110. Each of the Audit Committee members is able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow statement, and has an understanding of the accounting principles used to prepare financial statements, as well as an understanding of the internal controls and procedures necessary for financial reporting. See “The Board in General” above for the relevant education and experience of each current member of the Audit Committee. The Board has also determined that each member of the Audit Committee qualifies as an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K.

The Audit Committee oversees our financial reporting process and system of internal control over financial reporting, and selects and oversees the performance of, and approves in advance the services provided by, our independent registered public accounting firm. The Audit Committee provides an open avenue of communication among our independent registered public accounting firm, financial and senior management and the Board. The Audit Committee meets regularly with our independent registered public accounting firm without management present, and from time to time with management in separate private sessions, to discuss any matters that the Audit Committee or these individuals believe should be discussed privately with the Audit Committee, including any significant issues or disagreements that may arise concerning our accounting practices or financial statements. The Audit Committee also oversees our whistleblower policy for receiving and handling complaints or concerns regarding accounting, internal accounting controls or auditing matters. In addition, the Audit Committee assists the Board in its oversight role by receiving periodic reports regarding our risk and control environment.

The foregoing description of the responsibilities of the Audit Committee is intended as a summary only and does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of the Audit Committee’s charter, a  copy of which is set out in Annex B to this Proxy Statement and posted on our website at www.aralez.com.

Compensation Committee

The current members of the Compensation Committee are Mr. Lee, who serves as Chairman, Mr. Aryeh, Mr. Fowler and Dr. Rudnick. Each of the current members of the Compensation Committee is independent as defined by the applicable NASDAQ listing standards and within the meaning of NI 58-101.

Decisions regarding the compensation of our executive officers are made by the Compensation Committee. The Compensation Committee’s principal responsibilities include reviewing our overall compensation philosophy and the adequacy and market competitiveness of our compensation plans and programs, evaluating the Company’s compensation policies and practices to determine whether these policies and practices create incentives for a particular employee group to take actions which could put the Company at undue risk, evaluating the performance of and reviewing and approving compensation for our executive officers, evaluating and recommending director compensation, and reviewing and discussing with management the Compensation Discussion and Analysis included in this Proxy Statement. The Compensation Committee also administers our equity-based and other incentive plans, including assuming responsibility for granting, or delegating as appropriate the authority for granting, and making decisions with respect to, awards under our equity compensation and other incentive plans.

To assist in its efforts to meet the objectives and responsibilities outlined above, the Compensation Committee has retained an executive compensation consultant. During the fiscal year ended December 31, 2015 (“Fiscal Year 2015”), the Pozen Compensation Committee retained Radford, an Aon Hewitt Company, and nationally known executive compensation and benefits consulting firm, to advise it on various matters related to executive and director compensation and compensation programs. Our Compensation Committee has continued to engage Radford to assist with its development of our executive compensation program and other compensation-related projects.

The foregoing description of the responsibilities of the Compensation Committee is intended as a summary only and does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of the Compensation Committee’s charter, a copy of which is posted on our website at www.aralez.com.

Nominating/Corporate Governance Committee

The current members of the Nominating/Corporate Governance Committee are Dr. Rudnick, who serves as Chairman, Mr. Fowler and Mr. Kirsch. Each of the members of the Nominating/Corporate Governance Committee is independent as defined by the applicable NASDAQ listing standards and within the meaning of NI 58-101.

The Nominating/Corporate Governance Committee assists the Board in fulfilling its responsibilities regarding the oversight of the composition of the Board and other corporate governance matters. Among its other duties, the Nominating/Corporate Governance Committee: (i) evaluates nominees and reviews the qualifications of individuals eligible to stand for election and reelection as

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directors and makes recommendations to the Board on this matter; (ii) oversees compliance with our Code of Business Conduct and Ethics; (iii) reviews and approves related party transactions; (iv) recommends and advises the Board on certain other corporate governance matters; and (v) oversees the Board’s performance evaluation process.

The foregoing description of the responsibilities of the Nominating/Corporate Governance Committee is intended as a summary only and does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of the Nominating/Corporate Governance Committee’s charter, a copy of which is posted on our website at www.aralez.com.

Transaction Committee

The current members of the Transaction Committee are Mr. Aryeh, who serves as Chairman, Mr. Adams, Mr. Harris and Mr. Kirsch.

The Transaction Committee’s principal activities include, among others, reviewing and evaluating potential strategic business development and licensing transactions of the Company, overseeing strategic transactions, facilitating the negotiation and/or consummation of the terms of any proposed strategic transaction, and approval of any strategic transaction that falls within the scope of the Transaction Committee’s authority in respect of business development strategy and which the Transaction Committee believes to be in the best interest of the Company.

The foregoing description of the responsibilities of the Transaction Committee is intended as a summary only and does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of the Transaction Committee’s charter, a copy of which is posted on our website at www.aralez.com.

Other Committees

The Board may establish other committees as it deems necessary or appropriate from time to time.

Board Meetings and Attendance During Fiscal Year 2015

Pozen’s board of directors held a total of 38 meetings during Fiscal Year 2015 to, among other things, review significant developments affecting Pozen, engage in strategic planning, and act on matters requiring approval from the Pozen Board. During Fiscal Year 2015, each director who continued as a director of the Company attended more than 75% of the aggregate number of Pozen Board meetings and meetings of committees of the Pozen Board on which he served.

Director Attendance at Annual Shareholders’ Meetings

The Board encourages all directors to make attendance at all annual general meetings of shareholders a priority. All of the Board members named in this Proxy Statement who previously served as members of the Pozen Board prior to the Tribute Transaction attended Pozen’s 2015 annual meeting of stockholders.

Compensation Committee Interlocks and Insider Participation

During Fiscal Year 2015, the members of Pozen’s compensation committee were Messrs. Fowler, Kirsch, Lee and Rudnick. None of these individuals has ever served as an officer or employee of Pozen (and none has ever served as an officer or employee of Aralez). None of the executive officers of Pozen served on the board of directors or compensation committee of a company that had an executive officer that served on the board of directors or the compensation committee of Pozen.

Orientation and Continuing Education

The Company is in the process of developing an orientation program for new directors under which a new director will, among other things, meet separately with the Chairman of the Board and members of the senior executive team. A new director will be presented with a director manual that reviews Board policies and procedures, the Company’s current strategic plan, financial plan and capital plan, the most recent annual and quarterly reports and materials relating to key business issues. The Chairman of each committee is responsible for coordinating orientation and continuing director development programs relating to the committee’s mandate.

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Code of Business Conduct and Ethics

We have adopted a Code of Conduct that applies to our employees, officers (including our principal executive officer, principal financial officer and other members of our finance and administration department) and our directors.

The objective of the Code of Conduct is to provide guidelines for maintaining integrity, honesty and ethical conduct, objectivity and impartiality of the Company. The Code of Conduct addresses, among other topics, conflicts of interest, protection and proper use of corporate assets and opportunities, confidentiality, fair dealing with the Company’s shareholders, customers, suppliers, competitors and employees, compliance with laws, rules and regulations and reporting of any illegal or unethical behavior.

As part of the Code of Conduct, any person subject to the Code of Conduct is required to avoid situations involving a conflict, or an appearance of a conflict, between their personal, family or business interests, and interests of those of the Company and must promptly disclose any such conflict, or an appearance of a conflict, to the Company. The Board has the ultimate responsibility for stewardship of the Code of Conduct. The Board has designated the Nominating/Corporate Governance Committee to oversee the administration of the Code of Conduct. The Nominating/Corporate Governance Committee reviews and approves all related party transactions that must be disclosed pursuant to applicable securities laws and regulations.

All persons subject to the Code of Conduct are required to provide, upon request, certification of compliance with the Code of Conduct, as well as compliance with all Company policies.

The foregoing description of the Code of Conduct is intended as summary only and does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions, of the Code of Conduct, a copy of which is available on our website at www.aralez.com and available on SEDAR at www.sedar.com. We will disclose on our website any future amendments to and/or waivers from the Conduct of Conduct that relate to our directors or executive officers.

Considerations in Evaluating Director Nominees

The Board is responsible for nominating members for election to the Board and for filling vacancies on the Board that may occur between annual meetings of shareholders. The Nominating/Corporate Governance Committee is responsible for evaluating and recommending candidates to the Board for board membership based upon an assessment of the independence, skills, qualifications and experience of the candidate and in a manner consistent with the criteria approved by the Board. Directors should be persons of good character and thus should possess integrity, accountability, judgment, responsibility, high performance standards, commitment, enthusiasm and courage.  Specifically, the Board seeks members from diverse professional and personal backgrounds who combine a broad spectrum of experience and expertise with a reputation for integrity. No director should serve on more than five other public company boards and no member of the Audit Committee should serve on more than two other public company audit committees.

It is our Nominating/Corporate Governance Committee’s policy to consider shareholder proposals for nominees for election as directors that are nominated in accordance with our Articles, including the Advance Notice provisions contained therein (as described below), and other applicable laws, including the rules and regulations of the SEC, applicable NASDAQ listing standards, and any other stock market on which we have applied to list our Common Shares for trading or quotation. See “Advance Notice Provisions” below.

Advance Notice Provisions

The Company’s Articles include advance notice provisions (the “Advance Notice Provisions”) for the purpose of providing shareholders, directors and management of the Company with a clear framework for nominating directors of the Company in connection with any annual or special meeting of Shareholders. The Advance Notice Provisions are intended to (i) ensure that all shareholders receive adequate notice of director nominations and sufficient time and information with respect to all nominees for appropriate deliberations and register an informed vote; and (ii) facilitate an orderly and efficient process for annual or special meetings of shareholders of the Company. The Advance Notice Provisions fix the deadlines by which shareholders must submit director nominations to the Corporate Secretary of the Company prior to any annual or special meeting of Shareholders for an effective nomination to occur. No person will be eligible for election as a director of the Company unless nominated in accordance with the Advance Notice Provisions.

In the case of an annual meeting of shareholders, notice must be received by a senior officer of the Company at the principal executive office of the Company not less than 30 days before the date of the annual meeting; provided, however, that in the event that the annual meeting is to be held on a date that is less than 50 days after the date on which the first public announcement of the date of the annual meeting was made, notice may be made not later than the close of business on the 10th day following such public announcement. In the case of a general meeting of shareholders (which is not also an annual meeting), notice to the Company must be

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made not later than the close of business on the 15th day following the day on which the first public announcement of the date of the general meeting of shareholders was made. These provisions may preclude shareholders from making nominations for directors at a general meeting of shareholders. The Board may, in its sole discretion, waive any requirement of the Advance Notice Provisions. For the purposes of the Advance Notice Provisions, “public announcement” means disclosure in a press release reported by a national news service in Canada, or in a document publicly filed by the Company under its profile on the SEDAR website maintained by the Canadian Securities Administrators (“CSA”) at www.sedar.com or under the EDGAR website at www.sec.gov.

Diversity Policy

Currently, the Board is comprised of eight (8) male directors (100%). There are currently no female directors on the Board. There are currently six men (86%) and one woman (14%) with representation in the Company’s senior leadership group.

In May 2016, the Company adopted a written diversity policy (the “Diversity Policy”), which recognizes the importance and benefit of having a Board and a slate of executive officers comprised of highly talented and experienced individuals, with a view toward fostering and promoting diversity amongst members of the Board and the Company’s executive team. The Diversity Policy mandates that the Board and its committees, as applicable, will, when identifying candidates for election to the Board or appointment as executive officers: (i) consider individuals who are highly qualified, based on their talents, experience, functional expertise and personal skills, character and qualities; (ii) consider criteria that promote diversity, including with regard to gender, ethnicity, age, national origin, disability, sexual orientation, and other dimensions; and (iii) consider the level of representation of women on the Board and in executive officer positions.

The Board recognizes the benefits that diversity brings to a company and will measure the effectiveness of the Diversity Policy based on, among other things, the relative increase of diversity on the Board and in executive officer positions over time, as well as the implementation of specific processes designed to foster the progression of diverse candidates to be considered for nomination or appointment. A key objective of the Diversity Policy is to bring that diversity of thought which the Board believes is important to successful decision-making and stewardship to the Company.

Neither targets nor quotas relating to the identification and nomination of women directors or officers have been adopted to date, as the Board believes the focus when filling vacancies on the Board or the executive team should remain on finding the best qualified candidates given the needs and circumstances of the Company. A nominee’s diversity of gender, race, nationality, age, experience and other attributes has and will, however, continue to be considered in the assessment of director nominees.

The foregoing description of the Diversity Policy is intended as a summary only and does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of the Diversity Policy, which is appended to the Corporate Governance Guidelines set out in Annex A to this Proxy Statement and posted on our website at www.aralez.com.

Board Renewal

The Board has considered the issue of term limits and will continue to do so from time to time. At this time, given that the Company is a newly public company, the Board is of the view that imposing term limits would not be appropriate for the Company. The Board believes that its self-evaluation process is an effective and transparent way to ensure directors continue to remain strong contributors and that the current composition of the Board reflects this objective. See “- Board Evaluations” below. The Board has adopted a policy of mandatory retirement for directors such that no person shall be nominated by the Board to serve as a director after he or she has passed his or her 75th birthday, unless the Nominating/Corporate Governance Committee has voted, on an annual basis, to waive the mandatory retirement age for such director. The Board believes that this retirement policy, taken in conjunction with the Company’s annual assessment process and Diversity Policy, ensures the natural evolution of the Board.

