Document:

ex10-2.htm

    Exhibit
10.2

     

    EXECUTION
VERSION

    

    ENDO
PHARMACEUTICALS HOLDINGS INC.

    

    EXECUTIVE
EMPLOYMENT AGREEMENT

    

    

     

    THIS
AGREEMENT (the “Agreement”) is hereby entered into as of the 7th day of
May, 2009 and is effective as of June 1, 2009 (the “Effective Date”), by and
between Endo Pharmaceuticals Holdings Inc. (the “Company”) and Alan G. Levin
(the “Executive”) (hereinafter collectively referred to as “the
parties”).

     

    In
consideration of the respective agreements of the parties contained herein, it
is agreed as follows:

     

    
      	
              1.

            	
              Term. The
      initial term of Executive’s employment under this Agreement shall be for
      the period commencing on the Effective Date and ending, subject to earlier
      termination as set forth in Section 6, on the third anniversary of the
      Effective Date (the “Employment Term”).  The Employment Term
      shall automatically renew for an additional one (1) year period
      unless a notice of non-renewal is delivered by either party no later than
      120 days prior to the expiration of the Employment
  Term.

            

    

     

    
      	
              2.

            	
              Employment.  During
      the Employment Term:

            

    

     

    
      	
               
      

            	
               (a)

            	
              Executive will serve as the
      Executive Vice President, Chief Financial Officer of the Company, as well
      as the principal financial officer for SEC reporting purposes, and shall
      report directly to the Chief Executive Officer of the Company (the
      “CEO”).  Executive shall perform the duties, undertake the
      responsibilities, and exercise the authorities customarily performed,
      undertaken and exercised by persons situated in a similar executive
      capacity at a similar company.  If, at any time, Executive is
      elected as a director of the Company or as a director or officer of any of
      the Company’s subsidiaries, Executive will fulfill Executive’s duties as
      such director or officer without additional
      compensation.

            

    

     

    
      	
               
      

            	
               (b)

            	
              Executive shall devote his
      full-time business attention to the business and affairs of the Company.
      Executive may serve on up to two outside corporate boards or committees,
      subject to the approval of the CEO and the Board of
      Directors.  Executive may also serve on civil or charitable
      boards or committees as long as such service does not interfere with the
      performance of his responsibilities hereunder and subject to the Company's
      code of conduct and other applicable policies as in effect from time to
      time.  Executive may manage personal and family investments and
      affairs, participate in industry organizations and deliver lectures at
      educational institutions, so long as such activities do not interfere with
      the performance of Executive’s responsibilities
      hereunder.

            

    

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
               (c)

            	
              Executive shall be subject to and
      shall abide by each of the Company’s personnel policies applicable and
      communicated in writing to senior
  executives.

            

    

     

    
      	
              3.

            	
              Annual
      Compensation.

            

    

     

    
      	
               
      

            	
               (a)

            	
              Base
      Salary. The Company
      agrees to pay or cause to be paid to Executive during the Employment Term
      a base salary at the rate of $600,000 per annum or such increased amount
      as the Board may from time to time determine (hereinafter referred to as
      the “Base Salary”). Such Base Salary shall be payable in accordance with
      the Company’s customary practices applicable to its executives, but no
      less frequently than monthly.  Such Base Salary shall be
      reviewed at least annually by the Board or by the Compensation Committee
      of the Board (the “Committee”), with consideration given to
      recommendations by the CEO, and may be increased in the sole discretion of
      the Committee, but in no event shall it be decreased without Executive’s
      express written consent.

            

    

     

    
      	
               
      

            	
               (b)

            	
              Incentive
      Compensation.  For each fiscal year
      of the Company ending during the Employment Term, beginning with the 2009
      fiscal year, Executive shall be eligible to receive a target annual cash
      bonus of 55% of the Base Salary (such target bonus, as may hereafter be
      increased, the “Target Bonus”) with the opportunity to receive a maximum
      annual cash bonus of 200% of the Base Salary, as recommended in good faith
      by the CEO and approved by the Committee in its sole discretion, if the
      Company and Executive achieve certain performance targets set by the
      Committee.  Such annual cash bonus (“Incentive Compensation”)
      shall be paid in no event later than the 15th day of the third month
      following the end of the taxable year (of the Company or Executive,
      whichever is later) in which the performance targets have been
      achieved.  Notwithstanding the foregoing, Executive’s total 2009
      Incentive Compensation will not be prorated based on Executive’s partial
      year of employment (i.e., it will be determined as if Executive had been
      employed by the Company, and received Base Salary, for the entire 2009
      calendar year).

            

    

     

    
      	
               
      

            	
               (c)

            	
              Equity
      Compensation Plans.  To the extent the
      Company determines to award stock options, restricted stock units or other
      similar consideration to management personnel based upon duration of
      employment, status as an officer of the Company or achievement of
      performance targets, or any combination of the foregoing, Executive shall
      be permitted to participate in such programs.  For each fiscal
      year or part thereof during the Employment Term, Executive shall be
      eligible to receive equity-based compensation in an amount equal up to two
      hundred percent (200%) of the Base Salary for such fiscal year (or such
      lesser (including zero) or greater percent of the Salary for such fiscal
      year as is recommended in good faith to the Committee by the CEO and
      approved by the Committee)  All such equity-based awards shall
      be subject to the terms and conditions set forth in the applicable plan
      and agreements, and in all cases shall be as determined by the Committee;
      provided, however, that such terms and conditions
      shall be no less favorable to Executive than the terms and conditions
      applicable to other Executive Vice Presidents (excluding the terms and
      conditions

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    of special incentive awards granted to
Executive Vice Presidents in connection with hire or otherwise granted outside
of the ordinary course of business).  Executive’s 2009 long-term
equity incentive to be granted in 2010 will not be prorated based on Executive’s
partial year of employment (i.e., it will be determined as if Executive had been
employed by the Company for the entire 2009 calendar year).

     

    
      	
              4.

            	
              Sign-On Compensation
      and Benefits.

            

    

     

    
      	
               
      

            	
               (a)

            	
              Initial
      Stock Option Grant.  Effective as of the
      Effective Date, the Company shall grant Executive stock options to
      purchase 80,000 shares of Company stock (the "Initial Stock Options"),
      with an exercise price equal to the closing market price on the Effective
      Date.  Such initial grant of stock options shall vest ratably
      over a four-year period, 25% on each anniversary of the date of grant,
      provided Executive is employed on such dates by the
      Company.  All such stock options shall be granted outside of the
      Company's 2007 Stock Incentive Plan but shall be subject to the terms and
      conditions of the Company’s 2007 Stock Incentive Plan and applicable award
      agreement attached as Exhibit A hereto.  Within 30 days
      following the Effective Date, the Company shall file with the Securities
      and Exchange Commission a registration statement on Form S-8 with respect
      to all shares of Company stock issuable pursuant to the Initial Stock
      Options and shall cause such registration statement to remain in effect
      for so long as the Initial Stock Options remain
      outstanding.

            

    

     

    
      	
               
      

            	
               (b)

            	
              Initial
      Restricted Stock Unit Grant.  Effective as of the
      Effective Date, the Company shall grant Executive 43,500 restricted stock
      units (the "Initial RSUs").  Such initial grant of restricted
      stock units shall vest ratably over a four-year period, 25% on each
      anniversary of the date of grant, provided Executive is employed on such
      dates by the Company.  All such restricted stock units shall be
      granted outside of the Company's 2007 Stock Incentive Plan but shall be
      subject to the terms and conditions of the Company’s 2007 Stock Incentive
      Plan and applicable award agreement attached as Exhibit B
      hereto.  Within 30 days following the Effective Date, the
      Company shall file with the Securities and Exchange Commission a
      registration statement on Form S-8 with respect to all shares of Company
      stock issuable pursuant to the Initial RSU grant and shall cause such
      registration statement to remain in effect for so long as the Initial RSUs
      remain outstanding.

            

    

     

    
      	
               
      

            	
               (c)

            	
              Sign-On
      Bonuses.  On the first regular
      payroll period payment date following the Effective Date, the Company
      shall pay Executive a sign-on cash bonus of $225,000.  The
      Company is required to withhold tax at the time of payment of this
      bonus.  If Executive’s employment with the Company is terminated
      by the Company for Cause (as described in Section 6(c)), or by Executive
      without Good Reason (as described in Section 6(f)), within 18 months of the Effective Date,
      Executive must repay to the Company the full amount of the sign-on cash
      bonus. Any such repayment must be made within 90 days of such
      termination.

            

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
              5.

            	
              Other
      Benefits.

            

    

     

    
      	
               
      

            	
               (a)

            	
              Employee
      Benefits. During the
      Employment Term, Executive shall be entitled to participate in all
      employee benefit plans, practices and programs maintained by the Company
      and made available to employees generally, including, without limitation,
      all pension, retirement, profit sharing, savings, medical,
      hospitalization, disability, dental, life or travel accident insurance
      benefit plans, to the extent Executive is eligible under the terms of such
      plans.  Executive’s participation in such plans, practices and
      programs shall be on the same basis and terms as are applicable to
      employees of the Company
generally.

            

    

     

    
      	
               
      

            	
               (b)

            	
              Executive
      Benefits. During the
      Employment Term, Executive shall be entitled to participate in all
      executive benefit or incentive compensation plans now maintained or
      hereafter established by the Company for the purpose of providing
      compensation and/or benefits to other senior executives of the Company
      including, but not limited to, the Company’s deferred compensation plans
      and any supplemental retirement, deferred compensation, supplemental
      medical or life insurance or other bonus or incentive compensation plans.
      Unless otherwise provided herein, Executive’s participation in such plans
      shall be on the same basis and terms, as other senior executives of the
      Company.  No additional compensation provided under any of such
      plans shall be deemed to modify or otherwise affect the terms of this
      Agreement or any of Executive’s entitlements
    hereunder.

