Document:

Ex 10.1 PSUFormOfAgreement-022718

Exhibit 10.1

Grant No.
ENDO INTERNATIONAL PLC
PERFORMANCE AWARD AGREEMENT 
UNDER THE AMENDED AND RESTATED 2015 STOCK INCENTIVE PLAN

This Performance Award Agreement (this “Award Agreement”) is made and entered into as of the date of grant set forth below (the “Date of Grant”) by and between Endo International plc, an Irish public limited company (the “Company”), and the participant named below (the “Participant”).  Capitalized terms not defined herein shall have the meanings ascribed to them in the Company’s Amended and Restated 2015 Stock Incentive Plan (the “Plan”).  Where the context permits, references to the Company shall include any successor to the Company. 

Name of Participant:    

Total Target Performance Award (Total Number of Restricted Stock Units Underlying the Target Performance Award): 

Date of Grant:    

		
	Performance Period for the TSR Performance Award:
	The period beginning on the Date of Grant and ending on the third anniversary of the Date of Grant.

		
	Performance Period for the FCF Performance Award:
	Each of three successive annual periods, the first of which begins on the first day of the Company’s fiscal year that includes the Date of Grant. 

1.    Grant of Performance Awards.  The Company hereby grants to the Participant the total number of restricted stock units set forth above, fifty percent (50%) of which shall be subject to Total Shareholder Return performance targets (the “TSR Performance Award”) and the other fifty percent (50%) of which shall be subject to Free Cash Flow performance targets (the “FCF Performance Award,” and together with the TSR Performance Award, the “Performance Award”).  The Performance Award shall be subject to all of the terms and conditions of this Award Agreement and the Plan.  

2.     Form of Payment and Vesting.  

(a) The TSR Performance Award shall vest on the last day of the TSR Performance Period (the “TSR Vesting Date”) in a number of shares of Company Stock equal to the multiple of the TSR Performance Award achieved, as determined by the Committee (or its designee) in accordance with the performance conditions set forth in Exhibit A hereto, provided that the Participant is providing service to the Company or one of its Subsidiaries on the TSR Vesting Date (other than as is provided by Paragraph 4 of this Award Agreement).  Any shares of Company Stock earned in accordance with the prior sentence shall be delivered to the Participant as soon as practicable following the TSR Vesting Date, but no later than the later to occur of the end of the calendar year in which the TSR Vesting Date occurs and the fifteenth day of the third 

calendar month following the TSR Vesting Date.  Any portion of the TSR Performance Award that could have been earned in accordance with the provisions of Exhibit A that is not earned as of the TSR Vesting Date, as determined by the Committee (or its designee), shall be immediately forfeited.  

(b) During each FCF Performance Period, one third (1/3rd) of the number of restricted stock units underlying the target FCF Performance Award shall be eligible to be earned based on achievement of the performance conditions set forth in Exhibit B hereto (as may be supplemented from time to time) (“Exhibit B”). The FCF Performance Award shall vest on the third anniversary of the Date of Grant of the FCF Performance Award (the “FCF Vesting Date”) in a number of shares of Company Stock equal to the sum of the number of shares of Company Stock so earned for each of the three FCF Performance Periods, as determined by the Committee (or its designee), provided that the Participant is providing service to the Company or one of its Subsidiaries on the FCF Vesting Date (other than as is provided by Paragraph 4 of this Award Agreement). Any shares of Company Stock earned and vested in accordance with the foregoing shall be delivered to the Participant as soon as practicable following the FCF Vesting Date, but no later than the fifteenth day of the third calendar month following the calendar year in which the FCF Vesting Date occurs.  For each FCF Performance Period, any portion of the FCF Performance Award that could have been earned in accordance with the provisions of Exhibit B that is not earned as of the last day of the applicable FCF Performance Period, as determined by the Committee (or its designee), shall be immediately forfeited.  

3.    Restrictions.  The Performance Award granted hereunder may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of or encumbered, and shall be subject to a risk of forfeiture until any requirements or restrictions contained in this Award Agreement or in the Plan have been otherwise satisfied, terminated or expressly waived by the Company in writing.

4.     Termination of Service; Disability 

(a)   Termination of Service for Cause.  Upon the Participant’s termination of service with the Company and its Subsidiaries for Cause prior to the TSR Vesting Date or the FCF Vesting Date, the unvested portion, if any, of the Participant’s Performance Award shall be forfeited as of the date of such termination of service.   

(b)  Termination of Service on Account of Death.  Upon termination of the Participant’s service with the Company and its Subsidiaries on account of death prior to the TSR Vesting Date or the FCF Vesting Date, the unvested portion, if any, of the Participant’s Performance Award shall vest as of the date of such termination of service at target levels (as set forth on Exhibit A and Exhibit B, as applicable). The vested Performance Award (determined in accordance with the foregoing and including any portion of the FCF Performance Award that was earned prior to the Participant’s death in accordance with Exhibit B for any completed FCF Performance Period) shall be settled in shares of Company Stock for the benefit of the Participant’s estate no later than the later to occur of the end of the calendar year in which the Participant’s death occurs and the fifteenth day of the third calendar month following the Participant’s death.

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(c)  Termination of Service on Account of Voluntary Retirement with Consent of Company.  If the Participant voluntarily Retires with the consent of the Company prior to the TSR Vesting Date or the FCF Vesting Date, the Participant’s Performance Award shall continue to be eligible to vest in accordance with the performance-based vesting conditions set forth on Exhibit A and Exhibit B, as applicable, regardless of such termination of service.

(d)  Disability.  If the Participant incurs a Disability that also constitutes a “disability” within the meaning of Section 409A of the Code prior to the TSR Vesting Date or the FCF Vesting Date, the Participant’s Performance Award shall continue to be eligible to vest in accordance with the performance-based vesting conditions set forth on Exhibit A and Exhibit B, as applicable, regardless of any subsequent termination of service.

(e) Termination of Service by the Company without Cause or by the Participant for Good Reason.  

(i) Upon termination of the Participant’s service with the Company and its Subsidiaries by the Company or its Subsidiaries without Cause or by the Participant for “good reason” (or any like term as defined under any employment agreement with the Company or a Subsidiary to which the Participant is a party, as modified below) prior to the TSR Vesting Date, a portion of the Participant's TSR Performance Award shall vest based upon achievement of the TSR Performance Criteria (as defined in Exhibit A) measured as of the date of the Participant’s termination of service, multiplied by a fraction, the numerator of which is the number of full months of the Participant’s service during the TSR Performance Period and the denominator of which is the total number of months in the TSR Performance Period. The vested portion of the TSR Performance Award shall be settled in shares of Company Stock as soon as practicable following the Participant’s termination of service, but no later than the later to occur of (A) the end of the calendar year in which such termination occurs or (B) by the fifteenth day of the third calendar month following such termination. Notwithstanding the foregoing, the Committee (or such individual or individuals authorized by the Committee) may, in its discretion, exercise negative discretion to determine payout achievement.  Any portion of the TSR Performance Award that could have been earned in accordance with the provisions of this Section 4(e)(i) that is not earned as of the date of the Participant’s termination of service shall be immediately forfeited on the date of the Participant’s termination of service.  

