##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended
    December 31, 2010oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission File Number
    000-23019
  KENDLE INTERNATIONAL
    INC.
  Ohio

31-1274091(State or other jurisdiction
    of incorporation or organization)

IRS Employer
    ID No.   441 Vine Street, 500 Carew Tower
 Cincinnati, Ohio 45202
 513-381-5550
  Securities Registered Pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, no par value

The NASDAQ Stock Market LLC
    (NASDAQ Global Select Market)   Securities Registered Pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer  þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      Documents
    Incorporated by Reference




---



##### 





Kendle
    International Inc.
  Form 10-K
    Annual Report
    For the Fiscal Year Ended December 31, 2010
  Table of
    Contents
    
 PagePART IItem 1  Business


3Item 1A  Risk Factors


6Item 1B  Unresolved Staff Comments


13Item 2  Properties


13Item 3  Legal Proceedings


14Item 4  Removed and Reserved


14PART IIItem 5  Market for Registrants
    Common Equity, Related Shareholder Matters and Issuer Purchases
    of Equity Securities


14Item 6  Selected Financial Data


16Item 7  Managements Discussion
    and Analysis of Financial Condition and Results of Operations


17Item 7A  Quantitative and Qualitative
    Disclosures about Market Risk


38Item 8  Financial Statements and
    Supplementary Data


39Item 9  Changes in and Disagreements
    with Accountants on Accounting and Financial Disclosure


39Item 9A  Controls and Procedures


39Item 9B  Other Information


42PART IIIItem 10  Directors, Executive Officers
    and Corporate Governance


42Item 11  Executive Compensation


43Item 12  Security Ownership of Certain
    Beneficial Owners and Management and Related Stockholder
    Matters


43Item 13  Certain Relationships and
    Related Transactions, and Director Independence


44Item 14  Principal Accountant Fees and
    Services


44PART IVItem 15  Exhibits and Financial
    Statement Schedules


45SignaturesEX-10.18EX-12.1EX-21EX-23.1EX-24EX-31.1EX-31.2EX-32.1EX-32.2    2




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##### Table of Contents



Form 10-K
   PART I  ITEM 1.
    BUSINESS  General
    Early
    Stage
  First-in-Human proof-of-concept Form 8-K
  Late
    Stage
         3




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##### Table of Contents



Acquisition
    Activity
    Business
    Strategy
    
    Driving growth in the Companys core competency in Phases I
    through IV clinical trials, while increasing profitability
    through its enhanced global platform.
    Meeting the specific development pipeline needs for the
    Companys targeted customers.
    Gaining share in the CRO market through further penetration in
    the large (greater than $10 million in contract value)
    trial sector as well as continued expansion in mid-sized trials.
    Expanding the Companys geographic footprint with a focus
    on high-growth regions such as Latin America, and Asia/Pacific.
    Setting the stage for business mix expansion.
    Continuing to enhance infrastructure to support expansion and
    growth of the Company.  Customers
    and Marketing
      Backlog
   4




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##### Table of Contents



Competition
      Government
    Regulation
     5




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##### Table of Contents



Employees
  non-U.S. locations
  Available
    Information
  www.kendle.com. Form 10-K. Form 10-K, Form 10-Q Form 8-K,
  http://www.SEC.gov
  ITEM 1A.
    RISK
    FACTORS  Form 10-K
  and/or
  Risks
    Related to Our Industry
  The
    Company depends on the biopharmaceutical industry for most of
    its revenue.
   6




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##### Table of Contents



The
    CRO industry is highly competitive.
    Revenue
    and earnings growth rates in the future may not be as robust as
    in the past.
    Change
    in government regulation or healthcare reform could adversely
    affect the Company.
      Risks
    Related to Our Business
  The
    Companys contracts may be delayed, terminated or reduced
    in scope with little or no notice.
      The
    fixed price nature of many of the Companys contracts could
    result in financial losses.
   7




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##### Table of Contents



The
    Companys backlog may not be indicative of future
    results.
  non-U.S. subsidiaries
  The
    economic climate has caused the Company to rapidly adjust from a
    robust growth strategy to a cost containment strategy in a short
    period of time, which has placed, and is expected to continue to
    place, significant demands on it.
    If the
    Company is unable to attract suitable investigators and
    volunteers for clinical trials, the Companys business may
    suffer.
    If the
    Company is required to write off goodwill or other intangible
    assets acquired in its business combinations, its financial
    position and results of operations would be adversely
    affected.
    The
    Companys indebtedness could adversely affect its business
    and financial condition.
   8




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##### Table of Contents




    Seek additional financing in the debt or equity markets;
    Seek to refinance or restructure all or a portion of its
    indebtedness;
    Sell selected assets;
    Reduce or delay planned capital expenditures      The
    Companys access to funds under the Facility or its money
    market fund holdings is dependent on the solvency and liquidity
    of the participating lenders or fund sponsors.
    The
    Company may be exposed to risk from its various
    counterparties.
   9




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The
    Companys international operations are subject to numerous
    risks.
    The
    Companys financial results are exposed to exchange rate
    fluctuations.
    The
    Companys quarterly operating results may
    vary.
    
    Exchange rate fluctuations;
    Timing of contract amendments for changes in scope that could
    affect the value of a contract and potentially impact the amount
    of net service revenues from quarter to quarter;
    Commencement, completion, execution or cancellation of large
    contracts;
    Collections of accounts receivable;
    Progress of ongoing contracts and retention of customers;
    Timing of and charges associated with completed acquisitions or
    other events; and
    Changes in the mix, both in terms of geography and type of
    services.    The
    Companys business depends on the continued effectiveness
    and availability of its information technology infrastructure,
    and failures of this infrastructure could limit its
    operations.
   10




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The
    Companys business depends on the successful implementation
    and deployment of its enterprise wide reporting solution and
    failure could harm the Companys ability to manage its
    business and obtain accurate financial reporting.
    The
    Companys business could expose it to potential liability
    for personal injury claims that could affect its financial
    condition.
    The
    nature of the Companys business exposes it to litigation
    and regulatory risk.
    If the
    Company fails to hire, retain and integrate qualified personnel,
    it will be difficult for it to achieve its financial and
    operational goals.
  and/or
 11




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New
    standards or changes in existing accounting standards issued by
    the Financial Accounting Standards Board (FASB), SEC or other
    standard setting bodies may adversely affect the Companys
    financial statements and could entail significant expenditures.
    The application of these standards often requires the use of
    estimates and assumptions that may materially differ from actual
    results.
  and/or
    Risks
    related to our Common Stock
  Market
    conditions have caused significant volatility in the
    Companys stock price.
    
    The Companys number of shares outstanding is significantly
    less than that of its peers, causing relatively small
    adjustments to have a substantial impact on earnings per share
    and relatively small market activity to cause substantial
    volatility.
    General conditions in the economy and financial markets and
    other developments affecting the Company or its competitors have
    caused the market value of the Companys common stock to
    decline.    The
    Companys convertible note hedge and warrant transactions
    may affect the trading price of its common stock.
    
    May enter into various
    over-the-counter
    derivative transactions or purchase or sell the Companys
    common stock in secondary market transactions; and
    May enter into, or may unwind, various
    over-the-counter
    derivatives or purchase or sell the Companys common stock
    in secondary market transactions, including during any
    conversion reference period with respect to a conversion of the
    Convertible Notes. 12




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##### Table of Contents



over-the-counter over-the-counter
    Anti-takeover
    provisions in the Companys charter documents and under
    Ohio law may make an acquisition of the Company, which may be
    beneficial to its stockholders, more difficult, which could
    depress its stock price.
      
    The authorization of undesignated preferred stock, the terms,
    rights, privileges and restrictions of which may be established
    and shares of which may be issued without shareholder approval;
    Limitations on persons authorized to call a special meeting of
    shareholders; and
    Advance notice procedures required for shareholders to nominate
    candidates for election as directors or to bring matters before
    an annual meeting of shareholders.    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES   13




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ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    REMOVED
    AND RESERVED PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED SHAREHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  ®
  2010 Quarterly

First


Second


Third


FourthRanges of stock priceHigh

$
21.79


$
19.67


$
13.57


$
11.59Low


17.00



11.44



7.68



8.86   2009 Quarterly

First


Second


Third


FourthRanges of stock priceHigh

$
25.66


$
23.13


$
17.33


$
18.88Low


15.05



8.28



9.57



14.71    14




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##### Table of Contents



Performance
    Graph
    COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN* Among
    Kendle International Inc., The NASDAQ Composite Index
    And The NASDAQ Health Services Index
  
   *
    
    $100 invested on
    12/31/05 in
    stock or index, including reinvestment of dividends.   Dollar Value of $100 Investment at December 31,2005

2006

2007

2008

2009

2010Kendle International Inc.