Board Evaluations

Pursuant to the terms of the Company’s Corporate Governance Guidelines and the charters of each of the respective committees of the Board, the Board intends to develop and undertake a process to assess the effectiveness of the Board and each of the committees of the Board at regular intervals. The Nominating/Corporate Governance Committee, on behalf of the Board, will work with external counsel to develop and undertake the assessment process.

Communications with the Board

The Board values communications with shareholders and other stakeholders, and will ensure that measures are in place to facilitate effective communications between the Board and its shareholders and other stakeholders. In accordance with the Corporate Governance Guidelines, the Board is in the process of developing a communications policy governing communications between

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shareholders and other stakeholders and the Board. Historically, almost all communications that the Company receives from shareholders and other stakeholders are administrative in nature and are not directed to the Board. If the Company should receive a shareholder or stakeholder communication directed to the Board, or to an individual director, said communication will be relayed to the Board or the individual director as the case may be.

Cease Trade Orders and Bankruptcies

Except as noted below, none of the Company’s directors or executive officers:

(a)         is, as at the date of this Proxy Statement, or has been, within 10 years before the date of this Proxy Statement, a director, CEO or CFO of any company (including the Company) that,

i.            was subject to an order that was issued while the director or executive officer was acting in the capacity as director, CEO or CFO; or

ii.         was subject to an order that was issued after the director or executive officer ceased to be a director, CEO or CFO and which resulted from an event that occurred while that person was acting in the capacity as a director, CEO or CFO;

(b)   is, as at the date of this Proxy Statement, or has been within 10 years before the date of this Proxy Statement, a director or executive officer of any company (including the Company) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or

(c)    has, within the 10 years before the date of this Proxy Statement, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive officer or shareholder.

For the purposes of the paragraphs above, “order” means: (i) a cease trade order; (ii) an order similar to a cease trade order; or (iii) an order that denied the relevant company access to any exemption under securities legislation that was in effect for a period of more than 30 consecutive days.

In September 2011, Mr. Adams was appointed Chairman and Chief Executive Officer of Neurologix and Mr. Koven was appointed President and Chief Administrative Officer and a member of the board of directors of Neurologix. Mr. Adams and Mr. Koven each resigned from Neurologix in November 2011, primarily due to the company’s inability to raise sufficient capital to continue its operations (including its inability to compensate Messrs. Adams and Koven for their services). Neurologix filed for protection under Chapter 7 of the U.S. Bankruptcy Code on March 16, 2012.

Mr. Thrasher was a director of New Food Classics Inc., a private company which filed for creditor protection in January 2012 under the Companies’ Creditors Arrangement Act (Canada). Mr. Thrasher resigned from the board of New Food Classics Inc. in February 2012.

Penalties or Sanctions

No director or executive officer of the Company has:

(a)   been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or

(b)   been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable security holder in deciding whether to vote for a proposed director.

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EXECUTIVE OFFICERS

Our Executive Officers as of the date of this Proxy Statement are as follows:

Our executive officers are appointed by, and serve at the discretion of, the Board. There are no familial relationships among any of our executive officers and directors of the Company.

Adrian Adams — For Mr. Adam’s biography, please see above under “Board of Directors and Corporate Governance—The Board in General”.

Andrew I. Koven has been our President and Chief Business Officer since February 5, 2016.  Previously, Mr. Koven was the President and Chief Business Officer of Pozen from June 2015 through February 5, 2016. Prior to joining Pozen, Mr. Koven served as Chief Administrative Officer and General Counsel of Auxilium Pharmaceuticals Inc., a specialty biopharmaceutical company, from February 2012 until January 2015, when it was acquired by Endo International plc. Mr. Koven served as President and Chief Administrative Officer and a member of the board of directors of Neurologix, Inc., a company focused on the development of multiple innovative gene therapy development programs, from September 2011 to November 2011. Before Neurologix, Inc., Mr. Koven served as Executive Vice President and Chief Administrative and Legal Officer of Inspire Pharmaceuticals, Inc., a specialty pharmaceutical company, from April 2010 until April 2011 when it was acquired by Merck & Co., Inc. Previously, Mr. Koven served as Executive Vice President, General Counsel and Corporate Secretary of Sepracor Inc., a specialty pharmaceutical company, from March 2007 until February 2010 when it was acquired by Dainippon Sumitomo Pharma Co., Ltd. Prior to joining Sepracor, Mr. Koven served as Executive Vice President, General Counsel and Corporate Secretary of Kos Pharmaceuticals, Inc., a specialty pharmaceutical company, from August 2003 until its acquisition by Abbott Laboratories in December 2006. Mr. Koven began his career in the pharmaceutical industry first as an Assistant General Counsel and then as Associate General Counsel at Warner-Lambert Company from 1993 to 2000, followed by his role as Senior Vice President and General Counsel at Lavipharm Corporation from 2000 to 2003. From 1986 to 1992 he was a corporate associate at Cahill, Gordon & Reindel in New York. From 1992 to 1993 he served as Counsel, Corporate and Investment Division, at The Equitable Life Assurance Society of the U.S.

Scott J. Charles has been our Chief Financial Officer since February 5, 2016.  Mr. Charles was previously Chief Financial Officer of Pozen from January 1, 2016 through February 5, 2016, and was Pozen’s Senior Vice President of Finance of from July 2015 through December 31, 2016. Prior to joining Pozen, Mr. Charles served as the Vice President of Finance and Treasurer at Ikaria, Inc., a critical care pharmaceutical company, from April 2008 to July 2015. From April 2002 to March 2008, Mr. Charles worked at Reliant Pharmaceuticals, Inc. in various finance functions, culminating with serving as the Vice President of Finance and Treasurer from April 2006 to March 2008. Prior to that, he was a Manager of Assurance and Business Advisory Services at Arthur Andersen, LLP. He holds a Bachelor of Science degree in Business Administration from Bucknell University and is a Certified Public Accountant.

Jennifer L. Armstrong has been our Executive Vice President, Human Resources and Administration since February 5, 2016.  Ms. Armstrong was previously the Executive Vice President, Human Resources and Administration of Pozen from June 2015 through February 5, 2016.  Prior to joining Pozen, she served as Senior Vice President of Human Resources at Auxilium Pharmaceuticals, Inc., a specialty biopharmaceutical company, from July 2009 to March 2015. Prior to that, she served at Senior Vice President of Human Resources and Corporate Communications at Genaera Corporation, a specialty biopharmaceutical company, from January 1998 to May 2009. Ms. Armstrong holds a Master’s degree in Arts Administration and a Bachelor’s degree in Corporate Communications, both from Drexel University.

Mark A. Glickman has been our Chief Commercial Officer since February 5, 2016.  From June 2015 to February 5, 2016, Mr. Glickman was the Chief Commercial Officer of Pozen. Mr. Glickman previously served as Executive Vice President of Sales and Marketing for Auxilium Pharmaceuticals, a specialty biopharmaceutical company, from February 2012 to March 2015. From

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February 2009 to February 2012, he served as Vice President in the medical device division at Otsuka America Pharmaceutical, Inc., a pharmaceutical and medical device company and a subsidiary of Otsuka America, Inc. Prior to Otsuka, Mr. Glickman served as Senior Vice President of Sales and Marketing at Oscient Pharmaceuticals Corp., a commercial-stage pharmaceutical company, from September 2007 to September 2009. Before joining Oscient, from May 2007 to September 2007, Mr. Glickman served as Vice President of Sales at Bayer Healthcare’s Diabetes Care Division. From 2001 to 2007, he held various positions at Kos Pharmaceuticals, including Director of Marketing, Regional Sales Director and Vice President of Sales. Mr. Glickman started his pharmaceutical career at Bristol-Myers Squibb where he was responsible for the marketing of cardiovascular products, including the blockbuster Plavix. Mr. Glickman holds a Master of Business Administration degree from New York University.

Eric L. Trachtenberg has been our General Counsel, Chief Compliance Officer and Corporate Secretary since February 5, 2016.  Previously, Mr. Trachtenberg was the General Counsel, Chief Compliance Officer and Corporate Secretary of Pozen from January 1, 2016 through February 5, 2016, and was Deputy General Counsel of Pozen from June 2015 through December 31, 2015.  Prior to joining Pozen, Mr. Trachtenberg most recently served as Deputy General Counsel at Auxilium Pharmaceuticals, Inc., a specialty biopharmaceutical company, from May 2012 through its acquisition by Endo Pharmaceuticals in February 2015. Prior to Auxilium, he was Vice President, General Counsel and Corporate Secretary of Enobia Pharma, Inc., from April 2011 to April 2012, and managed all legal aspects of Enobia’s sale to Alexion Pharmaceuticals. Prior to that, Mr. Trachtenberg served as Vice President and Associate General Counsel of Sepracor Inc. and remained in that position with Sunovion Pharmaceuticals Inc. following the acquisition of Sepracor by Dainippon Sumitomo Pharma. Mr. Trachtenberg also held a Senior Counsel position at Kos Pharmaceuticals, Inc. before its acquisition by Abbott. Mr. Trachtenberg began his career as an Associate at Blank Rome LLP. He holds a Bachelor of Science degree in Management from Tulane University and a Juris Doctorate and Master of Business Administration degree from Temple University.

James P. Tursi, M.D. has been our Chief Medical Officer since February 5, 2016.  From October 2015 to February 5, 2016, Dr. Tursi was Chief Medical Officer of Pozen. Previously, Dr. Tursi served as Chief Medical Officer of Innocoll AG, a specialty pharmaceutical company, from March 2015 to September 2015, where he was responsible for managing all clinical research and development, medical affairs and safety activities. Prior to joining Innocoll, Dr. Tursi served as Chief Medical Officer at Auxilium Pharmaceuticals Inc., a specialty biopharmaceutical company, from August 2011 to March 2015, and as Vice President of Clinical Research & Development from March 2009 to August 2011. In these positions, Dr. Tursi was responsible for oversight of clinical and nonclinical development programs, clinical operations, medical affairs and global safety activities, and served as the clinical medical safety lead for all regulatory agency interactions with the FDA, Europe and Canada. Prior to Auxilium, he served as Director of Medical Affairs for GlaxoSmithKline Biologicals from January 2006 to March 2009 and directed all medical affairs responsibilities for the cervical cancer vaccine in North America. Dr. Tursi entered the pharmaceutical industry in 2004 as a Medical Director for Procter and Gamble Pharmaceuticals until 2006. He worked on several products and therapeutic areas, which included female sexual dysfunction, overactive bladder, and osteoporosis. His responsibilities included clinical development and medical affairs. Dr. Tursi was a board certified OB/GYN and practiced medicine and surgery for over 10 years. Dr. Tursi received his doctor of medicine degree from the Medical College of Pennsylvania and completed his residency training at the Johns Hopkins Hospital. Dr. Tursi has served as a member of the board of directors of Agile Therapeutics, a women’s health specialty pharmaceutical company, since October 2014.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The Board has adopted written policies and procedures for the review, approval or ratification of transactions involving the Company and any executive officer, director, director nominee, 5% shareholder and certain of their immediate family members (each of whom we refer to as a “related person”). The policies and procedures cover any transaction involving $120,000 or more with a related person (a “related person transaction”) in which the related person has a material interest and which does not fall under an explicitly stated exception set forth in the applicable disclosure rules of the SEC.

Any proposed related person transaction must be reported to the Chairman of our Nominating/Corporate Governance Committee. The policy calls for the transaction to be reviewed and, if deemed appropriate, approved by the Nominating/Corporate Governance Committee. The transaction should be approved in advance whenever practicable. If not practicable, the Nominating/Corporate Governance Committee will review, and may, if deemed appropriate, ratify the related person transaction. The policy also permits the Chairman of the Nominating/Corporate Governance Committee to approve related person transactions that arise between committee meetings, subject to ratification by the Nominating/Corporate Governance Committee at its next meeting. Any related person transaction that is ongoing in nature will be reviewed annually.

A related person transaction will be considered approved or ratified if it is authorized by the Nominating/Corporate Governance Committee or Chairman after full disclosure of the related person’s interest in the transaction. The transaction may be approved or ratified only if the Nominating/Corporate Governance Committee determines that the transaction is not inconsistent with the Company’s best interests. In considering related person transactions, the Nominating/Corporate Governance Committee will consider any information considered material to investors and the following factors:

·                              the related person’s interest in the transaction;

·                              the approximate dollar value of the transaction;

·                              whether the transaction was undertaken in the ordinary course of our business;

·                              whether the terms of the transaction are no less favorable to us than terms that we could have reached with an unrelated third party; and

·                              the purpose and potential benefit to us of the transaction.

The policy provides that transactions involving the compensation of our executive officers will be reviewed and approved by the Compensation Committee or the Board, in accordance with the Compensation Committee’s charter.

Second Amended and Restated Debt Facility Agreement and Amended and Restated Subscription Agreement

Subsequent to December 31, 2015, and concurrent with Tribute Transaction, we received an aggregate of $149.2 million of cash proceeds consisting of $75 million from the Deerfield Entities (hereafter defined) pursuant to the Second Amended and Restated Debt Facility Agreement (the “Facility Agreement”), dated December 7, 2015, by and among Aralez, Pozen, Tribute, Deerfield Private Design Fund III, L.P. (“Deerfield Private Design”), Deerfield International Master Fund, L.P. (“Deerfield International) and Deerfield Partners, L.P. (“Deerfield Partners” and, together with Deerfield Private Design, and Deerfield International, the “Deerfield Entities”), and an aggregate of $75 million from certain investors pursuant to the Amended and Restated Subscription Agreement (the “Subscription Agreement”), dated December 7, 2015, by and among Aralez, Aralez Pharmaceuticals Limited, Tribute, Pozen, QLT ($45,000,000), Deerfield Private Design ($5,000,000), Deerfield International ($2,800,000), Deerfield Partners ($2,200,000), Broadfin Healthcare Master Fund, Ltd. ($12,500,000), JW Partners, LP ($5,850,000) and JW Opportunities Master Fund, Ltd. ($1,650,000), net of certain transaction-related costs, and used part of the proceeds to pay off Tribute’s existing debt obligations including accrued interest and termination fees in the amount of $22.5 million. As a result of these transactions, the Deerfield Entities and Broadfin became holders of more than 5% of our outstanding Common Shares.

