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Exhibit 10.26
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this
"Agreement") is made as of December 31, 2006 by Endo
Pharmaceuticals Holdings Inc., a Delaware corporation (the
"Employer"), and Charles A. Rowland, Jr. (the "Employee").
WHEREAS, the Employee has been employed by the Employer pursuant
to the terms of an Employment Agreement, dated as of
December 6, 2006 (the "Original Agreement"); and
WHEREAS, the Employer and the Employee each desire to amend and
restate the Original Agreement in its entirety;
NEW THEREFORE, intending to be legally bound, and in
consideration of the mutual agreements contained herein, the
parties agree to amend and restate the Original Agreement in its
entirety as follows:
ARTICLE 1. DEFINITIONS .
For the purposes of this Agreement, the following terms have the
meanings specified or referred to in this Article 1.
"Agreement" means this Employment Agreement, including
the Exhibits hereto, as amended from time to time.
"Basic Compensation" means Salary and Benefits.
"Benefits" shall have the meaning set forth in
Section 3.1(b).
"Board of Directors" means the board of directors of the
Employer.
"Confidential Information" means any and all:
(a) trade secrets concerning the business and affairs of the
Employer, product specifications, data, know-how, formulae,
compositions, processes, designs, sketches, photographs, graphs,
drawings, samples, inventions and ideas, past, current, and planned
research and development, current and planned manufacturing or
distribution methods and processes, customer lists, current and
anticipated customer requirements, price lists, market studies,
business plans, computer software and programs (including object
code and source code), computer software and database technologies,
systems, structures, and architectures (and related formulae,
compositions, processes, improvements, devices, know-how,
inventions, discoveries, concepts, ideas, designs, methods and
information);
(b) information concerning the business and affairs of the
Employer (which includes unpublished financial statements,
financial projections and budgets, unpublished and
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projected sales, capital spending budgets and
plans, the names and backgrounds of key personnel, to the extent
not publicly known, personnel training and techniques and
materials) however documented; and
(c) notes, analysis, compilations, studies, summaries, and other
material prepared by or for the Employer containing or based, in
whole or in part, on any information included in the foregoing.
"disability" shall have the meaning set forth in
Section 6.2.
"Effective Date" means January 1, 2007.
"Employment Period" shall have the meaning set forth in
Section 2.2.
"Fiscal Year" means the Employer’s fiscal year, as
it exists on the Effective Date or as changed from time to
time.
"for cause" shall have the meaning set forth in
Section 6.3.
"for good reason" shall have the meaning set forth in
Section 6.4.
"Incentive Compensation" shall have the meaning set forth
in Section 3.2.
"person" means any individual, corporation (including any
non-profit corporation), general or limited partnership, limited
liability company, joint venture, estate, trust, association,
organization, or governmental body.
"Post-Employment Period" shall have the meaning set forth
in Article 8.
"Renewal Term" shall have the meaning set forth in
Section 2.2.
"Salary" shall have the meaning set forth in
Section 3.1(a).
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ARTICLE 2. EMPLOYMENT TERMS AND
DUTIES.
Section 2.1 Employment . The Employer hereby employs
the Employee, and the Employee hereby accepts employment by the
Employer, upon the terms and conditions set forth in this
Agreement.
Section 2.2 Term . Subject to the provisions
of Article 6, the term of the Employee’s employment under
this Agreement will be a rolling twenty-four month period
commencing each day after the Effective Date and ending on the
twenty-four month anniversary of such day (the "Employment
Period"). For purposes of this Agreement, employment and
compensation paid by any direct or indirect subsidiary of the
Employer will be deemed to be employment and compensation paid by
the Employer.
