UNITED STATES SECURITYSECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF

THE SECURITIES EXCHANGE ACT OF 1934

(AMENDMENT NO.     )

 

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material Pursuant to Section 240.14a-12

 

  Endo International plc

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LOGO

 

 

 20162018   

Notice of the

20162018 Annual

General Meeting

of Shareholders

and Proxy Statement

 

 

 

 

 

 

June 9, 20167, 2018 at 8:00 a.m. local time

Endo International plc

First Floor Minerva House Simmonscourt Road Ballsbridge Dublin 4 Ireland

endo.com


LOGO

Endo International plc

First Floor

Minerva House

Simmonscourt Road

Ballsbridge

Dublin 4, Ireland

endo.com

LOGO

Endo International plc is a highly focused generics
and specialty branded pharmaceutical company,
delivering quality medicines to patients through
excellence in development, manufacturing and
commercialization.

Dear Fellow Endo International plc Shareholder:

It is my pleasure to invite you to the Annual General Meeting of Shareholders (the Annual Meeting) of Endo International plc (the Company), which will be held on June 7, 2018 at 8:00 a.m., local time, at First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland.

At the meeting, we will be voting:

(1)

To elect, by separate resolutions, eight members to our Board of Directors to serve until the next Annual General Meeting of Shareholders;

(2)

To approve the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2018 and to authorize the Board of Directors, acting through the Audit Committee, to determine the independent registered public accounting firm’s remuneration;

(3)

To approve, on an advisory basis, the compensation of our named executive officers(say-on-pay);

(4)

To approve the Endo International plc Amended and Restated 2015 Stock Incentive Plan;

(5)

To renew the Board’s existing authority to issue shares under Irish law;

(6)

To renew the Board’s existing authority toopt-out of statutorypre-emption rights under Irish law; and

(7)

To act upon such other matters as may properly come before the Annual Meeting or any adjournment or postponement thereof.

During the Annual Meeting, we will also review the Company’s 2017 Irish statutory financial statements. In addition to these formal items of business, we will report on the Company’s performance.

We look forward to seeing you at the Annual Meeting should you be able to attend.

Your vote is important. Whether you plan to attend the Annual Meeting or not, we encourage you to read this Proxy Statement and vote your shares. Please vote by promptly completing and returning your proxy by internet, by mail or by attending the Annual Meeting and voting in person by ballot. You may revoke your proxy at any time before it is exercised as explained in this Proxy Statement.

Thank you for your continued interest in Endo.

Very truly yours,

LOGO

PAUL V. CAMPANELLI

President, Chief Executive Officer and Director

Dublin, Ireland

April 27, 2018

Endo International plc

Registered Office: First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland

Registered in Ireland: Number—534814

Directors: Roger Hartley Kimmel (USA), Paul Victor Campanelli (USA), Shane  Martin Cooke (Ireland), Nancy June Hutson (USA), Michael Hyatt (USA), Sharad Sunder Mansukani (USA),

William Patrick Montague (USA),

Todd Benjamin Sisitsky (USA), Jill Deborah Smith (USA).


 

LOGO

      

Endo International plc

 

First Floor

 

Minerva House

 

Simmonscourt Road

 

Ballsbridge

 

Dublin 4, Ireland

 

endo.com

 

 

LOGO  

Endo International plc is a global specialty pharmaceutical company focused on improving

the lives of patients while creating value.

Dear Fellow Endo International plc Shareholder:

It is my pleasure to invite you to the Annual General Meeting of Shareholders of Endo International plc (the Company), which will be held on June 9, 2016 at 8:00 a.m., local time, at First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland.

At the meeting, we will be electing by separate resolutions nine members of our Board of Directors, voting to approve the selection of PricewaterhouseCoopers LLP as our independent auditor and to authorize the Audit Committee of the Board of Directors to determine the auditors’ remuneration, conducting an advisory vote on the compensation of our named executive officers, voting to approve the amendment of the Company’s Memorandum of Association, voting to approve the amendment of the Company’s Articles of Association and voting to approve the amendment of the Company’s 2015 Stock Incentive Plan. During the Annual General Meeting, we will also review the Company’s 2015 Irish statutory financial statements. In addition to these formal items of business, we will report on our Company’s performance.

We look forward to seeing you at the Annual General Meeting should you be able to attend.

Your vote is important. Whether you plan to attend the meeting or not, we encourage you to read this Proxy Statement and vote your shares. Please vote by promptly completing and returning your proxy by internet, by mail or by attending the Annual General Meeting and voting in person by ballot. You may revoke your proxy at any time before it is exercised as explained in this Proxy Statement.

Thank you for your continued interest in Endo.

Very truly yours,

LOGO

RAJIV DE SILVA

President and Chief Executive Officer

Dublin, Ireland

April 28, 2016

Endo International plc,

Registered Office: First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland

Registered in Ireland: number—534814

Directors: Roger Hartley Kimmel (USA), Rajiv Kanishka Liyanaarchchie De Silva (USA), Shane Martin Cooke (Ireland),

Arthur Joseph Higgins (USA), Nancy June Hutson (USA), Michael Hyatt (USA), William Patrick Montague (USA),

Jill Deborah Smith (USA), William Frederick Spengler (USA).


LOGO

Endo International plc

First Floor

Minerva House

Simmonscourt Road

Ballsbridge

Dublin 4, Ireland

endo.com

LOGOLOGO

TO BE HELD ON JUNE 9, 20167, 2018

8:00 a.m., Local Time

First Floor, Minerva House,

Simmonscourt Road, Ballsbridge, Dublin 4, Ireland

Notice is hereby given that the 20162018 Annual General Meeting of Shareholders (the Annual Meeting) of Endo International plc, an Irish public limited company, will be held on June 9, 20167, 2018 at 8:00 a.m., local time, at First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland.

The purposes of the meeting are:

 

(1)

To elect, by separate resolutions, nine directors, representing all of theeight members of theto our Board of Directors of the Company, to serve until the next Annual Meeting;General Meeting of Shareholders;

 

(2)

To approve the appointmentselection of PricewaterhouseCoopers LLP as the Company’sour independent auditorsregistered public accounting firm for the year ending December 31, 20162018 and to authorize the Audit Committee of the Board of Directors, acting through the Audit Committee, to determine the auditors’independent registered public accounting firm’s remuneration;

 

(3)

To conductapprove, on an advisory vote onbasis, the compensation of our named executive officers;officers(say-on-pay);

 

(4)

To approve the amendment of the Company’s Memorandum of Association;Endo International plc Amended and Restated 2015 Stock Incentive Plan;

 

(5)

To approverenew the amendment of the Company’s Articles of Association;Board’s existing authority to issue shares under Irish law;

 

(6)

To approverenew the amendmentBoard’s existing authority toopt-out of the Company’s 2015 Stock Incentive Plan;statutorypre-emption rights under Irish law; and

 

(7)

To act upon such other matters as may properly come before the Annual Meeting or any adjournment or postponement thereof.

These proposals, other than proposals (4) and (5),Proposals 1 through 5 are ordinary resolutions requiring the approval of a simple majority of the votes cast at the meeting. Proposals (4) and (5) areAnnual Meeting. Proposal 6 is a special resolutionsresolution requiring the approval of not less than 75% of the votes cast at the meeting.Annual Meeting. All proposals are more fully described in this proxy statement.Proxy Statement.

The Company’s Irish statutory financial statements for the fiscal year ended December 31, 2015,2017, including the reports of the directors and auditors thereon, will be presented at the Annual Meeting. There is no requirement under Irish law that such statements be approved by the shareholders, and no such approval will be sought at the Annual Meeting. The Annual Meeting also will also include a review by the members of the Company’s affairs.

Only shareholders of record at the close of business on April 14, 201613, 2018 are entitled to notice of and to vote at the 20162018 Annual Meeting and any adjournment thereof.

This year, we have elected to furnish proxy materials to our shareholders electronically so that we can both provide our shareholders with the information they need and also reduce our costs of printing and delivery and the environmental impact of our Annual Meeting.

It is important that your shares be represented and voted at the Annual Meeting. Please vote by promptly completing and returning your proxy by internet, by mail or by attending the Annual Meeting and voting in person by ballot, so that


whether you intend to be present at the Annual Meeting or not, your shares can be voted. Returning your proxy will not limit your rights to attend or vote at the Annual Meeting.


If you are a shareholder who is entitled to attend and vote, then you are entitled to appoint a proxy or proxies to attend and vote on your behalf. A proxy is not required to be a shareholder in the Company. If you wish to appoint as proxy any person other than the individuals specified on the proxy card, please specify the name(s) and addressaddress(es) of such person(s) in the proxy card.

In addition to the above notice of the Annual General Meeting, the Board would like to draw your attention to the following notice concerning a proposed change to the Financial Reporting Standards used in the preparation of the financial statements of the ultimate holding company, Endo International plc.

Adoption of New Financial Reporting Standards

The Company prepares its stand-alone parent entity Irish statutory financial statements consistent with Irish generally accepted accounting principles (Irish GAAP). During the year ending December 31, 2015, Endo International plc adopted FRS 102 “The Financial Reporting Standard Applicable in the UK and Republic of Ireland”.

By orderOrder of the Board of Directors,

 

LOGO

Orla Dunlea

Company Secretary

Dublin, Ireland

April 28, 201627, 2018

Endo International plc

Registered Office: First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland

Registered in Ireland: number—Number—534814

Directors: Roger Hartley Kimmel (USA), Rajiv Kanishka Liyanaarchchie De SilvaPaul Victor Campanelli (USA), Shane Martin Cooke (Ireland), Arthur Joseph Higgins (USA),

Nancy June Hutson (USA), Michael Hyatt (USA), Sharad Sunder Mansukani (USA),

William Patrick Montague (USA), Todd Benjamin Sisitsky (USA), Jill Deborah Smith (USA), William Frederick Spengler (USA).


 

LOGO

Proxy Statement for 20162018 Annual General Meeting

of Shareholders

 

 

Table of Contents

 

General Information

   1 

Annual General Meeting Admission

   1 

Shareholders Entitled to Vote

   1 

How to Vote if You Are a Shareholder of Record

   1 

Electronic Access to Investor Information

   2 

General Information on Voting and Required Vote

   2 

Proposal 1: ElectionPresentation of DirectorsIrish Statutory Financial Statements

   3 

Proposal 1: Election of Directors

4
Proposal 2: Approval of Appointment of Independent Registered Public Accounting Firm and Authorization to Determine the Firm’s Remuneration

   1316 

Proposal 3: Advisory Vote on the Compensation of Our Named Executive Officers (“Say-on-Pay Vote”)(Say-on-Pay)

   1518 

Proposal 4: Approval of the Endo International plc Amended Memorandum of Association

17

Proposal 5: Approval of the Amended Articles of Association

17

Proposal 6: Approval of an Amendment to theand Restated 2015 Stock Incentive Plan

   2021 

Proposal 5: Renewal of the Board’s Existing Authority to Issue Shares under Irish Law

28
Proposal 6: Renewal of the Board’s Existing Authority toOpt-Out of StatutoryPre-Emption Rights under Irish Law29
Compensation Discussion and Analysis

   2531 

Compensation of Executive Officers and Directors

   4853 

Other Information Regarding the Company

   5865 

No Dissenters’ Rights

   6067 

Other Matters

   6067 

Annual Report/Form10-K

   6067 

Shareholder Proposals for the 20172019 Annual General Meeting

   6067 

Annex 1

   A-1 

Annex 2

B-1

Annex 3

C-1


Proxy Statement for 2018 Annual General Meeting of Shareholders

 

General Information

We are providing these proxy materials in connection with the solicitation by the Board of Directors of Endo International plc, an Irish public limited company, of proxies to be voted at our 20162018 Annual General Meeting orof Shareholders (the Annual MeetingMeeting) to be held on June 9, 2016,7, 2018, beginning at 8:00 a.m., local time. The Annual Meeting will be held at First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland.

In accordance with the rules of the U.S. Securities and Exchange Commission (SEC), we are furnishing our proxy materials (Proxythe Proxy Statement for Annual Meeting, 20152017 Annual Report to Shareholders, 20152017 Endo International plc Form10-K and 20152017 Irish Statutory Financial Statements)Statements (collectively, the proxy materials) by providing access to these materials electronically on the internet. As such, we are not mailing a printed copy of our proxy materials to each shareholder of record or beneficial owner, and our shareholders will not receive printed copies of the proxy materials unless they request this form of delivery. Printed copies will be provided upon request at no charge.

We are mailing a Notice of Meeting and Internet Availability of Proxy Materials (Notice of Internet Availability) to our shareholders on or about April 28, 2016.27, 2018. This Notice of Internet Availability is being mailed in lieu of mailing the printed proxy materials and contains instructions for our shareholders as toon how they may: (1) access and review our proxy materials on the internet; (2) submit their proxy; and (3) receive printed proxy materials. Shareholders may request to receive printed proxy materials by mail or electronically bye-mail on an ongoing basis by following the instructions in the Notice of Internet Availability. We believe that providing future proxy materials electronically will enable us to save costs associated with printing and delivering the materials and reduce the environmental impact of our annual meetings. A request to receive proxy materials in printed form by mail or bye-mail will remain in effect until such time as the shareholder elects to terminate it.

Unless otherwise indicated or the context otherwise requires, references in this proxy statement to “Endo,” “the Company,the “Company,” “we,” “us,”“us” and “our” refer to Endo International plc and its consolidated subsidiaries.

 

 

Annual General Meeting Admission

Shareholders must present a form of personal identification in order to be admitted to the Annual Meeting. For directions to the Annual Meeting, visitwww.endo.com/about-us/locations.locations.

No cameras, recording equipment or electronic devices will be permitted in the Annual Meeting.

 

 

Shareholders Entitled to Vote

Holders of ordinary shares at the close of business on April 14, 201613, 2018 (the record date), are entitled to receive this notice and to vote their shares at the Annual Meeting. As of that date, there were 222,660,743223,786,744 issued ordinary shares of Endo entitled to vote.

Each ordinary share is entitled to one vote on each matter properly brought before the Annual Meeting. Your proxy indicates the number of votes you have.

 

 

How to Vote if You Are a Shareholder of Record

 

Your vote is important. Shareholders of record can vote by internet, by mail or by attending the Annual Meeting and voting in person by ballot as described below.

Vote by Internet

If you choose to vote by internet, visitwww.proxyvote.com, enter the control number found on the Notice of Internet Availability and follow the steps outlined on the secure website.

Vote by Mail

You can vote by mail by requesting a paper copy of the materials, which will include a proxy card. If you choose to vote by mail, simply complete your proxy card, date and sign it, and return it in the postage-paid envelope provided.

Deadline for Voting by Internet or by Mail

If you are a shareholder of record, you may vote by internet or by telephone until 11:59 PM U.S. Eastern Time on June 6, 2018.

If you are a beneficial owner of shares held through a bank or brokerage firm, please follow the voting instructions provided by your bank or brokerage firm.

1


Vote at the Annual Meeting

Voting by internet or mail will not limit your right to vote at the Annual Meeting if you decide to attend in person. If your shares are held in the name of a bank, broker or other holder of record, you must obtain a proxy, executed in your favor, from the holder of record to be able to vote at the Annual Meeting.

All shares that have been properly voted and not revoked will be voted at the Annual Meeting. If you execute your proxy but do not give voting instructions, the ordinary shares represented by that proxy will be voted FOR each ofas described below under the nominees for election as director, FOR the approval of the appointment of PricewaterhouseCoopers as the Company’s independent auditors for the year ending December 31, 2016section entitled “General Information on Voting and to authorize the Audit Committee of the Board of Directors to determine the auditors’ remuneration, FOR the approval, on an advisory basis, of the compensation to be paid to Endo’s named executive officers, FOR the approval of the amendment of the Company’s Memorandum of Association, FOR the approval of the amendment of the Company’s Articles of Association and FOR the approval of the amendment of the Company’s 2015 Stock Incentive Plan.

Required Vote.”

 

1


 

Electronic Access to Investor Information

 

 

Endo’s Proxy Statement and other investor information are available on ourthe Company’s website atwww.endo.com, under “Investors”.“Investors / Media.” You can also access the Investor page of our website by scanning the QR code to the right with your smartphone.

 

LOGO

 

 

General Information on Voting and Required Vote

You are entitled to cast one vote for each ordinary share of Endo you own on the record date. Provided that a quorum is present, (1) in order for a nominee to be elected as a director, (2) the approval of the appointment of the Company’s independent auditor and the authorization of the Audit Committee of the Board of Directors to fix the auditors’ remuneration (3) the approval, on an advisory basis, of the compensation to be paid to Endo’s named executive officers and (4) the approval of the amendment of the Company’s 2015 Stock Incentive Plan will each require the majority of the votes cast at the Annual Meeting will be required in person or by proxy. Provided that a quorum is present, order for:

(1)

a nominee to be elected as a director;

(2)

the Company’s independent registered public accounting firm to be appointed for the year ending December 31, 2018 and the Board, acting through the Audit Committee, to be authorized to determine the independent registered public accounting firm’s remuneration;

(3)

the compensation of the named executive officers to be approved, on anon-binding advisory basis;

(4)

the Endo International plc Amended and Restated 2015 Stock Incentive Plan to be approved; and

(5)

the Board’s existing authority to issue shares to be renewed.

Proposal 6, renewal of the Board’s existing authority toopt-out of statutorypre-emption rights, requires the approval of the amendment of the Company’s Memorandum of Association and (2) the approval of the amendment of the Company’s Articles of Association will each requirenot less than 75% of the votes cast at the Annual Meeting in person or by proxy.Meeting.

The presence of the holders of a majority of the issued and outstanding ordinary shares as of the record date entitled to vote at the Annual Meeting, present in person or represented by proxy, is necessary to constitute a quorum. Shares represented by a proxy marked “abstain” on any matter will be considered present at the Annual Meeting for purposes of determining a quorum. Abstentions will not be considered votes cast at the Annual Meeting. The practical effect of this is that abstentions are not voted in respect of these proposals. Shares represented by a proxy as to which there is a “brokernon-vote” (for example, where a broker does not have the discretionary authority to vote the shares), will be considered present for the Annual Meeting for purposes of determining a quorum and will not have any effect on the outcome of voting on the proposals.

All ordinary shares that have been properly voted and not revoked will be voted at the Annual Meeting in accordance with your instructions. If you execute the proxy but do not give voting instructions, the ordinary shares represented by that proxy will be voted FOR each of the nominees for election as director, FOR the approval of the appointment of PricewaterhouseCoopers as the Company’s independent auditors for the year ending December 31, 2016 and to authorize the audit committee of the Board of Directors to determine the auditors’ remuneration, FOR the approval, on an advisory basis, of the compensation to be paid to Endo’s named executive officers, FOR the approval of the amendment of the Company’s Memorandum of Association, FOR the approval of the amendment of the Company’s Articles of Association and FOR the approval of the amendment of the Company’s 2015 Stock Incentive Plan.follows:

(1)

FOR each of the nominees for election as director;

(2)

FOR the approval of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2018 and the authorization of the Board, acting through the Audit Committee, to determine the independent registered public accounting firm’s remuneration;

(3)

FOR the approval, on an advisory basis, of the compensation to be paid to the named executive officers;

(4)

FOR the approval of the Endo International plc Amended and Restated 2015 Stock Incentive Plan;

(5)

FOR the renewal of the Board’s existing authority to issue shares; and

(6)

FOR the renewal of the Board’s existing authority toopt-out of statutorypre-emption rights.

Voting on Other Matters

If other matters are properly presented at the Annual Meeting for consideration, the persons named in the proxy will have the discretion to vote on those matters for you. At the date the Company began printing this Proxy Statement, no other matters had been raised for consideration at the Annual Meeting.

How You MayCan Revoke or Change Your Vote

You can revoke your proxy at any time before it is voted at the Annual Meeting by:

 ¡ 

sending written notice of revocation to the Company Secretary;

 ¡ 

timely delivering a valid, later-dated proxy; or

2


 ¡ 

attending the Annual Meeting and voting in person. If your shares are held in the name of a bank, broker or other holder of record, you must obtain a proxy, executed in your favor from the holder of record, to be able to vote at the meeting.

List of Shareholders

The names of shareholders of record entitled to vote at the Annual Meeting will be available at the Annual Meeting and for ten days prior to the Annual Meeting for any purpose germane to the meeting, between the hours of 8:45 a.m. and 4:30 p.m., local time, at our registered office at First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland.

Cost of Proxy Solicitation

The Company will pay for preparing, printing and mailing this Proxy Statement and we will pay for the cost of soliciting proxies. Proxies may be solicited on our behalf by directors, officers or employees in person or by telephone, electronic transmission and facsimile transmission. The Company will reimburse banks, brokers and other custodians, nominees and fiduciaries for their reasonableout-of-pocket costs of sending the proxy materials to our beneficial owners. We have also retained Innisfree M&A Inc. to assist in soliciting proxies. We will pay Innisfree M&A Inc. a base fee of approximately $25,000$15,000 plus reasonableout-of-pocket expenses for these services.

 

2


Presentation of Irish Statutory Financial Statements

The Company’s Irish statutory financial statementsStatutory Financial Statements for the fiscal year ended December 31, 2015,2017, including the reports of the directors and auditors thereon, will be presented at the Annual Meeting. There is no requirement under Irish law that such financial statements be approved by shareholders, and no such approval will be sought at the Annual Meeting. The Company’s 20152017 Irish statutory financial statementsStatutory Financial Statements are available, along with the Proxy Statement for Annual Meeting, 20152017 Annual Report to Shareholders, 20152017 Endo International plc Form10-K and other proxy materials, at www.proxyvote.com.www.proxyvote.com.

 

3


 

Proposal 1: Election of Directors

The Board of Directors

The Company’s Memorandum and Articles of Association provides that the number of directors of the Company shall be not less than five nor more than twelve, the exact number of which shall be fixed from time to the time by resolution of the Board of Directors or by a resolution adopted by holders of a majority of the Company’s ordinary shares. On April 28, 2015, Mr. Delucca informed the Board of Directors that he would not stand for re-election at the 2015 Annual Meeting. The Board has not filled the vacancy left by Mr. Delucca’s departure and has fixed the directors at nine effective June 9, 2015, the date of the 2015 Annual Meeting.

Under the terms of the Company’s Memorandum and Articles of Association, directors need not be shareholders of the Company or residents of Ireland. However, pursuant to the Common Stock Ownership Guidelines (the Ownership Guidelines) approved by the Board of Directors, eachnon-employee Director director eligible to own Company stock should, but is not required to, have ownership of the Company’s ordinary shares equal in value to at least five times his or her current annual cash retainer to be achieved within five years of joining the Board, or in the case of non-employee Directors serving at the time the Ownership Guidelines were adopted, within five years of the date of the adoption, or December 10, 2015, as further described in the section titledbelow entitled “Common Stock Ownership Guidelines”.Guidelines.” Directors are elected for aone-year term and shall retire from office unlessre-elected by ordinary resolution at the next following Annual General Meeting.Non-employee Directors receive compensation for their services as determined by the Board of Directors. See “COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS — 2015Directors, as further described in the section entitled “Compensation of Executive Officers and Directors—2017 Compensation ofNon-Employee Directors.”

The Company’s Memorandum and Articles of Association provide that the number of directors of the Company shall be not less than five nor more than twelve, the exact number of which shall be fixed from time to time by resolution of the Board of Directors. A vacancy on the Board, or a newly created directorship resulting from any increase in the authorized number of directors, may be filled by a majority of the directors then in office, even though less than a quorum remains. A director appointed to fill a vacancy remains a director until the next following Annual Meeting or his or her earlier death, resignation or removal. In March 2017, the Board fixed the number of directors at nine, effective June 2017.

Currently,As of December 31, 2017, the Board of Directors consistsconsisted of nine members. Currently serving as directors aremembers, including Roger H. Kimmel, Rajiv De Silva,Paul V. Campanelli, Shane M. Cooke, Arthur J. Higgins, Nancy J. Hutson, Ph.D., Michael Hyatt, William P. Montague, Jill D. Smith and William F. Spengler. On April 28, 2015, Mr. Delucca resigned fromSharad S. Mansukani, M.D. (who was appointed to the Company’s Board of Directors effective June 9, 2015.November 8, 2017 to replace Douglas S. Ingram, who resigned from the Board of Directors on November 6, 2017 due to his appointment as president and chief executive officer of another company), William P. Montague, Todd B. Sisitsky and Jill D. Smith. All of the current members are nominated by the Board of Directors of the Company for the electionre-election as directors of the Company.Company, other than Ms. Smith, who advised the Company in March 2018 that she would not be standing forre-election due to her appointment as president and chief executive officer of another company in 2017. On April 26, 2018, the Board fixed the number of directors at eight, effective June 7, 2018, the date of the Annual Meeting.

The Board annually determines the independence of directors based on a review by the directorsBoard and the Nominating & Governance Committee. No director is considered independent unless the Board of Directors has determined that he or she has no material relationship with the Company, either directly or as a partner, shareholder or officer of an organization that has a material relationship with the Company. Material relationships can include commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships, among others. To evaluate the materiality of any such relationship, the Board has adopted categorical independence standards consistent with the NASDAQ ExchangeNasdaq’s listing guidelines.rules. These standards are available on the Company’s website atwww.endo.com, under “Investors-Corporate Governance-Nominating“Investors/Media—Corporate Governance—Nominating & Governance Committee.”

Members of the Audit, Compensation, and Nominating & Governance Committees must meet applicable independence tests of the NASDAQ.Nasdaq.

The Board of Directors has affirmatively determined that eightall of its nine current members and nominees, except for Mr. Campanelli, are independent directors under the NASDAQ rules and regulations. The eight independent directors under the NASDAQ rules and regulations are Messrs. Kimmel, Cooke, Higgins, Hyatt, Montague, and Spengler, Dr. Hutson and Ms. Smith. If the nominees recommended by the Board of Directors are elected at the 2016 Annual Meeting, eight of the Company’s nine directors will be independent directors under the NASDAQ rules and regulations.Nasdaq’s listing rules. Mr. De SilvaCampanelli is not independent due to his role as President and Chief Executive Officer.Officer of the Company. It was determined that neither Dr. Mansukani’s service as an advisor to nor Mr. Sisitsky’s service as an executive of TPG Capital, one of Endo’s shareholders, interferes with their independence. In determining Mr. Cooke’s independence, the Board considered that Mr. Cooke was the President of Alkermes plc (Alkermes), which has a 2002 license agreement with one of the Company’s subsidiaries with respect to Megace ES®in the ordinary course of their respective businesses. The total amount of royalty payments made to Alkermes in 2017 was less than $270,000. The Board has determined that this relationship is not material and that it does not impair Mr. Cooke’s independence.

On an annual basis and upon the nomination of any new director, the Nominating & Governance Committee and the Board review directors’ responses to a questionnaire asking about their relationships with the Company (and those of their immediate family members) and other potential conflicts of interest. The Nominating & Governance Committee has determined that the eightnon-employee directors currently serving are independent and that the members of the Audit, Compensation and Nominating & Governance Committees also meet the independence tests referenced above. Specifically, the Nominating & Governance Committee and the Board have determined that, all non-employee directors have not had during the last three years, none of the currentnon-employee directors has had (i) any of the relationships listed above or (ii) any other material relationship with the Company that would compromise his or her independence. The Nominating & Governance Committee recommended this determination to the Board of Directors and explained the basis for its decision, and this determination was adopted by the full Board.

3


As of the date of this Proxy Statement, there are nothe Company is not aware of any material legal proceedings to which any director or executive officer of the Company, or any associate thereof, is a party to that are adverse to the Company or any of its subsidiaries.

4


Between January 1, 20152017 and December 31, 2015,2017, the Board of Directors of the Company as a whole met nineseven times and did not act by written consent. All members of the Board of Directors who are standing for election attended at leastmore than 75% or more of the aggregate number of meetings of the Board and of the committeesCommittees of the Board on which he or shethey served in 2017 (that were held during 2015.the respective periods in which they served on the Board and related Committees).

Nominees

There are nineeight nominees for election as directors of the Company to serve until the 20172019 Annual General Meeting of Shareholders of the Company, or until his/her earlier death, resignation or removal. All of the nominees are currently serving as directors of the Company. In addition, all of the nine nominees were elected to the Board at the last Annual Meeting.Meeting, except for Sharad S. Mansukani, who was appointed by the Board in November 2017.

The proposed nominees for election as directors have confirmed that they are each willing to serve as directors of the Company. If, as a result of circumstances not now known or foreseen, a nominee shall be unavailable or unwilling to serve as a director, an alternate nominee may be designated by the present Board of Directors to fill the vacancy.

The Board believes that each of the Company’s directors is highly qualified to serve as a member of the Board and each has contributed to the mix of skills, core competencies and qualifications of the Board. When evaluating candidates for election to the Board, the Nominating & Governance Committee seeks candidates with certain qualities that it believes are important, including experience, skills, expertise, personal and professional integrity, character, business judgment, time availability in light of other commitments, dedication, independence, those criteria and qualifications described in each director's biography belowand such other relevant factors that the Nominating & Governance Committee considers appropriate in the context of the needs of the Board of Directors. Although not specified in the charter, the Committee also considers ethnicity and gender when selecting candidates so that additional diversity may be represented on the Board. Our current directors are highly experienced and have diverse backgrounds and skills as well as extensive track records of success in what we believe are highly relevant positions. The Board believes that each director's service as the Chairman, Vice Chairman, President and Chief Executive Officer, Executive Vice President and Chief Financial Officer or Senior Executive of significant companies has provided each director with skills that are important to serving on our Board.

 

Set forth below are
summaries of the back
ground,background, business
experience and descrip
tionsprincipal occupation of the princi
pal occupation of
each of the Company’s
current directors:director nominees:

  

including experience, skills, expertise, personal and professional integrity, character, business judgment, time availability in light of other commitments, dedication, conflicts of interest, those criteria and qualifications described in each director’s biography below and such other relevant factors that the Nominating & Governance Committee considers appropriate in the context of the needs of the Board of Directors. Although not specified in the charter, the Committee also considers ethnicity and gender when selecting candidates so that additional diversity may be represented on the Board. Our directors are highly experienced and have diverse backgrounds and skills as well as extensive track records of success in what we believe are highly relevant positions. The Board believes that each director’s service as the Chairman, Vice Chairman, President and Chief Executive Officer, Executive Vice President & Chief Financial Officer or Senior Executive of significant companies has provided the directors with skills that are important to serving on our Board.

 

 

 

 

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ROGER H. KIMMEL, 69,71, is Chairman of the Board of Endo and is Chairmana member of Endo’s Nominating & Governance Committee, a member of Endo’s TransactionsAudit Committee and an alternatea member of Endo’s Audit Committee and OperationsCompensation Committee. Mr. Kimmel became Chairman of the Board upon the Company’s inception in February 2014. Mr. Kimmel has been Vice Chairman of Rothschild Inc., an investment banking firm, since January 2001. Previously, Mr. Kimmel was a partner of the law firm Latham & Watkins for more than five years. Mr. Kimmel is also a Director of PG&E Corporation, a public energy-based holding company, and its subsidiary Pacific Gas and Electric Company, a utility company. Mr. Kimmel was a Director of Schiff Nutrition International until 2012, and was a Director and Chairman of Endo Health Solutions Inc. from July 2000 until February 2014. Mr. Kimmel also served as the Chairman of the Board of Endo Health

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Solutions Inc. during part of his tenure as Director. Mr. Kimmel served as Chairman of the Board of Trustees of the University of Virginia Law School Foundation(not-for-profit) from January 2009 to June 30, 2015. Mr. Kimmel holds a Bachelor of Arts degree from the George Washington University and a J.D. degree from the University of Virginia School of Law. He has been a public speaker on corporate governance issues and private equity transactions. Mr. Kimmel’s qualifications to serve on the Board of Endo include, among others, his extensive legal and leadership experience, significant experience as a board member of a publicly traded company, corporate governance expertise, investment banking and financial experience andin-depth knowledge about the Company.

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RAJIV DE SILVA, 49,PAUL V. CAMPANELLI, 56,is was appointed President, Chief Executive Officer and a Director of Endo.Endo International plc effective September 23, 2016. Mr. Campanelli joined Endo in 2015 as the President of Par Pharmaceutical, leading Endo’s fully integrated U.S. Generics business, following Endo’s acquisition of Par Pharmaceutical. Prior to joining Endo, in March 2013,he had served as Chief Executive Officer of Par Pharmaceutical Companies, Inc. following the company’s September 2012 acquisition by TPG. Prior to the TPG acquisition, Mr. De Silva has had a broad international experience, having managed businesses in the United States, Europe, Canada, Latin America, Asia, South Africa and Australia/New Zealand. He was responsible for all specialty pharmaceutical operations, including sales and marketing, research and development, manufacturing and business development while servingCampanelli served as the President of Valeant Pharmaceuticals International, Inc. from October 2010 to January 2013 and as its Chief Operating Officer Specialty Pharmaceuticalsand President of Par Pharmaceutical, Inc. from January 2009 until January 2013.2011 to 2012. At Par Pharmaceutical Inc., Mr. Campanelli had also served as Senior Vice President, Business Development & Licensing; Executive Vice President and President of Par Pharmaceutical, Inc.; and was named a Corporate Officer by its board of directors. He also served

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on the board of directors of Sky Growth Holdings Corporation. Prior to joining Valeant,Par Pharmaceutical Companies Inc., Mr. De Silva held various leadership positions with Novartis. HeCampanelli served as Vice President, Business Development at Dr. Reddy’s Laboratories Ltd., where he was employed from 1992 to 2001. Mr. Campanelli earned his Bachelor of Novartis Vaccines USA and Head, Vaccines of the Americas at Novartis. During this time, he played a key leadership role at Novartis’ Vaccines & Diagnostics Division.Science degree from Springfield College. Mr. De Silva also served as President of Novartis Pharmaceuticals Canada. He originally joined Novartis as Global Head of Strategic Planning for Novartis Pharma AG in Basel, Switzerland. PriorCampanelli’s qualifications to his time at Novartis, Mr. De Silva was a Principal at McKinsey & Company and served as a member of the leadership group of its Pharmaceuticals and Medical Products Practice. Mr. De Silva was a Director of AMAG Pharmaceuticals, Inc. and is currently a Member ofserve on the Board of TrusteesEndo include, among others, his experience in leadership positions at Kent Place School in Summit, NJ. He holds a Bachelorpharmaceutical companies, including the role of Science in Engineering, Honors from Princeton University,chief executive officer, hisin-depth knowledge of the pharmaceutical industry, the Company, its businesses and a Master of Science from Stanford Universitymanagement as well as his judgment and a Master of Business Administration with Distinction from the Wharton School at the University of Pennsylvania.strategic vision.

 

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SHANE M. COOKE, 53,55, was appointed tohas been a member of the Board of Directors insince July 2014 and is a memberChairman of Endo’s Audit Committee and Transactions Committee. He is currentlyMost recently until March 31, 2018, Mr. Cooke served as President of Alkermes plc based in Dublin, Ireland upon completion of the merger between Elan Drug Technologies (EDT) and Alkermes, Inc. in September 2011.2011 and was appointed to the board of directors of Alkermes on March 30, 2018. Previously, he was head of EDT and executive vice presidentExecutive Vice President of Elan from 2007 through the Alkermes merger in 2011 and concurrently served as chief financial officerChief Financial Officer of Elan Corporation from 2001 to May 2011. Mr. Cooke was appointed director of Elan in May 2005. Prior to joining Elan, he was chief executiveChief Executive of Pembroke Capital Limited, an aviation leasing company of which he was a founder. Mr. Cooke also previously held a number of senior positions in finance in the

banking and aviation industries. Mr. Cooke is a chartered accountant and a graduate of University College Dublin, Ireland. He currently serves on the board of directors of Prothena Corporation plc.plc, a publicly traded biotechnology company. Mr. Cooke’s qualifications to serve on the Board of Endo include, among others, his extensive knowledge of the pharmaceutical industry, significant executive- and board-level experience at a publicly traded company and financial expertise and experience, including service as a chief financial officer of a public company.

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ARTHURNANCY J. HIGGINS, 60,HUTSON, Ph.D., 68,has been a member of the Board of Directors since the Company’s inception in February 2014 and is a member of Endo’s Compensation Committee, Operations Committee and Transactions Committee. He is currently a Senior Advisor to Blackstone Healthcare Partners, the dedicated healthcare team of The Blackstone Group, where he focuses on product-based healthcare acquisitions. Mr. Higgins was Chairman of the Board of Management of Bayer HealthCare AG, and Chairman of the Bayer HealthCare Executive Committee. Prior to joining Bayer HealthCare in 2004, Mr. Higgins served as Chairman, President and CEO of Enzon Pharmaceuticals, Inc. from 2001 to 2004. Prior to joining Enzon Pharmaceuticals, Mr. Higgins spent 14 years with Abbott Laboratories, including serving as President of the Pharmaceutical Products Division from 1998 to 2001. Mr. Higgins is a Director of Ecolab, Inc. and Zimmer Holdings, Inc., public companies in the healthcare field. From December 2013 until February 2014, Mr. Higgins was a Director of Endo Health Solutions Inc. He is a past member of the Board of Directors of the Pharmaceutical Research and Manufacturers of America (PhRMA), of the Council of the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) and President of the European Federation of Pharmaceutical Industries and Associations (EFPIA).

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NANCY J. HUTSON, Ph.D., 66,has been a member of the Board of Directors since the Company’s inception in February 2014 and Chairman of Endo’s OperationsCompliance Committee and a member of Endo’s Nominating & Governance Committee and an alternate member of the Transactions Committee. Dr. Hutson retired from Pfizer, Inc. (Pfizer) in 2006 after spending 25 years in various research and leadership positions, most recently serving as Senior Vice President, Pfizer Global Research and Development and Director of Pfizer’s pharmaceutical R&D site, known as Groton/New London Laboratories, the largest R&D site of any pharmaceutical company. At Pfizer, she led 4,500 colleagues (primarily scientists) and managed a budget in excess of $1 billion. She currently is a Director of BioCryst Pharmaceuticals, Inc. Dr. Huston previously served aas Director of Cubist Pharmaceuticals until January 2015, and from March 2009 until February 2014, was a Director of Endo Health Solutions Inc. Dr. Hutson owns and operates Standing Stones

Farm in Ledyard, CT, which is dedicated to supporting the equestrian sport of dressage. Dr. Hutson’s qualifications to serve on the Board of Endo include, among others, herin-depth knowledge and understanding of the complex research, drug development and business issues facing pharmaceutical companies.

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MICHAEL HYATT, 70,72, is a Director of Endo and is Chairman of Endo’s Transactions Committee,has been a member of Endo’s Compensation Committee and an alternate memberthe Board of the Nominating & Governance CommitteeDirectors since the Company’s inception in February 2014.2014 and is Chairman of Endo’s Nominating & Governance Committee and a member of Endo’s Compensation Committee. Mr. Hyatt is currently a Senior Advisor to Irving Place Capital, a leading institutional private equity firm focused on making equity investments in middle-market companies. Until 2008, Mr. Hyatt was a Senior Managing Director of Bear Stearns & Co., Inc. Mr. Hyatt previously served as a Director of Schiff Nutrition International until 2012. From July 2000 until February 2014, Mr. Hyatt was a Director of Endo Health Solutions Inc. Mr. Hyatt’s qualifications to serve on the Board of Endo include, among others, his leadership experience in the banking industries,in-depth knowledge of the Company and experience as a board member of a publicly traded company.

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SHARAD S. MANSUKANI, M.D., CPE, CMCE, 49, was appointed to the Board of Directors in November 2017 and to the position of Senior Independent Director in April 2018 and is a member of Endo’s Compensation Committee and a member of the Compliance Committee. Dr. Mansukani currently serves as a senior advisor of TPG Capital LP and on the board of directors of Kindred Healthcare Inc. From 2012 to 2015, Dr. Mansukani served as a strategic advisor to the board of directors of Cigna Corp. Prior to his position at Cigna Corp., Dr. Mansukani was appointed to Medicare’s Program Advisory and Oversight Committee by the Secretary of the Department of Health and Human Services from 2009 to 2012. Dr. Mansukani also served as a senior advisor to the Administrator of the Centers for Medicare and Medicaid Services (CMS) from 2003 to 2005, where he advised on design

and implementation of the Medicare prescription drug benefit, also known as Medicare Part D. Prior to CMS, Dr. Mansukani was a senior vice president and chief medical officer at Health Partners from 1999 to 2003. Previously, Dr. Mansukani served as the vice chairman of the board of directors of Health Spring Inc. from 2007 to 2012 and as chairman of the board of directors of Envision Rx Options from 2013 to 2016. Dr. Mansukani also served on the board of directors of Surgical Care Affiliates, Inc. from 2007 to 2017, IASIS Healthcare Corporation from 2005 to 2017, IMS Health Holdings, Inc. from 2009 to 2016 and Par Pharmaceutical Holdings, Inc. from 2012 to 2015, prior to the Company’s acquisition of Par Pharmaceutical Holdings, Inc. in 2015. Dr. Mansukani currently serves on the board of directors of the Children’s Hospital of Philadelphia and serves on the editorial boards of the American Journal of Medical Quality, Managed Care, Biotechnology Healthcare and American Health & Drug Benefits. Dr. Mansukani is qualified to serve on the Board of the Company based on his extensive knowledge of the pharmaceutical industry and service as a board member of publicly traded and private companies in the industry and based on hisin-depth knowledge and understanding of the complex U.S. healthcare system. Dr. Mansukani was identified as a potential candidate by our Chief Executive Officer and by a non-management director, and following an independent third party review process, recommended to the Nominating & Governance Committee and later approved by the Board.

6


WILLIAM P. MONTAGUE, 69,71, has been a member of the Board of Directors since the Company’s inception in February 2014 and is Chairman of Endo’s Compensation Committee and a member of Endo’s Audit Committee and an alternate member of Endo’s Nominating & Governance Committee and Transactions Committee. Mr. Montague served as Chief Executive Officer of Mark IV Industries, Inc., a leading global diversified manufacturer of highly engineered systems and components for transportation infrastructure, vehicles and equipment, from November 2004 until his retirement onin July 31, 2008 and as Director from March 1996. He joined Mark IV Industries in April 1972 as Treasurer/Controller, serving as Vice President of Finance from May 1974 to February 1986, then Executive Vice President and Chief Financial Officer from February 1986 to March 1996 and then as

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5


President from March 1996 to November 2004. Mr. Montague is also a Director of Gibraltar Industries, Inc., a publicly

LOGO

traded manufacturer and distributor of products for the building and industrial markets since 1993, and has served as Chairman of Gibraltar’s Board ifof Directors since June 2015. From February 2013 until May 2014, Mr. Montague served as a Director of Allied Motion Technologies Inc., a publicly traded company focused exclusively on serving the motion control market. From February 2009 until February 2014, Mr. Montague was a Director of Endo Health Solutions Inc. Mr. Montague is a Certified Public Accountant; he holds a Bachelor of Science degree in accounting and an M.B.A. from Wilkes University. Mr. Montague’s qualifications to serve on the Board of Endo include, among others, his significant executive and leadership experience at manufacturing companies, including service as chief executive officer and membership on the board of directors of such companies, and financial expertise and experience, including service as a company’s chief financial officer.

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JILL D. SMITH, 58,TODD B. SISITSKY, 46,has been a member of was appointed to the Board of Directors since the Company’s inception in February 2014,May 2016 and is a member of Endo’s Nominating & Governance Committee and Operations Committeea member of Endo’s Compensation Committee. Mr. Sisitsky is a Partner of TPG, the global alternative asset management firm. He is the Managing Partner of TPG Capital,co-head of the firm’s global healthcare investing platform, and is an alternatea member of the Auditfirm’s Executive Committee. Ms. Smith has been an international business leaderMr. Sisitsky serves on the boards of directors of Adare Pharmaceuticals, Inc. (formerly Aptalis Pharma, Inc.), Immucor Inc., and IQVIA Holdings Inc. He previously served on the boards of directors of IASIS Healthcare LLC, Quintiles IMS Holdings, Inc., Surgical Care Affiliates, Inc., IMS Health Holdings, Inc. and Par Pharmaceuticals Companies, Inc. Mr. Sisitsky also serves on the board of directors of the globalnot-for-profit organization the Campaign for more than 25 years, including 16 yearsTobacco Free Kids, as a CEO of private and public companies in the technology and information services markets and was most recently Chairman, CEO and President of DigitalGlobe Inc., a leading provider of satellite imagery products and services to governments and companies worldwide. Ms. Smith is a Director and currently serveswell

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as on the Board of Hexagon AB, a global providerOverseers of design, measurementthe Dartmouth Medical School. Prior to joining TPG in 2003, Mr. Sisitsky worked at Forstmann Little & Company and visualization technologies, J.M. Huber, a leader in engineered materialsOak Hill Capital Partners. He received an M.B.A. from the Stanford Graduate School of Business, where he was an Arjay Miller Scholar, and Allied Minds, a United Kingdom listed technology development and commercialization company and has servedearned his undergraduate degree from Dartmouth College, where he graduatedsumma cum laude. Mr. Sisitsky’s qualifications to serve on the corporate boards of SoundBite Communications, Inc., Germany-based Elster Group, Smith & Hawken and DigitalGlobe (prior to her appointment as Chairman and CEO). Ms. Smith was a Director of Endo Health Solutions Inc. from September 2012 until February 2014.

LOGO  

WILLIAM F. SPENGLER, 61,has been a member of the Board of Directors sinceEndo include, among others, his extensive knowledge of the Company’s inception in February 2014, and is Chairman of Endo’s Audit Committee and an alternatepharmaceutical industry, service as a board member of the Compensation Committee and Operations Committee. From November 2010 until February 2012, Mr. Spengler was President of ChromaDex Corporation, a publicly traded company. From July 2008 until November 2010, Mr. Spengler served as Executive Vice President and Chief Financial Officer of Smith & Wesson Holding Corporation, a global leaderprivate companies in safety, security, protectionthe industry, and sport. Until March 2008, he was Executive Senior Vice Presidentleadership and Chief Financial Officer at MGI Pharmaceuticals Inc., an oncology- and acute care- focused biopharmaceutical company, where he had worked since 2005. Prior to joining MGI Pharma, Mr. Spengler was Executive Vice President and Chief Financial Officer at Guilford Pharmaceuticals Inc., a bioscience company, from July 2004 to October 2005. Mr. Spengler was previously Vice President of Finance at Black & Decker for 5 years, and prior to that spent 14 years in various finance, planning and business development positions at Bristol Myers Squibb. From 2008 until February 2014, Mr. Spengler was a Director of Endo Health Solutions Inc.financial expertise.

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Vote Required

Provided that a quorum is present, eachEach nominee for director receiving a majority of the votes cast at the Annual Meeting in person or by proxy will be elected.

The Board of Directors recommends a vote FOR the election of each of these nominees for election as director.

Shareholder Communications with Directors

The Board has established a process to receive communications from shareholders. Shareholders may contact any member or all members of the Board, any Board committee or any chair of any such committee by mail. To communicate with the Board of Directors, any individual director or any group or committee of directors, correspondence should be addressed to the Board of Directors or any such individual director or group or committee of directors by either name or title. All such correspondence should be sent “c/o Company Secretary” to Endo International plc, First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland.

All communications received as set forth in the preceding paragraph will be opened by the office of our Company Secretary for the sole purpose of determining whether the contents represent a message to our directors. Any contents that are not in the nature of advertising, promotions of a product or service, or patently offensive material will be forwarded promptly to the addressee. In the case of communications to the Board or any group or committee of directors, the Company Secretary’s office will make sufficient copies of the contents to send to each director who is a member of the group or committee to which the envelope ore-mail is addressed.

The Company does not have a policy on director attendance at Annual Meetings. Messrs. Kimmel and Cooke Higgins, De Silva and Dr. Hutson attended the 20152017 Annual Meeting.General Meeting of Shareholders.

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Corporate Governance — Board Leadership Structure and Risk Oversight

Board Leadership Structure

We have a board leadership structure under which Mr. Kimmel serves asnon-executive independent Chairman of the Board and Dr. Mansukani serves as Senior Independent Director of the Board. FollowingIn April 2018, the Annual Meeting, we will have nineBoard appointed Dr. Mansukani to the newly created position of Senior Independent Director upon the recommendation of the Nominating & Governance Committee, as part of Board’s succession planning process, to support the Chairman and to provide management and shareholders with additional means of access to the Board. This position was created to align the Company’s board leadership structure with those of other Irish-domiciled companies. All of our directors each of whom isare independent, with the exception of our President and Chief Executive Officer, Mr. De Silva. OurCampanelli. During 2017, our Board currently hashad five standing committees, including the Transactions Committee, which the Board of Directors determined to discontinue effective March 20, 2017. Each committee has a committee chair and each of which is comprisedcommittee consists solely of independent directors with a committee chair.directors. In addition, the Board appoints other committees as the Board considers necessary from time to time.

The Board believes that the Chairman and the role of the President and Chief Executive Officer should be separate and that the Chairman should not be an employee of the Company. Further, the Board believes this separation serves the Company’s shareholders best for setting our strategic priorities and executing our business strategy. We believe that our Board consists of directors with significant leadership, organizational and strategic skills, as discussed above. All of our independent directors have served as the Chairman, Vice Chairman, Chief Executive Officer, Chief Financial Officer or Senior Executive of other companies. Accordingly, we believe that our independent directors have demonstrated leadership in large enterprises, many with relevant industry experience, and are well-versed in board processes and corporate governance. We believe that having directors with such significant leadership skills benefits our Companycompany and our shareholders.

In addition to the general duties and responsibilities of a director, in accordance with the Company’s Memorandum and Articles of Association and our corporate governance guidelines, the Chairman is responsible for chairingsetting Board meeting agendas, dates and locations, presiding over all Board and shareholder meetings, presiding over all executive sessions of the Board, meeting regularly with the Chief Executive Officer between Board meetings and settingfacilitating full and candid communication among directors and between the agendaBoard and the Chief Executive Officer. In addition to the general duties and responsibilities of a director, in accordance with our corporate governance guidelines, if a Senior Independent Director is appointed, he will be responsible for these meetings.fulfilling the Chairman’s duties, as described above, in the event that the Chairman is unavailable, together with assisting the Chairman and the chair of the Nominating & Governance Committee with board evaluation, acting as a liaison with specified industry groups designated by the Board or the Chief Executive Officer at their direction, supporting the Chairman and providing management and shareholders with additional means of access to the Board and acting as an intermediary for other directors, if necessary or appropriate. Each director also may suggest items for inclusion on the agenda and may, at any Board meeting, raise subjects that are not on the agenda for that meeting. As required by our corporate governance guidelines, our independent directors meet separately, without management present, at each meeting of the Board. In addition, our Board committees regularly meet without members of management present.

8


As part of its annual self-evaluation process, the Board evaluates the Company’s governance structure. We believe that having a President and Chief Executive Officer for our Company with oversight of company operations, coupled with an experienced independent Board Chairman and experienced independent directors, with five separate independent committee chairs, is the appropriate leadership structure for Endo.

On a regular basis, the Company’s officers who are responsible for monitoring and managing risks across the Company’s risks, including our Presidentvarious functions and Chief Executive Officer; our President, Par Pharmaceutical; our President, Branded Pharmaceuticals, our Executive Vice President & Chief Financial Officer; our Executive Vice President and Chief Legal Officer; our Executive Vice President, Chief Scientific Officer and Global Head of Research and Development and Quality; our Executive Vice President and Chief Compliance Officer; our Vice President, Controller and Principal Accounting Officer and our Director of Internal Audit,business segments make reports to the Audit Committee. The Audit Committee, in turn, reports to the full Board.Board of Directors. While the Audit Committee has primary responsibility for overseeing risk management, our entire Board is actively involved in overseeing risk management for the Company by engaging in periodic discussions with Company officers as the Board may deem appropriate. In addition, each of our Board committees considers the risks within its respective areas of responsibility.

Risk Oversight

The Board of Directors believes that one of its most important responsibilities is to oversee how management manages the various risks the Company faces and has delegated primary responsibility for overseeing the Company’s Enterprise Risk Management (or ERM)(ERM) program to the Audit Committee. It is management’s responsibility to manage risk and bring to the Audit Committee’s and the Board of Directors’ attention the most material risks to the Company.Company to the attention of the Audit Committee and the Board of Directors. The Company’s head of internal audit, who reports independentlyfunctionally to the Audit Committee, facilitates the ERM program under the sponsorship of our Executive Leadership Team, (or ELT), which includes our Presidentcurrent named executive officers (NEOs) and Chief Executive Officer; Executive Vice President & Chief Financial Officer; Executive Vice President, Chief Legal Officer; Chief Scientific Officerother senior leaders overseeing the Company’s various key functions and Global Head of Research & Development and Quality; Executive Vice President, Human Resources; President, International Pharmaceuticals and Executive Vice President of Corporate Development; Executive Vice President and Chief Compliance Officer; President, Par Pharmaceuticals; President, Branded Pharmaceuticals; amongst others.business segments. Enterprise risks are identified and prioritized by management, and each risk is assigned by the Board to a Board committee or the full Board for oversight based on the nature of the risk area and the committee’s charter. The committee or full Board agendas include discussions of individual risk areas throughout the year. Additionally, the Audit Committee agendas include periodic updates on the ERM process throughout the year. The Board level risk discussions are led by an assigned executive sponsor, from the ELT, for each risk area.process.

The Audit Committee also regularly reviews treasury risks (insurance, credit(liquidity and debt), financial and accounting, legal, tax and compliance risks, information technology security risks and other risk management functions.activities. In addition, the Compensation Committee considers risks related to succession planning and the attraction and retention of talent as well as risks relating to the design of compensation programs and arrangements. The Compensation Committee also reviews compensation and benefit plans affecting Endo employees in addition to those applicable to our executive officers. The full Board considers strategic risks and opportunities and regularly receives detailed reports from the committees regarding risk oversight in their respective areas of responsibility.

Code of Conduct

The Board of Directors has adopted a Code of Conduct that applies to the Company’s directors, executivesexecutive officers (including its President and Chief Executive Officer and Executive Vice President &and Chief Financial Officer) and employees.other employees (Endo Code). The Board has also adopted a Director Code of Conduct.Conduct for the Board of Directors (Director Code). These Codes are posted on the Company’s website atwww.endo.com,. The Endo Code is available under “Investors—“Our Responsibility—Corporate Compliance—Code of Conduct,” and the Director Code is available under “Investors/Media—Corporate Governance—Code of Conduct.” Any waiver of either Code for a director or executive officer of the Company, as applicable, may be made only by the Board of Directors or a Committee of the Board. Such waivers and any amendments to either Code will be disclosed on the Company’s website if required by law or stock exchange rules.

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Insider Trading Policy

The Board of Directors has adopted an Insider Trading Policy, which applies to all personnel, includingnon-employee Directors directors and officers, arising from our legal and ethical responsibilities as a public company. Among other restrictions, the Insider Trading Policy contains hedging restrictions prohibitingnon-employee Directors, directors, the Company’s executive officers and all other employees from purchasing any financial instrument that is designed to hedge or offset any decrease in the market value of the Company’s shares, including, but not limited to, coveredputs, calls collars, or other derivative transactions.Non-employee Directors, directors, the Company’s executive officers and all other employees are also restricted from engaging in short sales related to the Company’s ordinary shares, and pledging the Company’s shares as collateral for a loan, including holding shares in a margin account.

Ordinary SharesCommon Stock Ownership Guidelines

The Board of Directors has adopted share ownership guidelines (thethe Ownership Guidelines)Guidelines both fornon-employee Directors directors and for executive officers and senior management of the Company. The Board believes thatnon-employee directors and senior management should have a significant equity position in the Company and that the Ownership Guidelines serve to further the Board’s interest in encouraging a longer-term focus in managing the Company. The Board also believes that the Ownership Guidelines align the interests of its directors and senior management with the interests of shareholders and further promote Endo’s commitment to sound corporate governance. The Ownership Guidelines are posted on the Company’s website at www.endo.com, under “Investors—“Investors/Media—Corporate Governance—CompensationNominating & Governance Committee.” The current Ownership Guidelines provide that eachnon-employee directors director eligible to own Company stock should, attain

Endo sharebut is not required to, have ownership of the Company’s ordinary shares equal in value to at least five times his or her current annual cash retainer to be achieved within the later of five years of joining the BoardBoard.

9


On August 1, 2017, the Nominating & Governance Committee approved an amendment to the Company’s Ownership Guidelines. The amendment waives the applicability of the Ownership Guidelines to anynon-employee director who is a representative or employee of a significant shareholder of the Company or an investment firm if suchnon-employee director is prohibited from personally owning Company shares of common stock by the internal policies of such significant shareholder or investment firm. The waiver covered by this amendment applies to Todd B. Sisitsky, who serves as a representative of TPG Capital, a significant shareholder of the Company. TPG Capital’s policies prohibit personal ownership of Company stock by its representatives and, December 10, 2015.accordingly, Mr. Sisitsky has waived all rights to receive any annual cash retainer fees, meeting fees, share-based awards or other compensation of any kind (other than certain rights to indemnification, directors and officers insurance and expense reimbursement) in connection with his service as a director of the Company.

Review and Approval of Transactions with Related Persons

The Board of Directors has adopted written policies and procedures for review, approval and monitoring of transactions involving the Company and “related persons” (directors and executive officers or their immediate family members, or shareholders owningbeneficial owners of greater than five percent or greater of the Company’s issuedoutstanding ordinary shares). The policy covers any related person transaction that meets the minimum threshold for disclosure in the Proxy Statement under the relevant SEC rules of the U.S. Securities and Exchange Commission (the SEC) (generally, transactions involving amounts exceeding $120,000 in which a related person has a direct or indirect material interest). Such transactions are subject to review and approval by the Audit Committee.

Robert Campanelli is the Executive Director, Supply Chain at Par Pharmaceutical, Inc., a subsidiary of the Company. Mr. Campanelli joined Par Pharmaceutical Inc. in 2003 as a senior product manager and has worked in ascending areas of responsibility since that time. He is the brother of Paul Campanelli, President, Chief Executive Officer and Director of Endo. In 2017, Robert Campanelli received $421,983 in total compensation, of which $208,996 was salary, $88,646 was annual and other bonuses and $124,341 was a grant in the Company’s long-term incentive equity plan. In addition, Robert Campanelli is also eligible to participate in the retirement plans, insurance programs, health benefits and other similar employee welfare benefit arrangements available to other employees of comparable level and on substantially similar terms and conditions.

Committees of the Board of Directors

The Board of Directors has a standing Audit Committee, Compensation Committee, Nominating & Governance Committee and Compliance Committee (in April 2018, the Board changed the name of the Operations Committee and Transactions Committee. The following table shows the directors who are currently members or Chairman of each of these committees. In addition to the committee members listed below,Compliance Committee). During 2017, the Board also had a Transactions Committee, which it determined to discontinue, effective March 20, 2017. The Board has designated other Boarddetermined that each committee’s chairman and members, as alternate members ofboth current and expected, are “independent” in accordance with the committees who can attend meetings incriteria established by the stead of appointed members.SEC and Nasdaq.

NameAudit Committee

Compensation

Committee

Nominating &
Governance
Committee
Operations
Committee
(formerly known
as the Research
& Development
Committee)

Transactions

Committee

Roger H. Kimmel

Alternate-ChairmanAlternateMember

Rajiv De Silva

-----

Shane M. Cooke

Member---Member

Arthur J. Higgins

-Member-MemberMember

Nancy J. Hutson, Ph.D.

--MemberChairmanAlternate

Michael Hyatt

-MemberAlternate-Chairman

William P. Montague

MemberChairmanAlternate-Alternate

Jill D. Smith

Alternate-MemberMember-

William F. Spengler

ChairmanAlternate-Alternate-

Audit Committee

The Audit Committee is responsible for overseeing the Company’s financial reporting process on behalf of the Board of Directors. In addition, the Audit Committee reviews, acts on and reports to the Board of Directors with respect to various auditing and accounting matters, including the selection of the Company’s independent auditors,registered public accounting firm, the scope of the annual audits, fees to be paid to the auditors,independent registered public accounting firm, the performance of the Company’s independent registered public accounting firm, and the accounting practices of the Company and the Company’s internal controls and legal compliance functions. The Audit Committee operates pursuant to a written charter adopted by the Board of Directors, which is available on the Company’s website atwww.endo.com, under “Investors—“Investors/Media—Corporate Governance—Audit Committee.” The charter describes the nature and scope of responsibilities of the Audit Committee.

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Management of the Company has the primary responsibility for the Company’s financial reporting process, principles and internal controls as well as preparation of its financial statements. The Company’s independent registered public accounting firm is responsible for performing an independent audit of, the Company’s financial statements and expressing an opinion as toon, the conformity of suchthe Company’s financial statements with accounting principles generally accepted in the United States.

Messrs. Cooke, MontagueStates and Spengler serve as membersthe effectiveness of the Audit Committee, while Mr. Kimmel and Ms. Smith serve as alternates. Subject to their election at the 2016 Annual Meeting, the Board of Directors expects to reappoint Messrs. Cooke, Montague and Spengler as members of the Audit Committee and Mr. Kimmel and Ms. Smith as alternates, and to reappoint Mr. Spengler as the Chair of the Audit Committee effective June 9, 2016. Company’s internal controls over financial reporting.

Between January 1, 20152017 and December 31, 2015,2017, the Audit Committee met sixfive times, in each case including periodic meetings held separately with management, the Company’s internal auditors and the independent registered public accounting firm. The Board has determined that Messrs. Spengler and Montague are “financial experts”, as defined by the SEC regulations, and he has the related financial management expertise within the meaning of the NASDAQ rules. The Board of Directors has determined that Messrs. Kimmel, Cooke, Montague and Spengler and Ms. Smith are “independent” and financially literate in accordance with the criteria established by the SEC and the NASDAQ.

Compensation Committee

The Compensation Committee of the Board of Directors determines the salaries and incentive compensation of the executive officersPresident and Chief Executive Officer of the Company, reviews and approves the compensation levels of Endo’s NEOs and provides broad guidance regarding the remuneration and incentive compensation of the other employees of the Company. The Compensation Committee also reviews and acts on any recommendations of the Company’s management for awards granted under the Endo International plc Amended and Restated 2015 Stock Incentive Plan. The current members of the Compensation Committee are Messrs. Montague, Higgins and Hyatt, while Mr. Spengler serves as an alternate. Subject to their election at the 2016 Annual Meeting, the Board of Directors expects to reappoint Messrs. Montague, Higgins and Hyatt as members of the Compensation Committee, Mr. Spengler as an alternate, and to reappoint Mr. Montague as Chair of the Compensation Committee, effective June 9, 2016. Each of Messrs. Montague, Higgins, Hyatt, and Spengler is “independent” in accordance with the criteria established by the SEC and the NASDAQ. Between January 1, 2015 and December 31, 2015, the Compensation Committee of the Company met seven times. The Compensation Committee operates pursuant to a written charter adopted by the Board of Directors, which is available on the Company’s website atwww.endo.com, under “Investors-Corporate Governance-Compensation“Investors/Media—Corporate Governance—Compensation Committee.” The charter describes the nature and scope of responsibilities of the Compensation Committee.

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The primary function of the Compensation Committee is to conduct reviews of the Company’s general executive compensation policies and strategies and oversee and evaluate the Company’s overall compensation structure and programs. The Compensation Committee confirms that total compensation paid to the President and Chief Executive Officer, Executive Vice President &and Chief Financial Officer and those other individuals included in the Summary Compensation Table is competitive and performance-based. All of these individuals are referred to as the named executive officers, or NEOs. Responsibilities of the Compensation Committee include, but are not limited to:

 ¡ 

evaluatingsetting and approvingreviewing, at least annually, the goals and objectives relevant to compensation of the President and Chief Executive Officer and other NEOs,Company’s executive compensation plans and evaluating annually the performanceperformances of the executivesCompany’s NEOs (and certain other employees) in light of those goals and objectives;objectives, and determining and approving their compensation level based on this evaluation;

 ¡ 

determining and recommending for approval by the Board of Directors the compensation level of the President and Chief Executive Officer;

¡

evaluatinginterpreting, implementing, administering, reviewing and approving compensation levels and all grantsaspects of equity-based compensationremuneration to the Company’s NEOs (and certain other employees), as recommended by the Company’s Presidentincluding their employment agreements, severance arrangements and CEO;change in control agreements or provisions;

 ¡

recommending to the Board compensation policies for outside directors;

¡

providing general compensation oversight on significant issues affecting the Company’s compensation philosophy and/or policies;

¡

providing input to management on whether compensation arrangements for the NEOs (and certain other employees) incentivize excessive risk taking;

¡ 

establishing or reviewing performance-based and equity-based incentive plans for the PresidentNEOs (and certain other employees), as well as reviewing and Chief Executive Officer,approving other NEOs, and reviewing other benefit programssupplemental benefits and perquisites for the Company’s executive officers;such NEOs (and certain other employees);

 ¡

developing, approving, administering and recommending to the Board and the Company’s shareholders for their approval (to the extent such approval is required by any applicable law, regulation or Nasdaq rule) all stock option and other equity-based compensation plans of the Company and all related policies and programs;

approving individual recommendations and granting any shares, stock options or other equity-based awards under all equity-based long-term incentive stock plans that are outside the approved guidelines for such grants, and exercising such power and authority as may be required or permitted under such plans;

 

reviewing and approving the aggregate amount of dollars, in the case of the annual cash incentive compensation, and performance share units (PSU), restricted stock units (RSU), and stock options, in the case of the annual long-term incentive (LTI) compensation, that is available to the Company each year;

¡

reviewing at least annually the Company’s management succession plan relating to Named Executive Officer (NEO) positions with a focus on the ongoing evaluation and planning related to succession for the position of President and Chief Executive Officer;senior management; and

 ¡ 

reviewing and recommending toapproving compensation policies for the Board for approval the annual goals and objectives of the Company as a whole, which in turn serve as the foundation for incentive compensation.Company’snon-employee directors.

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Endo management is required to provide reviews and recommendations for the Compensation Committee’s consideration, and to manage the Company’s executive compensation programs, policies and governance. Direct responsibilities in this regard include, but are not limited to:

 ¡ 

providing an ongoing review of the effectiveness of the compensation programs for all employees, including competitiveness, and alignment with the Company’s objectives;

 ¡ 

recommending changes, if necessary, to achieve all program objectives; and

 ¡ 

recommending pay levels, payout and/or awards for NEOs and certain other employees other than the President and Chief Executive Officer.

The Compensation Committee can exercise its discretion in modifying any recommended adjustments or awards to the NEOs, in accordance with Internal Revenue Code (IRC) 162(m)taking into consideration the requirements related to performance-based compensation.compensation under Section 162(m) of the Internal Revenue Code (the Code).

Between January 1, 2017 and December 31, 2017, the Compensation Committee met six times.

Use of Compensation Consultants

The Compensation Committee retains Korn Ferry Hay Group, a division of Korn Ferry International, as its consultant to provide objective, independent analysis, advice and recommendations with regard to executive compensation including, but not limited to, competitive market data, and compensation analysis and recommendations related to our CEO,President and Chief Executive Officer, Board and our other senior executives. Korn Ferry Hay Group served as the independent executive compensation consultant to the Compensation Committee for the Company’s entire 20152017 fiscal year. The consultant reports to the Chairman of the Compensation Committee and has direct access to the other members of the Compensation Committee. The Compensation Committee also authorizes the consultant to shareinteract with request and receive from management in certain specified informationrespects in order to prepare for meetings with, and respond to requests from, the Compensation Committee. The Compensation Committee may retain other consultants and advisors from time to time.

A representative of Korn Ferry Hay Group attends meetings of the Compensation Committee, is available to participate in executive sessions and communicates directly with the Compensation Committee.

In making an overall determination ofdetermining the independence and lack of any conflict of interest regarding Korn Ferry Hay Group and Korn Ferry Hay Group’s lead advisor to the Compensation Committee, the Compensation Committee considered, among other things, the following factors:

 ¡ 

the amount of Korn Ferry Hay Group’s fees for executive compensation consulting services, noting in particular that such fees are nominal when considered in the context of Korn Ferry International and Korn Ferry Hay Group’s total revenues for the period,period;

 ¡ 

Korn Ferry Hay Group’s policies and procedures concerning conflicts of interest (copies of which were made available to the Compensation Committee),;

 ¡ 

that there are no conflicts of interest resulting from other business or personal relationships between any members of the Compensation Committee andKorn Ferry Hay Group’s lead advisor to the Compensation Committee and any members of the Compensation Committee or the Company’s executive team;

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 ¡ 

the lead Korn Ferry Hay Group advisor who provides executive compensation consulting services to the Company does not directly own any shares of the Company, and has agreed not to purchase any such shares so long as Korn Ferry Hay Group and the lead advisor isare engaged to provide executive compensation advisory services to the Compensation Committee,

¡

there are no other business or personal relationships between the Company’s executives and the lead Hay Group advisor,Committee; and

 ¡ 

any other factors relevant to the independence of Korn Ferry Hay Group.

In 2015,addition, Korn Ferry Hay Group’s Policy on Avoiding Conflicts of Interest confirms that Korn Ferry Hay Group’s compensation consultants will continue to provide clients with independent, unbiased advice. Endo’s Board determined that the policy sufficiently allows Korn Ferry Hay Group Compensation Committee consultants to maintain independence.

In 2017, Korn Ferry Hay Group assisted the Compensation Committee with, among other things, (i) performing a review of the Company’s executive and Board compensation program,programs, including competitive market analyses, assessment of potential risks associated with compensation arrangements, policies and plans and considerations related to Endo’s CEOPresident and ourChief Executive Officer and other senior executives, (ii) determining the appropriate allocation among short-term and long-term compensation, cash andnon-cash compensation and the different forms ofnon-cash compensation, (iii) identifying appropriate Pay Comparator Companies (as defined below in the Compensationsection entitled “Compensation Discussion and AnalysisAnalysis” (CD&A) section)) for purposes of benchmarking the Company’s executive compensation in the industry sectors in which Endo competes for talent and (iv) providing competitive market information and an overview of critical issues and trends affecting the executive compensation landscape. The aggregate amount of fees for Hay Group’s services was $269,634.