The Facility Agreement includes a $75 million 6-year convertible note, which was fully drawn and bears an interest rate of 2.5% per annum and is not prepayable.  Under the Facility Agreement, Aralez also has a $200 million acquisition facility until April 30, 2017.  The acquisition facility is currently undrawn, can be drawn on for permitted acquisitions and is to be repaid over a 6-year period from each draw.  Amounts drawn under the acquisition facility will bear an interest rate of 12.5% per annum and shall be prepayable in whole or in part at any time following the end of the sixth month after the funding date of each draw.

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Payments to Rob Harris

In connection with the Tribute Transaction, Mr. Harris resigned from his position as President, Chief Executive Officer and a director of Tribute. Pursuant to the terms of his employment agreement with Tribute, Mr. Harris received a lump sum severance payment of $1,216,542 CAN, less deductions and withholdings, upon his execution of a general release of claims against Tribute and Aralez.

Mr. Harris entered into a Consulting Agreement, dated February 5, 2016, with Tribute, pursuant to which he agreed to provide consulting services to Tribute through his consulting firm and to advise and assist Mr. Adams, our Chief Executive Officer, on all material aspects of the Canadian business and business conducted by Tribute, commencing February 5, 2016 and ending on June 30, 2016. Pursuant to the terms of the Consulting Agreement, Mr. Harris’ consulting firm will be paid a weekly fee of $9,375 CAD for the services provided and reimbursed for all reasonable travel and out-of-pocket expenses actually and properly incurred by the Consultant from time to time in connection with the services provided under the Consulting Agreement.

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OWNERSHIP OF THE COMPANY

Security Ownership of Certain Beneficial Owners and Management

The following tables sets forth information known to us concerning the beneficial ownership of Aralez’s outstanding Common Shares as of May 3, 2016 (unless otherwise noted) for:

·                              each person known by us to beneficially own 5% or more of Aralez’s outstanding Common Shares;

·                              each of our directors;

·                              each of our named executive officers; and

·                              all of our directors and current executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. In computing the number of Common Shares beneficially owned by a person and the percentage ownership of that person, Common Shares that could be issued upon the exercise of outstanding options and warrants held by that person that are currently exercisable at May 3, 2016, or that will become exercisable within 60 days of May 3, 2016, are considered outstanding. These Common Shares, however, are not considered outstanding when computing the percentage ownership of each other person.

Except as indicated in the footnotes to this table and pursuant to state community property laws, each shareholder named in the table has sole voting and investment power for the Common Shares shown as beneficially owned by them. Percentage of ownership is based on 64,019,851 Common Shares issued and outstanding on May 3, 2016.

(1) This amount reflects ownership by Silver Hill Investments, LLC, John R. Plachetka and Clare A. Plachetka and certain affiliated entities, and consists of (i) 1,157,808 Common Shares owned by Silver Hill Investments, LLC, which is 50% owned by the Family Trust under the John R. Plachetka Irrevocable Trust (the “JRP Family Trust”), 40% owned by John R. Plachetka through his assignee, the Revocable Declaration of Trust, John R. Plachetka, Trustee (the “JRP Revocable Trust”), and 10% owned by his wife, Clare A. Plachetka, through her assignee, the Clare A. Plachetka Revocable Declaration of Trust, Clare A. Plachetka, Trustee (the “CAP Revocable Trust”); (ii) 1,232,623 Common Shares owned by the JRP Revocable Trust; (iii) 218,910 Common Shares owned by the CAP Revocable Trust; (iv) 22,631 Common Shares owned by the JRP Family Trust; (v) 506,799 Common Shares held by John R. Plachetka; and (vi) 716,384 Common Shares issuable pursuant to options granted to John R. Plachetka that are currently exercisable.  This amount does not reflect 77,243 Common Shares underlying options that are not currently exercisable. The business address of Dr. Plachetka is c/o Aralez Pharmaceuticals Inc., 151 Steeles Avenue East, Milton, Ontario, Canada L9T 1Y1.

(2) Based on information disclosed in a Schedule 13G filed with the SEC on February 16, 2016 by Deerfield Mgmt, L.P., Deerfield Management Company, L.P., Deerfield Mgmt III, L.P., Deerfield Private Design Fund III, L.P., Deerfield International Master Fund, L.P., Deerfield Partners, L.P. and James E. Flynn (the “Deerfield Reporting Persons”).  As reported in the Schedule 13G filed by the Deerfield Reporting Persons: (i) Deerfield Mgmt, L.P. has shared voting power and shared dispositive power with respect to 5,373,569 Common Shares, comprised of an aggregate of 844,583 Common Shares and 4,528,986 Common Shares underlying convertible notes held by Deerfield Partners, L.P. and Deerfield International Master Fund, L.P., of which Deerfield Mgmt, L.P. is the General Partner; (ii) Deerfield Management Company, L.P. has shared voting power and shared dispositive power with respect to 10,702,554 Common Shares, comprised of an aggregate of 1,644,583 Common Shares and 9,057,971 Common Shares underlying convertible notes held by Deerfield Private Design Fund III, L.P. and Deerfield International Master Fund, L.P., of which Deerfield Management Company, L.P. is the investment advisor; (iii) Deerfield Mgmt III, L.P. has shared voting power and shared dispositive power with respect to 5,328,985 Common Shares, comprised of an aggregate of 800,000 Common Shares and 4,528,985 Common Shares underlying convertible notes held by Deerfield Private Design Fund III, L.P., of which Deerfield Mgmt III, L.P. is the general partner; (iii)  Deerfield Private Design Fund III, L.P. has shared voting power and

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shared dispositive power with respect to 5,328,985 Common Shares, comprised of an aggregate of 800,000 Common Shares and 4,528,985 Common Shares underlying convertible notes; (iv) Deerfield International Master Fund, L.P. has shared voting power and shared dispositive power with respect to 3,009,198 Common Shares, comprised of an aggregate of 472,966 Common Shares and 2,536,232 Common Shares underlying convertible notes; (v) Deerfield Partners, L.P. has shared voting power and shared dispositive power with respect to 2,364,371 Common Shares, comprised of an aggregate of 371,617 Common Shares and 1,992,754 Common Shares underlying convertible notes; and (vi) James E. Flynn has shared voting power and shared dispositive power with respect to 10,702,554 Common Shares, comprised of an aggregate of 1,644,583 Common Shares and 9,057,971 Common Shares underlying convertible notes held by Deerfield Private Design Fund III, L.P., Deerfield Partners, L.P. and Deerfield International Master Fund, L.P. The provisions of the convertible notes beneficially owned by the Deerfield Entities restrict the conversion of such securities to the extent that, upon such exercise or conversion, the number of Common Shares then beneficially owned by the holder and any other person or entities with which such holder would constitute a Section 13(d) “group” would exceed 9.985% of the total number of Common Shares of Aralez then outstanding (the “Ownership Cap”).  Accordingly, notwithstanding the number of Common Shares reported, the Deerfield Entities disclaim beneficial ownership of the Common Shares issuable upon the conversion of such convertible notes to the extent that upon such conversion the number of Common Shares beneficially owned by the Deerfield Reporting Persons hereunder, in the aggregate, would exceed the Ownership Cap. The address of the Deerfield Reporting Persons is 780 Third Avenue, 37th Floor, New York, NY 10017.

(3) Based on information disclosed in a Schedule 13G filed with the SEC on February 16, 2016 with respect to ownership as of December 31, 2015 by PAR Investment Partners, L.P., PAR Group, L.P. and PAR Capital Management, Inc. PAR Group, L.P. is the sole general partner of PAR Investment Partners, L.P. PAR Capital Management, Inc. is the sole general partner of PAR Group, L.P. The address of PAR Capital Management, Inc. is One International Place, Suite 2041, Boston, MA 02110.

(4) Based on information disclosed in a Schedule 13G filed with the SEC on March 24, 2016, Broadfin Capital, LLC, Broadfin Healthcare Master Fund, Ltd., and Kevin Kotler share voting power and dispositive power with respect to these Common Shares. The address of Broadfin Capital, LLC is 300 Park Avenue, 25th Floor, New York, NY 10022.

*                 Less than 1%

(1)  Unless otherwise set forth herein, the address of the named beneficial owners is c/o Aralez Pharmaceuticals Inc., 151 Steeles Avenue East, Milton, Ontario, Canada L9T 1Y1.

(2)  This number includes 6,576 Common Shares that are issuable pursuant to stock options that are currently exercisable or will become exercisable within 60 days of May 3, 2016 and 486,222 Common Shares that are issuable pursuant to RSUs that will vest within 60 days of May 3, 2016.

(3)  This amount reflects ownership by Silver Hill Investments, LLC, John R. Plachetka and Clare A. Plachetka and certain affiliated entities, and consists of (i) 1,157,808 Common Shares owned by Silver Hill Investments, LLC, which is 50% owned by the Family Trust under the John R. Plachetka Irrevocable Trust (the “JRP Family Trust”), 40% owned by John R. Plachetka through his assignee, the Revocable Declaration of Trust, John R. Plachetka, Trustee (the “JRP Revocable Trust”), and 10% owned by his

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wife, Clare A. Plachetka, through her assignee, the Clare A. Plachetka Revocable Declaration of Trust, Clare A. Plachetka, Trustee (the “CAP Revocable Trust”); (ii) 1,232,623 Common Shares owned by the JRP Revocable Trust; (iii) 218,910 Common Shares owned by the CAP Revocable Trust; (iv) 22,631 Common Shares owned by the JRP Family Trust; (v) 506,799 Common Shares held by John R. Plachetka; and (vi) 716,384 Common Shares issuable pursuant to options granted to John R. Plachetka that are currently exercisable.

(4)  These Common Shares are held by JALAA Equities, LP, of which Mr. Aryeh is the General Partner, and include 45,468 Common Shares issuable pursuant to warrants that are currently exercisable.

(5)   This number represents 2,505 Common Shares that are issuable pursuant to stock options that are currently exercisable or will become exercisable within 60 days of May 3, 2016.

(6)   This number includes 9,390 Common Shares that are issuable pursuant to RSUs that will vest within 60 days of May 3, 2016.

(7)   This number represents 2,409 Common Shares that are issuable pursuant to stock options that are currently exercisable or will become exercisable within 60 days of May 3, 2016 and 29,000 Common Shares that are issuable pursuant to RSUs that will vest within 60 days of May 3, 2016.

(8)   This number includes 361,078 Common Shares that are issuable pursuant to stock options that are currently exercisable or will become exercisable within 60 days of May 3, 2016.

(9)   This number includes 172,321 Common Shares that are issuable pursuant to stock options that are currently exercisable or will become exercisable within 60 days of May 3, 2016.

(10) This number includes 18,321 Common Shares that are issuable pursuant to options that are currently exercisable or will become exercisable within 60 days of May 3, 2016 and 9,390 Common Shares that are issuable pursuant to RSUs that will vest within 60 days of May 3, 2016.

(11) This number represents 3,285 Common Shares that are issuable pursuant to stock options that are currently exercisable or will become exercisable within 60 days of May 3, 2016 and 369,169 Common Shares that are issuable pursuant to RSUs that will vest within 60 days of May 3, 2016.

(12) This number includes 6,107 Common Shares that are issuable pursuant to stock options that are currently exercisable or will become exercisable within 60 days of May 3, 2016 and 9,390 Common Shares that are issuable pursuant to RSUs that will vest within 60 days of May 3, 2016.

(13) This number includes 9,390 Common Shares issuable pursuant to RSUs that will vest within 60 days of May 3, 2016.

(14) This number includes 121,493 Common Shares issuable pursuant to stock options that are currently exercisable or will become exercisable within 60 days of May 3, 2016.

(15) This number includes 573,239 Common Shares that are issuable pursuant to stock options that are currently exercisable or will become exercisable within 60 days of May 3, 2016 and 968,701 Common Shares that are issuable pursuant to RSUs that will vest within 60 days of May 3, 2016.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act, and the rules issued thereunder, requires our directors and executive officers and beneficial owners of more than 10% of our equity securities to file reports of ownership and changes in beneficial ownership of our equity securities with the SEC. Copies of these reports are furnished to the Company. Based solely on our review of the copies of such reports furnished to us, and representations from the persons subject to Section 16(a) with respect to the Company, we believe that during 2015 all of our executive officers, directors and 10% shareholders complied with the Section 16(a) requirements, except that James P. Tursi filed two late reports, each reporting a single transaction, and Eric L. Trachtenberg filed one late report reporting a single transaction.