100.00



122.18



190.05



99.92



71.13



42.31NASDAQ Composite


100.00



111.74



124.67



73.77



107.12



125.93NASDAQ Health Services


100.00



109.80



117.78



87.97



99.96



100.19   Securities
    Authorized Under Equity Compensation Plans:
  Form 10-K.
 15




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##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  For the Years Ended December 31,2010


2009


2008


2007(1)


2006(In thousands except per share data)Net service revenues

$
333,766


$
416,688


$
475,092


$
397,584


$
283,471Reimbursable
    out-of-pocket
    revenues


114,493



135,224



203,489



171,234



90,465Total revenues


448,259



551,912



678,581



568,818



373,936Cost and expenses:Direct costs


171,600



210,586



247,436



204,161



152,826Reimbursable
    out-of-pocket
    costs


114,493



135,224



203,489



171,234



90,465Selling, general and administrative


135,239



144,659



155,577



125,744



91,796Depreciation and amortization


16,340



15,712



15,253



14,865



10,403Employee severance and office consolidation costs


4,522



10,157











236Intangible impairment charge


















8,200Goodwill impairment charge


7,263















Total costs and expenses


449,457



516,338



621,755



516,004



353,926Income (loss) from operations


(1,198
)


35,574



56,826



52,814



20,010Other income (expense):Interest income


144



579



760



1,466



1,939Interest expense


(11,949
)


(14,403
)


(15,891
)


(17,547
)


(6,781
)Write-off of deferred financing costs














(4,152
)


Other


7,770



4,034



(2,043
)


(4,816
)


(1,795
)Gain on debt extinguishment






2,887











Total other income (expenses)


(4,035
)


(6,903
)


(17,174
)


(25,049
)


(6,637
)Income (loss) before income taxes


(5,233
)


28,671



39,652



27,765



13,373Income tax provision (benefit)


(674
)


13,434



16,509



11,755



4,843Net (loss) income

$
(4,559
)

$
15,237


$
23,143


$
16,010


$
8,530INCOME (LOSS) PER SHARE DATABasic:Net income (loss) per share

$
(0.31
)

$
1.03


$
1.57


$
1.10


$
0.60Weighted average shares


14,907



14,862



14,751



14,520



14,323Diluted:Net income (loss) per share

$
(0.31
)

$
1.02


$
1.54


$
1.08


$
0.58Weighted average shares


14,907



14,992



14,993



14,889



14,762   CONSOLIDATED
    BALANCE SHEET DATA(2)
  As of December 31,2010


2009


2008


2007


2006Working capital

$
42,214


$
56,476


$
68,595


$
60,084


$
56,404Total assets


489,911



539,723



554,888



498,675



455,072Total short and long-term debt, including capital leases


133,116



138,394



172,159



165,673



200,099Total shareholders equity


230,847



236,047



212,624



175,257



140,112     (1)
    
    Includes the effects of the January 1, 2007 adoption of
    FASB Interpretation No. 48, Accounting for Uncertainty in
    Income Taxes.(2)
    
    From 2006 to 2008, the Company made three acquisitions. See the
    Acquisitions section of Managements Discussion and
    Analysis of Financial Condition and Results of Operations. 16




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##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Refer
    to Risk Factors previously discussed in Part 1 Item 1A
    and the Cautionary Statement for
    Forward-Looking
    Information later in this section.
  Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations
    Company
    Overview
      Late
    Stage Segment Contracts
      
    The customer may request a change in the assumptions;
    The customer may increase or decrease the scope of services,
    which requires a change to the service assumptions; and
    The Company may discover that, for a particular contract, the
    assumptions are incorrect or insufficient to permit completion
    of the contract. 17




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##### Table of Contents



dollar-for-dollar out-of-pocket out-of-pocket
  out-of-pocket
      Early
    Stage Segment Contracts
  per-unit
 18




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Acquisitions
      Recent
    Developments and CRO Marketplace
  and/or
    Results
    of Operations
  Year
    Ended December 31, 2010 (2010) Compared with Year
    Ended December 31, 2009 (2009)
  Net
    Service Revenues
    Year Ended December 31,Increase


% Increase2010


2009


(Decrease)


(Decrease)(In thousands)Net service revenuesLate stage

$
305,872


$
370,178


$
(64,306
)


(17.4
)%Early stage


25,888



37,473



(11,585
)


(30.9
)%Support & other(a)


2,006



9,037



(7,031
)


(77.8
)%Total net service revenues


333,766



416,688



(82,922
)


(19.9
)%Reimbursable
    out-of-pocket
    revenues(b)


114,493



135,224



(20,731
)


(15.3
)%Total revenues

$
448,259


$
551,912


$
(103,653
)


(18.8
)%     (a)
    
    Support & Other consists of revenues performed for
    administrative services.(b)
    
    Reimbursable
    out-of-pocket
    revenues and expenses fluctuate from period to period, primarily
    due to the level of investigator activity in a particular period. 19




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For the Year Ended December 31,$ Increase


% Increase2010


2009


(Decrease)


(Decrease)(In thousands)North America

$
154,090


$
200,866


$
(46,776
)


(23.3
)%Europe


130,767



157,628



(26,861
)


(17.0
)%Latin America


36,215



40,830



(4,615
)


(11.3
)%Asia-Pacific


12,694



17,364



(4,670
)


(26.9
)%Total net service revenues

$
333,766


$
416,688


$
(82,922
)


(19.9
)%       Reimbursable
    Out-of-Pocket
    Revenues/Expenses
  out-of-pocket out-of-pocket
 20




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##### Table of Contents



Operating
    Expenses
  For the Year Ended December 31,$ Increase


% Increase2010


2009


(Decrease)


(Decrease)(In thousands)Direct costs


171,600



210,586



(38,986
)


(18.5
)%Reimbursable
    out-of-pocket
    costs


114,493



135,224



(20,731
)


(15.3
)%SG&A expenses


135,239



144,659



(9,420
)


(6.5
)%Restructuring expenses


4,522



10,157



(5,635
)


(55.5
)%Depreciation and amortization


16,340



15,712



628



4.0
%Goodwill impairment


7,263







7,263Total operating expenses


449,457



516,338



(66,881
)


(13.0
)%              21




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##### Table of Contents



For the Year Ended December 31,Increase


% Increase2010


2009


(Decrease)


(Decrease)(In thousands)Operating income (loss)Late stage

$
63,575


$
81,109



(17,534
)


(21.6
)%Early stage


(11,455
)


4,187



(15,642
)


(373.6
)%Support & other


(53,318
)


(49,722
)


(3,596
)


7.2
%Total operating income (loss)

$
(1,198
)

$
35,574


$
(36,772
)


(103.4
)%         Other
    Income/(Expense)
      For the Year Ended December 31,Increase2010


2009


(Decrease)(In thousands)Other income (expense)Interest income

$
144


$
579


$
(435
)Interest expense


(11,949
)


(14,403
)


2,454Gain (loss) on extinguishment of debt


(71
)


2,887



(2,958
)Foreign currency gains


8,665



5,350



3,315Other expenses


(824
)


(1,316
)


492Total other income (expense)

$
(4,035
)

$
(6,903
)

$
2,868  22




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Interest
    Income
    Interest
    Expense
    Gain
    on Extinguishment of Debt
      Foreign
    Currency
  and/or
     23




---



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Income
    Taxes
    Net
    Income (Loss)
    Non-GAAP Operating
    Income, Net Income and EPS
   24




---



##### Table of Contents



For the Years EndedDecember 31,2010


2009(In thousands except per share data)Reconciliation of
    non-GAAP
    income (loss) from operations:Income (loss) from operations, as reported

$
(1,198
)

$
35,574Restructuring expense


4,522



10,157Goodwill impairment


7,263



Non-GAAP income from operations

$
10,587


$
45,731Reconciliation of
    non-GAAP net
    income (loss):Net income (loss), as reported

$
(4,559
)

$
15,237Restructuring expense, net of tax


3,349



6,799Goodwill impairment, net of tax


7,173



Non-GAAP net income

$
5,963


$
22,036Reconciliation of
    non-GAAP
    diluted net income (loss) per share:Net income (loss) per share, as reported

$
(0.31
)

$
1.02Restructuring expense, net of tax


0.22



0.45Goodwill impairment, net of tax


0.48



Rounding


0.01



Non-GAAP net income per share

$
0.40


$
1.47   Restructuring
    Expenses
    Goodwill
    Impairment
   25




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##### Table of Contents



Year
    Ended December 31, 2009 (2009) Compared with Year
    Ended December 31, 2008 (2008)
  Net
    Service Revenues
    Revenues
  Year Ended December 31,$ Increase


% Increase2009


2008


(Decrease)


(Decrease)Net service revenuesLate stage

$
370,178


$
430,317


$
(60,139
)


(14.0
)%Early stage(a)


37,473



35,199



2,274



6.5
%Support & other(b)


9,037



9,576



(539
)


(5.6
)%Total net service revenues

$
416,688


$
475,092


$
(58,404
)


(12.3
)%     (a)
    
    The Early Stage segment results for the twelve months ended
    December 31, 2008 include the June (acquisition date)
    through December operating results of DecisionLine.(b)
    