On December 1, 2015, Korn/Ferry International (Korn Ferry) announced the completion of its acquisition of Hay Group. Korn Ferry, a nationally recognized global people and organizational advisory firm, has provided services to Endo in the areas of executive recruiting and leadership development over the past several years. Prior to the announcement of Korn Ferry’s acquisition of Hay Group in September of 2015, Endo engaged Korn Ferry in the first half of 2015 to provide executive recruiting services. Following the announced acquisition, Endo’s Board considered Korn Ferry-Hay Group’s Policy on Avoiding Conflicts of Interest, which confirms that Hay Group’s compensation consultants will continue to provide clients with independent, unbiased advice. Following this review, Endo’s Board determined that the policy sufficiently allows Hay Group Compensation Committee consultants to maintain independence. Endo has not incurred any fees related to services provided by Korn Ferry since the completion of its acquisition of Hay Group.

Compensation Committee Interlocks and Insider Participation

None of the members of the Compensation Committee, during 20152017 or as of the date of this Proxy Statement, is or has been an officer or employee of the Company, or had any relationship requiring disclosure under Item 404(a) of RegulationS-K, and no executive officer of the Company served on the compensation committee or board of any company that employed any member of the Company’s Compensation Committee or Board of Directors.

10


Nominating & Governance Committee

The Nominating & Governance Committee of the Board of Directors, which is comprisedconsists of independent directors, identifies and recommends to the Board individuals qualified to serve as directors of the Company, recommends to the Board directors to serve on committees of the Board and advises the Board with respect to matters of Board composition and procedures. The Nominating & Governance Committee also oversees the Company’s corporate governance. The Nominating & Governance Committee operates pursuant to a written charter adopted by the Board of Directors, which is available on the Company’s website atwww.endo.com, under “Investors/Media—Corporate Governance—Nominating & Governance Committee.”

The Nominating & Governance Committee will consider director candidates recommended by shareholders. In considering candidates submitted by shareholders, the Nominating & Governance Committee will take into consideration the needs of the Board and the qualifications of the candidate. The Nominating & Governance Committee may also take into consideration the number of shares held by the recommending shareholder and the length of time that such shares have been held. To have a candidate considered by the Nominating & Governance Committee, a shareholder must submit the recommendation in writing and must include the following information:

 ¡ 

TheShareholder Information: name of the shareholder and evidence of the person’sshare ownership of shares in the Company, including the number of sharesquantity owned and the length of time of ownership; andownership.

 ¡ 

TheCandidate Information: name of the candidate, the candidate’shis or her resume or a listing of his or her qualifications to be a director of the Company and the person’shis or her consent to be named as a director if selected by the Nominating & Governance Committee and nominated by the Board.

The shareholder recommendation and information described above must be sent to the Company Secretary at Endo International plc, First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland, and must be received by the Company Secretary not less than 120 days prior to the anniversary date of the Company’s most recent Annual General Meeting.

While the Board does not have a formal policy with respect to diversity, the Board of Directors and the Nominating & Governance Committee advocate diversity in the broadest sense. We believe that it is important that nominees for the Board represent diverse viewpoints and have diverse backgrounds. The Nominating & Governance Committee looks at a broad array of qualifications and attributes including: experience, skills, expertise, and personal and professional integrity, character, business judgment, time availability in light of other commitments, dedication, conflicts of interestindependence and such other relevant factors that the Nominating & Governance Committee considers appropriate in the context of the needs of the Board of Directors. Although not specified in theits charter, the Nominating & Governance Committee actively considers diversity, such as ethnicity and gender, when selecting candidates so that additional diversity may be represented on the Board.

The Nominating & Governance Committee engages national search firms that specialize in identifying and evaluating director candidates. As described above, the Nominating & Governance Committee will also consider candidates recommended by shareholders for inclusion in the search process.

Once a person has been identified by the Nominating & Governance Committee as a potential candidate, the Nominating & Governance Committee may collect and review publicly available information regarding the person to assess whether the

12


person should be considered further. If the Nominating & Governance Committee determines that the candidate warrants further consideration, the Chairman or a member of the Nominating & Governance Committee utilizes a recognized search firm to review the candidate’s qualifications and background. Generally, if the person expresses a willingness to be considered and to serve on the Board, the Nominating & Governance Committee requests information from the candidate, reviews the person’s accomplishments and qualifications, including in light of any other candidates that the Nominating & Governance Committee might be considering, and conducts one or more interviews with the candidate. Generally, Nominating & Governance Committee members may conduct additional due diligence ofon the candidate. The Nominating & Governance Committee’s evaluation process does not vary based on whether or not a candidate is recommended by a shareholder, although as stated above, the Board may take into consideration the number of shares held by the recommending shareholder and the length of time that such shares have been held.held may be taken into consideration.

The Nominating & Governance Committee has established procedures under which any director who is not elected shall, if requested by the Board upon the Nominating & Governance Committee’s recommendation, tender his or her resignation to the Board of Directors. The Board of Directors will publicly disclose its decisions of whether or not to request any director to tender his or her resignation, and whether or not to accept any such tendered resignation and the rationale behind such decisions within 90 days from the date of the certification of the election results.

The current members ofBetween January 1, 2017 and December 31, 2017, the Nominating & Governance Committee are Mr. Kimmel, Dr. Hutson and Ms. Smith, while Messrs. Hyatt and Montague serve as alternates. The Board has elected Mr. Kimmel as Chairman of the Nominating & Governance Committee. Between January 1, 2015 and December 31, 2015, the Nominating & Governancemet five times.

Compliance Committee of the Company met four times. Subject to their election at the 2016 Annual Meeting,(formerly, Operations Committee)

In April 2018, the Board of Directors expects to reappoint Mr. Kimmel, Dr. Hutson and Ms. Smith as memberschanged the name of the Nominating & GovernanceOperations Committee Messrs. Hyattto the Compliance Committee and Montague as alternates,amended its charter to focus on assisting the Board by providing oversight of regulatory, compliance, quality and to re-appoint Mr. Kimmel as Chair of the Nominating & Governance Committee, effective June 9, 2016.legal matters. The Board of Directors has determined that all of the members of the Nominating & Governance Committee are “independent” in accordance with the criteria established by the SEC and the NASDAQ. The Nominating & GovernanceCompliance Committee operates pursuant to a written charter adopted by the Board of Directors, which is available on the Company’s website atwww.endo.com, under “Investors-Corporate Governance-Nominating & Governance“Investors/Media—Corporate Governance—Compliance Committee.”

11


Operations Committee

The purpose ofBetween January 1, 2017 and December 31, 2017, the Operations Committee is to review matters relating to scientific technology, research and development activities and pipeline investments; to provide advice and counsel to the Company’s management and Transactions Committee in connection with management’s decisions regarding the allocation, deployment, utilization of, and investment in the Company’s scientific assets; to provide advice and counsel to the Company’s management in connection with decisions regarding acquiring or divesting scientific technology or otherwise investing in research or development programs; to assist the Board by providing oversight of regulatory, compliance, quality and legal matters; and to designate a subcommittee to assess and review the Company’s Compliance Program, if necessary. Between January 1, 2015 and December 31, 2015, the Operations Committee of the Company met five times. The current members of the Operations Committee are Dr. Hutson, Mr. Higgins and Ms. Smith, while Messrs. Kimmel and Spengler serve as alternates. Subject to their election at the 2016 Annual Meeting, the Board of Directors expects to reappoint Dr. Hutson, Mr. Higgins and Ms. Smith as members of the Operations Committee, Messrs. Kimmel and Spengler as alternates, and to reappoint Dr. Hutson as the Chair of the Operations Committee, effective June 9, 2016. The Operations Committee operates pursuant to a written charter adopted by the Board of Directors, which is available on the Company’s website at www.endo.com, under “Investors—Corporate Governance—Operations Committee.”

Transactions Committee

On July 31, 2007,The Board of Directors determined to discontinue the Transactions Committee, effective March 20, 2017. The Transactions Committee of the Board of Directors formed a Transactions Committee to providewas responsible for providing advice and guidance to the Company’s management in connection with the exploration of strategic acquisition and licensing opportunities as well as any overture for merger with the Company, or sale of the Company or other likesimilar event. The current members of the Transactions Committee are

Messrs. Kimmel, Cooke, Hyatt Cooke, Higgins and Kimmel, while Dr. Hutson and Mr. Montague serve as alternates. Subject to their election at the 2016 Annual Meeting, the Board of Directors expects to reappoint Messrs. Hyatt, Cooke, Higgins and KimmelSisitsky served as members of the Transactions Committee, Dr. Hutson and Mr. Montague as alternates, and to reappointwith Mr. Hyatt serving as its chairman. Between January 1, 2017 and March 20, 2017 when the Chair ofTransaction Committee was discontinued, the Transactions Committee effective June 9, 2016. Between January 1, 2015 and December 31, 2015, the Transaction Committeemet one time.

Composition of Committees of the Company met three times.Board of Directors

The following table shows the directors who currently serve on and/or chair each of the current committees.

NameAudit Committee

Compensation

Committee

Nominating &
Governance
Committee
Compliance
(formerly,
Operations)
Committee (2)

Roger H. Kimmel

MemberMemberMember-

Paul V. Campanelli

----

Shane M. Cooke

Chairman---

Nancy J. Hutson, Ph.D.

--MemberChairman

Michael Hyatt

-MemberChairman-

Sharad S. Mansukani, M.D. (1)

-Member-Member

William P. Montague

MemberChairman--

Todd B. Sisitsky

-MemberMember-

Jill D. Smith

Member--Member

(1)

Appointed as a member of the Board in November 2017.

(2)

As discussed above, Ms. Smith will not be standing for re-election at the June 7, 2018 Annual Meeting due to her appointment as president and chief executive officer of another company in 2017. Mr. Kimmel will become a member of the Compliance Committee upon Ms. Smith’s departure.

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Subject to there-election of each of the director nominees at the 2018 Annual Meeting, the expected composition of the committees will be as follows:

NameAudit Committee

Compensation

Committee

Nominating &
Governance
Committee
Compliance
(formerly,
Operations)
Committee

Roger H. Kimmel

Member-MemberMember

Paul V. Campanelli

----

Shane M. Cooke

Chairman---

Nancy J. Hutson, Ph.D.

--MemberChairman

Michael Hyatt

-MemberChairman-

Sharad S. Mansukani, M.D.

-Member-Member

William P. Montague

MemberChairman--

Todd B. Sisitsky

-MemberMember-

With respect to the Audit Committee, the Board has determined that: (1) Messrs. Cooke and Montague are “audit committee financial experts,” as defined by the SEC regulations, and each has the related financial management expertise within the meaning of the Nasdaq listing rules and (2) the current and expected chairman and members are financially literate in accordance with the criteria established by the SEC and the Nasdaq.

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Audit Committee Report

The Audit Committee has reviewed and discussed the Company’s audited consolidated financial statements as of and for the year ended December 31, 20152017 with the management of the Company and PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm. Further, the Audit Committee has discussed with PricewaterhouseCoopers LLP the matters required to be discussed by the Public Company Accounting and Oversight Board’s (PCAOB) Auditing Standard No. 16,1301, Communications with Audit Committees, other standards of the PCAOB (United States), rules of the SEC, and other applicable regulations, relating to the firm’s judgment about the quality, not just the acceptability, of the Company’s accounting principles, the reasonableness of significant judgments and estimates, and the clarity of disclosures in the audited consolidated financial statements as of and for the year ended December 31, 2015.2017.

The Audit Committee also has received the written disclosures and the letter from PricewaterhouseCoopers LLP required by PCAOB Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence, which relate to PricewaterhouseCoopers LLP’s independence from the Company, and has discussed with PricewaterhouseCoopers LLP their independence from the Company. The Audit Committee has also considered whether the independent registered public accounting firm’s provision ofnon-audit services to the Company is compatible with maintaining the firm’s independence. The Audit Committee has concluded that the independent registered public accounting firm is independent from the Company and its management. The Audit Committee has also discussed with management of the Company and PricewaterhouseCoopers LLP such other matters and received such assurances from them as it has deemed appropriate.

The Committee also reviewed management’s report on its assessment of the effectiveness of the Company’s internal control over financial reporting and the independent registered public accounting firm’s report on the effectiveness of the Company’s internal control over financial reporting. In addition, the Audit Committee reviewed key initiatives and programs aimed at strengthening the effectiveness of the Company’s internal and disclosure control structure. As part of this process, the Audit Committee continued to monitor the scope and adequacy of the Company’s internal auditing program.

Based on the reviews, reports and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board approved, that the Company’s audited consolidated financial statements for the year ended December 31, 20152017 and management’s assessment of the effectiveness of the Endo International plc’s internal control over financial reporting be included in the Company’s Annual Report on Form10-K for the year ended December 31, 2015,2017, for filing with the SEC. The Audit Committee has selected, and the Board of Directors has approved, subject to shareholder approval, the selection of PricewaterhouseCoopers LLP as the Company’s independent auditorsregistered public accounting firm for the year ending December 31, 2016.2018.

Submitted by the Audit Committee of the Company’s Board of Directors.

Members of the Audit Committee:

William F. Spengler (Chairman)

Shane M. Cooke (Chairman)

Roger H. Kimmel (Member)

William P. Montague (Member)

Roger H. Kimmel (Alternate)

Jill D. Smith (Alternate)(Member)

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The above Audit Committee Report does not constitute soliciting material, and shall not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (the Exchange Act), except to the extent that the Company specifically incorporates the Audit Committee Report by reference therein.

 

15


 

Proposal 2: Approval of Appointment of Independent

Registered Public Accounting Firm and Authorization to Determine the Firm’s Remuneration

The Audit Committee of the Board of Directors has selected PricewaterhouseCoopers LLP (PwC), an independent registered accounting firm, to audit the books, and financial records and internal controls of the Company for the year ending December 31, 2016. 2018.

In accordance with SEC rules and PwC policies, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide audit service to a company. For lead and concurring review audit partners, the maximum number of consecutive years of service in that capacity is five years. The Audit Committee is involved in the selection of the lead audit partner under this rotation policy.

The Company is asking its shareholders to approve the appointment of PricewaterhouseCoopers LLPPwC as the Company’s independent auditorsregistered public accounting firm for 20162018 and to authorize the Audit Committee of the Board of Directors, acting through the Audit Committee, to determine the auditor’sindependent registered public accounting firm’s remuneration.

A representative of PricewaterhouseCoopers LLPPwC is expected to be present at the Annual Meeting and available to respond to appropriate questions, and will have the opportunity to make a statement if he or she desires to do so.

As previously disclosed in the Company’s Current Report onForm 8-K filed on June 13, 2014, on June 11, 2014 the Audit Committee of Endo’s Board of Directors requested Deloitte & Touche LLP to resign as the independent registered public accounting firm previously engaged as the principal accountant to audit the Company’s financial statements. This became effective on June 12, 2014, upon the engagement of PricewaterhouseCoopers. There were no disagreements or reportable events in connection with the change in accountants requiring disclosure under Item 304(b) ofRegulation S-K. There were no additional changes made during fiscal year 2015.

Fees Paid to the Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLPPwC has served as the Company’s independent registered public accounting firm forsince the yearsyear ended December 31, 2015 and 2014. The table below summarizes the aggregate fees for services PricewaterhouseCoopers LLPPwC provided during years 20152017 and 2014, respectively.2016:

 

a      Fees

Fees for audit services in 20152017 and 20142016 consisted of:

¡Audit of the Company’s annual financial statements;
¡Evaluation and reporting on the effectiveness of the Company’s internal controls over financial reporting;
¡Reviews of the Company’s quarterly financial statements;

Audit of the Company’s annual financial statements;

Evaluation and reporting on the effectiveness of the Company’s internal controls over financial reporting;

Reviews of the Company’s quarterly financial statements;

Statutory audits for the Company and certain of its subsidiaries; and

   2015  2014 

Audit Feesa

 $            11,565,000   $          5,774,500  

Audit-Related Feesb

 $639,500   $3,025,000  

Tax-Feesc

 $1,373,685   $608,600  

All Other Feesd

 $8,910   $423,100  
  

 

 

  

 

 

 

Total

 $13,587,095   $9,831,200  
  

 

 

  

 

 

 
  

 

 

  

 

 

 
   2017  2016 

Audit Fees(a)

 $9,128,378  $11,258,000 

Audit-Related Fees(b)

  632,032   10,000 

Tax-Fees(c)

  1,292,134   2,346,904 

All Other Fees(d)

  6,840   6,662 
        

Total

 $11,059,384  $13,621,566 
        
 

¡Statutory audits for certain of the Company’s subsidiaries; and

¡

Comfort letters, consents and other services related to debt issuances an exchange offer and other SEC matters.

b

Fees for      Feesfor audit-related services in 20152017 and 20142016 consisted of:

¡

Attestation services requested by management and fees associated with carve-out audits;management;

¡

Due diligence services; and

¡

Pre- or post- implementation reviews of processes or systems.

c

Fees for      Feesfor tax services in 20152017 and 20142016 consisted of tax compliance and tax planning and advice.of:

¡

Tax fees include statutorycompliance;

Statutory tax return preparation and reviewreview; and

Tax planning and advice, onincluding advice related to the impact of changes in local tax laws.

d

All other      Allother fees principally includes subscriptions to knowledge tools and other advisory services.

In considering the nature of the services provided by PricewaterhouseCoopers LLP,PwC, the Audit Committee determined that such services are compatible with the provision of independent audit services. The Audit Committee discussed these services with PricewaterhouseCoopers LLPPwC and Company management to determine that they are permitted under the rules and regulations concerning auditor independence promulgated by the SEC to implement the Sarbanes-Oxley Act of 2002, as well as the American Institute of Certified Public Accountants.

standards adopted by the PCAOB.

13Pre-Approval Policy


Pre-Approval Policy

Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation for and overseeing the work of the independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established a policy topre-approve all audit and permissiblenon-audit services provided by the independent registered public accounting firm.

Prior to the engagement of the independent registered public accounting firm for the next year’s audit, management will submit to the Audit Committee for approval a list of services and related fees expected to be rendered during that year within each of the following four categories of services to the Audit Committee for approval.services:

 

 11.

Audit services include audit work performed on the financial statements and related to the evaluation and reporting on the effectiveness of the Company’s internal control over financial reporting, as well asreporting. Also included in this category is work that generally only the independent registered public accounting firm can reasonably be expected to provide, including comfort letters, consents and other services related to SEC matters, and discussion surrounding the proper application of financial accounting and/or reporting standards.

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 22.

Audit-related services are for assurance and related servicesmatters that are traditionally performed by the independent registered public accounting firm, including due diligence related to mergers and acquisitions,carve-out audits and employee benefit plan audits.

 33.

Tax services include all services, except those services specifically related to the audit of the financial statements, performed by the independent registered public accounting firm’s tax personnel, including tax analysis; assisting with the coordination of execution of tax related activities, primarily in the area of mergers and acquisitions; supporting other tax related regulatory requirements; and tax compliance and reporting.

 44.

Other Feesfees are those associated with services not captured in the other categories.

Prior to engagement, the Audit Committeepre-approves the independent registered public accounting firm’s services within each category. The fees are budgeted and the Audit Committee requires the independent registered public accounting firm and management to report actual fees versus budget periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage the independent registered public accounting firm for additional services not contemplated in the originalpre-approval categories. In those instances, the Audit Committee requires specificpre-approval before engaging the independent registered public accounting firm.

The Audit Committee may delegatepre-approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, anypre-approval decisions to the Audit Committee at its next scheduled meeting.

Vote Required

The affirmative vote of aA majority of the issued ordinary shares entitled to vote and representedvotes cast at the Annual Meeting in person or by proxy will be required to approve the appointment of the Company’s independent auditorsregistered public accounting firm and the authorization toof the Board, acting through the Audit Committee, of the Board of Directors to determine the auditor’sindependent registered public accounting firm’s remuneration.

 

The Audit Committee and the Board of Directors recommend a vote FOR the approval of the Board’s appointment of PricewaterhouseCoopers LLP as the Company’s independent auditorsregistered public accounting firm for the year ending December 31, 20162018 and to authorizethe authorization of the Board, acting through the Audit Committee, of the Board of Directors to determine the auditors’independent registered public accounting firm’s remuneration.

 

1417


 

Proposal 3: Advisory Vote on the Compensation of Our

Named Executive Officers (“Say-on-Pay Vote”)(Say-on-Pay)

Compensation Philosophy

Pay-for-performance, alignment with shareholder interests and offering competitive pay are fundamental to Endo’s compensation philosophy.

 

 

A significant portion of executive compensation is linked directly with Endo’s shortshort- and long-term strategic and operating performance, without encouraging excessive risk;

 
 

Endo’s executive pay programs incorporate significant amounts of performance-based equityvariable incentive-based compensation that directly reflectsaligns with Endo’s financial, strategic, operating and share price performance;performance objectives; and

 
 

Total Direct Compensation is competitive within the Endo Pay Comparator Companies, enabling the Company to attract and retainmotivate highly-talented individuals and motivate themkey contributors to achieve high level performance, while embracing the Company’s Key Valueskey values and behaviors.

 

Endo’s CEOexecutive compensation package supports this philosophy by offering annual and long-term incentive compensation opportunities that are entirely performance based. CashIncentive-based cash compensation receivedawarded is subject to the Company achieving its annual performance objectives, and any realizedrealizing value in long-term equity value is largely dependent upon Endo’s financial performance and the delivery of shareholder value.

The Company’s commitment to its pay-for-performance philosophy was demonstrated again in connection with the 2017 performance year. In the context of the Company’s solid financial, strategic, operating and compliance performance, as well as external dynamics negatively impacting Endo’s stock price performance this past year, the Compensation Committee remained committed to the Company’s pay-for-performance philosophy, which is reflected in the awarded and realized pay levels for all NEOs. The following was considered by the Compensation Committee as part of the decision process for the 2017 performance year:

Since his appointment to the position of President and Chief Executive Officer on September 23, 2016, Mr. Campanelli entered the 2017 performance year confronted with numerous legacy issues, as well as litigation matters and debt obligations. Despite these challenges, Mr. Campanelli’s strong leadership and ability to remain focused on the execution of the Company’s key priorities confirms the Board’s confidence in Mr. Campanelli and the Executive Leadership Team, and their ability to lead the organization.

Under Mr. Campanelli’s leadership, the members of the Executive Leadership Team focused on priorities within their direct control, resulting in solid financial and operational performance throughout 2017. These achievements were driven primarily by key initiatives focused on strategic portfolio optimization, selective investments in product development, improved operating efficiency and mitigation of legal liabilities, leading to enhanced cash flow management and margin expansion (discussed in greater detail in the CD&A section). Mr. Campanelli and select members of the Executive Leadership Team worked with the FDA to voluntarily execute the cessation of shipments of OPANA® ER. In managing Endo’s debt obligations, the Company’s credit agreement was also refinanced, significantly enhancing the Company’s operational flexibility.

Despite the challenges facing the Company, Endo delivered solid operating results in 2017, including strong Adjusted EBITDA generation. Nevertheless, various external pressures and the challenges in the U.S. generics industry impacted Endo’s stock price, negatively affecting the realized value associated with the Company’s equity-based long-term incentive program.

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Please see the below example for Mr. Campanelli, which compares expected target compensation values with realized values based on actual results through the record date of April 13, 2018. As demonstrated by this example, equity compensation levels reflect a reduction of approximately 67%, with overall compensation levels reduced by approximately 52%. See Summary Compensation Table’s footnote (1) on page 53 for details regarding LTI valuations under ASC 718 for accounting and proxy reporting purposes.

LOGO

The information disclosed in the CD&A section details the actions approved by the Compensation Committee and explains the steps taken to support the Company’s executive management team charged with advancing Endo’s strategic imperatives, financial performance and operating objectives.

Pay-for-performance Incentive Plan Design

The Company’s compensation programs consist of elements designed to complement each other and reward achievement of short-term and long-term objectives tiedobjectives. This is achieved by tying the Company’s compensation programs to the Company’sits performance through the establishment and achievement of strategic operating metrics, or as a function of the Company’s share price Total Shareholder Return (TSR). We have chosen the selected metrics to align employee compensation, including compensation for the NEOs as disclosed in the Summary Compensation Table located under the section entitled “COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS”,“Compensation of Executive Officers and Directors,” to the Company’s strategic operating results and business strategy in an effort to enhance shareholder value. The summary below reflects the incentive program enhancements implemented and maintained by Endo in an effort to optimizepay-for-performance:

 

Pay-for-performance Incentive Plan Design

¡   EmphasisHigh concentration on performance-basedvariable short- and long-term incentive programscompensation

¡   PSUs compriseIncentive-based compensation accounts for a significant portionmajority of senior managementthe compensation provided to Endo’s NEOs; over 90% for Mr. Campanelli, with all other NEOs averaging over 75%

¡   PSUs for Mr. De Silva account for 75% of LTI valuePSU design with remaining LTI in the form of stock options; 100% tied to value creationmeasurement based on relative TSR and free cash flow performance over a three-year performance period

¡   PSUs for senior management account for 50% of LTI value; 75% tied to value creation

¡   PSUs for Vice President-level positions account for 33.3% of LTI Value; 66.6% tied to value creation

¡   PSU measurement based on 3-year share price appreciation performance

¡LTI awards granted to employees are generally required to vest, at a minimum, over a 3-yearthree-year period (subject to earlier vesting on certain events)

¡Equity plans prohibit there-pricing of equity awards without shareholder approval

¡   “Double“Double trigger” change in control provision

¡Equity plans do not allow for cash buyouts of underwater options

As the Company’s shareholders consider the evolution of Endo’spay-for-performance practices, consideration should be given to the significant progress made in recent years (see “Compensation Discussion and Analysis”). Based on the Company’s performance and competitive positioning of pay, CEOpay-for-performance has demonstrated a high degree of alignment with Endo’s Pay Comparator Companies across multiple quantitative screens.

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Compensation Committee Governance

The Compensation Committee regularly reviews industry compensation practices to align the Company’s compensation philosophy with the Company’s business strategy, while focusing on the enhancement of long-term shareholder value and management of risk. The summary below reflects the leading governance practices implemented and maintained by Endo’s Compensation Committee:

 

Governance

¡Utilize “Pay Comparator Companies” utilized for NEO total compensation comparison purposes

¡   AnnualConduct annual assessments of NEO pay positioning against Pay Comparator Companies

¡   AnnualPerform independent annual reviews of risks associated with compensation arrangements, policies and practices

¡   CompensationExpanded the Company’s compensation recovery policy (clawback) in the event of a restatement of Company financial results

¡   HedgingProhibit hedging and pledging of Company shares is prohibited

Prohibit Change in Controlgross-up payments

Employment agreements do not have automatic renewal provisions

¡Non-employee   Change in Control gross-up payments prohibited

¡   Employment agreements with automatic renewal provisions prohibited

¡   Non-employee Directors and executive management subject to ownership guidelines

¡Ownership guidelines requiring requirenon-employee Directors not to sell shares until guidelines are attained

¡   Shareholder approval sought for non-employee DirectorPlan has individual share limitations (described in additional detail in Proposal 6)fornon-employee Directors

¡The Compensation Committee retainsretained and is advised by an independent compensation consultant

15


As the Company’s shareholders consider the evolution of Endo’s pay-for-performance practices over the past several years, consideration should be given to the significant progress made since the company’s transformational strategic realignment initiated in 2013 (see “COMPENSATION DISCUSSION AND ANALYSIS”). Based on the Company’s performance and competitive positioning of pay over the past three years, CEO pay-for-performance has demonstrated a high degree of alignment in 2013, 2014 and 2015 with Endo’s Pay Comparator Companies across multiple quantitative screens. Since 2013, the Company has also been successful in managing share utilization levels while enhancing pay-for-performance effectiveness as noted below:

Pay-For-Performance Enhancements

2013:

¡   Enhanced the Endo performance scorecard process by adding growth drivers to the Company’s strategic priorities, including the achievement of operating efficiency goals and the execution of value-creating accretive deals

¡   Increased the weighting and impact of financial performance on the Company’s annual incentive program

¡   Increased NEO allocation of PSUs to 50% of LTI mix; providing for 75% of total LTI value based upon 3-year share price growth

¡   Enhanced opportunity for all PSU recipients if significant 3-year growth stock appreciation price targets are achieved

2014:

¡   Increased CEO allocation of PSUs to 75% of LTI mix; allowing for 100% of total LTI value based upon share price growth

¡   Expanded PSU eligibility while adjusting the equity mix for all Vice President-level positions; allowing for approximately 67% of total LTI value based upon share price growth

2015:

¡   Expanded stock option eligibility to middle-management positions

¡   Implemented minimum vesting requirements

¡   Implemented double-trigger PSU vesting upon a Change In Control

2016:

¡   Enhanced PSU program to measure 3-year performance against relative TSR with maximum award levels also dependent upon Endo achieving absolute stock price performance goals

¡   Approved a custom index of pharmaceutical companies, including companies in the New York Stock Exchange ARCA Pharmaceutical Index, Endo’s Pay Comparator Companies, and other specialty pharmaceutical companies to determine Endo’s relative TSR performance

The Compensation Committee has taken and will continue to take action to structure our executive compensation practices in a manner that is performance-based with a view towards rewarding outstanding operating performance and maximizing shareholder value creation and preservation.creation. The Board believes that the executive compensation as disclosed in the CD&A section, tabular disclosures and other narrative executive compensation disclosures in this Proxy Statement corresponds directly with the Company’s compensation philosophy and aligns, where appropriate, with our Pay Comparator Companies’ pay practices.

Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires that we regularly seek anon-binding advisory vote from our shareholders to approve the compensation of our named executive officers, or NEOs, as disclosed in the CD&A section and tabular disclosures of this Proxy Statement. Since the annual required vote is advisory, the result of the vote is not binding upon the Board.

Vote Required

A majority of the votes cast at the Annual Meeting will be required to approve, on an advisory basis, the compensation of Endo’s named executive officers.

 

The Compensation Committee and the Board of Directors recommends that youa vote FOR the approval, on an advisory basis, of the compensation to be paid toof Endo’s named executive officers as described in the CD&A section, tabular disclosures, and other narrative executive compensation disclosures in this Proxy Statement as required by the Securities and Exchange Commission.SEC.

Effect of Proposal

The abovesay-on-pay resolution isnon-binding. The approval or disapproval of this proposal by shareholders will not require the Board or the Compensation Committee to take any action regarding the Company’s executive compensation practices.

The Board values the opinions of the Company’s shareholders as expressed through their votes and other communications. Although the resolution isnon-binding, the Board will consider the outcome of the advisory vote on executive compensation when making future compensation decisions.

 

1620


Proposals 4 and 5

Proposal 4 sets out certain proposed amendments to the Company’s Memorandum of Association and Proposal 5 sets out certain proposed amendments to the Company’s Articles of Association. Under Irish law, any amendment to a company’s Articles of Association must be voted on separately from any amendment to a company’s Memorandum of Association. For these reasons, we are asking shareholders to separately vote on Proposals 4 and 5, however, given the inextricable link between Proposals 4 and 5, each proposal is subject to and conditioned upon the other proposal being approved by shareholders. If one of these proposals is not adopted, the other proposal will also not be adopted.

 

Proposal 4: AmendApproval of the Company’s Memorandum of AssociationEndo International plc Amended and Restated 2015 Stock Incentive Plan

Background

The Companies Act 2014, which consolidates Irish company law, took effect on June 1, 2015. In addition to consolidating pre-existing Irish company law, the Companies Act 2014 amended certain provisions of the pre-existing Irish company law as well as introduced new provisions.

Proposal 4 is being proposed so that certain administrative amendments can be made to the Company’s Memorandum of Association to account for the adoption of the Companies Act 2014. These proposed updates to the Memorandum of Association in response to the enactment of the Companies Act 2014 will not materially change the rights of the Company’s shareholders.

A copy of the Memorandum of Association in the form proposed to be amended by the following special resolution is attached to this proxy statement, as Annex 1. We urge you to read Annex 1 in its entirety before you cast your vote.

Vote Required

The affirmative vote of at least 75% of the issued ordinary shares entitled to vote and be represented at the Annual Meeting in person or by proxy will be required to approve the amendment of the Company’s Memorandum of Association. In addition, adoption of Proposal 4 is subject to and conditioned upon shareholder approval of Proposal 5.

Accordingly, the Board of Directors is requesting that the shareholders approve the following resolution as a special resolution of the Company:

“RESOLVED as a special resolution that, subject to and conditional upon Proposal 5 being passed, Clauses 2 and 3.16 of the Memorandum of Association, in the form produced to the meeting (a copy of which are marked ‘X’ for identification and as shown in Annex 1 of the proxy statement), be adopted in substitution for, and the exclusion of, the existing Clauses 2, and 3.16.”

The Board of Directors recommends a vote FOR the amendment of the Company’s Memorandum of Association in the manner described above.

Proposal 5: Amend the Company’s Articles of AssociationSummary

Background

There are two categories of amendments proposed to be made to the Company’s Articles of Association: (i) amendment to the advance notice provisions; and (ii) amendments in connection with the enactment of the Companies Act 2014.

The description set forth below is only intended to be a summary of the amendments proposed to be made to the Company’s Articles of Association pursuant to this proposal. A copy of the Articles of Association in the form proposed to be amended by the following special resolution is attached to this proxy statement, as Annex 1. We urge you to read Annex 1 in its entirety before you cast your vote.

(i) Amendment to the Advance Notice Provisions

The Company’s Articles of Association provide shareholders with the right to propose business at a general meeting and nominees for election to the Board. In order to avail of such right, a shareholder’s notice of the proposed business or nominees must be delivered to the Company’s registered office not less than sixty (60) days nor more than ninety (90) days prior to the anniversary date of the immediately preceding annual meeting of the Company. The Board of Directors has determined, based on, among other things, its review of current corporate governance norms and practices, (i) any shareholder who desires to propose a nominee for election to the Board of Directors should provide meaningful disclosure so that the Board of Directors and shareholders can adequately assess the nominee and (ii) the time frame during which any such notice should be delivered to the Company should be adjusted so that such notices must be delivered not less than ninety (90) days nor more than one-hundred and twenty (120) days prior to the anniversary date of the immediately preceding annual meeting of the Company. In light of these principles, the Board of Directors recommends amending our Articles of Association to enhance the current dis-

17


closure obligations applicable to shareholder nominations and to adjust the time frame for delivering notice provided in the Company’s advance notice provision. Specifically, our Board of Directors believes that making the following enhancements to the advance notice provision in our Articles of Association is in the best interests of the Company and its shareholders:

ItemCurrent ProvisionProposed Amendment
Timely notice60-90 days prior to the anniversary date of the immediately preceding annual meeting90-120 days prior to the anniversary date of the immediately preceding annual meeting
Disclosure and details of any fee arrangement the shareholder nominee has entered into or compensation received by the shareholder nominee from any person or entity other than the Company, in each case in connection with their candidacy or service as a Director of the CompanyNo requirement for shareholder nominee to provideMust be provided by shareholder nominee
Either (i) a representation that the shareholder nominee is not and will not become a party to any voting commitment with respect to any matter to be voted upon by the Board of Directors or (ii) if the shareholder nominee is a party to a voting commitment, a detailed disclosure from the shareholder nominee regarding the voting commitment, its terms and any such compensation receivedNo requirement for shareholder nominee to provideMust be provided by shareholder nominee
Representation that the shareholder nominee will agree to and abide by all policies of the Board if elected (e.g., Code of Conduct for the Board of Directors for Endo International plc, Policy of Endo International plc Relating to Insider Trading in Company Securities and Confidentiality of Information, and Travel and Expense Policy)No requirement for shareholder nominee to provideMust be provided by shareholder nominee
Representation whether shareholder proponent intends to deliver proxy statement or solicit proxiesNo requirement for shareholder proponent to provideMust be provided by shareholder proponent
Information as may be necessary to determine eligibility of shareholder nomineeNo requirement for shareholder proponent to provideMust be provided by shareholder proponent
Requirement to supplement and update information in member’s notice nominating a person for election or re-election as a DirectorNo requirement for shareholder proponent to updateShareholder proponent must update notice so that it is true and correct as of the record date and 15 days prior to the annual general meeting

While the table above is intended to be a useful summary, it is not complete, and therefore, we urge you to read and consider the full text of the amended advance notice provision in the Memorandum and Articles of Association contained in Annex 1 before you cast your vote.

(ii) Amendment to the Articles of Association in response to the enactment of the Companies Act 2014

As discussed in connection with Proposal 4 above, on June 1, 2015, the Companies Act 2014 became effective in Ireland. Although the changes to Irish company law will not impact the Company’s day-to-day operations, the Board of Directors is proposing to make certain amendments to the Company’s Articles of Association in addition to the proposed amendments to the Company’s Memorandum of Association, in order to confirm that the changes to Irish company law effected by the Companies Act 2014 will not have unintended effects on the application of the Company’s Articles of Association.

For example, the Companies Act 2014 contains optional statutory provisions, which will apply automatically to the Company unless such provisions are explicitly excluded from the Company’s Articles of Association. Because many of these optional statutory provisions are already covered by the Company’s current Articles of Association, to avoid any confusion and to continue the Company’s existing approach of setting out regulations governing the Company rather than relying on statutory defaults, the Board of Directors has proposed the Company explicitly exclude such optional statutory provisions from the Company’s Articles of Association. A summary has been prepared listing the optional provisions in the Companies Act 2014 that the Company is proposing to exclude from the Company’s Articles of Association. Such summary is contained in Part I of Annex 2.

One such optional statutory provision that the Board of Directors is not proposing to exclude is the provision enabling shareholders holding not less than 50% of the paid up share capital of the Company to convene an extraordinary general meeting of the Company. This provision benefits shareholders by providing them the enhanced ability to cause an extraordinary general meeting of the Company by eliminating the requirement that the Board of Directors must call such a meeting.

18


Part II of Annex 2 contains a summary of the other administrative amendments that the Board of Directors is proposing to make to the Company’s Articles of Association to address the enactment of the Companies Act 2014. Some of these amendments are for the purposes of addressing inconsistencies between the existing Articles of Association and the provisions of the Companies Act 2014. Other amendments are made to update legislative references in keeping with the equivalent provisions of the Companies Act 2014.

A copy of the Articles of Association, in the form proposed to be amended by the following special resolution, and which captures the above two categories of proposed changes, is attached to this proxy statement, as Annex 1. While the tables contained in Parts I and II of Annex 2 are intended to be useful summaries, they are not complete, and therefore, we urge you to consider the full text of the amended Memorandum and Articles of Association contained Annex 1 before you cast your vote.

Vote Required

The affirmative vote of at least 75% of the issued ordinary shares entitled to vote and be represented at the Annual Meeting in person or by proxy will be required to approve the amendment of the Company’s Articles of Association. In addition, the adoption of Proposal 5 is subject to and conditioned upon shareholder approval of Proposal 4.

Accordingly, the Board of Directors is requesting that the shareholders approve the following resolution as a special resolution of the Company:

“RESOLVED as a special resolution that, subject to and conditional upon Proposal 4 being passed, the Articles of Association of the Company, in the form produced to the meeting (a copy of which are marked ‘X’ for identification and as shown in Annex 1 of the proxy statement), be adopted in substitution for, and to the exclusion of, the existing Articles of Association of the Company.”

The Board of Directors recommends a vote FOR the amendment of the Company’s Articles of Association in the manner described above.

19


Proposal 6: Approval of an Amendment to the 2015 Stock

Incentive Plan

On June 9, 2015, shareholders approved the Endo International plc 2015 Stock Incentive Plan (the “Plan”)(as amended, the Plan). On March 20,June 9, 2016, shareholders approved an amendment that imposed a limit on the value of equity grants that may be made to eachnon-employee director and provided technical updates to reflect changes in accounting rules. On June 8, 2017, shareholders approved an amendment that increased the authorized number of shares of Company stock that may be issued with respect to awards under the Plan, established parameters applicable to certain awards granted under the Plan intended to qualify as “performance-based compensation” under Section 162(m) of the Code and updated Irish statutory references in the Plan to ensure consistency with the Companies Act 2014. On April 26, 2018, our Board of Directors approved, subject to shareholder approval at the Annual Meeting, an amendment toand restatement of the Plan. The reasons forPlan that increases the amendment are to limit the valueauthorized number of equity grantsshares of Company stock that may be madeissued with respect to each non-employee directorawards under the Plan by five million (5,000,000) shares, provides that those shares may be used for any type of award issuable under the Plan and updates certain provisions in connection with the Tax Cuts and Jobs Act of 2017 (the Tax Act). In other regards, the Plan, as proposed, generally restates the terms and conditions of the Company to $750,000 and to make certain technical updates to reflect changes in accounting rules. The textcurrent Plan. A summary of the proposed amendment tomaterial provisions of the Plan is set forth below.

Long-term equity awards are a key element of our compensation programs and accomplish the following objectives:

Align the interest of key employees with those of our shareholders through increased employee ownership of the Company;

Attract, motivate and retain key employees who will contribute to our long-term financial success;

Provide incentive compensation opportunities in a highly competitive industry to encourage top talent to remain dedicated to our long-term objectives; and

Attract and retain members of our Board of Directors that are highly competent individuals upon whose judgment, initiative, leadership and continued efforts our success depends.

In the context of a challenging external environment, it is critical that we maintain the ability to attract and motivate key individuals who are essential to the long-term success of the Company. This proposal will allow the Plan to maintain a sufficient number of shares to help achieve our goals and enable us to continue making long-term equity awards to employees to incentivize them to support the Company’s strategic objectives. If the shareholders do not approve the Plan, as amended and restated in Annex 32018, then the terms, conditions and current share reserve of the current Plan will continue in effect, but we will not have a sufficient number of shares available for future grants.

In determining the number of shares of Company stock to this Proxy Statement.

As partreserve under the Plan, our management and the Compensation Committee, in consultation with our compensation consultant, evaluated the dilution, historic share usage, burn rate and the existing terms of this proposal, we performed a detailed reviewoutstanding equity awards. We believe the increased dilution resulting from the approval of the Plan, togetheras amended and restated in 2018, remains consistent with shareholder interests. For additional information on our compensation advisors.dilution, historic share usage and burn rate, see the section entitled “Dilution and Historical Share Usage” below.

Vote Required

A majority of the votes cast at the Annual Meeting will be required to approve the Plan.

The Compensation Committee and the Board of Directors recommends a vote FOR the approval of the Endo International plc Amended and Restated 2015 Stock Incentive Plan.

Dilution and Historical Share Usage

Dilution. Subject to shareholder approval of the Plan, as amended and restated in 2018, an estimated 9,542,291 shares of Company stock will be reserved for issuance under the Plan (comprised of 5,000,000 new shares available for awards under the Plan and 4,542,291 shares available for future awards under the Plan as of April 13, 2018, all of which may be used for any type of award issuable under the Plan), which represents approximately 4.3% of our issued and outstanding shares. The Board of Directors believes that this number of shares constitutes reasonable potential equity dilution and provides a significant incentive for employees to increase the value of the Company for all shareholders. The closing trading price of each share of Company stock as of the record date was $5.48.

As of April 13, 2018, Endo had:

4,542,291 shares remaining available for future awards under the current Plan (no shares remain available for future awards under any other plan).

16,675,416 shares of Company stock underlying outstanding awards, comprised of:

7,669,974 stock options outstanding (vested and unvested), with a weighted average exercise price of $22.49 and a weighted average remaining contractual term of 7.6 years. The outstanding stock options all had exercise prices greater than the Company’s stock price as of the record date.

21


9,005,442 shares of full value awards outstanding, consisting of 6,826,950 shares of unvested restricted stock units and 2,178,492 unvested and unearned performance-contingent awards.

223,786,744 shares of Company stock outstanding.

The new shares available under the Plan, as amended and restated in 2018, would represent an additional potential equity dilution of approximately 2.2%. Including the shares under the Plan, as amended and restated in 2018, the potential equity dilution from all equity incentive awards outstanding and available for grant under all of our equity plans would result in a maximum potential equity dilution of approximately 11.7%. The following summarizes current and proposed amendment promotesshare reserves and resulting dilution levels as of April 13, 2018:

      # Shares  Dilution 
A.  Shares Available for Grant Under the Current Plan  4,542,291   2.0% 
B.  New Shares Available for Grant Under the Proposed Plan  5,000,000   2.2% 
C.  Total Shares Available for Grant Under the Proposed Plan (A+B)  9,542,291   4.3% 
D.  Current Shares Outstanding  16,675,416   7.5% 
E.  Total Shares Authorized Under the Proposed Plan (C+D)  26,217,707   11.7% 

The shares reserved for issuance under the Plan may be authorized but unissued Company stock or authorized and issued Company stock held in the Company’s treasury. If any shares subject to an award are forfeited, cancelled, exchanged or surrendered or if an award terminates or expires without a distribution of shares to the participant, the shares of Company stock with respect to such award will, to the extent of any such forfeiture, cancellation, exchange, surrender, withholding, termination or expiration, again be available for awards under the Plan except that any shares of Company stock surrendered or withheld as payment of either the exercise price of an award and/or withholding taxes in respect of an award will not again be available for awards under the Plan.

The quantity of shares available for issuance under the Plan is required to provide the Company with the ability to support ourpay-for-performance compensation philosophy by offering the appropriate level of incentives and equity ownership stake to effectively attract, motivate and retain highly-talented individuals, while supporting our strategic growth objectives focused on the creation of shareholder value. As demonstrated by the Company’s responsible use of equity over the past several years and good compensationcorporate governance practices associated with equity and executive compensation practices in supportgeneral, the stock reserved under the Plan will allow the Company to remain focused on business continuity and strategic growth priorities, while managing program costs and share utilization levels within acceptable industry standards.

Share Usage. In determining the number of shareholder interests. Ifshares to reserve under the Plan, we evaluated the dilution and historic share usage (as described above), burn rate and the existing terms of outstanding awards under our shareholders do not approveequity plans. The annual share usage under our equity plans for the Amendment, the current Plan (prior to such proposed amendment) will remain in effect.last three fiscal years was as follows:

      Fiscal Year
2017
   Fiscal Year
2016
   Fiscal Year
2015
   Average 
A  Total Shares Granted During Fiscal Year (1)   11,541,391    4,951,749    2,185,578    6,226,239 
B  Basic Weighted Average Common stock Outstanding   223,198,000    222,651,000    197,100,000    214,316,333 
C  Burn Rate (A/B)   5.17   2.22   1.11   2.83

(1)

Includes the number of options and full value awards (restricted shares and restricted stock units) granted for such year. PSUs granted are also included as full value awards. The number of full value awards granted for each year is multiplied by a multiplier of 1.5 based on the volatility in the Company’s stock price over the preceding three years.

Description of Material Features of the Plan

Except as set forth in the proposed amendment, the Plan is identical to the version approved by shareholders in 2015.Terms and Provisions. The material featuresterms and provisions of the Plan, assuming this Proposal 4 is approved, are summarized below, whichbelow. This description is not intended to be complete and is qualified in its entirety by reference to the full textPlan, a copy of the Plan.which is attached as Annex 1 to this Proxy Statement.

Administration.Administration. The Plan is administered by the Compensation Committee, whowhich was appointed by our Board of Directors. The Compensation Committee has the authority, in its sole discretion, subject to and not inconsistent with the express terms and provisions of the Plan, to administer the Plan and to exercise all the powers and authorities either specifically granted to it under the Plan or as necessary or advisable. The Compensation Committee may delegate all or any part of its authority under the Plan to an employee, employees or committee of employees. All decisions, determinations and interpretations of the Compensation Committee are final and binding, and no member of the Compensation Committee will be liable for any action taken or determination made in good faith with respect to the Plan or any award.

Eligibility.Eligibility. Awards pursuant to the Plan may be granted to the following classes of persons: (1) employees of the Company, including officers and directors who are employees, to(2) non-employee directors and to(3) consultants of the Company. Incentive

22


stock options may only be granted to Company employees (including officers and directors who are also employees). AllAs of our April 13, 2018, we had eightnon-employee directors, seven of whom are currently eligible to participate in the Plan. As of April 13, 2018, we had approximately 2,960 employees (which includes all of the full-time and part-time employees of the Company and its subsidiaries and approximately six officers of the Company and its subsidiaries), all of whom are eligible to participate in the Plan, andalthough awards will typically be limited to approximately 570 employees of the number of employees whoCompany. While consultants are eligible to participate in the Plan, it is approximately 700.not the Company’s practice to grant awards under the Plan to these individuals.

Shares Available.Available As. The number of April 14, 2016, 7,052,252 shares of Company stock are reserved for issuance under the Plan, as amended and restated in 2018, will be 5,000,000 plus the number of shares reserved but unissued under the Plan as of the date the Plan, as amended and restated in 2018, is approved by shareholders, or that become available for reuse in accordance with the terms of the Plan, following the date the Plan, as amended and restated in 2018, is approved by shareholders, subject to adjustment for a change in capitalization. Of the total shares reserved for issuance under this Plan, no more than half of such shares may be issued as “full value awards”. The shares may be authorized but unissued Company stock or authorized and issued Company stock held in the Company’s treasury. If any shares subject to an award are forfeited, cancelled, exchanged or surrendered or if an award terminates or expires without a distribution of shares to the participant, the shares of stock with respect to such award will, to the extent of any such forfeiture, cancellation, exchange, surrender, withholding, termination or expiration, again be available for awards under the Plan except that any shares of Company stock surrendered or withheld as payment of either the exercise price of an award and/or withholding taxes in respect of an award will not again be available for awards under the Plan. In no eventThe shares available under the Plan, as amended and restated in 2018, may be used to grant any type of award issuable under the Plan.

Section 162(m) Limitations. We are asking shareholders to approve individual award limitations and performance goals in order to allow certain “Grandfathered Awards” granted under the Plan to qualify as “performance-based compensation” under Section 162(m) of the Code. “Grandfathered Awards” means remuneration which the Company intended to qualify as “performance-based compensation” under Section 162(m) of the Code and which is provided pursuant to a written binding contract that was in effect on November 2, 2017, and that was not modified in any material respect on or after such date, within the meaning of Section 13601(e)(2) of P.L.115-97 (the Tax Cuts and Jobs Act) as may be amended from time to time (including any regulations or further guidance). The Plan contains the following limitations for Grandfathered Awards. The total number of shares of Company stock subject to stock-based awards awardedintended to qualify as Grandfathered Awards granted to any one participant during any tax year of the Company may not exceed one million five hundred thousand (1,500,000) shares (based on highest levels of performance resulting in maximum payout), subject to adjustment for certain transactions. The proposed amendment will also limitWith respect to cash-based awards intended to qualify as Grandfathered Awards, (i) the maximum value of the aggregate payment that any participant may receive with respect to any such cash-based award that is an annual equityincentive award is $5,000,000, (ii) the maximum value of the aggregate payment that any participant may receive with respect to any such award that is a long-term cash incentive award is the amount set forth in clause (i) above multiplied by a fraction, the numerator of which is the number of months in the performance period and the denominator of which is twelve, (iii) the achievement of the awards will be based on the business criteria listed under “Performance Awards” below, and (iv) the additional rules described below will apply.

Director Compensation Limitation. The maximum fair market value of shares of Company stock subject to awards that may be granted to eachnon-employee director participants, as noted above.participant in any consecutive twelve-month period is limited to $750,000.

Description of Awards.Awards. The Plan provides for the grant of stock options, stock appreciation rights, shares of restricted stock, stock bonus, performance awards or other share-based or cash-based awards. Subject to earlier vesting on certain events, as described below, no award (or portion of an award) granted under the Plan provides for vesting prior to the first anniversary of its date of grant. However, awards that result in the issuance of an aggregate of up to 5% of the shares of Company stock available under the Plan may be granted under the Plan without regard to such minimum vesting provisions. In addition, as described below, awards that are subject to time-based vesting conditions are generally required under the Plan to vest over a 3-yearthree-year period. However, awards that result in the issuance of an aggregate of up to 5% of the shares of common stock available under the Plan may be granted under the Plan without regard to such minimum vesting provisions.

Stock Options.Options. Options granted under the Plan may be incentive stock options meeting the definition of an incentive stock option under Section 422 of the Internal Revenue Code or options which do not qualify as incentive stock options (referred to as nonqualified options). An award will be evidenced by an award agreement that specifies the option price, duration of the option, the number of shares to which the option pertains, termination and transferability rights and other provisions as the Compensation Committee may determine to be appropriate. The option price for each grant will be at least equal to the fair market value of the shares subject to the option on the grant date of the option. The date on which the Compensation Committee adopts a resolution granting an option will be considered the grant date of the option, unless such resolution specifies a later date. No option may be exercised later than the tenth anniversary date of its grant. Notwithstanding the foregoing, if the vesting condition for any option (other than options excluded from the minimum vesting requirement) relates exclusively to the passage of time and continued employment, such time period will not be less than 36 months, with no more than 33 1/3% of the award vesting every 12 months from the date of the award (subject to earlier vesting on certain events described below). If the vesting condition for any award relates to the attainment of specified performance goals, such award will vest over a performance period of not less than one year (subject to earlier vesting on certain events described below).

 

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Stock Appreciation Rights (SARs). The Compensation Committee may grant SARs under the Plan, either in tandem with stock options or freestanding and unrelated to options. Tandem SARs may be exercised only when the related option is exercisable. Freestanding SARs may be exercised upon such terms and conditions established by the Compensation Committee. Each SAR will be evidenced by an award agreement that will specify the grant price, the term of the SAR and other provisions as the Compensation Committee or board may determine to be appropriate. In no event will the appreciation base of the ordinary shares subject to the SAR be less than the fair market value of the shares on the date of grant. The term of the SAR may not exceed ten (10) years. Notwithstanding the foregoing, if the vesting condition for any SAR (other than SARs excluded from the minimum vesting requirement) relates exclusively to the passage of time and continued employment, such time period will not be less than 36 months, with no more than 33 1/3% of the award vesting every 12 months from the date of the award (subject to earlier vesting on certain events described below). If the vesting condition for any award relates to the attainment of specified performance goals, such award will vest over a performance period of not less than one year (subject to earlier vesting on certain events described below). Upon exercise of a SAR, a participant will be entitled to receive payment from the Company in an amount determined by multiplying (i) the difference between the fair market value of a share on the exercise date and the appreciation base of the SAR, by (ii) the number of shares with respect to which the SAR is exercised.

Restricted Stock and Bonus Stock Bonus.. The Compensation Committee may grant restricted stock awards, alone or in tandem with other awards under the Plan, subject to such restrictions, terms and conditions, as the Compensation Committee may determine in its sole discretion and as may be evidenced by the applicable agreements. The vesting of a restricted stock award granted under the Plan may be conditioned upon the completion of a specified period of employment or service with the Company or any subsidiary, upon the attainment of specified performance goals and/or upon such other criteria as the Compensation Committee may determine in its sole discretion. Notwithstanding the foregoing, if the vesting condition for any award that is settled in Company stock, such as restricted stock awards (full value awards) (other than full value awards excluded from the minimum vesting requirement) relates exclusively to the passage of time and continued employment, such time period will not be less than 36 months, with no more than 33 1/3% of the award vesting every 12 months from the date of the award (subject to earlier vesting on certain events described below). If the vesting condition for any full value award (including award of restricted stock) relates to the attainment of specified performance goals, such full value award will vest over a performance period of not less than one year (subject to earlier vesting on certain events described below). Each agreement with respect to a restricted stock award will set forth the amount (if any) to be paid by the participant with respect to the award and when and under what circumstances such payment is required to be made. The Compensation Committee may grant stock bonus awards, alone or in tandem with other awards under the Plan, subject to such terms and conditions as the Compensation Committee may determine in its sole discretion and as may be evidenced by the applicable agreement.

Performance Awards.Awards. The Compensation Committee may grant performance awards, alone or in tandem with other awards under the Plan, to acquire shares of Company stock in such amounts and subject to such terms and conditions as the Compensation Committee may, from time to time in its sole discretion, determine, subject to the terms of the Plan. To the extent necessary to satisfy the short-term deferral exception to Section 409A of the Internal Revenue Code, unless the Compensation Committee will determine otherwise, the Performance Awards will provide that payment will be made within 2 1/2 months after the end of the year in which the Participant has a legally binding vested right to such award. No dividends or dividend equivalents will be paid in respect of unvested performance awards. In the event that the Compensation Committee grants a performance award or other award (other than a nonqualified option or incentive stock option) that is intended to constitute qualified performance-based compensation within the meaning Section 162(m) of the Internal Revenue Code, the following rules will apply:a Grandfathered Award, payments under the award will be made solely on account of the attainment of one or more objective performance goals. Thegoals and the performance goals must be established in writing by the Compensation Committee not later than 90 days after the commencement of the period of service to which the award relates (but in no event after 25 percent of the period of service has elapsed). The performance goal(s) to which the awardGrandfathered Award relates may be based on one or more of the business criteria set forth in the Plan.Plan, which include: stock appreciation; net revenues; return on total shareholders’ equity; earnings per ordinary share; net income; return on assets, return on investment, return on capital or return on equity; earnings from continuing operations; levels of expense, cost or liability; earnings before all or any interest, taxes, depreciation and/or amortization; inventory goals; market share; cost reduction goals; business development goals; customer satisfaction goals; employee satisfaction or employee engagement goals; identification or consummation of investment opportunities or completion of specified projects; entry into new markets; meeting specified market penetration or value added goals; development of new technologies; or cash flow.

Other Stock- or Cash-Based Awards.Awards. The Compensation Committee is authorized to grant other stock-based awards or other cash-based awards, as deemed by the Compensation Committee to be consistent with the purposes of the Plan. To the extent necessary to satisfy the short-term deferral exception to Section 409A of the Internal Revenue Code, unless the Compensation Committee will determine otherwise, the awards will provide that payment will be made within 2 1/2 months after the end of the year in which the participant has a legally binding vested right to such award. With respect to other cash-based awards intended to qualify as performance based compensation under Section 162(m) of the Internal Revenue Code, (i) the maximum value of the aggregate payment that any participant may receive with respect to any such other cash-based award that is an annual incentive award is $5,000,000, (ii) the maximum value of the aggregate payment that any participant may receive with respect to any such award that is a long-term cash incentive award is the amount set forth in clause (i) above multiplied by a fraction, the numerator of which is the number of months in the performance period and the denominator of which is twelve, (iii) the achievement of the awards will be based on the business criteria listed under “Performance Awards” above, and (iv) the additional rules described above applicable to awards intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code will apply. The Compensation Committee may establish such other rules applicable to the other stock- or cash-based awards to the extent not inconsistent with Section 162(m) of the Internal Revenue Code.Code with respect to Grandfathered Awards.

Termination of Service.Service. Unless the applicable award agreement provides otherwise or the Compensation Committee in its sole discretion determines otherwise, the Plan generally provides for the treatment of outstanding awards in the event of a

21


termination of a participant’s service with or without cause (as such term is defined in the Plan), for good reason (or any like term as defined under a participant’s employment agreement), or as a result of voluntary retirement, death or disability.

24


Effect of Change in Control. Unless the applicable award agreement provides otherwise, in the event of a Change in Control (as such term is defined in the Plan), and in accordance with the requirements of Section 409A of the Internal Revenue Code:

 ¡ 

For any award that is assumed in connection with a Change in Control, in the event of a termination of a participant’s service by the Company without cause, during the24-month period following the Change in Control, at the time of termination, all awards held by the participant will vest, and any performance conditions imposed on the awards will be deemed to be achieved at target levels.

 ¡ 

For any award that is not assumed in connection with a Change in Control, immediately upon the occurrence of the Change in Control, all awards held by the participant will become fully vested and any performance conditions imposed on the awards will be deemed to be achieved at target levels.

 ¡ 

An award will be considered assumed if, following the Change in Control, the award remains subject to the same terms and conditions that were applicable to the award immediately prior to the Change in Control except that, if the award related to shares of Company stock, the award instead confers the right to receive ordinary shares of the acquiring entity.

 ¡ 

In the event of a Change in Control, except as would otherwise result in adverse tax consequences under Section 409A of the Code, the Company may provide that each award will, immediately upon the occurrence of a Change in Control, be cancelled in exchange for a payment in cash or securities in an amount equal to (x) the excess of the consideration paid per share of Company stock in the Change in Control over the exercise price (if any) per share of Company stock subject to the award multiplied by (y) the number of shares granted under the award.

Amendment or Termination of the Plan.Plan. Subject to certain limitations, the Board of Directors or the Compensation Committee may, at any time, suspend or terminate the Plan or revise or amend it in any respect whatsoever; provided, however, neither the Board of Directors, the Compensation Committee nor their respective delegates will have the authority to(a) re-price (or cancel andre-grant) any option or, if applicable, othereither award at a lower exercise, base or purchase price, or (b) cancel underwater options or stock appreciation rights in exchange for cash (at any time when the fair market value as defined in the Plan of the Company stock is less than the exercise price of the option or stock appreciation right) without first obtaining the approval of the Company’s shareholders.

Federal Income Tax Consequences of the Company’sEndo International plc Amended and Restated 2015 Stock Incentive Plan.Plan

The following discussion of certain relevant federal income tax effects applicable to stock options and other stock-based awards granted under the planPlan is a summary only, and reference is made to the Internal Revenue Code for a complete statement of all relevant federal tax provisions.

Options.Options. With respect to nonqualified options (NSO), the participant will recognize no income upon grant of the option, and, upon exercise, will recognize ordinary income to the extent of the excess of the fair market value of the shares on the date of option exercise over the amount paid by the participant for the shares. Upon a subsequent disposition of the shares received under the option, the participant generally will recognize capital gain or loss to the extent of the difference between the fair market value of the shares at the time of exercise and the amount realized on the disposition.

In general, no taxable income is realized by a participant upon the grant of an incentive stock option (“ISO”)(ISO). If ordinary shares are issued to a participant (option shares) pursuant to the exercise of an ISO granted under the planPlan and the participant does not dispose of the option shares within thetwo-year period after the date of grant or within one year after the receipt of such option shares by the participant (a disqualifying disposition), then, generally (i) the participant will not realize ordinary income upon exercise and (ii) upon sale of such option shares, any amount realized in excess of the exercise price paid for the option shares will be taxed to such participant as capital gain (or loss). The amount by which the fair market value of ordinary shares on the exercise date of an ISO exceeds the purchase price generally will constitute an item which increases the participant’s “alternative minimum taxable income.”

If option shares acquired upon the exercise of an ISO are disposed of in a disqualifying disposition, the participant generally would include in ordinary income in the year of disposition an amount equal to the excess of the fair market value of the option shares at the time of exercise (or, if less, the amount realized on the disposition of the option shares), over the exercise price paid for the option shares. Subject to certain exceptions, an option generally will not be treated as an ISO if it is exercised more than three months following termination of employment. If an ISO is exercised at a time when it no longer qualifies as an ISO, such option will be treated as an NSO as discussed above.

In general, we will receive an income tax deduction at the same time and in the same amount as the employee recognizes ordinary income.

Payment of Option Price in Shares.Shares. If an option is exercised through the use of Company stock previously owned by the participant (subject to applicable law), such exercise generally will not be considered a taxable disposition of the previously owned shares and, thus, no gain or loss will be recognized with respect to such previously owned shares upon such exercise. The amount of anybuilt-in gain on the previously owned shares generally will not be recognized until the new shares acquired on the option exercise are disposed of in a sale or other taxable transaction. However, if the previously owned shares were acquired on the exercise of an incentive stock option and the holding period requirement for those shares was not satisfied at

25


the time they were used to exercise a stock option, such use would constitute a disqualifying disposition of such previously owned shares resulting in the recognition of ordinary income in the amount described above.

22


SARs. The recipient of a grant of SARs will not realize taxable income and we will not be entitled to a deduction with respect to such grant on the date of such grant. Upon the exercise of an SAR, the recipient will realize ordinary income equal to the amount of cash (including the amount of any taxes withheld) and the fair market value of any shares received at the time of exercise. In general, we will be entitled to a corresponding deduction, equal to the amount of income realized.

Restricted Stock.Stock. A participant who receives a grant of restricted stock will not recognize any taxable income at the time of the award, provided the shares are subject to restrictions (that is, they are nontransferable and subject to a substantial risk of forfeiture). A participant’s rights in restricted stock awarded under the planPlan are subject to a substantial risk of forfeiture if the rights to full enjoyment of the shares are conditioned, directly or indirectly, upon the future performance of substantial services by the participant. However, the participant may elect under Section 83(b) of the Internal Revenue Code to recognize compensation income in the year of the award in an amount equal to the fair market value of the shares on the date of the award, determined without regard to the restrictions. If the participant does not make a Section 83(b) election within 30 days of receipt of the restricted shares, the fair market value of the shares on the date the restrictions lapse, less any amount paid by the participant for such shares, will be treated as compensation income to the participant and will be taxable in the year the restrictions lapse. We generally will be entitled to a compensation deduction for the amount of compensation income the participant recognizesrecognizes.

Other Types of Awards.Awards. With respect to other awards under the Plan, generally when the participant receives payment with respect to an award, the amount of cash and fair market value of any other property received will be ordinary income to the participant, and the Company generally will be entitled to a tax deduction in the same amount.

New Plan Benefits

Future grants under the Plan will be made at the discretion of the Compensation Committee and, accordingly, are not yet determinable. In addition, benefitsOn August 10, 2017, the Compensation Committee approved a grant of restricted stock units and options to Mr. Campanelli under the Plan, will depend on a numbersubject to shareholder approval of factors, including the fair market value of our ordinary shares on future dates and the exercise decisions made by the participants. Consequently, at this time, it is not possible to determine the future benefits that might be received by participants receiving discretionary grants under the Plan. The following table reflects annual awards made under the Plan, as amended and restated in 2016.2018. The table below further describes the awards that were granted to Mr. Campanelli subject to shareholder approval of the Plan, as amended and restated in 2018, and which will become effective on the date that such approval is obtained. No other grants were made subject to shareholder approval of the Plan, as amended and restated in 2018.

 

NEW PLAN BENEFITS 
   2015 Stock Incentive Plan 
Name and Position Dollar Value ($)(1)   Number of Units 

Rajiv De Silva,President and Chief Executive Officer

 $12,516,354     317,239  

Suketu P. Upadhyay,Executive Vice President & Chief Financial Officer

 $3,310,505     89,936  

Paul V. Campanelli,President, Par Pharmaceutical

 $2,773,310     75,342  

Matthew J. Maletta,Executive Vice President, Chief Legal Officer

 $1,331,238     36,165  

Susan Hall,Executive Vice President, Chief Scientific Officer and Global Head of Research & Development and Quality

 $1,563,569     42,477  

Executive Group

 $6,549,503     179,005  

Non-Executive Director Group

 $3,095,008     61,629  

Non-Executive Officer Employee Group

 $42,079,578     1,500,002  
Endo International plc Amended and Restated 2015 Stock Incentive Plan 
Name and Position Dollar Value ($)(1)  Number of Units (#)(2) 

Paul V. Campanelli,President and Chief Executive Officer

 $657,814   1,091,629 

Blaise Coleman,Executive Vice President and Chief Financial Officer

 $    

Terrance J. Coughlin,Executive Vice President and Chief Operating Officer

 $    

Matthew J. Maletta,Executive Vice President, Chief Legal Officer

 $    

Tony Pera,President, Par Pharmaceutical

 $    

Executive Group (6 persons)(3)

 $657,814   1,091,629 

Non-Executive Director Group (8 persons)

 $    

Non-Executive Officer Employee Group (2,960 persons)

 $    

 

(1)

Award levels established at the time of grant are based on the grant expected value, which is derived from Endo’s closing stock price at the time of grantThe values for RSUs were calculated by multiplying the number of RSUs included in the table above (120,039) by the closing price of the Company’s ordinary shares of $5.48 per share on April 13, 2018 (the latest practicable date before the filing of this proxy statement).

(2)

Includes 120,039 RSUs and PSUs971,590 stock options awarded at a price of $7.55 and approved on August 10, 2017, subject to shareholder approval of this proposal, all of which would vest ratably over a three-year period at a rate ofone-third of the Black-Scholes valuation modeltotal RSUs or stock options on each anniversary of August 10, 2017, subject to continued service through such dates.

(3)

Represents the executive officers disclosed in our Annual Report on Form10-K for options. For accountingthe year ended December 31, 2017.

26


Existing Plan Benefits

Pursuant to SEC rules, the following table sets forth the number of shares subject to options granted through April 13, 2018 that count against the maximum share authorization of the current Plan.

Endo International plc Amended and proxy reporting purposes,Restated 2015 Stock Incentive Plan
Name and PositionNumber of Options (#)(1)

Paul V. Campanelli,President and Chief Executive Officer

1,036,644

Blaise Coleman,Executive Vice President and Chief Financial Officer

360,129

Terrance J. Coughlin,Executive Vice President and Chief Operating Officer

418,607

Matthew J. Maletta,Executive Vice President, Chief Legal Officer

382,631

Tony Pera,President, Par Pharmaceutical

173,940

Executive Group (6 persons)

2,371,951

Non-Executive Director Group (8 persons)

Non-Executive Officer Employee Group (2,960 persons)

5,298,023

(1)

Does not include the LTI amounts reported above represent971,590 stock options approved for Mr. Campanelli on August 10, 2017, subject to shareholder approval of this proposal, which are instead included in the grant date fair value under ASC 718 (see Summary Compensation Table’s footnote (1) on page 48 for additional details).New Plan Benefits table.