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EXECUTIVE AND DIRECTOR COMPENSATION

Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the disclosures contained in the “Compensation Discussion and Analysis” below. Based on that review and discussion, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

Compensation Discussion and Analysis

This Compensation Discussion and Analysis explains Pozen’s compensation program for Fiscal Year 2015 as it pertains to our named executive officers, and also discusses the post-Tribute Transaction compensation programs for Aralez for the balance of the fiscal year ending December 31, 2016 (“Fiscal Year 2016”). Our named executive officers for Fiscal Year 2015 consisted of the following:

·                              Adrian Adams, Chief Executive Officer (“CEO”), who joined Pozen on May 31, 2015;

·                              John R. Plachetka, former Chairman, President, and Chief Executive Officer, who retired on June 1, 2015;

·                              William L. Hodges, former Senior Vice President and Chief Financial Officer, who resigned as an executive officer of Pozen effective January 1, 2016 and who remained employed as Senior Vice President, Finance through the first quarter of 2016 and is now employed on a part-time basis in that position;

·                              Andrew I. Koven, President and Chief Business Officer, who joined Pozen on May 31, 2015;

·                              Scott J. Charles, former Senior Vice President, Finance, who joined Pozen on July 27, 2015 and was appointed Chief Financial Officer effective January 1, 2016; and

·                              Mark A. Glickman, Chief Commercial Officer, who joined Pozen on June 22, 2015.

For purposes of this Compensation Discussion and Analysis, we refer to these persons as our “named executive officers.” For discussions concerning Aralez compensation actions and compensation programs for Fiscal Year 2016, “named executive officers” means Messrs. Adams, Koven, Charles and Glickman, as Dr. Plachetka has left the Company and Mr. Hodges is no longer an executive officer.

Prior to the Tribute Transaction, the compensation of our named executive officers was determined by the Pozen Compensation Committee. While we are required to disclose the compensation of our named executive officers and decisions made with respect to their compensation during Fiscal Year 2015, this disclosure reflects compensation under Pozen programs and does not necessarily reflect the compensation our named executive officers will be eligible to receive following the Tribute Transaction.

In anticipation of the Tribute Transaction, we formed the Aralez Compensation Committee, which is developing our executive compensation program for Fiscal Year 2016 and beyond. Where compensation decisions have been made with respect to Fiscal Year 2016, we have included a description of those decisions and compensation programs in order to provide a clear picture as to the implementation of the Aralez compensation philosophy following the Tribute Transaction.  Due to the larger size, complexity, and broader commercial focus of Aralez, and the more competitive market for talent within which Aralez must compete, we anticipate that there will be differences between the Aralez executive compensation program and the Pozen executive compensation program that are more reflective of the new stage and business focus for Aralez.

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References below to the “Pozen Compensation Committee” relate to the Compensation Committee of Pozen prior to the completion of the Tribute Transaction, and references to the “Aralez Compensation Committee” or “our Compensation Committee” relate to the Compensation Committee as it existed after the completion of the Tribute Transaction.

Executive Summary

As discussed above, the Pozen and Tribute business combination was completed on February 5, 2016, and the combined entity now operates as Aralez. The combined company provides the former shareholders of Pozen and Tribute with significant strategic and financial benefits, as the combined company is a more diversified provider of specialty healthcare products with a focus on cardiovascular and pain indications and a multi-country footprint, and is better positioned to meet the challenges of the expected future landscape in the pharmaceutical industry.

Aralez Compensation Actions

In anticipation of and since the completion of the Tribute Transaction, our Compensation Committee undertook a review of the Pozen executive compensation program, and focused on creating the appropriate compensation metrics for a company the size of Aralez, at a similar stage and with similar objectives. In the last quarter of Fiscal Year 2015 and the first quarter of Fiscal Year  2016, our Compensation Committee developed several key components of a new executive compensation program, including the following:

·                  Development of the Aralez compensation philosophy;

·                  Establishment of the Aralez peer group, consisting of companies of a similar size to Aralez with a similar focus;

·                  Adoption of our annual incentive bonus plan for Fiscal Year 2016, based on the potential achievement of Aralez corporate goals for Fiscal Year 2016; and

·                  Development of our long-term equity-based incentive program, consisting of a combination of time-based and performance-based equity awards.

Pozen 2015 Corporate Goals and Results

During Fiscal Year 2015, the main focuses of Pozen were (i) the entry into the Tribute Transaction agreements and related financing transactions, (ii) preparation for the completion of the Tribute Transaction, pending shareholder approval, and (iii) the buildout of the commercial organization and preparation for the potential launch of YOSPRALA. These activities shaped both Pozen’s corporate goals for Fiscal Year 2015 as well as the 2015 executive compensation program. The 2015 corporate goals were determined by the Board in consultation with the new Pozen management team.

Pozen’s corporate goals for Fiscal Year 2015 were:

·                  Complete the Tribute Transaction and the formation of Aralez (assuming shareholder approval);

·                  Develop a commercialization strategy to potentially launch YOSPRALA in 2016 and execute upon the 2015 related activities;

·                  Complete all supply chain activities, including developing an alternate API supplier, and regulatory filing, to obtain regulatory approval and allow a 2016 launch of YOSPRALA; and

·                  Develop the Aralez Pharmaceuticals Strategic Plan and complete the 2015 activities.

Following the completion of the Tribute Transaction, the Aralez Compensation Committee reviewed Pozen’s performance during 2015. The Aralez Compensation Committee determined that two of these corporate goals were completed during Fiscal Year 2015: the development of a commercialization strategy for YOSPRALA and execution of 2015 related activities, and the development of the Aralez strategic plan. The supply chain activities relating to YOSPRALA were not completed during 2015, and the Tribute Transaction was not completed until the first quarter of 2016. However, the Aralez Compensation Committee determined that the delay of the completion of the Tribute Transaction was outside of the Pozen management’s control, and that the management team took all necessary steps to effect the completion of the Tribute Transaction. As a result of the completion of only two of the corporate goals, and the efforts taken to complete a third, the Aralez Compensation Committee determined that it would be fair and reasonable to fund the bonus pool for cash bonuses relating to Fiscal Year 2015 at 60% of the target level. Messrs. Adams, Koven, Charles and

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Glickman received the guaranteed minimum bonuses for Fiscal Year 2015 that were provided in their employment agreements, which were equal to the target bonus pro-rated for the portion of Fiscal Year 2015 that they were employed.

Retirement of Dr. Plachetka and Recruitment of New Management Team

During Fiscal Year 2015, we made significant changes to our executive management team. On June 1, 2015, Pozen’s founder, Chairman, President and Chief Executive Officer, John R. Plachetka, retired. On May 31, 2015, Adrian Adams was appointed Pozen’s Chief Executive Officer and member of the Board, and Andrew I. Koven was appointed Pozen’s President and Chief Business Officer. Mr. Adams and Mr. Koven had both been consultants to Pozen since April 2, 2015. Following the appointment of Mr. Adams and Mr. Koven, they assembled a talented and experienced management team, which includes Mr. Charles (as Senior Vice President of Finance and, as of January 1, 2016, Chief Financial Officer) and Mr. Glickman (as Chief Commercial Officer). The engagement of our new executive management team is vital to the success of Aralez following the completion of the Tribute Transaction.

2015 Shareholder Say-on-Pay Vote

Pozen provides shareholders the opportunity to cast an annual, non-binding advisory vote on executive compensation (a “say-on-pay proposal”). Aralez has adopted this policy, and is holding a say-on-pay proposal at this Annual Meeting. Aralez intends to hold a vote at the 2017 meeting of shareholders regarding the frequency of future say-on-pay proposals.

At the Pozen annual meetings of stockholders held on June 4, 2014 and June 10, 2015, approximately 77% and 53%, respectively, of the votes cast on the say-on-pay proposal were voted in favor of the proposal. The Pozen Compensation Committee considered the outcome of Pozen’s say-on-pay votes when making future compensation decisions for the named executive officers. The Pozen Compensation Committee spent the portion of Fiscal Year 2015 following the say-on-pay vote focusing on the executive compensation program as it related to the Tribute Transaction, and beginning to develop an executive compensation program for Aralez following the completion of the Tribute Transaction, and soliciting feedback from shareholders.

The input received from shareholders, as well as the 2015 Pozen say-on-pay vote results, have been considered by the Aralez Compensation Committee in the development of the 2016 executive compensation programs. In response to the 2015 say-on-pay vote, our Compensation Committee has taken the following actions, which differ from the past practices of Pozen:

·                              Double-Trigger Vesting on Equity Awards. Awards granted under the 2016 Long-Term Incentive Plan (the “2016 Plan”) will not automatically accelerate upon a change in control.

·                              No Section 280G Gross-Ups. The employment agreements with our new executive management team do not contain a tax gross-up with respect to any excise tax under Section 280G or 4999 of the Internal Revenue Code of 1986, as amended (the “Code”).

·                              Objective Performance Goals. The Aralez Annual Incentive Bonus Plan provides annual incentive bonuses based on the achievement of pre-established, objective performance goals rather than on a discretionary basis.

·                              Mix of Long-Term Equity Awards. Long-term equity incentives are composed of a 50/50 mix of time-based and performance-based awards, in order to more closely link pay to Company performance while retaining our executives and aligning their interests with the interests of our shareholders.

·                              Revised Peer Group. Our Compensation Committee developed a new peer group based on the anticipated size and revenues of Aralez following the Tribute Transaction.

·                              Emphasis on Performance-Based Compensation. For Fiscal Year 2016, approximately 50% of our CEO’s target compensation and 43% of our other named executive officers’ target compensation is earned based on the achievement of pre-established performance goals.

Our Compensation Committee will continue to take the results of the say-on-pay votes into consideration when it evaluates our executive compensation program.

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Philosophy and Compensation Process

The following is a description of our compensation philosophy and process for determining executive compensation, as well as the compensation philosophy and process of Pozen prior to the Tribute Transaction, which applied to the compensation decisions made during Fiscal Year 2015.

Objectives of Aralez’s Executive Compensation Program

Our compensation philosophy was developed by our Compensation Committee following the completion of the Tribute Transaction, and will continue to be refined to ensure alignment with our business and human capital objectives. Our executive compensation program is designed:

·                              to promote the achievement of our annual and long-term performance objectives as approved by the Compensation Committee and/or the Board;

·                              to ensure that our executive officers’ interests are aligned with maximizing shareholder value and the success of the Company; and

·                              to provide compensation packages that will attract, retain, and motivate superior executive personnel.

Our executive compensation program is designed to reward achievement of annual and long-term corporate goals, as well as individual goals that are supportive of our corporate goals and strategic objectives. We aim to provide higher levels of pay when executive and organizational performance exceeds the performance standards. Likewise, individual and organizational performance that falls short of the approved standards will result in payments and overall compensation that are at the lower end of competitive pay ranges. Our compensation programs are designed not only to reward past performance, but to provide incentives for continued high levels of executive performance, particularly through the multi-year vesting of equity awards. All compensation decisions are guided by the overarching principle that the highest comparative levels of compensation should be paid to our highest performing executives when the Company is achieving high levels of performance.

Our Compensation Committee uses a mix of salary, variable cash and equity-based incentives in our executive compensation program in order to motivate our executive officers to work to fulfill our corporate goals and to build long-term value for our shareholders. Our Compensation Committee also believes that employees should be owners of the Company, and all of our executive officers are shareholders or hold unvested equity-based incentive awards. As of May 3, 2016, our actively employed named executive officers beneficially owned 3.4% of the outstanding Common Shares of Aralez, which creates alignment with our shareholders.

Our Compensation Committee strives to mitigate excessive risk-taking that could harm our value or reward poor judgment by our executives. Several features of our executive compensation program reflect sound risk management practices that balance incentive opportunities with long-term value creation for our shareholders: (i) our annual cash incentives are based on balanced performance metrics that promote progress towards long-term Company goals rather than rewarding high-risk investments at the expense of long-term Company value; (ii) our Compensation Committee allocates compensation among base salary and short and long-term compensation target opportunities in such a way as to not encourage excessive risk-taking; and (iii) our Compensation Committee grants a mix of equity award instruments that include performance-based equity awards, full value awards, and appreciation awards, and have multi-year vesting periods, which mitigates risk and properly accounts for the time horizon of risk. Our Compensation Committee has determined that our policies, practices, and programs do not create risks that are likely to have a material adverse impact on the Company.

Role of Aralez Compensation Committee, Executive Officers, and Compensation Consultant

Our Compensation Committee is responsible for our executive compensation program. In accordance with its charter, our Compensation Committee’s responsibilities include reviewing and approving our overall compensation philosophy and the adequacy and market effectiveness of our compensation plans and programs; evaluating the performance of, and reviewing and approving total compensation for, its executive officers; and administering its equity-based and other incentive programs.

As required by its charter, our Compensation Committee is composed solely of independent directors under NASDAQ and SEC rules and “outside directors” as determined under Section 162(m) of the Code and the applicable Treasury Regulations.

Our Compensation Committee receives staff support from members of our management, including Mr. Adams, Mr. Koven, and Mr. Charles, as well as Jennifer Armstrong, our Executive Vice President, Human Resources and Administration, and Eric Trachtenberg, our General Counsel, Chief Compliance Officer and Corporate Secretary. Our management provides input to our

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Compensation Committee regarding corporate goals and performance criteria for our annual incentive awards and long-term performance awards. In evaluating our executive officers other than the CEO, our Compensation Committee relies in part on the input and recommendations of our CEO. In evaluating our CEO’s compensation, our Compensation Committee considers, among other factors, an annual self-assessment submitted by our CEO, as well as a thorough review of corporate performance. Our CEO is not present during our Compensation Committee’s deliberations or determinations of his compensation.