Section 2.3 Duties . The Employee will have
such duties as are described on Exhibit A attached hereto and made
a part hereof and such similar duties as are assigned or delegated
to the Employee by the Chief Executive Officer, and will serve as
Executive Vice President, Chief Financial Officer and Treasurer of
the Employer. The Employee will devote the Employee’s
business, time, attention, skill, and energy to the business of the
Employer, will promote the success of the Employer’s
business, and will cooperate with the Chief Executive Officer and
the Board of Directors in the advancement of the best interests of
the Employer. Nothing in this Section 2.3, however, will
prevent the Employee from engaging in additional activities in
connection with personal investments, corporate directorships and
community affairs that are not inconsistent with the
Employee’s duties under this Agreement. It is expressly
understood and agreed that to the extent any such activities have
been conducted by the Employee prior to the Effective Date, the
continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective
Date shall not thereafter be deemed to be inconsistent with the
Employee’s duties under this Agreement. The Employee shall,
from time to time, inform the Chief Executive Officer of those
additional activities in which the Employee is engaged. If, at any
time, the Employee is elected as a director of the Employer or as a
director or officer of any of Employer’s subsidiaries, the
Employee will fulfill the Employee’s duties as such director
or officer without additional compensation.
Section 2.4 Director’s and Officer’s
Liability Coverage . The Employer shall cause the Employee
to be (a) indemnified as an officer and/or director of the
Employer or any of its affiliates, to the extent applicable, to the
maximum extent permitted by applicable law, and (b) covered by
director’s and officer’s liability insurance in
connection with the Employee serving as an officer and/or director
of Employer or any of its affiliates. The provisions of this
Section 2.4 shall survive termination of this Agreement for
any reason.
ARTICLE 3. COMPENSATION.
Section 3.1 Basic Compensation .
(a) Salary . The Employee will be paid an annual
salary of $450,000, subject to adjustment as provided below (the
"Salary"), which will be payable in equal periodic
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installments according to the Employer’s
customary payroll practices, but no less frequently than the
15 th and
the last day of each month. The Salary, upon a recommendation by
the Chief Executive Officer, will be reviewed by the Compensation
Committee of the Board of Directors (the "Committee") not less
frequently than annually, and be adjusted in the sole discretion of
the Committee, but in no event will the Salary be less than
$450,000 per year. In determining the amount of any adjustment to
Salary, the Committee shall take into account inflation, merit,
changes in responsibilities and industry salary practices for
executives. Any increase in Salary shall not serve to limit or
reduce any other obligation to the Employee under this Agreement.
Salary shall not be reduced after such increase unless such
reduction is part of a reduction in salaries of specified
management personnel of the Employer undertaken in a program
approved by the Employer’s Board of Directors.
(b) Benefits . The Employee will, during the
Employment Period, be permitted to participate in such incentive,
savings, pension, profit sharing, bonus, life insurance,
hospitalization and major medical, and other employee benefit
plans, practices, policies and programs, of the Employer that may
be in effect from time to time, to the extent the Employee is
eligible under the terms of those plans (collectively, the
"Benefits").
(c) Stock Options/Restricted Shares . To the
extent the Employer determines to award stock options, restricted
shares or other similar consideration to management personnel based
upon duration of employment or achieving performance targets, or
both, the Employee shall be permitted to participate in such
programs. For each Fiscal Year or part thereof during the
Employment Period the Employee shall be eligible to earn as
additional compensation for the services to be rendered by the
Employee pursuant to this Agreement, long-term equity incentives in
an amount equal up to one hundred fifty percent (150%) of the
Salary for such Fiscal Year (or such lesser (including zero) or
greater percent of the Salary for such Fiscal Year as is
recommended in good faith to the Committee by the Chief Executive
Officer of the Employer and approved by the Committee). On the
December 6, 2006 (the Employee’s first day of employment
with the Employer), the Employee was granted (i) 100,000 stock
options under the 2004 Stock Incentive Plan and (ii) in lieu
of a 2007 option grant, additional stock options under the 2004
Stock Incentive Plan valued at $250,000, with all such options
valued with reference to the closing market price on the
December 6, 2006.
Section 3.2 Incentive Compensation . For each
Fiscal Year or part thereof during the Employment Period the
Employee shall be eligible to be paid in cash additional
compensation (the "Incentive Compensation") for the services to be
rendered by the Employee pursuant to this Agreement, an amount
equal to fifty percent (50%) of the Salary for such Fiscal
Year (or such lesser (including zero) or greater (not to exceed two
hundred) percent of the Salary for such Fiscal Year as is
recommended in good faith to the Committee by the Chief Executive
Officer of the Employer and approved by the Committee) if the
Employer achieves certain performance targets set by the Committee
(the "Performance Targets") for such Fiscal Year; it being
understood that the Employee shall receive full year 2006
Incentive Compensation in an amount equal to 50% of the Salary.