            

    

     

    
      	
               
      

            	
               (c)

            	
              Fringe
      Benefits and Perquisites.  During the Employment
      Term, Executive shall be entitled to all fringe benefits and perquisites
      generally made available by the Company to its senior executives, on terms
      and conditions that are no less favorable to Executive than those that
      apply to other senior executives of the Company; provided, however, that
      in lieu of financial counseling benefits provided to other senior
      executives, Executive may elect to utilize the services of a personal
      financial counselor selected by Executive and, if so elected, the Company
      shall reimburse Executive for the reasonable costs incurred by the
      Executive in using such counselor up to the maximum costs that the Company
      would have incurred had Executive elected to use the Company-provided
      financial counseling services.  For the avoidance of doubt,
      Executive shall not be entitled to any excise tax gross-up under Section
      280G or Section 4999 of the Internal Revenue Code (or any successor
      provision) or any other tax
gross-up.

            

    

     

    
      	
               
      

            	
               (d)

            	
              Business
      Expenses. Upon
      submission of proper invoices in accordance with the Company’s normal
      procedures, Executive shall be entitled to receive prompt reimbursement of
      all reasonable out-of-pocket business, entertainment and travel expenses
      incurred by Executive in connection with the performance of Executive’s
      duties hereunder and otherwise incurred in accordance with the Company’s
      travel and entertainment policy in effect from time to
      time.  Such reimbursement shall be made as soon as practicable
      and in no event later than the end of the calendar year following the
      calendar year in which the expenses were
  incurred.

            

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
               (e)

            	
              Office
      and Facilities.  During the Employment
      Term, Executive shall be provided with an appropriate office at the
      Company’s headquarters, with such secretarial and other support facilities
      as are commensurate with Executive’s status with the Company, which
      facilities shall be adequate for the performance of Executive’s duties
      hereunder.  Notwithstanding the foregoing, Executive shall be
      permitted, from time to time and to the extent reasonably requested by
      Executive, to perform his duties hereunder at a location other than at the
      Company's headquarters, providing that doing so does not reasonably
      interfere with the performance of Executive's responsibilities
      hereunder.

            

    

     

    
      	
               
      

            	
               (f)

            	
              Motor
      Vehicle Allowance.  As of the Effective Date,
      Executive will be entitled to use of an
      automobile, and a replacement thereof, mutually acceptable to Executive and the Company, at least every three
      (3) fiscal years after the Effective Date during the Employment Term.
       The Company will reimburse Executive for all operating expenses
      relating thereto upon Executive’s submission of appropriate
      documentation as set forth in Section 5(d).  Notwithstanding the
      above, in lieu of receiving use of an automobile, Executive may elect to
      use a car service to transport Executive between the Company's
      headquarters and any airport, train station or temporary lodging that
      Executive uses in connection with his working at Company headquarters and,
      if so elected, the Company shall reimburse Executive for such reasonable
      costs incurred by the Executive in using such car service up to $22,000
      per calendar year (pro-rated for partial calendar years, as
      applicable).  The Company will determine the actual value,
      if any, of Executive’s non-business use of such
      automobile or car
      service and will
      furnish Executive with a W-2 Wage and Tax
      Statement to be included in Executive’s income tax returns, in
      accordance with prevailing Internal Revenue Service
      regulations.

            

    

     

    
      	
               
      

            	
               (g)

            	
              Vacation
      and Sick Leave.  Executive shall be
      entitled, without loss of pay, to absent himself voluntarily from the
      performance of Executive’s employment under this Agreement, pursuant to
      the following:

            

    

     

    
      	
               
      

            	
               (i)

            	
              Executive shall be entitled to
      annual vacation in accordance with the vacation policies of the Company as
      in effect from time to time, which shall in no event be less than four
      weeks per year;  vacation must be taken at such time or times as
      approved by the CEO; and

            

    

     

    
      	
               
      

            	
               (ii)

            	
              Executive shall be entitled to
      sick leave (without loss of pay) in accordance with the Company’s policies
      as in effect from time to
time.

            

    

     

    
      	
              6.

            	
              Termination.
      The Employment Term and Executive's employment hereunder may be terminated
      under the circumstances set forth below; provided, however, that
      notwithstanding anything contained herein to the contrary, Executive shall
      not have any duties or responsibilities to the Company after Executive's
      termination of employment during the Employment Term or upon expiration of
      the Employment Term that would

            

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
       

      
        	
                 

              	preclude
      Executive from having a “separation from service” from the Company within
      the meaning of Section 409A of the Internal Revenue Code of 1986, as
      amended (the “Code”), upon expiration of the Employment
  Term.

      

    

     

    
      	
               
      

            	
               (a)

            	
              Disability. The Company may terminate
      Executive’s employment, on written notice to Executive after having
      reasonably established Executive’s Disability. For purposes of this
      Agreement, Executive will be deemed to have a “Disability” if, as a result
      of any medically determinable physical or mental impairment that can be
      expected to result in death or can be expected to last for a continuous
      period of not less than twelve (12) months, Executive is unable to perform
      the core functions of Executive’s position (with or without reasonable
      accommodation) or is receiving income replacement benefits for a period of
      three months or more under an accident and health plan covering employees
      of the Company.  Executive shall be entitled to the compensation
      and benefits provided for under this Agreement for any period prior to
      Executive’s termination by reason of Disability during which Executive is
      unable to work due to a physical or mental infirmity in accordance with
      the Company’s policies for similarly-situated
      executives.

            

    

     

    
      	
               
      

            	
               (b)

            	
              Death.  Executive’s
      employment shall be terminated as of the date of Executive’s
      death.

            

    

     

    
      	
               
      

            	
               (c)

            	
              Cause.  The Company may
      terminate Executive’s employment for “Cause” by providing a Notice of
      Termination (as defined in Section 7 below) that notifies Executive of his
      termination for Cause, effective as of the date of such
      notice.  “Cause” shall mean, for purposes of this
      Agreement:  (a) the continued failure by Executive to use good
      faith efforts in the performance of Executive’s duties under this
      Agreement (other than any such failure resulting from Disability or other
      allowable leave of absence); (b) the criminal felony indictment of
      Executive by a court of competent jurisdiction; (c) the engagement by
      Executive in misconduct that has caused, or is reasonably likely to cause,
      material harm (financial or otherwise) to the Company; such harm may be
      caused by, without limitation, (i) the disclosure of material secret or
      Confidential Information (as defined in Section 11(d)) of the Company or
      any of its subsidiaries, if any, (ii) the debarment of the Company or any
      of its subsidiaries, if any, by the U.S. Food and Drug Administration or
      any successor agency (the “FDA”), or (iii) the registration of the Company
      or any of its subsidiaries, if any, with the U.S. Drug Enforcement
      Administration of any successor agency (the “DEA”) to be revoked; (d) the
      debarment of Executive by the FDA, (e) the continued material breach by
      Executive of this Agreement, or (f) Executive makes, or is found to have
      made, a knowingly false certification relating to the Company's financial
      statements.  Notwithstanding the foregoing, prior to having
      “Cause” for Executive’s termination (other than as described in clauses
      (b) and (d) thereof), the Company must deliver a written demand to
      Executive which specifically identifies the conduct that may provide
      grounds for Cause, and the Executive must have failed to cure such conduct
      (if  curable) within fifteen (15) days after such
      demand.

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

     

    
      
        	
                 
      

              	
                 

              	Reference
      in this paragraph to the Company shall also include direct and indirect
      subsidiaries of the Company.

      

       

    

    
      	
               
      

            	
               (d)

            	
              Without
      Cause.  The
      Company may terminate Executive’s employment other than for Cause,
      Disability or death.  The Company shall deliver to Executive a
      Notice of Termination (as defined in Section 7 below) not less than thirty
      (30) days prior to the termination of Executive’s employment other than
      for Cause, Disability or death, and the Company shall have the option of
      terminating Executive’s duties and responsibilities prior to the
      expiration of such thirty-day notice
  period.

            

    

     

    
      	
               
      

            	
               (e)

            	
              Good
      Reason.  Executive may
      terminate employment with the Company for Good Reason (as defined below) by delivering
      to the Company a Notice of Termination (as defined in Section 7 below) not less than thirty (30)
      days prior to the termination of
      Executive’s employment for Good Reason. The
      Company shall have the option of terminating
      Executive’s duties and responsibilities
      prior to the expiration of such thirty-day notice
      period.  For purposes of this Agreement, “Good Reason” means any of the
      following:  (a) a material diminution in
      Executive’s salary or benefits; (b) a material
      diminution, without Executive’s written consent, of his position,
      responsibilities, duties or authorities from those in effect immediately
      following the Effective Date; (c) any change in reporting structure such
      that Executive is required to report to someone other than the CEO or the
      Board of Directors of the Company; (d) the Company changing its
      headquarters to a location that results in a
      one-way commute that is on average greater than two hours and forty-five
      minutes from Executive’s current residence in New York, New York;
      (e) any material
      breach by the Company of its obligations under this Agreement (including,
      without limitation, Section 5); or (f) a Change of Control before
      November 2, 2009 that involves any acquisition of a majority interest in
      the Company (or its operating assets) by any entity listed as a peer group
      member on Appendix B of the proxy filing (on SEC Form DEF 14A) for Pfizer,
      Inc. dated as March 15, 2007, or any of such entities’ majority-owned
      subsidiaries.  Executive shall provide notice of
      the existence of the Good Reason condition within ninety (90) days of the
      date Executive learns of the condition, and the Company shall have a
      period of thirty (30) days during which it may remedy the condition, and
      in case of full remedy such condition shall not be deemed to constitute
      Good Reason hereunder.

            

    

     

    
      	
               
      

            	
               (f)

            	
              Without
      Good Reason.  Executive may
      voluntarily terminate Executive’s employment without Good Reason by
      delivering to the Company a Notice of Termination not less than thirty
      (30) days prior to the termination of Executive’s employment and the
      Company shall have the option of terminating Executive’s duties and
      responsibilities prior to the expiration of such thirty-day notice
      period.

            

    

     

    
      	
              7.