    Support and Other consists of revenues performed for
    administrative services.          For the Year Ended December 31$ Increase


% Increase2009


2008


(Decrease)


(Decrease)North America

$
200,866


$
229,346


$
(28,480
)


(12.4
)%Europe


157,628



189,528



(31,900
)


(16.8
)%Latin America


40,830



38,996



1,834



4.7
%Asia-Pacific


17,364



17,222



142



0.8
%Total net service revenues

$
416,688


$
475,092


$
(58,404
)


(12.3
)%  26




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##### Table of Contents



Reimbursable
    Out-of-Pocket
    Revenues/Expenses
  out-of-pocket out-of-pocket
  Operating
    Expenses
  For the Year Ended December 31,$ Increase


% Increase2009


2008


(Decrease)


(Decrease)Direct costs

$
210,586


$
247,436


$
(36,850
)


(14.9
)%Reimbursable
    out-of-pocket
    costs


135,224



203,489



(68,265
)


(33.5
)%SG&A expenses


144,659



155,577



(10,918
)


(7.0
)%Restructuring expenses


10,157







10,157Depreciation and amortization


15,712



15,253



459



3.0
%Total operating expenses

$
516,338


$
621,755


$
(105,417
)


(17.0
)%            27




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##### Table of Contents



Year Ended December 31,Increase


% Increase2009


2008


(Decrease)


(Decrease)Operating Income/(Loss):Late stage

$
81,109


$
105,140


$
(24,031
)


(22.9
)%Early stage(a)


4,187



6,177



(1,990
)


(32.2
)%Support & other(b)


(49,722
)


(54,491
)


4,769



8.8
%Total operating income

$
35,574


$
56,826


$
(21,252
)


(37.4
)%     (a)
    
    The Early Stage segment results for the twelve months ended
    December 31, 2008 include the June (acquisition date)
    through December operating results of DecisionLine.(b)
    
    Support and Other consists of unallocated corporate expenses,
    primarily information technology, marketing and communications,
    human resources, finance and legal, net of revenues earned.        Other
    Income/(Expense)
   28




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For the Year Ended December 31,2009


2008


ChangeOther income (expense)Interest income

$
579


$
760


$
(181
)Interest expense


(14,403
)


(15,891
)


1,488Gain on extinguishment of debt


2,887







2,887Foreign currency gains / (losses)


5,350



(1,006
)


6,356Other expenses


(1,316
)


(1,037
)


(279
)Total other income (expense)

$
(6,903
)

$
(17,174
)

$
10,271   Interest
    Income
    Interest
    Expense
      Gain
    on Extinguishment of Debt
      Foreign
    Currency
     29




---



##### Table of Contents



and/or
  Income
    Taxes
    Net
    Income
      Liquidity
    and Capital Resources
     30




---



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same-day
         31




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##### Table of Contents



32




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##### Table of Contents



Contractual
    Obligations
    Year


Years


Years


Years2011


2012-2013


2014-2015


After 2016


Total(In thousands)Capital lease obligations (including interest)

$
35


$



$



$



$
35Operating Leases


17,127



26,195



17,136



17,974



78,432Debt payments(1)






142,500











142,500Interest on debt(2)


4,809



2,605











7,414FIN 48 obligation, including interest and penalties(3)


















Total

$
21,971


$
171,300


$
17,136


$
17,974


$
228,381       (1)
    
    Under the terms of the Convertible Notes, the Convertible Notes
    are convertible into shares of the Common Stock upon the
    occurrence of various factors described in the Liquidity and
    Capital Resources section of Managements Discussion and
    Analysis. The above table assumes no conversion with the
    remaining principal amount of the Convertible Notes paid at the
    maturity date of July 15, 2012.(2)
    
    The interest rate used in the calculation of interest was 3.375%
    which represents the cash coupon obligation.(3)
    
    FIN 48 obligations of $1.1 million (including
    interest) have not been reflected in the above table due to the
    inherent uncertainty as to the amount and timing of settlement,
    which is contingent upon the occurrence of possible future
    events, such as examinations and determinations by various tax
    authorities.  Critical
    Accounting Policies and Estimates
    Revenue
    Recognition
  percentage-of-completion) per-unit time-and-materials
  Percentage-of-Completion
   33




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##### Table of Contents




    Actual costs incurred to date and the work completed as a result
    of incurring the actual costs;
    The remaining work to be completed based on the timeline of the
    contract as well as the number of incomplete tasks in the
    contract; and
    Factors that could change the rate of progress of future
    contract performance.      percentage-of-completion
      Units-Based
   34




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##### Table of Contents



out-of-pocket out-of-pocket
  Direct
    Costs
      
    Higher utilization rates for billable employees; and
    The ability to complete contracted work more efficiently than
    estimated by the Company.    
    The occurrence of cost overruns from increased time to complete
    contract performance;
    Lower utilization rates for billable employees;
    Increased costs due to higher-paid employees or contractors
    performing contract services; and
    Pricing pressure from increased competition.  Other
    Costs
     35




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##### Table of Contents



Accounts
    Receivable/Allowance for Doubtful Accounts
      Goodwill
    and Intangible Assets
        and/or
  Internally
    Developed Software
   36




---



##### Table of Contents



Tax
    Valuation Allowance and Tax Liabilities
      Stock-based
    Compensation
      New
    Accounting Pronouncements
   37




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##### Table of Contents



Cautionary
    Statement for Forward-Looking Information
  Form 10-K
    Form 10-K.
  ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Interest
    Rates
    Foreign
    Currency
         38




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##### Table of Contents



Foreign
    Currency Hedges
        ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA    ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Managements
    Evaluation of Disclosure Controls and Procedures
  Form 10-K, Rules 13a-15(e) 15d-15(e)
  (a) Managements
    Report on Internal Control over Financial
    Reporting
   39




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##### Table of Contents



(b) Changes
    in Internal Control Over Financial Reporting
        /s/  Candace
    KendleCandace
    Kendle, PharmD

Chairman of the Board of Directors, Chief Executive Officer and
    Principal Executive Officer

March 16, 2011/s/  Keith
    A. CheesmanKeith
    A. Cheesman

Senior Vice President, Chief Financial Officer and Principal
    Financial Accounting Officer

March 16, 2011  40




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##### Table of Contents



REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                  DELOITTE &
    TOUCHE LLP
     41




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##### Table of Contents



ITEM 9B
    OTHER
    INFORMATION   PART III ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
    GOVERNANCE  DIRECTORS
    OF THE COMPANY
    AUDIT
    COMMITTEE
    EXECUTIVE
    OFFICERS OF THE COMPANY
    ExecutiveName

Age

Position

Officer SinceCandace Kendle, PharmD

64

Chief Executive Officer and Chairman of the Board of Directors

1989Christopher C. Bergen

60

Executive Vice President and Chief Administrative Officer

1989Keith A. Cheesman

51

Senior Vice President and Chief Financial Officer

2009Mark J. Roseman, D.Sc

50

Senior Vice President and Chief Marketing Officer

2010Stephen A. Cutler, PhD

51

Senior Vice President and Chief Operating Officer

2009     SECTION 16(A)
    BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
    CODE OF
    ETHICS
  www.kendle.com
 42




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##### Table of Contents



ITEM 11.
    EXECUTIVE
    COMPENSATION    
    Compensation Committee Interlocks and Insider
    Participation; and
    Directors Compensation and Equity Holding
    Requirements.    
    Compensation Discussion and Analysis:;
    Compensation Committee Report;
    Summary Compensation Table;
    Grants of Plan-Based Awards;
    Outstanding Equity Awards at Fiscal Year End;
    Option Exercises and Stock Vested;
    Nonqualified Deferred Compensation; and
    Potential Payments Upon Termination or
    Change-in-Control.  ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS     43




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##### Table of Contents



Equity
    Compensation Plan Information
  (c)Number of Securities(a)





Remaining AvailableNumber of





for Future IssuanceSecurities to be


(b)


Under EquityIssued upon


Weighted-Average


Compensation PlansExercise of


Exercise Price


(ExcludingOutstanding


of Outstanding


SecuritiesOptions, Warrants


Options, Warrants


Reflected in ColumnPlan Category

and Rights(1)


and Rights(1)


(a))(2)Equity compensation plans approved by security holders


397,150


$
15.60



590,430Equity compensation plans not approved by security holders










Total


397,150


$
15.60



590,430     (1)
    
    Excludes the 2003 Directors Compensation Plan under
    which no options, warrants or rights are granted. This plan has
    been approved by shareholders for up to 75,000 shares.(2)
    
    Represents shares available for issuance under the 2007 Stock
    Incentive Plan.  ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE  TRANSACTIONS
    WITH RELATED PERSONS
    REVIEW,
    APPROVAL OR RATIFICATION OF TRANSACTIONS WITH RELATED
    PERSONS
    PROMOTERS
    AND CERTAIN CONTROL PERSONS
    DIRECTOR
    INDEPENDENCE
    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   44