(ii) Upon termination of the Participant’s service with the Company and its Subsidiaries by the Company or its Subsidiaries without Cause or by the Participant for “good reason” (or any like term as defined under any employment agreement with the Company or a Subsidiary to which the Participant is a party, as modified below) prior to the FCF Vesting Date but after the Company’s first approval of estimated Free Cash Flow for the FCF Performance Period in which such termination of service occurs, the Participant's FCF Performance Award in respect of such FCF Performance Period shall vest based upon achievement of the most recently approved estimate of Free Cash Flow for the applicable FCF Performance Period, multiplied by a fraction, the numerator of which is the number of full months of Participant’s service during the current FCF Performance Period and the denominator of which is twelve (12). If such termination 

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occurs prior to the FCF Vesting Date and prior to the Company’s first approval of estimated Free Cash Flow for the FCF Performance Period in which such termination of service occurs, then the Participant shall not vest in any portion of the FCF Performance Award in respect of the FCF Performance Period in which such termination of service occurs. The vested portion of the FCF Performance Award determined in accordance with the foregoing (plus any portion of the Participant’s FCF Performance Award for which the FCF Performance Criteria (as defined in Exhibit B) has been achieved in respect of any previously completed FCF Performance Period) shall be settled in shares of Company Stock immediately following such termination. Notwithstanding the foregoing the Committee (or such individual or individuals authorized by the Committee) may, in its discretion, exercise negative discretion to determine payout achievement.  Any portion of the FCF Performance Award that could have been earned in accordance with the provisions of this Section 4(e)(ii) that is not earned as of the date of the Participant’s termination of service shall be immediately forfeited on the date of the Participant’s termination of service.

(iii) For the purposes of this Section 4(e), for any Participant who is a party to an employment agreement with the Company or a Subsidiary, “good reason” shall also include the Participant's termination of his or her employment within ninety (90) days following the expiration of the employment term of the Participant's employment agreement under circumstances that would have constituted good reason had such termination occurred during the employment term.

(f)  Termination of Service for any Other Reason.  Unless otherwise provided in an individual agreement with the Participant, if the Participant has a termination of service with the Company and its Subsidiaries prior to the TSR Vesting Date or the FCF Vesting Date for any reason other than the reasons enumerated in Subparagraphs (a) through (e) above, the Participant’s Performance Award as of the date of termination of service shall be forfeited.

5.    Change in Control.  Notwithstanding anything to the contrary in the Plan, in the event of a Change in Control prior to the TSR Vesting Date or the FCF Vesting Date, as applicable, the provisions of this Section 5 shall apply. 
(a)    if the entire Performance Award is assumed or substituted (within the meaning of the Plan) in connection with such Change in Control, and the Participant incurs a termination of service from the Company and its Subsidiaries by the Company or its Subsidiary without Cause or by the Participant for good reason (or any like term as defined under any employment agreement with the Company or a Subsidiary to which the Participant is a party, as modified by Section 4(e)(iii)) during the 24-month period following such Change in Control, then the restrictions, deferral limitations, payment conditions, and forfeiture conditions applicable to any portion of the Performance Award shall lapse and: 
(i)     the TSR Performance Award shall be settled in shares of Company Stock as soon as practicable following the Participant’s termination of service, but no later than the later to occur of the end of the calendar year in which such termination occurs or the fifteenth day of the third calendar month following such termination, based on the greater of (y) actual achievement of TSR Performance Criteria or (z) target achievement of the TSR Performance Criteria, in either case measured as of the date of such termination, and 

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(ii)     the FCF Performance Award shall be settled as soon as practicable following the Participant’s termination of service, but no later than the later to occur of the end of the calendar year in which such termination occurs or the fifteenth day of the third calendar month following such termination, with the number of shares equal to the sum of (y) the number of shares of Company Stock underlying any portion of the Participant’s FCF Performance Award for which the FCF Performance Criteria has been achieved in respect of any previously completed FCF Performance Period and (z) the number of shares of Company Stock subject to any portion of the FCF Performance Award for any FCF Performance Period not completed multiplied by one (1) or, if greater, a multiple determined based upon achievement of the most recently approved estimate of Free Cash Flow.
(b)    if any portion of the Performance Award is not assumed or substituted in connection with such Change in Control, then the restrictions, deferral limitations, payment conditions, and forfeiture conditions applicable to any portion of the Performance Award shall lapse and:
(i)     the TSR Performance Award shall be settled in shares of Company Stock immediately prior to the Change in Control based on the greater of (i) actual achievement of TSR Performance Criteria or (ii) target achievement of the TSR Performance Criteria, in either case measured as of the date of the Change in Control, and 
(ii)     the FCF Performance Award shall be settled immediately prior to the Change in Control, with the number of shares equal to the sum of (y) the number of shares of Company Stock underlying any portion of the Participant’s FCF Performance Award for which the FCF Performance Criteria has been achieved in respect of any previously completed FCF Performance Period and (z) the number of shares of Company Stock subject to any portion of the FCF Performance Award for any FCF Performance Period not completed multiplied by one (1) or, if greater, a multiple determined based upon achievement of the most recently approved estimate of Free Cash Flow. 
(c)    Any portion of the Performance Award that could have been earned in accordance with Section 5(a) or Section 5(b) that is not earned shall be immediately forfeited on the date of termination of service or the date the Change in Control occurs, as applicable.  
6.    Change in Control Definition.  Notwithstanding anything to the contrary in the Plan, for purposes of this Award Agreement, Change in Control means and shall be deemed to have occurred upon the first of the following events to occur:
(a)    Any “Person” (as defined below) is or becomes the “beneficial owner” (“Beneficial Owner”) within the meaning set forth in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its “Affiliates” (as defined in Rule 12b-2 promulgated under Section 12 of the Exchange Act)) representing 30% or more of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a 

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Beneficial Owner in connection with a transaction described in clause (A) of Subparagraph (c) below; or 
(b)    The following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date hereof, constitute the Board of Directors and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board of Directors or nomination for election by the Company’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or
(c)    There is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation or other entity, other than (A) a merger or consolidation which results in (i) the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, at least 60% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation and (ii) the individuals who comprise the Board of Directors immediately prior thereto constituting immediately thereafter at least a majority of the board of directors of the Company, the entity surviving such merger or consolidation or, if the Company or the entity surviving such merger is then a subsidiary, the ultimate parent thereof, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 30% or more of the combined voting power of the Company’s then outstanding securities; or
(d)    The shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (it being conclusively presumed that any sale or disposition is a sale or disposition by the Company of all or substantially all of its assets if the consummation of the sale or disposition is contingent upon approval by the Company’s shareholders unless the Board of Directors expressly determines in writing that such approval is required solely by reason of any relationship between the Company and any other Person or an Affiliate of the Company and any other Person), other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity (A) at least 60% of the combined voting power of the voting securities of which are owned by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale or disposition and (B) the majority of whose board of directors immediately following such sale or disposition consists of individuals who comprise the Board of Directors immediately prior thereto.

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For purposes hereof, “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 15(d) thereof, except that such term shall not include (i) the Company or any of its Subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.
Notwithstanding the foregoing, (i) a “Change in Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of Company Stock immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions and (ii) with respect to any Award that constitutes a deferral of compensation subject to Section 409A of the Code, no such Award shall become payable as a result of the occurrence of a Change in Control unless such Change in Control also constitutes a change in the ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company under Section 409A of the Code.
For the avoidance of doubt, any one or more of the events described in subparagraphs (a) through (d) may be effected pursuant to (A) a takeover under Irish takeover rules; (B) a compromise or arrangement under Chapter 1 of Part 9 of the Companies Act 2014 of the Republic of Ireland or (C) Chapter 2 of Part 9 of the Companies Act 2014 of the Republic of Ireland.
7.    No Shareholder Rights Prior to Delivery.  The Participant shall not have any rights of a shareholder (including the right to distributions or dividends) with respect to the Performance Award until shares of Company Stock are issued pursuant to the terms of this Award Agreement. 

