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endo | 100 Endo Boulevard | Chadds Ford, Pennsylvania 19317 32
Executive Deferred Compensation Plan. The Executive Deferred Compensation Plan permits executives to elect to defer up
to 100% of the portion of the following year’s LTI compensation that is in the form of RSUs. The RSUs will vest while
deferred. The 2012 grant of RSUs to executives will vest ratably over four years.
Deferral of the RSUs defers federal and state (as allowed under state laws) taxes on the compensation when the RSUs
vest. The compensation is deferred until the deferred RSUs are settled in stock. The RSUs may be deferred to a specified
payment date on which the elected disbursement(s) under the participant’s account will commence. The value of the
compensation an executive receives upon the stock delivery is based on the value of the Company’s common stock on
the date the deferral is delivered to the executive, and the executive will be responsible for the federal and state taxes at
that time.
The Executive Deferred Compensation Plan also allows an executive to defer up to 50% of his or her annual cash IC
award. When an executive makes his or her irrevocable election to defer cash IC, he or she also elects a specific payment
date in which the elected disbursement(s) under the participant’s account will commence.
Employment and Change in Control Agreements; Severance Agreements. The Company generally enters into a written employ-
ment agreement with each of its NEOs. The purpose of these agreements is to aid recruitment and retention and to
reinforce an ongoing commitment to shareholder value creation.
On March 12, 2008, the Company announced that David P. Holveck had been named the Company’s President and Chief
Executive Officer, with effect from April 1, 2008. The Company entered into an employment agreement with Mr. Holveck
as of April 1, 2008, which was amended and restated on October 27, 2011. On April 11, 2008, the Company announced
that Ivan P. Gergel, M.D. had been named the Company’s Executive Vice President, Research and Development & Chief
Scientific Officer, effective April 29, 2008. The Company entered into an employment agreement with Dr. Gergel as of
April 11, 2008, which was amended and restated on October 27, 2011. On May 7, 2009, the Company announced that Alan
G. Levin had been named the Company’s Executive Vice President, Chief Financial Officer, effective June 1, 2009. The
Company entered into an employment agreement with Mr. Levin as of May 7, 2009. On March 12, 2010, the Company
announced that Julie H. McHugh had been named the Company’s Chief Operating Officer effective March 12, 2010. The
Company entered into an employment agreement with Ms. McHugh as of March 12, 2010. The Company has affirma-
tively determined not to enter into any future employment agreements that include excise tax gross-ups with respect to
payments contingent upon a change in control, as demonstrated by the employment agreements entered into with Mr.
Holveck, Mr. Levin, Ms. McHugh and Dr. Gergel. Ms. Manogue’s employment agreement has a rolling twenty-four month
employment period commencing each day after January 1, 2008 and ending on the twenty-four month anniversary of
such day (the Employment Period), unless either the Company or Ms. Manogue elects to terminate her employment
agreement. Mr. Holveck’s, Dr. Gergel’s and Mr. Levin’s employment agreements each has an initial term of three years.
Mr. Holveck and Dr. Gergel’s employment agreements were amended further to exclude automatic renewal provisions.
Mr. Levin’s employment agreement renews automatically for a successive one-year period unless 120 days’ notice of
non-renewal is given by either party or unless either the Company or Mr. Levin elects to terminate his employment
agreement. Ms. McHugh’s employment agreement has an initial term of three years and renews automatically for two
additional one-year periods unless 120 days’ notice of non-renewal is given by either party. We refer to the employment
period for each named executive officer as the Employment Period. Each Employment Agreement sets forth the annual
salary of the respective named executive officer, which is, in each case, subject to annual reviews, at the discretion of the
Compensation Committee.
Each named executive officer will be paid cash IC in an amount equal to a set percentage of his or her annual salary for
each year (or such lesser or greater amount (not to exceed two hundred twenty-five percent of the target bonus amount)
for such year) amount as is recommended and approved by the Compensation Committee) if the Company achieves
certain performance targets set by the Compensation Committee for such year.
Each named executive officer is eligible to earn as additional compensation for the services to be rendered pursuant to
his or her employment agreement, if applicable, equity-based LTI in an amount approved by the Compensation Commit-
tee.
If any of the named executive officers terminates his or her employment agreement for Good Reason or if the Company
terminates him or her Without Cause, the Company will (i) pay a lump sum equal to two times his or her then current sala-
ry and target IC for the year in which the termination is effective and (ii) continue to provide such named executive officer
with medical and life insurance benefits for twenty-four (24) months. If Ms. Manogue is terminated other than for Cause
or quits for Good Reason within twenty-four (24) months of a Change In Control, then she will be entitled to receive (x)
a lump sum payment equal to two times the sum of (1) her then current salary plus (2) the higher of (a) her target IC for
the year during which the termination is effective or (b) her IC for the year immediately preceding the year in which the
termination is effective, plus (y) medical and life insurance benefits for a period equal to twenty-four (24) months after
the date on which the termination is effective. If Mr. Levin or Ms. McHugh is terminated other than for Cause or quits for
Good Reason within twenty-four (24) months of a Change In Control, then such named executive officer will be entitled
to receive (x) a lump sum payment equal to two times the sum of (1) such named executive officer’s then current salary
plus (2) such named executive officer’s target bonus, plus (y) medical and life insurance benefits for a period equal to