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##### Table of Contents



PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Form 10-K page F-1.
    ExhibitNumber

Description of Exhibit2
.1

Stock Purchase Agreement between the Company and Charles River
    Laboratories International, Inc. dated as of May 9, 2006
    (Incorporated by reference to the
    Form 8-K
    filed with the Commission on May 12, 2006)2
.2

First Amendment to the Stock Purchase Agreement dated as of
    August 16, 2006 between the Company and Charles River
    Laboratories, Inc. (Incorporated by reference to the
    Companys Current Report on
    Form 8-K
    filed with the Commission on August 18, 2006)3
.1

Restated and Amended Articles of Incorporation. Incorporated by
    reference to the Companys Registration Statement
    No. 333-30581
    filed under the Securities Act of 1933.3
.2

Amended and Restated Code of Regulations (Incorporated by
    reference to the Companys Current Report on
    Form 8-K
    filed with the Commission on November 16, 2009)3
.3

Amendment of the Restated and Amended Articles of Incorporation
    to Increase the Authorized Shares (Incorporated by reference to
    the Companys definitive Proxy Statement on
    Schedule 14A filed with the Commission on April 14,
    1999)4


Specimen Common Stock Certificate (Incorporated by reference to
    the Companys Registration Statement
    No. 333-30581
    filed under the Securities Act of 1933)4
.1

Shareholder Rights Agreement dated August 14, 2009 between
    the Company and American Stock Transfer &
    Trust Company LLC, as Rights Agent (Incorporated by
    reference to the Companys filing on
    Form 8-A
    filed with the Commission on August 20, 2009)4
.2

Indenture dated March 31, 2007 between the Company and
    LaSalle Bank National Association (Incorporated by reference to
    the Companys
    Form S-3
    filed with the Commission on April 9, 2007)4
.3

Supplemental Indenture No. 1 dated July 16, 2007
    between the Company and LaSalle Bank National Association
    (Incorporated by reference to the Companys Current Report
    on
    Form 8-K
    filed with the Commission on July 16, 2007)10
.1

Indemnity Agreement dated June 21, 1996 by and between the
    Company and Candace Kendle Bryan (Incorporated by reference to
    the Companys Registration Statement
    No. 333-30581
    filed under the Securities Act of 1933)10
.2

Indemnity Agreement dated June 21, 1996 by and between the
    Company and Christopher C. Bergen (Incorporated by reference to
    the Companys Registration Statement
    No. 333-30581
    filed under the Securities Act of 1933)10
.3

Indemnity Agreement dated June 21, 1996 by and between the
    Company and Timothy M. Mooney (Incorporated by reference to the
    Companys Registration Statement
    No. 333-30581
    filed under the Securities Act of 1933)10
.4

Indemnity Agreement dated May 14, 1997 by and between the
    Company and Charles A. Sanders (Incorporated by reference to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 1997)10
.5

Indemnity Agreement dated May 14, 1997 by and between the
    Company and Philip E. Beekman (Incorporated by reference to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 1997)10
.6

Indemnity Agreement dated December 10, 1998 by and between
    the Company and Robert Buck (Incorporated by reference to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 1998) 45




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##### Table of Contents



ExhibitNumber

Description of Exhibit10
.7

Indemnity Agreement dated December 10, 1998 by and between
    the Company and Mary Beth Price (Incorporated by reference to
    the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 1998)10
.8

Form of Indemnity Agreement by and between the Company and each
    member of the Companys Board of Directors, except for
    those Indemnity Agreements noted above (Incorporated by
    reference to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2003)10
.9

Confirmation of Convertible Bond Hedge Transaction, dated
    July 10, 2007, by and between the Company and UBS AG,
    London Branch (Incorporated by reference to the Companys
    Current Report on
    Form 8-K
    filed with the Commission on July 10, 2007)10
.10

Confirmation of Convertible Bond Hedge Transaction, dated
    July 10, 2007, by and between the Company and JPMorgan
    Chase Bank, National Association, London Branch (Incorporated by
    reference to the Companys Current Report on
    Form 8-k
    filed with the Commission on July 10, 2007)10
.11

Confirmation of Issuer Warrant Transaction, dated July 10,
    2007, by and between the Company and UBS AG, London Branch
    (Incorporated by reference to the Companys Current Report
    on
    Form 8-k
    filed with the Commission on July 10, 2007)10
.12

Confirmation of Issuer Warrant Transaction, dated July 10,
    2007, by and between the Company and JPMorgan Chase Bank,
    National Association, London Branch (Incorporated by reference
    to the Companys Current Report on
    Form 8-k
    filed with the Commission on July 10, 2007)10
.13

Lease Agreement dated February 27, 2008 by and between the
    Company and Carew Realty, Inc. (Incorporated by reference to the
    Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended March 31, 2008)10
.14

Credit Agreement dated as of March 15, 2010 by and among
    the Company , various Lenders and JPMorgan Chase Bank, N.A., as
    Administrative Agent (Incorporated by reference to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2009)10
.15

Guaranty dated as of March 15, 2010 by and among various
    Subsidiaries of the Company in favor of JPMorgan Chase Bank,
    N.A., as Administrative Agent (Incorporated by reference to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2009)10
.16

Pledge and Security Agreement dated as of March 15, 2010 by
    and among the Company, various Subsidiaries of the Company and
    JPMorgan Chase Bank, N.A., as Administrative Agent (Incorporated
    by reference to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2009)10
.17

Amendment No. 1 to Credit Agreement with various lenders
    and JPMorgan Chase Bank, N.A., as Administrative Agent dated as
    of April 27, 2010 (Incorporated by reference to the
    Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended March 31, 2010)10
.18

Amendment No. 2 to Credit Agreement with various lenders
    and JPMorgan Chase Bank, N.A., as Administrative Agent dated as
    of January 21, 2011 (Filed herewith)10
.19

MANAGEMENT CONTRACTS AND COMPENSATION PLANS(a) 1995 Stock Option and Stock Incentive Plan
    (Incorporated by reference to the Companys Registration
    Statement
    No. 333-30581
    filed under the Securities Act of 1933)(b) 1995 Stock Option and Stock Incentive Plan 
    Individual Stock Option Agreement for Incentive Stock Option
    (contained in Exhibit 10.20(a)) (Incorporated by reference
    to the Companys Registration Statement
    No. 333-30581
    filed under the Securities Act of 1933)(c) 1997 Stock Option and Stock Incentive Plan
    (Incorporated by reference to the Companys Registration
    Statement
    No. 333-30581
    filed under the Securities Act of 1933)(c)(1) Amendment No. 1 to 1997 Stock Option and Stock
    Incentive Plan (Incorporated by reference to the Companys
    Annual Report on
    Form 10-K
    for the year ended December 31, 2002)(c)(2) Amendment No. 2 to 1997 Stock Option and Stock
    Incentive Plan (Incorporated by reference to the Companys
    definitive Proxy Statement on Schedule 14A filed with the
    Commission on April 12, 2000)(c)(3) Amendment No. 3 to 1997 Stock Option and Stock
    Incentive Plan (Incorporated by reference to the Companys
    Annual Report on
    Form 10-K
    for the year ended December 31, 2002) 46




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##### Table of Contents



ExhibitNumber

Description of Exhibit(c)(4) Form of Restricted Stock Award Agreement (Incorporated by
    reference to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2004)(d) Form of Protective Compensation and Benefit Agreement.
    Incorporated by reference to the Companys Registration
    Statement
    No. 333-30581
    filed under the Securities Act of 1933)(e) 2007 Stock Incentive Plan (Incorporated by reference to
    the Companys definitive Proxy Statement on
    Schedule 14A filed with the Commission on April 9,
    2007)(e)(1) Form of Performance Based Stock Unit Agreement
    (Incorporated by reference to the Companys Quarterly
    Report on
    Form 10-Q
    for the quarterly period ended March 31, 2008)(f) Annual Incentive Plan (Incorporated by reference to the
    Companys Current Report on
    Form 8-K
    filed with the Commission on May 20, 2008)(g) Nonqualified Deferred Compensation Plan (Incorporated
    by reference to the Companys Current Report on
    Form 8-K
    filed with the Commission on May 20, 2008)(h) 2003 Directors Compensation Plan (Incorporated by
    reference to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2003)12
.1

Computation of Ratio of Earnings to Fixed Charges (Filed
    herewith)14


Code of Ethics (Available on the Companys Web site at
    www.kendle.com)21


List of Subsidiaries (Filed herewith)23
.1

Consent of Deloitte & Touche LLP (Filed herewith)24


Powers of Attorney (Filed herewith)31
.1

Certification of the Chief Executive Officer pursuant to
    Rule 13a-14(a)
    (Filed herewith)31
.2

Certification of the Chief Financial Officer pursuant to
    Rule 13a-14(a)
    (Filed herewith)32
.1

Certification Pursuant to 18 U.S.C Section 1350 as Adopted
    Pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002  Chief Executive Office (Filed herewith)32
.2

Certification Pursuant to 18 U.S.C Section 1350 as Adopted
    Pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002  Chief Financial Officer (Filed herewith)  47




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##### Table of Contents



Kendle
    International Inc.
  Index to
    Consolidated Financial Statements
  PageReport of Independent Registered Public
    Accounting Firm


F-2Consolidated Statements of Operations for the
    years ended December 31, 2010, 2009 and 2008.