8.    Performance Award Agreement Subject to Plan.  This Award Agreement is made pursuant to all of the provisions of the Plan, which is incorporated herein by reference, and is intended, and shall be interpreted, in a manner to comply therewith.  In the event of any conflict between the provisions of this Award Agreement and the provisions of the Plan, the provisions of the Plan shall govern, except as expressly provided by Sections 5 and 6 of this Award Agreement.

9.    No Rights to Continuation of Service.  Nothing in the Plan or this Award Agreement shall confer upon the Participant any right to continue in the employ of the Company or any Subsidiary thereof or shall interfere with or restrict the right of the Company or its shareholders (or of a Subsidiary or its shareholders, as the case may be) to terminate the Participant’s service at any time for any reason whatsoever, with or without Cause.

10.    Tax Withholding.  The Company shall be entitled to require a cash payment by or on behalf of the Participant and/or to deduct from the Performance Award granted hereunder or other compensation payable to the Participant any sums required by federal, state or local tax 

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law to be withheld or to satisfy any applicable payroll deductions with respect to the vesting of, lapse of restrictions on, or payment of the Performance Award.  A Participant who is an officer or director subject to the provisions of Section 16 of the Exchange Act as of the date of the withholding requirement may satisfy the foregoing requirement by electing to have the Company withhold from delivery shares of Company Stock in accordance with Section 12(b) of the Plan.

11.    Section 409A Compliance.  The Performance Award is intended to comply with Code Section 409A to the extent subject thereto and shall be interpreted in accordance with Code Section 409A and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Date of Grant.  Notwithstanding any provision in the Plan or Award Agreement to the contrary, no payment or distribution under this Award Agreement that constitutes an item of deferred compensation under Code Section 409A and becomes payable by reason of the Participant’s termination of service with the Company and its Subsidiaries will be made to the Participant until the Participant’s termination of service constitutes a “separation from service” (as defined in Code Section 409A).  For purposes of this Award Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Code Section 409A.  If a participant is a “specified employee” (as defined in Code Section 409A), then to the extent necessary to avoid the imposition of taxes under Code Section 409A, such Participant shall not be entitled to any payments upon a termination of his or her service until the earlier of:  (i) the expiration of the six (6)-month period measured from the date of such Participant’s “separation from service” or (ii) the date of such Participant’s death.  Upon the expiration of the applicable waiting period set forth in the preceding sentence, all payments and benefits deferred pursuant to this Paragraph 11 (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such deferral) shall be paid to such Participant in a lump sum as soon as practicable, but in no event later than sixty (60) calendar days, following such expired period, and any remaining payments due under this Award Agreement will be paid in accordance with the normal payment dates specified for them herein. 

12.    Governing Law.  This Award Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the internal laws, and not the laws pertaining to conflicts or choice of laws, of the State of Delaware applicable to agreements made and to be performed wholly within the State of Delaware.

13.    Binding on Successors.  The terms of this Award Agreement shall be binding upon the Participant and upon the Participant’s heirs, executors, administrators, personal representatives, transferees, assignees and successors in interest, and upon the Company and its successors and assignees, subject to the terms of the Plan.

14.    No Assignment.  Notwithstanding anything to the contrary in this Award Agreement, neither this Award Agreement nor any rights granted herein shall be assignable by the Participant.

15.    Necessary Acts.  The Participant hereby agrees to perform all acts, and to execute and deliver any documents that may be reasonably necessary to carry out the provisions of 

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this Award Agreement, including but not limited to all acts and documents related to compliance with federal and/or state securities and/or tax laws and applicable Irish law.

16.    Entire Performance Award Agreement.  This Award Agreement (including Exhibits A and B and Annex A) and the Plan contain the entire agreement and understanding among the parties as to the subject matter hereof.

17.    Headings.  Headings are used solely for the convenience of the parties and shall not be deemed to be a limitation upon or descriptive of the contents of any such Paragraph.

18.    Counterparts.  This Award Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

19.    Notices.  All notices and other communications under this Award Agreement shall be in writing and shall be given by first class mail, certified or registered with return receipt requested, and shall be deemed to have been duly given three days after mailing to the respective parties named below:

If to Company:    Endo International plc
c/o Endo Health Solutions Inc.
1400 Atwater Drive
Malvern, PA 19355
Attention: Treasurer

If to the Participant:    At the address on file with the Company.
                                         
Either party hereto may change such party’s address for notices by notice duly given pursuant hereto.

20.    Amendment.  No amendment or modification hereof shall be valid unless it shall be in writing and signed by all parties hereto.

21.    Acceptance.  The Participant hereby acknowledges receipt of a copy of the Plan and this Award Agreement.  The Participant has read and understands the terms and provisions thereof, and accepts the Performance Award subject to all the terms and conditions of the Plan and this Award Agreement. 

22.    No Compensation for Loss of Rights.  The Participant hereby acknowledges that under no circumstances will s/he, on ceasing to be an employee or director of the Company and its Subsidiaries, be entitled to any compensation for any loss of any right or benefit or prospective right or benefit under the Plan that s/he might otherwise have enjoyed whether such compensation is claimed by way of damages for wrongful dismissal or other breach of contract or by way of compensation for loss of office or otherwise howsoever.

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23.    Severability.  All the terms and provisions of this Award Agreement are distinct and severable, and if any term or provision is held unenforceable, illegal or void in whole or in part by any court, regulatory authority or other competent authority it shall to that extent be deemed not to form part of this Award Agreement, and the enforceability, legality and validity of the remainder of this Award Agreement will not be affected; if any invalid, unenforceable or illegal provision would be valid, enforceable or legal if some part of it were deleted, the provision shall apply with whatever modification is necessary to make it valid, enforceable and legal.

24.    Data Protection.  The Participant hereby acknowledges and consents to the Company and any Subsidiary sharing and exchanging his/her information held in order to administer and operate the Plan (including personal details, data relating to participation, salary, taxation and employment and sensitive personal data, e.g. data relating to physical or mental health, criminal conviction or the alleged commission of offences) (the “Information”) and providing the Company and/or the Subsidiary’s agents and/or third parties with the Information for the administration and operation of the Plan and the Participant further accepts that this may involve the Information being sent to a country outside the country in which the Participant provides service including to a country which may not have the same level of data protection laws as his/her home country.  The Participant acknowledges that s/he has the right to request a list of the names and addresses of any potential recipients of the Information and to review and correct the Information by contacting his/her local human resources representative. The Participant acknowledges that the collection, processing and transfer of the Information is important to Plan administration and that failure to consent to same may prohibit participation in the Plan.
25.    Additional Matters.    This Award Agreement is intended to comply with the applicable laws of any country or jurisdiction where the Performance Award is granted under the Plan, and all provisions hereof shall be construed in a manner to so comply.  The following provisions apply to Participants providing service in the country noted:

Canada:

Section 4 above shall be amended to add the following language at the end thereof as a new sub-section (g):  

(g)    The Participant’s date of termination of service shall be the Participant’s last day of active service with the Company and its Subsidiaries and shall not include any period of statutory, contractual or common law reasonable notice or any period of deemed employment or salary continuance.

Section 10 above shall be deleted in its entirety and replaced with the following language:

The Company shall be entitled to receive either a cash payment by or on behalf of the Participant or a sufficient amount of the proceeds from the sale of Company Stock to be acquired pursuant to this Award Agreement by the Participant’s delivery to the Company of an assignment of such proceeds and an authorization to the broker or selling agent to pay that amount to the Company and to effect such sale at 

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the time of exercise or other delivery of shares of Company Stock for any sums required by federal, state or local tax law to be withheld or to satisfy any applicable payroll deductions with respect to the vesting of, lapse of restrictions on, or payment of any Performance Award. 

India:

As used herein, “Participant” shall have the meaning set forth in the Plan, except the term shall not include consultants of any Subsidiary in India.