In addition, our Compensation Committee has engaged Radford, an Aon Hewitt Company, and leading compensation consultant, to assist the Compensation Committee in the performance of its duties. Radford served as an advisor to the Pozen Compensation Committee since 2008 in connection with the compensation decisions for the executive officers, and our Compensation Committee has continued this engagement following the completion of the Tribute Transaction. During Fiscal Year 2015 and Fiscal Year 2016, Radford has assisted our Compensation Committee with the development of our executive compensation program, including an assessment of Board compensation and the establishment of our 2015 peer group (described below) and has provided data relating to the compensation practices of our peers. Other than services provided to our Compensation Committee, Radford has not performed any services for Aralez, Pozen, or any of its management during 2016 or 2015.

Objectives of Pozen’s Executive Compensation Program

The Pozen Compensation Committee reviewed and approved all compensation paid to our named executive officers during Fiscal Year 2015 and was responsible for determining the most appropriate total executive compensation principles that govern such compensation.

In Fiscal Year 2015, the Pozen Compensation Committee focused the executive compensation program on (i) attracting the highly experienced management team that would be necessary to lead Pozen following the retirement of our founder, President, Chief Executive Officer and Chairman, and in connection with the complex and transformative combination with Tribute; (ii) retaining the personnel who would be vital to the successful completion of the Tribute Transaction and potential launch of YOSPRALA; and (iii) aligning the interests of the new management team with the interests of Pozen’s shareholders. Pozen’s executive compensation principles for Fiscal Year 2015 were based on the Pozen business strategy and business model and were designed to be competitive with Pozen’s peer group of companies and consistent with shareholder interests without encouraging unnecessary or excessive short-term risk.

Role of Pozen Compensation Committee, Executive Officers and Compensation Consultant

The Pozen Compensation Committee was responsible for our executive compensation program during Fiscal Year 2015, including approving the Pozen compensation philosophy, approving the compensation for executive officers, and administering the equity compensation plans.

The Pozen Compensation Committee reviewed and determined its independence using factors set forth in applicable SEC and NASDAQ rules on an annual basis, and was comprised solely of independent directors and “outside directors” as determined under Section 162(m) of the Code and the applicable Treasury Regulations.

The Pozen Compensation Committee received staff support from members of management. In the beginning of Fiscal Year 2015, Dr. Plachetka, our former President and CEO, reviewed the performance of each of our other named executive officers employed by Pozen at such time and made recommendations regarding their compensation to the Pozen Compensation Committee. The annual goal setting process used by the Pozen Compensation Committee for the named executive officers other than our CEO involved establishing performance criteria supportive of Pozen’s annual corporate goals and included elements of participation and refinement by our named executive officers, with final agreement by our CEO. The Pozen Compensation Committee recognized that internal, external and other extraordinary factors may lead to adjustments of corporate efforts that may not be reflected in the annual Board-approved corporate goals; therefore, the Pozen Compensation Committee used its judgment in completing a thorough review of annual corporate and personal performance before the annual awards were approved.

Each named executive officer’s goals were designed to require significant effort, cooperation and effectiveness in business plan execution in order to achieve the performance standards. After his appointment, Mr. Adams made recommendations to the Pozen Compensation Committee with respect to the compensation of the new members of our management team, including Messrs. Koven, Charles and Glickman.

As part of its 2015 review of Pozen’s compensation programs, the Pozen Compensation Committee directly engaged Radford to assist with several compensation-related projects, including development of our pre-Tribute Transaction severance plan, advice and peer data relating to the hiring of the new members of our management team, and an update of Pozen’s peer group to be more closely aligned to the estimated valuation of the combined entity following the completion of the Tribute Transaction.

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Peer Group and Benchmarking

Aralez Peer Group

In October 2015 and in preparation for the Tribute Transaction, the Pozen Compensation Committee engaged Radford to conduct an analysis of Aralez’s peer group and suggest updates to the peer group based on the business model of Aralez and the anticipated valuation of Aralez following the Tribute Transaction. A new peer group was selected based on the following criteria (reflecting projections as of October 2015):

·                              Commercial biopharmaceutical/specialty pharmaceutical companies, with no preference for location.

·                              Market Capitalization: range of 0.5x to 3x of the estimated post-deal market capitalization (estimated in October 2015 at $750 million).

·                              Revenue: range of 0.5x to 3x of the estimated post-deal annual revenue (estimated in October 2015 at $75 million).

·                              Preference for companies with fewer than 300 employees that meet the financial metrics set forth above to reflect the business model and organization complexity of similar leadership roles.

Using these criteria, the Pozen Compensation Committee approved the following peer group for purposes of compensation benchmarking following the completion of the Tribute Transaction:

In selecting peer companies, the Pozen Compensation Committee considered a number of factors, including whether a potential peer has products on the market, whether a potential peer has executive positions of similar scope of responsibility, as well as whether investors might consider such company as a peer when considering investments in the Company. Our peer group shares only a few peers with the Pozen peer group due to the larger size and different business model of Aralez. Our Compensation Committee determined that it was appropriate to have peers that ranged from 0.5x to 3x of the anticipated Aralez market capitalization due to the anticipated growth of Aralez through acquisitions following the Tribute Transaction. The approved peers have market capitalization ranging from approximately $200 million to $2 billion, and annual revenue ranging from approximately $20 million to $250 million.

Our Compensation Committee also considered the peer group criteria used by institutional investor advisory groups such as Institutional Shareholder Services (ISS) and Glass Lewis for making comparisons. Because the institutional investor advisory firms select peer companies from broad industry categories and do not focus on companies with products on the market and with similar business models, we have found that there is only limited overlap between the Aralez peer group and those used by the institutional investor advisory firms.

Pozen Peer Group

Pozen relied on survey data and information on compensation paid by comparable companies gathered by its compensation consultant, Radford, to benchmark its executive compensation programs. Radford conducted an independent review of the peer group selection criteria and specific companies at the request of the Pozen Compensation Committee. In selecting the peer companies, the Pozen Compensation Committee determined that Pozen’s market capitalization and the fact that it had products on the market sold by licensees were the two most critical criteria for making pay comparisons, and the Pozen peer group reflected these criteria.

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The companies below were identified by Radford in 2013 as the Pozen peer group for purposes of compensation benchmarking and remained unchanged until the changes noted above were made in October 2015.

These companies were selected based on the following criteria:

·                              Market Capitalization: range of 0.5x to 2x of the Company’s then current valuation, approximately $100M to $500M.

·                              Publicly traded biopharmaceuticals/biotherapeutics companies with a product on the market, with consideration for the therapeutic area.

·                              Location: predominately east coast (as available).

Elements of Compensation — Aralez Post-Transaction Programs

Our executive compensation program following the Tribute Transaction, as designed by our Compensation Committee, incorporates four primary elements of compensation, described below:

·                              Base salary: Fixed compensation based on the role of the executive and the base salary for similar positions in our market for talent. Base salary provides compensation regardless of market performance or external factors and helps to retain our management team.

·                              Annual cash incentives: Variable compensation based on Company performance and, for named executive officers other than the CEO, individual performance. Annual cash incentives encourage our executives to work towards our corporate goals and provides our executives an opportunity to earn more compensation for outstanding performance.

·                              Long-term incentive compensation: Variable compensation based on the value of our Common Shares. We grant both time-based awards and performance-based awards in order to retain our executives and to reward them for above-target performance. Equity-based compensation aligns the interests of our executives with the interests of our shareholders.

·                              Other benefits: Our executives participate in our benefit plans on the same basis as other employees, and we do not provide material perquisites.

In addition, employment agreements with each of our named executive officers provide for potential payments upon certain terminations of employment and upon a change of control of our company, which are described in the narrative accompanying the Summary Compensation Table (for fiscal years 2015, 2014 and 2013) and Grants of Plan-Based Awards in 2015 Table and the section of this Proxy Statement entitled “Potential Payments on Termination and Change of Control”. Our Compensation Committee believes that each of these compensation elements complements the others and that together they serve to achieve our compensation objectives.

Compensation awarded to our named executive officers is weighted towards performance-based compensation, with an emphasis on long-term equity incentive awards. We believe that putting a substantial proportion of our named executive officers’ compensation “at risk” motivates our executives to achieve our corporate objectives, and delivering compensation in the form of equity creates an ownership culture amongst our executives and ensures that our executives are focused on the interests of our shareholders.

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The chart below illustrates the proportion of our CEO’s and the average of our other named executive officers’ targeted compensation for 2016 that is allocated to each type of compensation.

The target annual cash incentive bonus and performance share units are earned based on pre-established Company performance goals, meaning that approximately 50% of our CEO’s target compensation and 43% of our other named executive officers’ target compensation is only earned if the performance goals have been satisfied. Equity-based compensation makes up approximately 53% of our CEO’s target compensation and 50% of our other named executive officers’ target compensation, the value of which will increase or decrease with the price of our Common Shares, ensuring an alignment between our executives and our shareholders.

Base Salary

The base salary of our CEO and other named executive officers is intended to provide a level of assured cash compensation that is commensurate with their senior professional status and career accomplishments. Accordingly, their base salaries are designed to be competitive with similar positions within the biopharmaceutical industry. Our Compensation Committee relies on peer group analysis, surveys, and the advice of Radford to set base salaries for our named executive officers that are benchmarked to similar roles in the peer group.

Base salary adjustments include a combination of cost-of-living and merit increases, based on the executive’s performance of his or her key responsibilities and duties, and will be generally approved, communicated, and implemented in March of each year to allow for evaluation of the entire year, including our financial performance. Our Compensation Committee considers each executive officer’s self-assessment of annual performance in its base salary review process and takes into account the CEO’s assessment of and recommendations with respect to each of the other executive officers. In addition, our Compensation Committee considers the market pay practices for the individual jobs.

Our Compensation Committee reviewed the base salaries of our named executive officers in March 2016, and determined that no changes would be made. The base salary for Messrs. Adams, Koven, Charles and Glickman for Fiscal Year 2016 remain at the level that was negotiated when they joined Pozen during Fiscal Year 2015, as set forth below.

Annual Cash Incentives

We award annual cash incentives to our named executive officers in order to reward them for the achievement of short-term goals relating to the financial performance of the Company as well as their execution of our operating plan and strategic initiatives. Annual cash incentives are paid pursuant to our Annual Incentive Bonus Plan, which is a sub-plan under our 2016 Plan.

Target annual cash incentives are based on a percentage of each named executive officer’s base salary. The target annual cash incentive level for each named executive officer is specified in his employment agreement. Annual cash incentive targets were set based upon advice from the Pozen Compensation Committee’s independent consultants and through negotiations with our executives when they were hired.

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The annual cash incentive for our CEO is based solely on the achievement of Company goals, while the annual cash incentive for our other named executive officers is based 75% on the achievement of Company goals and 25% on a subjective assessment of individual performance, relating to core values.

For Fiscal Year 2016, our Compensation Committee set performance goals based on three separate performance metrics, with the weightings set forth below:

(1)   Net Revenue includes the revenue from Tribute and Pozen beginning January 1, 2016 prior to the closing of the Tribute Transaction on February 5, 2016.

Adjusted EBITDA and Adjusted Net Income results are adjusted at the end of the performance period to take into account items of significant income or expense which are determined to be appropriate adjustments and to exclude the following one-time/discrete items:

·          Items related to a change in accounting principle and tax law;

·          Costs to evaluation, execute and integrate acquisitions, and related accounting implications, including acquired in-process research and development;

·          Items related to the sale or disposition of a business, segment or product, including discontinued operations;

·          Other items including changes in foreign currency exchange rates, asset impairment charges, income tax adjustments and losses on extinguishment or modification of debt;

·          Charges related to stock-based compensation including charges related to warrants;

·          Depreciation and amortization;

·          Restructuring costs; and

·          Financing costs as well as related interest expense implications.

Performance goals are based on our corporate plan for Fiscal Year 2016, with performance at the budget level resulting in a payout at approximately the target level.

Each performance goal is assigned a threshold, target, stretch, super-stretch, and super-super-stretch level. Payout (as a percentage of target) for each level of achievement is set forth below:

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The threshold level of performance must be achieved on the Net Revenue goal and also either Adjusted EBITDA or Adjusted Net Income in order for payment on any performance goal to be paid out above the target level. Payout percentages are interpolated in a straight-line basis between band points. Our Compensation Committee set performance goals that are aligned with our corporate plan for Fiscal Year 2016 such that the stretch, super-stretch, and super-super-stretch payout levels would require extraordinary performance.

In the first quarter of 2017, our Compensation Committee will review 2016 performance and determine the level of achievement of the performance goals for the annual incentive bonuses and the individual performance of each of our named executive officers other than the CEO.

Long-Term Incentive Compensation

Long-term equity-based incentive compensation is a key element of the Aralez executive compensation program.  Equity-based incentive compensation ties a significant portion of compensation to Company performance by linking a significant portion of the executive’s total pay opportunity to the price of our Common Shares. The long-term equity-based compensation package granted to our executives is composed of stock options, time-based RSUs, and performance-based restricted stock units (“PSUs”), in the proportions set forth below:

Our Compensation Committee grants these types of awards together in order to balance the goals of retention and pay-for-performance.

Our named executive officers were granted equity awards on March 17, 2016, with the following grant date fair value (at the target level):

(1)   Grant date fair value of stock options was determined using a Black-Scholes model. The grant date fair value of RSUs and PSUs was determined using the “face value” of these awards, based on the closing price of our stock on NASDAQ on the date of grant.

