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endo | 100 Endo Boulevard | Chadds Ford, Pennsylvania 19317 8
Risk Oversight
The Board of Directors believes that one of its most important responsibilities is to oversee how management manages the
various risks the Company faces and has delegated primary responsibility for overseeing the Company’s Enterprise Risk
Management (or ERM) program to the Audit Committee. It is management’s responsibility to manage risk and bring to the
Audit Committee’s and the Board of Directors’ attention the most material risks to the Company. The Company’s head of
internal audit, who reports independently to the Audit Committee, facilitates the ERM program under the sponsorship of
our Executive Leadership Committee (or ELC), which includes our President and Chief Executive Officer; Chief Operating
Officer; Executive Vice President & Chief Financial Officer; Executive Vice President, Chief Legal Officer & Secretary; Exec-
utive Vice President, Research & Development & Chief Scientific Officer; Executive Vice President, Human Resources; Ex-
ecutive Vice President, Enterprise Quality and Supply Chain; Executive Vice President, Corporate Compliance & Business
Practices; Company Group President, AMS; and Company Group President, HealthTronics. Enterprise risks are identified
and prioritized by management, and each risk is assigned by the Board to a Board committee or the full Board for oversight
based on the nature of the risk area and the committee’s charter. The committee or full Board agendas include discussions
of individual risk areas throughout the year. Additionally, the Audit Committee agendas include periodic updates on the
ERM process throughout the year. The Board level risk discussions are led by an assigned executive sponsor, from the ELC,
for each risk area.
The Audit Committee also regularly reviews treasury risks (insurance, credit and debt), financial and accounting, legal and
compliance risks, information technology security risks and other risk management functions. In addition, the Compensa-
tion Committee considers risks related to succession planning and the attraction and retention of talent as well as risks
relating to the design of compensation programs and arrangements. The Compensation Committee also reviews compen-
sation and benefits plans affecting Endo employees in addition to those applicable to our executive officers. The full Board
considers strategic risks and opportunities and regularly receives detailed reports from the committees regarding risk
oversight in their respective areas of responsibility.
Code of Conduct
The Board of Directors has adopted a Code of Conduct that applies to the Company’s directors, executives (including its
President and Chief Executive Officer and Executive Vice President & Chief Financial Officer) and employees. The Code is
posted on the Company’s website at www.endo.com, under “Investors-Corporate Governance-Code of Conduct.”
Common Stock Ownership Guidelines
The Board of Directors has adopted stock ownership guidelines (the Ownership Guidelines) both for non-employee Direc-
tors and for executive officers and senior management of the Company (collectively, Executive Management). The Board
of Directors approved the Ownership Guidelines on February 21, 2008, and amended these Ownership Guidelines on April
28, 2010 to increase the required ownership of the President and Chief Executive Officer. The Board of Directors amended
the Ownership Guidelines on December 10, 2010 to further increase the required ownership levels for non-employee Direc-
tors and for Executive Management. The Board believes that non-employee directors and Executive Management should
have a significant equity position in the Company and that the Ownership Guidelines serve to further the Board’s interest
in encouraging a longer-term focus in managing the Company. The Board also believes that the Ownership Guidelines
align the interests of its directors and Executive Management with the interests of stockholders and further promote
Endo’s commitment to sound corporate governance. The Ownership Guidelines are posted on the Company’s website at
www.endo.com, under “Investors-Corporate Governance-Compensation Committee.”
Ownership Guidelines for Non-Employee Directors
The Ownership Guidelines advise that each non-employee Director should have an ownership equal in value to at least
three times his or her then current annual cash retainer. Non-employee Directors are expected to achieve the Ownership
Guidelines within five (5) years of joining the Board, or, in the case of non-employee Directors serving at the time the Own-
ership Guidelines were adopted, within five (5) years of the date of adoption of the Ownership Guidelines or February 20,
2013. On December 10, 2010, the Board of Directors approved revised Ownership Guidelines, increasing ownership equal in
value to at least five times his or her current annual cash retainer to be achieved within five (5) years of joining the Board,
or in the case of non-employee Directors serving at the time the Ownership Guidelines were adopted, within five (5) years
of the date of the adoption of these revised Ownership Guidelines, or December 10, 2015. Non-employee Directors are also
expected to continuously own sufficient shares to meet the Ownership Guidelines once attained.
Review and Approval of Transactions with Related Persons
The Board of Directors has adopted written policies and procedures for review, approval and monitoring of transactions
involving the Company and “related persons” (directors and executive officers or their immediate family members, or
stockholders owning five percent or greater of the Company’s outstanding stock). The policy covers any related person
transaction that meets the minimum threshold for disclosure in the Proxy Statement under the relevant rules of the U.S.
Securities and Exchange Commission (the SEC) (generally, transactions involving amounts exceeding $120,000 in which a
related person has a direct or indirect material interest).