F-3Consolidated Balance Sheets as of
    December 31, 2010 and 2009.


F-4Consolidated Statements of Shareholders
    Equity for the years ended December 31, 2010, 2009 and
    2008.


F-5Consolidated Statements of Cash Flows for the
    years ended December 31, 2010, 2009 and 2008.


F-6Notes to Consolidated Financial
    Statements.


F-7  F-1




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##### Table of Contents



REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM              DELOITTE &
    TOUCHE LLP
    F-2




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##### Table of Contents



CONSOLIDATED
    STATEMENTS OF OPERATIONS  For the Years Ended December 31,2010


2009


2008(In thousands except per share data)Net service revenues

$
333,766


$
416,688


$
475,092Reimbursable
    out-of-pocket
    revenues


114,493



135,224



203,489Total revenues


448,259



551,912



678,581Costs and expenses:Direct costs


171,600



210,586



247,436Reimbursable
    out-of-pocket
    costs


114,493



135,224



203,489Selling, general and administrative


135,239



144,659



155,577Depreciation and amortization


16,340



15,712



15,253Restructuring expenses


4,522



10,157



Goodwill impairment


7,263







Total costs and expenses


449,457



516,338



621,755Income (loss) from operations


(1,198
)


35,574



56,826Other income (expense):Interest income


144



579



760Interest expense


(11,949
)


(14,403
)


(15,891
)Gain on extinguishment of debt






2,887



Other


7,770



4,034



(2,043
)Total other income (expense)


(4,035
)


(6,903
)


(17,174
)Income (loss) before income taxes


(5,233
)


28,671



39,652Income tax provision (benefit)


(674
)


13,434



16,509Net income (loss)

$
(4,559
)

$
15,237


$
23,143Income (loss) per share data:Basic:Net income (loss) per share

$
(0.31
)

$
1.03


$
1.57Weighted average shares


14,907



14,862



14,751Diluted:Net income (loss) per share

$
(0.31
)

$
1.02


$
1.54Weighted average shares


14,907



14,992



14,993    F-3




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##### Table of Contents



CONSOLIDATED
    BALANCE SHEETS  As of December 31,

2010


2009(In thousands except share data)ASSETSCurrent assets:Cash and cash equivalents

$
21,217


$
52,103Restricted cash


881



1,112Accounts receivable, net


105,586



125,287Deferred tax asset  current


7,876



8,147Other current assets


24,665



20,676Total current assets


160,225



207,325Property and equipment, net


56,898



53,539Goodwill


236,189



243,589Other intangible assets, net


11,808



15,164Long-term deferred tax asset


17,929



12,716Other assets


6,862



7,390Total assets

$
489,911


$
539,723LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current portion of obligations under capital leases

$
34


$
52Trade payables


18,187



14,928Advance billings


57,525



76,202Other accrued liabilities


42,265



59,667Total current liabilities


118,011



150,849Obligations under capital leases, less current portion






34Convertible notes, net


133,082



138,308Deferred income taxes liabilities


2,872



7,508Non-current income taxes payable


1,110



1,872Other liabilities


3,989



5,105Total liabilities


259,064



303,676Commitments and contingenciesShareholders equity:Preferred stock  no par value; 100,000 shares
    authorized; none issued and outstandingCommon stock  no par value; 45,000,000 shares
    authorized; 14,955,259 and 14,912,327 shares issued and
    14,932,207 and 14,889,275 outstanding at December 31, 2010
    and 2009, respectively


75



75Additional paid-in capital


181,308



180,534Retained earnings


29,177



33,736Accumulated other comprehensive income:Foreign currency translation adjustment


20,779



22,194Less: Cost of common stock held in treasury, 23,052 shares
    at December 31, 2010 and 2009, respectively


(492
)


(492
)Total shareholders equity


230,847



236,047Total liabilities and shareholders equity

$
489,911


$
539,723    F-4




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##### Table of Contents



CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY  AccumulatedCommon Stock


Common


Additional





Retained


Other


TotalNumber of


Stock


Paid-in


Treasury


Earnings


Comprehensive


Shareholders


ComprehensiveShares


Amount


Capital


Stock


(Deficit)


Income


Equity


Income (Loss)(In thousands except share data)Balance at January 1, 2008


14,657,977


$
75


$
176,521


$
(492
)

$
(4,644
)

$
3,798


$
175,258Net income


















23,143







23,143



23,143Other comprehensive income:Foreign currency translation adjustment






















10,724



10,724



10,724Comprehensive income






























33,867Shares issued under stock plans


180,489







2,294















2,294Stock compensation expense










1,030















1,030Income tax benefit from exercise of stock options










175















175Balance at December 31, 2008


14,838,466


$
75


$
180,020


$
(492
)

$
18,499


$
14,522


$
212,624Net income


















15,237







15,237



15,237Other comprehensive income:Foreign currency translation adjustment






















7,672



7,672



7,672Comprehensive income






























22,909Share based compensation plans and other


50,809







815















815Repurchase of equity component of convertible notes










(204
)














(204
)Partial retirement of note hedges and warrants










(97
)














(97
)Balance at December 31, 2009


14,889,275


$
75


$
180,534


$
(492
)

$
33,736


$
22,194


$
236,047Net loss


















(4,559
)






(4,559
)


(4,559
)Other comprehensive loss:Foreign currency translation adjustment






















(1,415
)


(1,415
)


(1,415
)Comprehensive loss






























(5,974
)Share based compensation plans and other


42,932







1,125















1,125Repurchase of equity component of convertible notes










(348
)














(348
)Partial retirement of note hedges and warrants










(3
)














(3
)Balance at December 31, 2010


14,932,207


$
75


$
181,308


$
(492
)

$
29,177


$
20,779


$
230,847    F-5




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##### Table of Contents



CONSOLIDATED
    STATEMENTS OF CASH FLOWS  For the Years Ended December 31,2010


2009


2008(In thousands)Cash flows from operating activitiesNet income (loss)

$
(4,559
)

$
15,237


$
23,143Adjustments to reconcile net income to cash provided by
    operating activities:Depreciation and amortization


16,340



15,712



15,253Goodwill impairment charge


7,263







Deferred income taxes


(9,605
)


4,138



(6,745
)Income tax benefit from stock option exercises


(11
)


(2
)


(175
)Compensation expense on stock grants


914



679



1,030Debt issue cost amortization


7,197



7,729



7,783Foreign currency exchange (gain) loss


(1,905
)


(2,691
)


4,321Gain on extinguishment of debt






(2,887
)


Other


459



1,333



(1,564
)Changes in operating assets and liabilities, net of effects from
    acquisitions:Restricted cash


206



(82
)


(85
)Accounts receivable


13,995



37,786



(28,036
)Other current assets


(3,254
)


(1,344
)


(3,493
)Other assets


579



(31
)


(317
)Trade payables


5,111



(4,395
)


1,010Advance billings


(13,154
)


(22,401
)


19,613Accrued liabilities and other


(18,646
)


5,508



5,318Net cash provided by operating activities


930



54,289



37,056Cash flows from investing activitiesProceeds from termination of foreign currency hedges






17,312



Acquisitions of property and equipment


(17,043
)


(18,431
)


(25,911
)Additions to internally developed software


(249
)


(535
)


(1,186
)Acquisitions of businesses, less cash acquired


(2,400
)


(2,875
)


(18,053
)Other


62



32



(1,143
)Net cash used in investing activities


(19,630
)


(4,497
)


(46,293
)Cash flows from financing activitiesProceeds from issuance of long-term debt


10,000







37,500Payments of long-term debt


(10,000
)






(37,500
)Repurchase of convertible notes


(11,145
)


(36,463
)


Purchase of note hedges and warrants


(3
)


(97
)


Proceeds from issuance of common stock


160



247



2,241Income tax benefit from stock option exercises


11



2



175Amounts payable  book overdraft


(281
)


133



465Payments on capital lease obligations


(52
)


(228
)


(234
)Debt issue costs


(470
)


(482
)


Net cash (used in) provided by financing activities


(11,780
)


(36,888
)


2,647Effects of exchange rates on cash and cash equivalents


(406
)


4,030



(3,753
)Net increase (decrease) in cash and cash equivalents


(30,886
)


16,934



(10,343
)Cash and cash equivalentsBeginning of year


52,103



35,169



45,512End of year

$
21,217


$
52,103


$
35,169Supplemental disclosure of cash flow informationCash paid during the year for interest

$
5,436


$
7,312


$
8,087Cash paid during the year for income taxes

$
14,106


$
14,382


$
25,931Supplemental schedule of noncash investing and financing
    activitiesAccrued equipment purchases