            	
              Notice of
      Termination. Any purported termination by the Company or by
      Executive shall be communicated by written Notice of Termination to the
      other party hereto. For purposes of this Agreement, a “Notice of
      Termination” shall mean a notice that indicates a termination date, the
      specific termination provision in this Agreement relied upon and sets
      forth in reasonable detail the facts and circumstances claimed to provide
      a basis for

            

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    
       

      
        	
                 

              	termination of
      Executive’s employment under the provision so indicated. For purposes of
      this Agreement, no such purported termination of Executive’s employment
      hereunder shall be effective without such Notice of Termination (unless
      waived by the party entitled to receive such notice, in the manner
      described in Section 16(h)).

      

    

     

    
      	
              8.

            	
              Compensation Upon
      Termination. Upon termination of Executive’s employment during the
      Employment Term (or, to the extent explicitly provided for in Sections
      8(f) and 8(g) below, upon expiration of the Employment Term), Executive
      shall be entitled to the following
benefits:

            

    

     

    
      	
               
      

            	
               (a)

            	
              Termination
      by the Company for Cause or by Executive Without Good Reason. If Executive’s employment is
      terminated by the Company for Cause or by Executive without Good Reason,
      the Company shall provide Executive with the following payments and
      benefits:

            

    

     

    
      	
               
      

            	
               (i)

            	
              any accrued and unpaid Base
      Salary;

            

    

     

    
      	
               
      

            	
               (ii)

            	
              any  Incentive
      Compensation earned but unpaid in respect of any completed fiscal year
      preceding the termination
date;

            

    

     

    
      	
               
      

            	
               (iii)

            	
              reimbursement for any and all
      monies advanced or expenses incurred in connection with Executive’s
      employment for reasonable and necessary expenses incurred by Executive on
      behalf of the Company for the period ending on the termination
      date;

            

    

     

    
      	
               
      

            	
               (iv)

            	
              any accrued and unpaid vacation
      pay;

            

    

     

    
      	
               
      

            	
               (v)

            	
              any previous compensation that
      Executive has previously deferred (including any interest earned or
      credited thereon), in accordance with the terms and conditions of the
      applicable deferred compensation plans or arrangements then in effect, to
      the extent vested as of Executive’s termination date;
      and

            

    

     

    
      	
               
      

            	
               (vi)

            	
              any amount or benefit as provided
      under any plan, program, agreement or corporate governance document of the
      Company or its affiliates that are then-applicable (the “Company
      Arrangements”), in accordance with the terms
    thereof.

            

    

     

    (the
foregoing items in Sections 8(a)(i) through 8(a)(vi) being collectively referred
to as the “Accrued Compensation”).

     

    
      	
               
      

            	
               (b)

            	
              Termination
      by the Company for Disability. If Executive’s employment is
      terminated by the Company for Disability, the Company shall pay
      Executive:

            

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
               (i)

            	
              the Accrued Compensation;
      and

            

    

     

    
      	
               
      

            	
               (ii)

            	
              an amount equal to the product of
      (A) the Incentive Compensation that Executive would have been entitled to
      receive in respect of the fiscal year in which Executive’s termination
      date occurs, had Executive continued in employment until the end of such
      fiscal year, which amount shall be determined based on the Company’s
      actual performance for such year relative to the Company performance goals
      applicable to Executive (but without any exercise of negative discretion
      with respect to Executive in excess of that applied either to senior
      executives of the Company generally for the applicable performance period
      or in accordance with the Company's historical past practice), and (B) a
      fraction (x) the numerator of which is the number of days in such fiscal
      year through termination date and (y) the denominator of which is 365;
      such amount (the “Pro-Rata Bonus”) shall be payable in a cash lump sum
      payment at the time such bonus or incentive awards are payable to other
      participants (but no later than March 15 of the following calendar
      year).

            

    

     

    Further,
upon Executive’s Disability (irrespective of any termination of employment
related thereto), the Company shall pay Executive for twenty-four (24)
consecutive months thereafter regular payments in the amount by which the
monthly Base Salary exceeds Executive’s Company-provided monthly Disability
insurance benefit.

     

    
      	
               
      

            	
               (c)

            	
              Termination
      By Reason of Death.
      If Executive’s employment is terminated by reason of Executive’s death,
      the Company shall pay Executive’s
  beneficiaries

            

    

     

    
      	
               
      

            	
               (i)

            	
              the Accrued Compensation,
      and

            

    

     

    
      	
               
      

            	
               (ii)

            	
              the Pro-Rata
      Bonus.

            

    

     

    
      	
               
      

            	
               (d)

            	
              Termination
      by the Company Other Than
      for Cause, Disability or Death,
      or by Executive with Good Reason, Other Than in Connection with a Change
      of Control.  If Executive’s
      employment by the Company shall be terminated by the Company other than
      for Cause, Disability or death, or by Executive with Good Reason, in any
      such case either prior to a Change of Control or more than twenty-four
      (24) months following a Change of Control, then, subject to Section 16(g)
      of this Agreement, Executive shall be entitled to the benefits provided in
      this Section 8(d):

            

    

     

    
      	
               
      

            	
               (i)

            	
              the Company shall pay to Executive
      the Accrued Compensation;

            

    

     

    
      	
               
      

            	
               (ii)

            	
              the Company shall pay to Executive
      the Pro-Rata Bonus;

            

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
               (iii)

            	
              the Company shall pay to Executive
      as severance pay and in lieu of any further Base Salary or other
      compensation or benefits not described in clauses (i), (ii), (iv) or (v)
      for periods subsequent to the termination date, an amount in cash, which
      amount shall be payable in a lump sum payment within sixty (60) days
      following such termination (subject to Section 10), equal to two (2) times
      the sum of (A) Executive’s Base Salary and (B) the Target Bonus;
      and

            

    

     

    
      	
               
      

            	
               (iv)

            	
              accelerated vesting, non
      forfeitability and exercisability, as of the termination date, of the
      portion of the Initial Stock Options and the Initial RSUs that would have
      vested had Executive remained employed by the Company for an additional
      two years following Executive's termination date, and the Initial Stock
      Options shall remain exercisable in accordance with its terms;
      and

            

    

     

    
      	
               
      

            	
               (v)

            	
              the Company shall provide
      Executive and Executive's dependents with continued coverage under any
      health, medical, dental, vision or life insurance program or policy in
      which Executive was eligible to participate as of the time of Executive’s
      employment termination, for two (2) years following such termination on
      terms no less favorable to Executive and Executive’s dependents (including
      with respect to payment for the costs thereof) than those in effect
      immediately prior to such termination, which coverage shall become
      secondary to any coverage provided to Executive by a subsequent employer
      and to any Medicare coverage for which Executive becomes
      eligible.  After such two-year period, Executive and Executive's
      dependents who are qualified beneficiaries shall be entitled, at
      Executive’s election and cost, to eighteen (18) months of continuation
      coverage at COBRA rates.

            

    

     

    
      	
               
      

            	
               (e)

            	
              Termination
      by the Company Other Than for Cause, Disability or Death, or by Executive
      with Good Reason Following a Change of Control. If Executive’s employment by the
      Company shall be terminated by the Company other than for Cause,
      Disability or death, or by Executive with Good Reason, in any such case
      within twenty-four (24) months following a Change of Control, then in lieu
      of the amounts due under Section 8(d) above and subject to the
      requirements of Section 16(g) of this Agreement, Executive shall be
      entitled to the benefits provided in this 
Section
      8(e):

            

    

     

    
      	
               
      

            	
               (i)

            	
              the Company shall pay Executive
      any Accrued Compensation;

            

    

     

    
      	
               
      

            	
               (ii)

            	
              the Company shall pay Executive
      any Pro-Rata Bonus;

            

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
               (iii)

            	
              the Company shall pay Executive as
      severance pay and in lieu of any further Base Salary or other compensation
      and benefits, not described in clauses (i), (ii), (iv) or (v) for periods
      subsequent to the termination date, an amount in cash, which amount shall
      be payable in a lump sum payment within sixty (60) days following such
      termination (subject to Section 10), equal to two (2) times the sum of (A)
      Executive’s Base Salary and (B) the Target Bonus;
    and

            

    

     

    
      	
               
      

            	
               (iv)

            	
              the Company shall provide
      Executive and Executive's dependents with continued coverage under any
      health, medical, dental, vision or life insurance program or policy in
      which Executive was eligible to participate as of the time of Executive’s
      employment termination, for two (2) years following such termination on
      terms no less favorable to Executive and Executive’s dependents (including
      with respect to payment for the costs thereof) than those in effect
      immediately prior to such termination, which coverage shall become
      secondary to any coverage provided to Executive by a subsequent employer
      and to any Medicare coverage for which Executive becomes
      eligible.  After such two-year period, Executive and Executive's
      dependents who are qualified beneficiaries shall be entitled, at
      Executive’s election and cost, to eighteen (18) months of continuation
      coverage at COBRA rates.

            

    

     

    
      	
               
      

            	
               (f)

            	
              Expiration
      of Employment Term
      After Notice of Non-Renewal by the Company. If the Employment Term ends
      after the Company delivers a notice of non-renewal (as described in
      Section 1), or upon expiration of Employment Term in 2013, and in either
      case, Executive terminates employment upon expiration of the Employment
      Term, Executive shall be entitled to the benefits provided in this Section
      8(f):

            

    

     

    
      	
               
      

            	
               (i)

            	
              the Company shall pay Executive
      any Accrued Compensation;

            

    

     

    
      	
               
      

            	
               (ii)

            	
              the Company shall pay to Executive
      a Pro-Rata Bonus; and

            

    

     

    
      	
               
      

            	
               (iii)

            	
              full vesting, non-forfeitability
      and exercisability, as of the termination date, of the grants and bonuses
      described in Section 4
hereof.