Section 4(b) shall be deleted in its entirety and replaced with the following language:

Termination of Service on Account of Death.  Upon termination of the Participant’s service on account of death prior to the either the TSR Vesting Date or the FCF Vesting Date, the Participant’s Performance Award shall immediately vest in his legal heirs or nominees, subject to fulfilment of the performance conditions specified in Exhibits A and B and shall be settled in shares of Company Stock for the benefit of the Participant’s estate no later than the later of the end of the calendar year in which the Participant’s death occurs or the fifteenth day of the third calendar month following the Participant’s death.

Section 4(c) shall be deleted in its entirety and replaced with the following language:

Termination of Service on Account of Voluntary Retirement with Consent of Company.  If the Participant voluntarily Retires with the consent of the Company, the unvested portion, if any, of the Participant’s Performance Award as of the date of termination shall stand vested on the date of termination of service, subject to the fulfilment of the performance conditions specified in Exhibits A and B. 

Section 4(d) shall be deleted in its entirety and replaced with the following language:

Disability.  If the Participant incurs a Disability that also constitutes a “disability” within the meaning of Section 409A, the unvested portion, if any, of the Participant’s Performance Award as of the date of such Disability shall continue to be eligible to vest in accordance with the performance-based vesting conditions set forth on Exhibits A and B regardless of any subsequent termination of service, provided such Disability does not result in termination of service. In the event of termination of service, the unvested portion, if any, of the Performance Award shall vest in him on the date of termination.

Section 10 shall be deleted in its entirety and replaced with the following language:

Tax Withholding. The Subsidiary under whose payroll the Participant is registered shall have the right to deduct or withhold from the Performance Award or payroll of the Participant an amount sufficient to satisfy income taxes required by law to be 

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withheld with respect to the vesting of, lapse of restrictions on, or payment of the Performance Award or to satisfy any applicable payroll deductions. The obligations of the Company under this Award Agreement will be conditioned on such arrangement and the Company or such Subsidiary will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant.   A Participant who is an officer or director subject to the provisions of Section 16 of the Exchange Act as of the date of the withholding requirement may satisfy the foregoing requirement by electing to have the Subsidiary under whose payroll the Participant is registered withhold from delivery shares of Company Stock in accordance with Section 12(b) of the Plan.

Section 13 shall be amended to delete the term “transferees”. 

Section 14 shall be deleted in its entirety and replaced with the following language:

No Assignment.  Notwithstanding anything to the contrary in this Award Agreement, but subject to the assignment of the Performance Award upon death of the Participant, neither this Award Agreement nor any rights granted herein shall be assignable by the Participant.

Section 15 shall be deleted in its entirety and replaced with the following language:

Necessary Acts.  The Participant hereby agrees to perform all acts, and to execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Award Agreement, including but not limited to all acts and documents related to compliance with federal and/or state securities and/or tax laws and applicable Indian law.  The rights and interests of the Participant under the Award Agreement shall be subject to compliance under the Foreign Exchange Management Act, 1999 and the related rules thereto.

Ireland:

Section 4(c) above shall be deleted and be of no force and effect. 

Section 13 above shall be amended to delete the words “transferees, assignees” therefrom.

Section 14 above shall be deleted in its entirety and replaced with the following language:

No Assignment or Transfer.  Notwithstanding anything to the contrary in this Award Agreement, neither this Award Agreement nor any rights granted herein shall be assignable by the Participant. Neither this Award Agreement nor any rights granted herein shall be transferable by the Participant in any circumstances, except on the death of the Participant. 

Mexico:

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Section 10 above shall be deleted and be of no force and effect. 

Section 21 above shall be amended to add the following language: 

The Performance Award shall not become part of the Participant’s salary or compensation, nor an acquired right, since it is not intended to compensate the Participant for his/her service to his/her employer but to be part of a global employee retention plan implemented by the Company.  Therefore, the Plan, or the right of the Participant to receive any awards pursuant to the Plan, may be modified or terminated at any time.  In addition, the value of such Performance Awards will not be considered at any time for purposes of the Participant’s severance calculations. 

South Africa:

Section 10 above shall be amended to include the language in bold: 

Tax Withholding.  The Company and/or the Participant’s employer shall be entitled to require a cash payment by or on behalf of the Participant and/or to deduct from the Performance Award granted hereunder of compensation payable to the Participant and/or from any other compensation payable to the Participant any sums required by federal, state or local tax law to be withheld or to satisfy any applicable payroll deductions with respect to the vesting of, lapse of restrictions on, or payment of the Performance Award.  A Participant who is an officer or director subject to the provisions of Section 16 of the Exchange Act as of the date of the withholding requirement may satisfy the foregoing requirement by electing to have the Company and/or the Participant’s employer  withhold from delivery shares of Company Stock in accordance with Section 12(b) of the Plan.

Section 15 above shall be amended to include the language in bold: 

Necessary Acts.  The Participant hereby agrees to perform all acts, and to execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Award Agreement, including but not limited to all acts and documents related to compliance with federal and/or state securities and/or tax laws and applicable Irish law.  Participant’s participation in terms of this Award Agreement is subject to compliance by the Participant with all applicable South African exchange control laws and rules.

Section 21 above shall be amended to add the following provisions: 

This Performance Award contains no promise of any future awards. In other words, by the Participant’s signature below, he/she agrees that he/she will have no 

13

entitlement or claim to, or expectation of, receiving further awards on the basis of this Performance Award or previous awards. 

The Performance Award shall not constitute part of the Participant’s terms and conditions of employment, including without limitation his/her remuneration, nor an acquired right, since it is not intended to compensate the Participant for his/her service to his/her employer.  Therefore, the Plan, or the right of the Participant to receive awards pursuant to the Plan, may be amended, supplemented, substituted or terminated at any time.  In addition, the value of such Performance Awards will not be considered at any time for purposes of calculating any leave pay, notice pay, severance pay or compensation or the like, which may be due or awarded to the Participant. 

United Kingdom:

As used herein, “Cause” shall have the meaning set forth in the Plan and, with respect to any Participant who is a party to an employment agreement with the Company, the definition of “Cause” shall include any circumstances in which the Company may terminate the Participant’s employment agreement without notice in accordance with its terms.

As used herein, “Disability” shall mean the Participant's inability to, solely because of injury or physical or mental illness: (i) perform the material duties of his or her regular occupation and (ii) earn 80% or more of his or her base salary or wages in respect of his or her regular occupation, for a period that lasts or can reasonably be expected to last for a continuous period of 12 months.

Section 4(c) above shall be deleted and be of no force and effect. 

Section 10 above shall be deleted in its entirety and replaced with the following:

Tax Liabilities.  The Participant irrevocably agrees (A) to pay, or enter into arrangements to the satisfaction of the Company to pay, to the Company, the Participant’s employer or former employer (as appropriate) the amount of any Tax Liability, (B) that the Company, the Participant’s employer or former employer (as appropriate) may, if it so elects by written notice to the Participant, recover the whole or any part of any Employer NICs from the Participant, (C) that the Participant shall, promptly upon being requested to do so by the Company, the Participant’s employer or former employer (as appropriate), elect (using a form approved by HM Revenue & Customs) that the whole or any part of the liability for Employer NICs shall be transferred to the Participant; (D) to enter into a joint election, under section 431(1) or 431(2) of the Income Tax (Earnings & Pensions) Act 2003 (“ITEPA”), in respect of the Company Stock delivered pursuant to a Performance Award, if required to do so by the Company, the Participant’s employer or former employer, before, on or within 14 days after any date of delivery of such Company Stock.  For the purposes of this section the following capitalized terms shall have the meanings set out below:

14

“Employer NICs”: any secondary class 1 (employer) national insurance contributions that the Company or any employer (or former employer) of the Participant is liable to pay as a result of any Taxable Event (or which that person would be liable to pay in the absence of an election of the type referred to in (C) above) and that may be lawfully recovered from the Participant.