Incentive Compensation for each Fiscal Year or part thereof shall
be paid as soon as practicable following the receipt by the
Employer of its audited financial statements for the Fiscal Year
for which the Incentive Compensation is being paid, unless the
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Employee shall elect to defer the receipt of such
Incentive Compensation. The Employee shall be permitted to submit a
proposal for additional incentive compensation with respect to the
period commencing on the date hereof and ending at the end of the
Employers’ current Fiscal Year, and the Employer shall
consider such proposal in good faith.
Section 3.3 Relocation . The Employer will
provide the Employee with a relocation allowance of up to $75,000
to cover documented and reasonable moving expenses that are
incurred within twelve (12) months of the Effective Date, and
an additional sum of $75,000 to cover any realtor’s fees
incurred by the Employee in connection with his relocation to the
Chadds Ford, PA area shall be paid by the Employer. The Employee
shall also be eligible for temporary living expense reimbursement,
to be pre-approved by Employer, for up to twelve (12) months
after the Effective Date. All such sums must be repaid to the
Employer in the event the Employee voluntarily terminates his
employment within eighteen (18) months of the Effective
Date.
ARTICLE 4. FACILITIES AND EXPENSES.
Section 4.1 Reimbursement . The Employer will
furnish the Employee office space, equipment, supplies, and such
other facilities and personnel as the Employer deems necessary or
appropriate for the performance of the Employee’s duties
under this Agreement. The Employer will pay the Employee’s
dues in such professional societies and organizations as are
appropriate, and will pay on behalf of the Employee (or reimburse
the Employee for) reasonable expenses incurred by the Employee at
the request of, or on behalf of, the Employer in the performance of
the Employee’s duties pursuant to this Agreement, and in
accordance with the Employer’s employment policies, including
reasonable expenses incurred by the Employee in attending
conventions, seminars, and other business meetings and in
appropriate business entertainment activities. The Employee must
file expense reports with respect to such expenses in accordance
with the Employer’s policies.
Section 4.2 Motor Vehicle Allowance . As of
the Effective Date, the Employee will be entitled to use of an
automobile, and a replacement thereof, mutually acceptable to the
Employee and the Employer, at least every three (3) fiscal
years after the Effective Date during the Employment Term. The
Employer will reimburse the Employee for all operating expenses
relating thereto upon the Employee’s submission of
appropriate documentation as set forth in Section 4.1. The
Employer will determine the actual value, if any, of the
Employee’s non-business use of such automobile and will
furnish the Employee with a W-2 Wage and Tax Statement, grossed up
for taxes, to be included in the Employee’s income tax
returns, in accordance with prevailing Internal Revenue Service
regulations.
ARTICLE 5. VACATIONS AND HOLIDAYS .
The Employee will be entitled to paid vacation each Fiscal Year
in accordance with the vacation policies of the Employer in effect
for its executive officers from time to time, provided that in no
event shall such number of paid vacation days be fewer than twenty.
Vacation must be taken by the Employee at such time or times as
approved by the Chief
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Executive Officer. The Employee will also be
entitled to the paid holidays and other paid leave set forth in the
Employer’s policies. Vacation days and holidays during any
Fiscal Year that are not used by the Employee during such Fiscal
Year may be used in any subsequent Fiscal Year.
ARTICLE 6. TERMINATION AND ELECTION NOT TO RENEW
.
Section 6.1 Events of Termination . The Employment
Period, the Employee’s Basic Compensation and Incentive
Compensation, and any and all other rights of the Employee under
this Agreement or otherwise as an employee of the Employer will
terminate (except as otherwise provided in this Article 6):
(a) upon the death of the Employee;
(b) upon the disability of the Employee (as defined in
Section 6.2);
(c) for cause (as defined in Section 6.3),
immediately upon notice from the Employer to the Employee, or at
such later time as such notice may specify, unless otherwise
provided in Section 6.3;
(d) without cause upon not less than thirty days’
prior notice from the Employer to the Employee;
(e) for good reason (as defined in Section 6.4) upon
not less than thirty days’ prior notice from the Employee to
the Employer; or
(f) by the Company other than for cause upon not less
than thirty days’ prior notice from the Employer to the
Employee or by the Employ
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