$
(117
)

$
(1,307
)

$
(1,090
)Acquisitions of businesses:Fair value of assets acquired via cash

$



$
5,039


$
25,432Fair value of liabilities assumed or incurred

$
2,400


$
(2,164
)

$
(7,379
)Net cash payments

$
2,400


$
2,875


$
18,053    F-6




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS  1.
    NATURE OF
    BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES  Nature
    of Business
    Principles
    of Consolidation and Organization
      Business
    Combinations
    Foreign
    Currency Translation
    Cash
    and Cash Equivalents, Including Restricted Cash
    time-to-time
   F-7




---



##### Table of Contents



Revenue
    Recognition
  per-unit percentage-of-completion) time-and-materials
  Percentage-of-Completion
      
    Actual costs incurred to date and the work completed as a result
    of incurring the actual costs;
    The remaining work to be completed based on the timeline of the
    contract as well as the number of incomplete tasks in the
    contract; and
    Factors that could change the rate of progress of future
    contract performance.      percentage-of-completion
   F-8




---



##### Table of Contents



Units-Based
          Reimbursable
    Out of Pocket Revenues/Costs
  out-of-pocket out-of-pocket
  Concentration
    of Credit Risk
    Long-Lived
    Assets
   F-9




---



##### Table of Contents



Furniture and Fixtures

10 yearsComputer and Software

5 yearsLeasehold Improvements

Lesser of estimated life of asset or lease termBuildings

50 yearsCapital Lease Assets

Lesser of estimated life of asset or lease term         Goodwill
    and Intangible Assets
       F-10




---



##### Table of Contents



Derivatives
      Marketing
    and Advertising Costs
    Investigator
    and Project Costs
  out-of-pocket out-of-pocket out-of-pocket out-of-pocket
  Net
    Income (Loss) Per Share Data
   F-11




---



##### Table of Contents



Net
    Income (Loss) Per Share Data
  2010


2009


2008(In thousands)Weighted average common shares outstanding


14,907



14,862



14,751Stock options and non-vested restricted shares






130



242Weighted average shares


14,907



14,992



14,993       Incremental SharesTotal Treasury


Shares Due to the


Issued by theConvertible Notes





Method Incremental


Company under Note


Company UponShare Price

Shares


Warrant Shares


Shares(1)


Hedges


Conversion(2)$40.00


















$45.00


















$50.00


136,592







136,592



(136,592
)


$55.00


395,683







395,683



(395,683
)


$60.00


611,592







611,592



(611,592
)


$65.00


794,284



173,820



968,104



(794,284
)


173,820$70.00


950,877



374,732



1,325,609



(950,877
)


374,732     (1)
    
    Represents the number of incremental shares that must be
    included in the calculation of fully diluted shares under U.S.
    Generally Accepted Accounting Principles.(2)
    
    Represents the number of incremental shares to be issued by the
    Company upon conversion of the Convertible Notes, assuming
    concurrent settlement of the bond hedges and warrants.  Income
    Taxes
     F-12




---



##### Table of Contents



Stock
    Options
    Restricted/Unrestricted
    Stock
    Use of
    Estimates
   F-13




---



##### Table of Contents



Subsequent
    Events
    New
    Accounting Pronouncements
  2009-13,
  2009-17,
  2010-28,
  2.
    FAIR
    VALUE OF FINANCIAL INSTRUMENTS    Level 1:
  Level 2:
  Level 3:
   F-14




---



##### Table of Contents



Active Markets for

Significant Other

SignificantCarrying

Identical Assets

Observable Inputs

Unobservable InputsAmount

(Level 1)

(Level 2)

(Level 3)(In thousands)Money Market Accounts

$
6,509


$
6,509


$



$
     Quoted Prices inActive Markets for

Significant Other

SignificantCarrying

Identical Assets

Observable Inputs

Unobservable InputsAmount

(Level 1)

(Level 2)

(Level 3)(In thousands)Money Market Accounts

$
16,627


$
16,627


$



$
     3.
    ACCOUNTS
    RECEIVABLE    December 31,2010


2009(In thousands)Billed (net of allowance)

$
58,926


$
79,207Unbilled


46,660



46,080$
105,586


$
125,287     (In thousands)Balance at December 31, 2007

$
954Write-offs


(896
)Expense


3,150Foreign currency translation


(141
)Balance at December 31, 2008

$
3,067Write-offs


(1,317
)Expense


847Foreign currency translation


86Balance at December 31, 2009

$
2,683Write-offs


(997
)Expense


1,230Foreign currency translation


(32
)Balance at December 31, 2010

$
2,884  F-15




---



##### Table of Contents



4.
    PROPERTY
    AND EQUIPMENT    December 31,2010


2009(In thousands)Furnishings, equipment and other

$
116,544


$
95,786Construction in process


11,086



18,395Equipment under capital leases


303



467Less: accumulated depreciation and amortization


(71,035
)


(61,109
)Property and equipment, net

$
56,898


$
53,539     5.
    GOODWILL
    AND AMORTIZABLE INTANGIBLE ASSETS    Early Stage


Late Stage


Total(In thousands)Balance at December 31, 2008

$
11,547


$
224,782


$
236,329Contingent consideration paid


5,039







5,039Foreign currency fluctuations


1,727



494



2,221Balance at December 31, 2009

$
18,313


$
225,276


$
243,589Impairment charge


(7,263
)






(7,263
)Foreign currency fluctuations


680



(817
)


(137
)Balance at December 31, 2010

$
11,730


$
224,459


$
236,189    F-16




---



##### Table of Contents



December 31,2010


2009(In thousands)Carrying amount:Customer relationships

$
22,407


$
22,169Completed technology


2,600



2,600Backlog


6,200



6,200Internally developed software(a)


18,212



17,963Total carrying amount

$
49,419


$
48,932Accumulated Amortization:Customer relationships

$
(11,018
)

$
(8,098
)Completed technology


(2,292
)


(1,771
)Backlog


(6,089
)


(5,936
)Internally developed software(a)


(16,711
)


(16,187
)Total accumulated amortization

$
(36,110
)

$
(31,992
)Net amortizable intangible assets

$
13,309


$
16,940     (a)
    
    Internally developed software is included in Other Assets in the
    Companys Consolidated Balance Sheets.    InternallyCustomer


Completed





DevelopedRelationships


Technology


Backlog


Software(a)(In thousands)Balance at December 31, 2008

$
17,004


$
1,348


$
679


$
1,858Additional amounts acquired














536Foreign currency fluctuations


662











2009 amortization


(3,595
)


(519
)


(415
)


(618
)Balance at December 31, 2009

$
14,071


$
829


$
264


$
1,776Additional amounts acquired














249Foreign currency fluctuations


238











2010 amortization


(2,920
)


(521
)


(153
)


(524
)Balance at December 31, 2010

$
11,389


$
308


$
111


$
1,501Weighted average useful lives


13 years



5 years



7 years



5 years    F-17




---



##### Table of Contents



(In thousands)2011:

$
3,4262012:


2,3262013:


1,5032014:


9512015


720Thereafter:


4,383Total

$
13,309   6.
    OTHER
    ACCRUED LIABILITIES    December 31,2010


2009(In thousands)Accrued compensation and related payroll withholdings and taxes

$
18,427


$
22,428Income tax payable


590



4,369Interest payable


2,204



2,390Other


21,044



30,480$
42,265


$
59,667   7.
    DEBT    same-day
     F-18




---



##### Table of Contents



December 31,2010


2009(In thousands)Equity component, carrying amount

$
35,860


$
36,207Principal component, at par

$
142,500


$
154,500Unamortized discount


(9,418
)


(16,192
)Principal component, carrying amount

$
133,082


$
138,308    F-19




---



##### Table of Contents



For the Years Ended December 31,2010


2009


2008(In thousands)Interest cost at coupon rate

$
4,972


$
6,096


$
6,750Discount amortization


5,667



6,456



6,631Total interest expense recognized

$
10,639


$
12,552


$
13,381     8.
    EMPLOYEE
    BENEFIT PLANS  401(k)
    Plan
    Stock
    Option and Stock Incentive Plan
       F-20




---



##### Table of Contents



12-month
         F-21




---



##### Table of Contents



2010

2009

2008Expected dividend yield


0
%


0
%


0
%Risk-free interest rate


1.8
%


2.2
%


3.6
%Expected volatility


69.7
%


70.9
%


52.0
%Expected holding period


3.2 years



3.2 years



5.0 years        F-22




---



##### Table of Contents



WeightedWeighted


Average


AggregateAverage


Remaining


IntrinsicShares


Exercise Price


Contractual Life


Value(In thousands)Options outstanding at Dec. 31, 2007


543,007


$
13.33Granted


68,000



38.32Canceled


(17,290
)


24.94Exercised


(179,040
)


12.52Options outstanding at Dec. 31, 2008


414,677


$
17.35Granted


54,250



12.37Canceled


(53,275
)


25.79Exercised


(35,777
)