            

    

     

    
      	
               
      

            	
               (g)

            	
              Expiration
      of Employment Term After Notice of Non-Renewal by Executive; Expiration in
      2013. If the
      Employment Term ends (x) by reason of Executive having delivered a notice
      of non-renewal (as described in Section 1) or (y) upon expiration of the
      Employment Term in 2013, and in either case, Executive terminates
      employment upon expiration of the Employment Term, Executive shall be
      entitled to the benefits provided in this Section
    8(g):

            

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
               (i)

            	
              the Company shall pay Executive
      any Accrued Compensation;

            

    

     

    
      	
               
      

            	
               (ii)

            	
              the Company shall pay to Executive
      a Pro-Rata Bonus.

            

    

     

    
      	
               
      

            	
               (h)

            	
              No
      Mitigation.  Executive shall not
      be required to mitigate the amount of any payment provided for under this
      Agreement by seeking other employment or otherwise and, except as provided
      in Sections 8(d)(v) and 8(e)(iv) above, no such payment shall be offset or
      reduced by the amount of any compensation or benefits provided to
      Executive in any subsequent
employment.

            

    

     

    
      	
              9.

            	
              Change of
      Control.

            

    

     

    
      	
               
      

            	
               (a)

            	
              “Change of Control” means and
      shall be deemed to have occurred upon the first of the following events to
      occur:

            

    

     

    
      	
               
      

            	
               (i)

            	
              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
      Beneficial Owner in connection with a transaction described in clause (A)
      of paragraph (iii) below; or

            

    

     

    
      	
               
      

            	
               (ii)

            	
              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 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 or
      nomination for election by the Company’s stockholders 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

            

    

     

    
      	
               
      

            	
               (iii)

            	
              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

            

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    
       

      
        	
                 
      

              	
                 

              	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 benefitplan 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 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

      

    

     

    
      	
               
      

            	
               (iv)

            	
              The stockholders 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 stockholders unless the Board 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 stockholders 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 immediately prior
  thereto.

            

    

    
       

      
        	
                 
      

              	
                 

              	For
      purposes of this Section 9, “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 stockholders of the Company in
      substantially the same proportions as their ownership of stock of the
      Company.

      

      

        
          
             

          

          
            13

            
              

            

          

          
             

          

        

         

        
          	
                   
      

                	
                   

                	Notwithstanding the
      foregoing, a “Change of 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 the common
      stock of the Company 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.

        

         

      

    

    
      	
               
      

            	
               (b)

            	
              Accelerated
      Vesting.  On the date that a
      Change of Control occurs, the vesting of the Initial Stock Options and the
      Initial RSUs shall accelerate, each such award shall become
      non-forfeitable and fully exercisable in accordance with its terms, and
      the Initial Stock Options shall remain exercisable in accordance with its
      terms.

            

    

     

    
      	
               
      

            	
               (c)

            	
              Golden
      Parachute Tax. If any
      payment or benefit to be made or provided to or for the benefit of
      Executive (including any payment or benefit received pursuant to this
      Agreement or otherwise) would be (in whole or part) subject to the excise
      tax imposed by Section 4999 of the Code, or any successor provision
      thereto, or any similar tax imposed by state or local law, or any interest
      or penalties with respect to such excise tax (such tax or taxes, together
      with any such interest and penalties, are hereafter collectively referred
      to as the “Excise Tax”), then, the payments and benefits provided
      hereunder shall be reduced in the manner selected by Executive to the
      extent necessary to make such payments and benefits not subject to such
      Excise Tax (provided that cash payments that do not constitute deferred
      compensation within the meaning of Section 409A of the Code shall be
      reduced first), but only if such reduction results in a higher after-tax
      payment to Executive after taking into
      account the Excise Tax and any additional taxes Executive would pay if
      such payments and benefits were not
  reduced.

            

    

     

    
      	
              10.

            	
              Section
      409A.  Notwithstanding anything contained herein to the
      contrary, to the extent required in order to avoid accelerated taxation
      and/or tax penalties under Section 409A of the Code, (i) no amounts shall
      be paid to Executive under Section 6 of this Agreement until Executive
      would be considered to have incurred a separation from service from the
      Company within the meaning of Section 409A of the Code, and (ii) amounts
      that would otherwise be payable and benefits that would otherwise be
      provided pursuant to this Agreement during the six-month period
      immediately following Executive’s separation from service shall instead be
      paid on the first business day after the date that is six months following
      Executive’s separation from service (or death, if earlier), with interest
      from the date such amounts would otherwise have been paid at the
      short-term applicable federal rate, compounded
      semi-annually,  as determined under Section 1274 of the Code for
      the month in which payment would have been made but for the delay in
      payment required to avoid the imposition of an additional rate of tax on
      Executive under Section 409A of the
Code.

            

    

     

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    
      	
              11.

            	
              Records and
      Confidential Data.

            

    

     

    
      	
               
      

            	
               (a)

            	
              Executive acknowledges that in
      connection with the performance of Executive’s duties during the
      Employment Term, the Company will make available to Executive, or
      Executive will develop and have access to, certain Confidential
      Information (as defined below) of the Company and its subsidiaries.
      Executive acknowledges and agrees that any and all Confidential
      Information learned or obtained by Executive during the course of
      Executive’s employment by the Company or otherwise, whether developed by
      Executive alone or in conjunction with others or otherwise, shall be and
      is the property of the Company and its
  subsidiaries.

            

    

     

    
      	
               
      

            	
               (b)

            	
              Confidential Information will be
      kept confidential by Executive, will not be used in any manner that is
      detrimental to the Company, will not be used other than in connection with
      Executive’s discharge of Executive’s duties hereunder, and will be
      safeguarded by Executive from unauthorized disclosure; provided, however,
      that Confidential Information may be disclosed by Executive (v) to the Company and its
      affiliates, or to any authorized
      agent or representative of any of them, (w) in connection with performing
      his duties hereunder, (x) when required to do so by law or by a court,
      governmental agency, legislative body, arbitrator or other person with apparent jurisdiction
      to order him to divulge, disclose or make accessible such
      information, provided
      that Executive notify the Company prior to such disclosure, (y) in the course of any
      proceeding under Sections
      13 or 14 of this Agreement or (z) in confidence to an
      attorney or other professional advisor for the purpose of securing
      professional advice,
      so long as such attorney or advisor is subject to confidentiality
      restrictions no less restrictive than those applicable to Executive
      hereunder.

            

    

     

    
      	
               
      

            	
               (c)

            	
              Following the termination of
      Executive’s employment hereunder, as soon as possible after the Company’s
      written request, Executive will return to the Company all written
      Confidential Information that is in his possession or control and
      Executive will destroy all of his copies of any analyses, compilations,
      studies or other documents prepared by Executive or for Executive’s use
      containing or reflecting any Confidential Information. Within five (5)
      business days of the receipt of such request by Executive, Executive
      shall, upon written request of the Company, deliver to the Company a
      document certifying that such written Confidential Information has been
      returned or destroyed in accordance with this Section
      11(c).

            

    

     

    
      	
               
      

            	
               (d)

            	
              For the purposes of this
      Agreement, “Confidential Information” shall mean all confidential and
      proprietary information of the Company and its subsidiaries, including,
      without limitation,

            

    

     

    
      	
               
      

            	
               (i)

            	
              trade secrets concerning the
      business and affairs of the Company and its subsidiaries, product
      specifications, data, know-how, formulae, compositions, processes,
      non-public patent applications, designs, sketches, photographs, graphs,
      drawings, samples, inventions and ideas,
  past,

            

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    
       

      
        	
                 
      

              	
                 

              	current,
      and planned research and development, current and planned manufacturing or
      distribution methods and processes, customer lists, current and
      anticipated customer requirements, price lists, market studies,business
      plans, computer software and programs (including object code and source
      code), computer software and database technologies, systems, structures,
      and architectures (and related formulae, compositions, processes,
      improvements, devices, know-how, inventions, discoveries, concepts, ideas,
      designs, methods and information);

      

    

     

    
      	
               
      

            	
               (ii)

            	
              information concerning the
      business and affairs of the Company and its subsidiaries (which includes
      unpublished financial statements, financial projections and budgets,
      unpublished and projected sales, capital spending budgets and plans, the
      names and backgrounds of key personnel, to the extent not publicly known,
      personnel training and techniques and materials) however documented;
      and

            

    

     

    
      	
               
      

            	
               (iii)

            	
              notes, analysis, compilations,
      studies, summaries, and other material prepared by or for the Company or
      its subsidiaries containing or based, in whole or in part, on any
      information included in the foregoing.  For purposes of this
      Agreement, the Confidential Information shall not include and Executive’s
      obligation’s shall not extend to (i) information that is generally
      available to the public, (ii) information obtained by Executive other than
      pursuant to or in connection with this employment and (iii) information
      that is required to be disclosed by law or legal
      process.

            

    

     

    
      	
               
      

            	
               (e)

            	
              Nothing herein or elsewhere shall
      preclude Executive from retaining and using (i) his personal papers and
      other materials of a personal nature, including, without limitation,
      photographs, correspondence, personal diaries, calendars, personal files,
      rolodex (and paper/electronic equivalents) and phone books (so long as no such materials are
      covered by any Company hold order), (ii) documents relating to his
      personal entitlements and obligations, and (iii) information that is
      necessary for his personal tax purposes.

            

    

     

    
      	
              12.

            	
              Covenant Not to
      Solicit, Not to Compete, Not to Disparage and to Cooperate in
      Litigation.

            

    

     

    
      	
               
      

            	
               (a)

            	
              Covenant
      Not to Solicit.  To protect the
      Confidential Information and other trade secrets of the Company as well as
      the goodwill and competitive business of the Company, Executive agrees,
      during the Employment Term and for a period of twenty-four (24) months
      after Executive’s cessation of employment with the Company, not to solicit
      or participate in or assist in any way in the solicitation of any
      employees of the Company.  For purposes of this covenant,
      “solicit” or “solicitation” means directly or indirectly influencing or
      attempting to influence employees of the Company to cease employment with
      the Company (except in the course of Executive’s duties to the Company) or
      to become employed with
any

            

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    
       

      
        	
                 
      

              	
                 

              	other
      person, partnership, firm, corporation or other entity. Executive agrees
      that the covenants contained in this Section 12(a) are reasonable and
      desirable to protect the Confidential Information of the Company,
      provided, that solicitationthrough general advertising not targeted at the
      Company’s employees or the provision of references shall not constitute a
      breach of such obligations.

