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endo | 100 Endo Boulevard | Chadds Ford, Pennsylvania 19317 29
ing principles generally accepted in the United States (or another basis of accounting, such as International Financial
Reporting Standards, should the Company adopt or be required to adopt another basis of accounting).
The determination of Total Shareholder Return and Net Sales will be made in the sole discretion of Board. The Board also
has discretion to accelerate the vesting of all or a portion of the Participant’s Performance Award based upon the overall
performance of the Company and/or the Participant or based upon any change in business conditions, provided that the
exercise of such discretion would not cause a Performance Award that would otherwise be deductible as “performance-
based” compensation within the meaning of Section 162(m) of the Code to become non-deductible.
Restricted Stock Units. In addition to the stock options and PSUs described above, our NEOs also are granted time-
based RSUs, which are the third element of our equity-based LTI compensation package. RSUs are valued based on the
closing price of our common stock on the NASDAQ on the date of grant, and each RSU represents the right to receive
one (1) share of Company common stock as of the date of vesting. RSUs granted to the NEOs, generally vest ratably over
four years based on continued employment.
Considerations. The Company believes that the most effective means to encourage long-term performance by our NEOs
is to create an ownership culture. This philosophy is implemented through the granting of the equity-based awards de-
scribed above. The LTI program described above is designed so that Company leaders hold a competitive stake in the
Company’s financial future. The LTI program provides a future reward structure so that employees who have an impact
on the Company’s performance share in the results of that impact. The LTI pool is established annually based on the
Company’s achievement of goals and objectives, and can vary significantly from year to year. Prior to changing eligibil-
ity requirements in 2011, which generally establishes eligibility at the manager-equivalent level, all Company employees
were previously eligible to receive LTI. While these reductions in eligibility were implemented to more closely align Com-
pany and industry practices, the introduction of the approved Employee Stock Purchase Plan (ESPP) in 2012 reinforced
the Company’s emphasis on building an ownership culture. LTI opportunities remain an important component of the
Company’s compensation philosophy, and are allocated most heavily to:
• Reward consistently high performing individuals who we expect will drive the future value of the Company;
• Reward individuals at various levels who have high impact relative to the expectations of their role; and
• Retain eligible individuals who have skills critical to the long-term success of the Company and who exemplify
our core value behavior.
Timing of Grants. Annual grants of stock options, PSUs and RSUs to our NEOs are made at a regularly scheduled meeting
of the Board of Directors held during the first quarter of each year, and the grant date is the date of that meeting. The
Compensation Committee may also make occasional grants during the year to employees of the Company. These grants
are typically associated with promotions and hiring, and are typically made on the effective date of the promotion or the
first day of work.
2011 Decisions Regarding Equity-Based LTI Program. In 2011, the Compensation Committee awarded LTI compensation for
NEOs pursuant to the program described above resulting in the awards of stock options and restricted stock units identi-
fied in the Summary Compensation Table and the 2011 Grants of Plan-Based Awards Table.
Periodic Review. The Compensation Committee reviews both the annual IC program and the LTI program annually to con-
firm that their key elements continue to meet the objectives described above.
Ownership Guidelines for Executive Management. The Ownership Guidelines approved on December 10, 2011 currently advise
that Executive Management should, but is not required to, have an ownership equal in value as follows:
Executive Management is expected to achieve the Ownership Guidelines within five (5) years of joining the Company,
or, if in the case of individuals serving in this capacity at the time the Ownership Guidelines were adopted, within five (5)
years of the date of adoption of the Ownership Guidelines. Executive Management is also expected to continuously own
sufficient shares to meet the Ownership Guidelines once attained. Members of Executive Management who subsequent-
ly get promoted to a higher level will have five years from the date of promotion to achieve their new ownership target.
President and Chief
Executive Officer
Chief Operating Officer,
Business Unit Presidents and
Executive Vice Presidents
Chief Accounting Officer and
Senior Vice Presidents
Multiple of base salary Multiple of base salary Multiple of base salary