6.95Options outstanding at Dec. 31, 2009


379,875


$
16.44Granted


73,500



11.36Canceled


(35,290
)


20.50Exercised


(20,935
)


7.63Options outstanding at Dec. 31, 2010


397,150


$
15.60


$
5.19


$
560Exercisable at Dec. 31, 2010


331,384


$
15.94


$
4.42


$
481         Weighted Average


WeightedOutstanding at


Remaining


AverageRange of Exercise Price

December 31, 2010


Contractual Life


Exercise Price$ 3.46 - $ 6.92


40,600



2.64


$
5.90$ 6.93 - $10.38


146,825



5.19



8.47$10.39 - $13.83


44,750



5.64



11.85$13.84 - $17.29


42,000



8.26



14.89$17.30 - $20.75


37,975



0.73



19.76$20.76 - $24.21


8,000



8.11



22.28$24.22 - $27.67










$27.68 - $31.13


12,000



5.98



30.06$31.14 - $34.59


35,000



5.93



32.65$34.60 - $60.00


30,000



7.37



37.54397,150



5.19


$
15.60  F-23




---



##### Table of Contents



WeightedExercisable at


AverageRange of Exercise Price

December 31, 2010


Exercise Price$ 3.46 - $ 6.92


40,600


$
5.90$ 6.93 - $10.38


115,325



8.49$10.39 - $13.83


25,750



11.63$13.84 - $17.29


36,934



14.74$17.30 - $20.75


37,975



19.76$20.76 - $24.21


6,200



22.40$24.22 - $27.67






$27.68 - $31.13


9,600



30.06$31.14 - $34.59


35,000



32.65$34.60 - $60.00


24,000



37.48331,384


$
15.94     Restricted/Unrestricted
    Stock
      For the Year Ended December 31,2010


2009


2008(In thousands)Restricted stock

$
556


$
315


$
244Unrestricted stock






35



Total stock based compensation

$
556


$
350


$
244  F-24




---



##### Table of Contents



SharesOutstanding at December 31, 2007


125Granted


24,200Vested


(125
)Canceled


(15,250
)Outstanding at December 31, 2008


8,950Granted


86,250Vested


(6,084
)Canceled


(36,800
)Outstanding at December 31, 2009


52,316Granted


105,370Vested


(14,183
)Canceled


(63,394
)Outstanding at December 31, 2010


80,109     9.
    RESTRUCTURING
    COSTS     F-25




---



##### Table of Contents



10.
    COMMITMENTS
    AND CONTINGENCIES  Leases
    Capital


OperatingLeases


Leases(In thousands)2011

$
35


$
17,1272012






15,3032013






10,8922014






8,6542015






8,482thereafter






17,974Total minimum lease payments


35


$
78,432Amounts representing interest


(1
)Present value of net minimum lease payments


34Current portion


34Obligations under capital leases, less current portion

$
     Protective
    Compensation and Benefit Agreements
    Legal
    Proceedings
    Anti-takeover
    Provisions
   F-26




---



##### Table of Contents



11.
    INCOME
    TAXES    For the Years Ended December 31,2010


2009


2008(In thousands)Current:Federal

$
(1,084
)

$
(4,519
)

$
2,908State and local


272



(586
)


324Foreign


9,743



14,401



19,702Subtotal


8,931



9,296



22,934Deferred:Federal


(6,977
)


4,131



(3,394
)State and local


(777
)


164



(828
)Foreign


(1,851
)


(157
)


(2,523
)Subtotal


(9,605
)


4,138



(6,745
)Benefit applied to reduce goodwill










320Total provision (benefit)

$
(674
)

$
13,434


$
16,509     2010


2009


2008(In thousands)United States

$
(37,878
)

$
(19,124
)

$
4,406Foreign


32,645



47,795



35,246Income (loss) before income taxes

$
(5,233
)

$
28,671


$
39,652     2010


2009


2008(In thousands)Income tax expense at the U.S. Federal statutory rate


(1,779
)


9,748



13,483Effects of foreign taxes, net of foreign tax credits and
    deductions


(1,562
)


(1,867
)


794State and local income taxes, net of Federal benefit


179



(389
)


(713
)Change in Valuation Allowances


(2,171
)


(811
)


Effects of cross currency hedge unwind






4,070



Non-Deductible Goodwill


2,380







Effects of deemed foreign dividend


2,431



2,244



3,292Other


(152
)


439



(347
)Total


(674
)


13,434



16,509    F-27




---



##### Table of Contents



December 31,2010


2009(In thousands)Deferred tax assets:Compensation and employee benefits

$
1,358


$
1,346Accrued expenses and other future deductible items


3,151



5,412Foreign operating loss carryforward


20,328



17,965State and local operating loss carryforward


3,932



2,317Federal operating loss carryforward


16,728



2,873Deferred state income taxes






182Contributions carryforward


68



68Capital loss carryforward


12



18Foreign tax credit carryforward


10,552



10,552Unrealized foreign exchange losses


4,525



3,377Stock option expense


674



455Other


3,014



3,141Total deferred tax assets


64,342



47,706Deferred tax liabilities:Deferred state income taxes


(63
)


0Intangible assets


(2,413
)


(1,673
)Depreciation and software costs


(9,437
)


(3,930
)Open market repurchase


(990
)


(995
)Total deferred tax liability


(12,903
)


(6,598
)Valuation allowance


(28,559
)


(28,080
)Total net deferred tax asset

$
22,880


$
13,028            F-28




---



##### Table of Contents



2010


2009


2008(In thousands)Beginning balance

$
28,080


$
22,368


$
19,341Additions charged to expense


752



1,025



9,080Additions attributable to acquisitions






6,874



Reductions from utilization, reassessments and expirations


(273
)


(2,187
)


(6,053
)Ending balance

$
28,559


$
28,080


$
22,368       2010


2009


2008(In thousands)Beginning Balance

$
1,768


$
1,764


$
5,447Gross increases  tax positions in prior period










230Gross decreases  tax positions in prior period


(180
)






(2,747
)Gross increases  tax positions in current period


387



451



384Gross decreases  tax positions in current period










Settlements










Lapse of statute of limitations


(1,001
)


(447
)


(1,550
)Unrecognized tax benefit balance at December 31

$
974


$
1,768


$
1,764          F-29




---



##### Table of Contents



United States


2007 - 2010Germany


2006 - 2010United Kingdom


2009 - 2010Netherlands


2008 - 2010     12.
    INVESTMENTS    13.
    SEGMENT
    INFORMATION      Early


Late


SupportStage


Stage


& Other


Total(In thousands)Twelve months ended December 31, 2010Net service revenues

$
25,888


$
305,872


$
2,006


$
333,766Reimbursable
    out-of-pocket
    revenues

$
2,106


$
112,387


$



$
114,493Total revenues

$
27,994


$
418,259


$
2,006


$
448,259Operating Income (loss)

$
(11,455
)

$
63,575


$
(53,318
)

$
(1,198
)Total assets

$
32,528


$
390,608


$
66,775
(a)

$
489,911   Early


Late


SupportStage


Stage


& Other


Total(In thousands)Twelve months ended December 31, 2009Net service revenues

$
37,473


$
370,178


$
9,037


$
416,688Reimbursable
    out-of-pocket
    revenues

$



$
135,224


$



$
135,224Total revenues

$
37,473


$
505,402


$
9,037


$
551,912Operating Income (loss)

$
4,187


$
81,109


$
(49,722
)

$
35,574Total assets

$
48,070


$
406,832


$
84,821
(a)

$
539,723   F-30




---



##### Table of Contents



Early


Late


SupportStage(b)


Stage


& Other


Total(In thousands)Twelve months ended December 31, 2008Net service revenues

$
35,199


$
430,317


$
9,576


$
475,092Reimbursable
    out-of-pocket
    revenues

$



$
203,489


$



$
203,489Total revenues

$
35,199


$
633,806


$
9,576


$
678,581Operating Income (loss)

$
6,177


$
105,140


$
(54,491
)

$
56,826     (a)
    
    Primarily comprised of cash and tax-related assets.(b)
    
    The Early Stage segment results for the twelve months ended
    December 31, 2008 include the June (acquisition date)
    through December operating results of DecisionLine.    For the Years Ended December 31,Net service revenues

2010


2009


2008(In thousands)North American Region:United States

$
138,043


$
179,700


$
214,935Other


16,047



21,166



14,411$
154,090


$
200,866


$
229,346European Region:Germany

$
39,542


$
40,475


$
56,661United Kingdom


30,518


$
37,792


$
42,303Other


60,707



79,362



90,564$
130,767


$
157,629


$
189,528Latin American Region:(1)

$
36,215


$
40,829


$
38,996Asia/Pacific Region:

$
12,694


$
17,364


$
17,222Total Net Service Revenues


333,766



416,688



475,092     (1)
    
    Latin American region includes Mexico  For the Years Ended December 31,Identifiable Long-Lived Assets