      

    

     

    
      	
               
      

            	
               (b)

            	
              Covenant
      Not to Compete.

            

    

     

    
      	
               
      

            	
               (i)

            	
              To protect the Confidential
      Information and other trade secrets of the Company as well as the goodwill
      and competitive business of the Company, Executive agrees, during the
      Employment Term and for a period of eighteen (18) months after Executive’s
      cessation of employment with the Company, that Executive will not, except
      in the course of Executive’s employment hereunder, directly or indirectly
      manage, operate, control, or participate in the management, operation, or
      control of, be employed by, associated with, or in any manner connected
      with, lend Executive’s name to, or render services or advice to, any third
      party, or any business, whose products compete (including as described
      below) with the material products (both on market and in development) of
      the Company (disregarding any non-pain management products that were not
      products promoted by the Company during the last two years); provided, however, that Executive may in
      any event (w) own up to a 5% passive ownership
      interest in any public or private entity, (x) be employed by, or otherwise
      have material association with, any business whose products compete with the material products of the
      Company so long as his employment or association is
      with a separately managed and operated division or affiliate of such business that
      does not compete with the Company, and (y) serve on the board of any
      business whose
      products compete with the Company as an immaterial part of its
      overall business, provided that he recuses himself
      fully and completely from all matters relating to such
    products.

            

    

     

    
      	
               
      

            	
               (ii)

            	
              For purposes of this Section
      12(b), any third party, or any business, whose products compete includes
      any entity with which the Company has a product(s) licensing agreement at
      the end of the Employment Term and any entity with which the Company is at
      the time of termination, to the knowledge of Executive (as reflected by
      the deliberations of the Company’s senior leadership team), negotiating,
      and eventually concludes within twelve (12) months of the Employment Term,
      a product licensing or acquisition
  agreement.

            

    

     

    
      	
               
      

            	
               (c)

            	
              Nondisparagement.  Executive covenants
      that during and following the Employment Term, Executive will not
      disparage or encourage or induce others to disparage the Company or its
      subsidiaries, together with all of their respective past and present
      directors and officers, as well as their respective past and
      present

            

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    
       

      
        	
                 
      

              	
                 

              	managers,
      officers, shareholders, partners, employees, agents, attorneys, servants
      and customers and each of their predecessors, successors and assigns
      (collectively, the “Company Entities and Persons”); provided that such
      limitationshall extend to past and present managers, officers,
      shareholders, partners, employees, agents, attorneys, servants and
      customers only in their capacities as such or in respect of their
      relationship with the Company and its subsidiaries.   The
      Company agrees that, during and following the Employment Term, neither the
      Company nor any director or officer, will make any statement that
      disparages Executive or encourages or induces others to disparage
      Executive.   The term “disparage” includes, without
      limitation, comments or statements adversely affecting in any manner (i)
      the conduct of the business of the Company Entities and Persons or
      Executive, or (ii) the business reputation of the Company Entities and
      Persons or Executive.  Nothing in this Agreement is intended to
      or shall prevent either party from providing, or limiting testimony in
      response to a valid subpoena, court order, regulatory request or other
      judicial, administrative or legal process or otherwise as required by law,
      or in arbitration under Section 14.

      

    

     

    
      	
               
      

            	
               (d)

            	
              Cooperation
      in Any Investigations and Litigation.  Executive agrees that
      Executive will reasonably cooperate with the Company, and its counsel, in
      connection with any investigation, inquiry, administrative proceeding or
      litigation relating to any matter in which Executive becomes involved or
      of which Executive has knowledge as a result of Executive’s service with
      the Company by providing truthful information.  The Company
      agrees to promptly reimburse Executive for reasonable expenses (including
      attorneys fees and other expenses of counsel) reasonably incurred by
      Executive, in connection with Executive’s cooperation pursuant to this
      Section 12(d).  Such reimbursements shall be made as soon as
      practicable, and in no event later than the calendar year following the
      year in which the expenses are incurred.  Executive agrees that,
      in the event Executive is subpoenaed by any person or entity (including,
      but not limited to, any government agency) to give testimony (in a
      deposition, court proceeding or otherwise) which in any way relates to
      Executive’s employment by the Company, Executive will, to the extent not
      legally prohibited from doing so, give prompt notice of such request to
      the Chief Legal Officer of the Company so that the Company may contest the
      right of the requesting person or entity to such disclosure before making
      such disclosure.  Nothing in this provision shall require
      Executive to violate Executive’s obligation to comply with valid legal
      process.

            

    

     

    
      	
               
      

            	
               (e)

            	
              Blue
      Pencil.  It
      is the intent and desire of Executive and the Company that the provisions
      of this Section 12 be enforced to the fullest extent permissible under the
      laws and public policies as applied in each jurisdiction in which
      enforcement is sought. If any particular provision of this Section 12
      shall be determined to be invalid or unenforceable, such covenant shall be
      amended, without any action on the part of either party hereto, to delete
      therefrom the portion so determined to be invalid or unenforceable, such
      deletion to apply only with respect to the operation of such covenant in
      the particular jurisdiction in which such adjudication is
      made.

            

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
               (f)

            	
              Survive.  Executive’s
      obligations under this Section 12 shall survive the termination of the
      Employment Term.

            

    

     

    
      	
              13.

            	
              Remedies for Breach of
      Obligations under Sections 11 or 12 hereof. Executive acknowledges
      that the Company will suffer irreparable injury, not readily susceptible
      of valuation in monetary damages, if Executive breaches Executive’s
      obligations under Sections 11 or 12 hereof. Accordingly, Executive agrees
      that the Company will be entitled, in addition to any other available
      remedies, to obtain injunctive relief against any breach or prospective
      breach by Executive of Executive’s obligations under Sections 11 or 12
      hereof in any Federal or state court sitting in the State of Delaware, or,
      at the Company’s election, in any other state in which Executive maintains
      Executive’s principal residence or Executive’s principal place of
      business.  Executive hereby submits to the non-exclusive
      jurisdiction of all those courts for the purposes of any actions or
      proceedings instituted by the Company to obtain that injunctive relief,
      and Executive agrees that process in any or all of those actions or
      proceedings may be served by registered mail, addressed to the last
      address provided by Executive to the Company, or in any other manner
      authorized by law.

            

    

     

    
      	
              14.

            	
              Resolution of
      Disputes.  Any claim or dispute arising out of or
      relating to this Agreement, any other Company Arrangement, Executive’s
      employment with the Company, or any termination thereof (collectively,
      “Covered
      Claims”) shall (except to the extent otherwise provided in Section
      13 with respect to certain requests for injunctive relief) be resolved by
      binding confidential arbitration, to be held in the Borough of Manhattan
      in New York City, in accordance with the Commercial Arbitration Rules (and
      not the National Rules for Resolution of Employment Disputes) of the
      American Arbitration Association and this Section 14.  The
      arbitrators, of which there shall be no less than three, shall set forth
      in writing, and in reasonable detail, the basis for any award they
      render.  Judgment upon such award may be entered in any court
      having jurisdiction thereof.  Upon any decision by the
      arbitrators awarding Executive reimbursement for any expenses (including,
      without limitation, reasonable attorneys fees and other charges of
      counsel), the Company shall promptly pay (or, if already paid, shall
      reimburse Executive for) any such expenses so
  awarded.

            

    

     

    
      	
              15.

            	
              Representations and
      Warranties.

            

    

     

    
      	
               
      

            	
               (a)

            	
              The Company represents and
      warrants that (i) it is fully authorized by action of the Board
      of Directors of the
      Company (and of any
      other person or body whose action is
      required) to enter into this Agreement and to perform its obligations
      under it, (ii) the execution, delivery and performance of this Agreement
      by it does not violate any applicable law, regulation, order, judgment or
      decree or any agreement, arrangement, plan or corporate governance
      document (x) to which it is a party or (y) by which it  is
      bound, and (iii) upon the execution and
      delivery of this Agreement by the parties, this Agreement shall be
      its valid and binding obligation, enforceable against it in accordance
      with its terms, except to the extent that enforceability may be limited by
      applicable bankruptcy, insolvency or similar laws affecting the
      enforcement of creditors’ rights generally.

            

    

     

    

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
               (b)

            	
              Executive represents and warrants
      to the Company that the execution and delivery by Executive of this
      Agreement do not, and the performance by Executive of Executive's
      obligations hereunder will not, with or without the giving of notice or
      the passage of time, or both: (a) violate any judgment, writ, injunction,
      or order of any court, arbitrator, or governmental agency applicable to
      Executive; or (b) conflict with, result in the breach of any provisions of
      or the termination of, or constitute a default under, any agreement to
      which Executive is a party or by which Executive is or may be
      bound.

            

    

     

    
      	
              16.

            	
              Miscellaneous.

            

    

     

    
      	
               
      

            	
               (a)

            	
              Successors
      and Assigns.

            

    

     

    
      	
               
      

            	
               (i)

            	
              This Agreement shall be binding
      upon and shall inure to the benefit of the Company, its successors and
      permitted assigns and the Company shall require any successor or assign to
      expressly assume and agree to perform this Agreement in the same manner
      and to the same extent that the Company would be required to perform if no
      such succession or assignment had taken place. The Company may not assign
      or delegate any rights or obligations hereunder except to a successor
      (whether direct or indirect, by purchase, merger, consolidation or
      otherwise) to all or substantially all of the business and/or assets of
      the Company. The term “the Company” as used herein shall include a
      corporation or other entity acquiring all or substantially all the assets
      and business of the Company (including this Agreement) whether by
      operation of law or
otherwise.