Current Equity Compensation Plan Information

The following information relates to plans in effect as of December 31, 20152017 under which equity securities of Endo may be issued to employees and directors.

 

   Column A  Column B  Column C 
Plan Category Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
  Weighted-average
exercise price of
outstanding options,
warrants and rights(1)
  Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in Column A)
 

Equity compensation plans approved by security holders

  4,558,977   $51.48    9,288,514  

Equity compensation plans not approved by security holders

            
 

 

 

  

 

 

  

 

 

 

Total

  4,558,977   $51.48    9,288,514  

Plan Category 

Number of securities

to be issued upon
exercise of

outstanding options,
warrants and rights (a)(1)

  Weighted-average
exercise price of
outstanding options,
warrants and rights (b)(2)
  

Number of securities
remaining available for future
issuance under

equity compensation
plans (excluding securities
reflected in column (a)) (c)(1)(3)

 

Equity compensation plans approved by security holders

  13,426,446  $22.79   8,822,860 
Equity compensation plans not approved by security holders         

Total

  13,426,446  $22.79   8,822,860 
(1)

The company issued approximately 1.0 million stock options and 0.1 million restricted stock units for which a grant date has not yet been established for accounting purposes. These options and restricted stock units were not considered to have been granted for purposes of this table.

(2)

Excludes shares of restricted stock units and performance share units outstandingoutstanding.

(3)

Reflects shares available for future grants under the current Plan as of December 31, 2017. As of April 13, 2018, 4,542,291 shares remain available for future awards under the current Plan.

Registration with the SEC

We intend to file with the SEC a registration statement on FormS-8 covering the Company stock reserved for issuance under the Plan.

 

2327


As

Proposal 5: Renewal of April 14, 2016, the Company had 222,660,743 ordinaryBoard’s Existing Authority to Issue Shares under Irish Law

Summary

Under Irish law, directors of an Irish public limited company must have authority from its shareholders to issue any shares, outstanding,including shares which are part of the company’s authorized but unissued share capital. The Company’s current authorization is included in our Articles of Association and underauthorizes the Endo International plc 2004, 2007, 2010, 2015 and Assumed Stock Incentive Plans: (i) 4,048,005 stock options outstanding (vested and unvested), with a weighted average exercise price of $51.14 and a weighted average remaining term of 6.71 years; and (ii) 2,066,439Board to issue shares of unvested restricted stock and restricted stock units outstanding. As of April 14, 2016, 7,052,252 shares were available for grant underup to the Endo International plc 2015 Stock Incentive Plan, which is the sole equity compensation plan under which the Company grants equity awards. The closing priceamount of the Company’s authorized but unissued share capital. This authorization will expire on February 25, 2019. We are presenting this proposal to renew the Board’s existing authority to issue authorized but unissued shares on the terms set forth below, which are in line with customary practice in Ireland and are more limited than the Board’s current authorization. If this proposal is not approved, the Company will have a limited ability to issue new ordinary shares after February 25, 2019.

It is customary practice in Ireland to seek shareholder authority to issue an aggregate number of shares up to 33% of the company’s issued share capital and for such authority to be limited to a period of 12 to 18 months. Therefore, in accordance with that customary practice in Ireland, we are seeking approval to issue up to a maximum of 33% of our issued ordinary capital as of April 19, 2018 (the latest practicable date before this proxy statement), for a period expiring on the date which is 18 months from our 2018 Annual Meeting, unless otherwise varied, revoked or renewed. The Board expects to propose a renewal of this authorization on a regular basis at our annual general meetings in future years.

Granting the Board this authority is a routine matter for public companies incorporated in Ireland and is consistent with Irish market practice. This authority, which is more limited than the Board’s current authority, is fundamental to our business and enables us to issue shares, including, if applicable, in connection with funding acquisitions and raising capital. We are not asking you to approve an increase in our authorized share capital or to approve a specific issuance of shares. Instead, approval of this proposal will only grant the Board the authority to issue shares that are already authorized under our Articles of Association pursuant to the terms set forth below. In addition, because we are a Nasdaq-listed company, our shareholders continue to benefit from the protections afforded to them under the rules and regulations of Nasdaq and the SEC, including those rules that limit our ability to issue shares in specified circumstances without obtaining shareholder approval. This authorization is required as a matter of Irish law and is not otherwise required for other companies listed on Nasdaq. Accordingly, approval of this resolution would merely place us on equal footing with other Nasdaq-listed companies.

The text of the resolution in respect of Proposal 5 (which is proposed as an ordinary resolution) is as follows:

RESOLVED, that, without limitation to the authority contained in Article 7.1 of the Company’s Articles of Association, the directors be and they are, with effect from the passing of this resolution, hereby generally and unconditionally authorized pursuant to section 1021 of the Companies Act 2014 to exercise all the powers of the Company to allot relevant securities (within the meaning of the said section 1021 of the Companies Act 2014) up to an aggregate nominal amount of $415,781,113 (73,850,997 ordinary shares) (being equivalent to approximately 33% of the aggregate nominal value of the issued ordinary share capital of the Company as of April 14, 2016 was $27.16.19, 2018 (the latest practicable date before this Proxy Statement)). The authority conferred by this resolution shall expire 18 months from the passing of this resolution, unless previously renewed, varied or revoked by the Company; provided that the Company may before such expiry make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the directors may allot relevant securities in pursuance of such an offer or agreement as if the authority conferred by this resolution had not expired.

Vote Required

The affirmative vote of aA majority of the votes cast at the Annual Meeting in person or by proxy will be required to approverenew the amendment to the Plan. Abstentions will not be considered votes cast in respectauthorization of the proposal.Board to issue shares.

 

The Compensation Committee and Board of Directors recommends a vote FOR the renewal of its existing authority to issue shares under Irish law.

28


Proposal 6: Renewal of the Board’s Existing Authority toOpt-Out of StatutoryPre-Emption Rights under Irish Law

Summary

Under Irish law, unless otherwise authorized, when an Irish public limited company issues shares for cash to new shareholders, it is required first to offer those shares on the same or more favorable terms to existing shareholders of the company on apro-rata basis (commonly referred to as thepre-emption right). Our current authorization, contained in our Articles of Association, will expire on February 25, 2019. We are therefore proposing to renew the Board’s authority toopt-out of thepre-emption right on the terms set forth below, which are more limited than the Board’s current authorization.

It is customary practice in Ireland to seek shareholder authority toopt-out of thepre-emption rights provision in the event of the issuance of shares for cash if the issuance is limited to up to 10% of a company’s issued ordinary share capital and provided that the authority granted in respect of 5% of such issued share capital is used only for the purposes of an acquisition or a specified capital investment. It is also customary practice for such authority to be limited to a period of 12 to 18 months.

Therefore, in accordance with customary practice in Ireland, we are seeking this authority, pursuant to a special resolution, to authorize the directors to issue shares for cash without applying statutorypre-emption rights, up to a maximum of approximately 10% of the Company’s issued share capital as of April 19, 2018 (the latest practicable date before this proxy statement),provided that the authority granted in respect of 5% of such issued share capital is used for the purposes of an acquisition or a specified capital investment. The proposed authority is for a period expiring on the date which is 18 months from our 2018 Annual Meeting, unless otherwise varied, renewed or revoked. The Board expects to propose a renewal of this authorization on a regular basis at our annual general meetings in future years.

Granting the Board this authority is a routine matter for public companies incorporated in Ireland and is consistent with Irish market practice. Similar to the authorization sought for Proposal 5, this authority is fundamental to our business and, if applicable, will facilitate our ability to fund acquisitions and otherwise raise capital. We are not asking you to approve an increase in our authorized share capital. Instead, approval of this proposal will only grant the amendmentBoard the authority to issue shares in the manner already permitted under our Articles of Association upon the terms below. Without this authorization, in each case where we issue shares for cash after February 25, 2019, we would first have to offer those shares on the same or more favorable terms to all of our existing shareholders, which could cause delays in the completion of acquisitions and the raising of capital for our business. This authorization is required as a matter of Irish law and is not otherwise required for other companies listed on Nasdaq. Accordingly, approval of this resolution would merely place us on equal footing with other Nasdaq-listed companies.

The text of the resolution in respect of Proposal 6 (which is proposed as a special resolution, as required under Irish law) is as follows:

RESOLVED, that, subject to and conditional on the passing of the resolution in respect of Proposal No. 5 as set out above and with effect from the passing of this resolution, but without limitation to the Endo International plc 2015 Stock Incentive Plan.authority contained in Article 7.2 of the Company’s Articles of Association, the directors be and they are hereby empowered pursuant to section 1023 of the Companies Act 2014 to allot equity securities (within the meaning of section 1023 of the Companies Act 2014) for cash, pursuant to the authority conferred by Proposal No. 5 as if section 1022 of that Act did not apply to any such allotment, provided that this power shall be limited to:

(a)

the allotment of equity securities in connection with a rights issue in favor of the holders of ordinary shares (including rights to subscribe for, or convert into, ordinary shares) where the equity securities respectively attributable to the interests of such holders are proportional (as nearly as may be) to the respective numbers of ordinary shares held by them (but subject to such exclusions or other arrangements as the directors may deem necessary or expedient to deal with fractional entitlements that would otherwise arise, or with legal or practical problems under the laws of, or the requirements of any recognized regulatory body or any stock exchange in, any territory, or otherwise); and

(b)

the allotment (otherwise than pursuant tosub-paragraph (a) above) of equity securities up to an aggregate nominal value of $125,994,277 (22,379,090 shares) (being equivalent to approximately 10% of the aggregate nominal value of the issued ordinary share capital of the Company as of April 19, 2018 (the latest practicable date before this Proxy Statement)) provided that, with respect to 11,189,545 of such shares (being equivalent to approximately 5% of the issued ordinary share capital as of April 19, 2018), such allotment is to be used for the purposes of an acquisition or a specified capital investment;

and, in each case, the authority conferred by this resolution shall expire 18 months from the passing of this resolution, unless previously renewed, varied or revoked; provided that the Company may make an offer or agreement before the expiry of this authority, which would or might require any such securities to be allotted after this authority has expired, and in that case, the directors may allot equity securities in pursuance of any such offer or agreement as if the authority conferred hereby had not expired.

 

2429


Vote Required

75% of the votes cast at the Annual Meeting will be required to renew the authorization of the Board toopt-out of statutorypre-emption rights. In addition, this proposal is conditioned upon the approval of Proposal 5, as required by Irish law.

The Board of Directors recommends a vote FOR the renewal of Board’s existing authority toopt-out of statutorypre-emption rights under Irish law.

30


 

Compensation Discussion and Analysis

 

 

    Executive Summary

 

 

    A Message from Endo’s Chairman of the Board and Chairman of the Compensation Committee

LOGO

Dear Shareholders:

In developing this year’s proxy statement, efforts have been made to clearly communicate the decisions made by the Compensation Committee in the context of the Company’s operating performance and strategic actions over the past year, while remaining consistent with ourpay-for-performance philosophy. The Compensation Committee recognized that while the past few years have been challenging for Endo’s shareholders, significant progress has been made since the appointment of Paul Campanelli to the position of President and Chief Executive Officer in September 2016.

Roger H. Kimmel

LOGO

William P. Montague

In 2017, the first full year under Mr. Campanelli’s leadership, the Company achieved solid financial and operating results despite being confronted with numerous strategic challenges and legacy issues, while laying the groundwork for long-term sustainable growth. This past year represents an important step in the Company’s turnaround, with the fundamental goal of delivering value to our shareholders. These legacy issues were compounded by additional external headwinds, including challenges specific to the U.S. generics industry.

Prior to the start of 2017, Mr. Campanelli and the management team outlined a multi-year turnaround plan based on a set of key strategic priorities that directly address the various opportunities and challenges facing Endo. Throughout the year, the management team made significant progress against the multi-year plan and achieved solid performance in 2017, expanding adjusted operating margins, generating strong cash flow and growing key products, including XIAFLEX®; VASOSTRICT®; and ADRENALIN®. These and other key accomplishments including strategic portfolio optimization, selective investments in product development, improved operating efficiency and mitigation of significant legacy liabilities are discussed in greater detail throughout the CD&A.

In acknowledgement of the successes and challenges facing Endo in 2017, the Company’s pay practices continued to reinforce the Compensation Committee’s commitment to ourpay-for-performance philosophy. By design, awards issued under our performance-based annual incentive compensation program were reflective of our management team’s accomplishments throughout the year, while lower levels of realized value associated with the Company’s equity-based long-term incentive program reflect the various external pressures negatively impacting Endo’s stock price. Director pay was also adjusted, with an overall decrease in compensation and a greater proportion of pay in the form of Endo shares.

The Board is keenly aware that management continuity will be critical to Endo’s successful turnaround, and is confident in the management team’s ability to build on recent successes and continue the transformation of Endo as a result of the following:

  Excellent management team and their track record of success

  Focused strategy and clear set of priorities

  Strong business segments, focusing on branded pharmaceuticals, sterile injectables, high-value generics and select international markets

  Exciting growth platforms, including XIAFLEX® as the Company’s flagship product, with multipleon-market indications and promising potential indications including cellulite

  Promising generics pipeline with more than 100 ANDAs

We are confident in the management team’s ability to achieve the Company’s core vision to be a highly focused specialty branded and generic pharmaceutical company, delivering quality medicines to patients in need through excellence in development, manufacturing and commercialization.

Sincerely,

Roger H. Kimmel

William P. Montague

LOGO

LOGO

Chairman of the Board of Directors

Chairman of the Compensation Committee

31


    Executive Summary (continued)

 

Compensation Philosophy

 

Pay-for-performance underlies Endo’s compensation philosophy. The Compensation Committee (referred to in this “Compensation Discussion and Analysis” section as the Committee) believes that the most effective executive compensation program is one that is designed to provide incentives that advance the interests of shareholders and deliver levels of compensation that are commensurate with performance. Endo’s compensation philosophy is designed to support our business strategy by attracting and retaining highly-talented individuals and motivating them to achieve competitive corporate performance, while embracing the Company’s Key Valueskey values and behaviors.

 

The following summarizes Endo’sCompany’s commitment to itspay-for-performance philosophy was demonstrated again in 2017. In the context of the Company’s financial, strategic, operating and marketcompliance achievements, as well as legacy issues and external challenges impacting Endo’s stock price performance under Mr. De Silva’s leadership:

this past year, the Committee remained committed to the Company’spay-for-performance philosophy, which is reflected in the awarded and realized pay levels for all NEOs.

   
  

 

Strategic Vision & Results

 

¡    To become a leading global specialty pharmaceutical company that improves lives while creating value:

¡    Top tier shareholder value creator

¡    Leadership in areas with relevance to patients, physicians and customers

¡    Focus on areas where we can create value:

¡    Growth in U.S. Branded Pharmaceuticals, U.S. Generic Pharmaceuticals and International Pharmaceuticals

¡    Target specialized segments to gain leadership in branded and generic pharmaceuticals

¡    Create value through differentiated operating model:

¡    Operating structure, scope and size to fuel robust and sustainable growth

¡    Durable financial structure strengthened by favorable effective tax and prudent allocation of capital

¡    Increasing operating efficiency and margins

¡    Achieve sustainable growth:

¡    Expanded portfolios in both branded and generic pharmaceuticals leading to double digit organic top- and bottom-line growth

¡    Dual focus on organic growth and selective M&A opportunities

¡    Invest in de-risked R&D pipeline

  

 

A highly focused generics and specialty branded pharmaceutical company delivering quality medicines to patients in need through excellence in development, manufacturing and commercialization.

 

Strategic ResultsBuild on strengths in generic and branded pharmaceuticals:

 

¡  Advanced Endo’s strategic transformation into a leading specialty pharmaceutical company that improves lives while creating value

¡    Delivered solid financial resultsInvestments in 2015XIAFLEX® contributed to significant product growth, generating high single-digit demand growth for 2017, with the Company positionedcombined low double-digit fourth quarter growth run rates for double-digit underlying growth over the mid- to long-term:Peyronie’s Disease and Dupuytren’s Contracture

¡  Achieved 37% increase in total revenues compared to 2014 with strong organicRealized meaningful revenue and overall growth in Branded, Generic and International Pharmaceuticalsprofitability contributions from new U.S. generics product launches, while enhancing the Company’s product selection process

¡  Exceeded budgeted diluted earnings per share from continuing operations and exceededSuccessfully navigated the top end ofbusiness challenges within the EPS guidance range, with an overall increase of 28%consolidating U.S. generics industry

¡  Achieved 63% increase in adjusted income from continuing operations compared to 2014Significantly expanded the Company’snon-U.S. product portfolio and pipeline, filing several products for the Canadian market, while closing severalin-licensing deals

Invest prudently in product pipeline:

¡  Completed value creating M&A transactions:Significantly progressed cellulite treatment development program for collagenase clostridium histolyticum (CCH), with agreed upon plan with FDA including primary endpoint, safety measures and analysis method

¡  Acquired Auxilium Pharmaceuticals revitalizing Branded portfolioExpanded VASOSTRICT® patent estate and expanding R&D pipelinelisted additional patent in Orange Book; aggressively pursued patent and trade secret lawsuits against challengers for VASOSTRICT® and ADRENALIN®

¡  CompletedLaunched 17 new generic products in 2017, while progressing the acquisitioninitiation of Par Pharmaceutical creating a top-four U.S. generics company by market share and a powerful platformtwo pivotal Phase III clinical trials of CCH for future growth and further strategic M&Athe treatment of cellulite

¡  Divested AMS Men’s Health business consistent with specialty pharmaceuticalPlaced intense focus on high value product opportunities while eliminatingnon-core assets, including the return of BELBUCA™ to BDSI

¡  ExpandedIn consultation with the International Pharmaceuticals business unit further diversifying the Company’s financial profile

¡    Expanded and de-risked R&D pipeline in both Branded and Generic Pharmaceuticals capableFDA, voluntarily ceased shipments of fueling long-term organic growth

¡    Gained approval for BELBUCA™ and received updated XIAFLEX® Label with Recurrence and Retreatment Data in Patients with Dupuytren’s Contracture, while selecting and initiating studies for new indications

¡    Extended U.S. rights for VOLTAREN® Gel and gained rights to an authorized generic through 2023

¡    Achieved favorable OPANA® ER ruling upholding two patents and removing generic versionsas part of the removal of the product from the market

Enhance focus on operational execution:

  Implemented a series of restructuring initiatives, resulting in a leaner operating model leading to projected annualized cost savings of$95-$115 million

¡  ContinuedRefinanced $3.7 billion existing credit agreement, significantly enhancing the Company’s operational flexibility over the medium to build Irish infrastructure producing a favorable effective tax rate leadinglong-term

  Met all compliance objectives, including no warning letters received and reductions in filed alerts and recalls, with none due to excellent cash flow conversioninternal systems quality failures

  Divestednon-core assets, finalizing the Litha Healthcare sale to Acino Pharma AG and balance sheet de-leveringthe Somar sale to AI Global Investments (Netherlands) PCC Limited

 

Meet financial objectives establishing a foundation for growth:

  Achieved 98.2% of targeted Adjusted Revenue, 105.2% of targeted Adjusted EBITDA Margin and 110.2% of targeted Adjusted Diluted EPS from Continuing Operations objectives

  Refinanced debt to allow for greater operating flexibility

  Optimized annual Capital Expenditure budget, appropriately investing in growth drivers

2017 Financial Results as a Percent of Operating Plan Target

LOGO

 

 
      

Financial Results & Market Performance

LOGO

 

2532


 

    Executive Summary (continued)

 

 

Program Objectives and Elements of Executive Compensation

 

Our executive compensation program seeks to:

¡  Align pay practices and incentive structures with long-term shareholder value;

¡  Provide appropriate compensation for achieving annual results while fostering a long-term performance orientation;

¡  Link compensation with Company and individual performance;

¡  Reward high performance as measured against the Company’s strategic and business plans;

¡  Reflect the competitive market for acquiring and retaining top talent; and

¡  Mitigate pay practice risks through a balanced approach to performance-based compensation.

 

In support of these objectives, the Company’s compensation programs consist of elements designed to complement each
other and reward achievement of short-term and long-term objectives tied to the Company’s performance through the
establishment and achievement of strategic operating metrics or as a function of the Company’s total shareholder return.
In support of our compensation philosophy, we have chosen selected metrics to align employee compensation, including
compensation for the NEOs, to the Company’s business strategy and strategic operating results. The three principal
components of the Company’s total compensation are base salary, annual cash incentive compensation (IC) and equity-
basedequity-based LTI compensation, as discussed in greater detail under the section “Executive Compensation Program”.Program.”

 

Competitive Considerations

 

In making compensation decisions with respect to each element of compensation, the Compensation Committee consid
ersconsiders the competitive market for executives and compensation levels provided by comparable companies. The Compensa
tion Committee reviews the compensation practices at companies with which itthe Company competes for talent, including businesses
engaged in activities similar to those of the Company. While we do not believe that it is appropriate to establish
compensation levels based primarily on benchmarking, we believe that information regarding pay practices at other
companies is nevertheless useful in two respects. First, we recognize that our compensation practices must be com
petitivecompetitive in the marketplace. Second, independent marketplace information is one of the many factors that we consider in
assessing the reasonableness of compensation.

 

The Compensation Committee generally aligns target executive compensation at the median of compensation packages for
executives in similar positions and with similar responsibilities and experience at similar companies of comparable size, with the
opportunity for top quartile actual compensation based upon individual and Company performance. We recognize, however,
that positions with similar titles are not always comparable in terms of responsibility to such positions at the Company. The
Compensation Committee’s choice of this target percentile reflects the Company’s consideration for our shareholders’ inter
estsinterests in paying what is competitive to achieve our corporate goals, while conserving cash and equity as much as practicable.

 

We believe that, given our compensation philosophy and objectives, compensation targeted at the median of similar-
situatedsimilarly-situated companies with the opportunity for top quartile total compensation based upon performance is generally suffi
cientsufficient to retain our current executive officers and to hire new executive officers when and as required. In setting
compensation for the NEOs, the Compensation Committee considers comparative market data requested from Korn Ferry Hay
Group, its compensation consultant. In gathering relevant competitive market compensation data, the Compensation
Committee approved the use of a sample of companies with similar operations as Endo.

 

We refer to all of these sample companies as the “Pay Comparator Companies.” The Committee believes that Endo com
petescompetes with the Pay Comparator Companies for talent and for shareholder investment. In assessing the relevance of the
Pay Comparator Companies, Korn Ferry Hay Group evaluates the appropriateness based on several key criteria in an effort to identify
comparator companies with the most appropriate business fit. These factors include company size (in terms of both rev
enuerevenue and market cap), industry/business sector, operating complexity, location, talent market, customer base and other
relevant factors, recognizing that not all peer companies will match all criteria and not all criteria are of equal importance.

 

The Pay Comparator Companies typically have similar executive officer positions,positions; however, the Compensation Committee
does not attempt to set each compensation element for each executive within a particular range as it relates to the Pay
Comparator Companies. Instead, the Compensation Committee uses market comparisons as one factor in making com
pensationcompensation decisions. Among other factors considered when making individual executive compensation decisions include
individual contribution and performance, reporting structure, complexity and importance of role and responsibilities,
leadership and growth potential.

 

26


    Executive Summary

Korn Ferry Hay Group makes regularperiodic recommendations to the Committee regarding the recalibration of the Pay Comparator Companies referenced. As a result of this annual review, Endo recalibrated the Pay Comparator Companies in response to continuing acquisition activity within the industry, Endo’s decision to divest our AMS device businesses (now reported as discontinued operations), and the need to include organizations that were more relevant to Endo’s size and business composition. Industry consolidation continues to present significant challenges in Endo’s selection process. The continued consolidation of viable peer companies and loss of many similarly sizedsimilarly-sized competitor companies during the past few years has forced Endo to consider comparator companies that fall outside of the normal size parameters in order to include organizations relevant to Endo’s

33


    Executive Summary (continued)

business. This includes companies both larger and smaller in size, in an effort to include a balanced and fair assessment of the range of competitive pay levels. Ultimately, Endo believes it is imperative that the comparator companies align with Endo’s customer base and market for key talent in order to establish a reasonable assessment of competitive pay levels for our NEOs.

 

The Compensation Committee approved Pay Comparator Companies for 20152017 are listed in the table below:

 

 
  20152017 Pay Comparator Companies
 

Alexion Pharmaceuticals Inc.

 

Mallinckrodt plc

 

Alkermes plc

 

Mylan NV

 

Allergan plc

Perrigo Co. plc

 

Biogen Inc.

 

Regeneron PharmaceuticalsPerrigo Co. plc

 

BioMarin Pharmaceutical Inc.

 

United Therapeutics CorporationRegeneron Pharmaceuticals

 

Celgene Corporation

 

United Therapeutics Corporation

Horizon Pharma plc

Valeant Pharmaceuticals Int’lInternational Inc.

Impax Laboratories Inc.

Vertex Pharmaceuticals Inc.

 

Jazz Pharmaceuticals plc

 

Vertex Pharmaceuticals Inc.

 

 

Say-on-Pay Consideration

 

In establishing 20162018 compensation, the Compensation Committee also considered the results of the most recent shareholder advisory vote on executive compensation (thesay-on-pay vote) at the Company’s Annual Meeting held in June 2015,2017, where over 82%87% of the votes cast on thesay-on-pay proposal were voted in favor of the proposal. FollowingThe Committee believes this result affirms shareholder support for our executive compensation decisions and policies, and as such, the Company’s shareholder outreach initiatives in 2015, the Compensation Committee enhanced the Company’s disclosure related to performance metrics and how performance is measured, and following the 2015 say-on-pay vote, the Compensation Committee approved the transition from an absolute stock appreciation metric to relative TSR performance criteria for performance-based LTI awards.did not implement any changes as a result of this vote. The Compensation Committee will continue to consider the results of futuresay-on-pay votes when making executive compensation decisions and policies.

In addition to thesay-on-pay vote, the Committee believes it is important to directly engage with shareholders, including targeted outreach initiatives as a means of soliciting their views on matters, including governance, environmental, social, executive compensation and other important topics, in order to assist our Committee with items requiring a broader shareholder perspective. Over the past several years, certainnon-employee directors and members of our management team have engaged with our shareholders, as well as ISS and Glass Lewis to discuss key issues on a variety of topics. These conversations have been beneficial, and will continue to provide the Committee with a deeper understanding of the views of our shareholders, while serving as an effective communication channel for matters of critical importance to Endo’s short- and long-term priorities. These outreach initiatives will continue into 2018, focusing on the importance of leveraging Endo’spay-for-performance executive compensation program to effectively attract and retain key individuals essential to the long-term success of the Company.

 

Pay Risk and Governance

 

At least on an annual basis, the Company conducts an assessment of the potential risks associated with the Company’s compensation arrangements, policies and practices. The assessment is conducted by Korn Ferry Hay Group and then reviewed by the Company’s Compensation Committee. A key objective is to determine whether the Company’s compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the Company. This risk assessment process includes:

¡  A comprehensive review of compensation programs with the highest potential for material adverse effect;

¡  Identification of key Company positions and business areas that could potentially carry a significant portion of the Company’s risk profile;

¡  Identification of compensation programs for the key Company positions and/orand business areas; and

¡  An analysis of employee compensation plans with the highest potential for risk, pursuant to which we:

¡  Identify the features within the plans that could potentially encourage excessive or imprudent risk taking;

¡  Identify business risks that these features could potentially encourage;

¡  Identify controls and plan features that mitigate the risks identified;

¡  Determine residual risk remaining after having identified mitigating controls and features; and

¡  Assess whether residual risk is reasonably likely to have a material adverse effect on the Company as a whole.

 

27


    Executive Summary

The Compensation Committee also reviews the Company’s compensation programs that allow for variable payouts. A key consideration is the establishment of an appropriate mix of performance metrics. The Compensation Committee also oversees the plans so that they reward both annual goal achievement and the long-term sustainable success of the Company. In addition, the reviews focus on plans where an employee might be able to influence payout factors and programs that involve our executives, with a focus on analyzing whether any of the performance targets encourage excessive risk taking. During the assessment, several control and design features of the Company’s compensation program that are intended to mitigate the risk of excessive risk-taking are evaluated. Risk profiles are also evaluated on an on-goingongoing basis by the Company’s management team as new program designs are considered.

 

34


    Executive Summary (continued)

Based on the process described above, it was concluded that the potential risks associated with the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on Endo. The Compensation Committee will continue to review the Company’s compensation programs at least annually to identify and address potential risks that may have a material adverse effect on the Company.

 

Company Actions

 

In response to the evolving nature of our business structure and our goal to strengthen our executive pay decisions, emphasis has been placed on continuing to enhance the effectiveness of our executive compensation policies in increasing shareholder value creation and preservation. The following reflects the leading practices implemented and maintained by the Company in an effort to achievepay-for-performance, while maintaining good corporate governance:

 

 
  Item Actions
 Competitive

Considerations

 

¡   “Pay“Pay Comparator Companies” updated and maintained to compare NEO total compensation levels; and

¡Conduct assessments at least annually of the positioning of NEO total compensation levels against the Pay Comparator Companies to assess competitive external market alignment in the industry sectors in which Endo competes for talent.

 Incentive
Compensation
 

¡Short- and long-term incentive programs designed to closely link pay and performance with the objective of enhancing shareholder value;

¡   Equity plans prohibitThe Amended and Restated 2015 Stock Incentive Plan prohibits there-pricing of equity awards without shareholder approval and dodoes not allow for cash buyouts of underwater options;options (1);

¡   “Double“Double trigger” change in control provisions in our Amended and Restated 2015 Stock Incentive Plan;Plan (1);

¡LTI awards granted to employees under the Amended and Restated 2015 Stock Incentive Plan are generally subject to three yearthree-year vesting conditions, subject to earlier vesting on certain events;events (1);

¡PSU performance criteria based on relative 3-yearthree-year TSR against a custom index of pharmaceutical companies, with maximum payout levels based on 3-year compounded annual growth rate (CAGR) stock priceand free cash flow performance;

¡In an effort to minimize share pool utilization and underlying dilution levels, implemented 2018 initiatives including the use of an alternate equity mix, annual grant reductions and broader use of Long-term Cash Incentive (LTCI) awards fornon-executive PSUs for Mr. De Silva account for 75% of LTI value with remaining LTI in the form of stock options; 100% tied to value creation;positions;

¡   PSUs awardedIn addition to senior management accountsmanaging share pool availability, LTI mix changes for 50%2018 involve an expanded use of LTI, resultingRSUs in 75% ofan effort to increase the direct ownership equity compensation tiedstake for key executives, while contributing to value creation;

¡   PSU eligibility in place for all Vice President-level positions account for 33.3% of LTI Value; 66.6% tied to value creation to further strengthen the focus on shareholder value creationbusiness continuity and preservation;strategic growth priorities; and

¡   Stock option eligibility in place for middle-management positions, allowing for 50%A common grant date of April 1st (or the total LTI value to be tied to value creation.next business day if April 1st falls on a weekend or holiday), supporting best practices by granting the annual equity awards a sufficient amount of time after Endo’s annual earnings release.

 Employment

Agreements

 

¡   “Golden“Golden parachute”gross-up payments related to excise tax liabilities resulting from a change in control of the Company are prohibited; and

¡Except as required by local law, NEO employment agreements with automatic renewal provisions are disallowed.

 Risk
Management
 

¡Annual assessments conducted of the potential risks associated with compensation arrangements, policies and practices to confirm that they are not reasonably likely to have a material adverse effect on Endo;

¡   CompensationAmended the Company’s compensation recovery policy (clawback) relatingto: 1) expand covered payments to repayment ofinclude both cash incentive awards by an executiveas well as equity-based incentives, and 2) seek recoupment in situations involving material misconduct or gross negligence resulting in material financial harm to the event of a restatement of the Company’s financial results;Company;

¡Hedging and pledging of Company stock by employees and/ornon-employee Directors is prohibited;

¡Stock ownership guidelines for bothnon-employee Directors and for executive management to align their interests with the interests of Endo shareholders (requiringnon-employee Directors not to sell shares until guidelines are attained);

¡   Shareholder approval sought for individualIndividual share limitations fornon-employee Directors (as noted in the proposed amendment to the 2015 Stock Incentive Plan described earlier in Proposal 6)(1); and

¡The Compensation Committee retained Korn Ferry Hay Group as its independent compensation consultant.

(1)

Also noted in the proposed Endo International plc Amended and Restated 2015 Stock Incentive Plan, described earlier in Proposal 4.

 

2835


Executive Compensation Program

The Company’s primary objectives with respect to the development and implementation of executive compensation programs are to attract, retain and motivate highly qualified talent, as well as align executive compensation with the Company’s overall operating performance and business strategies, closely linked to the enhancement of shareholder value. The Compensation Committee believes that the most effective executive compensation program is one that is designed to recognize the achievement of specific annual, long-term and strategic goals of the Company, rewarding executives who contribute to meeting and exceeding the Company’s business objectives, with the ultimate objective of improving shareholder value.

The three principal components of the Company’s total compensation are: base salary, annual cash incentive compensation and equity-based LTI compensation. In allocating compensation among these elements, we believe that the majority of the compensation of our senior-most levels of management—the levels of management having the greatest ability to influence the Company’s performance—should be performance-based.variable and dependent upon performance.

 

LOGOLOGO

In making decisions with respect to any element of a named executive officer’s compensation, the Compensation Committee considers the total compensation that may be awarded to the officer, including salary, annual ICincentive compensation cash bonus and long-term incentive compensation. In addition, in reviewing and approving employment agreements for NEOs, the Compensation Committee considers the other benefits to which the officer is entitled by the agreement, including compensation payable upon termination of the agreement under a variety of circumstances. The Compensation Committee’s goal is to award compensation that is competitive to attract and retain highly qualified leaders and motivate high business performance. The Compensation Committee believes that its compensation programs align executive and shareholder interests by effectively calibrating compensation payout levels with individual and Company performance.

Base Salary

Purpose.Purpose. The objective of base salary is to reflect job responsibilities, value to the Company and individual performance while taking into consideration market competitiveness. We seek to provide our executive officers with competitive annual base salaries in order to attract and retain them. While the base salary component of our executive officer compensation program is primarily designed to provide the baseline level of compensation to executive officers, individual performance is also a key consideration when establishing appropriate base salary levels, further supporting the Company’spay-for-performance philosophy.

Considerations.Considerations. Salaries for the NEOs are determined initially by each individual’s employment agreement which are described under “Employment and Change in Control Agreements; Severance Agreements” below. These salaries and the amount of any increase over these salaries are determined by the Compensation Committee based on a variety of factors, including:

 ¡ 

the nature and responsibility of the position and, to the extent available, salary norms for persons in comparable positions at the Pay Comparator Companies;

 ¡ 

the expertise and competencies of the individual executive;

 ¡ 

the competitiveness of the market for the executive’s services;

 ¡ 

internal review of the executive’s compensation, both individually and relative to other NEOs;

 ¡ 

the recommendations of the President and Chief Executive Officer (except in the case of the President and Chief Executive Officer’s own compensation); and

 ¡ 

individual performance of the NEO, which includes:

 ¡ 

achievement of individual annual goals and objectives, the risks and challenges involved, and the impact of the results;

 ¡ 

performance ofday-to-day responsibilities;

 ¡ 

increases in competencies and skill development;

 ¡ 

value of the NEO’s contribution to function and Company goal achievement; and

 ¡ 

behaviors aligned with Endo Key Values.key values.

Base salaries are generally reviewed annually. In reviewing salaries, the Compensation Committee adjusts salaries from time to time to realign salaries with market levels, individual performance and incumbent experience. The Compensation Commit-

Committee also considers salaries relative

 

2936


tee also considers salaries relative to those of others within the Company and may, on occasion, make adjustments to salaries or other elements of total compensation, such as annual incentive compensation and long-term incentive targets, where such an adjustment would correct a compensation imbalance, as the Compensation Committee deems appropriate.

20152017 Decisions Regarding Base Salary.Salary. In November 2015,2017, as part of the Compensation Committee’s annual review of compensation, Korn Ferry Hay Group provided the Compensation Committee with a market assessment of the competitive compensation for the Company’s executive officers. This assessment included reviewing the Pay Comparator Companies and:

 ¡ 

establishing a benchmark match for each of the positions;

 ¡ 

gathering and analyzing competitive compensation from relevant labor markets; and

 ¡ 

developing competitive market medians of compensation for the positions.

Based on the competitive market data referred to above, the Compensation Committee developed, with the assistance of Korn Ferry Hay Group, market medians of compensation for each of Endo’s compensation elements (base salary, target annual incentive compensation, and expected target value of long-term incentive compensation) and then compared each NEO’s current compensation to the market median for each data sample. The market data and the performance of each of Endo’s NEOs are reviewed each year, but there is no assurance that any of their individual compensation packages will be aligned with the market. Please reference the “Individual Compensation Determination” section for approved salary actions.

Performance-Based Annual Cash Incentive Compensation

Purpose.Purpose. The compensation program provides for an annual cash incentive that directly reinforces the Company’spay-for-performance approach. This incentive compensation or IC, program is a short-term performance-based incentive plan that rewards the achievement of annual goals and objectives, as well as longer-range strategic goals. TheBoth the Company and individual performance goals, and the resulting payments, arepre-established and formulaic. The objective of the program is to compensate individuals based on the achievement of specific goals that are intended to correlate closely with shareholder value.

The Compensation Committee will annually assess each NEO’s achievement against the Company’s annualpre-established and formulaic objectives, while operating within the structure of the Internal Revenue Code Section 162(m) compliant IC program which allowsallow for a maximum bonus equal to 225% of the target bonus amount andbased on the useachievement ofpre-established consolidated adjusted net income goals. The Committee then applies negative Committee discretion based on actual performance.quantifiable Company scorecard and individual performance objectives. The following illustrates the mechanics underlying the annual cash incentive calculation:

 

LOGO

LOGO

The respective annual cash ICincentive compensation target for each named executive officer related to 2015,2017, paid in early 2016,2018, is expressed in the graph below.

 

LOGOLOGO

Please reference the “Individual Compensation Determination” section for additional information.

Considerations.Considerations. The annual cash ICincentive compensation program includes relative incentive levels based on theeach NEO’s specific position accountabilities, performance objectives and impact on overall Company operations,strategic and operating performance, with target awards established as a percentage of base salary. Each NEO’s target ICannual incentive compensation bonus is initially established pursuant

37


to his or her employment agreement, which is determined based on all factors that the Compensation Committee deems relevant, including (but not limited to) a review of Pay Comparator Company compensation. The ICannual incentive compensation metrics are aligned with the Company’s business strategy and the use of consolidated adjusted revenue, adjusted dilutednet income, as well as the Company scorecard objectives including Adjusted Revenue, Adjusted EBITDA Margin, Adjusted Diluted EPS from Continuing Operations andnon-financial metrics, and are supported by practices observed among our Pay Comparator Companies. The Compensation Committee establishes annual incentive plan targets based upon the Company’s strategic and business plans and then aligns the compensation plan with the Company’s financial guidance for the year. Related to financial guidance, the low end of the plan payout threshold, which is significantly below target compensation awards amounts, is typically aligned with the

30


low end of the guidance range. Achieving the high end of the bonus payout threshold is contingent upon achieving significantly higher financial performance than the top end of the guidance range. The annual bonus process for our NEOs involves two basic steps:

¡

At the outset of the year, set measurable and pre-established objectives, including:

¡

Company scorecard objectives (including financial, strategic, and operational objectives); and

¡

Individual objectives aligned with the business strategy and Company scorecard for the year.

¡

At the end of the year:

¡

Measure actual performance (individual and Company) against the predetermined Company performance goals and individual performance measures to determine the appropriate award.

These two steps are further described below:

(1)

Setting Company performance goals. Early in each year, the Compensation Committee, working with management, sets performance goals for the Company. The bonus determination for each NEO is primarily based upon the Company’s performance against these goals. The goals that were established for 2015 are discussed below under “2015 Decisions Regarding Incentive Compensation.”

(2)

Measuring performance. After the end of the year, the Compensation Committee reviews the Company’s actual performance against each of the performance goals established at the outset of the year. The Compensation Committee assesses the Company’s performance as well as each NEO’s performance against the individual goals set at the outset of the year. This assessment allows bonus decisions to take into account overall Company performance and each NEO’s personal performance and contribution during the year.

Discretion.Discretion. Under the ICannual incentive compensation program, the Compensation Committee has discretion, in appropriate circumstances, to pay annual incentive compensation at less than or in excess of target levels (e.g.,levels. For example, in determining the extent to which thepre-set performance goals are met for a given period, the Compensation Committee exercises its judgment whether to reflect or exclude the impact of changes in accounting principles and extraordinary, unusual or infrequently occurring events reported in the Company’s public filings, but no more than the lesser of 1) the maximum aggregate amount of the annual incentive pool based on apre-established fixed percentage of consolidated adjusted net income, or 2) a maximum individual amount of $5,000,000 for the President and Chief Executive Officer and three other highest-paid executive officers (not including the Company’s Executive Vice President & Chief Financial Officer in accordance with IRCSection 162(m)) of the Internal Revenue Code, as in effect for the 2017 tax year), which is the amount previously approved by shareholders in accordance with IRCSection 162(m) of the Internal Revenue Code under Endo’s Amended and Restated 2015 Stock Incentive Plan. Further, pursuant to each of our NEOs’NEO’s employment agreements, target ICannual incentive compensation as a percentage of annual base salary may subsequently be increased at the discretion of the Committee. Please reference the “Individual Compensation Committee. The Committee did not implement any ICDetermination” section for approved target changes for the Company’s NEOs for the 2015 performance year.annual incentive compensation changes.

20152017 Decisions Regarding Incentive Compensation.Compensation. The following information summarizes the components of the Company’s ICannual incentive compensation program and the basis for the actual award granted by the Compensation Committee for 2015.2017. With respect to 2015,2017, the annual award tofor each of the NEOsNEO was based on the achievement ofpre-established consolidated adjusted net income goals, with negative discretion derived from corporate goalsscorecard objectives and NEO individual performance. The consolidated adjusted net income performance target established for 2017, as well as each NEO’sthe corporate scorecard and individual NEO performance and demonstrated leadership. The Compensation Committee established corporate performance goals for 2015, placing emphasis onobjectives are aligned with the Company’s new priorities followingestablished as part of the 20152017 strategic assessment process. Following this assessment, theThe performance weightings were calibrated to align the program’s financial goals and strategic, operating and compliance prioritiesassociated with the Company’s goals for 2015. The performance goalscorporate scorecard were weighted as follows (specific targets are discussed in the following section heading “2015 Company Performance Against Objectives”entitled “2017 Consolidated Financial Results”):

 

LOGO

LOGO

The above “scorecard” is structured so that objectives allow for a payout opportunity ranging from 0% to 225% of the target bonus opportunity (commensurate with performance), while operating within the structure of the Internal Revenue Code Section 162(m) compliant ICannual incentive compensation program, which allows for a maximum bonus equal to 225% of the target bonus amount, and the use of negative Committee discretion based on actual performance. Under the IC program, no bonuses will be paid if the Company does not achieve at least 90% of the pre-established annual adjusted net income target. These goals are set so that the Company’s financial performance achieved in each scenario will appropriately fund the cost of the cash incentives. The Compensation Committee however,also has the discretion to withhold annual cash incentives that otherwise would be made to any

31


employees, including the NEOs, if it determines that overall performance is below performance thresholds. Moreover, the scorecard achievements are assessed based on whether the Company achieved the scorecard results considering (1) current healthcare compliance as reflected by a robust internal compliance program and as determined by outcomes of regulatory review and inspections, such as those of the Food and Drug Administration, and (2) progress on health and safety outcomes as determined by other regulatory and environmental matters.

2015 Company Performance Against Objectives.2017 Consolidated Financial Results. In 2015,2017, the Company continued to make significant progress in establishingshaping Endo as a leadinghighly focused generics and specialty branded pharmaceutical company through positive organicwith a strong set of assets in both generic and transactional growth, and targeted divestiture activity. Endobranded pharmaceuticals. The Company also continued to expand the value of the established corporate structure, while succeeding in organically growing core branded and generic products, progressing key pipeline assets and successfully defending and progressing key product patents.

38


Substantial progress was also made in advancing the Company’s Irish infrastructure in 2015, while advancing our corporate tax strategy, expanding Endo’s international capabilitiesculture to one that is customer focused and optimizing our transactional financing capabilities. In determining performance relativedriven, with a strong emphasis on operational execution. Over the past year, efforts have been taken to simplify the Company’s annual financial objectives,structure through centralization and unification, actions that serve to drive productivity improvements. In 2017, Endo also successfully optimized the design of the annual IC cash bonus plan requires adjustmentsCompany’s generic product portfolio, consistently seeking to be appliedmore efficient and operationally sound, while continuing to revenuefocus on core assets and diluted EPS in orderbusinesses that are critical to keep participants from being advantaged or disadvantaged as a result of certain unplanned and unbudgeted events or changes throughoutour success. On an adjusted basis, the performance period. These include: a) adjustments for unbudgeted acquisitions during the performance period to include deal model base case revenue and EPS commitments in the Company’s performance targets; b) adjustments for unplanned material changes in share count during the performance period; and c) adjustments to neutralize foreign exchange impact versus budget during the performance period. These adjustments were applied in 2015, consistent with Endo’s prior year approach.

The Company achieved the following financial objective results in 20152017 compared to plan and prior year:

Achieved $3.292 billion in adjusted consolidated revenue from operations compared to 2015 plan of $3.362 billion (97.9% of plan), representing an increase of 36% compared to 2014. Adjusted consolidated revenue from operations in 2015 consisted of $3.269 billion of revenue from continuing operations and an adjustment of $23.0 million of revenue related to nonrecurring items. Adjusted consolidated revenue from operations in 2014 of $2.418 billion consisted of revenue from continuing operations of $2.381 billion and an adjustment of $37.0 million related to nonrecurring items.

Achieved adjusted diluted EPS of $4.68 compared to target of $4.37 (107.1% of plan), representing a 30% increase compared to 2014. Adjusted diluted EPS in 2015 of $4.68 consisted of adjusted diluted EPS from continuing operations of $4.66 and an adjustment of $0.02 related to nonrecurring items. Adjusted diluted EPS in 2014 of $3.59 consisted of adjusted diluted EPS from continuing operations of $3.64 and an adjustment of ($0.05) related to nonrecurring items.

The graph below summarizes the Company’syear financial results (numbers are reported in millions, other than per share information).

LOGOperformance:

 

(1)

Achieved $3.369 billion and $4.013 billion in Adjusted diluted EPS is not preparedRevenue in 2017 and 2016, respectively, consisting of $3.469 billion and $4.010 billion of revenue determined in accordance with U.S. generally accepted accounting principles (GAAP), adjusted as described below.

Achieved 45.4% in Adjusted EBITDA Margin in 2017, consisting of $2.035 billion of net loss determined in accordance with GAAP, adjusted as described below, divided by $3.369 billion in Adjusted Revenue as described above.

Achieved $3.68 and may be different$4.73 in Adjusted Diluted EPS from non-GAAP financial measures used by other companies. Endo refersContinuing Operations in 2017 and 2016, respectively. These amounts consist of $(5.52) and $(14.48) of diluted EPS from continuing operations determined in accordance with GAAP, adjusted as described below.

Fully adjusted amounts are summarized in the graph below (Adjusted Revenue amounts are reported in millions).

LOGO

(1)

Adjusted Revenue, Adjusted EBITDA Margin and Adjusted Diluted EPS from Continuing Operations are not prepared in accordance with GAAP. In calculating these amounts, each amount is adjusted from GAAP in order to this non-GAAP financial measurekeep participants from being advantaged or disadvantaged as a result of certain unplanned and unbudgeted events or changes throughout the performance period. These adjustments include adjustments: for unbudgeted acquisitions during the performance period to include deal model base case revenue and EPS commitments in making operating decisions because it believes it provides meaningful supplemental information regarding the Company’s operational performance. For instance, Endo believes that adjustedperformance targets; for unbudgeted dispositions during the performance period; for unplanned material changes in share count during the performance period; and to neutralize foreign exchange impact versus budget during the performance period.

(2)

EBITDA represents net income (loss) before interest expense, net; income tax; depreciation; and amortization, each prepared in accordance with GAAP. Adjusted EBITDA further adjusts EBITDA by adjusting for the items enumerated in note (1) above and by excluding other (income) expense, net; share-based compensation; certain upfront and milestone payments to partners; acquisition-related and integration items, including transaction costs,earn-out payments or adjustments, changes in the fair value of contingent consideration and bridge financing costs; cost reduction and integration-related initiatives such as separation benefits, retention payments, excess inventory reserves, other exit costs and certain costs associated with integrating an acquired company’s operations; asset impairment charges; inventorystep-up recorded as part of our acquisitions; litigation-related and other contingent matters; gains or losses from early termination of debt; discontinued operations, net of tax; and certain other items. Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Adjusted Revenue.

(3)

To arrive at Adjusted Diluted EPS from Continuing Operations, GAAP diluted EPS facilitates its internal comparisonsfrom continuing operations is adjusted for the items enumerated in note (1) above and for certain upfront and milestone payments to its historical operating resultspartners; acquisition-related and comparisons to competitors’ results. The Company includes adjusted diluted EPSintegration items, including transaction costs,earn-out payments or adjustments, changes in its earnings announcements because it believes it is useful to investors in allowing for greater transparencythe fair value of contingent consideration and bridge financing costs; cost reduction and integration-related initiatives such as separation benefits, retention payments, other exit costs and certain costs associated with integrating an acquired company’s operations; asset impairment charges; amortization of intangible assets; inventorystep-up recorded as part of our acquisitions; certainnon-cash interest expense and penalty interest; litigation-related and other contingent matters; gains or losses from early termination of debt; foreign currency gains or losses on intercompany financing arrangements; adjustments related to supplemental information used by Endo in its financialincome taxes; and operational decision-making. In addition, Endo has historically reported similar non-GAAP financial measurescertain other items, including the impact of including dilutive securities if EPS moves from a net loss position to its investors and believes that the inclusion of comparative numbers provides consistency in its financial reporting. Further, Endo believes that adjusted diluted EPS may be useful to investors as it is aware that certain of its significant shareholders utilize this measure to evaluate its financial performance. Finally, adjusted diluted EPS is considered by the Compensation Committee of Endo’s Board of Directors in assessing the performance and compensation of its executive officers and other Company employees. Investors are encouraged to review the following reconciliation of adjusted diluted EPS to its most directly comparable GAAP financial measure-diluted EPS.a net income position.

 

3239


   2015  2014 

Adjusted diluted EPS from continuing operations

 $                4.66   $                3.64  

Upfront and milestone payments to partners

  (0.08  (0.33

Asset impairment charges

  (5.69  (0.14

Acquisition-related and integration items, net

  (0.53  (0.48

Separation benefits and other cost reduction initiatives

  (0.63  (0.16

Excise tax

      (0.35

Amortization of intangible assets

  (2.80  (1.39

Inventory step-up and certain manufacturing costs that will be eliminated pursuant to integration plans

  (1.24  (0.42

Non-cash interest expense related to the 1.75% Convertible Senior Subordinated Notes

  (0.01  (0.08

Loss on extinguishment of debt

  (0.34  (0.20

Certain litigation-related charges, net

  (0.19  (0.27

Costs associated with unused financing commitments

  (0.39    

Acceleration of Auxilium employee equity awards at closing

  (0.19    

Charge related to the non-recoverability of certain non-trade receivables

      (0.06

Net gain on sale of certain early-stage drug discovery and development assets

      0.03  

Other than temporary impairment of equity investment

  (0.09    

Foreign currency impact related to the remeasurement of intercompany debt instruments

  0.13    0.08  

Charge for an additional year of the branded prescription drug fee in accordance with IRS regulations issued in the third quarter of 2014

  (0.02  (0.16

Other income, net

  0.03      

Income tax

  5.88    0.69  

Exclusion of dilutive securities due to net loss

  (0.02    
  

 

 

  

 

 

 

Diluted EPS from continuing operations

 $(1.52 $0.40  
  

 

 

  

 

 

 
  

 

 

  

 

 

 

The following highlights changes in revenue from continuing operations by reportable segment compared to prior year:

U.S. Branded Pharmaceuticals.Overall Company Performance Against Objectives Revenues from our U.S. Branded Pharmaceuticals segment in 2015 increased 33% to $1,284.6 million from $969.4 million in 2014. This increase was primarily attributable to increased revenues from legacy Endo products such as Voltaren® Gel, Percocet® and Supprelin® LA and products acquired in the acquisition of Auxilium such as XIAFLEX®.

U.S. Generic Pharmaceuticals. Revenues from our U.S. Generic Pharmaceuticals segment in 2015 increased 47% to $1,672.4 million from $1,140.8 million in 2014. This increase was primarily attributable to an additional $382.7 million of revenue due In addition to the acquisition of Par Pharmaceutical. In addition, the Generics business benefited from new product launches, an increase in demand for generic pain products and certain sales incentives offered to customers in the fourth quarter of 2015 in anticipation of additional competitive entrants expected in early 2016. This benefit was partially offset by increased pricing pressures due to increased competition across pain and commoditized products within the legacy Qualitest business.

International Pharmaceuticals. Revenues from our International Pharmaceuticals segment in 2015 increased 15% to $311.7 million from $270.4 million in 2014. This increase was mainly the result of a full year of revenues from Somar, which we acquired in July 2014.

The following highlights changes in adjusted income (loss) from continuing operations before income tax by reportable segment compared to prior year:

U.S. Branded Pharmaceuticals. Adjusted income from continuing operations before income tax in 2015 increased 31% to $694.4 million from $529.5 million in 2014. This increase was primarily attributable to the acquisition of Auxilium and the resulting incremental adjusted income from continuing operations before income tax.

U.S. Generic Pharmaceuticals. Adjusted income from continuing operations before income tax in 2015 increased 60% to $741.8 million from $464.0 million in 2014. In 2015, revenues and gross margins increased primarily due to the DAVA and Par acquisitions and the resulting incremental adjusted income from continuing operations before income tax. In addition, adjusted income from continuing operations before income tax increased as a result of new product launches and an increase in demand for generic pain products.

33


International Pharmaceuticals. Adjusted income from continuing operations before income tax in 2015 increased 1% to $81.8 million from $80.7 million in 2014. This increase was primarily attributable to the acquisition of Somar and the resulting incremental adjusted income from continuing operations before income tax, partially offset by increased operating expenses associated with the expansion of our global operations.

Corporate unallocated. Corporate unallocated adjusted loss from continuing operations before income tax in 2015 increased 53% to $544.5 million from $355.4 million in 2014. The increase during the year ended December 31, 2015 was primarily attributable to an increase in operating expenses and interest expense due to acquisitions.

Otherfinancial results above, other performance goals are established in alignment with the Company’s strategic, operating and compliance priorities. Further, the goals are developed to deliver strong annual operating performance results, while positioning the Company for longer-term success and enhanced shareholder value. Performance goals are set to be challenging, while reasonably attainable given a concerted effort on the part of the Company’s NEOs and employees in consideration of conditions and trends. NEO compensation is closely aligned with the achievement of the 20152017 financial objectives, as well as the Company’s strategic, operating and compliance priorities.

The Compensation Committee reviewed the Company’s achievement of the scorecard objectives set forth above for 2015,2017, and made the following performance determination, which applies to each NEO.NEO (certain amounts may not recalculate due to rounding).

 

    Plan Weightings   Payout Percent
(Target 100%)
   Final Company
Performance
 

Adjusted Revenue

   28%     68.3%     19.1%  

Adjusted Diluted EPS

   42%     135.2%     56.8%  

Strategic/Operating/Compliance Priorities

   30%     107.4%     32.2%  

Total

   100%          108.1%  

       Plan Weightings        Payout Percent  
(Target 100%)  
   Final Company        
Performance        

Adjusted Revenue

  25%         85.4%     21.3%      

Adjusted EBITDA Margin

  25%         150.0%     37.5%      

Adjusted Diluted EPS from Continuing Operations

  20%         150.0%     30.0%      

Strategic/Operating/Compliance Priorities

  30%         112.3%     33.7%      
   

 

     

 

Total

  100%             122.5%      
  

 

    

 

 

3440


Details behind the Company performance objectives, relative weighting and actual results are summarized below from the 20152017 Company Performance Scorecard:Scorecard (certain amounts may not recalculate due to rounding and select results have been generalized due to competitive considerations):

 

   Objective 2015 Results Weighting  Achievement
Level
  Contribution
(Weighting x
Achievement)
 
FINANCIAL OBJECTIVES    70.0%    108.5%    75.92%  
Adjusted Revenue Goal (1) Meet or exceed revenue goals of $3.362B, adjusted for business development transactions and currency. Achieved adjusted revenue from continuing operations of 97.9% of adjusted plan resulting in a payout level of 68.3% of target.  28.0%    68.3%    19.12%  
Adjusted Diluted EPS Goal (1) (2) Meet or exceed adjusted diluted EPS goal of $4.37 adjusted for business development transactions, share repurchase activity and currency. Achieved adjusted diluted EPS from continuing operations of 107.1% of adjusted plan resulting in a payout level of 135.2% of target.  42.0%    135.2%    56.80%  
STRATEGIC, OPERATING AND COMPLIANCE PRIORITIES    30.0%    107.4%    32.21%  
Drive organic growth through core businesses Achieve overall company positive underlying growth versus 2014 and meet growth objectives for key pharmaceutical brands. Achieved positive underlying revenue growth of 7% and exceeded share targets.  4.5%    66.7%    3.00%  
Execute value-creating deals Announce 2-3 new transactions that meet all established deal criteria and meet Auxilium deal case revenue and EPS accretion objectives. Transformed Endo with the completion of the Auxilium and Par acquisitions, Aspen asset transaction and VOLTAREN® GEL marketing agreement extension through 2023, while selling the AMS Men’s Health business. Underachieved Auxilium 2015 revenue goals, but establishing positive momentum for 2016.  4.5%    75.0%    3.38%  
Increase value of R&D pipeline Gain approval for BELBUCA®, advance Generics pipeline progress XIAFLEX® development program in support of potential new indications. Gained BELBUCA® approval and meet Generics ANDA and new product launch goals consistent with Par portfolio reprioritization, while finalizing selection of XIAFLEX® development plans.  4.5%    116.7%    5.25%  
Establish robust international pharmaceuticals segment Expand International Pharmaceuticals through the successful integration and optimization of Litha in South Africa and establish a Latin American commercial platform though Somar to generate double digit future revenue growth. Expanded International Pharmaceuticals further diversifying the Company’s financial profile by repositioning Litha as a pharmaceutical growth business by divesting non-core businesses and completing the acquisition of 60 branded and generic products, while exceeding Somar’s revenue and profitability goals.  3.0%    131.3%    3.94%  
Enhance continued focus on quality, compliance and risk management Meet all FDA and DEA compliance requirements, appropriately and effectively manage liabilities, and effectively integrate Auxilium’s commercial platform into Endo’s corporate integrity agreement (CIA). Achieved successful inspections, effectively managed product liabilities, while completed CIA integration objectives for acquired companies.  4.5%    110.0%    4.95%  
Expand value of established corporate structure Manage the Company’s effective tax rate (ETR) to 19% or below and continue to enhance Irish entity’s infrastructure to gain further value. Achieved an ETR below the 2015 guidance range of 9% to 10% positioning the Company for sustainable operating efficiency and an ETR in 2016 of approximately 9% to 11%.  3.0%    150.0%    4.50%  
Maintain lean operating model principles Achieve 2015 exit annual run rate synergies of $100MM for Auxilium, and achieve underlying OpEx of 26.2% of sales. Exceeded Auxilium synergy targets with $120MM achieved, with Restated Actual OpEx of 21.7% as a percent of sales vs. Restated Budget of 22%.  3.0%    127.5%    3.83%  
Reinforce high performance culture/commitment to Endo’s Vision and Key Values Introduce Endo’s Vision, Key Values and Leadership Behaviors into all acquired companies and embed into core people management processes. Launched new Vision and Key Values in furthering Endo’s culture of compliance and performance, competed Organizational Health Index employee and revised people management processes in support of a lean operating culture.  1.5%    125.0%    1.88%  
Engage, retain and attract the best talent aligned with our strategy Enhance talent development and succession planning initiatives to further strengthen leadership pipeline, and further align incentive structure with longer-term value creation goals. Developed succession plan for all critical leadership positions. Revised stock compensation allocation and updated Performance Share Plan design further embedding performance-based equity as greater percentage of total compensation.  1.5%    100.0%    1.50%  

   

Objective

 

 

2017 Results

 

 

Weighting      

 

  

Achievement
Level

 

  

 

Contribution
(Weighting x
Achievement)

 

 

 

FINANCIAL OBJECTIVES

 

  

 

 

 

 

70.0%           

 

 

 

 

 

 

 

 

 

126.9%     

 

 

 

 

 

 

 

 

 

88.8%     

 

 

 

 

 

Adjusted Revenue  Goal (1)

 

 

 

Meet or Exceed Company Adjusted Revenue of $3.43 billion

 

 

 

Adjusted Revenue at 98.2% of target

 

 

 

 

25.0%           

 

 

 

 

 

 

85.4%     

 

 

 

 

 

 

21.3%     

 

 

 

Adjusted EBITDA Margin Goal (1)

 

 

 

Meet or Exceed EBITDA Margin of 43.1%

 

 

EBITDA Margin at 105.2% of target

  25.0%              150.0%        37.5%      

 

Adjusted Diluted EPS from Continuing Operations Goal (1)

 

 

 

Meet or Exceed Adjusted Diluted EPS from Continuing Operations of $3.34

 

 

Adjusted Diluted EPS from Continuing Operations at 110.2% of target

  20.0%              150.0%        30.0%      

 

STRATEGIC, OPERATING AND COMPLIANCE PRIORITIES

 

 

 

 

 

 

30.0%           

 

 

 

 

 

 

 

 

 

112.3%     

 

 

 

 

 

 

 

 

 

33.7%     

 

 

 

 

Drive revenue achievement through core businesses 

 

Execute XIAFLEX® investment plan to meet annual demand vial growth targets

 

 

Investments contributed to significant product growth, generating high single-digit demand growth for 2017, with combined low double-digit Q4 growth run rates for Peyronie’s Disease and Dupuytren’s Contracture

 

  3.0%              125.0%        3.8%      
 

 

Meet Generics revenue targets from 2017 launch products

 

 

Realized 91% of targeted revenue contributions, and meaningful profitability contributions, from new U.S. generics product launches, while enhancing the Company’s product selection process

 

  2.0%              90.0%        1.8%      
 

 

Successfully navigated the business challenges within the consolidating U.S. generics industry

 

 

 

Achieved90-100% of targeted objective

  2.0%              95.0%        1.9%      
 

 

Identify key Par product opportunities and file 4-6 products for Canada and/or UK markets, while closing 2-4 in-licensing or acquisition deals

 

 

Significantly expanded the Company’s non-U.S. product portfolio and pipeline, filing several products for the Canadian market, while closing several in-licensing deals

 

  2.0%              125.0%        2.5%      
Advance key R&D pipeline products 

 

Advance cellulite treatment development program for collagenase clostridium histolyticum (CCH), achieving Phase III First Patient In (FPI)

 

 

Significantly progressed cellulite treatment development program with agreed upon plan with FDA including primary endpoint, safety measures and analysis method

 

  3.0%              95.0%        2.9%      
 Develop and execute OPANA® ER Advisory Committee preparation and response plan 

After careful consideration and consultation with the FDA, voluntarily ceased shipments of OPANA® ER as part of the removal of the product from the market

 

  2.0%              100.0%        2.0%      
 Execute patent protection plan for VASOSTRICT® and ADRENALIN® 

Expanded VASOSTRICT® patent estate and listed additional patent in Orange Book; aggressively pursued patent and trade secret lawsuits against challengers for VASOSTRICT® and ADRENALIN®

 

  2.0%              150.0%        3.0%      
 Achieve 25 regulatory submissions and20-25 new product launches within Generics 

Achieved 17 high-value product launches while progressing generic regulatory filings based on commercial viability determinations

 

  2.0%              95.0%        1.9%      
Enhance focus on operational execution 

 

Achieve overall Enterprise SG&A percentage of Adjusted Revenue target and improvement versus 2016, while investing in core assets driven by execution of restructuring initiatives

 

 

 

Exceeded final SG&A percentage of Adjusted Revenue targets, while building capabilities to support overall strategy and core assets

 

  2.0%              125.0%        2.5%      
 Meet FDA, DEA and CIA compliance requirements including no warning letters received and no quality system failures that result in market action 

Met all compliance objectives, including no warning letters received and reductions in filed alerts and recalls, with none due to internal systems quality failures

 

  2.5%              125.0%        3.1%      
 Develop and execute strategic options for Somar and Litha 

Divested non-core assets, finalizing the Litha sale (July) and Somar sale (October) with respective proceeds of approximately $100 million and $124 million

 

  2.5%              100.0%        2.5%      
Achieve key financial metrics 

 

Deliver onyear-end 2017 Net Debt Leverage Ratio guidance

 

 

Achieved year-end Net Debt Leverage Ratio objective, while refinancing debt to allow for greater operating flexibility

 

  2.5%              125.0%        3.1%      
 

Execute capital expenditures plan achieving all key investment milestones and delivering below or to budget

 

 

Optimized annual Capital Expenditure budget, appropriately investing in growth drivers

 

  2.5%              110.0%        2.8%      

 

35


(1)

AdjustmentsRefer to revenuethe section above entitled “2017 Consolidated Financial Results” for discussion of Adjusted Revenue, Adjusted EBITDA Margin and adjusted dilutedAdjusted Diluted EPS include: a) adjustments for unbudgeted acquisitions during the performance period to include deal model base case revenue and EPS commitments in the Company’s performance targets; b) adjustments for unplanned material changes in share count during the performance period; and c) adjustments to neutralize foreign exchange impact versus budget during the performance period

(2)

Please see page 33 for reconciliation of adjusted diluted EPS to its mostly directly comparable GAAP financial measure—diluted EPS

(3)

Certain amounts above do not recalculate due to rounding.from Continuing Operations.

41


The Compensation Committee also considered each named executive officer’s contributionsindividual performance and awarded the NEOs the 20152017 annual cash IC bonus amounts set forth in the “Individual Compensation Determination” section. See also below under the heading “Post-Termination Benefits” regarding how each named executive officer with an employment agreement is entitled to annual cash incentive compensation as a percentage of salary under certain circumstances.

Equity-Based Long-term Incentive Compensation

Purpose. The LTI program provides an annual award (and, under certain circumstances, a periodic award) that is performance-based.directly aligned with Endo’s financial, strategic, operating and share price performance objectives. The objective of the program is to align compensation for NEOs over a multi-year period directly with the interests of shareholders of the Company by motivating and rewarding creation and preservation of long-term shareholder value. The level of LTI compensation is determined based on an evaluation of competitive factors in conjunction with total compensation provided to NEOs and the goals of the compensation program described above. Currently, LTI awards are equity-based providing for the awarding of PSUs, RSUs andand/or stock options. The timing of our equity grants, including stock options, is not coordinated in a manner that intentionally benefits our executive officers or is timed to coincide with the release of materialnon-public information.

The Company believes that a combinationtargeted combinations of PSUs, RSUs andand/or stock options closely equates the value of the benefit received by the recipient to the accounting expense of the benefit to the Company. The Company also believes that the resulting blend of PSUs, RSUs andand/or stock options is supported by the pattern of equity-based awards that prevails in the Pay Comparator Companies and in the external market generally.

SeniorIn 2017, senior management’s targeted annual equity mix has been calibratedwas established in a manner that was supported by Company priorities as well as practices observed among Endo’s Pay Comparator Companies. The intention was to assignmotivate management through a higher portionbalanced approach aimed at enhancing realized value opportunities for Endo’s executives, while creating and preserving shareholder value. Each NEO, including Mr. Campanelli, received an equally weighted allocation of performance-based equity compensation, specifically throughPSUs, RSUs and stock options during the expanded use2017 annual grant cycle, each award accounting forone-third of PSUs. For Mr. De Silva, PSUs account for 75% of histhe NEO’s overall LTI value, with the remaining portion awarded in the form of stock options. For senior leaders other than Mr. De Silva, 75% of the annual equity award is valued based upon share price growth through the granting of PSUs and stock options. This practice is intentionally designed to motivate senior management to increase the creation and preservation of shareholder value. The annual equity mix for senior management, other thanincluding Mr. De SilvaCampanelli is reflected in the graph below.

 

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In determining the annual LTI grants for the NEOs, the Compensation Committee considered market data on total compensation packages, the value of long-term incentive grants at the Pay Comparator Companies, total shareholder return,TSR, share usage and shareholder dilution and, except in the case of the award to the President and Chief Executive Officer, the recommendations of the President and Chief Executive Officer.

Select actions were taken by the Committee in connection with the 2018 annual grant in support of the Company’s 2018 priorities. In an effort to minimize share pool utilization and underlying dilution levels, the Committee implemented special initiatives, including the use of an alternate equity mix, annual grant reductions and broader use of Long-Term Cash Incentive (LTCI) awards fornon-executive positions. In addition to managing share pool availability, the LTI mix changes for 2018 involve an expanded use of RSUs for Vice President positions and above in an effort to increase the direct ownership equity stake for key executives, while contributing to business continuity and strategic growth priorities. Each NEO, including Mr. Campanelli, received a 25% allocation of PSUs and a 75% allocation of RSUs during the 2018 annual grant cycle. In support of these objectives, LTI awards for all employees were reduced by 10% during the 2018 annual grant cycle. Since Mr. Campanelli’s LTI compensation is determined at the sole discretion of the Committee, this decision to apply a company-wide reduction in LTI was taken into account (in addition to Mr. Campanelli’s performance and competitive pay positioning) when considering Mr. Campanelli’s 2018 LTI award.