“Taxable Event”: any event or circumstance that gives rise to a liability for the Participant to pay income tax and national insurance contributions or either of them in respect of: (a) the Performance Award, including its assignment or surrender for consideration, or the receipt of any benefit in connection with it; (b) any shares (or other securities or assets): (i) earmarked or held to satisfy the Performance Award; (ii) acquired pursuant to the Performance Award; or (iv) acquired in consideration of the assignment or surrender of the Performance Award; (c) any securities (or other assets) acquired or earmarked as a result of holding shares (or other securities or assets) mentioned in (b); or (d) any amount due in respect of assets within (a) to (c) above and not made good by the Participant within the time limit specified in section 222 ITEPA.

“Tax Liability”: the total of (a) any income tax and primary class 1 (employee) national insurance contributions that any employer (or former employer) of the Participant is liable to account for (or reasonably believes it is liable to account for) as a result of any Taxable Event; and (b) any Employer NICs that any employer (or former employer) of the Participant is liable to pay (or reasonably believes it is liable to pay) as a result of any Taxable Event and that can be recovered lawfully from the Participant.

Section 22 shall be replaced by the following provision:

Nothing contained in the Plan or this Performance Award shall form part of the Participant’s contract of employment.  The Participant hereby acknowledges that under no circumstances will s/he, on ceasing to be an employee or director of or otherwise engaged by the Company or any of its Subsidiaries for any reason (including as a result of a repudiatory breach of contract by the Company or any of its Subsidiaries), be entitled to any compensation for any loss of any right or benefit or prospective right or benefit under the Plan that s/he might otherwise have enjoyed whether such compensation is claimed by way of damages for wrongful dismissal or other breach of contract or by way of compensation for loss of office or otherwise howsoever. By signing this  Performance Award the Participant shall be deemed irrevocably to have waived any such entitlement.

15

IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement as of the date set forth above.

ENDO INTERNATIONAL PLC

__________________________________
By:
Name:  Paul V. Campanelli 
Title:  President & Chief Executive Officer

PARTICIPANT 

Signature: __________________________ 
Print Name:  

16

EXHIBIT A
		
	(I)
	TSR Performance Criteria.

The Participant will be entitled to receive a number of shares of Company Stock as of the TSR Vesting Date, equal to a multiple of the TSR Target Performance Award achieved based on achievement of targets relating to Relative TSR (the “TSR Performance Criteria”) as described below for the TSR Performance Period:

	
		
	Relative TSR
	Multiple Applicable to TSR Target Performance Award

	Equal to or above 90th percentile
	2

	Equal to or above 80th percentile but below 90th percentile
	1.61 - 1.80

	Equal to or above 70th percentile but below 80th percentile
	1.41 - 1.60

	Equal to or above 60th percentile but below 70th percentile
	1.21 – 1.40

	Equal to or above 50th percentile but below 60th percentile
	1.00 – 1.20

	Equal to or above 40th percentile but below 50th percentile
	0.5

	Below 40th percentile
	0

In the event that Relative TSR over the TSR Performance Period is negative, the multiple applicable to the TSR Target Performance Award shall not exceed 1.
 If Relative TSR is equal to or above the 50th percentile but below the 90th percentile, the Participant will vest in a number of shares of Company Stock that is the mathematical linear interpolation between the number of shares of Company Stock that would vest at the defined ends of the applicable spectrum. No such interpolation shall occur in the event that Relative TSR is below the 50th percentile or equal to or above the 90th percentile.
The determination of Relative TSR will be made in the sole discretion of the Committee, after the end of the TSR Performance Period once the applicable year-end audit is available.  The Committee has discretion to accelerate the vesting of all or a portion of the Participant’s TSR Performance Award based upon the overall performance of the Company and/or the Participant or based upon any change in business conditions, provided that the exercise of such discretion would not cause a TSR Performance Award that would otherwise be deducible as “performance-based” compensation within the meaning of Section 162(m) of the Code to become non-deductible.  
		
	(II)
	Definitions.

For purposes of this Exhibit A, the following terms have the meanings set forth below:

17

“Comparator Group” shall mean the companies listed on Annex A, attached hereto. Each such company shall be included in the Comparator Group only if the company is publicly-traded at both the beginning and end of the TSR Performance Period.
“Per Share Price” shall mean the average of the closing prices of common shares for the applicable company during the thirty (30) consecutive trading days ending on the day immediately preceding the applicable measurement date. 
“Relative TSR” shall mean the percentile ranking of the Company’s Total Shareholder Return as compared to the Total Shareholder Return of each company in the Comparator Group.  
“Total Shareholder Return” shall mean the appreciation of the Per Share Price during the TSR Performance Period, plus any dividends paid on the applicable company’s common stock during such TSR Performance Period.

18

ANNEX A
Comparator Group

1.    AbbVie Inc. (ABBV)
2.    Abbott Laboratories (ABT)
3.    Akorn, Inc. (AKRX)
4.    Alexion Pharmaceuticals Inc. (ALXN)
5.    Alkermes plc (ALKS)
6.    Allergan plc (AGN)
7.    AMAG Pharmaceuticals Inc. (AMAG)
8.    Amgen Inc. (AMGN)
9.    AstraZeneca PLC (AZN)
10.    Biogen Inc. (BIIB)
11.    BioMarin Pharmaceutical Inc. (BMRN)
12.    Bristol-Myers Squibb Company (BMY)
13.    Celgene Corporation (CELG)
14.    Dr. Reddy's Laboratories Ltd. (RDY)
15.    Eli Lilly and Company (LLY)
16.    Gilead Sciences Inc. (GILD)
17.    GlaxoSmithKline plc (GSK)
18.    Horizon Pharma Public Limited Company (HZNP)
19.    Impax Labs Inc. (IPXL)
20.    Incyte Corporation (INCY)
21.    Jazz Pharmaceuticals Public Limited Company (JAZZ)
22.    Johnson & Johnson (JNJ)
23.    Lannett Company (LCI)
24.    Mallinckrodt Public Limited Company (MNK)
25.    Merck & Co. Inc. (MRK)
26.    Mylan N.V. (MYL)
27.    Novartis AG (NVS)
28.    Novo Nordisk A/S (NVO)
29.    Perrigo Company Public Limited Company (PRGO)
30.    Pfizer Inc. (PFE)
31.    Qiagen NV (QGEN)
32.    Regeneron Pharmaceuticals Inc. (REGN)
33.    Roche Holding AG (RHHBY)
34.    Sanofi (SNY)
35.    Shire plc (SHPG)
36.    Taro Pharmaceutical Industries Ltd. (TARO)
37.    Teva Pharmaceutical Industries Limited (TEVA)
38.    United Therapeutics Corporation (UTHR)
39.    Valeant Pharmaceuticals International, Inc. (VRX)
40.    Vertex Pharmaceuticals Inc. (VRTX)
41.    Zoetis Inc. (ZTS)

19

EXHIBIT B

The following exhibit contains the FCF Performance Criteria in respect of 2018, which is the first FCF Performance Period for the 2018 FCF Performance Award. 

The FCF Performance Criteria (including any changes thereto) in respect of future FCF Performance Periods for the 2018 FCF Performance Award shall be communicated to the Participant no later than March 31st of the relevant FCF Performance Period. 
		
	(I)
	FCF Performance Criteria.