            

    

     

    
      	
               
      

            	
               (ii)

            	
              Neither this Agreement nor any
      right or interest hereunder shall be assignable or transferable by
      Executive, Executive’s beneficiaries or legal representatives, except by
      will or by the laws of descent and distribution. This Agreement shall
      inure to the benefit of and be enforceable by Executive’s legal personal
      representatives.

            

    

     

    
      	
               
      

            	
               (b)

            	
              Fees
      and Expenses.  The Company shall pay
      reasonable and documented legal fees and related expenses, up to a maximum
      amount of $50,000, incurred by Executive in connection with the
      negotiation of this Agreement.  Such reimbursement shall be made
      as soon as practicable, but in no event later than the end of the calendar
      year following the calendar year in which the expenses were
      incurred.

            

    

     

    
      	
               
      

            	
               (c)

            	
              Indemnification.  Executive shall be
      indemnified by the Company as provided in Company's by-laws and
      Certificate of Incorporation.  The obligations under this
      paragraph shall survive termination of the Employment
      Term.

            

    

     

    
      	
               
      

            	
               (d)

            	
              Right
      to Counsel.  Executive
      acknowledges that Executive has had the opportunity to consult with legal
      counsel of Executive’s choice in connection
  with

            

    

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    
       

      
        	
                 
      

              	
                 

              	the
      drafting, negotiation and execution of this Agreement and related
      employment arrangements.

      

    

     

    
      	
               
      

            	
               (e)

            	
              Notice. For the purposes of this
      Agreement, notices and all other communications provided for in the
      Agreement (including the Notice of Termination) shall be in writing and
      shall be deemed to have been duly given when personally delivered or sent
      by Certified mail, return receipt requested, postage prepaid, addressed to
      the respective addresses last given by each party to the other, provided
      that all notices to the Company shall be directed to the attention of the
      Chief Legal Officer of the Company with a copy to the Chief Executive
      Officer. All notices and communications shall be deemed to have been
      received on the date of delivery thereof or on the third business day
      after the mailing thereof, except that notice of change of address shall
      be effective only upon
receipt.

            

    

     

    
      	
               
      

            	
               (f)

            	
              Withholding. The Company shall be entitled to
      withhold the amount, if any, of all taxes of any applicable jurisdiction
      required to be withheld by an employer with respect to any amount paid to
      Executive hereunder. The Company, in its sole and absolute discretion,
      shall make all determinations as to whether it is obligated to withhold
      any taxes hereunder and the amount
  hereof.

            

    

     

    
      	
               
      

            	
               (g)

            	
              Release
      of Claims. The
      termination benefits described in Sections 8(d) and 8(e) of this Agreement
      shall be conditioned on Executive delivering to the Company, a signed
      release of claims in the form of Exhibit B hereto within forty-five (45)
      days or twenty-one (21) days, as may be applicable under the Age
      Discrimination in Employment Act of 1967, as amended by the Older Workers
      Benefit Protection Act, following Executive’s termination date, and not
      revoking Executive’s consent to such release of claims within seven (7)
      days of such execution; provided, however, that Executive shall not be
      required to release any rights Executive may have to be indemnified by the
      Company under Section 16(c) of this Agreement or under any other indemnification
      agreement entered
      into between Executive and the
Company.

            

    

     

    
      	
               
      

            	
               (h)

            	
              Modification. No provision of this Agreement
      may be modified, waived or discharged unless such waiver, modification or
      discharge is agreed to in writing and signed by Executive and the Company.
      No waiver by either party hereto at any time of any breach by the other
      party hereto of, or compliance with, any condition or provision of this
      Agreement to be performed by such other party shall be deemed a waiver of
      similar or dissimilar provisions or conditions at the same or at any prior
      or subsequent time. No agreement or representations, oral or otherwise,
      express or implied, with respect to the subject matter hereof have been
      made by either party which are not expressly set forth in this
      Agreement.

            

    

     

    
      	
               
      

            	
               (i)

            	
              Effect
      of Other Law.
      Anything herein to the contrary notwithstanding, the terms of this
      Agreement shall be modified to the extent required to meet the provisions
      of the Sarbanes-Oxley Act of 2002, or other federal law applicable to the
      employment arrangements between Executive and the Company. Any delay in
      providing benefits or payments, any failure to provide a benefit or
      payment, or

            

    

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    
       

      
        	
                 
      

              	
                 

              	any
      repayment of compensation that is required under the preceding sentence
      shall not in and of itself constitute a breach of this Agreement,
      provided, however,that the Company shall provide economically equivalent
      payments or benefits to Executive to the extent permitted by
  law.

      

    

     

    
      	
               
      

            	
               (j)

            	
              Governing
      Law. This Agreement
      shall be governed by and construed and enforced in accordance with the
      laws of the State of Delaware applicable to contracts executed
      in and to be performed entirely within such State, without giving effect
      to the conflict of law principles
  thereof.

            

    

     

    
      	
               
      

            	
               (k)

            	
              No
      Conflicts.  Executive represents and warrants
      to the Company that
      Executive is not a
      party to or otherwise bound by any agreement or arrangement
      (including, without limitation, any license,
      covenant, or commitment of any nature), or subject to any judgment, decree,
      or order of any court or administrative agency, that would conflict with or will
      be in conflict with or in any way preclude, limit or inhibit
      Executive’s ability to execute this
      Agreement or to carry out Executive’s duties and responsibilities
      hereunder.

            

    

     

    
      	
               
      

            	
               (l)

            	
              Inconsistencies.  In the event of any inconsistency
      between any provision of this Agreement and any provision of any employee
      handbook, personnel manual, program, policy, or arrangement of the Company
      or its affiliates
      (including, without
      limitation, any provisions relating to notice requirements and
      post-employment restrictions), the provisions of this Agreement shall
      control, unless Executive otherwise agrees in a writing that expressly
      refers to the provision of this Agreement whose control he is
      waiving.

            

    

     

    
      	
               
      

            	
               (m)

            	
              Beneficiaries/References.  In the event of
      Executive’s death or a judicial determination of his incompetence,
      references in this Agreement to Executive shall be deemed, where
      appropriate, to refer to his beneficiary, estate or other legal
      representative.

            

    

     

    
      	
               
      

            	
               (n)

            	
              Survivorship.  Except as otherwise
      set forth in this Agreement, the respective rights and obligations of the
      parties hereunder shall survive the Employment Term and any termination of
      the Executive’s employment.

            

    

     

    
      	
               
      

            	
               (o)

            	
              Severability. The provisions of this Agreement
      shall be deemed severable and the invalidity or unenforceability of any
      provision shall not affect the validity or enforceability of the other
      provisions hereof.

            

    

     

    
      	
               
      

            	
               (p)

            	
              Entire
      Agreement. This
      Agreement constitutes the entire agreement between the parties hereto and
      supersedes all prior agreements, if any, understandings and arrangements,
      oral or written, between the parties hereto with respect to the subject
      matter hereof.

            

    

     

    
      	
               
      

            	
               (q)

            	
              Counterparts.  This Agreement may be
      executed in one or more counterparts, each of which will be deemed to be
      an original copy of this Agreement and all of which, when taken together,
      will be deemed to constitute one and the same
      agreement.

            

    

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer and Executive has executed this Agreement as of the day
and year first above written.

     

     

    
      
        
          	 
      	
                  ENDO
      PHARMACEUTICALS HOLDINGS INC.

                
	 
      	 
      
	 
      	 
      
	 
      	
                  By:

                	
                  /s/
      David P.
      Holveck                        
      

                
	 
      	
                  Name: 
      

                	
                  David
      P. Holveck

                
	 
      	
                  Title:

                	
                  President
      and CEO

                
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
                  By: 
      

                	
                  /s/
      Alan G.
      Levin                              
      

                
	 
      	 
      	
                  Name: 
      

                	
                  Alan
      G. Levin

                

        

      

    

    

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    EXHIBIT
A

    

    [Form
of Initial Option Agreement]

    

    Grant
No.

    

    ENDO
PHARMACEUTICALS HOLDINGS INC.

    STOCK
OPTION AGREEMENT

    

     

    This
Stock Option Agreement (the “Option Agreement”) is made and entered into as of
the date of grant set forth below (the “Date of Grant”) by and between Endo
Pharmaceutical Holdings Inc., a Delaware corporation (the “Company”), and the
optionee named below (the “Optionee”).  Capitalized terms not defined
herein shall have the meaning ascribed to them in the Company’s 2007 Stock
Incentive Plan (the “Plan”).

    

    
      	
              Name
      of Optionee:

            	
              Alan
      G. Levin

            
	 
      	 
      
	
              Social
      Security No.:

            	 
      
	 
      	 
      
	
              Address:

            	
              100
      Endo Boulevard

            
	 
      	
              Chadds
      Ford, PA 19317

            
	 
      	 
      
	
              Shares
      Subject to Option:  

            	
              80,000

            
	 
      	 
      
	
              Exercise
      Price Per Share:

            	
              $
      [closing price on first date of employment]

            
	 
      	 
      
	
              Date
      of Grant:

            	
              June
      1, 2009

            
	 
      	 
      
	
              Expiration
      Date:

            	
              June
      1, 2019

            
	 
      	 
      
	
              Vesting
      Dates:

            	
              25%
      of the Option Shares on first anniversary of Date of
  Grant

            
	 
      	
              25%
      of the Option Shares on second anniversary of Date of
  Grant

            
	 
      	
              25%
      of the Option Shares on third anniversary of Date of
  Grant

            
	 
      	
              25%
      of the Option Shares on fourth anniversary of Date of
  Grant

            
	 
      	 
      
	
              Classification
      of Option

            	 
      
	
              (Check
      one):

            	
              [√]

            	
              Incentive
      Stock Option

            
	 
      	
              [    ]

            	
              Non-Qualified
      Stock Option

            

    

    

     

    1.        Number of
Shares.  The Company hereby grants to the Grantee an option
(the “Option”) to purchase the total number of shares of Company Stock set forth
above as Shares Subject to Option (the “Option Shares”) at the Exercise Price
Per Share set forth above (the “Exercise Price”), subject to all of the terms
and conditions of this Option Agreement and the Plan.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2.        Incorporation of
Plan.  The Options shall be granted outside of the Plan but
shall be deemed and treated for all purposes as though granted thereunder and
shall be subject to all of the terms and conditions of this Option Agreement and
the Plan.