 

3642


The equity-based LTI compensation target for each named executive officer related to 2015,2017, to be paidgranted in early 2016,2018, is reflected in the graph below.

 

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Note: LTI for Rajiv De Silva Paul V. Campanelli

determined at the

discretion of the Compensation Committee.Committee

Further, performance is considered based on a collective group of factors focused on financial, operational and strategic results, which drives the Company’s future success as a leading globalhighly focused generics and specialty branded pharmaceutical company, that improves lives while creating value.delivering quality medicines to patients in need through excellence in development, manufacturing and commercialization. At the end of the performance year, each named executive officer’s performance is assessed and then factored into the awarding of equity-based compensation. Grant levels are determined based on overall performance relative, but not limited to, the following factors adopted by the Committee for all applicable NEO LTI assessments:

 

Development of a long-term vision for the Company and the successful execution of the overall business strategy

 Formation

Strengthening the balance sheet by effectively managing capital and implementation of value-creating capital structure initiativescash flow conversion

Achievement

Focus on operational execution and the achievement of Company operating objectives and overall financial performance

 

Progress in the development and expansion of the Company’s product portfolio and pipeline

Success in forging the Company for long-term sustainable revenue and profitability growth

 

Advancement of the Company’s performance-oriented culture and talent pipelineefficient operating model

Achievement of quality and compliance objectives

 Success in engaging with key stakeholders and investors
Success relative to deal model financial commitments and integration objectives

Relative shareholder value creation and preservation

Based upon the achievement of Company goals and individual objectives, our Chief Executive Officer recommends an adjustment to each named executive officer’s target annual equity-based LTI compensation target based upon performance related to key job accountabilities and annual performance objectives. The recommendation is then reviewed by the Compensation Committee, which has discretion to modify the final award. Regarding the award for the Company’s President and Chief Executive Officer, the Compensation Committee follows a similar process and has the ultimate discretion for determining the annual equity award.

Discretion.Discretion. Mr. De Silva’sCampanelli’s employment agreement diddoes not prescribe a specific LTI target but instead providedprovides that his LTI compensation would be determined at the sole discretion of the Compensation Committee if the Company and executive achieve certain performance targets set by the Committee with respect to each year ending during Mr. De Silva’sCampanelli’s employment term. All other NEOs are eligible to receive LTI compensation in an amount equal to a fixed percentage of their annual base salary for such year (or such lesser (including zero) or greater percent of the base salary for such year as is recommended to the Compensation Committee by the CEOPresident and Chief Executive Officer and approved by the Compensation Committee). The Compensation Committee may use negative discretion to take into account factors outside of thepre-established performance objectives to reflect extraordinary business circumstances. For example, because of overall 2012 corporate results and Company TSR, the long-term equity grant for the NEOs was reduced to 75% of the target award levels. These actions taken by Endo’s Compensation Committee demonstrated the Compensation Committee use of negative discretion under appropriate circumstances and the Company’s commitment to its pay-for-performance philosophy. Further, pursuant to each of our NEOs’NEO’s employment agreements, target LTI as a percentage of annual base salary may subsequently be increased at the discretion of the Committee. Please reference the “Individual Compensation Committee. Based on Mr. Upadhyay’s strong performance, and an analysis of the competitiveness of his pay related to the Company’s Pay Comparator Companies conducted by the Compensation Committee’s consultant, Hay Group, Mr. Upadhyay’s 2015Determination” section for approved target LTI was increased to 300% of annual base salary with a maximum award of 150% of target. The Committee did not implement any other LTI target changes for the Company’s NEOs for the 2015 performance year.changes.

Performance Share Units. PSU awards are granted annually, with each award covering a 3-yearthree-year performance period. Through this program, executives are eligible to earn a specified target number of Company shares of the Company at the end of the 3-yearthree-year performance period. The actual share award is released at the end of the 3-yearthree-year plan period depending on how well the Company performed against the targets set at the beginning of the 3-year program.performance period.

In 2015, the Company continued to grant PSU awards based exclusively on annual share price compounded annual growth rate (CAGR) over a 3-year performance period. These awards were granted to eligible Vice President-level and above execu-

37


tives to strengthen the focus on shareholder value creations and preservation. The number of PSUs awarded to each executive is based on a targeted percentage of the executive’s base salary with the actual number of shares awarded adjusted to between zero and 300% of the target award amount based upon achievement of pre-determined absolute stock price performance goals based on the 3-year CAGR targets. Payouts with respect to these PSUs, if any, will be made in ordinary shares of the Company following the close of the 3-year performance cycle. In determining the extent to which the pre-set performance measures are met for a given period, the Compensation Committee may exercise its judgment whether to reflect or exclude the impact of changes in accounting principles and extraordinary, unusual or infrequently occurring events reported in the Company’s public filings.

At the time this approach was under initial consideration, Endo analyzed median annualized TSR performance levels among companies in the S&P 1500 Healthcare Index, which served as the comparator group used to assess relative TSR performance prior to 2014. TSR levels were analyzed over multiple 3-year performance periods since 2008, and the results indicated that median annualized TSR levels were just over 10% on average, with a median low of 2.1% and median high of 18.7%. Based on this, the Compensation Committee designed the program to provide for forfeiture of the entire PSU award if Endo’s CAGR over the 3 year performance level was below 10% (that is, below median levels for the comparator group analyzed).

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In 2015, all executive leadership team members with the exception of Mr. De Silva remained eligible to participate in the share matching program offered from November 12, 2014 through December 31, 2015 (subject to restricted trading periods). The program allows participants to make a direct investment in Endo ordinary stock during a pre-defined period, which the Company would immediately match with a performance share unit for each share purchased up to one times the employee’s base salary. The matching PSUs would vest on the third anniversary of the date issued to the employee if the CAGR of the Company’s ordinary shares is at least 10% over the 3-year period. The program can be offered on a periodic basis to all eligible executive leadership team members, with subsequent offerings subject to Compensation Committee approval.

In February 2016,2017, the Compensation Committee approved modifications to the PSU program, effective with the 20162017 grants, to eligible Vice President-level and above positions, including the Company’s NEOs. In an effort to better align the program with the program’s objectives, including alignment with competitive practicesThe plan was based upon two discrete measures, relative TSR performance and the Company’s focus on increasing shareholder value, the Committee approved the implementationadjusted free cash flow. The addition of a singlefree cash flow performance measure based on relative 3-year TSR performance with maximum award levels also dependent upon Endo achieving 20% annual share price CAGR over the 3-year performance period. The number of PSUs awarded to each executive is based on a targeted percentagemetric, which accounted for 50% of the executive’s base salary withPSU award at grant, demonstrates its importance to the actual number of shares awarded adjusted to between zerosuccess and 300% of the target award amount dependent upon achievement of the pre-determined TSR performance goals.

Holders of PSUs will be entitled to receive a number of sharessustainability of the Company equaland will be measured annually over the performance cycle which spans over a three-year period. The three-year performance period is comprised of threeone-year annual free cash flow targets, established at the beginning of each annual performance period. Earned awards are banked each year and released at the end of the three-year vesting period. Under this design, the portion of the PSU award that is tied to afree cash flow performance will not vest unless the 2017 results reach the minimum 94% of target threshold, at which an attainment multiple of 0.5x will apply, while the award based onmaximum attainment multiple of 2x can only be achieved if the Company’s 2017 performance is at or above 112% of target. Award levels will be interpolated between the 0.5x and

43


2x payout multiples. The performance period for the 2017 awards measured against free cash flow performance began on January 1, 2017 and ended on December 31, 2017, with the final multiple of target PSUs associated with the 2017 performance cycle approved at 177.6% of target.

The remaining 50% of the PSU award was tied exclusively to relative TSR relative toperformance which will be measured against the three-year TSR of athe custom index of companies. The custom index utilized for the 20162017 grant iswas initially comprised of a statistically meaningful group of forty pharmaceutical companies, which include companies in the New York Stock Exchange ARCA Pharmaceutical Index, Endo’s Pay Comparator Companies and other specialty pharmaceutical companies. For purposes of determining the final relative TSR performance measurement, each company in the custom index will be included only if they are publicly-traded at both the beginning and end of the performance period. Under the newthis design, the portion of the PSU awardsaward that is tied to relative TSR performance will not vest unless the 3-yearthree-year TSR results reach the 40th percentile minimum threshold, at which an attainment multiple of 0.5x will apply, while the maximum attainment multiple of 3x2x can only be achieved if the Company’s percentile rankings is at or above the 90th percentile and the annual share price CAGR is at least 20% over the performance period. Further, a maximum of 1x of the award will vest if the Company’s Total Shareholder ReturnTSR for the performance period is negative, with no payout made if results are below the 40th percentile. Award levels based on positive TSR results will be interpolated between the 1x and 2x payout multiples.

The performance period for the 2016 annual2017 awards measured against relative TSR performance began on February 23, 201621, 2017 and ends on February 23, 2019,21, 2020, and will be assessed at the end of the performance cycle based on a beginning Per Share Price of $53.81. Payouts with respect$12.93.

The number of PSUs awarded to these PSUs, if any, willeach executive continues to be made in ordinary sharesbased on a targeted percentage of the Company onceexecutive’s base salary, with the performance attainment levels have been approved byactual number of shares awarded adjusted based on relative TSR and free cash flow performance. Effective with the Compensation Committee, following the close2017 awards, PSU award opportunities range between zero and 200% of the 3-yeartarget award amount, dependent upon achievement of thepre-determined relative TSR & free cash flow performance cyclegoals. As of the record date, TSR performance associated with the 2017 PSU awards is tracking below the 40th percentile and are therefore not eligiblea 0x payout opportunity. Free cash flow for earlier accelerationthe 2017 performance year achieved over 109% of vesting if target, TSR attainment levels are achieved prior toresulting in a payout of 177.6% (with this earned portion banked and released at the end of the 3-yearthree-year vesting period). The performance cycle. In determiningschedule for the extent to which the pre-set performance measures are met for a given period, the Compensation Committee may exercise its judgment whether to reflect or exclude the impact of changes in accounting principles and extraordinary, unusual or infrequently occurring events reported2017 awards is shown in the Company’s public filings. The determination of TSR, and CAGR performance, if applicable, will be made at the sole discretion of the Compensation Committee. The Committee also has discretion to accelerate the vesting of all or a portion of the Participant’s PSU based upon the overall performance of the

charts below:

 

38


Company and/or the Participant or based upon any change in business conditions, provided that the exercise of such discretion would not cause a PSU that would otherwise be deductible as “performance-based” compensation within the meaning of Section 162(m) of the Internal Revenue Code to become non-deductible.

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“Per Share Price” means the average of the closing prices of the Company’s ordinary shares for the applicable company during the thirty consecutive trading days ending on the day prior to the applicable measurement date.

“Total Shareholder Return” means the appreciation of the Per Share Price during the Performance Period,performance period, plus any dividends paid on the applicable Company’s ordinary shares during the Performance Period.performance period. The determination of the TSR attainment levels will be made by the Compensation Committee following an independent third-party confirmation of the results.

“CAGR”Free Cash Flow” means Adjusted Cash Flow from Operations less Capital Expenditures.

44 means


In February 2018, the compounded annual growth rate ofCommittee approved updates for the Company’s ordinary shares, which will be determined based onfree cash flow performance schedule for the appreciation of2018 performance year. In establishing the Per Share Price during2018 schedule, slight modifications to the Performance Period, plus any dividends paid on the shares during the Performance Period. The determination of the 3-Year CAGRperformance attainment levels will be madewere approved by the Compensation Committee following an independent third-party confirmationto align the program with 2018 budget projections. Under the updated schedule, the portion of the results.PSU award that is tied to free cash flow performance will not vest unless the 2018 results reach the minimum 95% of target threshold, at which an attainment multiple of 0.5x will apply, while the maximum attainment multiple of 2x can only be achieved if the Company’s 2018 performance is at or above 110% of target. Award levels will be interpolated between the 0.5x and 2x payout multiples. No changes were made to the relative TSR schedule. The free cash flow performance schedule for the new 2018 awards is shown in the chart below:

 

 

LOGOLOGO

Restricted Stock Units. In addition to the PSUs described above, our NEOs (other than Mr. De Silva) also are granted time-based RSUs, which are the second element of our equity-based LTI compensation package. RSUs are valued based on the closing price of our ordinary shares on the NASDAQNasdaq on the date of grant, and each RSU represents the right to receive one ordinary share of the Company as of the date of vesting. RSUs granted to the NEOs generally vest ratably over fourthree years.

Stock Options. Stock options represent the third element of our equity-based LTI compensation package, and are designed to reward NEOs only if the share price increases. The LTI program calls for stock options to be granted with exercise prices of not less than the closing price of our shares as quoted on the NASDAQNasdaq on the date of grant and generally to vest ratably over four years. The Compensation Committee will not reduce the exercise price of stock options (except in connection with adjustments to reflect recapitalizations, share or extraordinary dividends, share splits, mergers, spin-offs and similar events permitted by the relevant plan) without shareholder approval. Stock optionsoption grants to NEOs have been awarded with a term of seventen years, withbut were not issued as part of the exception of Mr. De Silva’s stock option awards and stock options issued under the 2015 Stock Incentive Plan, which have 10 year terms.2018 annual grant.

Vesting due to retirement age. On the first day of the year in which an NEO reaches retirement age, which is considered age 60 with five years of service or age 55 with ten years of service, PSUs, RSUs and stock options are eligible for continued vesting in accordance with the original vesting schedule. However, awards eligible for continued vesting as a result of reaching retirement age are not settled until after the end of the applicable performance or vesting period, if applicable.

Considerations. The Company believes that the most effective means to encourage long-term performance by our NEOs is to create an ownership culture. This philosophy is implemented through the granting of the equity-based awards describedabove.described above. The LTI program described above is designed so that Company leaders hold a competitive stake in the Company’s financial future. The LTI program provides a future reward structure so that employees who have an impact on the Company’s performance share in the results of that impact.

The LTI pool is established annually based on the Company’s achievement of goals and objectives, and can vary significantly from year to year.year, as demonstrated in 2018 with the application of the 10% award reductions. The share pool is also managed in a manner that focuses on optimizing share utilization, while remaining

39


aligned with competitive eligibility and grant practices. In an effort to proactively manage share utilization levels in 2017 and 2018, LTCI awards were granted to eligible middle-management and professional level employees. LTCI awards operate like cash-settled RSUs, vest ratably over a three-year period, can only be settled in cash and are tied to the value of Endo stock at the time of vesting. In addition, the LTI mix offered to Vice President positions and above was modified to offer only full value awards in 2018. This allowed the Committee to manage share pool availability, while increasing the direct ownership equity stake for key executives and contributing to business continuity and strategic growth priorities.

45


Key dilution metrics such as burn rate and overhang are regularly evaluated against external benchmarks, but also considered in the context of the Company’s significant growth in recent years.current business environment.

 

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The Company generally establishesnon-NEO eligibility criteria to align Company and industry practices, with participation in the LTI program based on individual performance. LTI awards remain an important component of the Company’s compensation philosophy and are allocated most heavily to:

 ¡ 

Reward consistently high performing individuals who we expect will increasemake significant contributions to the future valuesuccess of the Company;

 ¡ 

Reward individuals at various levels who have high impact relative to the expectations and objectives of their role; and

 ¡ 

Retain eligible individuals who have skills critical to the long-term success of the Company and who exemplify our core value behavior.Company.

The Endo International plc Amended and Restated Employee Stock Purchase Plan (ESPP) was introduced in 2012 to reinforce the Company’s emphasis on building an ownership culture for all eligible employees regardless of whether or not they participate in the LTI program.

Timing of Grants.Grants. Annual grants of PSUs, RSUs andand/or stock options to our NEOs are typicallyhave been historically made at a regularly scheduled meeting of the Compensation Committee held during the first quarter of each year. Effective with the 2018 annual grant, the Committee will approve the annual equity award values during the regularly scheduled meeting held during the first quarter of each year, but grant the awards on a new common grant date of April 1st (or the next business day if April 1st falls on a weekend or holiday). The number of PSUs, RSUs, LTCI awards and/or stock options awarded will be based on Endo’s closing stock price at the time of grant. Supported by best practices, this is intended to grant the annual equity awards after the annual earnings release, while allowing for a sufficient amount of time between the filing of the Company’s10-K and the date of Endo’s annual grant. The Company may also make occasional grants during the year to employees of the Company. These grants are typically associated with promotions and hiring, and are typically made shortly following the effective date of the promotion or date of hire.

20152017 Decisions Regarding Equity-Based LTI Program.Program. In 2015,2017, the Compensation Committee awarded LTI compensation for NEOs pursuant to the program described above resulting in the awards of PSUs, RSUs and stock options identified in the Summary Compensation Table and the 20152017 Grants of Plan-Based Awards Table. Included in these tables are special grants authorized by the Committee to address the Company’s need to increase each NEO’s direct ownership equity stake. These special grants help to further align the interests of our NEOs with those of our shareholders through the use of stock options, which only produce value for the recipient if shareholder value is created, and RSUs, which provide an enhanced ownership opportunity that is directly tied to shareholder value creation. For grants awarded in 20162018 based on 20152017 performance, the Compensation Committee reviewed the Company’s achievements as well as each named executive officer’sNEO’s contributions and awarded the NEOs the LTI amounts set forth in the “Individual Compensation Determination” section.

Periodic Review. The Compensation Committee reviews both the annual IC program and the LTI program annually to confirm that their key elements continue to meet the objectives described above.

Stock Ownership Guidelines for Executive and Senior Management.Management. The current Ownership Guidelines for executive and senior management are as follows:

 

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4046


Executive and senior management are expected to achieve the Ownership Guidelines within five years of joining the Company, or, if in the case of individuals serving in this capacity at the time the Ownership Guidelines were adopted, within five years of the date of adoption of the Ownership Guidelines.Company. Executive and senior management are also expected to continuously own sufficient shares to meet the Ownership Guidelines once attained. Members of executive and senior management who subsequently get promoted to a higher level will have five years from the date of promotion to achieve their new ownership target. All individuals subject to the Ownership Guidelines are in compliance with the established guidelines.

Mr. Campanelli has a sizable personal investment in the success of Endo. Per the terms of Mr. Campanelli’s original employment agreement following the acquisition of Par, Mr. Campanelli was required to purchase or retain shares of Endo stock equal in value to at least fifteen percent (15%) of the after-tax proceeds that he received in connection with the merger. Further, Mr. Campanelli is required to retain shares with a purchase price of $5,000,000 for three years and retain the balance of the shares for one year following his date of employment with Endo. Mr. Campanelli chose to retain substantially more than the aforementioned requirement, and has since made additional open market purchases of Endo stock (allowing him to exceed the Company’s Ownership Guidelines with a current ownership level of 15.2x base salary based on eligible share ownership levels of 1,642,461 shares as of April 13, 2018), strengthening the alignment between management and shareholder interests.

Periodic Review

The Committee reviews both the annual incentive compensation program and the LTI program annually to confirm that their key elements continue to meet the objectives described above.

Individual Compensation Determination

Under our compensation structure, the mix of base salary, annual cash ICincentive compensation and equity-based LTI compensation varies depending on each named executive officer’s level. Annual compensation determinations by the Compensation Committee are based on factors including the Company’s performance, individual performance and the competitiveness of each NEO’s pay as reported by the Compensation Committee’s consultant, Korn Ferry Hay Group. The following summarizes the compensation decisions madeopportunities applicable in 20162017 and the actual compensation awarded in 2018 by the Compensation Committee for the named executive officers based on 20152017 performance:

 

Name Base Salary as
of
December 31,
2015
 2015 IC Target 2015 IC Actual 2015 Long-Term
Equity Incentive
Compensation
Target
 2015 Long-
Term Equity
Incentive
Compensation
Expected
Value (1) (2)
  

Base Salary as

of

December 31,

2017

 

 


2017 Annual
Incentive
Compensation
Target

 

 


2017 Annual
Incentive
Compensation
Actual

 

 

2017 Long-Term
Equity Incentive
Compensation
Target

 

 

 

2017 Long-

Term Equity
Incentive
Compensation
Actual (Expected
Target Value)(1)

 

 

Rajiv De Silva

 $          1,155,000   $          1,443,750   $          1,687,110    
 
Committee
Discretion
  
  
 $        9,999,942  

Suketu Upadhyay

 $630,000   $346,500   $486,936   $          1,890,000   $2,834,913  

Paul V. Campanelli

 $950,000   $760,000   $1,064,000   $2,375,000   $2,374,891   

 

$

 

 

            950,000

 

 

 

 

 

 

$

 

 

            1,140,000

 

 

 

 

 

 

$

 

 

            1,815,450

 

 

 

 

 

 

 

 

 

Committee Discretion

 

 

 

 

 

 

$

 

 

            6,804,000

 

 

 

 

Blaise Coleman

 

 

$

 

 

            550,000

 

 

 

 

 

 

$

 

 

            302,500

 

 

 

 

 

 

$

 

 

            613,203

 

 

 

 

 

 

$

 

 

            1,375,000

 

 

 

 

 

 

$

 

 

            1,237,500

 

 

 

 

Terrance J. Coughlin

 

 

$

 

 

            600,000

 

 

 

 

 

 

$

 

 

            420,000

 

 

 

 

 

 

$

 

 

            800,125

 

 

 

 

 

 

$

 

 

            1,800,000

 

 

 

 

 

 

$

 

 

            1,620,000

 

 

 

 

Matthew J. Maletta

 $475,000   $261,250   $338,894   $950,000   $1,139,990   

 

$

 

 

            550,000

 

 

 

 

 

 

$

 

 

            302,500

 

 

 

 

 

 

$

 

 

            600,203

 

 

 

 

 

 

$

 

 

            1,375,000

 

 

 

 

 

 

$

 

 

            1,237,500

 

 

 

 

Susan Hall

 $515,000   $283,250   $398,051   $1,030,000   $1,338,941  

Tony Pera

 

 

$

 

 

            460,000

 

 

 

 

 

 

$

 

 

            253,000

 

 

 

 

 

 

$

 

 

            409,925

 

 

 

 

 

 

$

 

 

            920,000

 

 

 

 

 

 

$

 

 

            828,000

 

 

 

 

 

(1)

Award levels established at the time of grant are based on the grant expected target value which is derived from Endo’s closing stockshare price at the time of grant for RSUs and PSUs and the Black-Scholes valuation model for options (see Summary Compensation Table’s footnote (1) on page 4853 for details regarding LTI valuations under ASC 718 for accounting and proxy reporting purposes).

(2)

Special off-cycle PSU awards As further described below, based on Mr. Campanelli’s 2017 performance, the Committee approved an award for Mr. Upadhyay, Mr. Campanelli Mr. Malettawith an expected target value of $9,000,000; however, only approximately $6,804,000 (comprised of 900,000 RSUs and Dr. Hall (4,450, 2,100, 500 and 1,000, respectively) are not included in300,000 PSUs), representing expected target value, was granted by the figures noted in this table since the awards are outside ofCommittee during the annual grant process. These representcycle in 2018. This was due to the Matched PSUs grantedfact that Mr. Campanelli’s award exceeded the 1.5 million share maximum individual grant limitation under the share matching program on November 11, 2015. Subject to the terms and conditions approved by the Compensation Committee in February 2014, the Matched PSUs allow for a performance-based award, subject to 10% CAGR performance criteria over the three year performance period, to be granted in connection with the aforementioned NEO’s personal investments in Endo Shares. The share matching program was approved as a means of allowing Endo’s executive leadership team members the opportunity to quickly establish a significant equity stake in Endo, which is tied to performance-based vesting and holding conditions designed to increase shareholder value. Subject to the terms and conditions outlined in Mr. Campanelli’s employment agreement, Mr. Campanelli also received 72,632 Matched PSUs outside of the share matching program, which allow for a performance-based award in connection with Mr. Campanelli’s personal investment in Endo Shares. The Matched PSUs were approved by the Compensation Committee and Board as a means of allowing Mr. Campanelli the opportunity to quickly establish a significant equity stake in Endo, which is tied to performance-based vesting and holding conditions designed to increase shareholder value. Based on Mr. Maletta’s contributions in 2015 and the critical nature of his position to the implementation of the Company’s strategy, the Compensation Committee approved a special equity grant under the Company’s 2015 Stock Incentive Plan. The grant was comprised of 4,811 PSUs, 4,811 RSUs, and 17,394 stock options that follow the same general structure used for the 2015 annual grants, and is designed to increase the level of focus placed on increasing shareholder value. Since the awards for Mr. Campanelli and Mr. Maletta are outside of the annual grant process, both are not included in the figures noted in the above table.current LTI Program.

41


Each named executive officer’s target percentage and actual number of PSUs RSUs, and stock optionsRSUs granted in 20162018, based on 20152017 performance, were as follows:

 

Name LTI Target %
of Base
Salary
 PSUs
Actually
Granted
 RSUs
Actually
Granted
 Options
Actually
Granted
  

 

LTI Target % of
Base Salary

 

 

 

PSUs Actually
Granted

 

 

 

RSUs Actually
Granted

 

 

Rajiv De Silva

  
 
Committee
Discretion
  
  
  149,342        167,897  

Suketu P. Upadhyay

                300%                28,225                14,112                47,599  

Paul V. Campanelli

  250%    23,645    11,822    39,875   

 

 

 

 

Committee Discretion

 

 

 

 

 

 

 

 

 

200,000

 

 

 

 

 

 

 

 

 

900,000

 

 

 

 

Blaise Coleman

 

 

 

 

 

250%

 

 

 

 

 

 

 

 

 

36,375

 

 

 

 

 

 

 

 

 

163,690

 

 

 

 

Terrance J. Coughlin

 

 

 

 

 

300%

 

 

 

 

 

 

 

 

 

47,618

 

 

 

 

 

 

 

 

 

214,285

 

 

 

 

Matthew J. Maletta

  200%    11,350    5,675    19,140   

 

 

 

 

                                   250%

 

 

 

 

 

 

 

 

 

                                   36,375

 

 

 

 

 

 

 

 

 

                                   163,690

 

 

 

 

Susan Hall

  200%    13,331    6,665    22,481  

Tony Pera

 

 

 

 

 

200%

 

 

 

 

 

 

 

 

 

24,337

 

 

 

 

 

 

 

 

 

109,523

 

 

 

 

 

47


 

Rajiv De SilvaPaul V. Campanelli

President and Chief Executive Officer

 

 

To provide further assurance of independence, the information used to determine the compensation recommendation for the President and Chief Executive Officer is developed by Korn Ferry Hay Group. Korn Ferry Hay Group prepares analyses showing competitive Chief Executive Officer compensation among the Pay Comparator Companies for the individual elements of compensation and total direct compensation.Direct Compensation. The consultant develops a range of recommendations, based on various Company and individual performance assumptions, for any change in the President and Chief Executive Officer’s base salary, annual cash incentive, equity grant value, and equity mix. The recommendations take into account the competitive Pay Comparator Company pay analysis, expected future pay trends and the position of the President and Chief Executive Officer in relation to other senior company executives and proposed pay actions for all key employees of the Company. The results of this analysis are shared with the Committee, during which time the Company’s performance, and the performance of the President and Chief Executive Officer are evaluated, and compensation decisions determined. The President and Chief Executive Officer has no prior knowledge of the recommendations, and only participates in the process during the stage when he reviews his evaluation of Company performance and his personal performance with the Committee. The President and Chief Executive Officer takes no part in the recommendations, Committee discussions or decisions, other than what is described above.

 

The Committee’s assessment of Mr. De Silva’sCampanelli’s performance iswas based on the successful development and implementationadvancement of Endo’s transformational strategystrategic imperatives, the Company’s solid financial results and the executionachievement of a long-term sustainable growth plan for the Company. Further,operating performance objectives. Mr. De Silva’sCampanelli’s performance iswas evaluated based upon the Company’s overall financial performance and the achievement of annual operating objectives.objectives established for 2017. Specifically, the Committee strongly considered the specific CompanyCompany’s financial and operating objectives as summarized in the Compensation Discussion & Analysis “Executive Summary” and further detailed within the “Performance-Based Annual Cash Incentive Compensation” section. Among several performance-based categories,In addition, the assessment included meeting and exceeding key financial metrics,Committee considered Mr. Campanelli’s performance based upon his successful transition into the achievementCEO role, the progress made in executing the transformation of Endo based on the Company’s new strategy built on organic growth and portfolio optimization, the investments initiated in progressing the Company’s core businesses,growth assets and the completion and integrationadvancement of value-creating M&A transactions, the implementation of Endo’s corporatea more efficient cost structure and lean operating model augmenting the value of the Company’s pipeline and launch products, maximizing balance sheet flexibility and optimizing working capital, enhancing the Company’s focusfocused on quality, compliance and risk, and developing a sustainable Endo culture that motivates and energizes the organization toward achieving the Company’s strategy while building leadership strength and depth.operational execution.

 

Based on an analysis of the competitiveness of Mr. De Silva’sCampanelli’s pay related to the Company’s Pay Comparator Companies conducted by Korn Ferry Hay Group and the Company’s compensation plan objective to have a significant percentage of pay in the form of variable incentive-based compensation, Mr. De Silva’sCampanelli’s annual base salary compensation remained unchanged at $1,155,000.$950,000. The Compensation Committee also assessed Mr. De Silva’sCampanelli’s achievement against the Company’s annualpre-established and formulaic objectives, while operating within the structure of theEndo’s Internal Revenue Code Section 162(m) compliant ICannual incentive compensation program, which allows for a maximum bonus equal to 225% of the target bonus amount and the use of negative Committee discretion based on actual performance. Based on overall Company financialIn consideration of Mr. Campanelli’s contributions and operatingthe Company’s performance against the Company’s2017 scorecard objectives in 2015, the Committeeas noted on page 41, Mr. Campanelli was awarded Mr. De Silva a 2015an annual performance-based cash bonus equal to approximately 116.9%159% of his target amount.annual incentive compensation target. The 2017 annual incentive award reflects the Board’s confidence in Mr. Campanelli and his ability to lead the organization through the execution of key financial, operational and strategic priorities.

 

The following illustrates the mechanics underlying the annual cash incentive calculation for Mr. De Silva:Campanelli:

 

LOGO

 

42


 

Rajiv De SilvaLOGO

President and Chief Executive Officer (continued)

 

Mr. De SilvaCampanelli entered into a new employment agreement with the Company on February 28,September 23, 2016, with a three-year term effective March 18, 2016.term. His agreement does not prescribe a specific LTI target, but instead provides for his LTI compensation to be determined at the sole discretion of the Compensation Committee based upon several performance-based criteria.

 

Mr. De Silva’sCampanelli’s performance in 20152017 was assessed by the Committee based on a collective group of factors focused on strategic, financial and operational and strategic results, which drives the Company’s future success as a leading globalhighly focused generics and specialty branded pharmaceutical company that improves lives while creating value.company. Based on Korn Ferry Hay Group’s analysis of competitive LTI levels, and in consideration of Mr. De Silva’sCampanelli’s strong performance againstand the Company’s objectives, Mr. De Silva was grantedCommittee’s decision to apply a company-wide reduction in LTI, the Committee approved an equity-based award with an expected target value equal to approximately $10.0 million based on Endo’s closing stock price at the time of grant for PSUs and the Black-Scholes valuation model for options, whichequal to $9,000,000. The approved award is highly consistent with median actual

48


Paul V. Campanelli

President and Chief Executive Officer (continued)

LTI levels awarded by Endo’s Pay Comparator Companies (see Summary Compensation Table’s footnote (1) on page 4853 for details regarding LTI valuations under ASC 718 for accounting and proxy reporting purposes)., and reflective of Mr. De Silva’sCampanelli’s performance and contributions in 2017. The Committee granted a portion of this award with an expected target value of approximately $6,804,000 (comprised of 900,000 RSUs and 300,000 PSUs) during the annual grant cycle in 2018. This was due to the fact that Mr. Campanelli’s award exceeded the 1.5 million share maximum individual grant limitation under the current LTI Program.

Consistent with Endo’s other NEOs, Mr. Campanelli’s 2018 equity award was issued entirely in the form of RSUs equal to 75% of Mr. Campanelli’s total LTI award, and performance-based equity consisting of 75%25% PSUs, and 25% stock options, with any realizable value dependent upon the delivery of relativeshareholder value and absolute shareholder value.achievement of free cash flow objectives. The combined use of RSUs and PSUs in 2018 supported the Company’s share pool management priorities, and also allowed for a consistent approach for all executive and senior management employees aimed at increasing the equity stake for our key leaders, while motivating our key leaders so they can remain focused on business continuity and strategic growth priorities. Since joining Endo in 2015, Mr. Campanelli received a relatively high proportion of his LTI awards in the form of PSUs and stock options. The decision to award Mr. Campanelli 75% of his 2018 equity award in the form of RSUs also helped to balance the LTI he received since joining Endo more evenly across PSUs, RSUs and stock options. This grant was approved in recognition of Mr. De Silva’sCampanelli’s overall performance relative, but not limited to, the following factors adopted by the Committee for all applicable NEO LTI assessments:assessments (as referenced under the section “Equity-Based Long-term Incentive Compensation”).

 

 

Development of a long-term vision for the Company and execution of the overall business strategy

Formation and implementation of value-creating capital structure initiatives

Achievement of Company operating objectives and overall financial performance

Progress in the development and expansion of the Company’s product portfolio and pipeline

Success in forging the Company for long-term sustainable revenue and profitability growth

Advancement of the Company’s performance-oriented culture and talent pipeline

Achievement of quality and compliance objectives

Success in engaging with key stakeholders and investors

Success relative to deal model financial commitments and integration objectives

Relative shareholder value creation and preservation

Mr. De Silva’sCampanelli’s equity-based award allows his total direct compensationDirect Compensation levels and pay mix to be highly consistent with practices observed among CEOs of both Endo’s Pay Comparator Companies and ISS Peer Group. Endo’sGroup (2017 target Direct Compensation levels ranked below the 50th percentile compared to the Endo Pay Comparator Companies, and above the 50th percentile compared to the ISS Peer Group median). Mr. Campanelli’s 2017 pay structure supports the Company’spay-for-performance compensation philosophy in that only 9% of Mr. De Silva’sCampanelli’s total direct compensationDirect Compensation is fixed while 91% is variable and dependent upon performance.

LOGO

 

LOGO

 

4349


 

Suketu P. UpadhyayBlaise Coleman

Executive Vice President &and Chief Financial Officer

 

 

Mr. Upadhyay servesColeman has served as Executive Vice President and Chief Financial Officer since December 19, 2016 and also oversees investor relations,the Company’s information technology and government affairs.function. Mr. UpadhyayColeman has broad-based leadership skills, financial expertise and business acumen related to strategic and financial matters. Under Mr. Upadhyay’s financial leadership,For 2017, the Company achieved strong financial performance in 2015. The Company attained adjusted revenue growthended the year with Adjusted Revenue of greater than 37%$3.369 billion, Adjusted EBITDA Margin of 45.4% and Adjusted Diluted EPS from continuing operations as a resultContinuing Operations of underlying growth in core business combined with the addition of new revenue sources from acquisitions. Total adjusted diluted EPS for 2015 was $4.66, exceeding the top end of the financial guidance range. Net income exceeded expectations through prudent management of expenses and improvements in the Company’s effective tax rate.$3.68. Throughout 2017, Mr. Upadhyay alsoColeman played a key leadership role in executing Endo’s business development activities in 2015,strategic priorities, including the management of capital expenditure investments, targeting the Company’s key growth drivers. Mr. Coleman continued to optimize the Company’s cost structure, which included the acquisitionrefinancing of Auxilium Pharmaceuticals, Inc., Litha Healthcare Group and Par Pharmaceutical Holdings, as well as the divestiture of the AMS Men’s Health business.Endo’s debt obligations, allowing for greater operating flexibility. Based on Korn Ferry Hay Group’s analysis of the competitiveness of Mr. Upadhyay’sColeman’s pay related to Endo’s Pay Comparator Companies, and Mr. Upadhyay’s operational and strategic performance since joining Endo in 2013, the Committee approved an increase to Mr. Upadhyay’s 2015 equity-based long-term incentive target from 250% to 300%. In recognition of Mr. Upadhyay’s 2015Coleman’s 2017 performance, the Committee approved a merit increase to base salary of 4%approximately 9.1% effective March 1, 2016. Based on individual performanceFebruary 26, 2018. In consideration of Mr. Coleman’s contributions and Companythe Company’s performance against 2015the 2017 scorecard objectives as noted on page 34,41, Mr. UpadhyayColeman was awarded an annual performance-based bonus equal to approximately 141%203% of his annual cash ICincentive compensation target. Based on the performance factors noted on page 37,43, Mr. UpadhyayColeman was also awarded an equity-based award equal to 150%90% of his LTI target.

 

 

 

Paul V. CampanelliTerrance J. Coughlin

Executive Vice President Par Pharmaceuticaland Chief Operating Officer

 

 

Mr. Campanelli joined Endo on September 28, 2015Coughlin has served as Endo’s Executive Vice President Par Pharmaceutical following the Company’s acquisitionand Chief Operating Officer since November 1, 2016, with responsibility for global research & development and worldwide manufacturing operations. Previously, Mr. Coughlin served as Vice President, Operations of Par Pharmaceutical Companies, Inc., a subsidiary of Endo. Prior to joining Endo,Endo’s acquisition of Par in September 2015, Mr. Campanelli served asCoughlin was the Chief ExecutiveOperating Officer of Par Pharmaceutical Companies, Inc. where he led impressive growth through Par’s industry-leading product development achievements and targeted acquisition strategy. Mr. Campanelli is nowwas responsible for leading Par’s manufacturing operations, product development and supply operations. Throughout 2017, Mr. Coughlin played a key leadership role in progressing the Company’s integrated Generics business, which offersclinical development of collagenase clostridium histolyticum for the treatment of cellulite in cooperation with the FDA, while achieving 17 new product launches and progressing generic regulatory filings based on commercial viability determinations. Mr. Coughlin also led the review of Endo’s global manufacturing and supply chain capabilities, resulting in the initiation of an extensive range of dosage forms and delivery systems. The Company’s Par Pharmaceutical business, which is the combination of legacy Par and the Company’s Qualitest business, is one of the industry’s fastest growing generics companies and the fifth largest U.S. generics business based on sales revenue. In 2015, Mr. Campanelli was instrumentaloptimization strategy in the completionsupport of the Company’s acquisition of Par2017 financial and the achievement of a successful integration of the legacy Par and Qualitest organizations.operational priorities. Based on anKorn Ferry Hay Group’s analysis of the competitiveness of Mr. Campanelli’sCoughlin’s pay related to the Company’sEndo’s Pay Comparator Companies, conducted by the Hay Group, Mr. Campanelli’s annual base salary compensation remained unchanged at $950,000. Inand in recognition of Mr. Campanelli’s leadershipCoughlin’s performance and contributions in 2015,2017, the Committee approved a merit increase to base salary of approximately 4.2%, effective February 26, 2018. Based on individual performance and Company performance against 2017 scorecard objectives as noted on page 41, Mr. Coughlin was awarded an annual performance-based bonus equal to approximately 140%191% of his current annual cash IC target, consistent with Par’s 2015 annual incentive plan.compensation target. Based on the performance factors noted on page 37,43, Mr. CampanelliCoughlin was also awarded an equity-based award equal to 100%90% of his LTI target.

 

 

 

Matthew J. Maletta

Executive Vice President, Chief Legal Officer

 

 

Matthew J.Mr. Maletta serveshas served as the Company’s Executive Vice President, Chief Legal Officer since May 4, 2015. Mr. Maletta brings nearlyover two decades of legal experience and organizational leadership in the specialty pharmaceutical industry and with private law firms, including extensive experience in litigation strategy, M&A, corporate, governance, securities, finance, commercial and employment law. Since his arrival,Throughout 2017, Mr. Maletta has played a key leadership role in supporting the advancement of the Company’s business development strategy which included the acquisition of Par Pharmaceutical Holdings, Inc.both legal and the sale of the AMS Men’s Health business.operational priorities. Mr. Maletta has also led and progressed the Company’s product liability efforts,and litigation strategy, while providing advice on a wide range of significant legal and business matters. As a resultmatters, including product patent protection, regulatory matters, and corporate structure considerations. Based on Korn Ferry Hay Group’s analysis of the competitiveness of Mr. Maletta’s pay related to Endo’s Pay Comparator Companies, and in recognition of Mr. Maletta’s performance and contributions in 2015,2017, the Committee approved a merit increase to base salary of 7.4%approximately 4.5%, effective March 1, 2016.with the commencement of Mr. Maletta’s new employment agreement on February 13, 2018. Based on individual performance and Company performance against 20152017 scorecard objectives as noted on page 34,41, Mr. Maletta was awarded an annual performance-based bonus equal to approximately 130%198% of his annual cash ICincentive compensation target. Based on the performance factors noted on page 37,43, Mr. Maletta was also awarded an equity-based award equal to 120%90% of his LTI target.

 

 

 

Susan HallTony Pera

Executive Vice President, Chief Scientific Officer and Global Head of Research & Development and QualityPar Pharmaceutical

 

 

Susan Hall, Ph.D.Mr. Pera serves as President, Par Pharmaceutical, leading Endo’s Executive ViceU.S. Generics business, including responsibility and oversight of Par Generic and Par Sterile sales teams, as well as Par’s marketing and business analytics group. Mr. Pera was appointed as President, Par Pharmaceutical on November 1, 2016, and previously served as Chief ScientificCommercial Officer with responsibilityof Par Pharmaceutical. As Chief Commercial Officer, Mr. Pera was responsible for global Branded Pharmaceutical Research & Developmentall sales, marketing, pricing and enterprise-wide Quality Assurance.customer operations functions for Par. Throughout 2017, Mr. Pera effectively led the Company’s generics strategy and business during a period of significant disruption in the U.S. generics industry. Under Dr. Hall’shis leadership, the Company has made substantial progressCompany’s U.S. Generic Pharmaceuticals segment achieved Adjusted Revenue in expandingexcess of $2.2 billion, including the Branded Pharmaceutical product pipeline through a financially prudent de-risked approach focused on later stage and inherently lower risk high-value programs. In 2015, Dr. Hall was instrumental in securing approval for BELBUCA™, which is indicatedlaunch of several new products that led to new sources of revenue for the managementCompany. Based on Korn Ferry Hay Group’s analysis of pain severe enoughthe competitiveness of Mr. Pera’s pay related to require daily, around-the-clock, long-term opioid treatmentEndo’s Pay Comparator Companies, and for which alternative treatment options are inadequate. Additionally, Dr. Hall led the FDA approval of a XIAFLEX® label update for the treatment of adult Dupuytren’s contracture for patients with a palpable cord, while selecting and initiating studies for new XIAFLEX® indications. Dr. Hall also made significant contributions in the life-cycle management of key Company’s assets important to patient care, including the potential label expansion for OPANA® ER to include the Company’s abuse deterrent formulation technology. In recognition of Dr. Hall’sMr. Pera’s performance and contributions in 2015,2017, the Committee approved a merit increase to base salary merit increase of 6.8%approximately 2.5%, effective March 1, 2016.February 26, 2018. Based on individual performance and Company performance against 20152017 scorecard objectives as noted on page 34, Dr. Hall41, Mr. Pera was awarded an annual performance-based bonus equal to approximately 141%162% of herhis annual cash ICincentive compensation target. Based on the performance factors noted on page 37, Dr. Hall43, Mr. Pera was also awarded an equity-based award equal to 130%90% of herhis LTI target.

 

 

4450


Additional Compensation Components

The Company’s current practice is to limit use of perquisites. In 2015,2017, other than as described below, the only perquisites provided to the NEOs were financial planning services, use of a Company car or car serviceshousing allowances, term life and term lifelong-term disability insurance.

Retirement Benefits

The Company currently offers two executive retirement programs: the 401(k) Restoration Plan and the Executive Deferred Compensation Plan, each of which is described below. Both plans were effective January 1, 2008, and were amended and restated in 2014.

401(k) Restoration Plan. The purpose of the 401(k) Restoration Plan is to provide eligible employees with the opportunity to defer a portion of their compensation on atax-favored basis in parity with the tax benefit provided under the qualified 401(k) plan. The 401(k) Restoration Plan allows eligible employees whose compensation exceeds the Internal Revenue Code Section 401(a)(17) amount (or other criteria set by the Compensation Committee), including NEOs, to defer eligible pay after such individual’s compensation has exceeded the earnings maximum incontribution to the Company’s existing qualified 401(k) plan.plan has exceeded the maximum. The Company does not fund employer matching contributions in the 401(k) Restoration Plan.

The amount in any individual’s 401(k) Restoration Plan account will be paid to such individual at termination of employment or following the elected specified payment date. Actual 401(k) Restoration Plan participation will begin when an executive’s total cash compensation exceeds the Internal Revenue Code earnings limit for the qualified 401(k) ($265,000275,000 for 2016)2018). Individuals who elect to defer their eligible pay under the 401(k) Restoration Plan will defer federal and state (to the extent allowed by state law) taxes until the account is paid to the individual.

Executive Deferred Compensation Plan.Plan. The Executive Deferred Compensation Plan permits executives to elect to defer up to 100% of the portion of the following year’s LTI compensation that is in the form of RSUs.

Deferral of the RSUs defers federal and state (as allowed under state laws) taxes on the compensation when the RSUs vest. The compensation is deferred until the deferred RSUs are settled in shares. The RSUs may be deferred to a specified payment date on which the elected disbursement(s) under the participant’s account will commence. The value of the compensation an executive receives upon the share delivery is based on the value of the Company’s shares on the date the deferral is delivered to the executive, and the executive will be responsible for the federal and state taxes at that time.

The Executive Deferred Compensation Plan also allows an executive to defer up to 50% of his or her annual cash ICincentive compensation award. When an executive makes his or her irrevocable election to defer cash IC,incentive compensation, he or she also elects a specified payment date in which the elected disbursement(s) under the participant’s account will commence.

Post-Termination Benefits

Employment and Change in Control Agreements; Severance Agreements.Agreements. The Company generally enters into a written employment agreement with each of its NEOs. The purpose of these agreements and the compensation and benefits provided for therein is to aid recruitment and retention and to reinforce an ongoing commitment to shareholder value creation and preservation.

In connection with Mr. Campanelli’s appointment to President and Chief Executive Officer, the Company entered into a new executive employment agreement with Mr. Campanelli which was effective September 23, 2016, and has a term of three years. Mr. Campanelli’s new employment agreement replaced his previous agreement, which was dated as of September 25, 2015.

On February 28,December 9, 2016, the Company entered into a new executive employment agreement with Mr. De Silva,Terrance J. Coughlin, which iswas effective March 18,December 9, 2016 and has a term of three years. Mr. De Silva’sCoughlin’s new employment agreement replaced his previous agreement, which was scheduled to expire on March 18, 2016.dated as of September 8, 2015.

Each Employment Agreement sets forth the annual salary of the respective named executive officer, which is, in each case, subject to annual reviews, at the discretion of the Compensation Committee. Each named executive officer will be paid cash IC in an amount equal to a set percentage of his or her annual salary for each year (or such lesser or greater amount for such year) as is recommended and approved by the Compensation Committee) ifOn December 22, 2016, the Company achieves certain performance targets set by the Compensation Committee for such year. Each namedentered into an executive officer is eligible to earn as additional compensation for the services to be rendered pursuant to his or her employment agreement if applicable, equity-based LTI in an amount approved by the Compensation Committee.

If anywith Blaise Coleman, which was effective December 19, 2016 and has a term of the named executive officers terminates his or her current employment agreement for Good Reason or if the Company terminates him or her Without Cause, the Company will (i) pay a lump sum equal to two times his or her then current salary and target IC for the year in which the termination is effective and (ii) continue to provide such named executive officer with medical and life insurance benefits for twenty-four (24) months. Pursuant to his new agreement, if Mr. De Silva is terminated other than for Cause or quits for Good Reason within twenty-four (24) months of a Change In Control, then he will be entitled to receive (x) a lump sum payment equal to three times the sum of (1) his then current salary plus (2) his target bonus, plus (y) medical and life insurance benefits for a period equal to three (3) years after the date on which the termination is effective. Each named executive officer’s employment agreement contains a non-compete provision.

Camille I. Farhatyears.

On August 4, 2015, the Company announced that Mr. Farhat would be transitioning from his role as President, American Medical Systems following the sale of the American Medical Systems’ Men’s and Prostate Health businesses to Boston Scientific.

45


Following the sale, Mr. Farhat served as a Special Advisor to Mr. De Silva through his separation date of September 7, 2015. In connection with his pending transition,February 13, 2018, the Company entered into a Retention Agreementnew executive employment agreement with Matthew J. Maletta, which was effective February 13, 2018 and has a term of three years. Mr. FarhatMaletta’s new employment agreement replaced his previous agreement, which ended on June 30,was dated as of April 28, 2015.

On December 5, 2016, the Company entered into an executive employment agreement with Tony Pera, which was effective December 5, 2016 and has a term of three years.

Each employment agreement sets forth the benefits to be received upon termination of employment by each of the respective NEOs. These benefits are further described in the “Compensation of Executive Officers and Directors” section below under the heading “Potential Payments Upon Termination or Change in Control.” Each NEO’s employment agreement contains restrictive covenants.

The Company also generally enters into a written separation agreement with each of its NEOs upon his termination of employment. The purpose of these agreements is to provide the Company with certainty regarding its post-termination protections and obligations. With regard to termination of employment, each separation agreement replaces the employment agreement and thus constitutes the entire agreement between the NEO and the Company regarding post-termination benefits.

51


Other Compensation Practices and Policies

Tax Deductibility of Compensation

Prior to the enactment of the Tax Act in December 2017, Section 162(m) of the Internal Revenue Code precludesprecluded a public corporation from taking a tax deduction for certain compensation in excess of $1.0 million in any one year paid to its Chief Executive Officer or any of its three other highest-paid executive officers (not including the Company’s Chief Financial Officer), unless certain specific and detailed criteria are satisfied. However, certain qualifying “performance-based” compensation (i.e.,(that is, compensation paid under a plan administered by a committee of outside directors, based on achieving objective performance goals, the material terms of which were approved by shareholders, such as our Amended and Restated 2015 Stock Incentive Plan) iswas not subject to the $1.0 million deduction limit.

With the passage of the Tax Act, only qualifying performance-based compensation paid pursuant to a binding written contract in effect on November 2, 2017 (and not modified in any material respect on or after November 2, 2017) as set forth under the Tax Act will be eligible for the deduction exception. The Tax Act also expanded the executive officers covered by Section 162(m) to include the chief financial officer position as well as any person who ever was a covered executive for any prior taxable year, beginning after December 31, 2016. As a result of these changes, starting in 2018, most compensation payable to any person who was a named executive officer of the Company since fiscal year 2016 will not be deductible, regardless of whether the compensation is performance-based.

While the Compensation Committee considers the applicable rules regarding deductibility when making awards, it reserves the right to make nondeductible payments when it deems appropriate.

Company Policy on Parachute Payments

On May 5, 2009, the Company’s Board of Directors adopted a policy that provides that the Company will not enter into any future employment agreements that include “golden parachute” excise taxgross-ups with respect to payments contingent upon a change in control. Accordingly, the employment agreement of each of Mr. De Silva, Mr. Upadhyay, Mr.agreements for Messrs. Campanelli, Mr.Coleman, Coughlin, Maletta and Dr. Hall doesPera do not include excise taxgross-ups with respect to payments contingent upon a change in control. An excess parachute payment is generally a change in control payment in excess of one times the average of the officer’s taxableW-2 income for the five years prior to the change in control (base amount), and generally only results if the change in control payment exceeds 2.99 times the base amount. Excess parachute payments, including any excise taxgross-up payments, arenon-deductible to the Company under Section 280G of the Internal Revenue Code. The Company no longer hasdoes not have any employment agreements with Change in Control excise tax gross up provisions.

Code Section 4985 Excise Tax

In connection with the Company’s Paladin acquisition, Section 4985 of the Internal Revenue Code imposed a 15% excise tax on the value of certain stock compensation held by a “covered individual,” who is or was an executive officer or director and subject to the reporting requirements of Section 16(a) of the Exchange Act at any time during the six months before and six months after the closing of the merger. This excise tax applied to any outstanding (1) nonqualified stock options, whether vested or unvested, (2) restricted stock awards that remain subject to forfeiture, (3) unvested restricted stock unit awards, (4) vested but deferred shares and (5) unvested performance restricted stock unit awards, held by the covered individuals during this twelve month period.

Background. Prior to the approval of the Paladin transaction, the Endo Board of Directors considered the impact of the potential Section 4985 excise tax on the covered individuals, determining that the imposition of the tax on the covered individuals, when the vesting of outstanding equity awards subject to the excise tax is not being accelerated and covered individuals are receiving no additional benefit in connection with the transaction, would result in the affected individuals being deprived of a substantial portion of the value of their equity awards. The Endo Board of Directors concluded that it would not be appropriate to permit a significant burden arising from a transaction expected to bring significant strategic and financial benefits to Endo and its shareholders, including operational and tax synergies, to be imposed on the individuals most responsible for consummating the transaction and promoting the success of the combined company.

In addition, the Endo Board of Directors assessed and compared the relative costs and benefits of two approaches for mitigating the possible impact of the Section 4985 excise tax: (1) reimbursing the covered individuals for the Section 4985 excise tax that would be payable by them as a result of the transaction (and any resulting income), and (2) accelerating the vesting of and/or canceling these officers’ and directors’ equity awards. In weighing these alternatives, and deciding in favor of reimbursing the covered individuals for the Section 4985 excise tax and the resulting income, as opposed to accelerating the vesting and delivery of outstanding equity awards, the Endo Board of Directors considered the uncertainty of whether the excise tax will apply and the high cost to Endo and its shareholders of accelerating the awards given, the Endo Board of Directors determined that accelerating the vesting and payment of outstanding equity awards to avoid the excise tax could result in Endo incurring an unnecessary compensation expense following the merger to make the new grants that would be necessary to incentivize and retain key individuals and align the interests of the executive officers and directors with shareholders following the merger. Conversely, if the covered individuals had been reimbursed for the excise tax, Endo would only incur additional expense if and when it is determined that the excise tax is applicable.

In addition, the Endo Board of Directors considered the strong desire to continue to align the interests of executive officers and directors with stockholder interests through substantial and meaningful officer and director equity ownership. Several of Endo’s executive officers were newly employed and therefore have a significant number of unvested equity awards. Endo’s Board of Directors determined that the effect of accelerating the vesting of, or canceling, such awards would be to lose sig-

46


nificant retention value during a crucial period. Furthermore, the Endo Board of Directors considered the strong preference communicated by Endo’s investors that Endo’s executive officers hold long-term performance-based compensation, which represents a large percentage of the unvested awards outstanding, and that accelerating the vesting of these performance-based awards could result in unearned compensation being paid to the executives.

Therefore, after consideration, prior to the approval of the Paladin transaction, the Endo Compensation Committee concluded that, if the excise tax becomes applicable, Endo would provide the covered individuals with a payment with respect to the excise tax, so that, on a net after-tax basis, they would be in the same position as if no such excise tax had been applied. In addition, the covered individuals will retain the obligation to pay income and other taxes on all of their individual equity awards when due. The outstanding equity awards held by the covered individuals will continue to reflect the same terms, including vesting schedules, at the combined entity.

Conclusion. This specific arrangement was considered by our shareholders at the February 26, 2014 Special Meeting of Shareholders related to the Paladin acquisition. At that special meeting, approximately 99% of voting shareholders approved in an advisory vote the payments to our covered individuals with respect to the potential excise tax.

Endo has since determined that the excise tax was applicable. As a result, the appropriate amounts were determined and paid to the Company’s covered individuals in December 2014. Although the payments related to the excise tax appear as “All Other Compensation” in the Summary Compensation Table and the Compensation of Non-Employee Directors table, the payment of these non-recurring items resulted in no unique benefit to the directors and NEOs and were intended only to place them in the same position as other equity compensation holders after the Paladin acquisition.

Recovery of Compensation

In 2009, the Compensation Committee adopted a compensation recovery policy relating to repayment of cash incentive awards by an executive in the event of a restatement of the Company’s financial results under certain circumstances. In February 2018, the Committee amended this policy to: (1) expand the recoupable incentive awards to include equity-based incentives in addition to cash incentive awards (collectively, Covered Awards), and (2) expand the Committee’s ability to recoup certain Covered Awards granted within the prior12-month period to NEOs and other senior management employees who are at vice president level and above (collectively, Covered Employees) for their material misconduct or gross negligence resulting in a material violation of the Company’s policies or applicable laws, as determined by a court of competent jurisdiction in a final,non-appealable judgment, and causing material financial harm to the Company in addition to the Committee’s existing ability to recoup Covered Awards in connection with a restatement of the Company’s financial results.

Specifically, Under the policy, if the Company issues a material restatement of its reported financial results caused by the Covered Employee’s fraud or if it isintentional misconduct, as determined that there was executive misconduct in a prior period that impactedby the financial results for that period,Committee, then the Compensation Committee will determine whether the restatement was material, and if so, to what extent “covered payments” should be returned todirect the Company to the extent that such payments were overstated as a result of the change in financial condition. Restatements of financial results that are the direct result of changes in accounting standards will not result inuse reasonable efforts to seek recovery of covered payments.

all Covered payments” are those paymentsAwards that are eligible to be recovered by the Company under this policy including, without limitation, policies adopted to comply with applicable law, and include cash incentives paid to the NEOswere overpaid or overgranted for performance during the restated fiscal year(s).year or years. In addition, the Compensationevent that the Committee reserves the discretioninvokes this policy to recover covered payments from otherany Covered Awards, the Company will disclose such recoupment as required by law or regulation or if the applicable misconduct has otherwise become public knowledge. The Committee approved this amended policy after consideration of market practices and to further align the interests of senior management employees including all vice presidents and above, if the Compensation Committee deems it appropriate.with our shareholders.

Compensation Committee Report

The Compensation Committee reviewed and discussed with the Company’s management the section of this Proxy Statement entitled “COMPENSATION DISCUSSION AND ANALYSIS”.“Compensation Discussion and Analysis.” In reliance on this review and discussion, the Compensation Committee recommended to the Board of Directors that the section entitled “COMPENSATION DISCUSSION AND ANALYSIS”“Compensation Discussion and Analysis” be included in this Proxy Statement and incorporated by reference into the Endo International plc Annual Report on Form10-K for the year ended December 31, 2015.2017.

Submitted

Submitted

by the Compensation Committee of the Company’s Board of Directors.

Members of the Compensation Committee:

William P. Montague (Chairman)

Arthur J. HigginsRoger H. Kimmel (Member)

Michael Hyatt (Member)

William F. Spengler (Alternate)Sharad S. Mansukani (Member)

Todd B. Sisitsky (Member)

 

4752


 

Compensation of Executive Officers and Directors

Summary Compensation Table

The following table sets forth the cash andnon-cash compensation paid to or earned by our current President and Chief Executive Officer, current Executive Vice President &and Chief Financial Officer and the other three most highly compensated executive officers of the Company who were serving as executive officers at the end of the last completed fiscal year (collectively, the NEOs). Information for an NEO is included for each of the years ending December 31, 2017, 2016 and 2015 2014 and 2013.in which that individual met the definition of an NEO. For a complete understanding of the table, please read the footnotes and narrative disclosures that follow the table.

 

Name and Principal Position Year  Salary ($)  Bonus ($)  Share
Awards
($)(1)
  Option
Awards
($)(1)
  Non-Equity
Incentive Plan
Compensation
($)(2)
  All Other
Compensation
($)(3)
  Total ($) 
Current (as of 12/31/15) Named Executive Officers:                

Rajiv De Silva

President and Chief Executive Officer

  
 
 
2015
2014
2013
  
  
  
 $

$

$

  1,145,833

1,079,167

771,875

  

  

  

 $

$

$


  3,500,000

  

  

  

 $

$

$

  6,104,449

3,623,783

4,782,992

  

  

  

 $

$

$

  1,969,160

1,822,746

1,253,179

  

  

  

 $

$

$

1,687,110

2,819,608

2,193,750

  

  

  

 $

$

$

8,173

12,726,292

92,256

  

  

  

 $

$

$

  10,914,725

22,071,596

12,594,052

  

  

  

Suketu P. Upadhyay

Executive Vice President & Chief Financial Officer

  
 
 
2015
2014
2013
  
  
  
 $

$

$

625,000

595,833

157,019

  

  

  

 $

$

$


240,000

  

  

  

 $

$

$

2,406,241

1,470,210

1,595,917

  

  

  

 $

$

$

750,057

402,488

  

  

  

 $

$

$

486,936

708,840

186,006

  

  

  

 $

$

$

221,547

2,182,270

226,557

  

  

  

 $

$

$

4,489,781

5,599,641

2,165,499

  

  

  

Paul V. Campanelli

President, Par Pharmaceutical

  2015   $272,376   $   $3,664,071   $949,733   $1,064,000   $3,977   $5,954,157  

Matthew J. Maletta

Executive Vice President, Chief Legal Officer

  2015   $322,148   $   $1,466,873   $628,989   $338,894   $88,667   $2,845,571  

Susan Hall,

Executive Vice President, Chief Scientific Officer and Global Head of Research & Development and Quality

  2015   $512,500   $   $790,520   $249,871   $398,051   $169,775   $2,120,717  
Former Named Executive Officers                

Camille I. Farhat (4)

President, American Medical Systems

  
 
 
2015
2014
2013
  
  
  
 $

$

$

429,840

567,769

528,846

  

  

  

 $

$

$

5,000,000

  

  

  

 $

$

$

1,205,895

1,458,475

698,245

  

  

  

 $

$

$

393,278

429,449

194,431

  

  

  

 $

$

$

260,773

500,797

542,438

  

  

  

 $

$

$

2,048,179

4,007,230

73,893

  

  

  

 $

$

$

9,337,965

6,963,720

2,037,853

  

  

  

Name and Principal Position

 

 

Year

 

  

Salary
($)

 

  

Bonus
($)

 

  

Share
Awards
($)(1)

 

  

Option
Awards
($)(1)

 

  

Non-Equity
Incentive Plan
Compensation
($)(2)

 

  

All Other
Compensation
($)(3)

 

  

Total ($)

 

 

 

Paul V. Campanelli

President and Chief Executive

Officer

 

 

 

 

 

 

2017

2016

2015

 

 

 

 

 

 

 

 

$

$

$

 

 

  950,000

987,038

272,376

 

 

 

 

 

 

 

 

$

$

$

 

 

 

 

 

 

 

 

 

 

$

$

$

 

 

7,783,028

2,179,571

3,664,071

 

 

 

 

 

 

 

 

$

$

$

 

 

  2,996,836

4,590,794

949,733

 

 

 

 

 

 

 

 

$

$

$

 

 

  1,815,450

712,500

1,064,000

 

 

 

 

 

 

 

 

$

$

$

 

 

  57,081

23,007

3,977

 

 

 

 

 

 

 

 

$

$

$

 

 

  13,602,395

8,492,910

5,954,157

 

 

 

 

 

 

 

Blaise Coleman

Executive Vice President and

Chief Financial Officer

 

 

 

 

 

2017

2016

 

 

 

 

 

$

$

 

545,833

349,308

 

 

 

 

 

$

$

 

  165,000

100,000

 

 

 

 

 

$

$

 

1,661,589

291,038

 

 

 

 

 

$

$

 

1,360,469

190,191

 

 

 

 

 

$

$

 

613,203

216,563

 

 

 

 

 

$

$

 

4,417

10,819

 

 

 

 

 

$

$

 

4,350,511

1,157,919

 

 

 

 

Terrance J. Coughlin

Executive Vice President and

Chief Operating Officer

 

 

 

 

 

2017

2016

 

 

 

 

 

$

$

 

600,000

556,280

 

 

 

 

 

$

$

 

 

 

 

 

 

$

$

 

  2,214,791

951,113

 

 

 

 

 

$

$

 

1,655,854

258,306

 

 

 

 

 

$

$

 

800,125

315,000

 

 

 

 

 

$

$

 

5,000

8,292

 

 

 

 

 

$

$

 

5,275,770

2,088,991

 

 

 

 

Matthew J. Maletta

Executive Vice President, Chief

Legal Officer

 

 

 

 

 

2017

 

 

 

 

$

 

543,333

 

 

 

 

$

 

 

 

 

 

$

 

1,638,825

 

 

 

 

$

 

1,347,982

 

 

 

 

$

 

600,203

 

 

 

 

$

 

26,991

 

 

 

 

$

 

4,157,334

 

 

  2016  $504,167  $  $1,046,244  $284,120  $210,375  $31,887  $2,076,793 
  

 

2015

 

 

 

 $

 

322,148

 

 

 

 $

 

 

 

 

 $

 

1,466,873

 

 

 

 $

 

628,989

 

 

 

 $

 

338,894

 

 

 

 $

 

88,667

 

 

 

 $

 

2,845,571

 

 

 

 

Tony Pera

President, Par

Pharmaceutical

 

 

 

 

 

2017

 

 

 

 

$

 

460,000

 

 

 

 

$

 

 

 

 

 

$

 

920,046

 

 

 

 

$

 

692,505

 

 

 

 

$

 

409,925

 

 

 

 

$

 

39,548

 

 

 

 

$

 

2,522,024

 

 

 

 (1)

The amounts shown in this columnthese columns represent the grant date fair value for each executive’sof the awards undergranted in 2017, 2016 and 2015, determined in accordance with ASC 718. The grant date fair value of ourDuring the periods presented above, equity awards granted included both option awards and share awards, including RSUs, market-based PSUs which are earnedmeasured based on the Company’s stockTotal Shareholder Return (referred to asTSR-based PSUs) and performance-based PSUs measured based on the Company’s adjusted free cash flow performance (referred to asFCF-based PSUs). Option awards are valued using a Black-Scholes valuation model. RSUs are valued based on the closing price appreciation performance was determinedof Endo’s ordinary shares on the date of grant.TSR-based PSUs are valued using a Monte-Carlo variant valuation model which considersthat takes into account a variety of potential future share prices for Endo as well as our peer companies in a selected market index. See further discussionFCF-based PSUs are valued taking into consideration the probability of achieving the specified performance goal.FCF-based PSUs were first awarded to the NEOs in February 2017 and represented 50% of the provisionsFebruary 2017 PSU award. Although these awards are only released at the end of our PSUs abovea three-year vesting period,one-third of each award is measured upon the completion of three successive annual performance targets, which are generally established in February of each year. As of December 31, 2017, performance targets with respect to the “Performance Shares Units” section above. See notes 17, 172018 and 162019 annual performance periods were not yet established and, as such, a grant has not yet occurred in accordance with ASC 718 and no fair value has been ascribed to these annual performance periods. Share awards and option awards issued that are subject to shareholder approval are not considered to have been granted until such approval have been received. Refer to the “Share-Based Compensation” footnotes in our audited financial statements included in the Endo International plc 2015, 2014 and 2013 Annual Reports on Form10-K respectively, for 2017, 2016 and 2015 for the assumptions we used in valuing and expensing these awards in accordance with ASC 718. For additional information on the current year awards, refer to the “2017 Grants of Plan-Based Awards” table below.

 (2)

The amounts shown in this column represent cash amounts earned pursuant to the Company’s ICannual incentive compensation program with respect to 2017, 2016 and 2015 2014 and 2013 performance, respectively.performance. These amounts were awardedapproved by the Compensation Committee on February 23, 2016,13, 2018, February 24, 201521, 2017 and February 26, 2014,23, 2016, respectively.

53


 (3)

The amounts shown in this column for 20152017 include the items summarized in the table below:

 

Name and

Principal Position

 

Perquisites
& Other

Personal
Benefits (a)

  

Registrant
Contributions to
Defined
Contribution

Plans (b)

  Life Insurance
Premiums (c)
  Other (d)  Total 

Rajiv De Silva

 $   $7,333   $840   $   $8,173  

Suketu P. Upadhyay

 $216,288   $4,419   $840   $   $221,547  

Paul V. Campanelli

 $3,892   $   $85   $   $3,977  

Matthew J. Maletta

 $88,135   $   $532   $   $88,667  

Susan Hall

 $168,935   $   $840   $   $169,775  

Camille I. Farhat

 $77,499   $5,303   $840   $1,964,537   $2,048,179  

Name

 

 

Perquisites &
Other Personal
Benefits (a)

 

  

 

Registrant
Contributions to
Defined
Contribution
Plans (b)

 

  

Life Insurance
Premiums (c)

 

  

Other (d)

 

  

Total

 

 
      

Paul V. Campanelli

 

 $

 

44,721

 

 

 

 $

 

7,917

 

 

 

 $

 

2,860

 

 

 

 $

 

1,583

 

 

 

 $

 

57,081

 

 

 

      

Blaise Coleman

 

 $

 

—  

 

 

 

 $

 

4,417

 

 

 

 $

 

—  

 

 

 

 $

 

—  

 

 

 

 $

 

4,417

 

 

 

      

Terrance J. Coughlin

 

 $

 

—  

 

 

 

 $

 

5,000

 

 

 

 $

 

—  

 

 

 

 $

 

—  

 

 

 

 $

 

5,000

 

 

 

      

Matthew J. Maletta

 

 $

 

16,191

 

 

 

 $

 

10,800

 

 

 

 $

 

—  

 

 

 

 $

 

—  

 

 

 

 $

 

26,991

 

 

 

      

Tony Pera

 

 $

 

36,010

 

 

 

 $

 

3,538

 

 

 

 $

 

—  

 

 

 

 $

 

—  

 

 

 

 $

 

39,548

 

 

 

 

 (a)

Mr. UpadhyayCampanelli and Mr. Pera received $203,960$44,721 and $36,010, respectively, for relocation assistance and $12,328housing allowances. Mr. Maletta received $16,191 for financial planning services. Mr. Campanelli received $3,392 for car allowance and $500 for gym membership. Mr. Maletta received $80,180 for relocation assistance and $7,955 for financial planning services. Dr. Hall received $168,935 for a cost of living adjustment. Mr. Farhat received relocation assistance of $63,779 and travel compensation of $13,720.