The Participant will be eligible to earn a number of shares of Company Stock equal to one third (1/3rd) of the number of restricted stock units underlying the target FCF Performance Award multiplied by the multiple applicable to the FCF Performance Award for the FCF Performance Period, which will be based on achievement of a Target relating to Free Cash Flow (the “FCF Performance Criteria”) and determined in accordance with the below: 

	
		
	Free Cash Flow*
	Multiple Applicable to FCF Performance Award for the FCF Performance Period

	Equal to or greater than 110% of Target
	2

	Equal to or greater than 107.5% of Target but less than 110% of Target
	1.75

	Equal to or greater than 105% of Target but less than 107.5% of Target
	1.5

	Equal to or greater than 102.5% of Target but less than 105% of Target
	1.25

	Equal to or greater than 100% of Target but less than 102.5% of Target
	1

	Equal to or greater than 97.5% of Target but less than 100% of Target
	0.75

	Equal to or greater than 95% of Target but less than 97.5% of Target
	0.5

	Less than 95% of Target
	0

*Free Cash Flow for each FCF Performance Period associated with the 2018 FCF Performance Award  must equal or exceed the following minimum Free Cash Flow: 50% of actual annual adjusted net income for the relevant FCF Performance Period.
If Free Cash Flow is equal to or greater than 95% of Target but below 110% of Target, the Participant will earn a number of shares of Company Stock that is the mathematical linear 

20

interpolation between the number of shares of Company Stock that would be earned at the defined ends of the applicable spectrum. No such interpolation shall occur in the event that Free Cash Flow is less than 95% of Target or equal to or greater than 110% of Target.
The determination of Free Cash Flow will be made in the sole discretion of the Committee, after the end of the applicable FCF Performance Period once the applicable year-end audit is available. The Committee may adjust the FCF Performance Award in a manner approved by the Committee at the time of the grant of the FCF Performance Award. The Committee has discretion to increase the portion of the Participant’s FCF Performance Award earned based upon the overall performance of the Company and/or the Participant or based upon any change in business conditions, provided that the exercise of such discretion does not cause an FCF Performance Award that would otherwise be deducible as “performance-based” compensation within the meaning of Section 162(m) of the Code to become non-deductible. 
		
	(II)
	Definitions.

For purposes of this Exhibit B, the following terms have the meanings set forth below:
“Adjusted Cash Flow from Operations” shall mean cash from operations less the following expenses: mesh and other legal settlements; unused financing fees; separation, restructuring, transaction and integration payments; and one-time significant tax refunds or payments. 
“Capital Expenditures” shall mean the Company’s purchases of property, plant and equipment (including capitalized software costs). 
“Free Cash Flow” shall mean Adjusted Cash Flow from Operations less Capital Expenditures.
“Target” shall mean $456,000,000.

21Exhibit

EXHIBIT 10.1

EMPLOYMENT SECURITY AGREEMENT

This Employment Security Agreement (“Agreement”), is entered into as of the 3rd day of April , 2018, by and between Franklin Electric Co., Inc., an Indiana corporation (“Franklin”), and Paul Chhabra (“Executive”).

WITNESSETH:

WHEREAS,    Executive is currently employed by    Franklin    as the Vice President, Global Product Supply;

WHEREAS, Franklin desires to provide certain security to Executive in connection with Executive’s employment with Franklin; and

WHEREAS, Executive and Franklin desire to enter into this Agreement pertaining to the terms of the security Franklin is providing to Executive with respect to his employment.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

1.Definitions. For purposes of this Agreement:

(a)“Affiliate” has the meaning set forth in Rule 12b-2 under the Securities Exchange Act of 1934.

(b)“Base Salary” means Executive’s annual base salary at the rate in effect on the date of a Change in Control, or if greater, the rate in effect immediately prior to Executive’s termination of employment with Franklin.

(c)“Change in Control” means the occurrence of any of the following events:

(i)any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity (other than Franklin or a trustee or other fiduciary holding securities under an employee benefit plan of Franklin), or any syndicate or group deemed to be a person under Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is or becomes the "beneficial owner" (as defined in Rule 13d-3 of the General Rules and Regulations under the Exchange Act), directly or indirectly, of securities of Franklin representing 20% or more of the combined voting power of Franklin’s then outstanding securities entitled to vote generally in the election of directors;

(ii)Franklin is party to a merger, consolidation, reorganization or other similar transaction with another corporation or other legal person unless, following such transaction, more than 50% of the combined voting power of the outstanding securities of the surviving, resulting or acquiring corporation or person or its parent entity entitled to vote generally in the election of directors (or persons performing similar functions) is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of Franklin’s outstanding securities entitled to vote generally in the election of directors immediately prior to such transaction, in substantially the same proportions as their ownership, immediately prior to such transaction, of Franklin’s outstanding securities entitled to vote generally in the election of directors;

(iii)The stockholders of Franklin approve a plan of complete liquidation or dissolution of Franklin or Franklin sells all or substantially all of its business and/or assets to another corporation or other legal person unless, following such sale, more than 50% of the combined voting power of the outstanding securities of the acquiring corporation or person or its parent entity entitled to vote generally in the election of directors (or persons performing similar functions) is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of Franklin’s outstanding securities entitled to vote generally in the election of directors immediately prior to such sale, in substantially the same proportions as their ownership, immediately prior to such sale, of 

Franklin’s outstanding securities entitled to vote generally in the election of directors; or

(iv)during any period of two consecutive years or less, individuals who at the beginning of such period constituted the Board of Directors of Franklin (and any new Directors, whose appointment or election by the Board of Directors or nomination for election by Franklin’s stockholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of the period or whose appointment, election or nomination for election was so approved) cease for any reason to constitute a majority of the Board of Directors.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur by virtue of any transaction in which Executive is a participant in a group effecting an acquisition of Franklin if Executive holds an equity interest in the entity acquiring Franklin at the time of such acquisition.

(d)“Good Cause” means:

(i)Executive’s intentional and material misappropriation of, or damage to, the property or business of Franklin;

(ii)Executive’s conviction of a criminal violation involving fraud or dishonesty or of a felony that causes material harm or injury (whether financial or otherwise) to Franklin; or

(iii)Executive’s willful and continuous failure to perform his obligations under the Agreement, provided that Franklin shall first give written notice to Executive describing such failure and, as long as it is capable of being cured and does not involve acts of material dishonesty directed against Franklin, Executive does not substantially cure or correct such failure within 30 days
thereafter, or if such failure can not reasonably be cured within such period, cure is not commenced within such period and diligently pursued and fully cured within 60 days of Franklin’s original notice to Executive.

Notwithstanding anything herein to the contrary, in the event Franklin terminates the employment of Executive for Good Cause hereunder, Franklin shall give Executive at least 30 days prior written notice specifying in detail the reason or reasons for Executive’s termination.

(e)“Good Reason” means:

(i)a material reduction in Executive’s salary or retirement benefits or a material reduction in Executive’s compensation and benefits in the aggregate, excluding, in the case of incentive benefits that are based upon the performance of Executive or Franklin, reductions in benefits resulting from diminished performance by Executive or Franklin;

(ii)any purchaser (or affiliate thereof) who purchases substantially all of the assets of Franklin shall decline to assume all of Franklin’s obligations under this Agreement; or

(iii)the relocation of the Executive’s principal place of employment by more than 50 miles.

(f)“Severance Period” means the period beginning on the date Executive’s employment with Franklin terminates under circumstances described in Section 2 and ending on the date 24 months thereafter.

(g)“Target Bonus” means the amount that would be payable to Executive under the Executive Officer Annual Incentive Cash Bonus Program or any successor plan thereto for the year in which Executive’s employment with Franklin terminates, assuming attainment of the target performance goals at 100% level and employment of Executive at the end of such year (such amount to be determined regardless of whether Executive would otherwise be eligible for a bonus under the terms of any such plan or the extent to which the performance goals are actually met).