2010


2009(In thousands)North American Region:United States

$
45,379


$
41,711Other


2,473



2,414$
47,852


$
44,125European Region:Germany

$
587


$
743United Kingdom


3,226



3,606Other


2,457



3,107$
6,270


$
7,456Latin American Region:(1)

$
2,412


$
2,635Asia/Pacific Region:

$
1,864


$
1,099Total identifiable long-lived assets

$
58,398


$
55,315     (1)
    
    Latin American region includes Mexico F-31




---



##### Table of Contents



14.
    ACQUISITION    Acquisition
    of DecisionLine Clinical Research Corporation and related
    company:
        (In Thousands at thePrevailing Exchange Rateat June 2, 2008,Except ContingentConsideration Recordedat AppropriatePurchase Price Allocation

Exchange Rate)Cash

$
1,562Accounts receivable


5,922Other current assets


1,398Property, plant and equipment


2,913Other long-term assets


1,196Intangible assets


4,930Goodwill


14,112Total assets acquired


32,033Advance billings


(3,503
)Other current liabilities


(2,956
)Other long-term liabilities


(898
)Total liabilities assumed


(7,357
)Net assets acquired

$
24,676    F-32




---



##### Table of Contents



Twelve MonthsEndedDecember 31, 2008(In thousands, except pershare data)Net service revenues

$
485,778Income before income taxes

$
41,866Net income

$
24,302Net income per diluted share

$
1.62Weighted average shares


14,993       15.
    QUARTERLY
    FINANCIAL DATA  (unaudited)    Quarter

First


Second


Third


Fourth(In thousands, except per share data)2010Net service revenues

$
90,227


$
82,445


$
83,170


$
77,924Gross profit


42,788



39,612



43,171



36,594Income (loss) from operations


4,266



664



5,612



(11,741
)Net income (loss)


1,211



1,863



1,549



(9,182
)Net income (loss) per basic share

$
0.08


$
0.13


$
0.10


$
(0.62
)Net income (loss) per diluted share

$
0.08


$
0.12


$
0.10


$
(0.62
)   Quarter

First


Second


Third


Fourth2009Net service revenues

$
108,103


$
107,351


$
104,588


$
96,646Gross profit


50,126



52,147



55,674



48,155Income from operations


8,137



6,978



15,533



4,926Net income


887



3,193



8,826



2,331Net income per basic share

$
0.06


$
0.22


$
0.59


$
0.16Net income per diluted share

$
0.06


$
0.21


$
0.59


$
0.16  F-33




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##### Table of Contents



SIGNATURES    KENDLE INTERNATIONAL INC.
  
         Signature

Capacity

Date/s/  Candace
    KendleCandace
    Kendle, PharmD

Chairman of the Board of Directors, Chief Executive Officer and
    Principal Executive Officer

March 16, 2011*Christopher
    C. Bergen

Executive Vice President and
    Chief Administrative Officer

March 16, 2011/s/  Keith
    A. CheesmanKeith
    A. Cheesman

Senior Vice President, Chief Financial Officer and Principal
    Financial Accounting Officer

March 16, 2011*G.
    Steven Geis, Ph.D., M.D.

Director

March 16, 2011*Donald
    C. Harrison, M.D.

Director

March 16, 2011*Timothy
    E. Johnson, Ph.D.

Director

March 16, 2011*Frederick
    A. Russ, Ph.D.

Director

March 16, 2011*Robert
    R. Buck

Director

March 16, 2011*Timothy
    M. Mooney

Director

March 16, 2011*/s/  Jarrod
    B. PontiusJarrod
    B. Pontius

as Attorney In-Fact

March 16, 2011




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Description of Exhibit

Filing Status2
.1

Stock Purchase Agreement between the Company and Charles River
    Laboratories International, Inc. dated as of May 9, 2006

*2
.2

First Amendment to the Stock Purchase Agreement dated as of
    August 16, 2006 between the Company and Charles River
    Laboratories, Inc.3
.1

Restated and Amended Articles of Incorporation

*3
.2

Amended and Restated Code of Regulations

*3
.3

Amendment of the Restated and Amended Articles of Incorporation
    to Increase the Authorized Shares

*4


Specimen Common Stock Certificate

*4
.1

Shareholder Rights Agreement dated August 14, 2009 between
    the Company and American Stock Transfer &
    Trust Company LLC, as Rights Agent

*4
.2

Indenture dated March 31, 2007 between the Company and
    LaSalle Bank National Association

*4
.3

Supplemental Indenture No. 1 dated July 16, 2007
    between the Company and LaSalle Bank National Association

*10
.1

Indemnity Agreement dated June 21, 1996 by and between the
    Company and Candace Kendle Bryan

*10
.2

Indemnity Agreement dated June 21, 1996 by and between the
    Company and Christopher C. Bergen

*10
.3

Indemnity Agreement dated June 21, 1996 by and between the
    Company and Timothy M. Mooney

*10
.4

Indemnity Agreement dated May 14, 1997 by and between the
    Company and Charles A. Sanders

*10
.5

Indemnity Agreement dated May 14, 1997 by and between the
    Company and Philip E. Beekman

*10
.6

Indemnity Agreement dated December 10, 1998 by and between
    the Company and Robert Buck

*10
.7

Indemnity Agreement dated December 10, 1998 by and between
    the Company and Mary Beth Price

*10
.8

Form of Indemnity Agreement by and between the Company and each
    member of the Companys Board of Directors, except for
    those Indemnity Agreements noted above and filed previously.

*10
.9

Confirmation of Convertible Bond Hedge Transaction, dated
    July 10, 2007, by and between the Company and UBS AG,
    London Branch

*10
.10

Confirmation of Convertible Bond Hedge Transaction, dated
    July 10, 2007, by and between the Company and JPMorgan
    Chase Bank, National Association, London Branch

*10
.11

Confirmation of Issuer Warrant Transaction, dated July 10,
    2007, by and between the Company and UBS AG, London Branch

*10
.12

Confirmation of Issuer Warrant Transaction, dated July 10,
    2007, by and between the Company and JPMorgan Chase Bank,
    National Association, London Branch

*10
.13

Lease Agreement dated February 27, 2008 by and between the
    Company and Carew Realty, Inc.

*10
.14

Credit Agreement dated as of March 15, 2010 by and among
    the Company , various Lenders and JPMorgan Chase Bank, N.A., as
    Administrative Agent

*10
.15

Guaranty dated as of March 15, 2010 by and among various
    Subsidiaries of the Company in favor of JPMorgan Chase Bank,
    N.A., as Administrative Agent

*10
.16

Pledge and Security Agreement dated as of March 15, 2010 by
    and among the Company, various Subsidiaries of the Company and
    JPMorgan Chase Bank, N.A., as Administrative Agent

*




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##### Table of Contents



ExhibitNumber

Description of Exhibit

Filing Status10
.17

Amendment No. 1 to Credit Agreement with various lenders
    and JPMorgan Chase Bank, N.A., as Administrative Agent dated as
    of April 27, 2010

*10
.18

Amendment No. 2 to Credit Agreement with various lenders
    and JPMorgan Chase Bank, N.A., as Administrative Agent dated as
    of January 21, 2011

Filed Herewith10
.19

MANAGEMENT CONTRACTS AND COMPENSATION PLANS

*(a) 1995 Stock Option and Stock Incentive Plan

*(b) 1995 Stock Option and Stock Incentive Plan 
    Individual Stock Option Agreement for Incentive Stock Option
    (contained in Exhibit 10.20(a))

*(c) 1997 Stock Option and Stock Incentive Plan

*(c)(1) Amendment No. 1 to 1997 Stock Option and Stock
    Incentive Plan

*(c)(2) Amendment No. 2 to 1997 Stock Option and Stock
    Incentive Plan

*(c)(3) Amendment No. 3 to 1997 Stock Option and Stock
    Incentive Plan

*(c)(4) Form of Restricted Stock Award Agreement

*(d) Form of Protective Compensation and Benefit Agreement

*(e) 2007 Stock Incentive Plan

*(e)(1) Form of Performance-Based Stock Unit Agreement

*(f) Annual Incentive Plan

*(g) Nonqualified Deferred Compensation Plan

*(h) 2003 Directors Compensation Plan

*12
.1

Computation of Ratio of Earnings to Fixed Charges

Filed herewith14


Code of Ethics

Available on
    the Companys
    website21


List of Subsidiaries

Filed herewith23
.1

Consent of Deloitte & Touche LLP

Filed herewith24


Powers of Attorney

Filed herewith31
.1

Certification of the Chief Executive Officer pursuant to
    Rule 13a-14(a)

Filed herewith31
.2

Certification of the Chief Financial Officer pursuant to
    Rule 13a-14(a)

Filed herewith32
.1

Certification Pursuant to 18 U.S.C Section 1350 as Adopted
    Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002-
    Chief Executive Officer

Filed herewith32
.2

Certification Pursuant to 18 U.S.C Section 1350 as Adopted
    Pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002  Chief Financial Officer

Filed herewith