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Procedures and Policies for Granting Equity-Based Awards

Our Compensation Committee approves the grant of all equity and equity-based awards to our CEO and other executive officers, as well as to the non-employee members of our Board. Equity awards to our named executive officers for Fiscal Year 2016 were granted in March on the second clear trading day following the end of our year-end blackout period. In all cases, stock options are granted at exercise prices equal to the closing price of our Common Shares as reported on NASDAQ on the date of grant.

New-hire grants for our executive officers are approved by our Compensation Committee prior to employment and are granted on a quarterly basis following the date of hire. As permitted under the 2016 Plan, our Compensation Committee delegated to the CEO the authority to grant stock options and RSUs to new non-executive officer employees upon commencement of employment in accordance with a specified schedule of numbers of stock options or RSUs per grant, based on hiring position.

Other Benefits

Benefits offered to our named executive officers serve as a safety net of protection against financial catastrophes that can result from illness, disability or death. Benefits offered to our named executive officers are substantially the same as those offered to all of our regular full-time employees. We maintain a 401(k) plan for our employees, including our named executive officers, to encourage our employees to save some portion of their cash compensation for their eventual retirement. Effective April 1, 2016, we match 50% of the first 6% of an employee’s eligible earnings in the 401(k) plan. We generally do not provide substantial perquisites to our executives.

Elements of Compensation — Pozen Programs

The primary components of the Pozen executive compensation program were base salary, annual cash incentives, long-term incentives, and other benefits. In compensating our CEO and our other named executive officers, the Pozen Compensation Committee sought to ensure shareholder alignment by providing competitive base salaries; annual performance-based cash incentives; and longer-term awards under our equity-based incentive programs that were all targeted at the median of the peer group.

Although all of Pozen’s full-time, regular salaried employees were eligible to receive cash bonuses and equity-based compensation, the Pozen Compensation Committee historically placed a higher percentage of our CEO’s and other named executive officers’ total compensation “at risk”, as they have greater responsibility for, and a more direct impact on, overall corporate results.

Base Salary

The Pozen Compensation Committee set base salaries at a level that was competitive with other companies in the Pozen peer group. In addition to the peer group analyses undertaken by the Pozen Compensation Committee as described above, Pozen participated in prior years in, and subscribed to, the Radford Global Life Sciences Survey, which includes data from nearly 800 participating companies.

In March 2015, the Pozen Compensation Committee evaluated Pozen’s performance and the individual performance of each executive officer. The Pozen Compensation Committee awarded Dr. Plachetka and Mr. Hodges an increase in their base salaries of approximately 3.0% over their base salaries in 2014. The 3.0% range used for salary adjustments was in line with the survey data to which Pozen subscribed, and was in line with the increases provided to the broader Pozen employee population.

The base salaries of Messrs. Adams, Koven, Charles and Glickman were negotiated at arms’ length in connection with their hiring. The Pozen Compensation Committee considered peer data during these negotiations, as well as the complexities of the Tribute Transaction, the potential size of Aralez following the transaction, and the extensive experience and successes of this management team. The initial base salary for Messrs. Adams, Koven, Charles and Glickman are $700,000, $450,000, $400,000 and $385,000, respectively.

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Annual Cash Incentives

The Pozen Compensation Committee awarded annual cash incentives to our CEO and our other named executive officers on a discretionary basis based on a review of corporate and individual performance objectives. Pozen established corporate goals during every calendar year which were reviewed and approved by the Pozen Board. The goals were designed to drive long term value for Pozen shareholders, such as obtaining approval for product candidates, which can take many years, obtaining partners to commercialize approved products, and managing expenses. The annual cash incentive was also based on achievement of the executive’s individual goals for the year, which often included individual development goals designed to facilitate professional growth and succession planning.

Our named executive officers had the opportunity to earn an annual cash incentive that was calculated as a percentage of the executive’s annual base salary. The target annual cash incentive level for each of our named executive officers for Fiscal Year 2015, as specified in his employment agreement, was as follows: Mr. Adams, 100%; Dr. Plachetka, 65%; Mr. Hodges, 40%; Mr. Koven, 75%; Mr. Charles, 45%; and Mr. Glickman, 45%.

Following Fiscal Year 2015, the Pozen Compensation Committee evaluated the annual performance of the CEO and each of the other named executive officers, focusing on the executive’s performance in his area or areas of functional responsibility as well as the achievement of Pozen’s annual corporate goals and other significant corporate accomplishments, and determined the bonus that would be awarded to each executive.

The 2015 corporate goals were determined by the Board in consultation with the new Pozen management team. Due to the focus on the Tribute Transaction during Fiscal Year 2015, both the CEO and the other executives’ individual goals for Fiscal Year 2015 were identical to Pozen’s overall corporate goals set forth below:

·          Complete the Tribute Transaction (assuming shareholder approval);

·          Develop a commercialization strategy to potentially launch YOSPRALA in 2016 and execute the related 2015 activities;

·          Complete all supply chain activities, including developing an alternate API supplier and regulatory filing, to obtain regulatory approval and allow a 2016 launch of YOSPRALA; and

·          Develop the Aralez Pharmaceuticals Strategic Plan and complete the 2015 activities.

These corporate goals were not assigned specific weightings. The Pozen Compensation Committee also took into account the recommendations of the CEO in determining the annual cash incentives for our other named executive officers.

In March 2016, the Aralez Compensation Committee reviewed Pozen’s performance during Fiscal Year 2015 to determine the annual cash incentive awards that were earned by the legacy Pozen executives, including our named executive officers. The Aralez Compensation Committee determined that the corporate goals relating to the commercialization strategy for YOSPRALA and the development of the Aralez strategic plan were completed during Fiscal Year 2015. However, the corporate goal relating to the supply chain activities relating to YOSPRALA was not completed during 2015, and the Tribute Transaction was not completed until the first quarter of Fiscal Year 2016. In making its determination as to the level that the annual cash incentive would be funded for Fiscal Year 2015, the Aralez Compensation Committee recognized that the delay of the completion of the Tribute Transaction was due to unanticipated circumstances, and that our management team took all necessary steps to effect the completion of the Tribute Transaction. The Aralez Compensation Committee determined that, because only two of the four corporate goals were fully completed, and a third goal was incomplete only due to outside factors, it would be fair and reasonable to fund the 2015 bonus pool at 60% of the target level. As a result of this determination, Mr. Hodges received an annual cash incentive award of $89,709, which is equal to 60% of his target annual cash incentive.

Each of our newly hired executives, including our CEO, negotiated a guaranteed minimum bonus for Fiscal Year 2015 equal to the individual’s target annual cash incentive, pro-rated for the portion of Fiscal Year 2015 in which he was performing services. For Messrs. Adams, Koven, Charles, and Glickman, the guaranteed minimum bonus was $408,333, $196,875, $77,500 and $90,956, respectively, which reflects the target bonus, pro-rated for the portion of Fiscal Year 2015 in which he was performing services. The Aralez Compensation Committee determined that these executives would not receive annual cash incentives in excess of the minimum guaranteed bonuses that were negotiated at the time of hire, and Messrs. Adams, Koven, Charles and Glickman each received the minimum guaranteed bonus listed above with respect to Fiscal Year 2015.

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Equity and Other Long-Term Incentive Compensation

Stock-based incentives were a key component of the Pozen executive compensation program and have historically been provided to all of Pozen’s full-time employees. In Fiscal Year 2015 and prior years, it was Pozen’s practice to grant equity awards annually after careful review of corporate and individual performance. If the corporate goals were achieved, the equity pool was funded at the target level for all employees. The Pozen Compensation Committee also evaluated the corporate and individual performance of the CEO and other named executive officers and awarded annual equity grants based upon performance and evaluation of market practices of the peer companies. Pozen traditionally vested these awards over four years to include a retention element to the awards.

Long-term equity incentive awards were granted by Pozen under the POZEN Inc. 2010 Equity Compensation Plan (the “2010 Plan”). Following the completion of the Tribute Transaction, no further awards will be granted under the 2010 Plan. Future equity and equity-based awards will be granted under the 2016 Plan.

The Pozen Compensation Committee generally granted long-term incentives at the end of December after evaluation of performance for the calendar year. In accordance with this practice, on December 31, 2014, certain executive officers were granted RSUs, and Dr. Plachetka was granted a long-term incentive award consisting of a mix of cash and RSUs. However, due to the changes to the management team and the Tribute Transaction, no grants of equity compensation were made to our named executive officers in 2015, except for the sign-on RSUs described below and the performance-based stock options granted to Dr. Plachetka in connection with his retirement.

Sign-On Restricted Stock Units

Pozen has also granted equity awards in connection with the hiring of certain executives, in order to recruit the executives and to give the new executives an ownership stake upon their hire. The Pozen Compensation Committee did not have a policy as to the size or the terms of sign-on equity grants, and sign-on grants were historically made on a case-by-case basis, and through negotiation with the executives. In connection with the hiring of Pozen’s new management team, the Pozen Board and Compensation Committee granted certain sign-on RSU awards to Messrs. Adams, Koven, Charles and Glickman, which are described below in the section of this Compensation Discussion and Analysis entitled “Recruitment of New Management Team” and also in the narrative accompanying the Summary Compensation Table (for fiscal years 2015, 2014 and 2013) and Grants of Plan-Based Awards in 2015 Table.

Other Benefits

Pursuant to a discretionary employer match, in Fiscal Year 2015 Pozen matched all employee contributions in our 401(k) plan at 50% up to the IRS imposed limit. The IRS maximum allowable contribution in Fiscal Year 2015 was $18,000 with an additional $6,000 allowed for employees who were 50 years old or older. Pozen historically increased its employees’ base salary, including our named executive officers’, for the cost of group long-term disability insurance coverage to allow the premium to be employee paid, and provided a group life insurance benefit in a coverage amount equal to two times the employee’s annual base salary, up to a maximum of $750,000. Our named executive officers participated in these programs on the same terms and conditions as our other employees.

Pozen provided certain additional perquisites to its former CEO which were negotiated at the time Dr. Plachetka became CEO. These perks included the payment of life and disability insurance premiums above the level provided to our other employees, and reimbursement of certain expenses associated with its former CEO’s tax and estate planning. Mr. Adams and Mr. Koven also negotiated for payment of their legal fees in connection with their engagement by Pozen. The aggregate compensation value of these benefits is shown in the “All Other Compensation” column of the Summary Compensation Table (for fiscal years 2015, 2014 and 2013).

Post-Employment Benefits

Providing reasonable severance benefits to our named executive officers in the context of termination by us without cause or by the executive for good reason (as defined in their employment agreements), either in connection with a change of control or otherwise, is an important part of maintaining a competitive executive compensation program and contributes to our ability to attract and retain high quality executives. In part, this reflects a recognition that it may be difficult for a senior executive to find a comparable position in a relatively short period of time following termination of employment. Providing reasonable protections to our named executive officers in the event of a change of control is helpful in aligning our executives’ interests with those of our shareholders in the event a potential change of control situation should occur.

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Pozen entered into employment agreements with our named executive officers when they were initially hired by Pozen. These agreements require that we provide severance and related benefits in the event of a termination of employment or a change of control. In connection with negotiating these provisions in our executives’ employment agreements, the Pozen Compensation Committee received advice from its legal and compensation consultants as to practices and levels of such benefits among comparable companies. These provisions and benefits, as well as an estimate of the dollar value of these benefits that would be payable to our executive officers under specified assumed conditions and the dollar value of the benefits provided to Dr. Plachetka upon his retirement, are described in the section of this Proxy Statement entitled “Potential Payments on Termination and Change of Control.”

In addition, in connection with the entry into the Tribute Transaction agreements, the Pozen Board adopted the POZEN Inc. Employee Severance Plan and Summary Plan Description (the “Severance Plan”) to provide severance benefits to eligible employees of Pozen whose employment is terminated involuntarily under certain circumstances. All employees employed by Pozen as of March 31, 2015 are covered by the Severance Plan, including Mr. Hodges. The benefits provided under the Severance Plan are in lieu of, and not in addition to, any severance pay or benefits Mr. Hodges would be entitled to under his employment agreement. Our other named executive officers are not covered by the Severance Plan. A description of the payments and benefits under the Severance Plan, including an estimate of the dollar value of these benefits that would be payable to Mr. Hodges upon an involuntary termination, are described in the section of this Proxy Statement entitled “Potential Payments on Termination and Change of Control.”

We do not offer post-employment health or life insurance to our named executive officers other than to the extent such benefits are payable pursuant to their employment agreements.

Recruitment of New Management Team

On May 31, 2015, we appointed Adrian Adams as our CEO and Andrew I. Koven as our President and Chief Business Officer. Between April 2, 2015 and the date of their appointment, Mr. Adams and Mr. Koven served as consultants to Pozen. Mr Adams and Mr. Koven were instrumental in the planning and execution of the Tribute Transaction and in the assessment of other potential strategic alternatives.

Mr. Adams is a highly qualified pharmaceutical executive with over 30 years of experience in the industry and a reputation for growing organizations by excellence in commercialization and executing on business development opportunities that deliver compelling growth and value for shareholders. Mr. Adams and Mr. Koven have worked together for more than 12 years and are a proven and successful management team. Mr. Adams previously served as Chief Executive Officer and President of Auxilium Pharmaceuticals Inc., a specialty pharmaceutical company, where Mr. Koven served as Chief Administrative Officer and General Counsel, until its acquisition by Endo International plc in January 2015. Mr. Adams also previously served as Chief Executive Officer of Neurologix, Inc., Inspire Pharmaceuticals, Inc., Sepracor, Inc., and Kos Pharmaceuticals, Inc., with Mr. Koven serving as President and/or Chief Administrative Officer and General Counsel during Mr. Adams’ tenure at each company.