2.Termination of Employment. If within two years after a Change in Control, (a) Franklin terminates Executive’s employment for any reason other than Good Cause, or (b) Executive terminates his employment with Franklin for Good Reason, Franklin shall make the payments and provide the benefits described in Section 3 below.

3.Benefits Upon Termination of Employment. Upon termination of Executive’s employment with Franklin under circumstances described in Section 2 above:

(a)Within 30 days following the date of such termination, Franklin shall pay Executive a lump sum cash payment equal to the sum of (i), (ii) and (iii) below:

(i) unpaid Base Salary earned by Executive through the date of termination (which shall include payment for all accrued but unused vacation    pay);

(ii) two times Executive’s Base Salary; and

(ii) an amount equal to the sum of (A) a prorata portion of Executive’s
Target Bonus (based on the date on which such termination of employment occurs), and (B) two times Executive’s Target Bonus.

(b)Franklin shall pay Executive a lump sum payment (calculated based on his age as of his termination of employment) within 30 days following his termination of employment of an amount equal to the increase in benefits under all tax-qualified and supplemental retirement plans maintained by Franklin in which Executive participates at termination of employment that results from crediting Executive with an additional 24 months of service for all purposes (including determining service and age for early retirement factors, if applicable) under such plans, and deeming Executive to be an employee of Franklin during the Severance Period. The amounts attributable to additional benefits under any such plan shall be based on Executive’s compensation level as of his termination of employment. The amounts attributable to additional benefits under any retirement plan that is a defined contribution plan shall include the additional Franklin contributions that would have been made or credited on Executive’s behalf had he authorized the same elective contributions he had elected for the year in which the termination of employment occurs, and shall include earnings that would have accrued under the applicable plan during the Severance Period (the earnings will be determined by multiplying the aggregate contributions to each such plan by the weighted average of the rate of return of the actual investment alternatives elected by Executive as of the beginning of the 12-month period ending on the employment termination date). Benefits accrued under such plans prior to Executive’s termination of employment shall be paid in accordance with the terms of such plans. Notwithstanding the foregoing, the payment under this Section 3(b) shall be offset by the lump sum value of the amounts of additional benefits paid or payable in accordance with the terms of such plans as a result of the occurrence of a Change in Control but not below zero.

(c)If Executive holds any stock-based awards as of the date of his termination of employment, (i) all such awards that are stock options shall immediately become exercisable on such date and shall be exercisable for 12 months following such termination of employment, or if earlier, until the expiration of the term of the stock option; (ii) all restrictions on any awards of restricted stock or restricted stock units shall terminate or lapse; and (iii) all performance goals applicable to any performance-based awards shall be deemed satisfied at the target performance level, and in each case settlement of such awards shall be made to Executive within 30 days of Executive’s termination. To the extent any of the foregoing is not permissible under the terms of any plan pursuant to which the awards were granted, Franklin shall pay to Executive, in a lump sum within 30 days after termination of Executive’s employment, an amount as follows: (A) to the extent the acceleration of the exercise of such stock options is not permissible, an amount equal to the excess, if any, of the aggregate fair market value of the stock subject to such options, determined on the date of Executive’s termination of employment, over the aggregate exercise price of such stock options; (B) to the extent the termination or lapse of restrictions on restricted stock or restricted stock units is not permissible, an amount equal to the aggregate fair market value of the stock subject to the restrictions (determined without regard to such restrictions); and (C) to the extent performance awards are limited, an amount equal to the aggregate fair market value of the additional shares that were not awarded. Executive shall surrender all outstanding awards for which payment pursuant to the preceding sentence is made.

(d)During the Severance Period, Executive and his spouse and eligible dependents shall continue to be covered by all employee benefit plans of Franklin providing health, prescription drug, dental, vision, disability and life insurance in which he or his spouse or eligible dependents were participating immediately prior to the date of his termination of employment, as if he continued to be an active employee of Franklin, and Franklin shall continue to pay the costs of such coverage under such plans on the same basis as is applicable to active employees covered thereunder; provided that, if participation in any one or more of such plans is not possible under the terms thereof, 

Franklin shall provide substantially identical benefits. The date of Executive’s termination of employment shall be considered a “qualifying event” as such term is defined in Title I, Part 6 of the Employee Retirement Income Security Act of 1974 (“COBRA”), and any continued coverage by Executive, his spouse or eligible dependents under Franklin’s group health plan after Executive’s termination of employment shall be considered COBRA coverage.

(e)During the Severance Period, Executive will receive 12 months of executive outplacement services (not to exceed $50,000) with a professional outplacement firm selected by Franklin.

(f)If at the time of Executive’s termination of employment for reasons other than death he is a “Key Employee” as determined in accordance with the procedures set forth in Treas. Reg. §1.409A-1(i), any amounts payable to Executive pursuant to this Agreement that are subject to Section 409A of the Internal Revenue Code shall not be paid or commence to be paid until six months following Executive’s termination of employment, or if earlier, Executive’s subsequent death, with the first payment to include the payments that otherwise would have been made during such period and including interest accruing thereon from the first day of the month following the date of such termination of employment until the date of payment, based on the applicable interest rate as defined in Section 417(e)(3) of the Internal Revenue Code. Each payment made pursuant to Section 3 shall be considered a separate payment for purposes of Section 409A.

4.Release of Claims. Payment by Franklin of the termination benefits provided in Section 3 hereof shall be conditioned on Executive’s execution, and nonrevocation, of a release of claims. Payment of such termination benefits shall be delayed until the expiration of the revocation period applicable to the executed release of claims, provided that if Executive does not execute the release of claims within 60 days of the date of termination of employment, the
termination benefits described in Section shall be forfeited and Executive shall be entitled to receive only the benefits to which he is otherwise entitled under applicable law.

5.Death.    If Executive dies during the Severance Period, all amounts payable hereunder to Executive, to the extent not paid, shall be paid, within 30 days of the date of Executive’s death, to his surviving spouse or his designated beneficiary, or if none, then to his estate. Executive’s surviving spouse and eligible dependents shall continue to be covered under plans described in Section 3(d) during the remainder of the Severance Period. On the death of the surviving spouse and eligible dependents, no further coverage under such plans shall be provided (other than any coverage required pursuant to COBRA).

6.Excise Tax.

(a)If in connection with the Change in Control or other event Executive would be or is subject to an excise tax under Section 4999 of the Internal Revenue Code (an “Excise Tax”) with respect to any cash, benefits or other property received, or any acceleration of vesting of any benefit or award (the “Change in Control Benefits”), Executive may elect to have the Change in Control Benefits otherwise payable under this Agreement reduced to the largest amount payable without resulting in the imposition of such Excise Tax. Within 15 days after the occurrence of the event that triggers the Excise Tax, a nationally recognized accounting firm selected by Franklin shall make a determination as to whether any Excise Tax would be reported with respect to the Change in Control Benefits and, if so, the amount of the Excise Tax, the total net after-tax amount of the Change in Control Benefits (after taking into account federal, state and local income and employment taxes and the Excise Tax) and the amount of reduction to the Change in Control Benefits necessary to avoid such Excise Tax. Any reduction to the Change in Control Benefits shall first be made from any cash benefits payable pursuant    to this Agreement, if any, and thereafter, as determined by Executive, and Franklin shall provide Executive with such information as is necessary to make such determination. Franklin shall be responsible for all fees and expenses connected with the determinations by the accounting firm pursuant to this paragraph 6.