     

    3.        Option
Term.  The term of the Option and of this Option Agreement (the
“Option Term”) shall commence on the Date of Grant set forth above and, unless
previously terminated pursuant to Section 7 of the Plan or Paragraph 4 of this
Option Agreement, shall terminate upon the Expiration Date set forth
above.  As of the Expiration Date, all rights of the Optionee
hereunder shall terminate.

     

    4.        Vesting.  Except
as provided in Section 7 of the Plan or in an employment agreement with the
Optionee, the Option shall become exercisable with respect to the number of
Option Shares specified on the Exercisability Dates set forth
above.  Once exercisable, the Option shall continue to be exercisable
at any time or times prior to the Expiration Date, subject to the provisions
hereof and of the Plan.

     

    5.        Authority of the
Committee.  The Committee shall have full authority to
interpret and construe the terms of the Plan and this Option
Agreement.  The determination of the Committee as to any such matter
of interpretation or construction shall be final, binding and
conclusive.

     

    6.        Notices.  All
notices and other communications under this 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
      Pharmaceuticals Holdings Inc.

            
	 
      	 
      	
              100
      Endo Boulevard

            
	 
      	 
      	
              Chadds
      Ford, PA 19317

            
	 
      	 
      	
              Attention:
      Treasurer

            
	 
      	 
      	 
      
	 
      	
              If
      to the Optionee:  

            	
              At
      the most recent address on file at the
Company.

            

    

    

     

    Either
party hereto may change such party’s address for notices by notice duly given
pursuant hereto.

     

    7.        Amendments.  This
Option Agreement may be amended or modified at any time only by an instrument in
writing signed by each of the parties hereto.

     

    8.        Governing
Law.  This Option Agreement shall be governed by and construed
according to the laws of the State of Delaware without regard to its principles
of conflict of laws.

     

    9.        Acceptance.  The
Optionee hereby acknowledges receipt of a copy of the Plan and this Option
Agreement.  The Optionee has read and understand the terms and
provision thereof, and accepts the Option subject to all the terms and
conditions of the Plan and this Agreement.

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Option
Agreement on the day and year first above written.

    

    

    
      	 
      	
              ENDO
      PHARMACEUTICALS HOLDINGS INC.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By

            	 
      
	 
      	
              Name:

            	 
      
	 
      	
              Title:

            	 
      

    

    

    

                              

    Alan
G. Levin, Optionee

    

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    EXHIBIT
B

    

    [Form
of Initial RSU Agreement]

    

    

    ENDO
PHARMACEUTICALS HOLDINGS INC.

    ENDOCENTIVE
STOCK AWARD AGREEMENT

     

    

    This
Endocentive Stock 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 Pharmaceuticals Holdings Inc., a Delaware corporation (the
“Company”), and the participant named below (the
“Participant”).  Capitalized terms not defined herein shall have the
meanings ascribed to them in the Endo Pharmaceuticals Holdings Inc. 2007 Stock
Incentive Plan (the
“Plan”).  Where the context permits, references to the Company shall
include any successor to the Company.

    

    Name
of Participant:  Alan G. Levin

    

    Social
Security No.:

    

    
      	
              Address:

            	
              c/o
      Endo Pharmaceuticals

            
	 
      	
              100
      Endo Boulevard

            
	 
      	
              Chadds
      Ford, PA 19317

            

    

    

    Number
of Endocentive Stock Awards:  43,500

    

    Date
of Grant:  June 1, 2009

    

    Vesting
Dates:

    

    25%
of the Endocentive Stock Awards on first anniversary of Date of
Grant

    25%
of the Endocentive Stock Awards on second anniversary of Date of
Grant

    25%
of the Endocentive Stock Awards on third anniversary of Date of
Grant

    25%
of the Endocentive Stock Awards on fourth anniversary of Date of
Grant

    

    1.         Grant of Endocentive Stock
Awards.  The Company hereby grants to the Participant the total
number of “Endocentive” restricted stock units set forth above (the “Endocentive
Stock Awards”).  The Endocentive Stock Awards shall be granted outside
of the Plan but shall be deemed and treated for all purposes as though granted
thereunder and shall be subject to all of the terms and conditions of this Award
Agreement and the Plan.

    

    2.         Form of Payment and
Vesting.  Each Endocentive Stock Award granted hereunder shall
represent the right to receive (1) one share of Company Stock as of the date of
vesting.  Except as
provided in Section 7 of the Plan or Paragraph 4 of this Award
Agreement, such vesting shall occur on the vesting dates set forth above
provided that the Participant is

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    employed
by the Company on the applicable vesting date.  Upon vesting of
Endocentive Stock Awards, the shares vesting on the vesting date shall be
delivered to the Participant (fully registered and listed for trading) as soon
as practicable thereafter, but in no event later than the end of the taxable
year in which such vesting occurs or, if later, by the fifteenth (15th) day of
the third calendar month following the vesting date.

    

    3.         Restrictions.  The
Endocentive Stock Awards 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 and until any additional 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 Employment
Services; Disability

    

    (a)   Termination of Employment
For Cause.  Upon a Participant’s termination of employment with
the Company and its Subsidiaries for Cause all of the Participant’s unvested
Endocentive Stock Awards shall be forfeited as of such date.

    

    (b)  Termination of Employment On
Account of Death.  Upon termination of a Participant’s
employment on account of death, all of the Participant’s unvested Endocentive
Stock Awards shall vest immediately.

    

    (c)  Termination of Employment On
Account of Voluntary Retirement with Consent of Company.  If
the Participant voluntarily Retires with the consent of the Company, all of the
Participant’s unvested Endocentive Stock Awards as of date of termination shall
continue to vest in accordance with the original vesting schedule set forth in
Section 2 of this Award Agreement.

    

    (d)  Termination of Employment
For Any Other Reason.  Unless otherwise provided in an
individual agreement with the Participant, if the Participant has a termination
of employment for any reason other than the reasons enumerated in paragraphs (a)
through (d) above, Endocentive Stock Awards that are unvested as of the date of
termination shall be forfeited.

    

    (e)  Disability.  If
the Participant incurs a Disability that also constitutes a "disability" within
the meaning of Section 409A, all of the Participant’s unvested Endocentive Stock
Awards as of the date of such Disability shall continue to vest in accordance
with the original four (4) year vesting schedule set forth in Section 2 of this
Award Agreement regardless of any subsequent termination of
employment.

    

    5.         No Shareholder Rights Prior
to Vesting.  The Participant shall have no rights of a
shareholder (including the right to distributions or dividends) until shares of
Company Stock are issued pursuant to the terms of this Award
Agreement.

    

    6.         Endocentive Stock Award
(RSU) Agreement Subject to Plan.  This Award Agreement is made
subject to all of the same terms as are contained in the Plan, and is intended,
and shall

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    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.

    

    7.         No Rights to Continuation of
Employment.  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 employment at any time for any reason
whatsoever, with or without cause.

    

    8.         Tax
Withholding.  The Company shall be entitled to require a cash
payment by or on behalf of the Participant and/or to deduct from Endocentive
Stock Awards granted hereunder or 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 any Endocentive Stock Award.

    

    9.         Section 409A
Compliance.  The intent of the parties is that payments and
benefits under this Agreement comply with Section 409A of the Code to the extent
subject thereto, and, accordingly, to the maximum extent permitted, this
Agreement shall be interpreted and be administered to be in compliance
therewith.  Notwithstanding anything contained herein to the contrary,
to the extent required in order to avoid accelerated taxation and/or tax
penalties under Section 409A of the Code, the Participant shall not be
considered to have terminated employment with the Company for purposes of this
Agreement and no payment shall be due to the Participant under this Agreement
until the Participant would be considered to have incurred a “separation from
service” from the Company within the meaning of Section 409A of the
Code.  Any payments described in this Agreement or the Plan that are
due within the “short term deferral period” as defined in Section 409A of the
Code shall not be treated as deferred compensation unless applicable law
requires otherwise.  Notwithstanding anything to the contrary in this
Agreement or the Plan, to the extent that any Endocentive Stock Awards are
payable upon a separation from service and such payment would result in the
imposition of any individual excise tax and late interest charges imposed under
Section 409A of the Code, the settlement and payment of such awards shall
instead be made on the first business day after the date that is six (6) months
following such separation from service (or death, if earlier).

    

    10.       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 choices of laws, of the State of Delaware
applicable to agreements made and to be performed wholly within the State
of Delaware.

    

    11.       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.

    

    12.       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.

    

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    13.       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.

    

    14.       Entire Endocentive Stock
Award (RSU) Agreement.  This Award Agreement and the Plan
contain the entire agreement and understanding among the parties as to the
subject matter hereof.

    

    15.       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
Section.

    

    16.       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.

    

    17.       Notices.  All notices and other
communications under this
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 Pharmaceuticals Holdings
      Inc.

                
	 
      	 
      	
                  100 Endo
      Boulevard

                
	 
      	 
      	
                  Chadds Ford, PA 19317

                
	 
      	 
      	
                  Attention:
      Treasurer

                
	 
      	 
      	 
      
	 
      	
                  If to the Participant:  

                	
                  At the most recent address on file
      at the
Company.

                

        

      

    Either party hereto may
change such party’s address
for notices by notice duly given pursuant hereto.

    

    18.      
Amendment.  No
amendment or modification hereof shall be valid unless it shall be in writing
and signed by all parties hereto.

    

    19.       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 Endocentive Stock Awards subject to all the terms and conditions
of the Plan and this Award Agreement.

    

    [SIGNATURE
PAGE FOLLOWS]

    

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

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

    

    ENDO
PHARMACEUTICALS HOLDINGS INC.

