Exhibit 10.27
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT
AGREEMENT (this
“Agreement”) is made as of December 6, 2006, by
Endo Pharmaceuticals Inc., a Delaware corporation (the
“Employer”), and Joyce N. LaViscount (the
“Employee”).
Intending to be legally bound, and
in consideration of the mutual agreements contained herein, the
parties agree 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business and affairs of the Employer (which includes unpublished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unpublished and projected sales, capital spending budgets and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).
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 initial term of the Employee’s
employment under this Agreement will be one (1) year,
beginning on the Effective Date and ending on December 31,
2007 (the “Initial Term”). The term of this Agreement
shall be renewed by the Employee and the Employer for additional
periods of one year (each, a “Renewal Term”;) unless
either party gives the other party written notice prior to the end
of the Initial Term or any Renewal Term (in which event this
Agreement will continue for a period of thirty (30) days from
such notice) or unless sooner terminated in accordance with the
provisions of Section 6. The Initial Term together with all
Renewal Terms, if any, are hereinafter referred to as the
“Employment Period”.
Section 2.3 Duties
. The Employee will have
such duties as are assigned or delegated to the Employee by the
Chief Financial Officer, and will serve as Chief Accounting Officer
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 Financial Officer, 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
and community affairs that are not inconsistent with the
Employee’s duties under this Agreement. 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 $275,000, 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 the 15
th
and the last day of each
month. The Salary, upon a recommendation by the Chief Financial
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 $275,000 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
. To the extent the
Employer determines to award stock options 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 (the
“Long-Term Compensation”) for the services to be
rendered by the Employee pursuant to this Agreement, long-term
equity incentives in an amount equal up to sixty (60%) of the
Salary for such Fiscal Year (or such lesser (including zero)
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).
Section 3.2 Incentive
Compensation . For
each Fiscal Year or part thereof during the Employment Period the
Employee shall be eligible to earn as additional compensation (the
“Incentive Compensation”) for the services to be
rendered by the Employee pursuant to this Agreement, an amount
equal to thirty percent (30%) 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.
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.
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, 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 Financial
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) for good reason (as defined in Section 6.4)
upon not less than thirty days’ prior notice from the
Employee to the Employer; or
(e) by the Company other than for cause upon not
less than thirty days’ prior notice from the Employer to the
Employee or by the Employee 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 Employee will