We believe that Mr. Adams and Mr. Koven have a track record of success and the unique experience required to best position Aralez, to succeed, and to bring the greatest value to our shareholders. Mr. Adams and Mr. Koven have successfully led four public companies in our industry, and bring extensive global experience launching and commercializing innovative pharmaceutical products. The recruitment of Mr. Adams and Mr. Koven was vital for the success of Pozen and, ultimately, Aralez, and they have played a key role in facilitating the Tribute Transaction.

In making offers to engage Mr. Adams and Mr. Koven, the Pozen Compensation Committee recognized the need to be competitive with other offers these executives could receive in the marketplace, and, to induce them to join Pozen, granted one-time sign-on RSUs. The Pozen Board granted RSUs equal to 5.4% of the equity of Pozen to Mr. Adams, and RSUs equal to 4.1% of the equity of Pozen to Mr. Koven (these sign-on RSUs represent approximately 3.0% and 2.3%, respectively, of the equity of Aralez following the Tribute Transaction). The RSUs will vest on an annual basis ratably over four years, subject to the continued service through the applicable vesting dates. The RSUs were made as “inducement grants” as permitted under the NASDAQ rules, and were not granted under the 2010 Plan.

The Pozen Board and Compensation Committee considered these RSU awards as one-time costs which are an investment for the future of Pozen and Aralez. In determining the size and vesting of these sign-on RSU grants, the Pozen Board and Compensation Committee considered the following:

·                  Transformational Nature of Tribute Transaction: The Pozen Board intended the Tribute Transaction to be a transformational change to Pozen. In order to change the direction of Pozen, they needed to recruit a leader with the specific skills to lead Pozen through this change and to lead Aralez following the Tribute Transaction. Few executives have the experience required to lead Pozen, and ultimately Aralez, through this type of transformational change, and

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                        the Pozen Compensation Committee and Board determined that a large sign-on equity grant would be appropriate to ensure the success of this transformation.

·                  Unique Qualifications of Mr. Adams and Mr. Koven: Mr. Adams and Mr. Koven have a proven track record and are uniquely qualified to lead Pozen and Aralez. Mr. Adams and Mr. Koven had already been deeply involved in the planning of the Tribute Transaction at the time they were hired. The Pozen Board determined that the size of the sign-on RSUs was appropriate considering Mr. Adams’ and Mr. Koven’s proven track record of success, the complexity of Aralez following the Tribute Transaction, and the special skills that are needed to lead a company with this level of complexity.

·                  Sign-On Grants at Peer Companies: The Pozen Compensation Committee reviewed information regarding sign-on equity awards at comparable companies, and determined that the sign-on RSUs would be comparable to grants to other recent CEO and senior executive hires.

·                  Link to Shareholder Interest: These sign-on RSU awards establish an immediate and strong link between the executives and shareholder interest. The value of the sign-on RSUs will only increase if our shareholders receive value.

·                  Arms-Length Negotiations: The Pozen Compensation Committee engaged in extensive negotiations with Mr. Adams and Mr. Koven in connection with their hiring, including with respect to the size of the sign-on RSUs. It was clear to the Pozen Compensation Committee that the sign-on RSUs were necessary to induce Mr. Adams and Mr. Koven to join Pozen. Mr. Adams and Mr. Koven eventually agreed to this number of sign-on RSUs, and the Pozen Board and Compensation Committee determined that securing the services of Mr. Adams and Mr. Koven were worth this investment.

·                  Grant as Percentage of Outstanding Stock Appropriate: Due to the state of Pozen’s business at the time, including the regulatory status of YOSPRALA and the need for commercial pharmaceutical experience, and the importance of securing the services of Mr. Adams and Mr. Koven, the Pozen Board determined the sign-on RSU grants based on a percentage of Pozen common stock outstanding rather than based on the grant date fair value.

·                  Time-Based Vesting Was Appropriate: Because a strategic plan had not yet been developed for the period after the Tribute Transaction, and because Mr. Adams and Mr. Koven would be important to the development of such strategic plan, the Board believed that meaningful performance goals could not be put in place for the sign-on RSUs and granted the sign-on RSUs with time-based vesting.

The sign-on RSUs are subject to the 15% excise tax imposed by Section 4985 of the Code upon the completion of Tribute Transaction. As described in further detail in the section of this Compensation Discussion and Analysis entitled “Compensation Issues Related to the Tribute Transaction and Formation of Aralez—Section 4985 Tax Equalization”, the Pozen Board determined that Mr. Adams and Mr. Koven would receive an equalization payment to cover the amount of the excise tax and any additional taxes attributable to the equalization.

Following the appointment of Mr. Adams and Mr. Koven and the subsequent entry into the Tribute Transaction agreements by Pozen, one of their first objectives was assembling a strong and experienced leadership team to position Pozen to a successful combination with Tribute and to lead Aralez as the new combined entity. In June and July 2015, we entered into employment agreements with several new executives, including Mr. Charles and Mr. Glickman. Mr. Glickman was appointed Pozen’s Chief Commercial Officer. Mr. Charles was appointed Pozen’s Senior Vice President, Finance, with the intention of becoming the Chief Financial Officer of Aralez, and was subsequently appointed Chief Financial Officer effective January 1, 2016. These new executives also each received a sign-on grant of 29,137 RSUs upon their engagement by Pozen, which vest on an annual basis ratably over four years, subject to their continued service through the applicable vesting dates, and a cash sign-on grant equal to $400,000 and $200,000 for Mr. Charles and Mr. Glickman, respectively. The sign-on RSUs granted to Mr. Charles and Mr. Glickman were granted under the 2010 Plan. The size of the cash sign-on grant and the sign-on RSU grant were determined through negotiation with the executives. During the negotiations with Mr. Charles and Mr. Glickman, the Pozen Compensation Committee recognized that any equity-based awards granted to the executives prior to the Tribute Transaction would be subject to the 15% excise tax imposed by Section 4985 of the Code. The Pozen Compensation Committee agreed to provide a tax equalization payment to Mr. Charles and Mr. Glickman, as described above.

In addition, in order to lower the costs associated with the sign-on RSU grants, the Pozen Compensation Committee only granted 25% of the total number of RSUs that were intended to be eventually granted to Mr. Charles and Mr. Glickman at the time of

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hire, with the understanding that the additional 75% of the intended sign-on RSU award would be granted on or about the one-year anniversary of employment. Neither Mr. Charles nor Mr. Glickman had a legal, contractual, or enforceable right to any additional equity grants, and neither Pozen nor Aralez was obligated to grant additional RSUs to Mr. Charles or Mr. Glickman. Since the completion of the Tribute Transaction was delayed past the originally anticipated closing date, and the price of Pozen common stock fell between the executives’ dates of hire and the closing date, the Aralez Compensation Committee determined that the costs associated with the sign-on RSUs would be significantly lower than originally anticipated, and that the additional sign-on RSU award would provide retention and incentive benefits to Mr. Charles and Mr. Glickman and should not be further delayed. On February 12, 2016, the Aralez Compensation Committee granted each of Mr. Charles and Mr. Glickman an additional sign-on grant of 86,863 RSUs (the additional 75% of the award referred to above), which vest in four equal installments on the first, second, third and fourth anniversary of the executive’s date of hire, and agreed to provide a tax equalization payment with respect to the additional sign-on grant, as described above.

The terms of the employment agreements entered into with Messrs. Adams, Koven, Charles and Glickman are included in the narrative accompanying the Summary Compensation Table (for fiscal years 2015, 2014 and 2013) and Grants of Plan-Based Awards in 2015 Table and the section of this Proxy Statement entitled “Potential Payments on Termination and Change of Control”.

Departure of Dr. Plachetka

John R. Plachetka, Pozen’s founder, retired as Chairman, President, and Chief Executive Officer, and resigned as a director, effective June 1, 2015. In connection with Dr. Plachetka’s retirement from Pozen, Dr. Plachetka and the Pozen Board entered into a separation agreement and release detailing the severance payments and benefits that Dr. Plachetka would receive following his retirement.

The separation agreement also provides for a special performance-based stock option award to be granted to Dr. Plachetka in recognition of his efforts to secure approval of YOSPRALA by the FDA. Dr. Plachetka was granted stock options with a grant date fair value of $1 million. These options have a term of 10 years and may vest upon the achievement of certain milestones relating to the timing of the approval of YOSPRALA, as set forth in the separation agreement. Dr. Plachetka is also eligible to receive a cash bonus of up to $708,334 if YOSPRALA approval is obtained from the FDA within certain time frames set forth in the separation agreement, in lieu of certain forfeited long-term incentive plan awards. The Pozen Board determined that the performance-based stock options and cash bonus were appropriate to reward Dr. Plachetka for his efforts to secure FDA approval for YOSPRALA, even though the approval had not been obtained as of the date of his retirement. YOSPRALA has not yet been approved as of the date of this filing, and as a result, 50% of the stock option award and 50% of the cash bonus cannot be earned. Details regarding the separation agreement including the terms of the performance-based stock option and cash bonus, are set forth in the narrative accompanying the Summary Compensation Table (for fiscal years 2015, 2014 and 2013) and Grants of Plan-Based Awards in 2015 Table and the section of this Proxy Statement entitled “Potential Payments on Termination and Change of Control”.

Compensation Issues Related to the Tribute Transaction and Formation of Aralez

During Fiscal Year 2015, the Pozen Board and Compensation Committee paid close attention to the executive compensation matters that arose as a result of the Tribute Transaction. Retaining critical members of our management team through the closing of the Tribute Transaction was key to the success of the transaction and of Aralez. Pozen’s Board and Compensation Committee took steps to encourage the retention of these individuals, and considered the increased tax burden on our named executive officers relative to the other shareholders due to the structure of the Tribute Transaction.

Section 4985 Tax Equalization

Section 4985 of the Code imposes a 15% excise tax on the value of certain equity compensation held during the period commencing six months before and ending six months after the closing of the Tribute Transaction by individuals who are and/or were directors and executive officers of Pozen and are or were subject to the reporting requirements of Section 16(a) of the Exchange Act during the same period. This excise tax applies to all compensation (or rights to compensation) granted to such persons by Pozen if the value of such compensation or right is based on (or determined by reference to) the value of stock in Pozen or its affiliates (but excluding statutory incentive stock options and holdings in tax-qualified plans). This includes: (i) unexercised vested or unvested time-based and performance-based nonqualified stock options; (ii) unvested restricted stock; (iii) unvested RSUs; and (iv) other stock-based compensation held by such persons during this 12-month period. The excise tax, however, will not apply to any stock option that is exercised on or prior to the closing date of the Tribute Transaction or any other stock compensation that is distributed, cashed-out, or otherwise paid in a manner resulting in income inclusion (for U.S. purposes) prior to the closing of the Tribute Transaction.

The Pozen Board carefully considered the potential impact of the excise tax on Pozen’s executive officers and directors at the time it approved the Tribute Transaction and reviewed the approach taken by other issuers in similar transactions, including in

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transactions where executive officers and directors were reimbursed for excise tax applicable as a result of the transaction. The financial analysis considered by the Pozen board of directors at the time the Tribute Transaction was approved included an estimate of potential excise tax equalization payments.

The Pozen Compensation Committee held several meetings to consider the excise tax matter. Under the current understanding of Section 4985 of the Code, the Pozen Compensation Committee determined that there were four viable alternatives with respect to the treatment of the excise tax payable by the executive officers and directors:

·                              Provide an equalization payment to the Pozen executive officers and directors for the amount of the excise tax and for any additional taxes attributable to equalization.  We refer to these payments as tax equalization payments. Providing the Pozen executives and directors with a tax equalization payment would have the highest cost to Pozen but would ensure that all of the incentive and retention aspects of the equity awards remain in place.

·                              Accelerate the vesting for some or all of the outstanding awards.  Accelerating the vesting of some or all of the Pozen stock options and RSUs would reduce the value of the equity compensation subject to the excise tax. Pozen could then reimburse the excise tax and additional taxes attributable to equalization for only awards that are not accelerated. This alternative would reduce the tax equalization payments and lower the cost to Pozen, but would also reduce the incentive and retention value of the awards.

·                              Convert outstanding awards into cash-based awards not tied to the performance of Pozen stock.  This alternative would eliminate those new awards from the applicability of the excise tax, but only if the Tribute Transaction closed more than six months after the conversion of the awards and Pozen would still be required to make significant cash payments at the time of vesting.

·                              Take no action at all.  While there would be no cash cost to Pozen, this alternative would result in the Pozen executive officers and directors being subject to the 15% excise tax, and not receiving the intended benefits of the awards, and indeed being unfairly penalized financially, as a result of the imposition of an excise tax that was not contemplated when many of the awards were issued.