48


 (b)

Represents the employers’ matching contribution to the Company’s Savings and Investment (401(k)) Plan.Plan (Endo’s 401(k) plan).

 (c)

Represents annual premiums paid by the Company for executive term life insurance policies.

 (d)

Represents accrued vacation payout of $86,137 and severance payment of $1,878,400.

(4)

Mr. Farhat received retention bonuses of $5,000,000 duringannual premiums paid by the year ended December 31, 2015.Company for executive long-term disability benefits.

The employment agreements, short-term and long-term incentive compensation program and awards, explanation of amount of salary and bonus in proportion to total compensation and other elements of the Summary Compensation Table are discussed at length in the “COMPENSATION DISCUSSION AND ANALYSIS”“Compensation Discussion and Analysis” section above.

201554


2017 Grants of Plan-Based Awards

The following table summarizes grants of plan-based awards made to the NEOs under the Amended and Restated 2015 Stock Incentive Plan during the year ended December 31, 2015.2017.

 

Name and
Principal
Position
   Estimated Future Payouts Under
Non-Equity Incentive Plan Awards (2)
  Estimated Future Payouts Under
Equity Incentive Plan Awards (3)
  All Other
Stock
Awards
(number of
shares of
stock or
units)
(#)(4)
  All Other
Option
Awards
(number of
securities
underlying
options)
(#)(4)
  Exercise
or Base
Price of
Option
Awards
($/Sh)
  

Grant Date
Fair Value
of Stock &
Option
Awards

($)(5)

 
 Grant
Date (1)
 Threshold
($)
  

Target

($)

  Maximum
($)(6)
  Threshold
(#)
  Target
(#)
  Maximum
(#)(7)
     

Current (as of 12/31/15) Named Executive Officers:

  

                            

Rajiv De

Silva

 24 Feb 15 $   $  1,443,750   $  3,248,438                    85,245   $85.25   $  1,969,160  
 24 Feb 15 $   $   $        69,290    207,870           $   $6,104,449  

Suketu P.

Upadhyay

 24 Feb 15 $   $346,500   $779,625                    32,470   $85.25   $750,057  
 24 Feb 15 $   $   $                8,797       $   $749,944  
 24 Feb 15 $   $   $        17,595    52,785           $   $1,550,120  
 11 Nov 15 $   $   $        4,450    4,450           $   $106,177  

Paul V.

Campanelli

 28 Sep 15 $   $760,000   $1,710,000                    56,920   $61.82   $949,733  
 28 Sep 15 $   $   $                15,367       $   $949,988  
 28 Sep 15 $   $   $        30,734    92,202           $   $1,202,621  
  3 Nov 15 $   $   $        72,632    217,896           $   $1,461,356  
 11 Nov 15 $   $   $        2,100    2,100           $   $50,106  

Matthew J.

Maletta

 29 Apr 15 $   $261,250   $587,813                    13,403   $86.54   $312,354  
  31 Dec 15 $   $   $                    17,394   $61.22   $316,635  
 29 Apr 15 $   $   $                3,611       $   $312,496  
  31 Dec 15 $   $   $                4,811       $   $294,529  
  29 Apr 15 $   $   $        7,222    21,666           $   $509,657  
 11 Nov 15 $   $   $        500    500           $   $11,930  
 31 Dec 15 $   $   $        4,811    14,433           $   $338,261  

Susan Hall

 24 Feb 15 $   $283,250   $637,313                    10,823   $85.25   $249,871  
 24 Feb 15 $   $   $                2,932       $   $249,953  
  24 Feb 15 $   $   $        5,865    17,595           $   $516,707  
  11 Nov 15 $   $   $        1,000    1,000           $   $23,860  

Former Named Executive Officers

  

                            

Camille I.

Farhat

 24 Feb 15 $   $241,233   $542,774                    17,025   $85.25   $393,278  
 24 Feb 15 $   $   $                4,612       $   $393,173  
  24 Feb 15 $   $   $        9,225    27,675           $   $812,722  

    Name

 

    Estimated Future Payouts Under
Non-Equity Incentive Plan Awards (2)
  Estimated Future Payouts Under
Equity Incentive Plan Awards (3)
  

 

All Other
Stock
Awards
(number of
shares of
stock or
units)
(#)(4)

 

  

 

All Other
Option
Awards
(number of
securities
underlying
options)
(#)(4)

 

  

Exercise
or Base
Price of
Option
Awards
($/Sh)

 

  

Grant Date
Fair Value

of Stock &
Option
Awards
($)(5)

 

 
 

Grant
Date (1)

 

  

Threshold
($)

 

  

Target
($)

 

  

Maximum
($)

 

  

Threshold
(#)

 

  

Target
(#)

 

  

Maximum
(#)

 

     

 

Paul V.

Campanelli

 

 

 

 

 

 

 

 

$

 

 

 

 

 

$

 

1,140,000

 

 

 

 

$

 

2,565,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

  21 Feb 17  $  $  $               510,204  $13.19  $2,996,836 
  21 Feb 17  $  $  $      151,629   303,258       ��$  $2,461,698 
  21 Feb 17  $  $  $            227,445     $  $2,999,999 
   

 

10 Aug 17

 

 

 

 $

 

 

 

 

 $

 

 

 

 

 $

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

307,461

 

 

 

  

 

 

 

 

 $

 

 

 

 

 $

 

2,321,331

 

 

 

 

Blaise

Coleman

 

 

 

 

 

 

 

 

$

 

 

 

 

 

$

 

302,500

 

 

 

 

$

 

680,625

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

  21 Feb 17  $  $  $               74,404  $13.19  $437,034 
   21 Feb 17  $  $  $      22,112   44,224        $  $358,988 
   21 Feb 17  $  $  $            33,169     $  $437,499 
   10 Aug 17  $  $  $               260,416  $7.55  $923,435 
   

 

10 Aug 17

 

 

 

 $

 

 

 

 

 $

 

 

 

 

 $

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

114,583

 

 

 

  

 

 

 

 

 $

 

 

 

 

 $

 

865,102

 

 

 

 

Terrance J.

Coughlin

 

 

 

 

 

 

 

 

$

 

 

 

 

 

$

 

420,000

 

 

 

 

$

 

945,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

  21 Feb 17  $  $  $               127,551  $13.19  $749,209 
   21 Feb 17  $  $  $      37,907   75,814        $  $615,419 
   21 Feb 17  $  $  $            56,861     $  $749,997 
   10 Aug 17  $  $  $               255,681  $7.55  $906,645 
   

 

10 Aug 17

 

 

 

 $

 

 

 

 

 $

 

 

 

 

 $

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

112,500

 

 

 

  

 

 

 

 

 $

 

 

 

 

 $

 

849,375

 

 

 

 

Matthew J.

Maletta

 

 

 

 

 

 

 

 

$

 

 

 

 

 

$

 

302,500

 

 

 

 

$

 

680,625

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

  21 Feb 17  $  $  $               72,278  $13.19  $424,547 
   21 Feb 17  $  $  $      21,480   42,960        $  $348,728 
   21 Feb 17  $  $  $            32,221     $  $424,995 
   10 Aug 17  $  $  $               260,416  $7.55  $923,435 
   

 

10 Aug 17

 

 

 

 $

 

 

 

 

 $

 

 

 

 

 $

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

114,583

 

 

 

  

 

 

 

 

 $

 

 

 

 

 $

 

865,102

 

 

 

 

Tony Pera

 

 

 

 

 

 

 

 

$

 

 

 

 

 

$

 

253,000

 

 

 

 

$

 

569,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

  21 Feb 17  $  $  $               52,154  $13.19  $306,342 
   21 Feb 17  $  $  $      15,499   30,998        $  $251,626 
   21 Feb 17  $  $  $            23,249     $  $306,654 
   10 Aug 17  $  $  $               108,901  $7.55  $386,163 
   

 

10 Aug 17

 

 

 

 $

 

 

 

 

 $

 

 

 

 

 $

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

47,916

 

 

 

  

 

 

 

 

 $

 

 

 

 

 $

 

361,766

 

 

 

 

 (1)

The grant date of all awardseach award reflected above is the date of the Board of Directors’Board’s action inpursuant to which such award iswas approved.

 (2)

The amounts shown in these columns represent the range of ICtarget and maximum annual incentive compensation program payouts targetedapproved by the Board for 20152017 performance as described inunder the section titled “Performance-Based Annual Cash Incentive Compensation” heading in the “COMPENSATION DISCUSSION AND ANALYSIS”“Compensation Discussion and Analysis” section above. There is no threshold for this award. The bonusnon-equity incentive compensation payment for 20152017 performance has been made according to the metrics described in the “Compensation Discussion and Analysis” section above and is shown in the Summary Compensation Table in the column titled “Non-Equity“Non-Equity Incentive Plan Compensation.”

 (3)

The amountsquantities shown in these columns represent the rangetarget and maximum quantity of shares that may be released at the end of the 3-yearthree-year performance period applicable to our PSUs assuming achievementdeemed to have been granted in accordance with ASC 718 as of the relevant performance objectives, as described in the section titled “Equity-Based Long-term Incentive Compensation” in the “COMPENSATION DISCUSSION AND ANALYSIS” above.December 31, 2017. There is no threshold for this award.award and the release of any shares assumes achievement of performance objectives, as described under the “Equity-Based Long-term Incentive Compensation” heading in the “Compensation Discussion and Analysis” section above. As further described above in footnote (1) to the Summary Compensation Table, PSUs granted as of December 31, 2017 include 100% of theTSR-based PSUs issued in 2017 and approximatelyone-third of theFCF-based PSUs issued in 2017, representing the 2017 annual performance period for which performance targets were approved in February 2017. The PSU awardsPSUs granted in 20152017 were

49


made granted according to the metrics described above and are included in the Summary

55


Compensation Table in the column titled “Share Awards.” The PSUs grantedissued on February 24, 201521, 2017 were based on the Company’s 20142016 LTI compensation payout. On April 29, 2015 and September 28, 2015, respectively, Mr. Maletta and Mr. Campanelli received special off-cycle PSU equity awards at the commencement of their employment with Endo International plc. On November 3, 2015, Mr. Campanelli received a special off-cycle PSU equity award, which represents Matched PSUs granted under the share matching program. On November 11, 2015, Mr. Upadhyay, Mr. Campanelli, Mr. Maletta and Dr. Hall received special off-cycle PSU equity awards which represent the Matched PSUs granted under the share matching program. On December 31, 2015, Mr. Maletta was awarded a discretionary PSU award in recognition of his contributions to Endo International plc.

 (4)

Share awards and option awards issued that are subject to shareholder approval are not considered to have been granted until such approval have been received. The options and RSUs granted on February 24, 201521, 2017 as reflected in the table above, as well as the PSUs issued on that same date, were based on the Company’s 20142016 LTI compensation payout. OnThose granted on August 10, 2017 represent special grants authorized by the Compensation Committee to improve the competitive positioning of NEO pay, while addressing the Company’s need to increase each NEO’s direct ownership equity stake. The 2017 LTI compensation payout was approved by the Board on February 13, 2018 and made on April 29, 2015 and September 28, 2015, respectively, Mr. Maletta and Mr. Campanelli received special off-cycle option and RSU equity2, 2018. The following table shows grant details for eligible NEOs (including only those awards atgranted during the commencement of their employment with Endo International plc. On December 31, 2015, Mr. Maletta was awarded a discretionary option and RSU award in recognition of his contributions to Endo International plc.2018 annual grant cycle):

The 2015 equity incentive grant was made in February 2016 and is shown in more detail below:

Name 2015 Long-Term Equity
Incentive Compensation:
Number of Securities
Underlying Stock Options
(#)
 

Exercise or Base Price of
Option Awards

($/Sh)(a)

 2015 Long-Term Equity
Incentive Compensation:
Restricted Stock Units
(RSU) and Performance
Share Units (PSU) (#)(b)
 Grant Date Fair Value of
RSU, PSU & Option Awards
($)(c)
  

 

2017 Annual Long-Term
Equity Incentive
Compensation: Restricted
Stock Units (RSU) and
Performance Share Units
(PSU) (#)(a)

 

 

Grant Date Fair Value of 2017
Annual Long-Term Equity
Incentive Compensation
($)(b)

 

 

Rajiv De Silva

  167,897   $50.22    149,342   $12,516,354  

Suketu P. Upadhyay

  47,599   $50.22    42,337   $3,310,505  

Paul V. Campanelli

  39,875   $50.22    35,467   $2,773,310   

 

 

 

 

1,100,000

 

 

 

 

 

 

 

 

 

6,711,924

 

 

 

 

Blaise Coleman

 

 

 

 

 

200,065

 

 

 

 

 

 

 

 

 

1,220,746

 

 

 

 

Terrance J. Coughlin

 

 

 

 

 

261,903

 

 

 

 

 

 

 

 

 

1,598,063

 

 

 

 

Matthew J. Maletta

  19,140   $50.22    17,025   $1,331,238   

 

 

 

 

200,065

 

 

 

 

 

 

 

 

 

1,220,746

 

 

 

 

Susan Hall

  22,481   $50.22    19,996   $1,563,569  

Tony Pera

 

 

 

 

 

133,860

 

 

 

 

 

 

 

 

 

816,777

 

 

 

 

 

 (a)The exercise price

Each NEO received a 25% allocation of PSUs and a 75% allocation of RSUs during the 2018 annual grant cycle. Of the PSUs, 50% wereTSR-based and 50% wereFCF-based. ForFCF-based PSUs, only the portion considered to have been granted in accordance with ASC 718 is equalincluded in the table above, meaning that approximatelytwo-thirds of theFCF-based PSUs are excluded from this table as the 2019 and 2020 annual performance targets have not yet been established. For the total number of RSUs and PSUs awarded, refer to the closing price ontabular disclosure in the date of grant, which was February 23, 2016.“Compensation Discussion and Analysis” section above, under the heading “Individual Compensation Determination.”

 (b)The amounts shown in this column represent 100% PSUs for Mr. De Silva and approximately 67% PSUs and 33% RSUs for Mr. Upadhyay, Mr. Campanelli, Mr. Maletta and Ms. Hall.
(c)The amounts shown in this column include the fair value under ASC 718 of the 2015 option awards on the date of grant determined using the Black-Scholes or Monte-Carlo variant valuation model, as appropriate. Additionally, amounts reflect the grant-date fair value of the PSUs which include both a performance and market-based variable as defined within ASC 718. Although the fair value of executive award grants listed above has been determined in accordance with the applicable accounting standards, values may not be indicative of the fair value observed in a willing buyer / willing seller market transaction.
(5)

The amounts shown in this column represent the grant date fair value underof the awards determined in accordance with ASC 718. Refer to footnote (1) of the Summary Compensation Table for additional details on how grant date fair value is determined. ForFCF-based PSUs, only the portion considered to have been granted in accordance with ASC 718 of awards grantedis included in 2015 valued on the date of grant (even if not yet vested) determined using the Black-Scholes or Monte-Carlo variant valuation model, as appropriate.table above.

 (6)(5)For the current NEOs, the

The amounts shown in this column represent the maximum IC payout as approved by the Board.

(7)For the current NEOs, the amounts shown in this column represent the maximum number of shares related to our PSUs that could ultimately be released at the endgrant date fair value of the 3-year performance period.awards determined in accordance with ASC 718. Refer to footnote (1) of the Summary Compensation Table for additional details.

See “COMPENSATION DISCUSSION AND ANALYSIS”“Compensation Discussion and Analysis” section above regarding the material terms, determining amounts payable, vesting schedule and other material conditions of these grants, including pages 3743 to 3945 summarizing performance conditions associated with Endo’s PSU awards.

 

5056


Outstanding Equity Awards at December 31, 20152017

The following table summarizes the number of securities underlying outstanding plan awards for the NEOs at December 31, 2015:2017. Amounts in this table and the related footnotes do not include options and awards for which a grant date has not yet occurred in accordance with ASC 718.

 

   Option Awards  Stock Awards 
Name Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
  Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)(1)
  Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
  Option
Exercise
Price
($/Sh)
  Option
Expiration Date
  Number
of Shares
or Units of
Stock That
Have Not
Vested (#)
  Market Value
of Shares or
Units of Stock
That Have Not
Vested ($)(8)
  Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested (#)
  Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
Other Rights That
Have Not Vested
($)(9)
 

Rajiv De

Silva

      85,245       $85.25    24-Feb-2025       $       $  
  25,821    77,463       $63.82    2-Sep-2024       $       $  
   135,899           $30.42    18-Mar-2023       $       $  
              $        13,697(2)   $838,530       $  
              $           $    319,424(2)   $19,555,137  

Suketu P.

Upadhyay

      32,470       $85.25    24-Feb-2022       $       $  
  4,727    14,178       $79.33    26-Feb-2021       $       $  
              $        17,740(3)   $1,086,043       $  
             $           $    51,310(3)   $3,141,198  

Paul V.

Campanelli

      56,920       $61.82    28-Sep-2025       $       $  
             $        15,367(4)   $940,768       $  
              $           $    105,466(4)   $6,456,629  

Matthew J.

Maletta

      17,394       $61.22    31-Dec-2025       $       $  
      13,403       $86.54    29-Apr-2025       $       $  
              $        8,422(5)   $515,595       $  
              $           $    12,533(5)   $767,270  

Susan Hall

      10,823       $85.25    24-Feb-2022       $       $  
              $        7,515(6)   $460,068       $  
              $           $    13,740(6)   $841,163  

Camille I.

Farhat

  35,588           $32.27    5-Sep-2022       $       $  
  4,257           $85.25    24-Feb-2022       $       $  
   10,092           $79.33    26-Feb-2021       $       $  
   2,424           $30.80    27-Feb-2020       $       $  
              $           $    13,150(7)   $805,043  

   

 

Option Awards

 

  

 

Stock Awards

 

 

Name

 

 

Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)

 

  

Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)(1)

 

  

 

Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)

 

  

Option
Exercise
Price
($/Sh)

 

  

Option
Expiration Date

 

  

Number
of Shares
or Units of
Stock That
Have Not
Vested (#)

 

  

Market Value
of Shares or
Units of Stock
That Have Not
Vested ($)(7)

 

  

 

Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested (#)

 

  

Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
Other Rights That
Have Not Vested
($)(8)

 

 

 

Paul V.

Campanelli

 

 

 

 

 

 

 

 

 

 

510,204

 

 

 

 

 

 

 

 

 

 

$

 

13.19

 

 

 

 

 

 

21-Feb-2027

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

  143,215   286,430     $21.99   26-Sep-2026     $     $ 
   9,969   29,906     $50.22   23-Feb-2026     $     $ 
   28,460   28,460     $61.82   28-Sep-2025     $     $ 
           $      551,455 (2)  $4,273,776     $ 
   

 

 

 

 

  

 

 

 

 

  

 

 

 

 

 $

 

 

 

 

  

 

 

 

 

  

 

 

 

 

 $

 

 

 

 

  

 

280,740 (2)

 

 

 

 $

 

2,403,708

 

 

 

 

Blaise

Coleman

 

 

 

 

 

 

 

 

 

 

260,416

 

 

 

 

 

 

 

 

 

 

$

 

7.55

 

 

 

 

 

 

10-Aug-2027

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

     74,404     $13.19   21-Feb-2027     $     $ 
   6,749   13,497     $14.30   16-May-2026     $     $ 
  1,266   3,797     $50.22   23-Feb-2026     $     $ 
           $      154,237 (3)  $1,195,337     $ 
   

 

 

 

 

  

 

 

 

 

  

 

 

 

 

 $

 

 

 

 

  

 

 

 

 

  

 

 

 

 

 $

 

 

 

 

  

 

25,372 (3)

 

 

 

 $

 

229,878

 

 

 

 

Terrance J.

Coughlin

 

 

 

 

 

 

 

 

 

 

255,681

 

 

 

 

 

 

 

 

 

 

$

 

7.55

 

 

 

 

 

 

10-Aug-2027

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

     127,551     $13.19   21-Feb-2027     $     $ 
   4,351   13,050     $50.22   23-Feb-2026     $     $ 
   8,988   8,986     $61.82   28-Sep-2025     $     $ 
           $      177,656 (4)  $1,376,834     $ 
   

 

 

 

 

  

 

 

 

 

  

 

 

 

 

 $

 

 

 

 

  

 

 

 

 

  

 

 

 

 

 $

 

 

 

 

  

 

67,430 (4)

 

 

 

 $

 

579,578

 

 

 

 

Matthew J.

Maletta

 

 

 

 

 

 

 

 

 

 

260,416

 

 

 

 

 

 

 

 

 

 

$

 

7.55

 

 

 

 

 

 

10-Aug-2027

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

     72,278     $13.19   21-Feb-2027     $     $ 
   4,785   14,355     $50.22   23-Feb-2026     $     $ 
   8,698   8,696     $61.22   31-Dec-2025     $     $ 
   6,702   6,701     $86.54   29-Apr-2025     $     $ 
           $      155,270 (5)  $1,203,343     $ 
   

 

 

 

 

  

 

 

 

 

  

 

 

 

 

 $

 

 

 

 

  

 

 

 

 

  

 

 

 

 

 $

 

 

 

 

  

 

45,363 (5)

 

 

 

 $

 

383,858

 

 

 

 

Tony Pera

 

 

 

 

 

 

 

 

 

 

108,901

 

 

 

 

 

 

 

 

 

 

$

 

7.55

 

 

 

 

 

 

10-Aug-2027

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

     52,154     $13.19   21-Feb-2027     $     $ 
   1,931   5,792     $50.22   23-Feb-2026     $     $ 
   2,582   2,580     $70.02   01-Oct-2025     $     $ 
           $      73,595 (6)  $570,361     $ 
   

 

 

 

 

  

 

 

 

 

  

 

 

 

 

 $

 

 

 

 

  

 

 

 

 

  

 

 

 

 

 $

 

 

 

 

  

 

22,934 (6)

 

 

 

 $

 

201,043

 

 

 

 

5157


 (1)

The vesting dates of eachnon-fully vested option grant are listed in the table below by expiration date.date:

 

Expiration DataVesting Date

Expiration Date

Vesting Date

31-Dec-2025

 

Vesting Date

Expiration Date

Vesting Date

10-Aug-2027

33 1/3% on August 10, 2018

31-Dec-2025

25% on December 31, 2016

 

2-Sep-202433 1/3% on August 10, 2019

 

25% on February 26, 2015

 

25% on December 31, 2017

33 1/3% on August 10, 2020

  

25% on December 31, 2018

25% on December 31, 2019

21-Feb-2027

25% on February 26,21, 2018

01-Oct-2025

25% on October 1, 2016

  

25% on December 31,February 21, 2019

25% on October 1, 2017

25% on February 21, 2020

25% on October 1, 2018

25% on February 21, 2021

25% on October 1, 2019

26-Sep-2026

33 1/3% on September 26, 2017

28-Sep-2025

25% on September 28, 2016

33 1/3% on September 26, 2018

  

25% on February 26,September 28, 2017

  

25%33 1/3% on December 31,September 26, 2019

  

25% on February 26, 2018

28-Sep-2025

25% on September 28, 2016

24-Feb-2022

25% on February 24, 20162018

  

25% on September 28, 2017

  

25% on February 24,September 28, 2019

16-May-2026

33 1/3% on May 16, 2017

29-Apr-2025

25% on April 29, 2016

  

25%33 1/3% on September 28,May 16, 2018

  

25% on February 24, 2018April 29, 2017

  

25%33 1/3% on September 28,May 16, 2019

  

25% on February 24, 2019

29-Apr-2025

25% on April 29, 2016

26-Feb-2021

25% on February 26, 20152018

  

25% on April 29, 2017

 

25% on February 26, 2016

25% on April 29, 2018

25% on February 26, 2017

 

25% on April 29, 2019

23-Feb-2026

 

25% on February 26, 2018

24-Feb-2025

25% on February 24, 2016

25% on February 24,23, 2017

   
  

25% on February 24,23, 2018

   
  

25% on February 24,23, 2019

 

25% on February 23, 2020

  

 

 (2)

These amounts are comprisedconsist of 13,6977,683 RSUs granted on March 18, 2013, 164,364 PSUsSeptember 28, 2015 and 8,866 RSUs granted on March 18, 2013, 85,770February 23, 2016 (both of which vest ratably over a four-year period on each of the first, second, third and fourth anniversaries of the date of grant) and 227,445 RSUs granted on February 21, 2017 and 307,461 RSUs granted on August 10, 2017 (both of which vest ratably over a three-year period on each of the first, second and third anniversaries of the date of grant); and 30,734 PSUs granted on September 2, 2014 and 69,29028, 2015, 72,632 PSUs granted on November 3, 2015, 2,100 PSUs granted on November 11, 2015, 23,645 PSUs granted on February 24, 201523, 2016 and 151,629 PSUs granted on February 21, 2017 (all of which vest on the third anniversary of the date of grant).

 (3)

These amounts are comprisedconsist of 5,139 RSUs granted on September 24, 2013 (which vest on the third anniversary of the date of grant), 15,418 PSUs granted on September 24, 2013 (which vest on the third anniversary of the date of grant), 3,8041,125 RSUs granted on February 26, 2014 (which vest ratably over a three-year period on each of the second, third and fourth anniversaries of the date of grant), 10,147 PSUs granted on February 26, 2014, 3,700 Matched PSUs granted on November 14, 2014 (both of which vest on the third anniversary of the date of grant), 8,797 RSUs granted on February 24, 2015 (which vest ratably over a four-year period on each of the first, second, third and fourth anniversaries of the date of grant), 17,595 PSUs granted on February 24, 2015 and 4,450 PSUs granted on November 11, 2015 (both of which vest on the third anniversary of the date of grant).

(4)

These amounts are comprised of 15,367 RSUs granted on September 28, 2015 (which vest ratably over a four-year period on each of the first, second, third and fourth anniversaries of the date of grant), 30,734 PSUs granted on September 28, 2015, 72,632 PSUs granted on November 3, 2015 and 2,100 PSUs granted on November 11, 2015 (all of which vest on the third anniversary of the date of grant).

(5)

These amounts are comprised of 3,611 RSUs granted on April 29, 2015 (which vest ratably over a four-year period on each of the first, second, third and fourth anniversaries of the date of grant), 7,222 PSUs granted on April 29, 2015, 500 PSUs granted on November 11, 2015 (both of which vest on the third anniversary of the date of grant), 4,811 RSUs granted on December 31, 201523, 2016 (which vest ratably over a four-year period on each of the first, second, third and fourth anniversaries of the date of grant) and 4,8115,360 RSUs granted on May 16, 2016, 33,169 RSUs granted on February 21, 2017 and 114,583 RSUs granted on August 10, 2017 (all of which vest ratably over a three-year period on each of the first, second and third anniversaries of the date of grant); and 1,759 PSUs granted on December 31,February 24, 2015, (which1,501 PSUs granted on February 23, 2016 and 22,112 PSUs granted on February 21, 2017 (all of which vest on the third anniversary of the date of grant).

 (6)(4)

These amounts are comprisedconsist of 4,5832,426 RSUs granted on March 11, 2014 (which vest ratably over a two-year period on each of the secondSeptember 28, 2015 and third anniversaries of the date of grant), 6,875 PSUs granted on March 11, 2014 (which vest on the third anniversary of the date of grant), 2,9323,869 RSUs granted on February 24, 2015 (which23, 2016 (both of which vest ratably over a four-year period on each of the first, second, third and fourth anniversaries of the date of grant), 5,865 and 2,000 RSUs granted on September 28, 2015, 56,861 RSUs granted on February 21, 2017 and 112,500 RSUs granted on August 10, 2017 (all of which vest ratably over a three-year period on each of the first, second and third anniversaries of the date of grant); and 9,705 PSUs granted on September 28, 2015, 9,500 PSUs granted on November 10, 2015, 10,318 PSUs granted on February 24, 201523, 2016 and 1,00037,907 PSUs granted on November 11, 2015 (bothFebruary 21, 2017 (all of which vest on the third anniversary of the date of grant).

 (7)(5)

These amounts are comprisedconsist of 5,8541,805 RSUs granted on April 29, 2015, 2,405 RSUs granted on December 31, 2015 and 4,256 RSUs granted on February 23, 2016 (all of which vest ratably over a four-year period on each of the first, second, third and fourth anniversaries of the date of grant) and 32,221 RSUs granted on February 21, 2017 and 114,583 RSUs granted on August 10, 2017 (both of which vest ratably over a three-year period on each of the first, second and third anniversaries of the date of grant); and 7,222 PSUs granted on March 8, 2013 and 7,296April 29, 2015, 500 PSUs granted on July 1, 2013 (bothNovember 11, 2015, 4,811 PSUs granted on December 31, 2015, 11,350 PSUs granted on February 23, 2016 and 21,480 PSUs granted on February 21, 2017 (all of which vest on the third anniversary of the date of grant).

 (6)

These amounts consist of 714 RSUs granted on October 1, 2015 and 1,716 RSUs granted on February 23, 2016 (both of which vest ratably over a four-year period on each of the first, second, third and fourth anniversaries of the date of grant) and 23,249 RSUs granted on February 21, 2017 and 47,916 RSUs granted on August 10, 2017 (both of which vest ratably over a three-year period on each of the first, second and third anniversaries of the date of grant); and 2,856 PSUs granted on October 1, 2015, 4,579 PSUs granted on February 23, 2016 and 15,499 PSUs granted on February 21, 2017 (all of which vest on the third anniversary of the date of grant).

58


(7)

These values were calculated by multiplying the number of unvested RSUs by the closing price of $7.75 per share on December 31, 2017.

(8)

ValueForTSR-based PSUs, these values represent the number of units that would be earned at target performance levels and were calculated by multiplying the number of unvested units by the closing price of $61.22$7.75 per share on December 31, 2015.

(9)

Value calculated by multiplying the number of unvested units by the closing price of $61.22 per share on December 31, 2015.2017. The values shown in this column are based on the number of units that would be earned at target performance. Theseactual amounts could range from zero to three times the amounts listed in this column depending on performance in relation to the terms of the PSUs, which are discussed in detail above under the section titledheading “Equity-Based Long-term Incentive Compensation” in the “COMPENSATION DISCUSSION AND ANALYSIS.”“Compensation Discussion and Analysis” section. ForFCF-based PSUs, this value was calculated by multiplying the number of unvested units for which a grant date has occurred as of December 31, 2017 by the product of the closing price of $7.75 per share on December 31, 2017 and the final approved payout multiple associated with completed performance periods.

52


Option Exercises and Stock Vested in 20152017

The following table summarizes the stock option exercises by the NEOs and share vestings during the year ended December 31, 2015.2017.

 

   Option Awards  Stock Awards 
Name Number of Shares
Acquired on Exercise (#)
  Value Realized on
Exercise ($)(1)
  Number of Shares
Acquired on Vesting (#)
  Value Realized on Vesting
($)(2)
 

Rajiv De Silva

     $       $  

Suketu P. Upadhyay

     $    6,408   $480,233  

Paul V. Campanelli

     $       $  

Matthew J. Maletta

     $       $  

Susan Hall

     $    2,292   $201,146  

Camille I. Farhat

  40,438   $2,221,117    25,195   $1,865,031  
   

 

Option Awards

 

  

 

Stock Awards

 

 

Name

 

 

 

Number of Shares
    Acquired on Exercise (#)

 

  

 

                Value Realized  on
Exercise ($)(1)

 

  

 

Number of Shares
    Acquired on Vesting (#)

 

  

 

Value Realized on Vesting
($)(2)

 

 

 

Paul V. Campanelli

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

6,798

 

 

 

 

 

 

$

 

 

70,893

 

 

 

 

 

Blaise Coleman

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

6,136

 

 

 

 

 

 

$

 

 

76,775

 

 

 

 

 

Terrance J. Coughlin

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

4,503

 

 

 

 

 

 

$

 

 

43,459

 

 

 

 

 

Matthew J. Maletta

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

3,525

 

 

 

 

 

 

$

 

 

38,591

 

 

 

 

 

Tony Pera

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

930

 

 

 

 

 

 

$

 

 

10,732

 

 

 

 

 

 (1)

Amounts in this column weregenerally are calculated by determining the difference between the market price of the underlying securities at exercise and the exercise price of the options and then multiplying thisthat amount by the number of options exercised.

 (2)

Amounts in this column were calculated by determining the market price of the underlying securities on the vesting date and multiplying this amount by the number of awards vested.

 

5359


Potential Payments Upon Termination or Change in Control

The following tables show the potential payments to the NEOs upon termination or change of control, to the NEOs, as if such event(s) took place on December 31, 2015.2017. The amounts reflected in this table were determined in accordance using each NEO’s then existing employment agreement, individual award agreements and the respective equity planplan(s) to which each award relates. The equity award acceleration amounts below were calculated using the closing stock price of our stock on December 31, 20152017 of $61.22.

As previously stated, Mr. Farhat has left the Company. Accordingly, the values shown for Mr. Farhat represent the amount actually received under his termination event.$7.75.

 

Name Cash Separation
Payment ($)(1)
  Health and Welfare
and Life Insurance
Benefits ($)(2)
  Disability Insurance
Benefits ($)(3)
  Acceleration of
Equity Awards (in the
money value at
December 31, 2015)
($)(4)
  Value of Term Life
Insurance ($)(5)
 

Termination for Cause, Resignation or Retirement

  

Mr. De Silva (6)

 $-   $-   $-   $-   $-  

Mr. Upadhyay

 $-   $-   $-   $-   $-  

Mr. Campanelli

 $-   $-   $-   $-   $-  

Mr. Maletta

 $-   $-   $-   $-   $-  

Dr. Hall

 $-   $-   $-   $-   $-  

Mr. Farhat

 $-   $-   $-   $-   $-  

Death

  

Mr. De Silva (6)

 $-   $-   $-   $20,393,668   $1,000,000  

Mr. Upadhyay

 $-   $22,776   $-   $4,227,241   $1,000,000  

Mr. Campanelli

 $-   $22,104   $-   $7,397,396   $300,000  

Mr. Maletta

 $-   $22,704   $-   $1,282,865   $950,000  

Dr. Hall

 $-   $-   $-   $1,301,231   $1,000,000  

Mr. Farhat

 $-   $-   $-   $-   $-  

Disability

  

Mr. De Silva (6)

 $-   $-   $1,950,000   $5,869,712   $-  

Mr. Upadhyay

 $-   $35,944   $900,000   $314,610   $-  

Mr. Campanelli

 $-   $33,946   $1,594,000   $940,768   $-  

Mr. Maletta

 $-   $24,203   $590,000   $221,065   $-  

Dr. Hall

 $-   $17,508   $670,000   $280,571   $-  

Mr. Farhat

 $-   $-   $-   $-   $-  

Change of Control (COC)

  

Mr. De Silva (6)

 $-   $-   $-   $15,313,203   $-  

Mr. Upadhyay

 $-   $-   $-   $1,791,603   $-  

Mr. Campanelli

 $-   $-   $-   $-   $-  

Mr. Maletta

 $-   $-   $-   $-   $-  

Dr. Hall

 $-   $-   $-   $420,888   $-  

Mr. Farhat

 $-   $-   $-   $-   $-  

Termination Without Cause or Quit for Good Reason

  

Mr. De Silva (6)

 $5,197,500   $35,800   $-   $9,499,565   $-  

Mr. Upadhyay

 $1,953,000   $35,944   $-   $1,143,845   $-  

Mr. Campanelli

 $3,420,000   $33,946   $-   $1,403,999   $-  

Mr. Maletta

 $1,472,500   $24,203   $-   $230,947   $-  

Dr. Hall

 $1,596,500   $17,508   $-   $580,765   $-  

Mr. Farhat

 $2,119,633   $17,256   $-   $4,285,053   $-  

Termination Without Cause or Quit for Good Reason Within 24 Months After COC

  

Mr. De Silva (6)

 $5,197,500   $35,800   $-   $5,080,464   $-  

Mr. Upadhyay

 $1,953,000   $35,944   $-   $2,435,638   $-  

Mr. Campanelli

 $3,420,000   $33,946   $-   $7,397,396   $-  

Mr. Maletta

 $1,472,500   $24,203   $-   $1,282,865   $-  

Dr. Hall

 $1,596,500   $17,508   $-   $880,344   $-  

Mr. Farhat

 $-   $-   $-   $-   $-  

Name

 

 

Cash Separation
Payment ($)(1)

 

  

Health and Welfare
and Life Insurance
Benefits ($)(2)

 

  

Disability Insurance
Benefits ($)(3)

 

  

 

Acceleration of
Equity Awards (in the
money value at
December 31, 2017)
($)(4)

 

  

Value of Term Life
Insurance ($)(5)

 

 

 

Termination for Cause, Resignation or Retirement

 

 

 

Paul V. Campanelli

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Blaise Coleman

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Terrance J. Coughlin

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Matthew J. Maletta

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Tony Pera

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Death

 

 

 

Paul V. Campanelli

 

 

 

$

 

 

1,815,450

 

 

 

 

 

 

$

 

 

24,721

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

7,265,064

 

 

 

 

 

 

$

 

 

2,000,000

 

 

 

 

 

Blaise Coleman

 

 

 

$

 

 

613,203

 

 

 

 

 

 

$

 

 

28,632

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

1,562,990

 

 

 

 

 

 

$

 

 

1,000,000

 

 

 

 

 

Terrance J. Coughlin

 

 

 

$

 

 

800,125

 

 

 

 

 

 

$

 

 

28,557

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

2,154,441

 

 

 

 

 

 

$

 

 

1,000,000

 

 

 

 

 

Matthew J. Maletta

 

 

 

$

 

 

600,203

 

 

 

 

 

 

$

 

 

28,167

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

1,722,527

 

 

 

 

 

 

$

 

 

1,000,000

 

 

 

 

 

Tony Pera

 

 

 

$

 

 

409,925

 

 

 

 

 

 

$

 

 

23,020

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

853,247

 

 

 

 

 

 

$

 

 

920,000

 

 

 

 

 

Disability

 

 

 

Paul V. Campanelli

 

 

 

$

 

 

1,815,450

 

 

 

 

 

 

$

 

 

44,314

 

 

 

 

 

 

$

 

 

1,540,000

 

 

 

 

 

 

$

 

 

59,543

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Blaise Coleman

 

 

 

$

 

 

613,203

 

 

 

 

 

 

$

 

 

43,843

 

 

 

 

 

 

$

 

 

740,000

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Terrance J. Coughlin

 

 

 

$

 

 

800,125

 

 

 

 

 

 

$

 

 

44,304

 

 

 

 

 

 

$

 

 

780,000

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Matthew J. Maletta

 

 

 

$

 

 

600,203

 

 

 

 

 

 

$

 

 

43,722

 

 

 

 

 

 

$

 

 

740,000

 

 

 

 

 

 

$

 

 

13,989

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Tony Pera

 

 

 

$

 

 

409,925

 

 

 

 

 

 

$

 

 

35,794

 

 

 

 

 

 

$

 

 

500,000

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Change of Control (COC)

 

 

 

Paul V. Campanelli

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Blaise Coleman

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Terrance J. Coughlin

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Matthew J. Maletta

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Tony Pera

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Termination Without Cause or Quit for Good Reason

 

 

 

Paul V. Campanelli

 

 

 

$

 

 

5,995,450

 

 

 

 

 

 

$

 

 

44,314

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

1,546,752

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Blaise Coleman

 

 

 

$

 

 

2,318,203

 

 

 

 

 

 

$

 

 

43,843

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

132,475

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Terrance J. Coughlin

 

 

 

$

 

 

2,840,125

 

 

 

 

 

 

$

 

 

44,304

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

354,407

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Matthew J. Maletta

 

 

 

$

 

 

2,305,203

 

 

 

 

 

 

$

 

 

43,722

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

258,778

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Tony Pera

 

 

 

$

 

 

1,835,925

 

 

 

 

 

 

$

 

 

35,794

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

117,632

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Termination Without Cause or Quit for Good Reason Within 24 Months After COC

 

 

 

Paul V. Campanelli

 

 

 

$

 

 

8,085,450

 

 

 

 

 

 

$

 

 

66,471

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

7,265,064

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Blaise Coleman

 

 

 

$

 

 

2,318,203

 

 

 

 

 

 

$

 

 

43,843

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

1,562,990

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Terrance J. Coughlin

 

 

 

$

 

 

2,840,125

 

 

 

 

 

 

$

 

 

44,304

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

2,154,441

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Matthew J. Maletta

 

 

 

$

 

 

2,305,203

 

 

 

 

 

 

$

 

 

43,722

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

1,722,527

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Tony Pera

 

 

 

$

 

 

1,835,925

 

 

 

 

 

 

$

 

 

35,794

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

853,247

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 (1)

As of December 31, 2015,2017, in the event of a Termination Without Causetermination without cause by the Company or a Quit For Good Reasonquit for good reason by any of the NEOs (each as defined in the applicable employment agreement), subject to the respective NEO executing and not revoking a release of claims, the Cash Separation Payment isincludes an amount equal to two times the sum of the NEO’s current base salary plus target annual Incentive Compensation,cash incentive compensation, payable in alump-sum. The Cash Separation Payment also includes the respective NEO’spro-rated bonus for the year of termination (based on actual results). In addition to the Cash Separation Payment reported in the table above, all NEOs would receive any earned or accrued but unpaid compensation as of their respective termination dates. In the event of Termination Without Causetermination without cause by the Company or a Quit For Good Reasonquit for good reason by any of the NEOs within 24twenty-four (24) months after a Changechange of Control (COC)control (as defined in the applicable employment agreement), all

54


NEOs willwould receive a Cash Separation Payment equal to twothe same payments, except that Mr. Campanelli would receive three times the sum of theirhis current base salary plus target annual Incentive Compensation,cash incentive compensation, payable in alump-sum. Upon termination for Death or Disability, each NEO would receive hispro-rated bonus for the year of termination (based on actual results).

60


 (2)

Upon a Termination Without Causetermination without cause by the Company or a Quit For Good Reasonquit for good reason by any of the NEOs (each as defined in the applicable employment agreement) and subject to the respective NEO executing and not revoking a release of claims, health and welfare benefits, including medical, dental and vision, as well as life insurance benefits willwould continue to be provided, on a monthly basis, to each NEO for a period of 24twenty-four (24) months subsequent to termination.the termination date. In the event of termination without cause by the Company or a quit for good reason by any of the NEOs within twenty-four (24) months after a change of control (as defined in the applicable employment agreement), all NEOs would receive the same payments, except that Mr. Campanelli would receive coverage for a period ofthirty-six (36) months subsequent to the termination date. Upon a termination for Disabilitydisability for all NEOs (other than Mr. De Silva under his employment agreement in effect on December 31, 2015) ,any NEO, health and welfare benefits, including medical, dental and vision, as well as life insurance benefits willwould continue to be provided, on a monthly basis, to each NEO for a period of 24twenty-four (24) months subsequent to termination. Additionally, uponUpon termination for Death for all NEOs (other than Mr. De Silva under his employment agreement in effect on December 31, 2015),any NEO, health and welfare benefits including medical, dental and vision insurance benefits willwould continue to be provided to theirhis dependents, if any, on a monthly basis, for a period of 24twenty-four (24) months subsequent to termination.

 (3)

Upon Disability of any of the NEOs, disability insurance benefits willwould be paid to the NEO equal to the excess of 24twenty-four (24) months’ base salary over the theirhis respective disability benefits. As of December 31, 2015,2017, the disability insurance benefit for each NEO other than Mr. CampanelliCoughlin and Mr. Pera totaled $15,000 per month. As of December 31, 2015,For Mr. Coughlin and Mr. Pera, the disability insurance benefit for Mr. Campanelli totaled $12,750$17,500 per month. The amount represented in the table above is the difference between each NEO’s monthly base salary and theirhis respective monthly disability insurance benefit over a 24-monthtwenty-four (24) month period.

 (4)

The provisions governing acceleration of equity awards are discussed separately for each scenario below, as follows:

 (a)

Upon Termination for Cause or Voluntary Resignation - Resignation—all unvested equity held by our NEOs is forfeited and no amounts have been included under this scenario.

 (b)

Upon Retirement—For retirement eligible NEOs, upon retirement, none of our NEOs are eligible for Retirement astheir respective outstanding and unvested equity awards would accelerate; rather, their unvested equity awards would continue to vest in accordance with the applicable terms. As of December 31, 2015 under any of our equity incentive plans and no amounts have been included under this scenario.2017, only Mr. Campanelli was eligible for retirement.

 (c)

Upon Death—each of the NEO’s outstanding and unvested stock options and RSUs willwould accelerate and become immediately vested and, if applicable, exercisable. Each of the NEO’s outstanding and unvested PSUs, and Matchedincluding those PSUs willgranted under the prior share matching program (Matched PSUs), would accelerate and become immediately vested and deemed to be earned at target performance levels. Mr. De Silva’s Matchedlevels, except for any portion ofFCF-based PSUs granted in 2013 willrelating to annual performance periods completed as of December 31, 2017, which would accelerate and become immediately vested based uponand deemed to be earned at actual performance levels (for purposes of the value represented in the table above, target performance has been assumed).levels.

 (d)

Upon Disability—for each NEO other than Mr. De Silva only,Campanelli and Mr. Maletta, none of thetheir respective outstanding and unvested equity awards would accelerateaccelerate; rather, their unvested equity awards would continue to vest in accordance with the exception of his RSUsapplicable terms. For Messrs. Campanelli and Matched PSUs granted in 2013, which will accelerate and become immediately vested. Mr. De Silva’s Matched PSUs granted in 2013 will accelerate and become immediately vested based upon actual performance levels (for purposes of the value represented in the table above, target performance has been assumed). For Mr. Upadhyay only,Maletta, none of the outstanding and unvested equity would accelerate with the exception of the RSUs granted in 2013, which will accelerate and become immediately vested. For Mr. Campanelli only, none of the outstanding and unvested equity would accelerate with the exception of the stock options and RSUs granted in 2015, which will accelerate and become immediately vested, and if applicable, exercisable. For Mr. Maletta only, none of thetheir outstanding and unvested equity would accelerate with the exception of the stock options and RSUs granted in April 2015, September 2015 and September 2016, respectively, which willwould accelerate and become immediately vested and, if applicable, exercisable. For Dr. Hall only, none of the outstanding and unvested equity would accelerate with the exception of the RSUs granted in 2014, which will accelerate and become immediately vested.

 (e)

Upon a Change of Control (COC)—for Mr. De Silva and Mr. Upadhyay only, any performance goals imposed on alleach NEO, outstanding and unvested stock options, RSUs and PSUs grantedwould not accelerate upon a COC without termination as these awards require a “double trigger” in 2013 shall be deemedorder for such awards to be earned at target performance levels. For Mr. De Silva only, all of his outstanding and unvested Matched PSUs granted in 2013 will accelerate and become immediately earnedvested and, if applicable, exercisable. Generally, with respect to each outstanding equity award that is not assumed or substituted in connection with a change of control (other than Matched PSUs, which receive the following treatment whether or not the Matched PSUs are assumed or substituted), (i) such equity award would become fully vested and, if applicable, exercisable, (ii) the restrictions and conditions applicable to any such equity award would lapse, (iii) performance awards granted in 2015 and Matched PSUs would be settled based upon actualon the achievement of applicable performance levels. For Mr. De Silva, Mr. Upadhyaycriteria and Dr. Hall only, all of their respective outstanding and unvested(iv) PSUs granted in 2014 will2016 and 2017 would be settled based on the greater of actual performance and target performance.

(f)

Upon Termination Without Cause by the Company or Quit For Good Reason by the Executive—for all NEOs, the portion of any unvested and outstandingFCF-based PSUs for which the annual performance periods have not yet been completed as of December 31, 2017 would be forfeited. All other PSUs, including Matched PSUs, would accelerate and become immediately earned based upon actualvested on apro-rated basis for service actually completed during the performance levels. For Mr. Upadhyay only, all of his outstanding and unvested Matched PSUs granted in 2014 will accelerate and become immediately earnedperiod based upon actual performance levels. For purposes of the values represented in the table above, target performance has been assumed on a pro-rata basis except for all outstanding and unvestedthe portion ofFCF-based PSUs and Matched PSUs. For all NEOs, outstanding and unvested PSUs and Matched PSUs granted in 2015 and all other outstanding and unvestedrelating to annual performance periods completed as of December 31, 2017, for which actual performance has been assumed. Mr. Campanelli’s stock options and RSUs granted in September 2015 and his stock options granted in September 2016 (in connection with his promotion to President and Chief Executive Officer) would not accelerate upon a COC without termination as these awards require a “double-trigger” in order for such awards toalso accelerate and become immediately vested and, if applicable, exercisable.

(f)

Upon Termination Without Cause by Additionally, the Company or Quit For Good Reason by the Executive—for all NEOs, any unvestedportion of Mr. Maletta’s stock options and outstanding PSUs and Matched PSUs granted in 2014 and 2015 will accelerate and become immediately vested on a pro-rated basis (for service actually completed during the performance period) based upon actual performance levels (for purposes of the values represented in the table above, target performance has been assumed on a pro-rata basis). For Mr. De Silva only, all unvested and outstanding RSUs and Matched PSUs granted in 2013 will accelerate and become immediately vested. Mr. De Silva’s Matched PSUs granted in 2013 are based on actual performance levels but for purposes of the

55


value represented in the table above, target performance has been assumed. For Mr. Upadhyay only, all unvested and outstanding RSUs granted in 2013 will accelerate and become immediately vested. Dr. Hall would vest in the portion of her 2014 RSU grant that would have vested had she remained employed for an additional two years. Mr. Maletta would vest in the portion of his April 2015 stock option and RSU grant that would have vested had he remained employed for antwo additional two years. All other outstandingyears would accelerate and unvested equity awards held by NEOs will be forfeited.become immediately vested and, if applicable, exercisable.

61


 (g)

Upon Termination Without Cause by the Company or a Quit For Good Reason by the Executive Within 24 Months After COC—for all NEOs, all outstanding and unvested stock options and RSUs willwould accelerate and become immediately vested, and if applicable, fully exercisable. For all NEOs, 2015 PSUsany unvested and Matchedoutstanding PSUs, to the extent assumed or substituted, willwould accelerate and become immediately vested based on actual performance levels (forfor PSUs granted in 2015 and based on the greater of actual performance levels or target performance levels for PSUs granted in 2016 and 2017. For purposes of the values represented in the table above, target performance has been assumed).assumed except for the portion ofFCF-based PSUs relating to annual performance periods completed as of December 31, 2017, for which actual performance has been assumed.

 (5)

Each of our NEOs is covered by term life insurance policies, the premiums for which are reimbursed by the Company. The premiums for these term life insurance policies are listed above in the “All Other Compensation” table. The amounts included above represent the death benefits that would be received from the insurance provider under these life insurance policies.

CEO Pay Ratio

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of RegulationS-K, the following information is being provided, summarizing the relationship of the annual total compensation of Endo employees and the annual total compensation of our President and Chief Executive Officer, Mr. Campanelli, for 2017:

 (6)

The amounts set forththe annual total compensation of the employee identified as the median employee of our Company (other than our President and Chief Executive Officer) was $79,553, calculated in accordance with the rules applicable to the Summary Compensation Table; and

the annual total compensation of the President and Chief Executive Officer as reported in the table above represent amounts payable to Mr. De Silva under his employment agreement in effect December 31, 2015. See “COMPENSATION DISCUSSION AND ANALYSIS”, on page 45, for additional information on Mr. De Silva’s post-termination benefits under the employment agreement entered into with him on February 28, 2016.Summary Compensation Table was $13,602,395.

2015 CompensationBased on this information, the CEO Pay Ratio of Non-Employee Directorsthe annual total compensation of Mr. Campanelli to the annual total compensation of the employee identified as the median employee is approximately 171 to 1 for 2017. When comparing annual total compensation levels using realized values based on actual results through the record date of April 13, 2018, this ratio is reduced to 82 to 1.

FollowingAs permitted by SEC rules and regulations, we considered the formationCompany’s U.S. and India employee population, consisting of Endo International plc3,256 total employees as an Irish holding company,of December 31, 2017 (2,607 and 649 employees, respectively, in each case including full- and part-time, seasonal and temporary employees, including employees on a leave of absence as of December 31, 2017), for the purpose of identifying Endo’s median employee annual total compensation. We excluded from this calculation 166 employees in the aggregate employed by us in the following non-U.S. jurisdictions: Canada (total of 99 employees), Ireland (total of 60 employees) and the United Kingdom (total of 7 employees). The de minimis number of excluded non-U.S. employees, in the aggregate, represents less than 5% of our total employee population.

The compensation measure consistently applied to this population of employees included the sum of base salary, overtime, paid time off, annual bonus, other bonuses and long-term incentive compensation, as applicable for the period from January 1, 2017 through December 31, 2017. We converted the aggregate value of each India-based employee’s compensation from Indian rupees to U.S. dollars using the conversion rate of approximately 63.9:1, as in effect as of December 31, 2017. Based on the above, our non-Chief Executive Officer median employee is a full-time employee with annual total compensation equal to $79,553 in fiscal year 2017.

This information is being provided for compliance purposes. Neither the Compensation Committee reviewednor management of the Company used the pay ratio measure in making compensation decisions.

2017 Compensation ofNon-Employee Directors

The Compensation Committee annually reviews compensation for eachnon-employee director who was not affiliated with the Company (Non-Affiliated(Non-Affiliated Directors). In connection with this review, the Compensation Committee’s consultant, Hay Group, assessed the compensation paid to the Non-Affiliated Directors against non-employee director compensation trends and data from Endo’s Pay Comparator Companies. After consultation with Hay Group, the Compensation Committee found it appropriate to establish a compensation structure for Non-Affiliated Directors in support of competitive practicespay levels observed among Endo’s Pay Comparator Companies.

Companies and makes adjustments, as appropriate. In addition to offering a competitively positioned compensation package, our objective is to award a meaningful portion of compensation in the form of equity to further align the interests ofNon-Affiliated Directors with the interests of Endo shareholders. The following summarizes recent key changes made by Endo’s Compensation Committee annually reviews compensation paid to Non-Affiliated Directors against pay levels observed among Endo’s Pay Comparator Companies and makes recommendations for adjustments, as appropriate, to the full Board of Directors. In late 2015, the Board of Directors determined that it was in the best interests of the Company to amend the 2015 Stock Incentive Plan to incorporate a limit on the value of annual equity awards that may be granted to Non-Affiliated Directors. As indicated under Proposal 6, one reason for the amendment is to limit the value of equity grants that may be made to Non-Affiliated Directors of the Company to $750,000. The Board of Directors believes that this amendment will promote good compensation governance practices in support of shareholder interests. There have been no changes to our Non-Affiliated Directors compensation program since Endo International plc was formed.Committee:

Following the Compensation Committee’s review of theNon-Affiliated Directors’ compensation program on February 21, 2017, the Compensation Committee approved compensation package modifications and overall pay reductions to better align the program with competitive market practices observed among Endo’s Pay Comparator Companies. These changes allow Endo to appropriately alignNon-Affiliated Director pay levels with median Pay Comparator Companies’ pay levels, while balancing the mix between equity- and cash-based compensation in a manner that strengthens alignment betweenNon-Affiliated Director and shareholder interests, and increasing the level of consistency with the median mix reported by our Pay Comparator Companies. The changes that went into effect in 2017 include:

Rebalancing and reducing of annual Board cash and equity retainer fees in support of pay mix practices observed among Endo’s Pay Comparator Companies

Cash reduced from $140,000 to $75,000

62


Equity reduced from $300,000 to $275,000—allotting the equity portion of the retainer to account for approximately 79% of the Board retainer fees

Ending of Committee retainers fornon-chair members ranging from $12,500 to $20,000 per committee

Reducing the Chair of the Board of Directors retainer from $200,000 to $150,000

The Compensation Committee also approved a change in the timing of the annual cash and stock-based retainer fees forNon-Affiliated Directors. Effective with the 2017 compensation cycle, which runs from January 1st through December 31st of each year, the Compensation Committee approved moving the scheduled payment date to the first trading day following the Annual General Meeting of Shareholders. This new date aligns with the election of Endo Directors in the early June timeframe, and enhances the Company’s alignment with best practices by issuing equity-based compensation a sufficient amount of time after the Company’s annual earnings release in the first quarter of each year. In the event that aNon-Affiliated Director’s service ends before the payment date, theNon-Affiliated Director will be entitled to a cash payment equal to thepro-rated portion of their annual cash retainer fees and ordinary shares referred to below through the applicable ending service date. In the event that aNon-Affiliated Director’s service ends after the Company’s Annual General Meeting of Shareholders, apro-rated portion of the cash retainer fees and ordinary shares will be returned to the Company if so requested by the Compensation Committee.

On February 13, 2018, additional changes were approved by the Compensation Committee. The changes that went into effect in 2018 include:

Reducing the annual Board cash and equity retainer fees

Cash reduced from $75,000 to $60,000

Equity reduced from $275,000 to $240,000—allotting the equity portion of the retainer to account for 80% of the Board retainer fees

Reducing the Committee Chair retainers for the Audit, Compensation and Compliance (formerly, Operations) Committees from $30,000 to $25,000, $20,000 and $20,000, respectively

On April 26, 2018, the Compensation Committee approved a cash retainer of $60,000 for Dr. Mansukani in connection with his appointment by the Board to the newly created position of Senior Independent Director.

Non-Affiliated Directors are eligible for the following compensation:

Annual Cash Retainer Fees.Fees Each .Non-Affiliated Director receives Directors are entitled to receive an annual cash retainer of $140,000. Also, any Non-Affiliated Director who servesbased on their service on the Board, as the Chairwell as for their roles on certain committees of the Board ofBoard. The amounts thatNon-Affiliated Directors receives an additional fee of $200,000 cashwere entitled to receive in June 2017 and will be entitled to receive in June 2018 per year. Non-Affiliated Directors who serve as members or alternates of the Audit Committee,reduced director pay program noted above are set forth in the Compensation Committee, the Transactions Committee, or the Operations Committee receives a fee of $20,000 cash per year, and any Non-Affiliated Director who serves as a member or alternate of the Nominating & Governance Committee receives a fee of $12,500 cash per year. In addition, any Non-Affiliated Director who serves as the Chair of the Audit Committee, the Compensation Committee, the Transactions Committee, or the Operations Committee receives an additional fee of $30,000 cash per year, and any Non-Affiliated Director who served as the Chair of the Nominating & Governance Committee receives an additional fee of $15,000 cash per year. However, Mr. Kimmel elected to waive the cash retainer fee associated with his chairing the Nominating & Governance Committee.following schedule:

 

Purpose

 

 

 

            Paid in June 2017

 

  

 

To Be Paid in June 2018

 

 

 

For membership on the Board of Directors

 

 

 

$

 

 

75,000

 

 

 

 

 

 

$

 

 

60,000

 

 

 

 

 

For serving as the Chair of the Board of Directors

 

 

 

$

 

 

150,000

 

 

 

 

 

 

$

 

 

150,000

 

 

 

 

 

For serving as Senior Independent Director

 

 

 

 

 

 

n/a

 

 

 

 

 

 

$

 

 

60,000

 

 

 

 

 

For serving as Chair of the Audit Committee

 

 

 

$

 

 

30,000

 

 

 

 

 

 

$

 

 

25,000

 

 

 

 

 

For serving as Chair of the Compensation Committee

 

 

 

$

 

 

30,000

 

 

 

 

 

 

$

 

 

20,000

 

 

 

 

 

For serving as Chair of the Compliance (formerly, Operations) Committee

 

 

 

$

 

 

30,000

 

 

 

 

 

 

$

 

 

20,000

 

 

 

 

 

For serving as Chair of the Nominating & Governance Committee

 

 

 

$

 

 

15,000

 

 

 

 

 

 

$

 

 

15,000

 

 

 

 

Meeting Fees.Non-Affiliated Directors receive a fee of $5,000 cash per trip to Ireland on Company business, other than regularly scheduled meetings in Ireland.

Stock-based Awards.Awards Non-Affiliated Directors receive. Effective with the 2018 compensation cycle, eachNon-Affiliated Director receives an annual stock compensation described below:award equal in value to $240,000, 100% of which is ordinary shares. The number of ordinary shares actually awarded to eachNon-Affiliated

¡

Each Non-Affiliated Director receives an annual stock award equal in value to $300,000, 100% of which is ordinary shares. The number of ordinary shares actually awarded to each Non-Affiliated Director is calculated using the closing price as of the date of the grant.

¡

The annual stock award grant date is typically in early March of each year and the exercise price of the securities granted, if applicable, is the closing price on the date of grant.

All cash retainer fee payments will be made on March 1 of each year of service. In the event that a Non-Affiliated Director does not complete a full year of service following the date of such payments, a pro-rated portion of the cash retainer fees and ordinary sharesgrant. This annual stock award will be returned to the Company if so requested by the Compensation Committee.

On March 1, 2016, Non-Affiliated Directors each received 7,111 pre-tax shares of stock valued at $42.19 per share (the closing pricegranted on the day of grant).June 8, 2018. Pursuant to the Directors Stock Election Plan (described below), Mr. HigginsMontague elected to receive his cash

56


retainer fees in the form of Endo ordinary shares. In connection with this election, Mr. Higgins received 4,741Montague will receive approximately $80,000 worth of ordinary shares, in lieucalculated using the closing price as of June 8, 2018.

As noted above, Mr. Sisitsky, serves as a representative of TPG Capital, a significant shareholder of the Company. Since TPG Capital’s policies prohibit personal ownership of Company stock by its representatives, Mr. Sisitsky has waived all rights to receive any annual cash retainer fees.fees, meeting fees, share-based awards or other compensation of any kind (other than certain rights to indemnification, directors and officers insurance and expense reimbursement) in connection with his service as a director of the Company.

Directors Stock Election Plan.Plan. Under the Directors Stock Election Plan,Non-Affiliated Directors may elect to have some or all of their retainer fees delivered in the form of Endo ordinary shares. The amount of shares will be determined by dividing the portion of cash fees elected to be received as shares by the closing price of the shares on the day the payment would have otherwise been paid in cash.

63


Additional Arrangements.Arrangements. The Company pays for or provides (or reimburses directors forout-of-pocket costs incurred for) transportation, hotel, food and other incidental expenses related to attending Board and committee meetings or participating in director education programs and other director orientation or educational meetings.

Insurance and Indemnification.Indemnification. The Company has retained directors and officers indemnification insurance coverage. This insurance coversNon-Affiliated Directors and officers individually in the event the Company is unable to provide indemnification.

The following table provides information concerning the compensation of the Company’sNon-Affiliated Directors paid during 2015.2017 and includes any individual who served as aNon-Affiliated Director of the Company at any time during 2017. Directors who are employees of the Company receive no additional compensation for their services as directors or as members of Board committees. For a complete understanding of the table, please read the footnotes and the narrative disclosures that follow the table.

 

Name Length of Service Fees Earned or
Paid in Cash ($)(1)
 Stock
Awards ($)(2)(3)
 All Other
Compensation ($)
 Total ($)  

Length of Service  

 

 

 

Fees Earned or
Paid in Cash ($)(1)

 

 

 

Stock
Awards ($)(2)(3)

 

 

 

All Other
Compensation ($)

 

 

Total ($)

 

 

Roger H. Kimmel

 2 Years $422,500   $300,000   $   $722,500  

Roger H. Kimmel (4)

 

 

4 Years  

 

 

 

$

 

 

225,000

 

 

 

 

 

 

$

 

 

275,000

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

500,000

 

 

 

 

Shane M. Cooke

 1 Year 6 Months $180,000   $300,000   $   $480,000   

 

3 Years 6 Months  

 

 

 

$

 

 

105,000

 

 

 

 

 

 

$

 

 

275,000

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

380,000

 

 

 

 

John J. Delucca

 2 Years $210,000   $300,000   $   $510,000  

Arthur J. Higgins

 2 Years $205,000   $300,000   $   $505,000   

 

3 Years  

 

 

 

$

 

 

86,301

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

86,301

 

 

 

 

Nancy J. Hutson, Ph.D.

 2 Years $237,500   $300,000   $   $537,500   

 

4 Years  

 

 

 

$

 

 

105,000

 

 

 

 

 

 

$

 

 

275,000

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

380,000

 

 

 

 

Michael Hyatt

 2 Years $232,500   $300,000   $   $532,500   

 

4 Years  

 

 

 

$

 

 

96,493

 

 

 

 

 

 

$

 

 

275,000

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

371,493

 

 

 

 

Douglas S. Ingram

 

 

2 Years  

 

 

 

$

 

 

75,000

 

 

 

 

 

 

$

 

 

275,000

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

350,000

 

 

 

 

Sharad S. Mansukani, M.D.

 

 

2 Months  

 

 

 

$

 

 

11,096

 

 

 

 

 

 

$

 

 

40,685

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

51,781

 

 

 

 

William P. Montague

 2 Years $252,500   $300,000   $   $552,500   

 

4 Years  

 

 

 

$

 

 

105,000

 

 

 

 

 

 

$

 

 

275,000

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

380,000

 

 

 

 

Todd B. Sisitsky

 

 

2 Years  

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

Jill D. Smith

 2 Years $202,500   $300,000   $   $502,500   

 

4 Years  

 

 

 

$

 

 

75,000

 

 

 

 

 

 

$

 

 

275,000

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

350,000

 

 

 

 

William F. Spengler

 2 Years $240,000   $300,000   $   $540,000   

 

3 Years  

 

 

 

$

 

 

165,534

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

165,534

 

 

 

 

 

 (1)

The amounts in this column include all fees earned by eachNon-Affiliated Director. Non-Affiliated Directors may elect, pursuant to Director during the Endo International plc Directors Stock Election Plan,2017 compensation cycle. Mr. Kimmel elected to receive all20% of such fees, or a portion of their retainer and/or meeting fees$45,000, in Endo ordinary shares. The following table summarizes, for each ofAccordingly, the actual cash amount paid to Mr. Kimmel was approximately $180,000. Mr. Spengler and Mr. Higgins wereNon-Affiliated Directors who elected to receive all or a portion of such fees in Endo shares, theuntil June 8, 2017 and March 31, 2017, respectively. Their amounts of such non-cash compensation included in the table above. The dollar amountsabove representpro-rated payments, which were paid entirely in cash, for their service on the numberBoard from January 1, 2017 through their respective ending service dates. Mr. Hyatt was Chairman of shares granted multiplied by the trading priceTransactions Committee until it was discontinued on March 20, 2017. His compensation for this role has beenpro-rated based on his service from January 1, 2017 through March 20, 2017. Dr. Mansukani was appointed to the Board effective November 8, 2017. His amount in the table above represents hispro-rated payment for his service from the date of Endo’s stock at the time of payment:his appointment until December 31, 2017.

Name Fees Paid in Endo
Ordinary Shares ($)
 

Roger H. Kimmel

 $288,800  

Arthur J. Higgins

 $200,000  

 (2)

The amounts shown in this column represent the grant date fair value for eachNon-Affiliated Director’s share-based awards under ASC 718. The stock awards reflect compensation for annual services, forwhich runs from January 1st through December 31st of each year. Refer to the twelve months ended March 1, 2016. See note 17 to“Share-Based Compensation” footnote in our audited financial statements included in the Endo International plc 20152017 Annual Report on Form10-K for the assumptions we used in valuing and expensing these awards in accordance with ASC 718. The grant date fair value of each option and stock award granted in 2015,2017, computed in accordance with ASC 718, is as follows:

 

Name Grant Date Fair Value on Grant Date
of Restricted Stock ($)
 

Roger H. Kimmel

 March 2, 2015 $300,000  

Shane M. Cooke

 March 2, 2015 $300,000  

John J. Delucca

 March 2, 2015 $300,000  

Arthur J. Higgins

 March 2, 2015 $300,000  

Nancy J. Hutson, Ph.D.

 March 2, 2015 $300,000  

Michael Hyatt

 March 2, 2015 $300,000  

William P. Montague

 March 2, 2015 $300,000  

Jill D. Smith

 March 2, 2015 $300,000  

William F. Spengler

 March 2, 2015 $300,000  

Name

Grant Date

Fair Value on Grant Date
of Restricted Stock ($)

Roger H. Kimmel

June 9, 2017

$

275,000

Shane M. Cooke

June 9, 2017

$

275,000

Nancy J. Hutson, Ph.D.

June 9, 2017

$

275,000

Michael Hyatt

June 9, 2017

$

275,000

Douglas S. Ingram

June 9, 2017

$

275,000

Sharad S. Mansukani, M.D.

November 8, 2017

$

40,685

William P. Montague

June 9, 2017

$

275,000

Todd B. Sisitsky

n/a

$

Jill D. Smith

June 9, 2017

$

275,000

 

5764


 (3)

The following table summarizes the number of stock options and restricted stock units outstanding and exercisable at December 31, 2015,2017, for eachNon-Affiliated Director: Director serving on the Board at December 31, 2017:

 

Name 

Options

Outstanding at
Fiscal Year End (#)

  

Options

Exercisable at
Fiscal Year End (#)

  Restricted Stock
Units Outstanding
at Fiscal Year End (#)
  Value at Fiscal
Year End ($)(a)
  

Options

Outstanding at

Fiscal Year End (#)

 

  

Options

Exercisable at

Fiscal Year End (#)

 

  

Restricted Stock
Units Outstanding

at Fiscal Year End (#)

 

  

Value at Fiscal
Year End ($)(a)

 

 

Roger H. Kimmel

  14,858    14,858    21,589   $1,871,889   

 

 

 

 

8,094

 

 

 

 

 

 

 

 

 

8,094

 

 

 

 

 

 

 

 

 

21,589

 

 

 

 

 

 

$

 

 

167,315

 

 

 

 

Shane M. Cooke

             $   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

John J. Delucca

             $  

Arthur J. Higgins

             $  

Nancy J. Hutson, Ph.D.