     

    By                                             

    Name:
David P. Holveck

    Title:
Chief Executive Officer

     

    
 

    PARTICIPANT

    

    Signature                                      

     

    Print
Name: Alan G. Levin

    

    

    

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    EXHIBIT
C

    

    FORM
OF RELEASE AGREEMENT

    

    THIS
RELEASE AGREEMENT (the “Release”) is made as of this ____ day of _________,
____, by and between Alan G. Levin (“Executive”) and Endo Pharmaceuticals
Holdings Inc. (the “Company”).

    

    
      	
              1.

            	
              FOR
      AND IN CONSIDERATION of the payments and benefits provided in the
      Employment Agreement between Executive and the Company dated as of ______
      __, 2009, (the “Employment Agreement”), Executive, for himself or herself,
      his or her successors and assigns, executors and administrators, now and
      forever hereby releases and discharges the Company, together with all of
      its past and present parents, subsidiaries, and affiliates, together with
      each of their officers, directors, stockholders, partners, employees,
      agents, representatives and attorneys, and each of their subsidiaries,
      affiliates, estates, predecessors, successors, and assigns (hereinafter
      collectively referred to as the “Releasees”)
      from any and all rights, claims, charges, actions, causes of action,
      complaints, sums of money, suits, debts, covenants, contracts, agreements,
      promises, obligations, damages, demands or liabilities of every kind
      whatsoever, in law or in equity, whether known or unknown, suspected or
      unsuspected, which Executive or Executive’s executors, administrators,
      successors or assigns ever had, now has or may hereafter claim to have by
      reason of any matter, cause or thing whatsoever; arising from the
      beginning of time up to the date of the Release: (i) relating in any way
      to Executive’s employment relationship with the Company or any of the
      Releasees, or the termination of Executive’s employment relationship with
      the Company or any of the Releasees; (ii) arising under or relating to the
      Employment Agreement; (iii) arising under any federal, local or state
      statute or regulation, including, without limitation, the Age
      Discrimination in Employment Act of 1967, as amended by the Older Workers
      Benefit Protection Act, Title VII of the Civil Rights Act of 1964, the
      Americans with Disabilities Act of 1990, the Employee Retirement Income
      Security Act of 1974, and/or the applicable state law against
      discrimination, each as amended; (iv) relating to wrongful employment
      termination or breach of contract; or (v) arising under or relating to any
      policy, agreement, understanding or promise, written or oral, formal or
      informal, between the Company and any of the Releasees and Executive;
      provided,
      however,
      that notwithstanding the foregoing, nothing contained in the Release shall
      in any way diminish or impair:  (a) any rights Executive may
      have, from and after the date the Release is executed; (b) any rights to
      indemnification that may exist from time to time under the Company’s
      certificate of incorporation or bylaws, or state law or under any other
      indemnification agreement entered into between Executive and the Company;
      (c) any rights Executive may have that arise under (or that are preserved
      by) the Employment Agreement; (d) Executive’s ability to bring appropriate
      proceedings to enforce the Release; (e) any rights or claims Executive may
      have that cannot be waived under applicable law; (f) any claim against any
      Releasee that brings a claim against Executive (collectively, the “Excluded
      Claims”).  Executive further acknowledges and agrees
      that, except with respect to Excluded Claims, the Company and the
      Releasees have fully satisfied any and all obligations whatsoever owed to
      Executive arising out of Executive’s

            

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      
        	
                 

              	employment
      with the Company or any of the Releasees, and that no further payments or
      benefits are owed to Executive by the Company or any of the
      Releasees.

      

       

    

    
      	
              2.

            	
              Executive
      understands and agrees that, except for the Excluded Claims, Executive has
      knowingly relinquished, waived and forever released any and all rights to
      any personal recovery in any action or proceeding that may be commenced on
      Executive’s behalf arising out of the aforesaid employment relationship or
      the termination thereof, including, without limitation, claims for
      backpay, front pay, liquidated damages, compensatory damages, general
      damages, special damages, punitive damages, exemplary damages, costs,
      expenses and attorneys’ fees.

            

    

    

    
      	
              3.

            	
              Executive
      acknowledges and agrees that Executive has been advised to consult with an
      attorney of Executive’s choosing prior to signing the
      Release.  Executive understands and agrees that Executive has
      the right and has been given the opportunity to review the Release with an
      attorney of Executive’s choice should Executive so
      desire.  Executive also agrees that Executive has entered into
      the Release freely and voluntarily. Executive further acknowledges and
      agrees that Executive has had at least [twenty-one (21)] [forty-five (45)]
      calendar days to consider the Release, although Executive may sign it
      sooner if Executive wishes.  In addition, once Executive has
      signed the Release, Executive shall have seven (7) additional days from
      the date of execution to revoke Executive’s consent and may do so by
      writing to:  ___________.  The Release shall not be
      effective, and no payments shall be due hereunder, until the eighth (8th)
      day after Executive shall have executed the Release and returned it to the
      Company, assuming that Executive had not revoked Executive’s consent to
      the Release prior to such date.

            

    

    

    
      	
              4.

            	
              It
      is understood and agreed by Executive that the payment made to Executive
      is not to be construed as an admission of any liability whatsoever on the
      part of the Company or any of the other Releasees, by whom liability is
      expressly denied.

            

    

    

    
      	
              5.

            	
              The
      Release is executed by Executive voluntarily and is not based upon any
      representations or statements of any kind made by the Company or any of
      the other Releasees as to the merits, legal liabilities or value of
      Executive’s claims.  Executive further acknowledges that
      Executive has had a full and reasonable opportunity to consider the
      Release and that Executive has not been pressured or in any way coerced
      into executing the Release.

            

    

    

    
      	
              6.

            	
              The
      exclusive venue for any disputes arising hereunder shall be the state or
      federal courts located in the State of Delaware, and each of the parties
      hereto irrevocably waives, to the fullest extent permitted by law, any
      objection which it may now or hereafter have to the laying of the venue of
      any such proceeding brought in such a court and any claim that any such
      proceeding brought in such a court has been brought in an inconvenient
      forum.  Each of the parties hereto also agrees that any final
      and unappealable judgment against a party hereto in connection with any
      action, suit or other proceeding may be enforced in any court of competent
      jurisdiction, either within or outside of the United States.  A
      certified or exemplified copy of such award or judgment shall be
      conclusive evidence of the fact and amount of such award or
      judgment.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
 

    
      	
              7.

            	
              The
      Release and the rights and obligations of the parties hereto shall be
      governed and construed in accordance with the laws of the State of
      Delaware.  If any provision hereof is unenforceable or is held
      to be unenforceable, such provision shall be fully severable, and this
      document and its terms shall be construed and enforced as if such
      unenforceable provision had never comprised a part hereof, the remaining
      provisions hereof shall remain in full force and effect, and the court
      construing the provisions shall add as a part hereof a provision as
      similar in terms and effect to such unenforceable provision as may be
      enforceable, in lieu of the unenforceable
  provision.

            

    

    

    
      	
              8.

            	
              The
      Release shall inure to the benefit of and be binding upon the Company and
      its successors and assigns.

            

    

    

    

    IN
WITNESS WHEREOF, Executive and the Company have executed the Release as of the
date and year first written above.

    

    

    
      
        
          	 
      	 
      	 
	
                  ENDO
      PHARMACEUTICALS

                	 
      	
                  ALAN
      G. LEVIN

                
	
                  HOLDINGS
      INC

                	 
      	 
      

        

      

    

    

    3Exhibit 10.1

Exhibit 10.1

Summary

Management Bonus Program

We believe providing a competitive Total Compensation Program to our employees is essential to
attract and retain top talent. One component of our Total Compensation Program is the Management
Bonus Program.

Program Goals:

	 	•	 	To motivate management to achieve and exceed goals and objectives

	 	•	 	To drive expanded team alignment and effort

	 	•	 	To meaningfully and appropriately differentiate and reward individual performance

	 	•	 	To provide a market completive short-term incentive compensation program

Program Components:

There are three components of the Management Bonus Program.

	1.	 	Corporate Multiplier — Upon completion of the year, the Board of Directors will make
an evaluation as to how the organization performed against its annual Corporate Goals. Based
upon the Board’s determination of the Company’s performance, a “Corporate Multiplier” will be
established. This Multiplier may range from 0% — 150%.

	2.	 	Bonus Targets by Level — Employees are eligible for a target percentage of base
salary dependent upon level in the organization.

	 	 	 	 	 
	Position	 	% of base at Target	 
	Chiefs
	 	 	40	%
	SVP/VPs
	 	 	30	%
	Sr. Directors/Directors
	 	 	20	%
	Associate Directors/

Principal Scientists
	 	 	15	%

	 	•	 	If an employee is promoted to a new level during the course of the year, he/she
will be eligible for the new target for the prorated portion of the year and the old
target for the portion of the year he/she was at the previous level.

	 	•	 	Employees who were hired between April 1, and September 30, of a year, are eligible
for a prorated bonus based upon date of hire.

Effective 1/1/09

 

 

 

	 	•	 	Employees who were hired between October 1, and December 31, of a year are not
eligible for a Management Bonus.

	 	•	 	Employees must be actively employed on the date the bonus is paid to receive their
bonus.

	3.	 	Individual Multiplier — Dependent upon year end performance ratings, employees will
be eligible for a bonus payout percentage of target that range as follows:

	 	 	 	 	 
	Performance Rating	 	Recommended Bonus Payout	 
	Exceptional
	 	120% + of target
	Exceeds Objectives
	 	105-120% of target
	Solid Performer
	 	80 - 105% of target
	Improvement Needed
	 	0-50% of target
	Unsatisfactory
	 	0% of target

	4. 	 	Calculation of Bonus — An employee’s bonus under this plan will be calculated
according to the following formula: Base Salary x Bonus Target Level x Corporate Multiplier x
Individual Multiplier.

	5. 	 	Payment of Bonus — Bonus payments will be made by the end of February each year and
employees must be employed on the pay out date to receive a bonus.

Effective 1/1/09

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