(b)Executive agrees to notify Franklin in the event of any audit or other proceeding by the IRS or any taxing authority in which the IRS or other taxing authority asserts that any Excise Tax should be assessed against Executive and to cooperate with Franklin in contesting any such proposed assessment with respect to such Excise Tax (a “Proposed Assessment”). Executive agrees not to settle any Proposed Assessment without the consent of Franklin. If Franklin does not consent to allow Executive to settle the Proposed Assessment, within 30 days following such demand therefor, Franklin shall indemnify and hold harmless Executive with respect to any additional taxes, interest and/or penalties that Executive is required to pay by reason of the delay in finally resolving Executive’s tax liability (such indemnification to be made as soon as practicable, but in no event later than the end of the calendar year following the calendar year in which Executive makes such remittance).

7.Indemnification. Franklin shall indemnify, protect, defend and hold harmless Executive from and against all liabilities, costs and expenses (including but not limited to attorneys’ fees) incurred as a result of Executive’s employment with Franklin to the fullest extent permitted by the Indiana Business Corporation Law.

8.Litigation Expenses.    Franklin shall reimburse Executive all out-of-pocket expenses, including attorneys’ fees, incurred by Executive in connection with any enforcement, claim or legal action or proceeding involving this Agreement, whether brought by Executive or
by or on behalf of Franklin or by another party. Such reimbursement shall be made within 30 days of Executive’s submission of an invoice following resolution of the claim. Franklin shall pay prejudgment interest on any money judgment obtained by Executive, calculated at the published prime interest rate charged by Franklin’s principal banking connection from the date that payment(s) to him should have been made under this Agreement.

9.Post-Termination Payment Obligations.    Subject to Section 4, Franklin's obligation to pay Executive the compensation and to make the other arrangements provided herein to be paid and made after termination of Executive's employment with Franklin shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right that Franklin may have against him or anyone else. All amounts so payable by Franklin shall be paid without notice or demand. Each and every such payment made by Franklin shall be final and Franklin will not seek to recover all or any part of such payment from Executive or from whomsoever may be entitled thereto, for any reason whatsoever.

10.Disclosure Of Confidential Information.    Without the consent of Franklin, Executive shall not at any time divulge, furnish or make accessible to anyone (other than in the regular course of business of Franklin) any knowledge or information with respect to confidential or secret processes, inventions, formulae, machinery, plan, devices or materials of Franklin or with respect to any confidential or secret engineering development or research work of Franklin or with respect to any other confidential or secret aspect of the business of Franklin.  Executive recognizes that irreparable injury will result to Franklin and its business and properties, in the event of any breach by Executive of any of the provisions of this Section 10. In the event of any breach of any of the commitments of Executive pursuant to this Section 10, Franklin shall be entitled, in addition to any other remedies and damages available, to injunctive relief to restrain the violation of such commitments by Executive or by any person or persons acting for or with Executive in any capacity whatsoever.

11.Solicitation Of Employees. During Executive’s employment with Franklin and for a period of 18 months after termination of employment, Executive shall not (a) directly or indirectly, employ or retain or solicit for employment or arrange to have any other person, firm or other entity employ or retain or solicit for employment or otherwise participate in the employment or retention of any person who is an employee of Franklin or (b) encourage or solicit any such employee to leave the service of Franklin. Executive also acknowledges and agrees that he shall comply with the terms of the Confidentiality and Non-Compete Agreement in effect between him and Franklin. Executive and Franklin agree that of the amount paid to Executive pursuant to Section 3 of this Agreement, a portion equal to one times Executive’s Base Salary and one times the Target Bonus paid or payable to Executive pursuant to subparagraph 3(c) shall serve as adequate consideration for the restrictive covenants set forth in this Section 11.

12.Executive Assignment.    No interest of Executive or his spouse or any other beneficiary under this Agreement, or any right to receive any payment or distribution hereunder, shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or other alienation or encumbrance of any kind, nor may such interest or right to receive a payment or distribution be taken, voluntarily or involuntarily, for the satisfaction of the obligations or debts of, or other claims against, Executive or his spouse or other beneficiary, by operation of law or otherwise, other than pursuant to the terms of a qualified domestic relations order to which Executive is a party.

13.Reimbursements or In-Kind Benefits.    Reimbursements or in-kind benefits provided under this Agreement that are subject to Section 409A of the Internal Revenue Code of 1986, as amended, are subject to the following restrictions: (a) the amount of expenses eligible for reimbursements, or in-kind benefits provided, to Executive during a calendar year shall not affect the expenses eligible for reimbursement or the in-kind benefits provided in any other calendar year, and (b) reimbursement of an eligible expense shall be made as soon as practicable, but in no event later than the last day of the calendar year following the calendar year in which the expense was incurred.

14.Waiver, Modification.    No provisions of this Agreement may be waived, modified or discharged unless such waiver, modification or discharge is agreed to in a writing signed by Executive and Franklin. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be 

performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or at any prior or subsequent time.

15.Applicable Law. This Agreement shall be construed and interpreted pursuant to the laws of Indiana.

16.Entire Agreement. This Agreement contains the entire Agreement between Franklin and Executive and supersedes any and all previous agreements, written or oral, between the parties relating to severance benefits, including any previous employment agreement or employment security agreement between Executive and Franklin. No amendment or modification of the terms of this Agreement shall be binding upon the parties hereto unless reduced to writing and signed by Franklin and Executive.

17.Severability. If any provision of this Agreement or the application thereof is held invalid, such invalidity shall not affect other provisions or applications of this Agreement that can be given effect without the invalid provision or application and, to such end, the provisions of this Agreement are declared to be severable.

18.No Employment Contract. Nothing contained in this Agreement shall be construed to be an employment contract between Executive and Franklin. Executive is employed at will and Franklin may terminate his employment at any time, with or without cause.

19.Employment with an Affiliate. If Executive is employed by Franklin and an Affiliate, or solely by an Affiliate, on the date of termination of employment of Executive under circumstances described in Section 2, then (a) employment or termination of employment as used in this Agreement shall mean employment or termination of employment of Executive with Franklin and such Affiliate, or with such Affiliate, as applicable, and related references to Franklin shall also include Affiliate, as applicable, and (b) the obligations of Franklin hereunder shall be satisfied by Franklin and/or such Affiliate as Franklin, in its discretion, shall determine; provided that Franklin shall remain liable for such obligations to the extent not satisfied by such Affiliate.

20.Successors. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, representatives and successors. Any reference in this Agreement to Franklin shall be deemed a reference to any successor (whether direct or indirect, by purchase of stock or assets, merger or consolidation or otherwise) to all or substantially all of the business and/or assets of Franklin; provided that Executive’s employment by a successor shall not be deemed a termination of Executive’s employment with Franklin.

21.Withholding.    Franklin may withhold from any payment that it is required to make under this Agreement amounts sufficient to satisfy applicable withholding requirements under any federal, state, or local law.

22.Headings. The headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of any provision of this Agreement.

23.Notice. Notices given pursuant to this Agreement shall be in writing and shall be deemed given when received or, if mailed, two days after mailing by United States registered or certified mail, return receipt requested, postage prepaid and addressed as herein provided. Notice to Franklin shall be addressed to Corporate Secretary, Franklin Electric Co., Inc. at 9255 Coverdale Road, Fort Wayne, Indiana 46809.    Notices to Executive shall be addressed to Executive at his last permanent address as shown on Franklin's records. Notwithstanding the foregoing, if either party shall designate a different address by notice to the other party given in the foregoing manner, then notices to such party shall be addressed as designated until the designation is revoked by further notice given in such manner.

24.Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.

IN WITNESS WHEREOF, the parties have executed this Employment Security Agreement as of the day and year written above.

FRANKLIN ELECTRIC CO., INC.

By:    /s/ Jonathan Grandon    

Its:    General Counsel

EXECUTIVE

/s/ Paul Chhabra
Paul Chhabra

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