  13,185    13,185    6,515   $925,313   

 

 

 

 

13,185

 

 

 

 

 

 

 

 

 

13,185

 

 

 

 

 

 

 

 

 

6,515

 

 

 

 

 

 

$

 

 

50,491

 

 

 

 

Michael Hyatt

  29,809    29,809       $1,154,780   

 

 

 

 

25,242

 

 

 

 

 

 

 

 

 

25,242

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

Sharad S. Mansukani, M.D.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

William P. Montague

  18,478    18,478    23,108   $2,178,645   

 

 

 

 

18,478

 

 

 

 

 

 

 

 

 

18,478

 

 

 

 

 

 

 

 

 

23,108

 

 

 

 

 

 

$

 

 

179,087

 

 

 

 

Todd B. Sisitsky

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

Jill D. Smith

             $   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

William F. Spengler

  23,649    23,649    23,108   $2,371,626  

 

 (a)

Based upon the closing price on December 31, 20152017 of $61.22.$7.75. Includes all restricted stock units and all outstanding options as of December 31, 2015,2017, for which the exercise price is equal to or less than $61.22$7.75 per share.

(4)

As previously disclosed in Endo’s proxy statement for the 2015 Annual General Meeting of Shareholders, excise tax payments were made to the then-current directors and NEOs related to the gain on the Endo shareholders’ exchange of Endo Health Solutions Inc. common stock for Endo International plc ordinary shares in the 2014 Paladin acquisition. These payments were approved by 99% of voting shareholders and supported by ISS, noting that the payments resulted in no unique benefit to the directors and NEOs and were intended only to place them in the same position as other equity compensation holders after the Paladin acquisition. The total compensation table above does not include a reimbursement payment of $135,425 paid to Mr. Kimmel in respect of this excise tax following a final reconciliation of Mr. Kimmel’s excise tax payments.

 

 

Other Information Regarding the Company

Security Ownership of Certain Beneficial Owners and Management

Security Ownership of Certain Beneficial Owners and Management.The following table, together with the corresponding footnotes, sets forth, as of April 14, 2016,13, 2018, the name, address and holdings of each person, including any “group” as defined in Section 13(d)(3) of the Exchange Act, known by Endo to be the “beneficial owner” of more than 5% of issuedthe Company’s outstanding ordinary shares. The table also sets forth, as of April 13, 2018, the number of ordinary shares beneficially owned by each of the Company’s current directors and current NEOs, and by all current directors and NEOs of the Company as a group. Footnote (a)(1) below provides a brief explanation of what is meant by the term “beneficial ownership.” The following table also sets forth, as of April 14, 2016, the number of ordinary shares beneficially owned by each of the Company’s then current directors and the Chief Executive Officer, the Chief Financial Officer and the other three most highly compensated executive officers of the Company as of April 14, 2016. The following table also sets forth, as of April 14, 2016, the number of ordinary shares beneficially owned by all then current directors and executive officers of the Company as a group.

 

Name of Beneficial Owner Number of
Ordinary Shares
Beneficially Owned
(#)(a)
  Percentage of
Class (%)(a)
 

Directors and Executive Officers:

   

Roger H. Kimmel (b)

  271,456    *  

Shane M. Cooke (c)(o)

  17,290    *  

Arthur J. Higgins (d)(o)

  34,623    *  

Nancy J. Hutson, Ph.D. (e)(o)

  49,762    *  

Michael Hyatt (f)

  290,481    *  

William P. Montague (g)(o)

  57,706    *  

Jill D. Smith (h)(o)

  19,785    *  

William F. Spengler (i)(o)

  72,484    *  

Rajiv De Silva (j)(o)

  563,863    *  

Suketu P. Upadhyay (k)(o)

  36,114    *  

Paul V. Campanelli (l)

  188,069    *  

Matthew J. Maletta (m)(o)

  5,254    *  

Susan T. Hall (n)(o)

  7,532    *  

All current directors and executive officers of the Company as a group (13 persons)

  1,614,419    0.7

Other Shareholders:

   

Capital Research Global Investors (p)

  23,523,474    10.6

The Vanguard Group, Inc. (q)

  18,405,878    8.3

TPG Group Holdings (SBS) Advisors, Inc. (r)

  17,182,136    7.7

FMR LLC (s)

  16,168,105    7.3

BlackRock Inc. (t)

  14,810,915    6.7

Name of Beneficial Owner

 

 

 

Number of
Ordinary Shares
Beneficially Owned
(#)(1)

 

  

Percentage of
Class (%)(a)

 

 

 

Directors and Executive Officers:

 

   

 

Roger H. Kimmel (2)

 

 

 

 

 

 

283,173

 

 

 

 

  * 

 

Shane M. Cooke (3)

 

 

 

 

 

 

41,224

 

 

 

 

  * 

 

Nancy J. Hutson, Ph.D. (3)

 

 

 

 

 

 

56,883

 

 

 

 

  * 

 

Michael Hyatt (4)

 

 

 

 

 

 

298,360

 

 

 

 

  * 

 

Sharad S. Mansukani, M.D. (5)

 

 

 

 

 

 

27,268

 

 

 

 

  * 

 

William P. Montague (3)

 

 

 

 

 

 

70,152

 

 

 

 

  * 

 

Todd B. Sisitsky (6)

 

 

 

 

 

 

 

 

 

 

  * 

 

Jill D. Smith (3)

 

 

 

 

 

 

43,719

 

 

 

 

  * 

 

Paul V. Campanelli (3)

 

 

 

 

 

 

588,941

 

 

 

 

  * 

 

Blaise Coleman (3)

 

 

 

 

 

 

58,776

 

 

 

 

  * 

 

Terrance J. Coughlin (3)

 

 

 

 

 

 

205,680

 

 

 

 

  * 

 

Matthew J. Maletta (3)

 

 

 

 

 

 

70,600

 

 

 

 

  * 

 

Tony Pera (3)

 

 

 

 

 

 

44,064

 

 

 

 

  * 

 

All current directors and executive officers of the Company as a group (13 persons)

 

 

 

 

 

 

1,788,840

 

 

 

 

  * 

 

Other Shareholders:

 

   

 

TPG Group Holdings (SBS) Advisors, Inc. (7)

 

 

 

 

 

 

22,152,136

 

 

 

 

 

 

 

 

 

9.9

 

 

 

 

BlackRock Inc. (8)

 

 

 

 

 

 

21,415,949

 

 

 

 

 

 

 

 

 

9.6

 

 

 

 

Glenview Capital Management, LLC (9)

 

 

 

 

 

 

19,238,422

 

 

 

 

 

 

 

��

 

8.6

 

 

 

 

The Vanguard Group, Inc. (10)

 

 

 

 

 

 

17,018,473

 

 

 

 

 

 

 

 

 

7.6

 

 

 

*The percentage of the class to be owned by such security holder represents less than 1%.

65


 (a)(1)

“Beneficial ownership” is a term broadly defined by the SEC in Rule13d-3 under the Exchange Act and includes more than the typical form of share ownership, that is, shares held in the person’s name. The term also includes what is referred to as “indirect ownership,” meaning ownership of shares as to which a person has or shares investment power. For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares as of a given date that such person has the right to acquire within 60 days after such date. The amounts in this table do not reflect future grants. Beneficial ownership for the directors and named executive officers included in the table above is summarized as follows:

 

Name

 

 

Ordinary Shares (a)

 

  

Options to Purchase
Ordinary Shares That
Will Be Exercisable
within the Next

60 Days

 

  

RSUs That Will Be
  Vested within the Next

60 Days

 

  

PSUs That Will Be
Earned and Vested
within the Next 60
Days (at Target
Payout Amounts)

 

 

 

Roger H. Kimmel

 

 

 

 

 

 

275,079

 

 

 

 

 

 

 

 

 

8,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shane M. Cooke

 

 

 

 

 

 

41,224

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nancy J. Hutson, Ph.D.

 

 

 

 

 

 

43,698

 

 

 

 

 

 

 

 

 

13,185

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael Hyatt

 

 

 

 

 

 

273,118

 

 

 

 

 

 

 

 

 

25,242

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sharad S. Mansukani, M.D.

 

 

 

 

 

 

27,268

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

William P. Montague

 

 

 

 

 

 

51,674

 

 

 

 

 

 

 

 

 

18,478

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jill D. Smith

 

 

 

 

 

 

43,719

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paul V. Campanelli

 

 

 

 

 

 

269,777

 

 

 

 

 

 

 

 

 

319,164

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blaise Coleman

 

 

 

 

 

 

21,465

 

 

 

 

 

 

 

 

 

34,631

 

 

 

 

 

 

 

 

 

2,680

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Terrance J. Coughlin

 

 

 

 

 

 

156,103

 

 

 

 

 

 

 

 

 

49,577

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Matthew J. Maletta

 

 

 

 

 

 

16,084

 

 

 

 

 

 

 

 

 

46,391

 

 

 

 

 

 

 

 

 

903

 

 

 

 

 

 

 

 

 

7,222

 

 

 

 

 

Tony Pera

 

 

 

 

 

 

24,581

 

 

 

 

 

 

 

 

 

19,483

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

58


 (b)(a)

The ordinary share amounts for Mr. Kimmel isinclude 134,000 shares held in trusts for which he has shared voting power and shared disposition power. Excluding these amounts, the Chairman of the Board of Endo. owners listed above have sole voting power and sole disposition power with respect to their ordinary shares.

(2)

The business address for Mr. Kimmel is c/o Rothschild, Inc., 1251 Avenue of the Americas, New York, New York 10020. Mr. Kimmel’s beneficial ownership represents (i) options to purchase 8,094 shares of ordinary shares granted under the 2004 and 2007 Stock Incentive Plans which will be exercisable within the next 60 days, (ii) 73,362 directly owned ordinary shares or shares which he has the right to acquire within 60 days and (iii) 190,000 ordinary shares held in trusts for which Mr. Kimmel serves as trustee and as to which shares Mr. Kimmel holds either the sole or the shared power of disposition and power to vote. His beneficial ownership excludes 27,500 ordinary shares held in trust.

 (c)

Mr. Cooke is a director of Endo. Mr. Cooke’s beneficial ownership represents 17,290 directly owned ordinary shares.

(d)

Mr. Higgins is a director of Endo. Mr. Higgins beneficial ownership represents 34,623 directly owned ordinary shares.

(e)

Dr. Hutson is a director of Endo. Dr. Hutson’s beneficial ownership represents (i) options to purchase 13,185 ordinary shares granted under the 2007 Stock Incentive Plan which will be exercisable within the next 60 days and (ii) 36,577 directly owned ordinary shares or shares which she has the right to acquire within 60 days.

(f)

Mr. Hyatt is a director of Endo. The business address for Mr. Hyatt is c/o Irving Place Capital, 745 Fifth Avenue, 7th Floor, New York, New York 10151. Mr. Hyatt’s beneficial ownership represents (i) options to purchase 29,809 ordinary shares granted under the 2000 and 2007 Stock Incentive Plans which will be exercisable within the next 60 days, (ii) 250,297 directly owned ordinary shares and (iii) 10,375 ordinary shares held in trusts for which Mr. Hyatt serves as trustee and as to which shares Mr. Hyatt holds either the sole or the shared power of disposition or the power to vote. His beneficial ownership excludes 25,000 ordinary shares held in trust.

(g)

Mr. Montague is a director of Endo. Mr. Montague’s beneficial ownership represents options to purchase 18,478 ordinary shares granted under the 2007 Stock Incentive Plan which will be exercisable within the next 60 days and (ii) 39,228 directly owned ordinary shares of shares which he has the right to acquire within 60 days.

(h)

Ms. Smith is a director of Endo. Ms. Smith’s beneficial ownership represents 19,785 directly owned ordinary shares.

(i)

Mr. Spengler is a director of Endo. Mr. Spengler’s beneficial ownership represents (i) options to purchase 23,649 ordinary shares granted under the 2004 and 2007 Stock Incentive Plans which will be exercisable within the next 60 days and (ii) 48,835 directly owned ordinary shares or shares which he has the right to acquire within 60 days.

(j)

Mr. De Silva is a director of Endo and our President and Chief Executive Officer. Mr. De Silva’s beneficial ownership represents (i) options to purchase 208,853 ordinary shares granted under the 2010 and 2015 Stock Incentive Plans which will become exercisable in the next 60 days, (ii) 291,695 directly owned ordinary shares and (iii) 63,315 ordinary shares held in trusts. His beneficial ownership excludes (i) options to purchase 283,472 ordinary shares granted under the 2010 and 2015 Stock Incentive Plans which will not be exercisable within the next 60 days and (ii) 304,402 unvested, unearned performance share units.

(k)

Mr. Upadhyay is our Executive Vice President & Chief Financial Officer. Mr. Upadhyay’s beneficial ownership represents (i) options to purchase 17,571 ordinary shares granted under the 2010 Stock Incentive Plan and (ii) 18,543 directly owned ordinary shares. His beneficial ownership excludes (i) options to purchase 81,403 ordinary shares granted under the 2010 and 2015 Stock Incentive Plans which will not be exercisable within the next 60 days, (ii) 28,384 shares of unvested restricted stock units and (iii) 79,535 unvested, unearned performance share units.

(l)

Mr. Campanelli is our President, Par Pharmaceutical. Mr. Campanelli’s beneficial ownership represents 188,069 directly owned ordinary shares. His beneficial ownership excludes (i) options to purchase 96,795 ordinary shares granted under the 2015 Stock Incentive Plan which will not be exercisable within the next 60 days, (ii) 27,189 shares of unvested restricted stock units and (iii) 129,111 of unvested, unearned performance share units. The business address for Mr. Campanelli is c/o Par Pharmaceutical, 6 Ram Ridge Road, Chestnut Ridge, New York 10977.

(m)

Mr. Maletta is our Executive Vice President, Chief Legal Officer. Mr. Maletta’s beneficial ownership represents (i) options to purchase 3,351 ordinary shares granted under the 2010 Stock Incentive Plan which will be exercisable within the next 60 days, (ii) 1,000 directly owned ordinary shares and (iii) 903 restricted stock units which will vest within the next 60 days. His beneficial ownership excludes (i) options to purchase 46,586 ordinary shares granted under the 2010 and 2015 stock Incentive Plans which will not be exercisable within the next 60 days, (ii) 13,194 shares of unvested restricted stock units and (iii) 23,883 unvested, unearned performance share units.

(n)

Dr. Hall is our Executive Vice President, Chief Scientific Officer and Global Head of Research & Development and Quality. Dr. Hall’s beneficial ownership represents (i) options to purchase 2,706 ordinary shares granted under the 2010 Stock Incentive Plan which will be exercisable within the next 60 days and (ii) 4,826 directly owned ordinary shares. Her beneficial ownership excludes (i) options to purchase 30,598 ordinary shares granted under the 2010 and 2015 Stock Incentive Plans which will not be exercisable within the next 60 days, (ii) 11,155 shares of unvested restricted stock units and (iii) 27,071 unvested, unearned performance share units.

(o)(3)

The business address for this person is c/o Endo International plc, First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland.

 (p)(4)

The business address for this entityMr. Hyatt is 333 South Hope Street, Los Angeles, California 90071. This ownership information is based on a Schedule 13G/A filed with the SEC on April 8, 2016 byc/o Irving Place Capital, Research Global Investors.745 Fifth Avenue, 7th Floor, New York, New York 10151.

 (q)(5)

The business address for this entityDr. Mansukani is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. This ownership information is based on a Schedule 13G/A filed with the SEC on February 11, 2016 by The Vanguard Group.S.E. Third Avenue, For Lauderdale, Florida 33394.

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 (r)(6)

The business address for Mr. Sisitsky is c/o TPG Capital, 345 California Street, Suite 3300, San Francisco, California 94104.

(7)

The business address for this entity is 301 Commerce Street, Suite 3300, Fort Worth, Texas 76102. This ownership information is based on a Schedule 13F13D/A filed with the SEC on February 12,May 20, 2016 by TPG Group Holdings (SBS) Advisors, Inc.

 (s)

The business address for this entity is 245 Summer Street, Boston, Massachusetts 02210. This ownership information is based on a Schedule 13G filed with the SEC on February 12, 2016 by FMR LLC.

(t)(8)

The business address for this entity is 55 East 52nd Street, New York, New York 10055. BlackRock Inc. has sole power to (i) vote 20,585,713 ordinary shares and (ii) dispose 21,415,949 ordinary shares. This ownership information is based on a Schedule 13G/A filed with the SEC on January 26, 201630, 2018 by BlackRock Inc.

(9)

The business address for this entity is 767 Fifth Avenue, 44th Floor, New York, New York 10153. Glenview Capital Management, LLC has shared power to (i) vote 19,238,422 ordinary shares and (ii) dispose 19,238,422 ordinary shares. This ownership information is based on a Schedule 13G/A filed with the SEC on February 14, 2018 by Glenview Capital Management, LLC.

(10)

The business address for this entity is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. The Vanguard Group, Inc. has sole power to (i) vote 117,045 ordinary shares and (ii) dispose 16,895,806 ordinary shares, and shared power to (i) vote 25,600 ordinary shares and (ii) dispose 122,667 ordinary shares. This ownership information is based on a Schedule 13G/A filed with the SEC on February 8, 2018 by The Vanguard Group, Inc.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers, directors andgreater-than-ten-percent shareholders (collectively, Reporting Persons) to file an initial report of ownership (Form 3) and reports of changes of ownership (Forms 4 and 5) of Endo securities with the SEC and the NASDAQ.Nasdaq. These persons are also required to furnish the Company with copies of all Section 16(a) reports that they file with respect to Endo securities. Based solely upon a review of Section 16(a) reports furnished to the Company for the year ended December 31, 20152017 and written representations from certain Reporting Persons that no other reports were required, the Company believes that all the Reporting Persons complied with all applicable filing requirements for the year ended December 31, 2015.2017.

 

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No Dissenters’ Rights

The corporate action described in this Proxy Statement will not afford shareholders the opportunity to dissent from the actions described herein or to receive an agreed or judicially appraised value for their shares.

 

 

Other Matters

As of the date of this Proxy Statement, the Board of Directors of the Company knows of no other matters to be presented for shareholder action at the Annual Meeting. However, other matters may properly come before the Annual Meeting or any adjournment or postponement thereof. If any other matter is properly brought before the Annual Meeting for action by the shareholders, proxies in the enclosed form returned to the Company will be voted in accordance with the recommendation of the Board of Directors.

 

 

Annual Report/Form10-K

The Company will provide, without charge, to each person solicited by this Proxy Statement, at the written request of any such person, a copy of the 20152017 Annual Report and a copy of Endo International plc 20152017 Form10-K as filed with the SEC and any amendments thereto. Such written request should be directed to Endo International plc, First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland.

 

 

Shareholder Proposals for the 20172019 Annual General Meeting

The Company’s Articles of Association require that, for business to be properly brought before an Annual General Meeting, such shareholder must have given timely notice thereof, along with other specified material, in proper written form to the Company Secretary. To be timely, a shareholder’s notice to the Company Secretary must be received at the registered office of the Company not less than 60 days and not more than 90 days (or, in the event Proposal 5 is adopted, not less than 90 days and not more than 120 days) prior to the anniversary date of the immediately preceding Annual General Meeting. Accordingly, to make a proposal for consideration at our 20172019 Annual General Meeting that is “timely” within the meaning of the Company’s Articles of Association, a shareholder must make certain notice of such proposal is received by the Company Secretary no earlier than March 11, 20179, 2019 and no later than April 10, 2017 (or, in the event Proposal 5 is adopted, no earlier than February 9, 2017 and no later than March 11, 2017).8, 2019. In the event that the Annual General Meeting is called for a date that is prior to May 10, 20178, 2019 or after July 9, 2017,7, 2019, notice by the shareholder must be received at the registered office of the Company not later than the close of business on the 10th day following the day on which the 20172019 Annual General Meeting is publicly announced or notice of the 20172019 Annual General Meeting was mailed, whichever first occurs. Any shareholder who wishes to make a proposal should obtain a copy of the relevant section of the Articles of Association from the Company Secretary. Any proposal (other than a proposal pursuant to Rule14a-8) that is received after the times specified above for proposed items of business will be considered untimely under Rule14a-4(c) under the Exchange Act, and the persons named in the proxy for the meeting may exercise their discretionary voting power with respect to such proposal, including voting against such proposal.

In addition, the Company’s Articles of Association require that any shareholder who wishes to submit a nomination to the Board must deliver written notice of the nomination to the Company Secretary within the time period and comply with the information requirements specified in article 146.3147.3 of the Articles of Association (or, inrelating to shareholder nominations. In order to have the event Proposal 5 is adopted,nomination considered by the Board under article 147.3147.1(a) of the Articles of Association) relating toAssociation, the nominating shareholder nominations andmust follow the procedures set out in this Proxy Statement under the heading “Committees of the Board of Directors—Nominating & Governance Committee.” To be timely, a shareholder’s notice to the Company Secretary must be received at the registered office of the Company (a) in the case of the

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Annual General Meeting not less than 60 days nor more than 90 days (or, in the event Proposal 5 is adopted, not less than 90 days nor more than 120 days) prior to the anniversary date of the immediately preceding Annual General Meeting; provided that in the event that the Annual General Meeting is called for a date that is prior to May 10, 20178, 2019 or after July 9, 2017,7, 2019, notice by the shareholder must be received at the registered office of the Company not later than the close of business on the 10th day following the day on which the 20172019 Annual General Meeting is publicly announced or notice of the 20172019 Annual General Meeting was mailed, whichever first occurs and (b) in the case of a special meeting of shareholders called for the purpose of electing directors, not later than the close of business on the 10th day following the day on which notice of the date of the special meeting was mailed or publicly announced, whichever first occurs. Accordingly, to submit a nomination to the Board for consideration at our 20172019 Annual Meeting that is “timely” within the meaning of the Company’s Articles of Association, a shareholder must make certain notice of such nomination is received by the Company Secretary no earlier than March 11, 20179, 2019 and no later than April 10, 2017 (or, in the event Proposal 5 is adopted, no earlier than February 9, 2017 and no later than March 11, 2017).8, 2019. Any notice of nomination that is received after the dates specified above will be considered untimely. If the Company does not receive such notice of nomination between such dates, the notice will be considered untimely. Any shareholder who wishes to make a nomination should obtain a copy of the relevant section of the Articles of Association from the Company Secretary.

Proposals of shareholders intended to be included in the Company’s Proxy Statement pursuant to Rule14a-8 under the Exchange Act at the 20172019 Annual Meeting must be received by us at our registered office addressed to the Company Secretary no later than December 29, 2016.28, 2018.

All proposals should be addressed to the Company Secretary, Endo International plc, First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland.

 

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LOGO      

Endo International plc

 

First Floor

 

Minerva House

 

Simmonscourt Road

 

Ballsbridge

 

Dublin 4, Ireland

 

endo.com

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

FOR THE SHAREHOLDER ANNUAL GENERAL MEETING TO BE HELD ON JUNE 9, 20167, 2018

The Proxy Statement for the Annual General Meeting, 20152017 Annual Report to Shareholders and Form10-K are available atwww.endo.com/investors/financial-reportsfinancial-reports..

SIGNATURE

Pursuant to the requirement of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto authorized.

By orderOrder of the Board of Directors,

 

LOGO

Orla Dunlea

Company Secretary

Dublin, Ireland

April 28, 201627, 2018

 

Endo International plc,

Registered Office: First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland

Registered in Ireland: numberNumber – 534814

Directors: Roger Hartley Kimmel (USA), Rajiv Kanishka Liyanaarchchie De SilvaPaul Victor Campanelli (USA), Shane Martin Cooke (Ireland), Arthur Joseph Higgins (USA),

Nancy June Hutson (USA), Michael Hyatt (USA), Sharad Sunder Mansukani (USA),

William Patrick Montague (USA), Todd Benjamin Sisitsky (USA), Jill Deborah Smith (USA), William Frederick Spengler (USA).


ANNEX 1—COMPANIES ACT AND ADVANCE NOTICEAnnex 1

AMENDMENTS TO MEMORANDUM AND ARTICLES OF

ASSOCIATION

COMPANIESACTS, 1963 TO 2013ACT, 2014

A PUBLIC COMPANY LIMITED BY SHARES

MEMORANDUM

AND

ARTICLES OF ASSOCIATION

OF

ENDO INTERNATIONAL PUBLIC LIMITED COMPANYPLC

AMENDED AND RESTATED 2015 STOCK INCENTIVE PLAN

 

1.

Establishment and Purpose.

Incorporated 31 October 2013

(The purpose of the Endo International plc Amended and Restated 2015 Stock Incentive Plan, as amended and restated [•], 2018 (the “Plan”), is to promote the interests of the Company and the shareholders of the Company by Special Resolution on             2016)providing directors, officers, employees and consultants of the Company with appropriate incentives and rewards to encourage them to enter into and continue in the employ or service of the Company, to acquire a proprietary interest in the long-term success of the Company and to reward the performance of individuals in fulfilling long-term corporate objectives. Section references are to sections of the Plan unless otherwise stated.

 

2.

Administration of the Plan.

 

(a)

The Plan shall be administered by a Committee appointed by the Board of Directors. The Committee shall have the authority, in its sole discretion, subject to and not inconsistent with the express terms and provisions of the Plan, to administer the Plan and to exercise all the powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan, including, without limitation, the authority to grant Awards; to determine the persons to whom and the time or times at which Awards shall be granted; to determine the type and number of Awards to be granted (including whether an Option granted is an Incentive Stock Option or a Nonqualified Stock Option); to determine the number of shares of Company Stock to which an Award may relate and the terms, conditions, restrictions and performance criteria, if any, relating to any Award; to determine whether, to what extent, and under what circumstances an Award may be settled, cancelled, forfeited, exchanged or surrendered; to make adjustments in the performance goals that may be required for any Award in recognition of extraordinary events affecting the Company or the financial statements of the Company or in response to changes in applicable laws, regulations, or accounting principles (in each case, to the extent not inconsistent with Section 162(m) of the Code with respect to Awards intended to qualify as Grandfathered Awards); to construe and interpret the Plan and any Award; to prescribe, amend and rescind rules and regulations relating to the Plan; to determine the terms and provisions of Agreements; and to make all other determinations deemed necessary or advisable for the administration of the Plan.

A&L Goodbody

(b)

The Committee may, in its absolute discretion, without amendment to the Plan, (i) accelerate the date on which any Option granted under the Plan becomes exercisable, waive or amend the operation of Plan provisions respecting exercise after termination of service or otherwise adjust any of the terms of such Option, and (ii) accelerate the vesting date, or waive any condition imposed hereunder, with respect to any share of Restricted Stock, or other Award or otherwise adjust any of the terms applicable to any such Award. Notwithstanding the foregoing, and subject to adjustments for changes in capitalization pursuant to Section 4(d), neither the Board of Directors, the Committee nor their respective delegates shall have the authority, without first obtaining the approval of the Company’s shareholders, to(x) re-price (or cancel and/orre-grant) any Option, Stock Appreciation Right or, if applicable, other Award at a lower exercise, base or purchase price, (y) cancel underwater Options or Stock Appreciation Rights in exchange for cash or (z) grant an Option in consideration for, or conditioned on, the delivery of Company Stock to the Company in payment of the exercise price and/or the withholding taxes of an Award. For purposes of this Section 2(b), Options and Stock Appreciation Rights will be deemed to be “underwater” at any time when the Fair Market Value of the Company Stock is less than the exercise price of the Option or Stock Appreciation Right.

Solicitors

(c)

Notwithstanding anything set forth in the Plan to the contrary, any dividend or dividend equivalent Award issued under the Plan shall be subject to the same restrictions, conditions and risks of forfeiture as apply to the underlying Award.

(d)

Except with respect to Awards intended to qualify as Grandfathered Awards and except as required by Rule16b-3 with respect to grants of Awards to individuals who are subject to Section 16 of the Exchange Act (or as otherwise required for compliance with Rule16b-3 or other applicable law), the Committee may delegate all or any part of its authority under the Plan to an employee, employees or committee of employees.

(e)

All decisions, determinations and interpretations of the Committee or the Board of Directors (and their delegates) shall be final and binding on all persons with any interest in an Award, including the Company and the Participant (or any person claiming any rights under the Plan from or through any Participant). No member of the Committee or the Board of Directors (nor their delegates) shall be liable for any action taken or determination made in good faith with respect to the Plan or any Award.

(f)

Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in other countries in which Participants are located, or in order to comply with the requirements of anynon-U.S. stock exchange, the

 

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‘X’        

COMPANIESACTS, 1963 to 2013ACT, 2014

A PUBLIC COMPANY LIMITED BY SHARES

MEMORANDUM OF ASSOCIATION

OF

ENDO INTERNATIONAL PUBLIC LIMITED COMPANY

(as amended by Special Resolution on 2016)

1.The name

Committee, in its sole discretion, shall have the power and authority to: (i) determine which Subsidiaries shall be covered by the Plan; (ii) determine which Participants outside the United States are eligible to participate in the Plan; (iii) modify the terms and conditions of any Award granted to Participants outside the Company is: Endo International public limited company.

2.The CompanyUnited States to comply with applicablenon-U.S. laws or listing requirements of any suchnon-U.S. stock exchange; (iv) establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable (any such subplans and/or modifications shall be attached to the Plan as appendices); provided, however, that no such subplans and/or modifications shall increase the share limitations contained in Section 4; and (v) take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals or listing requirements of any suchnon-U.S. stock exchange. Notwithstanding the foregoing, the Committee may not take any actions hereunder, and no Awards shall be a public limited company. forgranted, that would violate the purposes of Part 17 of the CompaniesExchange Act 2014.or any other securities law or governing statute or any other applicable law.

 

3.The objects for which the Company is established are:

Definitions.

 

 3.1.(a)To carry on all or any of

“Agreement” shall mean the businesses of manufacturers, buyers, sellers, and distributing agents of and dealers in all kinds of patent, pharmaceutical, medicinal, and medicated preparations, patent medicines, drugs, herbs, and of and in pharmaceutical, medicinal, proprietary and industrial preparations, compounds, and articles of all kinds; and to manufacture, make up, prepare, buy, sell, and deal in all articles, substances, and things commonly or conveniently used in or for making up, preparing, or packing any of the products in whichwritten agreement between the Company is authorised to deal, or which may be required by customers of or persons having dealings with the Company.and a Participant evidencing an Award.

 

 3.2.(b)To invest

“Annual Incentive Award” shall mean an Award described in pharmaceutical and related assets, including, amongst other items, investments in pharmaceutical companies, products, businesses, divisions, technologies, devices, sales force and other marketing capabilities, development projects and related activities, licences, intellectual and similar property rights, premises and equipment, royalty rights and all other assets needed to operateSection 6(g) that is based upon a pharmaceuticals business.period of one year or less.

 

 3.3.(c)To establish, maintain and operate laboratories for

“Award” shall mean any Option, Restricted Stock, Stock Bonus award, Stock Appreciation Right, Performance Award, Other Stock-Based Award or Other Cash-Based Award granted pursuant to the purposeterms of carrying on chemical, physical and other research in medicine, chemistry, industry or other unrelated or related fields.the Plan.

 

 3.4.(d)To invest (including long-term investments in, and acquisitions

“Board of Directors” shall mean the Board of Directors of the shares of pharmaceutical companies) any monies of the Company in such investments and in such manner as may from time to time be determined, and to hold, sell or deal with such investments and generally to purchase, take on lease or in exchange or otherwise acquire any real and personal property and rights or privileges.Company.

 

 3.5.To develop and turn to account any land acquired by the Company or in which it is interested and in particular by laying out and preparing the same for building purposes, constructing, altering, pulling down, decorating, maintaining, fitting up and improving buildings and conveniences, and by planting, paving, draining, farming, cultivating, letting on building lease or building agreement and by advancing money to and entering into contracts and arrangements of all kinds with builders, tenants and others.

3.6.(e)

To acquire and hold shares and stocks“Cause” shall mean a termination of any class or description, debentures, debenture stock, bonds, bills, mortgages, obligations, investments and securities of all descriptions and of any kind issued or guaranteed by any company, corporation or undertaking of whatever nature and wheresoever constituted or carrying on business or issued or guaranteed by any government, state, dominion, colony, sovereign ruler, commissioners, trust, public; municipal, local or other authority or body of whatsoever

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nature and wheresoever situated and investments, securities and property of all descriptions and of any kind, including real and chattel real estates, mortgages, reversions, assurance policies, contingencies and choses in action.

3.7.To remunerate by cash payments or allotment of shares or securities of the Company credited as fully paid up or otherwise any person or company for services rendered or to be rendereda Participant’s service to the Company or any parent or subsidiary body corporate whether in the conduct or management of its business, orSubsidiaries due to (i) the continued failure by such Participant to use good faith efforts in placing or assisting to place or guaranteeing the placing of any of the shares of the Company’s capital, or any debentures or other securities of the Company or in or about the formation or promotion of the Company.

3.8.To purchase for investment only property of any tenure and any interest therein, and to make advances upon the security of land or other similar property or any interest therein.

3.9.To acquire by purchase, exchange, lease, fee farm grant or otherwise, either for an estate in fee simple or for any less estate or other estate or interest, whether immediate or reversionary and whether vested or contingent, any lands, tenements or hereditaments of any tenure, whether subject or not to any charges or encumbrances, and to hold, farm, work and manage and to let, sublet, mortgage or charge land and buildings of any kind, reversions, interests, annuities, life policies, and any other property real or personal, movable or immovable, either absolutely or conditionally, and either subject or not to any mortgage, charge, ground rent or other rents or encumbrances.

3.10.To erect or secure the erection of buildings of any kind with a view of occupying or letting them and to enter into any contracts or leases and to grant any licences necessary to effect the same.

3.11.To maintain and improve any lands, tenements or hereditaments acquired by the Company or in which the Company is interested, in particular by decorating, maintaining, furnishing, fitting up and improving houses, shops, flats, maisonettes and other buildings and to enter into contracts and arrangements of all kinds with tenants and others.

3.12.To sell, exchange, mortgage (with or without power of sale), assign, turn to account or otherwise dispose of and generally deal with the whole or any part of the property, shares, stocks, securities, estates, rights or undertakings of the Company, real, chattels real or personal, movable or immovable, either in whole or in part, upon whatever terms and whatever consideration the Company shall think fit.

3.13.To take part in the management, supervision, or control of the business or operations of any company or undertaking, and for that purpose to appoint and remunerate any directors, accountants, or other experts or agents to act as consultants, supervisors and agents of other companies or undertakings and to provide managerial, advisory, technical, design, purchasing and selling services.

3.14.To make, draw, accept, endorse, negotiate, issue, execute, discount and otherwise deal with bills of exchange, promissory notes, letters of credit, circular notes, and other negotiable or transferable instruments.

3.15.To redeem, purchase, or otherwise acquire in any manner permitted by law and on such terms and in such manner as the Company may think fit any shares in the Company’s capital.

3.16.

To guarantee, support or secure whether by personal covenant or by mortgaging or charging all or any part of the undertaking, property and assets (present and future) and uncalled capital of the Company or by both such methods the performance of the obligations of, and the repayment or payment of the principal amounts of and the premiums, interest and dividends on any security of any person, firm or company including (without prejudice to the generality of the foregoing) any company which is for

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the time being the Company’s holding company(as defined by Section 8 of the Companies Act 2014)or subsidiary(as defined bysection 155Section 7 of the Companies Act19632014) or another subsidiary as defined by the said section of the Company’s holding company(as defined by Section 8 of the Companies Act 2014)or otherwise associatedsuch Participant’s duties with the Company in business notwithstanding the fact that the Company may not receive any consideration, advantage or benefit, direct or indirect from entering into such guarantee or other arrangement or transaction contemplated herein.

3.17.To lend the funds of the Company with or without security and at interest or free of interest and on such terms and conditions as the directors shall from time to time determine.

3.18.To raise or borrow or secure the payment of money in such manner and on such terms as the directors may deem expedient whether or not by the issue of bonds, debentures or debenture stock, perpetual or redeemable, or by mortgage, charge, lien or pledge upon the whole or any part of the undertaking, property, assets and rights of the Company, present or future, including its uncalled capital and generally in any other manner as the directors shall from time to time determine and to enter into or issue interest and currency hedging and swap agreements, forward rate agreements, interest and currency futures or options and other forms of financial instruments, and to purchase, redeem or pay off any of the foregoing and to guarantee the liabilities of the Company or any other person, andof its Subsidiaries (other than any debentures, debenture stocksuch failure resulting from Disability, illness or other securities may be issued at a discount, premium or otherwise, and with any special privileges as to redemption, surrender, transfer, drawings, allotmentsallowable leave of shares; attending and voting at general meetings ofabsence); (ii) the Company, appointment of directors and otherwise.

3.19.To accumulate capital for any of the purposes of the Company, and to appropriate any of the Company’s assets to specific purposes, either conditionally or unconditionally, and to admit any class or section of those who have any dealings with the Company to any share in the profits thereof or in the profits of any particular branch of the Company’s business or to any other special rights, privileges, advantages or benefits.

3.20.To reduce the share capital of the Company in any manner permitted by law.

3.21.To make gifts or grant bonuses to officers or other persons who are or have been in the employment of the Company and to allow any such persons to have the use and enjoymentcriminal felony indictment (ornon-U.S. equivalent) of such property, chattelsParticipant by a court of competent jurisdiction; (iii) the engagement by such Participant in misconduct that has caused, or other assets belongingis reasonably likely to cause, material harm (financial or otherwise) to the Company upon such terms asor any of its Subsidiaries including, without limitation, (A) the Company shall think fit.

3.22.To establish and maintainunauthorized disclosure of material secret or procure the establishment and maintenance of any pension or superannuation fund (whether contributory or otherwise) for the benefit of and to give or procure the giving of donations, gratuities, pensions, annuities, allowances, emoluments or charitable aid to any persons who are or were at any time in the employment or serviceconfidential information of the Company or any of its predecessors in business, or of any company which is a subsidiarySubsidiaries, (B) the potential debarment of the Company or who may beany of its Subsidiaries by the U.S. Food and Drug Administration or have been directorsany successor agency (the “FDA”) or officersanynon-U.S. equivalent, or (C) the possibility that the registration of the Company or any of its Subsidiaries with the U.S. Drug Enforcement Administration or any successor agency (the “DEA”) could be revoked or an application with the DEA could be denied; (iv) the potential debarment of such Participant by the FDA; (v) the material breach by such Participant of any agreement between such other company as aforesaid, or any persons in whose welfareParticipant, on the one hand, and the Company, on the other hand; or any(vi) such other company as aforesaid may be interested and the wives, husbands, widows, widowers, families, relativesParticipant makes, or dependants of any such persons andis found to make payments towards insurance and assurance and to form and contribute to provident and benefit funds for the benefit of such persons and to remunerate any person, firm or company rendering serviceshave made, a certification relating to the Company, whether by cash payment, gratuities, pensions, annuities, allowances, emoluments or byCompany’s financial statements and public filings that is known to such Participant to be false. Notwithstanding the allotment of shares or securities ofabove, with respect to any Participant who is a party to an employment agreement with the Company, credited as paid upCause shall have the meaning set forth in full or in part or otherwise.such employment agreement.

 

 3.23.To employ experts to investigate and examine into the conditions, prospects, value, character and circumstances of any business concerns, undertakings, assets, property or rights.

3.24.To insure the life of any person who may, in the opinion of the Company, be of value to the Company, as having or holding for the Company interests, goodwill, or influence or otherwise and to pay the premiums on such insurance.

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3.25.To distribute either upon a distribution of assets or division of profits among the Members of the Company in kind any property of the Company, and in particular any shares, debentures or securities of other companies belonging to the Company or of which the Company may have the power of disposing.

3.26.To give, whether directly or indirectly, and whether by means of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares in the Company, or, where the Company is a subsidiary company, in its holding company.

3.27.To do and carry out all or any of the foregoing objects in any part of the world and either as principals, agents, contractors, trustees or otherwise, and either by or through agents, trustees or otherwise and either alone or in partnership or in conjunction with any other company, firm or person, provided that nothing herein contained shall empower the Company to carry on the businesses of insurance.

3.28.Apply for, purchase or otherwise acquire any patents, brevets d’invention, licences, trademarks, industrial designs, know-how, concessions and other forms of intellectual property rights and the like conferring any exclusive or non-exclusive or limited or contingent rights to use, or any secret or other information as to any invention or process of the Company, or the acquisition of which may seem calculated directly or indirectly to benefit the Company, and to use, exercise, develop, or grant licences in respect of, or otherwise turn to account the property, rights or information so acquired.

3.29.Enter into partnership or into any arrangement for sharing profits, union of interests, co-operation, joint venture, reciprocal concession or otherwise with any person or company carrying on or engaged in or about to carry on or engage in any business or transaction which the Company is authorised to carry on or engage in or any business or transaction capable of being conducted so as directly or indirectly to benefit the Company.

3.30.Acquire and undertake the whole or any part of the undertaking, business, property and liabilities of any person or company carrying on any business which the Company is authorised to carry on or which is capable of being conducted so as to benefit the Company directly or indirectly or which is possessed of assets suitable for the purposes of the Company.

3.31.Adopt such means of making known the Company and its products and services as may seem expedient.

3.32.Acquire and carry on any business carried on by a subsidiary or a holding company of the Company or another subsidiary of a holding company of the Company.

3.33.Promote any company or companies for the purpose of acquiring all or any of the property and liabilities of this Company or for any other purpose which may seem directly or indirectly calculated to benefit this Company.

3.34.Amalgamate with, merge with or otherwise become part of or associated with any other company or association in any manner permitted by law.

3.35.To do and carry out all such other things, except the issuing of policies of insurance, as may be deemed by the Company capable of being conveniently carried on in connection with the above objects or any of them or calculated to enhance the value of or render profitable any of the Company’s properties or rights.

And it is hereby declared that the word “company” in this clause, except where used in reference to this Company, shall be deemed to include any person, partnership or other body of persons whether incorporated or not incorporated and whether domiciled in the State or elsewhere and that the objects of the Company as specified in

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each of the foregoing paragraphs of this clause shall be separate and distinct objects and shall not be in anyway limited or restricted by reference to or inference from the terms of any other paragraph or the name of the Company.

4.The liability of each Member is limited to the amount from time to time unpaid on such Member’s Shares.

5.The authorised share capital of the Company is €40,000 and US$100,000 divided into 4,000,000 euro deferred shares of €0.01 each and 1,000,000,000 ordinary shares of US$0.0001 each.

6.The shares forming the capital, increased or reduced, may be increased or reduced and be divided into such classes and issued with any special rights, privileges and conditions or with such qualifications as regards preference, dividend, capital, voting or other special incidents, and be held upon such terms as may be attached thereto or as may from time to time be provided by the original or any substituted or amended Articles of Association and regulations of the Company for the time being, but so that where shares are issued with any preferential or special rights attached thereto such rights shall not be alterable otherwise than pursuant to the provisions of the Company’s Articles of Association for the time being.

7.Capitalised terms that are not defined in this Memorandum of association bear the same meaning as those given in the Articles of Association of the Company.

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We, the corporate body whose name and address is subscribed, wish to be formed into a company in pursuance of this memorandum of association, and we agree to take the number of shares in the capital of the Company set opposite our respective names.

      Name, Address and Description of                                                                              Number of shares

      the Subscriber                                                                                                               taken by the Subscriber

            For and on behalf of

            Goodbody Subscriber One Limited                        One Ordinary Share of

            IFSC, North Wall Quay, Dublin 1                                    EUR€1.00 each

Limited Liability Company

            For and on behalf of

            Goodbody Subscriber Two Limited                        One Ordinary Share of

            IFSC, North Wall Quay, Dublin 1                                    EUR€1.00 each

Limited Liability Company

Total Number of Shares Taken: 2

Dated

Witness to the above signature:                                                                                        

Name:                
Address:

    Occupation:‘X’

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COMPANIESACTS, 1963 TO 2013ACT, 2014

A PUBLIC COMPANY LIMITED BY SHARES

ARTICLES OF ASSOCIATION

OF

ENDO INTERNATIONAL PUBLIC LIMITED COMPANY

(as adopted by Special Resolution on 2016)

PRELIMINARY

1.The regulations contained in Table A in the First Schedule to the 1963 Act shall not apply to the Company.Sections 43(2), 43(3), 65 (2)-(7), 77 - 80, 81, 94(1), 95(1), 96, 124, 125, 126, 144(3), 144(4), 148(2), 158-165, 180(5), 181(1), 181(6), 182(2), 182(5), 183(3), 186 (c), 187, 188, 218 (3)-(5), 229, 230, 338(5), 338(6), 618(1)(b), 620(8) 1090, 1092, and 1113 of the Act shall not apply to the Company. The provisions of the Act which are stated therein to apply to a public limited company, save to the extent that its constitution is permitted to provide or state otherwise, will apply to the Company subject to the alterations contained in these Articles, and will, so far as not inconsistent with these Articles bind the Company and its Members.

2.

2.1.In these Articles:

“1963 Act”means the Companies Act 1963.
“1983 Act”means the Companies (Amendment) Act 1983.
1990Act”means the Companies Act1990.2014.
“Address”includes, without limitation, any number or address used for the purposes of communication by way of electronic mail or other electronic communication.
“Adoption Date”means thedate of adoption of these Articles.25 February 2014.
“Articles”or “Articles of Association”means these articles of association of the Company, as amended from time to time by Special Resolution.
“Assistant Secretary”means any person appointed by the Secretary from time to time to assist the Secretary.
“Auditors”means the persons for the time being performing the duties of auditors of the Company.
“Board”means the board of Directors for the time being of the Company.
“CA1990 Regs”The Companies Act 1990 (Uncertificated Securities) Regulations 1996 (S.I. No. 68 of 1996) as may be amended from time to time.
ChairmanChairpersonmeans thechairmanchairperson of the Board from time to time and/orchairmanchairperson of a general meeting of the Company as the context may require.
“clear days”means, in relation to a period of notice, that period excluding the day when the notice is given or deemed to be given and the day for which it is given or on which it is to take effect.

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“Companies Acts”means the Companies Acts 1963-2013.
“Company”means the above-named company.
“Court”means the Irish High Court.
“Directors”means the directors for the time being of the Company.
“dividend”includes interim dividends and bonus dividends.
“electronic communication”shall have the meaning given to those words in the Electronic Commerce Act 2000.
“electronic signature”shall have the meaning given to those words in the Electronic Commerce Act 2000.
“Exchange”means any securities exchange or other system on which the Shares of the Company may be listed or otherwise authorised for trading from time to time.
“Exchange Act”means the Securities Exchange Act of 1934 of the United States of America.
“Member”means a person who has agreed to become a Member of the Company and whose name is entered in the Register of Members as a registered holder of Shares.
“Member Associated Person”means (in connection to a Member) (A) any person controlling, directly or indirectly, or acting as a “group” (as such term is used in Rule 13d-5(b) under the Exchange Act) with, such Member, (B) any beneficial owner of shares of the Company owned of record or beneficially by such Member and (C) any person controlling, controlled by or under common control with such Member director by whatever name called.
“Memorandum”means the memorandum of association of the Company as amended from time to time by Special Resolution.
“month”means a calendar month.
“Ordinary Resolution”means an ordinary resolution of the Company’s Members within the meaning of section141191 of the 1963 Act.
“paid-up”means paid-up in accordance with the1983Act as to the nominal value and any premium payable in respect of the issue of any Shares and includes credited as paid-up.
“Redeemable Shares”means redeemable shares in accordance withsection 206 ofthe1990 Act.
“Register of Members”or “Register”means the register of Members of the Company maintained by or on behalf of the Company, in accordance with theCompanies ActsAct and includes (except where otherwise stated) any duplicate Register of Members.
“registered office”means the registered office for the time being of the Company.
“Seal”means the seal of the Company, if any, and includes every duplicate seal.

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“Secretary”means the person appointed by the Board to perform any or all of the duties of secretary of the Company and includes an Assistant Secretary and any person appointed by the Board to perform the duties of secretary of the Company.
“Share”and “Shares”means a share or shares in the capital of the Company.
“Special Resolution”means a special resolution of the Company’s Members within the meaning of section141191 of the 1963 Act.

2.2.In these Articles:

2.2.1.words importing the singular number include the plural number and vice-versa;

2.2.2.words importing the feminine gender include the masculine gender;

2.2.3.words importing persons include any company, partnership or other body of persons, whether corporate or not, any trust and any government, governmental body or agency or public authority, whether of Ireland or elsewhere;

2.2.4.expressions referring to “written” and “in writing” shall be construed, unless the contrary intention appears, as including references to printing, lithography, photography and any other modes of representing or reproducing words in a visible form except as provided in these Articles and/or where it constitutes writing in electronic form sent to the Company, and the Company has agreed to its receipt in written form;

2.2.5.expressions referring to execution of any document shall include any mode of execution whether under seal or under hand or any mode of electronic signature as shall be approved by the Directors;

2.2.6.expressions referring to receipt of any electronic communications shall, unless the contrary intention appears, be limited to receipt in such manner as the Company has approved;

2.2.7.references to a company include any body corporate or other legal entity, whether incorporated or established in Ireland or elsewhere;

2.2.8.references to provisions of any law or regulation shall be construed as references to those provisions as amended, modified, re-enacted or replaced from time to time;

2.2.9.any phrase introduced by the terms “including”, “include”, “in particular” or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms;

2.2.10.reference to “officer” or “officers” in these Articles means any executive that has been designated by the Company as an “officer” and, for the avoidance of doubt, shall not have the meaning given to such term in the1963Act and any such officers shall not constitute officers of the Company within the meaning of section 2(1) of the1963 Act;

2.2.11.headings are inserted for reference only and shall be ignored in construing these Articles; and

2.2.12.references to US$, USD, $ or dollars shall mean United States dollars, the lawful currency of the United States of America and references to €, euro, or EUR shall mean the euro, the lawful currency of Ireland.

REGISTERED OFFICE

3.The registered office shall be at such place in Ireland as the Board from time to time shall decide.

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SHARE CAPITAL; ISSUE OF SHARES

4.The authorised share capital of the Company is €40,000 and US$100,000 divided into 4,000,000 euro deferred shares of €0.01 each and 1,000,000,000 ordinary shares of US$0.0001 each.

5.Subject to the provisions of these Articles relating to new Shares, the Shares shall be at the disposal of the Directors, and they may (subject to the provisions of theCompanies ActsAct) allot, grant options over or otherwise dispose of them to such persons, on such terms and conditions and at such times as they may consider to be in the best interests of the Company and its Members, but so that no Share shall be issued at a discount save in accordance with sections2671(54) and281026 of the 1983 Act, and so that, in the case of Shares offered to the public for subscription, the amount payable on application on each Share shall not be less than one-quarter of the nominal amount of the Share and the whole of any premium thereon. To the extent permitted by the Act, shares may also be allotted by a committee of the Directors or by any other person where such committee or person is so authorised by the Directors.

6.Subject to any requirement to obtain the approval of Members under any laws, regulations or the rules of any Exchange, the Board is authorised, from time to time, in its discretion, to grant such persons, for such periods and upon such terms as the Board deems advisable, options to purchase or subscribe for any number of Shares of any class or classes or of any series of any class as the Board may deem advisable, and to cause warrants or other appropriate instruments evidencing such options to be issued.

7.

7.1.The Directors are, for the purposes of section201021 of the 1983 Act, generally and unconditionally authorised to exercise all powers of the Company to allot and issue relevant securities (as defined by the said section201021) up to the amount of Company’s authorisedbut unissuedshare capital as at the date of adoption of these Articles and to allot and issue any Shares purchased or redeemed by or on behalf of the Company pursuant to the provisions ofPart XI of the 1990 Act and held as treasury shares and this authority shall expire five years from thedate of adoption of these ArticlesAdoption Date.

7.2.The Directors are hereby empowered pursuant to sections231022 and241023(13) of the 1983 Act to allot equity securities within the meaning of the said section231023 for cash pursuant to the authority conferred by Article 7.1 as if section23(1)1022 of the said 1983 Act did not apply to any such allotment. The Company may before the expiry of such authority make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Board may allot equity securities in pursuance of such an offer or agreement as if the power conferred by Article 7.1 had not expired.

7.3.The Company may issueshare warrants to bearer pursuant topermissible letters of allotment (as defined by section881019 of the1963Act) to the extent permitted by the Act.

8.Without prejudice to any special rights previously conferred on the holders of any existing Shares or class of Shares, any Share in the Company may be issued with such preferred or deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise, as the Company may from time to time by Ordinary Resolution determine.

9.The Company may pay commission to any person in consideration of any person subscribing or agreeing to subscribe, whether absolutely or conditionally, for the Shares in the Company or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any Shares in the Company on such terms and, subject to the provisions of theCompanies ActsAct and to such conditions as the Board may determine, including, without limitation, by paying cash or allotting and issuing fully or partly paid Shares or any combination of the two. The Company may also on any issue of Shares pay such brokerage as may be lawful.

ORDINARY SHARES

10.The holder of an ordinary share shall be:

10.1.entitled to dividends on apro ratabasis in accordance with the relevant provisions of these Articles;

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10.2.entitled to participatepro rata in the distribution of the total assets of the Company in the event of the Company’s winding up; and

10.3.entitled, subject to the right of the Company to set record dates for the purpose of determining the identity of Members entitled to notice of and/or vote at a general meeting, to attend general meetings of the Company and shall be entitled to one vote for each Ordinary Share registered in his or her name in the Register of Members, in accordance with the relevant provisions of these Articles.

11.An ordinary share shall be deemed to be a Redeemable Share on, and from the time of, the existence or creation of an agreement, transaction or trade(“arrangement”)between the Company (including any agent or broker acting on behalf of the Company) and any third party pursuant to which the Company acquires or will acquire ordinary shares, or an interest in ordinary shares, from the relevant third party. In these circumstances, the acquisition of such shares by the Company, save where acquired for nil consideration in accordance with the Act, shall constitute the redemption of a Redeemable Share in accordance withPart XI ofthe1990 Act unless the Board resolves, prior to the existence or creation of any relevant arrangement, that the arrangement concerned is to be treated as a purchase of shares pursuant to Article 31.3, in which case the arrangement shall be so executed. No resolution, whether special or otherwise shall be required to be passed to deem any Share a Redeemable Share.

12.All ordinary shares shall rankpari passu with each other in all respects.

EURO DEFERRED SHARES

13.The holders of the euro deferred shares shall not be entitled to receive any dividend or distribution and shall not be entitled to receive notice of, nor to attend, speak or vote at any general meeting of the Company. On a return of assets, whether on liquidation or otherwise, the euro deferred shares shall entitle the holder thereof only to the repayment of the amounts paid up on such shares after repayment of the capital paid up on the ordinary shares plus the payment of $5,000,000 on each of the ordinary shares and the holders of the euro deferred shares (as such) shall not be entitled to any further participation in the assets or profits of the Company.

14.The Special Resolution adopting these Articles passed on the Adoption Date shall be deemed to confer irrevocable authority on the Company at any time after the Adoption Date:

14.1.to acquire all or any of the fully paid euro deferred shares otherwise than for valuable consideration in accordance with section41(2)102 of the 1983 Act and without obtaining the sanction of the holders thereof;

14.2.to appoint any person to execute on behalf of the holders of the euro deferred shares remaining in issue (if any) a transfer thereof and/or an agreement to transfer the same otherwise than for valuable consideration to the Company or to such other person as the Company may nominate;

14.3.to cancel any acquired euro deferred shares; and

14.4.pending such acquisition and/or transfer and/or cancellation to retain the certificate (if any) for such euro deferred shares.

15.In accordance with section431040(3) of the 1983 Act the Company shall, not later than three (3) years after any acquisition by it of any euro deferred shares as aforesaid, cancel such shares (except those which, or any interest of the Company in which, it shall have previously disposed of) and reduce the amount of the share capital by the nominal value of the shares so cancelled and the Board may take such steps as are requisite to enable the Company to carry out its obligations under that subsection without complying with sections7284 and7385 of the 1963 Act including passing resolutions in accordance with section431040(5) of the 1983 Act.

16.(f)

Neither the acquisition by the Company otherwise than for valuable consideration of all or any of the euro deferred shares nor the redemption thereof nor the cancellation thereof by the CompanyA “Change in accordance

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with this Article shall constitute a variation or abrogation of the rights or privileges attached to the euro deferred shares, and accordingly the euro deferred shares or any of them may be so acquired, redeemed and cancelled without any such consent or sanction on the part of the holders thereof. The rights conferred upon the holders of the euro deferred shares shall not be deemed to be varied or abrogated by the creation of further shares ranking in priority thereto or pari passu therewith.

ISSUE OF WARRANTS

17.TheTo the extent permitted by the Act, the Board may issue warrants to subscribe for any class of Shares or other securities of the Company on such terms as it may from time to time determine.

CERTIFICATES FOR SHARES

18.Unless otherwise provided for by the Board or the rights attaching to or by the terms of issue of any particular Shares, or to the extent required by any Exchange, depository or any operator of any clearance or settlement system, noAny person whose name is entered as a Member in the Register of Members shall be entitledupon request to receive a share certificate forallany Shares ofeachany class held by him or her (noror on transferring a part of holding, to a certificate for the balance).

19.Any share certificate, if issued, shall specify the number of Shares in respect of which it is issued and the amount paid thereon or the fact that they are fully paid, as the case may be, and may otherwise be in such form as shall be determined by the Board. Such certificates may be under Seal. All certificates for Shares shall be consecutively numbered or otherwise identified and shall specify the Shares to which they relate. The name and address of the person to whom the Shares represented thereby are issued, with the number of Shares and date of issue, shall be entered in the Register of Members of the Company. All certificates surrendered to the Company for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of Shares shall have been surrendered and cancelled. The Board may authorise certificates to be issued with the Seal and authorised signature(s) affixed by some method or system of mechanical process. In respect of a Share or Shares held jointly by several persons, the Company shall not be bound to issue a certificate or certificates to each such person, and the issue and delivery of a certificate or certificates to one of several joint holders shall be sufficient delivery to all such holders.

20.If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms (if any) as to evidence and indemnity and on the payment of such expenses reasonably incurred by the Company in investigating such evidence, as the Board may prescribe, and, in the case of defacement or wearing out, upon delivery of the old certificate.

REGISTER OF MEMBERS

21.The Company shall maintain or cause to be maintained a Register of its Members in accordance with theCompanies ActsAct.

22.If the Board considers it necessary or appropriate, the Company may establish and maintain a duplicateRegister or Registers of Members at such location or locations within or outside Ireland as the Board thinks fit. The original Register of Members shall be treated as the Register of Members for the purposes of these Articles and theCompanies ActsAct.

23.The Company, or any agent(s) appointed by it to maintain the duplicate Register of Members in accordance with these Articles, shall as soon as practicable and on a regular basis record or procure the recording in the original Register of Members all transfers of Shares effected on any duplicate Register of Members and shall at all times maintain the original Register of Members in such manner as to show at all times the Members for the time being and the Shares respectively held by them, in all respects in accordance with theCompanies ActsAct.

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24.The Company shall not be bound to register more than four (4) persons as joint holders of any Share. If any Share shall stand in the names of two (2) or more persons, the person first named in the Register of Members shall be deemed the sole holder thereof as regards service of notices and, subject to the provisions of these Articles, all or any other matters connected with the Company.

TRANSFER OF SHARES

25.Subject to such of the restrictions of these Articles and to such of the conditions of issue or transfer as may be applicable, all transfers of Shares shall be effected by an instrument in writing (an “instrument of transfer”) in such form as the Board may approve. All such instruments of transfer must be left at the registered office or at such other place as the Board may specify and all such instruments of transfer shall be retained by the Company.An instrument of transfer need not be executed by the transferee.

26.

26.1.The instrument of transfer of any Share shall be executed by the transferor or alternatively for and on behalf of the transferor by the Secretary (or such other person as may be nominated by the Secretary for this purpose) on behalf of the Company, and the Company, the Secretary (or relevant nominee)Control” shall be deemed to have been irrevocably appointed agent for the transferor of such Share or Shares with full power to execute, complete and deliver in the name of and on behalf of the transferor of such Share or Shares all such transfers of Shares held by the Members in the share capital of the Company.An instrument of transfer need not be executed by the transferee save that if the share concerned (or one or more of the shares concerned) is not fullypaid, the instrument shall be executed by or on behalf of the transferor and transferee.Any document which records the name of the transferor, the name of the transferee, the class and number of Shares agreed to be transferred, details of the total consideration payable and the date of the agreement to transfertheShares, shall, once executed in accordance with this Article, be deemed to be a proper instrument of transfer for the purposes of section8194 of the1963 Act.

26.2.The transferor shall be deemed to remain the holder of the Share until the name of the transferee is entered on the Register in respect thereof, and neither the title of the transferee nor the title of the transferor shall be affected by any irregularity or invalidity in the proceedings in reference to the sale should the Board so determine.

26.3.The Company, at its absolute discretion and insofar as theCompanies ActsAct or any other applicable law permits, may, or may procure that a subsidiary of the Company shall, pay Irish stamp duty arising on a transfer of Shares on behalf of the transferee of such Shares of the Company. If stamp duty resulting from the transfer of Shares in the Company which would otherwise be payable by the transferee is paid by the Company or any subsidiary of the Company on behalf of the transferee, then in those circumstances, the Company shall, on its behalf or on behalf of its subsidiary (as the case may be), be entitled to (i) seek reimbursement of the stamp duty from the transferee, (ii) set-off the stamp duty against any dividends payable to the transferee of those Shares and (iii) to claim a first and permanent lien on the Shares on which stamp duty has been paid by the Company or its subsidiary for the amount of stamp duty paid.

26.4.Notwithstanding the provisions of these Articles and subject to any regulations made under section239 of the 1990 Act1086 of the Act or the CA 1990 Regs, including any modification thereof or any regulations in substitution therefor made under the Act or otherwise, title to any Shares in the Company may also be evidenced and transferred without a written instrument in accordance with section2391086 of the1990 ActAct or the CA1990 Regs, including any modification thereof or any regulationsmade thereunderin substitution therefor made under the Act or otherwise. The Board shall have power to permit any class of Shares to be held in uncertificated form and to implement any arrangements they think fit for such evidencing and transfer which accord with such regulations and in particular shall, where appropriate, be entitled to disapply or modify all or part of the provisions in these Articles with respect to the requirement for written instruments of transfer and share certificates (if any), in order to give effect to such regulations.

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27.The Board may in its absolute discretion and without assigning any reason for its decision, decline to register any transfer of any Share which is not a fully paid Share. The Board may also, in its absolute discretion, and without assigning any reason, refuse to register a transfer of any Share unless:

27.1.The instrument of transfer is fully and properly completed and is lodged with the Company accompanied by the certificate for the Shares (if any) to which it relates (which shall upon registration of the transfer be cancelled) and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer;

27.2.the instrument of transfer is in respect of only one class of Shares;

27.3.a registration statement under the Securities Act of 1933 of the United States of America is in effect with respect to such transfer or such transfer is exempt from registration and, if requested by the Board, a written opinion from counsel reasonably acceptable to the Board is, obtained to the effect that such transfer is exempt from registration;

27.4.the instrument of transfer is properly stamped (in circumstances where stamping is required);

27.5.in the case of a transfer to joint holders, the number of joint holders to which the Share is to be transferred does not exceed four;

27.6.it is satisfied, acting reasonably, that all applicable consents, authorisations, permissions or approvals of any governmental body or agency in Ireland or any other applicable jurisdiction required to be obtained under relevant law prior to such transfer have been obtained; and

27.7.it is satisfied, acting reasonably, that the transfer would not violate the terms of any agreement to which the Company (or any of its subsidiaries) and the transferor are party or subject.

28.If the Board shall refuse to register a transfer of any Share, it shall, within two (2) months after the date on which the transfer was lodged with the Company, send to each of the transferor and the transferee notice of such refusal.

29.The Company shall not be obligated to make any transfer to aninfantindividual under 18 years of age or to a person in respect of whom an order has been made by a competent court or official on the grounds that he or she is or may be suffering from mental disorder or is otherwise incapable of managing his or her affairs or under other legal disability.

30.Upon every transfer of Shares the certificate (if any) held by the transferor shall be given up to be cancelled, and shall forthwith be cancelled accordingly, and subject to Article 18 a new certificate may be issued without charge to the transferee in respect of the Shares transferred to him or her, and if any of the Shares included in the certificate so given up shall be retained by the transferor, a new certificate in respect thereof may be issued to him or her without charge.

REDEMPTION AND REPURCHASE OF SHARES

31.Subject to the provisions ofChapter 6 ofPartXI3 and Chapter 5 of Part 17 of the 1990 Act and the other provisions of this Article 31, the Company may:

31.1.pursuant to section20766(4) of the 1990 Act, issue any Shares of the Company which are to be redeemed or are liable to be redeemed at the option of the Company or the Member on such terms and in such manner as may be determined by the Company in general meeting (by Special Resolution) on the recommendation of the Board;

31.2.redeem Shares of the Company on such terms as may be contained in, or be determined pursuant to the provisions of, these Articles. Subject as aforesaid, the Company may cancel any Shares so redeemed or may hold them as treasury shares and re-issue such treasury shares as Shares of any class or classes or cancel them;

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31.3.subject to or in accordance with the provisions of theCompanies ActsAct and without prejudice to any relevant special rights attached to any class of Shares, pursuant to section211105 and Chapter 5 of Part 17 of the 1990 Act, purchase any of its own Shares (including any Redeemable Shares and without any obligation to purchase on anypro ratabasis as between Members or Members of the same class) and may cancel any Shares so purchased or hold them as treasuryshares(as defined by section209106 of the1990 Act) and may reissue any such Shares as Shares of any class or classes or cancel them; or

31.4.pursuant to section21083(3) of the 1990 Act, convert any of its Shares into Redeemable Shares provided that the total number of Shares which shall be redeemable pursuant to this authority shall not exceed the limitinto section210(41071(1)(b) of the 1990 Act.

32.The Company may make a payment in respect of the redemption or purchase of its own Shares in any manner permitted by theCompanies ActsAct.

33.The holder of the Shares being purchased shall be bound to deliver up to the Company at its registered office or such other place as the Board shall specify, the certificate(s) (if any) thereof for cancellation and thereupon the Company shall pay to him or her the purchase or redemption monies or consideration in respect thereof.

VARIATION OF RIGHTS OF SHARES

34.If at any time the share capital of the Company is divided into different classes of Shares, the rights attached to any class (unless otherwise provided by the terms of issue of the Shares of that class) may be varied or abrogated with the consent in writing of the holders of three-quarters of all the votes of the issued Shares of that class, or with the sanction of a Special Resolution passed at a general meeting of the holders of the Shares of that class.

35.The provisions of these Articles relating to general meetings of the Company shall applymutatis mutandis to every such general meeting of the holders of one class of Shares except that the necessary quorum shall be one or more persons holding or representing by proxy at least one-half of the issued Shares of the class.

36.The rights conferredoccurred upon the holdersfirst occurrence of the Shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to be varied by (i) the creation or issue of further Shares rankingpari passu therewith; (ii) a purchase or redemption by the Company of its own Shares; or (iii) the creation or issue for value (as determined by the Board) of further Shares ranking as regards participation in the profits or assets of the Company or otherwise in priority to them.

LIEN ON SHARES

37.The Company shall have a first and paramount lien on every Share (not being a fully paid Share) for all monies (whether presently payable or not) payable at a fixed time or called in respect of that Share. The Board, at any time, may declare any Share to be wholly or in part exempt from the provisions of this Article 37. The Company’s lien on a Share shall extend to all monies payable in respect of it.

38.The Company may sell in such manner as the Board determines any Share on which the Company has a lien if a sum in respect of which the lien exists is presently payable and is not paid within fourteen (14) clear days after notice demanding payment, and stating that if the notice is not complied with the Share may be sold, has been given to the holder of the Share or to the person entitled to it by reason of the death or, bankruptcy, insolvency of the holder or where otherwise becomes entitled to the share by operation of any law or regulation (whether of Ireland or otherwise).

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39.To give effect to a sale, the Board may authorise some person to execute an instrument of transfer of the Share(s) sold to, or in accordance with, the directions of, the transferee. The transferee shall be entered in the Register as the holder of the Share(s) comprisedevent set forth in any such transfer and he or she shall not be bound to see to the application of the purchase monies nor shall his or her title to the Share be affected by any irregularity in, or invalidity of, the proceedings in reference to the sale, and after the name of the transferee has been entered in the Register, the remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively.

40.The net proceeds of the sale, after payment of the costs, shall be applied in payment of so much of the sum for which the lien exists as is presently payable and any residue (upon surrender to the Company for cancellation of the certificate for the Shares sold and subject to a like lien for any monies not presently payable as existed upon the Shares before the sale) shall be paid to the person entitled to the Shares at the date of the sale.

41.Whenever any law for the time being of any country, state or place imposes or purports to impose any immediate or future or possible liability upon the Company to make any payment or empowers any government or taxing authority or government official to require the Company to make any payment in respect of any Shares registered in the Register as held either jointly or solely by any Members or in respect of any dividends, bonuses or other monies due or payable or accruing due or which may become due or payable to such Member by the Company on, or in respect of, any Shares registered as mentioned above or for or on account or in respect of any Member and whether in consequence of:

a)the death of such Member;

b)the non-payment of any income tax or other tax by such Member;

c)the non-payment of any estate, probate, succession, death, stamp or other duty by the executor or administrator of such Member or by or out of his or her estate; or

d)any other act or thing;

in every such case (except to the extent that the rights conferred upon holders of any class of Shares renders the Company liable to make additional payments in respect of sums withheld on account of the foregoing):

41.1.the Company shall be fully indemnified by such Member or his or her executor or administrator from all liability;

41.2.the Company shall have a lien upon all dividends and other monies payable in respect of the Shares registered in the Register as held either jointly or solely by such Member for all monies paid or payable by the Company as referred to above in respect of such Shares or in respect of any dividends or other monies thereon or for or on account or in respect of such Member under or in consequence of any such law, together with interest at the rate of fifteen percent (15%) per annum (or such other rate as the Board may determine) thereon from the date of payment to date of repayment, and the Company may deduct or set off against such dividends or other monies so payable any monies paid or payable by the Company as referred to above together with interest at the same rate;

41.3.the Company may recover as a debt due from such Member or his or her executor or administrator (wherever constituted) any monies paid by the Company under or in consequence of any such law and interest thereon at the rate and for the period referred to above in excess of any dividends or other monies then due or payable by the Company; and

41.4.the Company may if any such money is paid or payable by it under any such law as referred to above refuse to register a transfer of any Shares by any such Member or his or her executor or administrator until such money and interest is set off or deducted as referred to above or in the case that it exceeds the amount of any such dividends or other monies then due or payable by the Company, until such excess is paid to the Company.

