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Exhibit 10.36
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"), Peter A. Lankau (the "Executive").
WHEREAS, the Executive has been employed by the Employer
pursuant to the terms of an Amended and Restated Employment
Agreement, dated as of December 20, 2005 (the "Original
Agreement"); and
WHEREAS, the Employer and the Executive each desire to amend and
restate the Original Agreement in its entirety;
NOW 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);
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(b) information concerning the business and
affairs of the Employer (which includes unpublished financial
statements, financial projections and budgets, unpublished and
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.
"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 Executive, and the Executive 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 Executive’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 Executive will have
such duties as are assigned or delegated to the Executive by the
Employer’s Board of Directors and will serve as President and
Chief Executive Officer of the Employer. The Executive will devote
the Executive’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 Board of
Directors in the advancement of the best interests of the Employer.
Nothing in this Section 2.3, however, will prevent the
Executive from engaging in additional activities in connection with
personal investments, corporate directorships and community affairs
that are not inconsistent with the Executive’s duties under
this Agreement. It is expressly understood and agreed that to the
extent any such activities have been conducted by the Executive
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 Executive’s
duties under this Agreement. The Executive shall, from time to
time, inform the Board of Directors of those additional activities
in which the Executive is engaged. If, at any time, the Executive
is elected as a director of the Employer or as a director or
officer of any of Employer’s subsidiaries, the Executive will
fulfill the Executive’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 Executive
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 Executive 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 Executive will be paid an annual
salary of $606,000, subject to adjustment as provided below (the
"Salary"), which will be payable in equal periodic installments
according to the Employer’s customary payroll practices, but
no less frequently than
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the 15 th
and the last day of each month. The Salary 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 $606,000 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 Executive
under this Agreement.
(b) Benefits . The Executive 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 Executive 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 Executive shall be permitted to participate in such
programs. For each Fiscal Year or part thereof during the
Employment Period the Executive shall be eligible to earn as
additional compensation (the "Long-Term Compensation") for the
services to be rendered by the Executive pursuant to this
Agreement, long-term equity incentives in an amount approved by the
Committee; provided that the Executive shall be eligible to
earn Long-Term Compensation for services rendered by the Executive
equal in value to $3,150,000 (or such lesser (including zero) or
greater amount as is approved by the Committee).
Section 3.2 Incentive Compensation . For each
Fiscal Year or part thereof during the Employment Period the
Executive shall be paid in cash as additional compensation (the
"Incentive Compensation") for the services to be rendered by the
Executive pursuant to this Agreement, an amount equal to sixty
percent (60%) 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 and approved by the Committee) if the Employer achieves
certain performance targets set by the Committee (the "Performance
Targets") for such Fiscal Year. 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 Executive shall elect to defer the
receipt of such Incentive Compensation. The Executive 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.
ARTICLE 4. FACILITIES AND EXPENSES.
Section 4.1 Reimbursement . The Employer will
furnish the Executive office space, equipment, supplies, and such
other facilities and personnel as the Employer deems necessary or
appropriate for the performance of the Executive’s duties
under this Agreement.
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The Employer will pay the Executive’s dues
in such professional societies and organizations as are
appropriate, and will pay on behalf of the Executive (or reimburse
the Executive for) reasonable expenses incurred by the Executive at
the request of, or on behalf of, the Employer in the performance of
the Executive’s duties pursuant to this Agreement, and in
accordance with the Employer’s employment policies, including
reasonable expenses incurred by the Executive in attending
conventions, seminars, and other business meetings and in
appropriate business entertainment activities. The Executive 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 Executive will be entitled to use of an
automobile, and a replacement thereof, mutually acceptable to the
Executive and the Employer, at least every three (3) fiscal
years after the Effective Date during the Employment Term. The
Employer will reimburse the Executive for all operating expenses
relating thereto upon the Executive’s submission of
appropriate documentation as set forth in Section 4.1. The
Employer will determine the actual value, if any, of the
Executive’s non-business use of such automobile and will
furnish the Executive with a W-2 Wage and Tax Statement, grossed up
for taxes, to be included in the Executive’s income tax
returns, in accordance with prevailing Internal Revenue Service
regulations.
ARTICLE 5. VACATIONS AND HOLIDAYS .
The Executive 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.
The Executive 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
Executive 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 Executive’s Basic Compensation and Incentive
Compensation, and any and all other rights of the Executive 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 Executive;
(b) upon the disability of the Executive (as defined in
Section 6.2);
(c) for cause (as defined in Section 6.3),
immediately upon notice from the Employer to the Executive, 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 Executive;
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(e) for good reason (as defined in
Section 6.4) upon not less than thirty days’ prior
notice from the Executive 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
Executive or by the Executive for good reason, in each case within
12 months following the occurrence of a Change of Control (as
defined in Section 6.5(e)).
Section 6.2 Definition of Disability . For
purposes of Sections 6.1 and 6.3, the Execu
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