Based upon the advice of its independent advisers, as well as reports from management of Pozen, including an examination of the potential impact of the excise tax on Pozen’s executive officers and directors, the Pozen Compensation Committee determined to take the following actions: (i) accelerate the vesting of the outstanding equity awards for the legacy Pozen employees (including Mr. Hodges); (ii) provide a tax equalization payment for the new management team officers (including Messrs. Adams, Koven, Charles and Glickman); (iii) provide a tax equalization payment to executive officers hired prior to May 31, 2015 and directors for any vested stock options that are “underwater” at the completion of the Tribute Transaction (i.e., the strike price is above the stock price on the day of the transaction); and (iv) provide a tax equalization payment to the directors for outstanding unvested RSUs that are being assumed and converted. The Pozen Compensation Committee determined this would be appropriate for the following reasons:

·                              There should be no financial penalty to the executive officers and directors.  Since the Tribute Transaction was pursued for the benefit of all of Pozen’s shareholders, the Pozen Compensation Committee determined that the executive officers should not be financially penalized, relative to Pozen’s shareholders in general, for either their efforts to complete the Tribute Transaction or their mere status as individuals covered by Section 4985 of the Code. The Pozen executive officers and directors were responsible for consummating the Tribute Transaction, which should benefit Pozen’s shareholders, and they should not be penalized for creating these benefits. The tax equalization payments will put the Pozen executive officers and directors in the same net after tax position they would have been in if no such excise tax had been applied. All Pozen executive officers and directors will still be subject to applicable income and capital gains taxes on these equity awards when due.

·                              The awards held by the recently hired executive officers were meant to retain their services. Acceleration of these awards could avoid any potential excise tax, but would not serve to retain these executives. It is vital for Pozen and Aralez to retain the services of these highly skilled executives in order to realize the strategic benefits of the Tribute Transaction. If these executives were forced to pay the excise tax on their recently granted equity awards, Pozen and Aralez would need to offer additional incentives to make up for the loss of compensation, or else risk losing these talented executives during a key time for the company.

·                              Converting the awards into cash-based awards was not appropriate.  This would require a large outlay of cash at the time of the ultimate payment of the awards and would not provide the intended benefit if the Tribute Transaction closed prior to the end of Fiscal Year 2015 as originally anticipated (in which event the excise tax still would be payable, notwithstanding the conversion of the awards).

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·                              Acceleration for legacy officers would reduce the potential tax equalization payments.  This split approach, acceleration of some awards and tax equalization payments for other awards, provides a good balance between reducing the cash costs payable and maintaining a significant portion of the outstanding equity awards for both long-term incentive and retention purposes. The Pozen Compensation Committee estimated that the acceleration of the awards held by legacy officers would reduce the aggregate tax equalization payments by approximately $0.6 million.

For all new executive officers and directors, the Pozen Compensation Committee and Board approved the payment by Pozen of a tax equalization payment in the amount of the excise tax payable with respect to the equity compensation that remained unvested as of the closing of the Tribute Transaction, and the additional sign-on RSUs granted in February 2016, as well as any additional taxes payable by the current executive officers as a result of equalization. The Pozen Compensation Committee and Board also approved the payment of tax equalization payments to the legacy executive officers and directors for the excise tax and the attendant related taxes for any vested stock options that were underwater at the time of the completion of the Tribute Transaction.

Retention Program

On June 19, 2015, the Pozen Board approved a retention program designed to retain certain Pozen employees so they could complete critical activities and transition their duties to new Aralez employees after the completion of the transaction between Pozen and Tribute. The retention program ensured that the Pozen legacy management team remained committed during the difficult and uncertain period of transition.

Mr. Hodges participated in the retention program, and entered into a retention agreement on June 19, 2015. Pursuant to the retention agreement Mr. Hodges received an upfront payment of $240,000 as an incentive to remain with Pozen through the completion of the Tribute Transaction. He received an additional payment of $240,000 on April 1, 2016, following his completion of certain pre-determined performance conditions. For Mr. Hodges, these performance conditions consisted of assisting in the financial and accounting activities related to the Tribute Transaction, leading Pozen’s U.S. finance and accounting operations through the end of Fiscal Year 2015, completing the 2015 audit, assisting in developing new accounting and compliance systems for Aralez, and transitioning his duties to Mr. Charles no later than April 1, 2016.

Stock Ownership Guidelines

Employee ownership is a core value of our operating culture, and we believe that stock ownership encourages our executives to create value for our shareholders over the long term, and promotes retention and affiliation with the Company by allowing our employees to share in our long-term success while aligning employee and executive interests with those of our shareholders. To reflect this commitment to employee ownership, we have adopted the stock ownership guidelines set by the Pozen Board, which requires the CEO to hold stock with a value equal to six times base salary, as well as Pozen’s stock retention policy for all named executive officers, which requires such officers to retain at least 50% of the total equity credited from grants of equity awards (net of amounts required to pay taxes and exercise prices) while such individual remains a named executive officer. As of May 3, 2016, Mr. Adams owned Common Shares of Aralez with a value greater than seven times his 2016 base salary. We expect that the newly hired members of our management team will comply with the stock retention policy when their equity awards vest.

Anti-Hedging/Anti-Pledging Policy

Certain short-term or speculative transactions in our securities by directors or executive officers create the potential for heightened legal risk and/or appearance of improper or inappropriate conduct involving our securities. As a result, we do not allow any director or executive officer to hedge the economic risk of his or her ownership of Aralez stock, which includes entering into any derivative transaction on Aralez securities (e.g., any short-sale, forward, option, collar). Further, we do not allow any director or executive officer to pledge Aralez securities at any time, which includes having Aralez securities in a margin account or using Aralez securities as collateral for a loan.

Clawback of Incentive Compensation

The Pozen Board adopted an incentive-based compensation recovery policy, which remains in effect at Aralez, that applies to all executives, including the named executive officers. The policy relates to the recoupment of incentive compensation awarded to these executives if there is a restatement of published financials.

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Tax and Accounting Implications

In setting elements of compensation, our Compensation Committee considers the impact of the following tax and accounting provisions:

·                              Section 162(m).  In making compensation decisions, our Compensation Committee is mindful of the potential impact of Section 162(m) of the Code, which generally disallows a tax deduction to public companies for certain compensation over $1 million paid in any year to its chief executive officer and its three most highly compensated executive officers (other than its chief executive officer and chief financial officer). Qualifying performance-based compensation is not subject to this deduction limit if certain requirements are met. Our Compensation Committee generally seeks, where feasible, to structure the incentive compensation granted to our named executive officers in a manner that is intended to minimize or eliminate the impact of Section 162(m) of the Code. However, the Pozen Compensation Committee did at times elect to make awards that are subject to the Section 162(m) deduction limit, such as time-based RSUs or cash awards, and our Compensation Committee may elect to make such awards as well, when it believed that such awards were appropriate to attract and retain top-quality executives or otherwise achieve its compensation objectives.

Also, under Section 162(m)(4)(G) of the Code, the $1 million compensation deduction limitation referenced above is reduced (but not below zero) by the amount of any payment made directly or indirectly by Pozen or Aralez of the excise tax imposed on those employees under Section 4985 of the Code. As discussed above in the section of this Compensation Discussion and Analysis entitled “Compensation Issues Related to the Tribute Transaction and Formation of Aralez—Section 4985 Tax Equalization,” our named executive officers became eligible to receive a payment following the completion of the Tribute Transaction. The Pozen Compensation Committee considered the impact of the tax equalization payments on the deduction limitation under Section 162(m) of the Code, but determined that the tax equalization payments are appropriate.

·                              Section 409A.  Section 409A of the Code, which governs the form and timing of payment of deferred compensation, generally changes the tax rules that affect most forms of deferred compensation that were not earned and vested prior to 2005. It also expands the types of compensation that are considered deferred compensation subject to these regulations. Section 409A imposes sanctions, including a 20% penalty and an interest penalty, on the recipient of deferred compensation that does not comply with Section 409A. Our Compensation Committee considers the potential implications of Section 409A of the Code in determining the form and timing of compensation awarded to our executives.

·                              Sections 280G and 4999.  Pre-2009 employment agreements, including the employment agreements with Dr. Plachetka and Mr. Hodges, provide for tax protection in the form of a gross-up payment to reimburse the executive for certain excise taxes imposed under Section 4999 of the Code as well as additional taxes resulting from such reimbursement. Section 4999 of the Code imposes a 20% excise tax on each executive who receives “excess parachute payments” in connection with a change of control, and Section 280G disallows the tax deduction to the company of any amount of an excess parachute payment that is contingent on a change of control. Payments as a result of a change of control that exceed three times the executive’s base amount (the average annualized taxable compensation for the five preceding years) may be considered excess parachute payments, and the excise tax is imposed on the parachute payments that exceed the executive’s base amount. The intent of the tax gross-up is to provide a benefit without a tax penalty to our executives whose employment terminates in connection with a change of control. The Pozen Compensation Committee considered the adverse tax liabilities imposed by Sections 280G and 4999, as well as other competitive factors, when it structured pre-2009 post-termination benefits for our executive officers. In any agreements executed after January 1, 2009, the gross-up payment has been eliminated, and there is no gross-up payment provision in the employment agreements with Messrs. Adams, Koven, Charles or Glickman.

·                              Accounting Rules.  Various rules under generally accepted accounting principles determine the manner in which grants for equity-based and other compensation are accounted for in our financial statements. Pozen records compensation expenses with respect to equity awards in accordance with FASB ASC Topic 718. Among the factors it has considered when making compensation decisions for our named executive officers, our Compensation Committee as well as the Pozen Compensation Committee have taken into account the accounting treatment under FASB ASC Topic 718 of equity-based and alternative forms of compensation.

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Summary Compensation Table (for fiscal years 2015, 2014 and 2013)

The following table summarizes the total compensation paid to or earned by, or with regard to stock awards and options, the grant date fair value of such awards granted during the fiscal years ended December 31, 2015, 2014 and 2013 to our named executive officers.

(1)    Mr. Adams and Mr. Koven joined Pozen on May 31, 2015. Mr. Charles joined Pozen on July 27, 2015 as Senior Vice President, Finance. Mr. Glickman joined Pozen on June 22, 2015. Dr. Plachetka retired from Pozen on June 1, 2015. Mr. Hodges resigned as Chief Financial Officer of Pozen effective January 1, 2016, but remained employed as Pozen’s (and subsequently Aralez’s) Senior Vice President, Finance until April 1, 2016, at which time he became a part-time employee of the Company. Mr. Charles was appointed Chief Financial Officer of Pozen effective January 1, 2016.

(2)    The amounts included in this column are the sign-on awards paid to Mr. Charles and Mr. Glickman at the time of hire.

(3)    The amounts included in this column are the dollar amounts representing the full grant date fair value of each stock option or RSU award, as applicable, calculated in accordance with FASB ASC Topic 718, and do not represent the actual value that may be recognized by the named executive officers upon option exercise or settlement of the RSU award. For information on the valuation assumptions used in calculating the grant date fair value of stock options, see Note 6 to Aralez’s audited financial statements included in the 2015 Annual Report.

(4)    This amount represents the amount that was earned based on performance objectives identified at the beginning of the performance period in fiscal years 2015, 2014 and 2013, as applicable. The awards for Messrs. Adams, Koven, Charles and Glickman were guaranteed at the target level, pro-rated for the portion of Fiscal Year 2015 in which they were employed by Pozen. Dr. Plachetka was not eligible to receive a 2015 annual cash incentive award. For Mr. Hodges, the amount shown in this column for Fiscal Year 2015 also includes the $240,000 of the retention award that vested and was paid in Fiscal Year 2015.

(5)    This amount includes $8,405 in employer matching contributions to Mr. Adams’ 401(k) plan and $98,907 for reimbursement of legal fees, and $90,570 for the related tax gross-up.

(6)    This includes annual cash incentive awards earned in 2014 and 2013 and amounts earned as long-term cash incentive awards (“LTIA”) granted for fiscal years 2014 and 2013. For fiscal year 2014, the cash performance award was $295,650 and the LTIAs granted on March 15, 2014 and December 31, 2014 were $850,000 and $637,500, respectively. For fiscal year 2013, the cash performance award was $382,700 and the LTIA was $1,275,000. Each individual LTIA grant has a payout over a three-year time-based vesting schedule. The 2014 LTIAs vest one-third per year beginning on the first anniversary of the award’s grant date. The 2013 LTIA vests one-third per year beginning on the first anniversary of the award’s March 15, 2013 grant date. For 2014 and 2013, the full value of the LTIA is included in the year of grant even though the payment was not made until a later year. Dr. Plachetka forfeited a portion of the LTIAs granted to him in 2014 with a value of $708,334 upon his resignation.

(7)    This amount includes the following:

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·      2015: $12,000 in employer matching contributions to Dr. Plachetka’s 401(k) plan; $19,168 for payment of supplemental life and disability insurance premiums; $30,000 for reimbursement of certain expenses associated with Pozen’s former CEO’s tax and estate planning; and $44,664 for the related tax gross-up. Also includes cash severance accrued upon resignation with a value of $3,435,156.

·      2014: $11,500 in employer matching contribution to Dr. Plachetka’s 401(k) plan; $17,763 for payment of supplemental life and disability insurance premiums; $11,946 for reimbursement of employment agreement related legal fees and expenses for tax, estate and financial planning services, and $27,043 for the related tax gross-up.

·      2013: $11,500 in employer matching contribution to Dr. Plachetka’s 401(k) plan; $16,353 for payment of supplemental life and disability insurance premiums; $6,584 for reimbursement of employment agreement related legal fees and expenses for tax, estate and financial planning services, and $17,553 for the related tax gross-up.

(8)    The amounts shown in this column reflect an employer matching contribution to Mr. Hodges’ 401(k) plan.

(9)    This amount includes $3,822 in employer matching contributions to Mr. Koven’s 401(k) plan and $98,907 for reimbursement of legal fees, and $119,190 for the related tax gross-up.

Grants of Plan-Based Awards in 2015

The following table provides additional information about awards granted to our named executive officers in 2015.