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Subject to the rights conferred upon the holders of any class of Shares, nothing in this Article 41 will prejudice or affect any right or remedy which any law may confer or purport to confer on the Company. As between the Company and every such Member as referred to above (and, his or her executor, administrator and estate, wherever constituted), any right or remedy which such law shall confer or purport to confer on the Company shall be enforceable by the Company.

CALLS ON SHARES

42.Subject to the terms of allotment, the Board may make calls upon the Members in respect of any monies unpaid on their Shares and each Member (subject to receiving at least fourteen (14) clear days’ notice specifying when and where payment is to be made) shall pay to the Company as required by the notice the amount called on his or her Shares. A call may be required to be paid by instalments. A call may be revoked before receipt by the Company of a sum due thereunder, in whole or in part and payment of a call may be postponed in whole or in part.

43.A call shall be deemed to have been made at the time when the resolution of the Board authorising the call was passed.

44.A person on whom a call is made shall (in addition to a transferee) remain liable notwithstanding the subsequent transfer of the Share in respect of which the call is made.

45.The joint holders of a Share shall be jointly and severally liable to pay all calls in respect thereof.

46.If a call remains unpaid after it has become due and payable, the person from whom it is due and payable shall pay interest on the amount unpaid from the day it became due until it is paid at the rate fixed by the terms of allotment of the Share or in the notice of the call or, if no rate is fixed, at the appropriate rate (as defined by theCompanies ActsAct) but the Board may waive payment of the interest wholly or in part.

47.An amount payable in respect of a Share on allotment or at any fixed date, whether in respect of nominal value by way of premium, shall be deemed to be a call and if it is not paid, the provisions of these Articles shall apply as if that amount had become due and payable by virtue of a call.

48.Subject to the terms of allotment, the Board may make arrangements on the issue of Shares for a difference between the holders in the amounts and times of payment of calls on their Shares.

49.The Directors may, if they think fit, receive from any Member willing to advance the same all or any part of the monies uncalled and unpaid upon any Shares held by him or her, and upon all or any of the monies so advanced may pay (until the same would, but for such advance, become payable) interest at such rate as may be agreed upon between the Directors and the Member paying such sum in advance.

FORFEITURE

50.If a Member fails to pay any call or instalment of a call on the day appointed for payment thereof, the Directors, at any time thereafter during such times as any part of the call or instalment remains unpaid, may serve a notice on him or her requiring payment of so much of the call or instalment as is unpaid together with any interest which may have accrued.

51.The notice shall state a further day (not earlier than the expiration of fourteen (14) clear days from the date of service of the notice) on or before which the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time appointed, the Shares in respect of which the call was made will be liable to be forfeited.

52.If the requirements of any such notice as aforesaid are not complied with, then at any time thereafter before the payment required by the notice has been made, any Shares in respect of which the notice has been given may be forfeited by a resolution of the Directors to that effect. The forfeiture shall include all dividends or other monies payable in respect of the forfeited Shares and not paid before forfeiture. The Board may accept a surrender of any Share liable to be forfeited hereunder.

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53.On the trial or hearing of any action for the recovery of any money due for any call, it shall be sufficient to prove that the name of the Member sued is entered in the Register as the holder, or one of the holders, of the Shares in respect of which such debt accrued, that the resolution making the call is duly recorded in the minute book and that notice of such call was duly given to the Member sued, in pursuance of these Articles, and it shall not be necessary to prove the appointment of the Directors who made such call nor any other matters whatsoever, but the proof of the matters aforesaid shall be conclusive evidence of the debt.

54.A forfeited Share may be sold or otherwise disposed of on such terms and in such manner as the Directors think fit and at any time before a sale or disposition the forfeiture may be cancelled on such terms as the Directors think fit. Where for the purposes of its disposal, such a Share is to be transferred to any person, the Board may authorise some person to execute an instrument of transfer of the Share to that person. The Company may receive the consideration, if any, given for the Share on any sale or disposition thereof and may execute a transfer of the Share in favour of the person to whom the Share is sold or disposed of and thereupon he or she shall be registered as the holder of the Share and shall not be bound to see to the application of the purchase money, if any, nor shall his or her title to the Share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the Share.

55.A person whose Shares have been forfeited shall cease to be a Member in respect of the forfeited Shares, but nevertheless shall remain liable to pay to the Company all monies which, at the date of forfeiture, were payable by him or her to the Company in respect of the Shares, without any deduction or allowance for the value of the Shares at the time of forfeiture but his or her liability shall cease if and when the Company shall have received payment in full of all such monies in respect of the Shares.

56.Astatutory declaration or affidavitstatement in writing that thedeclarantmaker of the statement is a Director or the Secretary of the Company, and that a Share in the Company has been duly forfeited on the date stated in thedeclarationstatement, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the Share.

57.The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the nominal value of the Share or by way of premium, as if the same had been payable by virtue of a call duly made and notified.

58.The Directors may accept the surrender of any Share which the Directors have resolved to have been forfeited upon such terms and conditions as may be agreed and, subject to any such terms and conditions, a surrendered Share shall be treated as if it has been forfeited.

NON-RECOGNITION OF TRUSTS

59.The Company shall not be obligated to recognise any person as holding any Share upon any trust (except as is otherwise provided in these Articles or to the extent required by law) and the Company shall not be bound by or be compelled in any way to recognise (even when having notice thereof) any equitable, contingent, future, or partial interest in any Share, or any interest in any fractional part of a Share, or (except only as is otherwise provided by these Articles or theCompanies ActsAct) any other rights in respect of any Share except an absolute right to the entirety thereof in the registered holder. This shall not preclude the Company from requiring the Members or a transferee of Shares to furnish to the Company with information as to the beneficial ownership of any Share when such information is reasonably required by the Company.

TRANSMISSION OF SHARES

60.

If a Member dies, the survivor or survivors where the deceased was a joint holder, and the legal personal representatives of the deceased where he or she was a sole holder or the only survivor of joint holders,

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shall be the only persons recognised by the Company as having any title to his or her interest in the Shares; but nothing herein contained shall release the estate of any deceased holder from any liability in respect of any Share which had been jointly held by him or her solely or jointly with other persons.

61.A person becoming entitled to a Share in consequence of the death, bankruptcy, liquidation or insolvency of a Member, or otherwise becoming entitled to a Share by operation of any law, directive or regulation (whether of the State, the European Union, or any other jurisdiction) may elect, upon such evidence of title being produced as the Directors may reasonably require at any time and from time to time, and subject as further provided in this Article, either to become the holder of the Share or to have some person nominated by him or her registered as the transferee. If he or she elects to become the holder of the Share, he or she shall give notice to the Company to that effect and, where the Directors are satisfied with the evidence of title produced to them, they may register such persons as the holder of the Share, subject to the other provisions of these Articles and of theActsAct. If he or she elects to have another person registered he or she shall execute an instrument of transfer of the Share to that person. All of these Articles relating to the transfer of Shares shall apply to the notice or instrument of transfer as if it were an instrument of transfer executed by the Member and the event giving rise to the entitlement of the relevant person to the Shares had not occurred.

62.A person becoming entitled to a Share by transmission shall have the rights to which he or she would be entitled if he or she were the holder of the Share (including, without limitation, the right to receive and give a valid discharge for any dividends, distributions or other moneys payable on or in respect of the Share), except that, before being registered as the holder of the Share he or she shall not be entitled in respect of it to receive notices of, or to attend or vote at any meeting of the Company or at any separate meeting of holders of any class of Shares in the Company, so, however, that the Directors, at any time, may give notice requiring any such person to elect either to be registered himself or herself to transfer the Share and, if the notice is not complied with within ninety (90) days, the Directors thereupon may withhold payment of all dividends, bonuses or other monies payable in respect of the Share until the requirements of the notice have been complied with.

AMENDMENT OF MEMORANDUM OF ASSOCIATION;

CHANGE OF LOCATION OF REGISTERED OFFICE; AND

ALTERATION OF CAPITAL

63.The Company may by Ordinary Resolution:

63.1.divide its share capital into several classes and attach to them respectively any preferential, deferred, qualified or special rights, privileges or conditions;

63.2.increase the authorised share capital by such sum to be divided into Shares of such nominal value, as such Ordinary Resolution shall prescribe;

63.3.consolidate and divide all or any of its share capital into Shares of larger amount than its existing Shares;

63.4.by subdivision of its existing Shares or any of them, divide the whole or any part of its share capital into Shares of smaller nominal value than is fixed by the Memorandum subject to section6883(1)(db) of the1963 Act, so, however, that in the sub-division, the proportion between the amount paid and the amount, if any, unpaid on each reduced Share shall be the same as it was in the case of the Share from which the reduced Share is derived;

63.5.cancel any Shares that at the date of the passing of the relevant Ordinary Resolution have not been taken or agreed to be taken by any person; and

63.6.subject to applicable law, change the currency denomination of its share capital.

64.Subject to the provisions of theCompanies ActsAct, the Company may:

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64.1.by Special Resolution change its name, alter or add to the Memorandum with respect to any objects, powers or other matters specified therein or alter or add to these Articles;

64.2.by Special Resolution, or as otherwise required or permitted by applicable law, including without limitation section 83(1)(c) of the Act, reduce its issued share capital and any capital redemption reserve fund or any share premium account or undenominated capital account. In relation to such reductions, the Company may by Special Resolution determine the terms upon which the reduction is to be effected, including in the case of a reduction of part only of any class of Shares, those Shares to be affected; and

64.3.by resolution of the Directors, change the location of its registered office.

65.Whenever as a result of an alteration or reorganisation of the share capital of the Company any Members would become entitled to fractions of a Share, the Board may, on behalf of those Members, sell the Shares representing the fractions for the best price reasonably obtainable to any person and distribute the proceeds of sale in due proportion among those Members, and the Board may authorise any person to execute an instrument of transfer of the Shares to, or in accordance with the directions of, the purchaser. The transferee shall not be bound to see to the application of the purchase money nor shall his or her title to the Shares be affected by any irregularity in or invalidity of the proceedings in reference to the sale.

CLOSING REGISTER OF MEMBERS OR FIXING RECORD DATE

66.For the purpose of determining Members entitled to notice of or to vote at any meeting of Members or any adjournment thereof, or Members entitled to receive payment of any dividend, or in order to make a determination of Members for any other proper purpose, the Board may provide, subject to the requirements of section121174 of the 1963 Act, that the Register of Members shall be closed for transfers at such times and for such periods, not exceeding in the whole thirty (30) days in each year. If the Register of Members shall be so closed for the purpose of determining Members entitled to notice of, or to vote at, a meeting of Members, such Register of Members shall be so closed for at least five (5) days immediately preceding such meeting and the record date for such determination shall be the date of the closure of the Register of Members.

67.In lieu of, or apart from, closing the Register of Members, the Board may fix in advance a date as the record date (a) for any such determination of Members entitled to notice of or to vote at a meeting of the Members, which record date shall not be more than sixty (60) days nor less than ten (10) days before the date of such meeting, and (b) for the purpose of determining the Members entitled to receive payment of any dividend, or in order to make a determination of Members for any other proper purpose, which record date shall not be more than sixty (60) days prior to the date of payment of such dividend or the taking of any action to which such determination of Members is relevant.

68.If the Register of Members is not so closed and no record date is fixed for the determination of Members entitled to notice of or to vote at a meeting of Members, the date immediately preceding the date on which notice of the meeting is deemed given under these Articles shall be the record date for such determination of Members. Where a determination of Members entitled to vote at any meeting of Members has been made as provided in these Articles, such determination shall apply to any adjournment thereof; provided, however, that the Directors may fix a new record date of the adjourned meeting, if they think fit.

GENERAL MEETINGS

69.The Board shall convene and the Company shall hold annual general meetings in accordance with the requirements of theCompanies ActsAct.

70.The Board may, whenever it thinks fit, and shall, on the requisition in writing of Members holding such number of Shares as is prescribed by, and made in accordance with,section 132 ofthe1963Act, convene a general meeting in the manner required by theCompanies ActsAct. All general meetings other than annual general meetings shall be called extraordinary general meetings.

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71.The Company shall in each year hold a general meeting as its annual general meeting in addition to any other meeting in that year, and shall specify the meeting as such in the notice calling it. Not more than fifteen (15) months shall elapse between the date of one annual general meeting of the Company and that of the next. Each general meeting shall be held at such time and place as designated by the Board and as specified in the notice of meeting. Subject to section140176 of the1963Act, allgeneralGeneral meetings may be held outside of Ireland.

72.The Board may, in its absolute discretion, authorise the Secretary to postpone any general meeting called in accordance with the provisions of these Articles (other than a meeting requisitioned under Article 70 or the postponement of which would be contrary to theCompanies ActsAct, law or a Court order pursuant to theCompanies ActsAct) if the Board considers that, for any reason, it is impractical or unreasonable to hold the general meeting, provided that notice of postponement is given to each Member before the time for such meeting. Fresh notice of the date, time and place for the postponed meeting shall be given to each Member in accordance with the provisions of these Articles.

NOTICE OF GENERAL MEETINGS

73.Subject to the provisions of theCompanies ActsAct allowing a general meeting to be called by shorter notice, an annual general meeting, and an extraordinary general meeting called for the passing of a Special Resolution, shall be called by at least twenty-one (21) clear days’ notice and all other extraordinary general meetings shall be called by at least fourteen (14) clear days’ notice. Such notice shall state the date, time, place of the meeting and,in the case of an extraordinary general meeting,the general nature of the business to be considered. Every notice shall be exclusive of the day on which it is given or deemed to be given and of the day of the meeting and shall specify such other details as are required by applicable law or the relevant code, rules and regulations applicable to the listing of the Shares on the Exchange.

74.A general meeting of the Company shall, whether or not the notice specified in this Article 74 has been given and whether or not the provisions of the Articles regarding general meetings have been complied with, be deemed to have been duly convened if applicable law so permits and it is so agreed by the Auditors and by all the Members entitled to attend and vote thereat or by their proxies.

75.The notice convening an annual general meeting shall specify the meeting as such, and the notice convening a meeting to pass a Special Resolution shall specify the intention to propose the resolution as a Special Resolution. Notice of every general meeting shall be given in any manner permitted by these Articles to all Members other than such as, under the provisions hereof or the terms of issue of the Shares they hold, those who are not entitled to receive such notice from the Company.

76.There shall appear with reasonable prominence in every notice of general meetings of the Company a statement that a Member entitled to attend and vote is entitled to appoint one or more proxies to attend and vote instead of him or her and, that a proxy need not be a Member of the Company.

77.The accidental omission to give notice of a general meeting to, or the non-receipt of notice of a meeting by any person entitled to receive notice shall not invalidate the proceedings of that meeting.

78.In cases where instruments of proxy are sent out with notices, the accidental omission to send such instrument of proxy to, or the non-receipt of such instrument of proxy by, any person entitled to receive notice shall not invalidate any resolution passed or any proceeding at any such meeting. A Member present, either in person or by proxy, at any general meeting of the Company or of the holders of any class of Shares in the Company, will be deemed to have received notice of that meeting and, where required, of the purpose for which it was called.

PROCEEDINGS AT GENERAL MEETINGS

79.The business of annual general meetings shall include:

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79.1.the consideration of the Company’s statutory financial statements and the report of the Directors and the report of the statutory auditors on those statements and that report;

79.2.the review by the Members of the Company’s affairs;

79.3.the declaration of a dividend (if any) of an amount not exceeding the amount recommended by the Directors;

79.4.79. All business shall be deemed special that is transacted at an extraordinary general meeting, and also all business that is transacted at an annual general meeting, with the exception of declaring a dividend, the consideration of the accounts, balance sheets and the reports of the Directors and Auditors, the election of Directors, the re-appointment of the retiring Auditors and the fixing of the remuneration of the Auditors.the authorisation of the Directors to approve the remuneration of the Auditors (if any);

79.5.the election and re-election of Directors; and

79.6.the appointment or re-appointment of Auditors.

80.No business shall be transacted at any general meeting unless a quorum is present. One or more Members present in person or by proxy holding not less than a majority of the issued and outstanding ordinary shares of the Company entitled to vote at the meeting in question shall be a quorum.

81.If within one hour from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of Members, shall be dissolved and in any other case it shall stand adjourned to the same day in the next week at the same time and place or to such other time or such other place as the Board may determine and if at the adjourned meeting a quorum is not present within one hour from the time appointed for the meeting the Members present shall be a quorum.

82.If the Board wishes to make this facility available to Members for a specific or all general meetings of the Company, a Member may participate in any general meeting of the Company, by means of a telephone, video, electronic or similar communication equipment by way of which all persons participating in such meeting can communicate with each other simultaneously and instantaneously and such participation shall be deemed to constitute presence in person at the meeting.

83.Each Director and the Auditors shall be entitled to attend and speak at any general meeting of the Company.

84.TheChairmanChairperson, or in his absence some other Director nominated by the Directors, shall preside at every general meeting of the Company, but if at any meeting neither theChairmanChairperson, nor such other Director is present within fifteen minutes after the time appointed for the holding of the meeting, or if none of them are willing to act asChairmanChairperson, the Directors present shall choose some Director present to beChairmanChairperson, or if no Director is present, or if all the Directors present decline to take the chair, the Members present shall choose some Member present to beChairmanChairperson.

85.TheChairmanChairperson of the meeting may, with the consent of any general meeting duly constituted hereunder, and shall if so directed by the meeting, adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished, or which might have been transacted, at the meeting from which the adjournment took place. When a general meeting is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting; save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned general meeting.

86.

No business may be transacted at a general meeting of the Company or of any class of Members, other than business that is either proposed by or at the direction of the Board; proposed at the direction of a court of competent jurisdiction; proposed on the requisition in writing of such number of Members as is prescribed by, and is made in accordance with, the relevant provisions of theCompanies ActsAct and, in respect of an annual general meeting only, these Articles; or theChairmanChairperson determines in his

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or her absolute discretion that the business may properly be regarded as within the scope of the meeting. For business or nominations to be properly brought by a Member at any general meeting, the Member proposing such business must be a Member at the time of giving the notice provided for in Articles 73 to 78 and must be entitled to vote at such meeting and any proposed business must be a proper matter for Member action.

87.

87.1.Subject to theCompanies ActsAct, a resolution may only be put to a vote at a general meeting of the Company or of any class of Members if:

a)it is specified in the notice of meeting;

b)it is proposed by or at the direction of the Board;

c)it is proposed at the direction of a court of competent jurisdiction;

d)it is proposed pursuant to, and in accordance with, the procedures and requirements of Article 146;

e)it is proposed on the requisition in writing of such number of Members as is prescribed by, and is made in accordance with, section132178(3) of the1963Act; or

f)theChairmanChairperson of the meeting in his or her absolute discretion decides that the resolution may properly be regarded as within the scope of the meeting.

87.2.No amendment may be made to a resolution, at or before the time when it is put to a vote, unless theChairmanChairperson of the meeting in his or her absolute discretion decides that the amendment or the amended resolution may properly be put to a vote at that meeting.

87.3.If theChairmanChairperson of the meeting rules a resolution or an amendment to a resolution admissible or out of order (as the case may be), the proceedings of the meeting or on the resolution in question shall not be invalidated by any error in his or her ruling. Any ruling by theChairmanChairperson of the meeting in relation to a resolution or an amendment to a resolution shall be final and conclusive.

88.

88.1.ForIn addition to any other applicable requirements for business to be properly requested by a Member to be brought before an annual general meeting, the Member must:

a)be a Member of the Company at the time of the giving of the notice for such annual general meeting and at the time the notice hereunder required is delivered to the Company;

b)be entitled to vote at such meeting; and

c)have given timely and proper notice in writing to the Secretary in accordance with this Article 88.

88.2.To be timely for an annual general meeting, a Member’s notice to the Secretaryas to the business to be brought before the meetingmust be delivered to or mailed and received at the registered officeof the Companynot less thansixtyninety (6090) days nor more thanninety (90one-hundred and twenty (120) days prior to thefirstanniversarydateof the immediately precedingyear’sannual general meeting of Members (save that in the case of the Company’s first annual general meeting, references to the preceding year’s annual general meeting will be to the annual general meeting of Endo Health Solutions, Inc. held that preceding year); provided, however, that in the event that the annual general meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the Member, in order to be timely, must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the annual general meeting was mailed or such public disclosure of the date of the annual general meeting was made by the Company, whichever first occurs. In no event shall the public announcement of an adjournment or postponement of an annual general meeting commence a new time period (or extend any time period) for the giving of a Member’s notice as described in Article 88.3.
paragraphs:

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88.3.To be in proper written form, a Member’s notice must in addition to any other applicable requirements set forth as to each matter such Member proposes to bring before the meeting:

88.3.1.A brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and if such business includes a proposal to amend the Articles, the text of the proposed amendment) and the reasons for conducting such business at the meeting;

88.3.2.As to thememberMember giving notice:

 

 (i)

any Person is or becomes the name and address, as they appear“Beneficial Owner” (as defined in Rule13d-3 under the Exchange Act), directly or indirectly, of securities of the Company (not including in the Registersecurities Beneficially Owned by such Person any securities acquired directly from the Company) representing 30% or more of Members,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 such Member and any Member Associated Person(if any)covered by this Article 88.3.2(i),andArticle 88.3.2(ii)and Article 88.3.2(iii)paragraph (iii) below; or

 

 (ii)(A)

the class and number of Sharesof the Companywhich are held of record or are beneficially owned by the Member and by any Member Associated Person (if any) with respect to the Company’s securities; (B) a description of any agreement, arrangement or understanding in connection with the proposal of such business between or among such Member and any Member Associated Person, any of their respective affiliates or associates, and any others (including their names) acting as a “group” (as such term is used in Rule 13d-5(b) under the Exchange Act) with any of the foregoing; (C) a description of any agreement, arrangement or understanding (including,regardless of the form of settlement, any derivative, long or short positions, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned securitieswithout limitation, any derivative, instrument, swap, option, warrant, short interest, hedge, borrowed or loaned shares and profit sharing arrangement) thathashave been entered into as of the date of the Member’s notice by,the effectoron behalf of, such Member and any Member Associated Person (if any) or any affiliates or associates of such Member and such Member Associated Person (if any), the effect orintent of which is to mitigate loss to, manage risk or benefit from share price changes for, or increase or decrease the voting power of, such Member or such Member Associated Person (if any), with respect toshares of the CompanyShares; (D) a representation that the Member is a holder of Shares of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business;and(E) a representation whether the Member ortheany Member Associated Person,(if any,) intends or is part of a group which intends (x) to deliver a proxy statement and / or form of proxy to holders of at least the percentage of the Company’s outstanding Shares required to adopt the proposal and / or (y) otherwise to solicit proxies from Members in support of such proposal. If requested by the Company, the information required under clauses (A), (B) and (C) of the preceding sentence shall be supplementedto disclose such information as of the record date by such Member and any Member Associated Person (if any) not later than ten(10) days after the later of the record date for the meeting or the date notice of the record date is first publicly disclosedto disclose such information as of the record date;

(iii)any other information relating to such Member and any Member Associated Person (if any) that would be required to be disclosed, in each case pursuant to section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder; and

(iv)(iii)any material interest of the Member or any Member Associated Person in such business.

TheChairmanChairperson shall have the power and duty to determine whether any business proposed to be brought before the meeting was made or proposed in accordance with the procedures set forth in this Article, and if any proposed business is not in compliance with this Article 88, to declare that such defective proposal shall be disregarded.

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TheChairmanChairperson shall, if the facts reasonably warrant, refuse to acknowledge that a proposal that is not made in compliance with the procedure specified in this Article, and any such proposal not properly brought before the meeting, be considered.

89.Except where a greater majority is required by theCompanies ActsAct or these Articles, any question proposed for a decision of the Members at any general meeting of the Company or a decision of any class of Members at a separate meeting of any class of Shares shall be decided by an Ordinary Resolution.

90.At any general meeting, a resolution put to the vote of the meeting shall be decided on a poll. The Board or theChairmanChairperson may determine the manner in which the poll is to be taken and the manner in which the votes are to be counted.

91.A poll demanded on the election of theChairmanChairperson or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time, not being more than ten days from the date of the meeting or adjourned meeting at which the vote was taken, as theChairmanChairperson of the meeting directs, and any business other than that on which a poll has been demanded may be proceeded with pending the taking of the poll.

92.No notice need be given of a poll not taken immediately. The result of the poll shall be deemed to be the resolution of the general meeting at which the poll was demanded. On a poll, a Member entitled to more than one vote need not use all his or her votes or cast all the votes he or she uses in the same way.

93.If authorised by the Board, any vote taken by written ballot may be satisfied by a ballot submitted by electronic or telephonic transmission, provided that any such electronic or telephonic submission must either set forth or be submitted with information from which it can be determined that the electronic submissionor telephonichas been authorised by the Member or proxy.

94.The Board may, and at any general meeting, theChairmanChairperson of such meeting may make such arrangement and impose any requirement or restriction it or he or she considers appropriate to ensure the security of a general meeting including, without limitation, requirements for evidence of identity to be produced by those attending the meeting, the searching of personal property and the restriction of items that may be taken into the meeting place. The Board and, at any general meeting, theChairmanChairperson of such meeting are entitled to refuse entry to a person who refuses to comply with such arrangements, requirements or restrictions.

95.Subject tosection 141the provisions of the 1963 Act, a resolution in writing signed by all of the Members for the time being entitled to attend and vote on such resolution at a general meeting (or being bodies corporate by their duly authorised representatives) shall be as valid and effective for all purposes as if the resolution had been passed at a general meeting of the Company duly convened and held, and may consist of several documents in like form each signed by one or more persons, and if described as a special resolution shall be deemed to be a special resolution within the meaning of the 1963 Act. Any such resolution shall be served on the Company.

VOTES OF MEMBERS

96.Subject to any rights or restrictions for the time being attached to any class or classes of Shares, every Member of record present in person or by proxy shall have one vote for each Share registered in his or her name in the Register of Members.

97.In the case of joint holders of record the vote of the senior holder who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register of Members.

98.

A Member of unsound mind,a Member who has made an enduring power of attorney,or in respect of whom an order has been made by any court, having jurisdiction inlunacycases of unsound mind, may

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vote by his or her committee,donee of an enduring power of attorney,receiver,curator bonis,guardian or other personin the nature of a committee, receiver or curator bonisappointed bythatthe foregoing court, and any such committee,donee of an enduring power of attorney,receiver,curator bonisguardian or otherpersonsperson appointed by the foregoing court may vote by proxy.

99.No Member shall be entitled to vote at any general meeting unless he or she is registered as a Member on the record date for such meeting.

100.No objection shall be raised to the qualification of any voter except at the general meeting or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at such general meeting shall be valid for all purposes. Any such objection made in due time shall be referred to theChairmanChairperson of the general meeting whose decision shall be final and conclusive.

101.Votes may be given either personally or by proxy. A Member may appoint more than one proxy or the same proxy under one or more instruments to attend and vote at a meeting and may appoint a proxy to vote both in favour of and against the same resolution in such proportion as specified in the instrument appointing the proxy.

PROXIES AND CORPORATE REPRESENTATIVES

102.

102.1.Every Member entitled to attend and vote at a general meeting may appoint a proxy to attend, speak and vote on his or her behalf and may appoint more than one proxy to attend, speak and vote at the same meeting. The appointment of a proxy or corporate representative shall be in such form and may be accepted by the Company at such place and at such time as the Board or the Secretary shall from time to time determine, subject to applicable requirements of the United States Securities and Exchange Commission and the Exchange on which the Shares are listed. No such instrument appointing a proxy or corporate representative shall be voted or acted upon after two (2) years from its date.

102.2.Without limiting the foregoing, the Board may from time to time permit appointments of a proxy to be made by means of an electronic or internet communication or facility and may in a similar manner permit supplements to, or amendments or revocations of, any such electronic or internet communication or facility to be made.For the avoidance of doubt, such appointments of proxy made by electronic or internet communications (as permitted by the Board or the Secretary) would be deemed to be deposited at the place specified for such purpose once received by the Company.The Board may in addition prescribe the method of determining the time at which any such electronic or internet communication or facility is to be treated asreceived by the Companydeposited at the place specified for such purpose. The Board may treat any such electronic or internet communication or facility which purports to be or is expressed to be sent on behalf of a Member as sufficient evidence of the authority of the person sending that instruction to send it on behalf of that Member.

103.Any body corporate which is a Member of the Company may authorise such person or persons as it thinks fit to act as its representative at any meeting of the Company or of any class of Members of the Company and the person or persons so authorised shall be entitled to exercise the same powers on behalf of the body corporate which he or she represents as that body corporate could exercise if it were an individual Member of the Company. The Company may require evidence from the body corporate of the due authorisation of such person or persons to act as the representative of the relevant body corporate.

104.An appointment of proxy relating to more than one meeting (including any adjournment thereof) having once been received by the Company for the purposes of any meeting shall not require to be delivered, deposited or received again by the Company for the purposes of any subsequent meeting to which it relates.

105.Receipt by the Company of an appointment of proxy in respect of a meeting shall not preclude a Member from attending and voting at the meeting or at any adjournment thereof which attendance and voting will automatically cancel any proxy previously submitted.

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106.An appointment proxy shall be valid, unless the contrary is stated therein,following individuals cease for any adjournment of the meeting as well as for the meetingreason to which it relates.

107.

107.1.A vote given in accordance with the terms of an appointment of proxy or a resolution authorising a representative to act on behalf of a body corporate shall be valid notwithstanding the death or insanity of the principal, or the revocation of the appointment of proxy or of the authority under which the proxy was appointed or of the resolution authorising the representative to act or transfer of the Share in respect of which the proxy was appointed or the authorisation of the representative to act was given, provided that no direction in writing (whether in electronic form or otherwise) of such death, insanity, revocation or transfer shall have been received by the Company at the Office,at least one hourbefore the commencement of the meeting or adjourned meeting at which the appointment of proxy is used or at which the representative acts; PROVIDED, HOWEVER, that where such direction is given in electronic form, it shall have been received by the Company at least 24 hours (or such lesser time as the Directors may specify) before the commencement of the meeting.

107.2.The Board may send, at the expense of the Company, by post, electronic mail or otherwise, to the Members, forms for the appointment of a proxy (with or without stamped envelopes for their return) for use at any general meeting or at any class meeting, either in blank or nominating any one or more of the Directors or any other persons in the alternative.

DIRECTORS

108.Unless otherwise determined by the Company by Ordinary Resolution, the number of Directors on the Board shall be not less than five (5) nor more than twelve (12). The exact number of Directors shall be fixed from time to time by resolution of the Board.

109.The remuneration to be paid to the Directors shall be such remuneration as the Directors shall determine. The Directors shall also be entitled to be paid their travelling, hotel and other expenses properly incurred by them in going to, attending and returning from meetings of the Directors, or any committee of the Directors, or general meetings of the Company, or otherwise in connection with the business of the Company, or to receive a fixed allowance in respect thereof as may be determined by the Board from time to time, or a combination partly of one such method and partly the other.

110.The Board may approve additional remuneration to any Director undertaking any special work or services for, or undertaking any special mission on behalf of, the Company other than his or her ordinary routine work as a Director. Any fees paid to a Director who is also counsel or solicitor to the Company, or otherwise serves it in a professional capacity shall be in addition to his or her remuneration as a Director.

111.Members of special or standing committees may be allowed like compensation for attending committee meetings.

DIRECTORS’ AND OFFICERS’ INTERESTS

112.A Director or an officer of the Company who is in any way, whether directly or indirectly, interested in a contract, transaction or arrangement or proposed contract, transaction or arrangement with the Company shall, in accordance with section194231 of the 1963 Act, declare the nature of his or her interest at the first opportunity either (a) at a meeting of the Board at which the question of entering into the contract, transaction or arrangement is first taken into consideration, if the Director or officer of the Company knows this interest then exists, or in any other case, at the first meeting of the Board after learning that he or she is or has become so interested or (b) by providing a general notice to the Directors declaring that he or she is a Director or an officer of, or has an interest in, a person and is to be regarded as interested in any transaction or arrangement made with that person, and after giving such general notice it shall not be necessary to give special notice relating to any particular transaction.

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113.A Director may hold any other office or place of profit under the Company (other than the office of its Auditors) in conjunction with his or her office of Director for such period and on such terms as to remuneration and otherwise as the Board may determine. Nothing in Section 228(1)(e) of the Act shall restrict a director from entering into any commitment which has been approved by the Board or has been approved pursuant to such authority as may be delegated by the Board in accordance with these Articles. It shall be the duty of each Director to obtain the prior approval of the Board, before entering into any commitment permitted by Sections 228(1)(e)(ii) and 228(2) of the Act.

114.A Director is expressly permitted (for the purposes of section 228(1)(d) of the Act) to use the property of the Company pursuant to or in connection with: the exercise or performance of his duties, functions and powers as Director or employee; the terms of any contract of service or employment or letter of appointment; and, or in the alternative, any other usage authorised by the Directors (or a person authorised by the Directors) from time to time; and including in each case for a Director’s own benefit or for the benefit of another person.

115.114.A Director may act by himself or herself or by his or her firm in a professional capacity for the Company (other than as its Auditors) and he or she or his or her firm shall be entitled to remuneration for professional services as if he or she were not a Director.

116.115.A Director may be or become a Director, managing director, joint managing director, deputy managing director, executive director, manager or other officer or Member of any other company or otherwise interested in any company promoted by the Company or in which the Company may be interested as Member or otherwise, and no such Director shall be accountable to the Company for any remuneration or other benefits received by him or her as a Director, managing director, joint managing director, deputy managing director, executive director, manager or other officer or Member of such other company; provided that he or she has declared the nature of his or her position with, or interest in, such company to the Board in accordance with Article 112.

117.116.No person shall be disqualified from the office of Director or from being an officer of the Company or prevented by such office from contracting with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered into by or on behalf of the Company in which any Director or officer of the Company shall be in any way interested be or be liable to be avoided, nor shall any Director or officer of the Company so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or transaction by reason of such Director or officer of the Company holding office or of the fiduciary relation thereby established; provided that:

117.1.116.1.he has declared the nature of his or her interest in such contract or transaction to the Board in accordance with Article 112; and

117.2.116.2.the contract or transaction is approved byconstitute a majority of the disinterestednumber of directors then serving: individuals who, on the Effective Date, constitute the Board of Directors notwithstanding the fact that the disinterested Directors may represent lessand any new director (other than a quorum.

118.117.A Director may be counteddirector whose initial assumption of office is in determiningconnection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the presenceelection of a quorum at a meetingdirectors of the Board which authorisesCompany) whose appointment or approves the contract, transaction or arrangement in which he or she is interested and he or she shall be at liberty to vote in respect of any contract, transaction or arrangement in which he or she is interested, provided that the nature of the interest of any Director in any such contract or transaction shall be disclosed by him or her in accordance with Article 112, at or prior to its consideration and any vote thereon.

119.118.For the purposes of Article 112:

119.1.118.1.a general notice given to the Directors that a Director is to be regarded as having an interest of the nature and extent specified in the notice in any transaction or arrangement in which a specified person or class of persons is interested shall be deemed to be a disclosure that the Director has an interest in any such transaction of the nature and extent so specified;

119.2.118.2.an interest of which a Director has no knowledge and of which it is unreasonable to expect him or her to have knowledge shall not be treated as an interest of his or hers; and

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119.3.118.3.a copy of every declaration made and notice given under Article 112 shall be entered within three (3) days after the making or giving thereof in a book kept for this purpose. Such book shall be open for inspection without charge by any Director, Secretary, the Auditors or Member of the Company at the registered office and shall be produced at every general meeting of the Company and at any meeting of the Directors if any Director so requests in sufficient time to enable the book to be available at the meeting.

POWERS AND DUTIES OF DIRECTORS

120.119.The business of the Company shall be managed by the Directors, who may pay all expenses incurred in promoting and registering the Company and may exercise all such powers of the Company as are not, by theCompanies ActsAct or by these Articles, required to be exercised by the Company in general meeting, subject, nevertheless, to any of these Articles and to the provisions of theCompanies ActsAct. No resolution made by the Company in general meeting shall invalidate any prior act of the Directors that would have been valid if that resolution had not been made.

121.120.The Board shall have the power to appoint and remove officers on such terms as the Board sees fit and to give such titles and delegate such responsibilities to those executives as it sees fit.

122.121.The Company may exercise the powers conferred bysection 41Section 44 of the 1963 Act with regard to having an official seal for use abroad and such powers shall be vested in the Directors.

123.122.Subject as otherwise provided with these Articles, the Directors may exercise the voting powers conferred by shares of any other company held or owned by the Company in such manner in all respects as they think fit and in particular they may exercise their voting powers in favour of any resolution appointing the Directors or any of them as Director or officers of such other company or providing for the payment of remuneration or pensions to the Directors or officers of such other company.

124.123.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for money paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, by such person or persons and in such manner as the Directors shall from time to time by resolution determine.

125.124.The Directors may from time to time authorise such person or persons as they see fit to perform all acts, including without prejudice to the foregoing, to effect a transfer of any Shares, bonds, or other evidences of indebtedness or obligations, subscription rights, warrants, and other securities in another body corporate in which the Company holds an interest and to issue the necessary powers of attorney for the same; and each such person is authorised on behalf of the Company to vote such securities, to appoint proxies with respect thereto, and to execute consents, waivers and releases with respect thereto, or to cause any such action to be taken.

126.125.The Board may exercise all powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital or any part thereof and to issue debentures, debenture stock, mortgages, bonds or such other securities whether outright or as security for any debt, liability or obligation of the Company or of any third party.

127.

126.The Directors may procure the establishment and maintenance of or participate in, or contribute to, any non-contributory or contributory pension or superannuation fund, scheme or arrangement or life assurance scheme or arrangement for the benefit of, and pay, provide for or procure the grant of donations, gratuities, pensions, allowances, benefits or emoluments to any persons (including Directors or other officers) who are or shall have been at any time in the employment or service of the Company or of any company which is or was a subsidiary of the Company or of the predecessor in business of the Company or any such subsidiary or holding Company and the wives, husbands, widows, widowers, families, relatives or dependants of any such persons. The Directors may also procure the establishment and subsidy of or subscription to and support of any institutions, associations, clubs, funds or trusts

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calculated to be for the benefit of any such persons as aforesaid or otherwise to advance the interests and well-being of the Company or of any such other company as aforesaid or its Members, and payments for or towards the issuance of any such persons as aforesaid and subscriptions or guarantees of money for charitable or benevolent objects or for any exhibition or for any public, general or useful object. Provided that any Director shall be entitled to retain any benefit received by him or her under this Article 126,127,subject only, where theCompanies Acts requireAct requires, to disclosure to the Members and the approval of the Company in general meeting.

128.127.The Board may from time to time provide for the management of the affairs of the Company in such manner as it shall think fit and the specific delegation provisions contained in the Articles shall not limit the general powers conferred by these Articles.

MINUTES

129.128.The Board shall cause minutes to be made in books kept for the purpose of all appointments of officers madeelection by the Board all resolutions and proceedings at meetings of the Company or the holders of any class of Shares, of the Directors and of committees of Directors, including the names of the Directors present at each meeting.

DELEGATION OF THE BOARD’S POWERS

130.129.The Board may delegate any of its powers (with power to sub-delegate) to any committee consisting of one or more Directors. The Board may also delegate to any Director, officer or member of the management of the Company or any of its subsidiaries such of its powers as it considers desirable to be exercised by him or her. The Board may also designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of any such committee. Any such delegation may be made subject to any conditions the Board may impose, and either collaterally with or to the exclusion of its own powers and may be revoked or altered. Subject to any such conditions, the proceedings of a committee of the Board shall be governed by the Articles regulating the proceedings of Directors, so far as they are capable of applying. Each committee shall keep regular minutes and report to the Board when required.

131.130.The Board may, by power of attorney or otherwise, appoint any person to be the agent of the Company on such conditions as the Board may determine, provided that the delegation is not to the exclusion of its own powers and may be revoked by the Board at any time.

132.131.The Board may, by power of attorney or otherwise, appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Board, to be the attorney or authorised signatory of the Company for such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board under these Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney or other appointment may contain such provisions for the protection and convenience of persons dealing with any such attorneys or authorised signatories as the Board may think fit and may also authorise any such attorney or authorised signatory to delegate all or any of the powers, authorities and discretions vested in him or her.

CHAIRMANCHAIRPERSON AND EXECUTIVE OFFICERS

133.132.The Board may elect any Director asChairmanChairperson of the Board and determine the period for which he or she is to hold office.

134.133.In addition to theChairmanChairperson, the Directors and the Secretary, the Company may have such officers as the Board may from time to time determine and, without limitation to the foregoing, may appoint any person (whether or not a Director) to fill the position of chief executive officer.

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135.134.The use of the word “officer” (or similar words) in the title of any executive or other position shall not be deemed to imply that the person holding such executive or other position is an “officer” of the Company within the meaning of theCompanies ActsAct.

PROCEEDINGS OF DIRECTORS

136.135.Except as otherwise provided by these Articles, the Directors shall meet together for the despatch of business, convening, adjourning and otherwise regulating their meetings and procedures as they think fit. Questions arising at any meeting shall be decided by a majority of votes of the Directors present at a meeting at which there is a quorum. Each Director shall have one vote.

137.136.Regular meetings of the Board may be held at such times and places as may be provided for in resolutions adopted by the Board. No additional notice of a regularly scheduled meeting of the Board shall be required.

138.137.A Director may, and the Secretary on the requisition of a Director shall, at any time summon a meeting of the Directors by at least 24 hours’ notice in writing to every Director, which notice shall set forth the general nature of the business to be considered unless notice is waived by all the Directors either at, before or after the meeting is held and provided further if notice is given in person, by telephone, cable, telex, telecopy or email, the same shall be deemed to have been given on the day it is delivered to the Directors or transmitting organisation as the case may be. The accidental omission to give notice of a meeting of the Directors to, or the non-receipt of notice of a meeting by any person entitled to receive notice, shall not invalidate the proceedings of that meeting.

139.138.The quorum necessary for the transaction of the business of the Board may be fixed by the Board from time to time and unless so fixed shall be a majority of the Directors in office. If a quorum shall not be present at any meeting of the Board, the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

140.139.The continuing Directors may act notwithstanding any vacancy in their body, but if and so long as their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of Directors, the continuing Directors or Director may act for the purpose of increasing the number of Directors to that number, or of summoning a general meeting of the Company, but for no other purpose.

141.140.Any casual vacancy shall only be filled by decision of a majority of the Board then in office, provided that a quorum is present. Any Director elected to fill a vacancy not resulting from an increase in the number of Directors shall have the same remaining term as that of his or her predecessor. Any vacancy on the Board, including a vacancy that results from an increase in the number of Directors or fromnomination for election by the death, resignation, retirement, disqualificationCompany’s shareholders was approved or removalrecommended by a vote of a Director, shall be deemed a casual vacancy.

142.141.If noChairmanChairperson is elected, or if at any meeting theChairmanChairperson is not present within five (5) minutes after the time appointed for holding the same, the Directors present may choose one of their number to be theChairmanChairpersonleast atwo-thirds of the meeting.

143.142.All acts done by any meeting of the Directors or of a committee of Directors shall, notwithstanding that it be afterwards discovered that there was some defectdirectors then still in the appointment of any Director, or that they or any of themoffice who either were disqualified, be as valid as if every such person had been duly appointed and qualified to be a Director.

144.143.Members of the Board or of any committee thereof may participate in a meeting of the Board or of such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting. Unless otherwise determined by the Directors the meeting shall be deemed to be held at the place where the telephone call or similar communication was initiated.

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145.144.A resolution in writing (in one or more counterparts), signed by all the Directors for the time being or all the members of a committee of Directors shall be as valid and effectual as if it had been passed at a meeting of the Directors or committee as the case may be duly convened and held.

RESIGNATION AND DISQUALIFICATION OF DIRECTORS

146.145.The office of a Director shall be vacated ipso facto:

146.1.145.1.if he or she resigns his or her office,directors on the date on which notice of hisEffective Date or her resignation is delivered to the registered officewhose appointment, election or tendered at a meeting of the Board or on such later date as may be specified in such notice; or

146.2.145.2.on him or her being prohibited by law from being a Director; or

146.3.145.3.on him or her ceasing to be a Director by virtue of any provision of theCompanies ActsAct.

APPOINTMENT, ROTATION, REMOVAL AND NOMINATION OF DIRECTORS

147.146.

147.1.146.1.No person shall be appointed a Director, unless nominated in accordance with the provisions of this Article 146.147. Nominations of personsnomination for election to the Board at a general meeting may be made:

(a)by the affirmative vote of the Board;

(b)with respect to election at an annual general meeting, by any Member who holds ordinary Shareswas previously so approved or other Shares carrying the general right to vote at general meetings of the Company, who is a Member at the time of the giving of the notice provided for in Article146.2147.2 and at the time of the relevant annual general meeting, and who timely complies with the notice procedures set forth in this Article146147; and

recommended; or

(c)with respect to election at an extraordinary general meeting requisitioned in accordance with section 132178(3) of the 1963 Act, by a Member or Members who hold ordinary Shares or other Shares carrying the general right to vote at general meetings of the Company and who make such nomination in the written requisition of the extraordinary general meeting in accordance with these Articles and theCompanies ActsAct relating to nominations of Directors and the proper bringing of special business before an extraordinary general meeting,

(sub-clauses (b) and (c) being the exclusive means for a Member to make nominations of persons for election to the Board).

147.2.146.2.For nominations of persons for election as Directors at an annual general meeting to be timely, a Member’s notice must comply with the requirements of Article 88.2.

147.3.146.3.To be in proper written form, a Member’s notice for nomination(s) of person(s) for election must in addition to any other applicable requirements set forth:

(a)as to each person whom the Member proposes to nominate for election or re-election as a Director:

(i)the name, age, business address and residence address of such person;

(ii)the principal occupation or employment of such person;

 

 (iii)

the class and number of Shares of which areowned (beneficiallyownedthere is consummated a merger or of record) by such personin the Company and any other direct or indirect pecuniary or economic interest in any Sharesconsolidation of the Company with any other corporation other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such person,andmerger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any affiliatesparent thereof) at least 50% of the combined voting power of the voting securities of the Company or associatessuch surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement are-capitalization of such person (if any) and a description of any agreement, arrangementthe Company (or similar transaction) in which no Person is or understanding (including, without limitation, any derivative, instrument, swap, option, warrant, shortbecomes the

 

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 interest, hedge, borrowed

Beneficial Owner, directly or loaned shares and profit sharing arrangement) that have been entered into as indirectly, of securities of the dateCompany (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company) representing 30% or more of the Member’s notice by, or on behalf of, such person or any affiliates or associates of such person (if any), the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease thecombined voting power of such personthe Company’s then outstanding securities; or any affiliates or associates of such person (if any), with respect to Shares;

 

 (iv)(A) if such person is

the shareholders of the Company approve a party to any compensatory, paymentplan of complete liquidation or other financial agreement, arrangement or understanding with any person or entity other thandissolution of the Company or has received any compensationthere is consummated an agreement for the sale or other payment from any persondisposition by the Company of all or entitysubstantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity at least 75% of the combined voting power of the voting securities of which are owned by Persons in each case in connection with candidacy or servicesubstantially the same proportions as a Director, a detailed description of such agreement, arrangement or understanding and its terms or of any such compensation received or (B) a written representation and agreement that such person is not and will not become a party to any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person as to how such person, if elected as a Directortheir ownership of the Company will act or vote onimmediately prior to such sale.

Notwithstanding the foregoing, to the extent necessary to avoid the imposition of taxes or penalties under Section 409A of the Code with respect to any Award that constitutes deferred compensation under Section 409A of the Code, a “Change in Control” will have occurred only if, in addition to the requirements set forth above, the event constitutes a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, within the meaning of guidance issued by the Secretary of the Treasury under Section 409A of the Code.

For the avoidance of doubt, any one or more of the above events may be effected pursuant to (A) a compromise or arrangement sanctioned by the court under Chapter 1 of Part 9 of the Companies Act 2014 of the Republic of Ireland or (B) otherwise under Part 9 of the Companies Act 2014 of the Republic of Ireland.

(g)

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and any issue or question; andregulations promulgated thereunder. References in the Plan to specific sections of the Code shall be deemed to include any successor provisions thereto.

 

 (v)(h)(iv)any other information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of Directors in an election contest (even if an election contest is not involved), or is otherwise required, in each case pursuant to section 14(a) of

“Committee” shall mean, at the Exchange Act, and the rules and regulations promulgated thereunder (including, without limitation, such person’s written consent to being named in the proxy statement as a nominee and, toserving as a Director if electedserve as a Director, if elected, and a representation to the effect that, if elected, such person will agree to and abide by all policiesdiscretion of the Board inof Directors, a Committee of the Board of Directors, which shall consist of two or more persons, each caseof whom, unless otherwise determined by the Board of Directors, (i) with respect to Awards intended to qualify as applicable to Directors, as may be in place from time to time),

(b)as toGrandfathered Awards, is an “outside director” within the Member givingmeaning of Section 162(m) of the noticeCode, and thebeneficial owner,Member Associated Person (if any,) on whose behalf(ii) is a “nonemployee director” within the nomination is(s) are made:meaning of Rule16b-3.

 

 (i)the name

“Company” shall mean Endo International plc, an Irish public limited company, and, address, as they appear on the Company’s Registerwhere appropriate, each of Members, of such Member, and of suchbeneficial ownerMember Associated Person (if any), on whose behalf the nomination(s) are being made;its Subsidiaries.

 

 (ii)(j)the class and number of Sharesin the

Companywhich areowned (beneficiallyownedor of record) by such Member and suchbeneficial owner and any other direct or indirect pecuniary or economic interest in any capital Shares Stock” shall mean ordinary shares of the Company, of such Member and such beneficial owner,Member Associated Person (if any) on whose behalf the nomination(s) are being made and a description of any agreement, arrangement or understanding (including, without limitation, any derivative, instrument, swap, option, warrant, short interest, hedge, borrowed or loaned shares and profit sharing arrangement) that have been entered into as of the date of the Member’s notice by, or on behalf of, such Member and such Member Associated Person (if any) or any affiliates or associates of such Member and such Member Associated Person (if any), the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such Member and such Member Associated Person (if any) or any affiliates or associates of such Member and such Member Associated Person (if any), with respect to Shares;par value $.0001 per share.

 

 (iii)(k)

a description of anyarrangements or understandingsagreement, arrangement or understanding betweenor amongsuch Member andeach proposed nominee and any other personsuch Member Associated Person (if any), any of their respective affiliates or associates, and any others (including their names)acting“Disability” shall mean permanent disability as a “group” (as such term is used in Rule 13d-5(b) under the Exchange Act) with any

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of the foregoing(if any) and each proposed nomineedetermined pursuant to which the nomination(s) are to be made byCompany’s long-term disability plan or policy, in effect at the time of such Member and suchbeneficial ownerMember Associated Person (if any);disability.

 

 (iv)(l)a representation that such Member

“Effective Date” shall mean the date as of which the Plan, as amended and restated, is a holderadopted by the Board of record of Shares entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to nominate thepersonsperson(s) named in its notice; andDirectors.

 

 (v)(m)a representation whether

“Exchange Act” shall mean the Member or the Member Associated Person (if any) intends or is partSecurities Exchange Act of a group which intends (A)1934, as amended from time to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Company’s outstanding Shares required to approve the election of the nominee(s) and/or (B) otherwise to solicit proxies from Members in support of such election;time.

 

 (vi)(n)

The “Fair Market Value” of a share of Company Stock, as of a date of determination, shall mean (i) the closing sales price per share of Company may requireStock on the Member to furnishnational securities exchange on which such other information as it may reasonably require to determinestock is principally traded on the eligibility of each proposed nominee to serve as an independent Directordate of the Company or that could be material to a reasonable Member’s understanding of the independence, or lack thereof,grant of such nominee(s); andAward, or (ii) if the shares of Company Stock are not listed or admitted to trading on any such exchange, the closing price as reported by the Nasdaq Stock Market for the last preceding date on which there was a sale of such stock on such exchange, or (iii) if the shares of Company Stock are not then listed on a national securities exchange or traded in anover-the-counter market or the value of such shares is not otherwise determinable, such value as determined by the Committee in good faith upon the advice of a qualified valuation expert. In no event shall the fair market value of any share of Company Stock, the Option exercise price of any Option, the appreciation base per share of Company Stock under any Stock Appreciation Right, or the amount payable per share of Company Stock under any other Award, be less than the par value per share of Company Stock.

 

 (vii)(o)(v)

“Full Value Award” shall mean any Award, other information relating to such Member and suchbeneficial ownerMember Associated Person (if any) that would be required to be disclosedthan an Option or a Stock Appreciation Right, which Award is settled in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of Directors, or may otherwise be required, in each case pursuant to section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder.Stock.

 

 (viii)(p)The information required

“Grandfathered Award” shall mean any Performance Award intended to constitute qualified performance-based compensation within the meaning of Section 162(m) of the Code and provided pursuant to a written binding contract that was in effect on November 2, 2017, and that was not modified in any material respect on or after such date, within the meaning of Section 13601(e)(2) of P.L.115-97 (the Tax Cuts and Jobs Act) as may be set forthamended from time to time (including any regulations or further guidance).

(q)

“Incentive Stock Option” shall mean an Option that is an “incentive stock option” within the meaning of Section 422 of the Code, or any successor provision, and that is designated by the Committee as an Incentive Stock Option.

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(r)

“Long Term Incentive Award” shall mean an Award described in Section 6(g) that is based upon a Member’s noticeperiod in excess of one year.

(s)

“Nonemployee Director” shall be supplementedmean a member of the Board of Directors who is not an employee of the Company.

(t)

“Nonqualified Stock Option” shall mean an Option other than an Incentive Stock Option.

(u)

“Option” shall mean an option to purchase shares of Company Stock granted pursuant to Section 6(b).

(v)

“Other Cash-Based Award” shall mean a right or other interest granted to a Participant pursuant to Section 6(g) other than an Other Stock-Based Award.

(w)

“Other Stock-Based Award” shall mean a right or other interest granted to a Participant, valued in whole or in part by reference to, or otherwise based on, or related to, Company Stock pursuant to Section 6(g), including but not limited to (i) unrestricted Company Stock awarded as a bonus or upon the attainment of performance goals or otherwise as permitted under the Plan, and updated(ii) a right granted to a Participant to acquire Company Stock from the Company containing terms and conditions prescribed by such Memberthe Committee.

(x)

“Participant” shall mean an employee, consultant or Member Associated Person (if any),director of the Company to whom an Award is granted pursuant to the Plan, and, upon the death of the employee, consultant or director, his or her successors, heirs, executors and administrators, as the case may be, to the extent necessary so that the information provided or required to be provided in such notice shall be true and correct (A) as of the record date for determining the Members entitled to notice of the meeting and (B) as of the date that is fifteen (15) days prior to the meeting or any adjournment or postponement thereof. Any such update and supplement shall be delivered in writing to the Secretary at the registered office not later than ten (10) days after the record date for determining the Members entitled to notice of the meeting (in the case of any update and supplement required to be made as of the record date for determining the Members entitled to notice of the meeting), and not later than the ten (10) days prior to the date for the meeting or any adjournment or postponement thereof (in the case of any update or supplement required to be made as of fifteen (15) days prior the meeting or adjournment or postponement thereof). In addition, the information required to be set forth in a Member’s notice pursuant to Article 147.3(b)(iii) shall be supplemented and updated by such Member or Member Associated Person (if any), as the case may be, whenever such Member or Member Associated Person (if any) determines that the information previously provided pursuant to Article 147.3(b)(iii) is no longer accurate in all respects. Any such update and supplement shall be delivered in writing to the Secretary at the registered office not later than five (5) days after such information is determined to no longer be accurate in all respects.be.

 

147.4.146.4.Notwithstanding the foregoing provisions of this Article146,147, unless otherwise required by law, if the Member (or(y)

“Performance Award” shall mean an Award granted to a qualified representative of the Member) does not appear at the meeting of Members of the CompanyParticipant pursuant to present a nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such vote may have been received by the Company.Section 6(f).

 

147.5.146.5.TheChairmanChairperson(z)

“Person” shall have the meaning set forth in Section 3(a)(9) of the meetingExchange Act, except that such term shall determine whethernot include (i) the Company, (ii) a nomination was not made in accordance with the procedures prescribed by these Articles, and if hetrustee or she should so determine, he or she shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.

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147.6.146.6.The Company may require any proposed nominee to furnish such other information as it may reasonably require, including the completion of any questionnaires to determine the eligibility of such proposed nominee to serve as a Directorfiduciary holding securities under an employee benefit plan of the Company, and(iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the impact that such service would have on the abilityshareholders of the Company to satisfyin substantially the requirementssame proportions as their ownership of laws, rules, regulations and listing standards applicable tostock of the Company or its Directors.Company.

 

148.147.At every annual general meeting(aa)

“Restricted Stock” shall mean a share of Company Stock which is granted pursuant to the Company, allterms of the Directors shall retire from office unless re-elected by Ordinary Resolution at the annual general meeting. A Director retiring at a meeting shall retain office until the close of that meeting (including any adjournment thereof)Section 6(e).

 

149.148.Every Director(bb)

“Retirement” shall be eligiblemean, in the case of employees, the termination of service to standthe Company (other than for re-election at an annual general meeting.Cause) during or after the calendar year in which a Participant has or will reach (i) age 55 with ten years of service with the Company, or (ii) age 60 with five years of service with the Company.

 

150.149.If a Director offers himself for re-election, he(cc)

“Rule16b-3” shall be deemedmean the Rule16b-3 promulgated under the Exchange Act, as amended from time to have been re-elected, unless at such meeting the Ordinary Resolution for the re-election of such Director has been defeated.time.

 

151.150.The Company may, by Ordinary Resolution,(dd)

“Securities Act” shall mean the Securities Act of which extended notice has been given in accordance with section142146 of the1963Act, remove any Director before the expiration of his or her period of office notwithstanding anything in these Articles or in any agreement between the Company and such Director. Such removal shall be without prejudice1933, as amended from time to any claim such Director may have for damages for breach of any contract of service between him or her and the Company.time.

 

152.151.The Company may,(ee)

“Stock Appreciation Right” shall mean the right, granted to a Participant under Section 6(d), to be paid an amount measured by Ordinary Resolution, appoint another personthe appreciation in placethe Fair Market Value of a Director removedshare of Company Stock from office under Article147153 and without prejudicethe date of grant to the powersdate of exercise of the Directors under Article 108, the Company in general meeting by Ordinary Resolution may appoint any personright, with payment to be made in cash and/or a Director either to fill a casual vacancyshare of Company Stock, as specified in the Award or as an additional Director, subject todetermined by the maximum number of Directors set out in Article 108.Committee.

 

153.152.Notwithstanding any other provision(ff)

“Stock Bonus” shall mean a bonus payable in shares of these Articles, the Directors may appoint a person who is willingCompany Stock granted pursuant to act to be a Director, either to fill a vacancy or as an additional Director, provided that the appointment does not cause the number of Directors to exceed the number fixed by or in accordance with these Articles as the maximum number of Directors. A Director so appointed shall hold office only until the next following annual general meeting. If not reappointed at such annual general meeting, such Director shall vacate office at the conclusion thereof.

ALTERNATE DIRECTORSSection 6(e).

154.153.

 

154.1.153.1.Any Director may appoint by writing under his or her hand one or more persons (including another Director) to be his or her alternate provided always that no such appointment of any person(s) other than a Director as an alternate shall be operative unless and until such appointment(s)(gg)

“Subsidiary” shall have been approved by resolutionthe meaning set forth in section 7 of the Directors.Companies Act 2014 of the Republic of Ireland; provided that, to the extent required to avoid the imposition of additional taxes under Section 409A of the Code, an entity shall not be treated as a Subsidiary unless it is also an entity in which the Company has a “controlling interest” (as defined in Treas. Reg. Sec.1.409A-1(b)(5)(ii)(E)(1)), either directly or through a chain of corporations or other entities in which each corporation or other entity has a “controlling interest” in another corporation or entity in the chain, as determined by the Committee.

 

154.2.4.153.2.An alternate Director shall be entitled, subject to him or her giving to the Company an address, to receive notices of all meetings of the Directors and of all meetings of committees of Directors of which his or her appointor is a member, to attend and vote at any such meeting at which the Director appointing him or her is not personally present and in the absence of his or her appointor to exercise all the powers, rights, duties and authorities of his or her appointor as a Director (other than the right to appoint an alternate hereunder).

154.3.

153.3.Save as otherwise provided in these Articles, an alternate Director shall be deemed for all purposes to be a Director and shall alone be responsible for his or her own acts and defaults and he or she shall not be deemed to be the agent of the Director appointing him or her. The remuneration of any such alternate Director shall be payable out of the remuneration paid to the Director appointing him or her and shall consist of such portion of the last mentioned remuneration as shall be agreed between the alternate and the Director appointing him or her.

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154.4.153.4.A Director may revoke at any time the appointment of any alternate appointed by him or her. If a Director shall die or cease to hold the office of Director, the appointment of his or her alternate shall thereupon cease and determine but if a Director retires by rotation or otherwise but is reappointed or deemed to have been reappointed at the meeting at which he or she retires, any appointment of an alternate Director made by him or her which was in force immediately prior to his or her retirement shall continue after his or her re-appointment.

154.5.153.5.Any appointment or revocation pursuant to this Article153154 may be sent by delivery, post, cable, commercial courier, telegram, telex, telefax, electronic mail or any other means of communication approved by the Directors and may bear a printed or facsimile signature of the Director making such appointment or revocation or in any other manner approved by the Directors.

SECRETARY

155.154.The Secretary shall be appointed by the Board at such remuneration (if any) and on such terms as the Board sees fit and any Secretary so appointed may be removed by the Board at any time.

156.155.The duties of the Secretary shall be those prescribed by theCompanies ActsAct, together with such other duties as shall from time to time be prescribed by the Board, and in any case, shall include the making and keeping of records of the votes, doings and proceedings of all meetings of the Members and the Board of the Company, and committees, and the authentication of records of the Company.

157.156.A provision of theCompanies ActsAct or these Articles requiring or authorising a thing to be done by or to a Director and the Secretary shall not be satisfied by its being done by or to the same person acting both as Director and as, or in the place of, the Secretary.

SEAL

158.157.The Company may, if the Board so determines, have a Seal (including any official seals kept pursuant to theCompanies ActsAct) which shall only be used by the authority of the Board or of a committee of the Board authorised by the Board in that regard and every instrument to which the Seal has been affixed shall be signed by any person who shall be either a Director or the Secretary or some other person authorised by the Board, either generally or specifically, for the purpose.

159.158.The Company may have for use in any place or places outside Ireland, a duplicate Seal or Seals each of which shall be a duplicate of the Seal of the Company except, in the case of a seal for use in sealing documents creating or evidencing securities issued by the Company, for the addition on its face of the word “Securities” and if the Board so determines, with the addition on its face of the name of every place where it is to be used.

DIVIDENDS, DISTRIBUTIONS AND RESERVES

160.159.The Company in general meeting may declare dividends, but no dividends shall exceed the amount recommended by the Board. Any general meeting declaring a dividend and any resolution of the Directors declaring an interim dividend may direct payment of such dividend or interim dividend wholly or partly by the distribution of specific assets and in particular of paid up shares, debentures or debenture stocks of any other company or in any one or more of such ways, and the Board shall give effect to such resolution, and where any difficulty arises in regard to such distribution, the Board may settle the same as they think expedient, and in particular may fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the footing of the value so fixed, in order to adjust the rights of all the parties, and may vest any such specific assets in trustees as may seem expedient to the Board.

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161.160.Subject to theCompanies ActsAct, the Board may from time to time declare dividends (including interim dividends) and distributions on Shares outstanding and authorise payment of the same out of the funds of the Company lawfully available therefore and in any currency chosen at its discretion.

162.161.The Board may, before declaring any dividends or distributions, set aside such sums as it thinks proper as a reserve or reserves which shall at the discretion of the Board, be applicable for any purpose of the Company and pending such application may, at the like discretion, be employed in the business of the Company. The Directors may also, without placing the same to reserve, carry forward any profits which they may think it prudent not to divide.

163.162.No dividend, interim dividend or distribution shall be paid otherwise than in accordance with the provisions ofPart IVsection 117 of the 1983 Act.

164.163.Stock Subject to the rights of persons, if any, entitled to Shares with special rights as to dividends or distributions, if dividends or distributions are to be declared on a class of Shares, they shall be declared and paid according to the amounts paid or credited as paid on the Shares of such class outstanding on the record date for such dividend or distribution as determined in accordance with these Articles.

Plan.165.164.The Directors may deduct from any dividend payable to any Member all sums of money (if any) immediately payable by him or her to the Company in relation to his or her Shares.

166.165.The Board or any general meeting declaring a dividend (upon the recommendation of the Board), may direct that any dividend or distribution be paid wholly or partly by the distribution of specific assets and in particular of paid up shares, debentures, or debenture stock or similar instrument of any other company or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Board may settle the same as it thinks expedient and in particular may issue fractional certificates and fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the footing of the value so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees as may seem expedient to the Board.

167.166.Any dividend, distribution, interest or other monies payable in cash in respect of Shares may be paid by cheque or warrant sent through the post, or sent by any electronic or other means of payment, directed to the registered address of the holder or, in the case of joint holders, to the holder who is first named on the Register of Members or to such person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant, electronic or other payment shall be made payable to the order of the person to whom it is sent and payment of the cheque or warrant shall be a good discharge to the Company. Any one of two or more joint holders may give effectual receipts for any dividends, bonuses, or other monies payable in respect of the Share held by them as joint holders. Any such dividend or other distribution may also be paid by any other method (including payment in a currency other than US$, electronic funds transfer, direct debit, bank transfer or by means of a relevant system) which the Directors consider appropriate and any Member who elects for such method of payment shall be deemed to have accepted all of the risks inherent therein. The debiting of the Company’s account in respect of the relevant amount shall be evidence of good discharge of the Company’s obligations in respect of any payment made by any such methods.

168.167.No dividend or distribution shall bear interest against the Company.

169.168.If the Directors so resolve, any dividend which has remained unclaimed for six (6) years from the date of its declaration shall be forfeited and cease to remain owing by the Company. The payment by the Directors of any unclaimed dividend or other monies payable in respect of a Share into a separate account shall not constitute the Company a trustee in respect thereof.

CAPITALISATION

170.169.Without prejudice to any powers conferred on the Directors as aforesaid, and subject to the Board’s authority to issue and allot Shares under Articles 6 and 7, the Board may:

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170.1.169.1.resolve to capitalise an amount standing to the credit of reserves (including a share premium account, undenominated capital account, capital redemption reserve and profit and loss account), whether or not available for distribution;

170.2.169.2.appropriate the sum resolved to be capitalised to the Members in proportion to the nominal amount of Shares held by them respectively and apply that sum on their behalf in or towards paying up in full unissued Shares or debentures of a nominal amount equal to that sum, and allot the Shares or debentures, credited as fully paid, to the Members (or as the Board may direct) in those proportions, or partly in one way and partly in the other, but the share premium account,undenominated capital account,the capital redemption reserve and profits that are not available for distribution may, for the purposes of this Article169,170, only be applied in paying up unissued Shares to be allotted to Members credited as fully paid;

170.3.169.3.make any arrangements it thinks fit to resolve a difficulty arising in the distribution of a capitalised reserve and in particular, without limitation, where Shares or debentures become distributable in fractions, the Board may deal with the fractions as it thinks fit;

170.4.169.4.authorise a person to enter (on behalf of all the Members concerned) into an agreement with the Company providing for the allotment to the Members respectively, credited as fully paid, of Shares or debentures to which they may be entitled on the capitalisation and any such agreement made under this authority being effective and binding on all those Members; and

170.5.169.5.generally do all acts and things required to give effect to the resolution.

ACCOUNTS

ACCOUNTING RECORDS

171.170.The Board shall cause to be keptproper books of accountaccounting records, whether in the form of documents, electronic form or otherwise, that:

171.1.170.1.correctly record and explain the transactions of the Company;

171.2.170.2.will at any time enable the financial position of the Company to be determined with reasonable accuracy;

171.3.170.3.will enable the Board to ensure that any balance sheet, profit and loss account or income and expenditure account of the Company complies with the requirements of theCompanies ActsAct;

171.4.170.4.will record all sums of money received and expended by the Company and the matters in respect of which the receipt or expenditure takes place, all sales and purchases of goods by the Company and the assets and liabilities of the Company; and

171.5.170.5.will enable the accounts of the Company to be readily and properly audited.

172.171. Books of accountAccounting records shall be kept on a continuous and consistent basis and entries therein shall be made in a timely manner and be consistent from year to year. The Company may send by post, electronic mail or any other means of electronic communication a summary financial statement to its Members or persons nominated by any Member. The Company may meet, but shall be under no obligation to meet, any request from any of its Members to be sent additional copies of its full report and accounts or summary financial statement or other communications with its Members.

173.172.Thebooks of accountaccounting records shall be kept at the registered office of the Company or, subject to the provisions of theCompanies ActsAct, at such other place as the Directors think fit and shall be open at all reasonable times to the inspection of the Directors.

174.173. Proper booksAccounting records shall not be deemed to be kept as required by Articles170171 to172,173, if there are not kept suchbooks of accountaccounting records as are necessary to give a true and fair view of the state of the Company’s affairs and to explain its transactions.

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175.174.In accordance with the provisions of theCompanies ActsAct, the Board may from time to time cause to be prepared and to be laid before the Company in general meeting profit and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by law.

176.175.A copy of every balance sheet (including every document required by law to be annexed thereto) which is to be laid before the annual general meeting of the Company together with a copy of the Directors’ report and Auditors’ report shall be sent by post, electronic mail or any other means of communication (electronic or otherwise), not less than twenty-one (21) clear days before the date of the annual general meeting, to every person entitled under the provisions of theCompanies ActsAct to receive them; provided that in the case of those documents sent by electronic mail or any other means of electronic communication, such documents shall be sent with the consent of the recipient, to the Address of the recipient notified to the Company by the recipient for such purposes.

AUDIT

177.176.Auditors shall be appointed and their duties regulated in accordance withsections 160 to 163Chapter 18 of the1963Act or any statutory amendment thereof, any other applicable law and such requirements not inconsistent with theCompanies ActsAct as the Board may from time to time determine.

NOTICES

178.177.Any notice to be given, served, sent or delivered pursuant to these Articles shall be in writing (whether in electronic form or otherwise).

178.1.177.1.A notice or document to be given, served, sent or delivered in pursuance of these Articles, and the annual report of the Company, may be given to, served on or delivered to any Director, Member or committee member by the Company:

 

 (a)by handing same to their authorised agent;

Shares Available for Awards.

The maximum number of shares of Company Stock reserved for issuance under the Plan (all of which may be granted as Incentive Stock Options or in any other type of Award selected by the Committee) shall be the sum of (in each case, subject to adjustment as provided herein) (i) 5,000,000 shares, (ii) the number of shares reserved but unissued under the Plan as of the date the Plan, as amended and restated, is approved by shareholders, and (iii) the number of shares becoming available for reuse in accordance with Section 4(e) of the Plan following the date the Plan, as amended and restated, is approved by shareholders. Shares reserved under the Plan may be authorized but unissued Company Stock or authorized and issued Company Stock held in the Company’s treasury. The Committee may direct that any stock certificate evidencing shares issued pursuant to the Plan shall bear a legend setting forth such restrictions on transferability as may apply to such shares pursuant to the Plan.

 

 (b)by delivering same to their registered address;

Grandfathered Award Individual Limitation.

To the extent required by Section 162(m) of the Code with respect to Grandfathered Awards, the total number of shares of Company Stock subject to such Awards granted to any one Participant during any tax year of the Company shall not exceed one million five hundred thousand (1,500,000) shares (based on highest levels of performance resulting in maximum payout), subject to adjustment as provided herein.

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 (c)by sending same by the post in a pre-paid cover addressed to their registered address; or

(d)by sending, with the consent of the

Director Member or committee member to the extent required by law, same by means of electronic mail or other means of electronic communication approved by the Directors, to the Address of the Director, Member or committee member notified to the Company by the Director, Member or committee member for such purpose (or if not so notified, then to the Address of the Director, Member or committee member last known to the Company).

178.2.Limitation.177.2.For the purposes of these Articles and the Companies Act, a document shall be deemed to have been sent to a Director, Member or committee member if a notice is given, served, sent or delivered to the Director, Member or committee member and the notice specifies the website or hotlink or other electronic link at or through which the Director, Member or committee member may obtain a copy of the relevant document.

178.3.177.3.Where a notice or document is given, served or delivered pursuant to sub-paragraph 177.1(a) or 177.1(b) of this Article, the giving, service or delivery thereof shall be deemed to have been effected at the time the same was handed to the Director, Member or committee member or his or her authorised agent, or left at his or her registered Address (as the case may be).

178.4.177.4.Where a notice or document is given, served or delivered pursuant to sub-paragraph 177.1(c) of this Article, the giving, service or delivery thereof shall be deemed to have been effected at the expiration of twenty-four (24) hours after the cover containing it was posted. In proving service or delivery it shall be sufficient to prove that such cover was properly addressed, stamped and posted.

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178.5.177.5.Where a notice or document is given, served or delivered pursuant to sub-paragraph 177.1(d) of this Article, the giving, service or delivery thereof shall be deemed to have been effected at the expiration of forty-eight (48) hours after despatch.

178.6.177.6.Every legal personal representative, committee, receiver, curator bonis or other legal curator, assignee in bankruptcy, examiner or liquidator of a Member shall be bound by a notice given as aforesaid if sent to the last registered Address of such Member, or, in the event of notice given or delivered pursuant to sub-paragraph 177.1(d), if sent to the Address notified by the Company by the Member for such purpose notwithstanding that the Company may have notice of the death, lunacy, bankruptcy, liquidation or disability of such Member.

178.7.177.7.Notwithstanding anything contained in this Article, the Company shall not be obliged to take account of or make any investigations as to the existence of any suspension or curtailment of postal services within or in relation to all or any part of any jurisdiction.

178.8.177.8.Any requirement in these Articles for the consent of a Member in regard to the receipt by such Member of electronic mail or other means of electronic communications approved by the Directors, including the receipt of the Company’s annual report,audited accountsstatutory financial statements and the Directors’ and auditor’s reports thereon, shall be deemed to have been satisfied where the Company has written to the Member informing him or her of its intention to use electronic communications for such purposes and the Member has not, within four (4) weeks of the issue of such notice, served an objection in writing on the Company to such proposal. Where a Member has given, or is deemed to have given, his/her consent to the receipt by such Member of electronic mail or other means of electronic communications approved by the Directors, she/he may revoke such consent at any time by requesting the Company to communicate with him or her in documented form; provided, however, that such revocation shall not take effect until five (5) days after written notice of the revocation is received by the Company.

178.9.177.9.Without prejudice to the provisions of sub-paragraphs 177.1(a) and 177.1(b) of this Article, if at any time by reason of the suspension or curtailment of postal services in any territory, the Company is unable effectively to convene a general meeting by notices sent through the post, a general meeting may be convened by a public announcement (as defined below) and such notice shall be deemed to have been duly served on all Members entitled thereto at noon (New York time) on the day on which the said public announcement is made. In any such case the Company shall put a full copy of the notice of the general meeting on its website. A “public announcement” shall mean disclosure in a press release reported by a financial news service or in a document publicly filed by the Company with the U.S. Securities and Exchange Commission pursuant to sections 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder.

179.178.Notice may be given by the Company to the joint holders of a Share by giving the notice to the joint holder whose name stands first in the Register in respect of the Share and notice so given shall be sufficient notice to all the joint holders.

180.179.

180.1.179.1.Every person who becomes entitled to a Share shall before his or her name is entered in the Register in respect of the Share, be bound by any notice in respect of that Share which has been duly given to a person from whom he or she derives his or her title.

180.2.179.2.A notice may be given by the Company to the persons entitled to a Share in consequence of the death or bankruptcy of a Member by sending or delivering it, in any manner authorised by these Articles for the giving of notice to a Member, addressed to them at the address, if any, supplied by them for that purpose. Until such an address has been supplied, a notice may be given in any manner in which it might have been given if the death or bankruptcy had not occurred.

181.180.The signature (whether electronic signature, an advanced electronic signature or otherwise) to any notice to be given by the Company may be written (in electronic form or otherwise) or printed.

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182.181.A Member present, either in person or by proxy, at any meeting of the Company or the holders of any class of Shares in the Company shall be deemed to have received notice of the meeting and, where requisite, of the purposes for which it was called.

UNTRACED HOLDERS

183.182.

183.1.182.1.The Company shall be entitled to sell at the best price reasonably obtainable, any Share or stock of a Member or any Share or stock to which a person is entitled by transmission if and provided that:

(a)for a period of six (6) years (not less than three (3) dividends having been declared and paid) no cheque or warrant sent by the Company through the post in a prepaid letter addressed to the Member or to the person entitled by transmission to the Share or stock at his or her address on the Register or other than the last known address given by the Member or the person entitled by transmission to which cheques and warrants are to be sent has been cashed and no communication has been received by the Company from the Member or the person entitled by transmission; and

(b)at the expiration of the said period of six (6) years the Company has given notice by advertisement in a leading newspaper circulating in the area in which the address referred to in paragraph (a) of this Article is located of its intention to sell such Share or stock; and

(c)the Company has not during the further period of three (3) months after the date of the advertisement and prior to the exercise of the power of sale received any communication from the Member or person entitled by transmission.

183.2.182.2.To give effect to any such sale, the Company may appoint any person to execute as transferor an instrument of transfer of such Share or stock and such instrument of transfer shall be as effective as if it had been executed by the Member or person entitled by transmission to such Share or stock. The Company shall account to the Member or other person entitled to such Share or stock for the net proceeds of such sale by carrying all monies in respect thereof to a separate account which shall be a permanent debt of the Company and the Company shall be deemed to be a debtor and not a trustee in respect thereof for such Member or other person. Monies carried to such separate account may either be employed in the business of the Company or invested in such investments (other than shares of the Company or its holding company if any) as the Directors may from time to time think fit.

DESTRUCTION OF DOCUMENTS

184.183.Former shareholders of Paladin Labs Inc. (“Paladin”) who do not deliver their Paladin share certificates and all other required documentation to Paladin’s exchange agent on or before the second anniversary of the completion of the Company’s indirect acquisition of Paladin (the “Paladin Acquisition”) may in the absolute discretion of the Board, have their relevant Shares repurchased by the Company for nil consideration in accordance with the procedures set out in Article 31.3 and thereafter shall cease to have a claim or interest of any kind or nature as a Member and shall lose their right to receive any dividend or other distribution declared by the Company with respect to his or her relevant Shares after the completion of the Paladin Acquisition.

185.184.The Company may destroy:

185.1.184.1.any dividend mandate or any variation or cancellation thereof or any notification of change of name or address, at any time after the expiry of two (2) years from the date such mandate variation, cancellation or notification was recorded by the Company;

185.2.184.2.any instrument of transfer of Shares which has been registered, at any time after the expiry of six (6) years from the date of registration; and

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185.3.184.3.any other document on the basis of which any entry in the Register was made, at any time after the expiry of six (6) years from the date an entry in the Register was first made in respect of it;

185.4.184.4.and it shall be presumed conclusively in favour of the Company that every share certificate (if any) so destroyed was a valid certificate duly and properly sealed and that every instrument of transfer so destroyed was a valid and effective instrument duly and properly registered and that every other document destroyed hereunder was a valid and effective document in accordance with the recorded particulars thereof in the books or records of the Company provided always that:

(a)the foregoing provisions of this Article shall apply only to the destruction of a document in good faith and without express notice to the Company that the preservation of such document was relevant to a claim;

(b)nothing contained in this Article shall be construed as imposing upon the Company any liability in respect of the destruction of any such document earlier than as aforesaid or in any case where the conditions of proviso (a) above are not fulfilled; and

(c)references in this Article to the destruction of any document include references to its disposal in any manner.

WINDING UP

186.185.If the Company shall be wound up and the assets available for distribution among the Members as such shall be insufficient to repay the whole of the paid up or credited as paid up share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Members in proportion to the capital paid up or credited as paid up at the commencement of the winding up on the Shares held by them respectively. And if in a winding up the assets available for distribution among the Members shall be more than sufficient to repay the whole of the share capital paid up or credited as paid up at the commencement of the winding up, the excess shall be distributed among the Members in proportion to the capital at the commencement of the winding up paid up or credited as paid up on the said Shares held by them respectively. Provided that this Article shall not affect the rights of the Members holding Shares issued upon special terms and conditions.

186.1.185.1.In case of a sale by the liquidator under section260601 of the 1963 Act, the liquidator may by the contract of sale agree so as to bind all the Members, for the allotment to the Members directly, of the proceeds of sale in proportion to their respective interests in the Company and may further, by the contract, limit a time at the expiration of which obligations or Shares not accepted or required to be sold shall be deemed to have been irrevocably refused and be at the disposal of the Company, but so that nothing herein contained shall be taken to diminish, prejudice or affect the rights of dissenting Members conferred by the said section.

186.2.185.2.The power of sale of the liquidator shall include a power to sell wholly or partially for debentures, debenture stock, or other obligations of another company, either then already constituted or about to be constituted for the purpose of carrying out the sale.

187.186.If the Company is wound up, the liquidator, with the sanction of a Special Resolution and any other sanction required by theCompanies ActsAct, may divide amongst the Membersin specie or kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not), and, for such purpose, may value any assets and determine how the division shall be carried out as between the Members or different classes of Members. The liquidator, with the like sanction, may vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories as, with the like sanction, he or she determines, but so that no Member shall be compelled to accept any assets upon which there is a liability.

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INDEMNITY

188.187.

188.1.187.1.Subject to the provisions of, and so far as may be permitted by, theCompanies ActsAct, every Director and Secretary shall be entitled to be indemnified by the Company against all costs, charges, losses, expenses and liabilities incurred by him or her in the execution and discharge of his or her duties or in relation thereto including any liability incurred by him in defending any proceedings, civil or criminal, which relate to anything done or omitted or alleged to have been done or omitted by him as an officer or employee of the Company and in which judgement is given in his or her favour (or the proceedings are otherwise disposed of without any finding or admission of any material breach of duty on his or her part) or in which he or she is acquitted or in connection with any application under any statute for relief from liability in respect of any such act or omission in which relief is granted to him by the Court.

188.2.187.2.As far as permissible under theCompanies ActsAct, the Company shall indemnify any current or former executive or officer of the Company (excluding any Directors or Secretary) or any person who is serving or has served at the request of the Company as a Director, executive, officer or trustee of another company, joint venture, trust or other enterprise against expenses, including attorneys’ fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, other than an action by or in the right of the Company, to which he or she was, is, or is threatened to be, made a party by reason of the fact that he or she is or was such a Director, executive, officer or trustee, provided always that the indemnity contained in this Article187.2188.2 shall not extend to any matter which would render it void pursuant to theCompanies ActsAct.

188.3.187.3.In the case of any threatened, pending or completed action, suit or proceeding by or in the right of the Company, the Company shall indemnify each person indicated in Article187.2188.2 against expenses, including attorneys’ fees, actually and reasonably incurred in connection with the defence or the settlement thereof, except no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for fraud or dishonesty in the performance of his or her duty to the Company unless and only to the extent that the Court or the Court in which such action or suit was brought shall determine upon application that despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the Court shall deem proper.

188.4.187.4.As far as permissible under theCompanies ActsAct, expenses, including attorneys’ fees, incurred in defending any action, suit or proceeding referred to in Articles187.2188.2 and187.3188.3 may be paid by the Company in advance of the final disposition of such action, suit or proceeding as authorised by the Board in the specific case upon receipt of an undertaking by or on behalf of the Director, executive, officer or trustee, or other indemnitee to repay such amount, unless it shall ultimately be determined that he or she is entitled to be indemnified by the Company as authorised by these Articles.

188.5.

187.5.It being the policy of the Company that indemnification of the persons specified in this Article shall be made to the fullest extent permitted by law, the indemnification provided by this Article shall not be deemed exclusive (a) of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Memorandum, Articles, any agreement, any insurance purchased by the Company, any vote of Members or disinterested Directors, or pursuant to the direction (however embodied) of any court of competent jurisdiction, or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, or (b) of the power of the Company to indemnify any person who is or was an employee or agent of the Company or of another company, joint venture, trust or other enterprise which he or she is serving or has served at the request of the Company, to the same extent and in the same situations and subject to the same determinations as are hereinabove set forth with respect to a Director, executive, officer or trustee. As used in this Article187.5,188.5, references to the “Company” include all constituent companies in a consolidation or merger

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in which the Company or a predecessor to the Company by consolidation or merger was involved. The indemnification provided by this Article shall continue as to a person who has ceased to be a Director, executive, officer or trustee and shall inure to the benefit of the heirs, executors, and administrators of such a person.

188.6.187.6.The Directors shall have power to purchase and maintain for any Director, the Secretary or other officers or employees of the Company insurance against any such liability as referred to in section200235 of the 1963 Act.

188.7.187.7.The Company may additionally indemnify any employee or agent of the Company or any Director, executive, officer, employee or agent of any of its subsidiaries to the fullest extent permitted by law.

FINANCIAL YEAR

189.188.The financial year of the Company shall be as prescribed by the Board from time to time.

SHAREHOLDER RIGHTS PLAN

190.189.The Board is hereby expressly authorised to adopt any shareholder rights plan, upon such terms and conditions as the Board deems expedient and in the best interests of the Company, subject to applicable law.

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We, the corporate body whose name and address is subscribed, wish to be formed into a company in pursuance of this memorandum of association, and we agree to take the number of shares in the capital of the Company set opposite our respective names.

Name, Address and Description of the Subscriber

Number of shares taken by the Subscriber

For and on behalf of

Goodbody Subscriber One Limited

IFSC, North Wall Quay, Dublin 1

One Ordinary Share of

EUR€1.00 each

Limited Liability Company

For and on behalf of

Goodbody Subscriber Two Limited

IFSC, North Wall Quay, Dublin 1

One Ordinary Share of

EUR€1.00 each

Limited Liability Company

Total Number of Shares Taken: 2

Dated
Witness to the above signature:

Name:

Address:

Occupation:

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ANNEX 2—ADMINISTRATIVE AMENDMENTS TO THE

ARTICLES OF ASSOCIATION & OPTIONAL PROVISIONS

FROM WHICH THE COMPANY PROPOSES TO OPT-OUT

Part I

Summary of amendments being made relating to the passing of the Companies Act 2014 or for administrative or housekeeping reasons

Amendment to current Articles of AssociationReason for amendment
All references to the old Irish company law statutes, which were repealed when the Companies Act 2014 became effective on June 1, 2015 are replaced by references to the Companies Act 2014To make the Memorandum and Articles of Association consistent with the statutory references in the Companies Act 2014.
Insert references to undenominated capitalIn various places in our Articles of Association, the expression “undenominated capital” is being inserted as this expression is now used in the Companies Act 2014 to refer to that part of a company’s issued share capital which is not represented by the nominal (or par) value paid up on a company’s issued shares.
Substitute references to Chairman with references to ChairpersonIn various places in our Articles of Association, the expression “Chairman” is being replaced with the expression “Chairperson” as this expression is now used in the Companies Act 2014.
Amendment to Article 5Article 5 is being amended to clarify that, to the extent permitted by the Companies Act 2014, shares may be allotted by a committee of the Directors or by any other person where such committee or person is authorized by the Directors.
Amendment to Article 7(1)Article 7(1) is being amended so that it is consistent with the correct statutory references in the Companies Act. It is also being amended to clarify that the authority of the Company to allot and issue relevant securities up to the amount of authorized but unissued share capital as at the date of the adoption of the revised Articles of Association shall expire on 25 February 2019. This expiry date is consistent with the existing authority as it is five years from the date of the adoption of the current Articles of Association in February 2014.
Amendment to Article 7(2)Article 7(2) is being amended so that it is consistent with the correct statutory references in the Companies Act. The authority to disapply statutory pre-emption provisions applies until the expiry date specified in the revised Article 7(1).
Amendment to Article 7(3)Article 7(3) is being amended to reflect that the instruments permitted to be issued under the Companies Act 2014 are permissible letters of allotment.
Amendment to Article 11Article 11 is being amended for clarification purposes by the insertion of the wording “, save where acquired for nil consideration in accordance with the Act,” because in the absence of this wording it deems every acquisition by the Company of its shares even for nil consideration to be a redemption (and consequently would require the criteria for a redemption to be fulfilled). A company is permitted to acquire its own shares for nil consideration pursuant to the Companies Act 2014 and does not need to satisfy the conditions of redemption to do so. The wording “unless the Board resolves, prior to the existence or creation of any relevant arrangement, that the arrangement concerned is to be treated as a purchase of shares pursuant to article 31.3, in which case the arrangement shall be so executed” has been included to clarify that the Board may effect a repurchase of shares by way of purchase in accordance with Article 31.3 and not only by way of redemption pursuant to Article 11. Article 11 includes further additional wording to clarify that no shareholders’ resolution will be required in the circumstances to deem a share redeemable since section 83 of the Companies Act 2014 provides that, unless otherwise provided in the Articles, the Company will be required to pass a special resolution to convert shares into redeemable shares.
Amendment to Article 18Article 18 is being updated so that it is consistent with section 99(7) of the Companies Act 2014 which provides that, if a member of a company so requests, such member shall be entitled to receive from the company a share certificate in respect of any shares held by such member.
Amendments to Articles 25 and 26(1)Articles 25 and 26(1) are being updated to be consistent with section 94(2) of the Companies Act 2014 (which provides that an instrument of transfer must be signed by both the transferor and transferee if the share concerned is not fully paid).

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Amendment to current Articles of AssociationReason for amendment
Amendment to Article 29Article 29 is being updated because the term ‘infant’ is no longer used in Irish legislation.
Amendment to Article 38Article 38 is being updated to reflect the wording in the Companies Act 2014.
Amendment to Article 56Article 56 is being updated to reflect the wording in section 81(7) of the Companies Act 2014 which deals with forfeiture of shares.
Amendment to Article 64.2Article 64.2 is being updated to add the wording “, or otherwise required or permitted by applicable law, including without limitation section 83(1)(c) of the Act,” to clarify that the provision is qualified by applicable law, including section 83(1)(c) of the Companies Act 2014.
Amendment to Article 79Article 79 is being updated to: (i) reflect that the distinction between special and ordinary business in general meetings no longer exists under the Companies Act 2014; and (ii) be consistent with section 186 of the Companies Act 2014 (which codifies and updates the legal position as to what constitutes the business of an annual general meeting) while still reflecting what the Company usually regards as the business of the annual general meeting.
Amendment to Article 98Article 98 is being updated to reflect the wording in section 188(4) of Companies Act 2014 which deals with votes of members.
Amendment to Article 102Article 102 is being amended to be consistent with sections 184 and 183 of the Companies Act 2014 which prescribe a mandatory form of proxy and new requirements with regard to the timing of the deposit of a proxy.
Amendment to Article 107(1)Article 107(1) is being amended to be consistent with section 183 of the Companies Act 2014 which prescribes new requirements with regard to the timing of any revocation of a proxy.
Insertion of new wording in Article 114Section 228(1)(d) of the Companies Act 2014 codifies the common law restriction on the use of company property by directors save to the extent permitted by a company’s constitution. The new Article 114 is being inserted so that our directors may continue to use Company property pursuant to or in connection with the exercise or performance of their duties, functions and powers as directors or employees; the terms of any contract of service or employment or letter of appointment; and, or in the alternative, any other usage authorized by our Board from time to time.
Insertion of new wording in Article 113Sections 228(1)(e) and 228(2) of the Companies Act 2014 codify the common law rules on directors fettering their independent judgment and the new wording in Article 113 makes it clear that section 228(1)(e) will not restrict anything which may be done by our directors in accordance with the prior authorization of our Board.
Substitute references to books of account with references to accounting recordsIn various places in our Articles of Association, the expression “proper books of account” is being replaced with the expression “accounting records” as this expression is now used in the Companies Act 2014.
Amendment to Article 177(8)Article 177(8) is being amended as “audited accounts” are now referred to as “statutory financial statements” in the Companies Act 2014.
Moving the subscription clause from the end of our memorandum of association to the end of our articles of associationAs provided for in Schedule 9 of the Companies Act 2014, the subscription clause has been moved from the end of our memorandum of association to the end of our articles of association.

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Part II

Summary of Optional Provisions in the Companies Act 2014 From Which the Company Proposes to Opt-Out

Sections of the Companies
Act 2014 from which the
Company proposes to

opt-out

 

Relevant section of

current Articles of

Association

 Company’s reason for opting-out of the section
43(2) and 43(3) 157 and 158 Sections 43(2) and 43(3) deal with the use of the common seal of a company. We propose to opt-out of these sections as such matters are already provided for in Articles 157 and 158.
65(2) to 65(7) Not applicable Sections 65(2) to 65(7) deal with the power of a company to convert shares into stock and reconvert stock into shares. We propose to opt-out of these sections as they are not contemplated in the Company’s existing Articles of Association and the intention is to preserve the status quo.
77 to 81 37 to 58 Sections 77 to 81 deal with the making of calls in respect of unpaid amounts due on shares issued by a company, liens on shares and forfeiture of shares. We propose to opt-out of these sections as such matters are already provided for in Articles 37 to 58.
94(1) 25 to 27 Section 94(1) deals with transfers of shares and debentures. We propose to opt-out of this section as such matter is already provided for in Articles 25 to 27.
95(1) 25 to 27 Section 95(1) deals with restrictions on the transfer of shares. We propose to opt-out of this section as such matter is already provided for in Articles 25 to 27.
96 60 to 62 Section 96 deals with transmission of shares in a company. We propose to opt-out of these sections as such matter is already provided for in Articles 60 to 62.
124 and 125 159 to 168 Sections 124 and 125 deal with the declaration and payment of dividends by a company. We propose to opt-out of these sections as such matters are already provided for in Articles 159 to 168.
126 169 Section 126 deals with the capitalization of a company’s reserves for the purposes of making bonus issues of shares. We propose to opt-out of this section as such matter is already provided for in Article 169.
144(3) and (4) 146 to 152 Sections 144(3) and (4) deal with the appointment of directors. We propose to opt-out of these sections as such matter is already provided for in Articles 146 to 152.
148(2) 145 Section 148(2) deals with how the office of a director may be vacated before the end of the appointed term. We propose to opt-out of this section as such matter is already provided for in Article 145.
158 to 165 (excluding 161(7) which is not applicable to the Company) 119 to 144 and 153 Sections 158 to 165 deal with a board’s power of management and delegation, the appointment of a managing director, the establishment of board committees, matters relating to board procedure and the appointment of alternate directors. We propose to opt-out of these sections as such matters are already provided for in Articles 119 to 144 and 153.

180(5), 181(1)

and 181(6)

 177 to 181 Sections 180(5), 181(1) and 181(6) deal with how notices of general meetings are given and who is entitled to receive such notices. We propose to opt-out of these sections as such matter is already provided for in Articles 177 to 181.
182(2) and 182(5) 80 and 81 Sections 182(2) and 182(5) deal with the quorum requirements for a general meeting of a company. We propose to opt-out of these sections as such matters are already provided for in Articles 80 and 81.
183(3) 102(1) We propose to opt-out of Section 183(3) as the appointment of multiple proxies is expressly permitted by Article 102(1).
186(c) 79 Section 186(c) deals with the business of the annual general meeting. We propose to opt-out of this section as the business of the annual general meeting is already provided for in Article 79.
187 and 188 79 to 101 Sections 187 and 188 deal with the conduct of general meetings and voting at such meetings. We propose to opt-out of these sections as such matters are already provided for in Articles 79 to 101.
218(3), (4) and (5) 177 to 181 Sections 218(3), (4) and (5) deal with the service of notice on members of a company. We propose to opt-out of this section as such matter is already provided for in Articles 177 to 181.
229, 230 and 1113 112 to 118 Sections 229, 230 and 1113 deal with potential conflicting interests of directors. We propose to opt-out of these sections as such matters are provided for in Articles 112 to 118.
338(5) and (6) 175 and 177 Sections 338(5) and (6) deal with delivery of financial statements via the website of a company. We propose to opt-out of these sections as such matter is already provided for in Articles 175 and 177.
618(1)(b) 185 Section 618(1)(b) deals with the distribution of property on a winding up of a company. We propose to opt-out of this section as such matter is already provided for in Article 185.
620(8) 168 Section 620(8) stipulates the timeframe for claiming dividends. We propose to opt-out of this section as such matter is already provided for in Article 168.
1090 146 to 152 Section 1090 deals with the rotation of directors. We propose to opt-out of this section as such matter is provided for in Articles 146 to 152.
1092 109 Section 1092 deals with the remuneration of the directors. We propose to opt-out of this section as such matter is provided for in Article 109.

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ANNEX 3—AMENDMENT TO

ENDO INTERNATIONAL PLC 2015 STOCK INCENTIVE PLAN

WHEREAS, the Board of Directors (the “Board”) of Endo International plc (the “Company”) adopted the Endo International plc 2015 Stock Incentive Plan (the “Plan”) on April 28, 2015, and the shareholders of the Company approved the plan on June 9, 2015;

WHEREAS, pursuant toSection 4(a) of the Plan, the Committee (as defined in the Plan) shall administer the Plan;

WHEREAS, pursuant toSection 15 of the Plan, the Board or the Committee may amend or alter the Plan;

WHEREAS, the Committee has determined that it is in the best interests of the Company to amend the Plan as hereinafter set forth in this Amendment to the Plan (this “Amendment”); and

WHEREAS, the Amendment shall be effective upon the date of its approval by the Company’s shareholders.

NOW, THEREFORE, the Plan is hereby amended as follows:

1.

Section 4 (Stock Subject to the Plan) is hereby amended (i) to reflect the inclusion of a new subsection 4(c) and (ii) to renumber the subsequent subsections as follows:

“(c)Director Limitation.

Subject to adjustment as provided by Section 4(d), the maximum Fair Market Value, as of the grant date, of shares of Company Stock subject to Awards granted to a Nonemployee Director in any consecutive twelve month period will be $750,000.

 

 2.(d)

Clause (4)Adjustment for Change in the second sentence of Section 6(f)(ii) is hereby amended to delete the words “extraordinary or.”Capitalization.

3.

Section 12(b) is hereby deleted and replaced with the following provision:

(b) WheneverIn the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Company Stock, or other property), or any other alteration to the capital structure of the Company whether by way of recapitalization, Company Stock split, reverse Company Stock split, reorganization, merger, consolidation,spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or event, makes an adjustment appropriate in order to prevent dilution or enlargement of the rights of Participants under the Plan, then the Committee shall make such equitable changes or adjustments as it deems necessary or appropriate to any or all of (i) the number and kind of shares of Company Stock are towhich may thereafter be delivered pursuant to an Award,issued in connection with Awards, (ii) the Company shall have the right to require the Participant to remit to the Company in cash an amount sufficient to satisfy any federal, statenumber and local withholding tax requirements related thereto. With the approvalkind of the Committee and subject to applicable law, a Participant may satisfy the foregoing requirement by electing to have the Company withhold from delivery shares of Company Stock, having a value equalsecurities or other property (including cash) issued or issuable in respect of outstanding Awards, (iii) the exercise price, grant price or purchase price relating to any Award, and (iv) the minimum amountmaximum number of tax requiredshares subject to be withheld or such other amount that will not cause adverse accounting consequences for the Company and is permitted under applicable withholding rules promulgated by the Internal Revenue Service or another applicable governmental entity. Such shares shall be valued at their Fair Market Value on the date ofAwards which the amount of tax to be withheld is determined. Fractional share amounts shall be settled in cash. Such a withholding election may be madeawarded to any employee during any tax year of the Company; provided that, with respect to all orIncentive Stock Options, any portionsuch adjustment shall be made in accordance with Section 424 of the sharesCode; and provided further that, no such adjustment shall cause any Award hereunder which is or could be subject to Section 409A of the Code to fail to comply with the requirements of such section; and provided further that in no event shall the per share exercise price of an Option or subscription price per share of an Award be delivered pursuantreduced to an Award.amount that is lower than the par value of a share.

 

 4.(e)

General Terms and Conditions. All other terms and conditionsReuse of Shares.

Except as set forth below, if any shares subject to an Award are forfeited, cancelled, exchanged or surrendered, or if an Award terminates or expires without a distribution of shares to the Participant, the shares of Company Stock with respect to such Award shall, to the extent of any such forfeiture, cancellation, exchange, surrender, withholding, termination or expiration, again be available for Awards under the Plan. Notwithstanding the foregoing, upon the exercise of any Award granted in tandem with any other Awards, such related Awards shall be cancelled to the extent of the number of shares of Company Stock as to which the Award is exercised and such number of shares shall no longer be available for Awards under the Plan, and upon the exercise of a Stock Appreciation Right, the number of shares of Company Stock reserved and available for issuance under the Plan shall be reduced by the full number of shares of Company Stock with respect to which such award is being exercised. In addition, notwithstanding the forgoing, the shares of Company Stock surrendered or withheld as payment of either the exercise price of an Option (including shares of Company Stock otherwise underlying an Award of a Stock Appreciation Right that are retained by the Company to account for the appreciation base of such Stock Appreciation Right) and/or withholding taxes in respect of an Award shall no longer be available for Awards under the Plan.

5.

Eligibility.

The persons who shall be eligible to receive Awards pursuant to the Plan shall be the individuals the Committee shall select from time to time, who are employees (including officers of the Company and its Subsidiaries, whether or not they are directors of the Company or its Subsidiaries), Nonemployee Directors, and consultants of the Company and its Subsidiaries; provided, that Incentive Stock Options may be granted only to employees (including officers and directors who are also employees) of the Company or its Subsidiaries.

6.

AwardsUnderthe Plan, not amended hereunder, shall remain in full force and effect, as applicable.Plan.

 

 5.(a)

This AmendmentAgreement.

The Committee may grant Awards in such amounts and with such terms and conditions as the Committee shall determine in its sole discretion, subject to the terms and provisions of the Plan. Each Award granted under the Plan (except an unconditional Stock Bonus) shall be evidenced by an Agreement as the Committee may in its sole discretion deem necessary or desirable and unless the Committee determines otherwise, such Agreement must be signed, acknowledged and returned by the Participant to the Company. Unless the Committee determines otherwise, any failure by the Participant to sign and return the Agreement within such period of time following the granting of the Award as the Committee shall prescribe shall cause such Award to the Participant to be null and void. By accepting an Award or other benefits under the Plan (including participation in the Plan), each Participant, shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, all provisions of the Plan and the Agreement.

(b)

Stock Options.

(i)

Grant of Stock Options. The Committee may grant Options under the Plan to purchase shares of Company Stock in such amounts and subject to such terms and conditions as the Committee shall from time to time determine in its sole discretion, subject to the terms and provisions of the Plan. The exercise price of the share purchasable under an Option shall be governeddetermined by the Committee, but in no event shall the exercise price be less than the Fair Market Value per share on the grant date of such Option. The date as of which the Committee adopts a resolution granting an Option shall be considered the day on which such Option is granted unless such resolution specifies a later date.

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(ii)

Notwithstanding the foregoing, if the vesting condition for any Option (other than Options excluded from the minimum vesting requirement as set forth in Section 6(j)) relates exclusively to the passage of time and construedcontinued employment, such time period shall not be less than 36 months, with no more than thirty-three andone-third percent (33 1/3%) of the Award vesting every 12 months from the date of the Award, subject to Sections 7 and 8. If the vesting condition for any Option, relates to the attainment of specified Performance Goals, such Option shall vest over a performance period of not less than one (1) year, subject to Sections 7 and 8.

(iii)

Each Option shall be clearly identified in the applicable Agreement as either an Incentive Stock Option or a Nonqualified Stock Option and shall state the number of shares of Company Stock to which the Option (and/or each type of Option) relates.

(c)

Special Requirements for Incentive Stock Options.

(i)

To the extent that the aggregate Fair Market Value of shares of Company Stock with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year under the Plan and any other stock option plan of the Company shall exceed $100,000, such Options shall be treated as Nonqualified Stock Options. Such Fair Market Value shall be determined as of the date on which each such Incentive Stock Option is granted.

(ii)

No Incentive Stock Option may be granted to an individual if, at the time of the proposed grant, such individual owns (or is deemed to own under the Code) stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company unless (A) the exercise price of such Incentive Stock Option is at least 110 percent of the Fair Market Value of a share of Company Stock at the time such Incentive Stock Option is granted and (B) such Incentive Stock Option is not exercisable after the expiration of five years from the date such Incentive Stock Option is granted.

(d)

Stock Appreciation Rights.

(i)

The Committee may grant a related Stock Appreciation Right in connection with all or any part of an Option granted under the Plan, either at the time such Option is granted or at any time thereafter prior to the exercise, termination or cancellation of such Option, and subject to such terms and conditions as the Committee shall from time to time determine in its sole discretion, consistent with the terms and provisions of the Plan, provided, however, that in no event shall the appreciation base of the shares of Company Stock subject to the Stock Appreciation Right be less than the Fair Market Value per share on the grant date of such Stock Appreciation Right. The holder of a related Stock Appreciation Right shall, subject to the terms and conditions of the Plan and the applicable Agreement, have the right by exercise thereof to surrender to the Company for cancellation all or a portion of such related Stock Appreciation Right, but only to the extent that the related Option is then exercisable, and to be paid therefor an amount equal to the excess (if any) of (A) the aggregate Fair Market Value of the shares of Company Stock subject to the related Stock Appreciation Right or portion thereof surrendered (determined as of the exercise date), over (B) the aggregate appreciation base of the shares of Company Stock subject to the Stock Appreciation Right or portion thereof surrendered. Upon any exercise of a related Stock Appreciation Right or any portion thereof, the number of shares of Company Stock subject to the related Option shall be reduced by the number of shares of Company Stock in respect of which such Stock Appreciation Right shall have been exercised.

(ii)

The Committee may grant unrelated Stock Appreciation Rights in such amount and subject to such terms and conditions, as the Committee shall from time to time determine in its sole discretion, subject to the terms and provisions of the Plan, provided, however, that in no event shall the appreciation base of the shares of Company Stock subject to the Stock Appreciation Right be less than the Fair Market Value per share on the grant date of such Stock Appreciation Right. The holder of an unrelated Stock Appreciation Right shall, subject to the terms and conditions of the Plan and the applicable Agreement, have the right to surrender to the Company for cancellation all or a portion of such Stock Appreciation Right, but only to the extent that such Stock Appreciation Right is then exercisable, and to be paid therefor an amount equal to the excess (if any) of (A) the aggregate Fair Market Value of the shares of Company Stock subject to the Stock Appreciation Right or portion thereof surrendered (determined as of the exercise date), over (B) the aggregate appreciation base of the shares of Company Stock subject to the Stock Appreciation Right or portion thereof surrendered.

(iii)

The grant or exercisability of any Stock Appreciation Right shall be subject to such conditions as the Committee, in its sole discretion, shall determine, subject to the terms and conditions of the Plan.

(iv)

Notwithstanding the foregoing, if the vesting condition for any Stock Appreciation Right (other than Stock Appreciation Rights excluded from the minimum vesting requirement as set forth in Section 6(j)) relates exclusively to the passage of time and continued employment, such time period shall not be less than 36 months, with no more than thirty-three andone-third percent (33 1/3%) of the Award vesting every 12 months from the date of the Award, subject to Sections 7 and 8. If the vesting condition for any Stock Appreciation Right relates to the attainment of specified Performance Goals, such Stock Appreciation Right shall vest over a performance period of not less than one (1) year, subject to Sections 7 and 8.

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(e)

Restricted Stock and Stock Bonus.

(i)

The Committee may grant Restricted Stock awards, alone or in tandem with other Awards under the Plan, subject to such restrictions, terms and conditions, as the Committee shall determine in its sole discretion and as shall be evidenced by the applicable Agreements. The vesting of a Restricted Stock award granted under the Plan may be conditioned upon the completion of a specified period of service with the Company or any Subsidiary, upon the attainment of specified performance goals, and/or upon such other criteria as the Committee may determine in its sole discretion, subject to the terms and conditions of the Plan.

(ii)

Notwithstanding the foregoing, if the vesting condition for any Full Value Award (including an Award of Restricted Stock, but other than any Full Value Awards excluded from the minimum vesting requirement as set forth in Section 6(j)) relates exclusively to the passage of time and continued employment, such time period shall not be less than 36 months, with no more than thirty-three andone-third percent (33 1/3%) of the Award vesting every 12 months from the date of the Award, subject to Sections 7 and 8. If the vesting condition for any Full Value Award (including Award of Restricted Stock) relates to the attainment of specified Performance Goals, such Full Value Award shall vest over a performance period of not less than one (1) year, subject to Sections 7 and 8.

(iii)

Each Agreement with respect to a Restricted Stock award shall set forth the amount (if any) to be paid by the Participant with respect to such Award and when and under what circumstances such payment is required to be made.

(iv)

The Committee may, upon such terms and conditions as the Committee determines in its sole discretion, provide that a certificate or certificates representing the shares underlying a Restricted Stock award shall be registered in the Participant’s name and bear an appropriate legend specifying that such shares are not transferable and are subject to the provisions of the Plan and the restrictions, terms and conditions set forth in the applicable Agreement, or that such certificate or certificates shall be held in escrow by the Company on behalf of the Participant until such shares become vested or are forfeited. Except as provided in the applicable Agreement, no shares underlying a Restricted Stock award may be assigned, transferred, or otherwise encumbered or disposed of by the Participant until such shares have vested in accordance with the lawsterms of such Award.

(v)

Subject to Section 2(c), if and to the extent that the applicable Agreement may so provide, a Participant shall have the right to vote and receive dividends on the shares underlying a Restricted Stock award granted under the Plan.

(vi)

The Committee may grant Stock Bonus awards, alone or in tandem with other Awards under the Plan, subject to such terms and conditions as the Committee shall determine in its sole discretion and as may be evidenced by the applicable Agreement.

(f)

Performance Awards.

(i)

The Committee may grant Performance Awards, alone or in tandem with other Awards under the Plan, to acquire shares of Company Stock in such amounts and subject to such terms and conditions as the Committee shall from time to time in its sole discretion determine, subject to the terms of the StatePlan. To the extent necessary to satisfy the short-term deferral exception to Section 409A of Delaware (without givingthe Code, unless the Committee shall determine otherwise, the Performance Awards shall provide that payment shall be made within 2 1/2 months after the end of the year in which the Participant has a legally binding vested right to such award.

(ii)

The following rules shall apply with respect to Grandfathered Awards (as such rules may be modified by the Committee to conform with Section 162(m) of the Code and the Treasury Regulations thereunder as may be in effect from time to time, and any amendments, revisions or successor provisions thereto): (a) payments under the Performance Award shall be made solely on account of the attainment of one or more objective performance goals established in writing by the Committee not later than 90 days after the commencement of the period of service to which the Performance Award relates (but in no event after 25 percent of the period of service has elapsed); (b) the performance goal(s) to which the Performance Award relates may be based on one or more of the following business criteria applied to the choiceParticipant and/or a business unit or the Company and/or a Subsidiary: (1) stock appreciation (including, without limitation, total shareholder return and compounded annual growth rate); (2) net revenues; (3) return on total shareholders’ equity; (4) earnings per share of law principles thereof)Company Stock; (5) net income (before or after taxes); (6) return on assets (gross or net), return on investment, return on capital or return on equity; (7) earnings from continuing operations; levels of expense, cost or liability; (8) earnings before all or any interest, taxes, depreciation and/or amortization (“EBIT”, “EBITA” or “EBITDA”); (9) inventory goals; (10) market share; (11) cost reduction goals; (12) business development goals (including without limitation regulatory submissions, product launches and other business development-related opportunities); (13) customer satisfaction goals; (14) employee satisfaction or employee engagement goals; (15) identification or consummation of investment opportunities or completion of specified projects in accordance with corporate business plans, including strategic mergers, acquisitions or divest-

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itures; (16) entry into new markets (either geographically or by business unit); (17) meeting specified market penetration or value added goals; (18) development of new technologies (including patent application or issuance goals); (19) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (20) tax efficiency metrics; (21) any combination of, or a specified increase or decrease of one or more of the foregoing over a specified period; and (22) such other criteria as the shareholders of the Company may approve; in each case as applicable, as determined in accordance with generally accepted accounting principles; and (c) once granted, the Committee may not have discretion to increase the amount payable under such Award, provided, however, that the Committee shall have the authority to make appropriate adjustments in performance goals under an Award to reflect the impact of extraordinary items not reflected in such goals, provided that such adjustments are done in accordance with Section 162(m) of the Code. For purposes of this Section, extraordinary items shall be defined as (1) any profit or loss attributable to acquisitions or dispositions of stock or assets, (2) any changes in accounting standards that may be required or permitted by the Financial Accounting Standards Board or adopted by the Company after the goal is established, (3) all items of gain, loss or expense for the year related to restructuring charges for the Company, (4) all items of gain, loss or expense for the year determined to be unusual in nature or infrequent in occurrence or related to the disposal of a segment of a business, (5) all items of gain, loss or expense for the year related to discontinued operations that do not qualify as a segment of a business as defined in APB Opinion No. 30, and (6) such other items as may be prescribed by Section 162(m) of the Code and the Treasury Regulations thereunder as may be in effect from time to time, and any amendments, revisions or successor provisions and any changes thereto. With respect to Awards intended to qualify as Grandfathered Awards, the Committee shall, prior to making payment under any Award under this Section 6(f), certify in writing that all applicable performance goals have been attained.

(g)

OtherStock-or Cash-Based Awards.

The Committee is authorized to grant Awards to Participants in the form of Other Stock-Based Awards or Other Cash-Based Awards, as deemed by the Committee to be consistent with the purposes of the Plan. To the extent necessary to satisfy the short-term deferral exception to Section 409A of the Code, unless the Committee shall determine otherwise, the awards shall provide that payment shall be made within 2 1/2 months after the end of the year in which the Participant has a legally binding vested right to such award. With respect to Other Cash-Based Awards intended to qualify as Grandfathered Awards, (i) the maximum value of the aggregate payment that any Participant may receive with respect to any such Other Cash-Based Award that is an Annual Incentive Award is $5,000,000, (ii) the maximum value of the aggregate payment that any Participant may receive with respect to any such Other Cash-Based Award that is a Long Term Incentive Award is the amount set forth in clause (i) above multiplied by a fraction, the numerator of which is the number of months in the performance period and the denominator of which is twelve, and (iii) such additional rules set forth in Section 6(f) applicable to such Awards shall apply. The Committee may establish such other rules applicable to the Other Stock- or Cash-Based Awards as it deems appropriate, to the extent not inconsistent with the Plan and, with respect to Grandfathered Awards, Section 162(m) of the Code.

(h)

Exercisability of Awards; Cancellation of Awards in Certain Cases.

(i)

Except as hereinafter provided, each Agreement with respect to an Option or Stock Appreciation Right shall set forth the period during which and the conditions subject to which the Option or Stock Appreciation Right evidenced thereby shall be exercisable, and each Agreement with respect to a Restricted Stock award, Stock Bonus award, Performance Award or other Award shall set forth the period after which and the conditions subject to which amounts underlying such Award shall vest or be deliverable, all such periods and conditions to be determined by the Committee in its sole discretion.

(ii)

Except as provided in Section 7(d), no Option or Stock Appreciation Right may be exercised and no shares of Company Stock underlying any other Award under the Plan may vest or become deliverable more than ten (10) years after the date of grant (the “Expiration Date”).

(iii)

Except as provided in Section 7, no Option or Stock Appreciation Right may be exercised and no ordinary shares underlying any other Award under the Plan may vest or become deliverable unless the Participant is at such time in the employ (for Participants who are employees) or service (for Participants who are Nonemployee Directors or consultants) of the Company or a Subsidiary (or a company, or a parent or subsidiary company of such company, issuing or assuming the relevant right or award in a Change in Control) and has remained continuously so employed or in service since the relevant date of grant of the Award.

(iv)

An Option or Stock Appreciation Right shall be exercisable by the filing of a written notice of exercise or a notice of exercise in such other manner with the Company, on such form and in such manner as the Committee shall in its sole discretion prescribe, and by payment in accordance with Section 6(i).

(v)

Unless the applicable Agreement provides otherwise, the “Option exercise date” and the “Stock Appreciation Right exercise date” shall be the date that the written notice of exercise, together with payment, are received by the Company.

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(i)

Payment of Award Price.

(i)

Unless the applicable Agreement provides otherwise or the Committee in its sole discretion otherwise determines, any written notice of exercise of an Option or Stock Appreciation Right must be accompanied by payment of the full Option or Stock Appreciation Right exercise price.

(ii)

Payment of the Option exercise price and of any other payment required by the Agreement to be made pursuant to any other Award shall be made in any combination of the following: (A) by certified or official bank check payable to the Company (or the equivalent thereof acceptable to the Committee), (B) with the consent of the Committee in its sole discretion, by personal check (subject to collection) which may in the Committee’s discretion be deemed conditional, and/or (C) unless otherwise provided in the applicable agreement, and as permitted by the Committee and subject to applicable law, on anet-settlement basis with the Company withholding the amount of ordinary shares sufficient to cover the exercise price and tax withholding obligation. Payment in accordance with clause (A) of this Section 6(i)(ii) may be deemed to be satisfied, if and to the extent that the applicable Agreement so provides or the Committee permits, by delivery to the Company of an assignment of a sufficient amount of the proceeds from the sale of Company Stock to be acquired pursuant to the Award to pay for all of the Company Stock to be acquired pursuant to the Award and an authorization to the broker or selling agent to pay that amount to the Company and to effect such sale at the time of exercise or other delivery of shares of Company Stock.

(j)

Minimum Vesting Requirement.

Subject to Sections 2, 7 and 8, no Award or portion thereof shall provide for vesting prior to the first anniversary of its date of grant; provided, however, that, notwithstanding the foregoing, Awards that result in the issuance of an aggregate of up to 5% of the shares of Company Stock available pursuant to Section 4(a) may be granted under the Plan without regard to such minimum vesting provision.

7.

Termination of Service.

(a)

Unless the applicable Agreement provides otherwise or the Committee in its sole discretion determines otherwise, upon termination of a Participant’s service to (or in the case of an Incentive Stock Option, the Participant’s employment with) the Company and its Subsidiaries by the Company or its Subsidiary for Cause (or in the case of a Nonemployee Director upon such Nonemployee Director’s failure to be renominated as Nonemployee Director of the Company), the portions of outstanding Options and Stock Appreciation Rights granted to such Participant that are exercisable as of the date of such termination of service shall remain exercisable for a period of thirty (30) days from and including the date of termination of service (and shall thereafter terminate). All portions of outstanding Options or Stock Appreciation Rights granted to such Participant which are not exercisable as of the date of such termination of service, and any other outstanding Award which is not vested as of the date of such termination of service shall terminate upon the date of such termination of service.

(b)

Unless the applicable Agreement provides otherwise or the Committee in its sole discretion determines otherwise, upon termination of the Participant’s service to (or in the case of an Incentive Stock Option, the Participant’s employment with) the Company and its Subsidiaries for any reason other than as described in subsection (a), (c), (d) or (e) hereof, the portions of outstanding Options and Stock Appreciation Rights granted to such Participant that are exercisable as of the date of such termination of service shall remain exercisable for a period of ninety (90) days from and including the date of termination of service (and shall thereafter terminate). All additional portions of outstanding Options or Stock Appreciation Rights granted to such Participant which are not exercisable as of the date of such termination of service, and any other outstanding Award which is not vested as of the date of such termination of service shall terminate upon the date of such termination of service.

(c)

Unless the applicable Agreement provides otherwise or the Committee in its sole discretion determines otherwise, if the Participant voluntarily Retires with the consent of the Company or the Participant’s service (or in the case of an Incentive Stock Option, the Participant’s employment) or terminates due to Disability, all outstanding Options, Stock Appreciation Rights and all other outstanding Awards (except, in the event a Participant voluntarily Retires, with respect to Awards (other than Options and Stock Appreciation Rights) intended to qualify as Grandfathered Awards) granted to such Participant shall continue to vest in accordance with the terms of the applicable Agreements. The Participant shall be entitled to exercise each such Option or Stock Appreciation Right and to make any payment, give any notice or to satisfy other condition under each such other Award, in each case, for a period of one (1) year from and including the later of (i) date such entire Award becomes vested or exercisable in accordance with the terms of such Award and (ii) the date of Retirement, and thereafter such Awards or parts thereof shall be canceled. Notwithstanding the foregoing, the Committee may in its sole discretion provide for a longer or shorter period for exercise of an Option or Stock Appreciation Right or may permit a Participant to continue vesting under an Option, Stock Appreciation Right or Restricted Stock award or to make any payment, give any notice or to satisfy other condition under any other Award. The Committee may in its sole discretion, and in accordance with Section 409A of the Code, determine (w) for purposes of the Plan, whether any termination of service is a voluntary Retirement with the Company’s consent or is due to Disability for purposes of the Plan, (x) whether any leave of absence (including any short-term or long-term Disability or medical leave) constitutes a termination of service, or a

A-9


failure to have remained continuously in service, for purposes of the Plan (regardless of whether such leave or status would constitute such a termination or failure for purposes of employment law), (y) the applicable date of any such termination of service, and (z) the impact, if any, of any of the foregoing on Awards under the Plan.

(d)

Unless the applicable Agreement provides otherwise or the Committee in its sole discretion determines otherwise, if the Participant’s service (or in the case of an Incentive Stock Option, the Participant’s employment) terminates by reason of death, or if the Participant’s service terminates under circumstances providing for continued rights under subsection (b), (c) or (e) of this Section 7 and during the period of continued rights described in subsection (b), (c) or (e) the Participant dies, all outstanding Options, Restricted Stock and Stock Appreciation Rights granted to such Participant shall vest and become fully exercisable, and any payment or notice provided for under the terms of any other outstanding Award may be immediately paid or given and any condition may be satisfied, by the person to whom such rights have passed under the Participant’s will (or if applicable, pursuant to the laws of descent and distribution) for a period of one (1) year from and including the date of the Participant’s death and thereafter all such Awards or parts thereof shall be canceled.

(e)

Unless the applicable Agreement provides otherwise or the Committee in its sole discretion determines otherwise, upon termination of a Participant’s service to (or in the case of an Incentive Stock Option, the Participant’s employment with) the Company and its Subsidiaries (i) by the Company or its Subsidiaries without Cause (including, in case of a Nonemployee Director, the failure to be elected as a Nonemployee Director) or (ii) by the Participant for “good reason” or any like term (provided that such term is defined under an employment agreement with the Company or a Subsidiary to which a Participant is a party), the portions of outstanding Options and Stock Appreciation Rights granted to such Participant which are exercisable as of the date of termination of service of such Participant shall remain exercisable for a period of one (1) year from and including the date of termination of service (and shall thereafter terminate). Unless the applicable Agreement provides otherwise or the Committee in its sole discretion determines otherwise, any other outstanding Award shall terminate as of the date of such termination of service.

(f)

Notwithstanding anything in this Section 7 to the contrary, no Option or Stock Appreciation Right may be exercised and no shares of Company Stock underlying any other Award under the Plan may vest or become deliverable past the Expiration Date.

8.

Effect of Change in Control.

Unless otherwise determined in an Award Agreement, in the event of a Change in Control:

(a)

With respect to each outstanding Award that is assumed or substituted in connection with a Change in Control, in the event of a termination of a Participant’s service to the Company without Cause during the24-month period following such Change in Control, on the date of such termination (i) such Award shall become fully vested and, if applicable, exercisable, (ii) the restrictions, payment conditions, and forfeiture conditions applicable to any such Award granted shall lapse, and (iii) any performance conditions imposed with respect to Awards shall be deemed to be achieved at target levels.

(b)

With respect to each outstanding Award that is not assumed or substituted in connection with a Change in Control, immediately upon the occurrence of the Change in Control, (i) such Award shall become fully vested and, if applicable, exercisable, (ii) the restrictions, payment conditions, and forfeiture conditions applicable to any such Award granted shall lapse, and (iii) any performance conditions imposed with respect to Awards shall be deemed to be achieved at target levels.

(c)

For purposes of this Section 8, an Award shall be considered assumed or substituted for if, following the Change in Control, the Award remains subject to the same terms and conditions that were applicable to the Award immediately prior to the Change in Control except that, if the Award related to shares, the Award instead confers the right to receive common stock of the acquiring entity.

(d)

Except as would result in the imposition of taxes or penalties under Section 409A of the Code, the Board of Directors may, in its sole discretion, provide that each Award will be cancelled as of the Change in Control in exchange for a payment in cash or securities in an amount equal to (i) the excess of the consideration paid per share in the Change in Control over the exercise or purchase price (if any) per share subject to the Award multiplied by (ii) the number of shares granted under the Award. To the extent required to avoid the imposition of additional taxes under Section 409A of the Code, such Award shall be settled in accordance with its original terms or at such earlier time as permitted by Section 409A of the Code.

9.

Miscellaneous.

(a)

Agreements evidencing Awards under the Plan shall contain such other terms and conditions, not inconsistent with the Plan, as the Committee may determine in its sole discretion, including penalties for the commission of competitive acts or other actions detrimental to the Company. Notwithstanding any other provision hereof, the Committee shall have the right at any time to deny or delay a Participant’s exercise of Options if such Participant is reasonably believed by the Committee (i) to be engaged in material conduct adversely affecting the Company or

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(ii) to be contemplating such conduct, unless and until the Committee shall have received reasonable assurance that the Participant is not engaged in, and is not contemplating, such material conduct adverse to the interests of the Company.

(b)

Participants are and at all times shall remain subject to the trading window policies adopted by the Company from time to time throughout the period of time during which they may exercise Options, Stock Appreciation Rights or sell shares of Company Stock acquired pursuant to the Plan.

(c)

Notwithstanding any other provision of the Plan, (a) the Company shall not be obliged to issue any shares pursuant to an Award unless at least the par value of such newly issued share has been fully paid in advance in accordance with applicable law (which requirement may mean the holder of an Award is obliged to make such payment) and (b) the Company shall not be obliged to issue or deliver any shares in satisfaction of Awards until all legal and regulatory requirements associated with such issue or delivery have been complied with to the satisfaction of the Committee.

(d)

Awards shall be subject to any share ownership guidelines and compensation recovery policy adopted by the Company from time to time, including, without limitation, policies adopted to comply with applicable law.

10.

No Special Employment Rights; No Right to Award.

(a)

Nothing contained in the Plan or any Agreement shall confer upon any Participant any right with respect to the continuation of employment or service by the Company or interfere in any way with the right of the Company, subject to the terms of any separate employment agreement to the contrary, at any time to terminate such employment or service or to increase or decrease the compensation of the Participant.

(b)

No person shall have any claim or right to receive an Award hereunder. The Committee’s granting of an Award to a Participant at any time shall neither require the Committee to grant any other Award to such Participant or other person at any time or preclude the Committee from making subsequent grants to such Participant or any other person.

11.

Securities Matters.

(a)

The Company shall be under no obligation to effect the registration pursuant to the Securities Act of any interests in the Plan or any shares of Company Stock to be issued hereunder or to effect similar compliance under any state laws. Notwithstanding anything herein to the contrary, the Company shall not be obligated to cause to be issued or delivered any certificates evidencing shares of Company Stock pursuant to the Plan unless and until the Company is advised by its counsel that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which shares of Company Stock are traded. The Committee may require, as a condition of the issuance and delivery of certificates evidencing shares of Company Stock pursuant to the terms hereof, that the recipient of such shares make such agreements and representations, and that such certificates bear such legends, as the Committee, in its sole discretion, deems necessary or desirable.

(b)

The transfer of any shares of Company Stock hereunder shall be effective only at such time as counsel to the Company shall have determined that the issuance and delivery of such shares is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which shares of Company Stock are traded. The Committee may, in its sole discretion, defer the effectiveness of any transfer of shares of Company Stock hereunder in order to allow the issuance of such shares to be made pursuant to registration or an exemption from registration or other methods for compliance available under federal or state securities laws. The Committee shall inform the Participant in writing of its decision to defer the effectiveness of a transfer. During the period of such deferral in connection with the exercise of an Award, the Participant may, by written notice, withdraw such exercise and obtain the refund of any amount paid with respect thereto.

12.

Withholding Taxes.

(a)

Whenever cash is to be paid pursuant to an Award, the Company shall have the right to deduct therefrom an amount sufficient to satisfy any federal, state and local withholding tax requirements related thereto, up to the maximum statutory rates.

(b)

Whenever shares of Company Stock are to be delivered pursuant to an Award, the Company shall have the right to require the Participant to remit to the Company in cash an amount sufficient to satisfy any federal, state and local withholding tax requirements related thereto, up to the maximum statutory rates. With the approval of the Committee and subject to applicable law, a Participant may satisfy the foregoing requirement by electing to have the Company withhold from delivery shares of Company Stock having a value equal to the minimum amount of tax required to be withheld or such other amount that will not cause adverse accounting consequences for the Company and is permitted under applicable withholding rules promulgated by the Internal Revenue Service or another applicable governmental entity. Such shares shall be valued at their Fair Market Value on the date of which the amount of tax to be withheld is determined. Fractional share amounts shall be settled in cash. Such a withholding election may be made with respect to all or any portion of the shares to be delivered pursuant to an Award.

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13.

Non-Competition and Confidentiality.

By accepting Awards and as a condition to the exercise of Awards and the enjoyment of any benefits of the Plan, including participation therein, each Participant agrees to be bound by and subject tonon-competition, confidentiality and invention ownership agreements acceptable to the Committee or any officer or director to whom the Committee elects to delegate such authority.

14.

Notification of Election Under Section 83(b) of the Code.

If any Participant shall, in connection with the acquisition of shares of Company Stock under the Plan, make the election permitted under Section 83(b) of the Code, such Participant shall notify the Company of such election within 10 days of filing notice of the election with the Internal Revenue Service.

15.

Amendment or Termination of the Plan.

The Board of Directors or the Committee may, at any time, suspend or terminate the Plan or revise or amend it in any respect whatsoever; provided, however, that the requisite shareholder approval shall be required if and to the extent the Board of Directors or Committee determines that such approval is appropriate or necessary for purposes of satisfying Sections 162(m) (with respect to Awards intended to qualify as Grandfathered Awards) or 422 of the Code or Rule16b-3 or other applicable law. Awards may be granted under the Plan prior to the receipt of such shareholder approval of the Plan but each such grant shall be subject in its entirety to such approval and no Award may be exercised, vested or otherwise satisfied prior to the receipt of such approval. No amendment or termination of the Plan may, without the consent of a Participant, adversely affect the Participant’s rights under any outstanding Award.

16.

Transfers Upon Death; Nonassignability.

(a)

A Participant may file with the Committee a written designation of a beneficiary on such form as may be prescribed by the Committee and may, from time to time, amend or revoke such designation. If no designated beneficiary survives the Participant, upon the death of a Participant, outstanding Awards granted to such Participant may be exercised only by the executor or administrator of the Participant’s estate or by a person who shall have acquired the right to such exercise by will or by the laws of descent and distribution. No transfer of an Award by will or the laws of descent and distribution shall be effective to bind the Company unless the Committee shall have been furnished with written notice thereof and with a copy of the will and/or such evidence as the Committee may deem necessary to establish the validity of the transfer and an agreement by the transferee to comply with all the terms and conditions of the Award that are or would have been applicable to the Participant and to be bound by the acknowledgments made by the Participant in connection with the grant of the Award.

(b)

During a Participant’s lifetime, the Committee may, in its discretion, pursuant to the provisions set forth in this clause (b), permit the transfer, assignment or other encumbrance of an outstanding Option unless such Option is an Incentive Stock Option and the Committee and the Participant intends that it shall retain such status. Subject to the approval of the Committee and to any conditions that the Committee may prescribe, a Participant may, upon providing written notice to the General Counsel of the Company, elect to transfer any or all Options granted to such Participant pursuant to the Plan to members of his or her immediate family, including, but not limited to, children, grandchildren and spouse or to trusts for the benefit of such immediate family members or to partnerships in which such family members are the only partners; provided, however, that no such transfer by any Participant may be made in exchange for consideration. Any such transferee must agree, in writing, to be bound by all provisions of the Plan.

17.

Effective Date and Term of Plan.

The Plan, as amended and restated, shall become effective on the Effective Date, but the Plan, as amended and restated, shall be subject to the requisite approval of the shareholders of the Company. In the absence of such approval, such Awards shall be null and void. Unless earlier terminated by the Board of Directors, the right to grant Awards under the Plan shall terminate on the tenth anniversary of the Effective Date. Awards outstanding at Plan termination shall remain in effect according to their terms and the provisions of the Plan.

18.

Applicable Law.

Except to the extent preempted by any applicable federal law, the Plan shall be construed and administered in accordance with the laws of the State of Delaware, without reference to its principles of conflicts of law.

19.

Participant Rights.

(a)

No Participant shall have any claim to be granted any award under the Plan, and there is no obligation for uniformity of treatment for Participants. Except as provided specifically herein, a Participant or a transferee of an Award shall have no rights as a shareholder with respect to any shares covered by any Award until the date of the issuance of a Company Stock certificate to him or her for such shares.

A-12


(b)

Determinations by the Committee under the Plan relating to the form, amount and terms and conditions of grants and Awards need not be uniform, and may be made selectively among persons who receive or are eligible to receive grants and awards under the Plan, whether or not such persons are similarly situated.

20.

Unfunded Status of Awards.

The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Agreement shall give any such Participant any rights that are greater than those of a general creditor of the Company.

21.

No Fractional Shares.

No fractional shares of Company Stock shall be issued or delivered pursuant to the Plan. The Committee shall determine whether cash, other Awards, or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

22.

Interpretation.

The Plan is designed and intended to comply with Section 162(m) of the Code with respect to Awards intended to qualify as Grandfathered Awards, and to provide for grants and other transactions which are exempt under Rule16b-3, and all provisions hereof shall be construed in a manner to so comply. Awards under the Plan are intended to comply with Code Section 409A to the extent subject thereto and the Plan and all Awards shall be interpreted in accordance with Code Section 409A and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the effective date of the Plan. Notwithstanding any provision in the Plan to the contrary, no payment or distribution under the Plan that constitutes an item of deferred compensation under Code Section 409A and becomes payable by reason of a Participant’s termination of employment or service with the Company will be made to such Participant until such Participant’s termination of employment or service constitutes a “separation from service” (as defined in Code Section 409A). For purposes of the Plan, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Code Section 409A. If a participant is a “specified employee” (as defined in Code Section 409A), then to the extent necessary to avoid the imposition of taxes under Code Section 409A, such Participant shall not be entitled to any payments upon a termination of his or her employment or service until the earlier of: (i) the expiration of the six (6)-month period measured from the date of such Participant’s “separation from service” or (ii) the date of such Participant’s death. Upon the expiration of the applicable waiting period set forth in the preceding sentence, all payments and benefits deferred pursuant to this Section 22 (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such deferral) shall be paid to such Participant in a lump sum as soon as practicable, but in no event later than sixty (60) calendar days, following such expired period, and any remaining payments due under the Plan will be paid in accordance with the normal payment dates specified for them herein.

 

C-1A-13


                ENDO INTERNATIONAL PLC

                FIRST FLOOR, MINERVA HOUSE

                SIMMONSCOURT ROAD, BALLSBRIDGE

                DUBLIN 4, IRELAND

                ATTN: ORLA DUNLEA

VOTE BY INTERNET -www.proxyvote.com

Use the internetInternet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS

If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards, Form 10-K, shareholder letters, annual reports and Irish statutory accounts electronically via e-mail or the internet.Internet. To sign up for electronic delivery, please follow the instructions above to vote using the internetInternet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Endo International plc, First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland.

 

 

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

E05344-P72264E35282-P00842                     KEEP THIS PORTION FOR YOUR RECORDS

 

DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

 

 ENDO INTERNATIONAL PLC       
  

The Board of Directors recommends you vote “FOR” the election of all of the following Directors to serve until the next Annual General Meeting of Shareholders or until their successors are duly elected and qualified:

   
  

1.

 

Election of Directors to serve until the next Annual General
Meeting of the Shareholders

ForAgainstAbstain
Nominees:

    
   1a.Nominees: Roger H. KimmelFor 

¨

Against
 

¨

¨

Abstain
       
   1b.1a.  Rajiv De SilvaRoger H. Kimmel 

¨

 

¨

 

¨

 

The Board of Directors recommends you vote “FOR” the following proposals:

ForAgainstAbstain 
   1b.  Paul V. Campanelli    2.  To approve the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2018 and to authorize the Board of Directors, acting through the Audit Committee, to determine the independent registered public accounting firm’s remuneration. For Against Abstain 
   

 

1c.

Shane M. Cooke

 

1d.

  

 

Shane M. Cooke

ArthurNancy J. HigginsHutson, Ph.D.

 

 

¨

¨

 

 

¨

¨

 

 

¨

¨

 

 

2.3.

  

 

To approve, the appointment of PricewaterhouseCoopers LLP as the Company’s independent auditors for the year ending December 31, 2016 and to authorize the Audit Committee of the Board of Directors to determine the Auditors’ remuneration.by advisory vote, named executive officer compensation.

 

 

¨

 

 

¨

 

 

¨

 
   1e.  Nancy J. Hutson, Ph.D.Michael Hyatt ¨ ¨ ¨ 3.4.  To approve by advisory vote, named executive officer compensation.the Endo International plc Amended and Restated 2015 Stock Incentive Plan. ¨ ¨ ¨ 
   

1f.

  

Michael Hyatt

Sharad S. Mansukani, M.D.
 

¨

 

¨

 

¨

 

4.

5.
  

To approverenew the amendment of the Company’s Memorandum of Association.

Board’s existing authority to issue shares under Irish law.
 

¨

 

¨

 

¨

 
   

1g.

  

William P. Montague

 

¨

 

¨

 

¨

 

5.

6.
  

To approverenew the amendmentBoard’s existing authority to opt-out of the Company’s Articles of Association.

statutory pre-emption rights under Irish law.
 

¨

 

¨

 

¨

1h.Todd B. Sisitsky 
   

1h.

  

Jill D. Smith

¨

¨

¨

6.

To approve the amendment of the Company’s 2015 Stock Incentive Plan.

¨

¨

¨

   

1i.

William F. Spengler

¨

¨

¨

       
 

 

To change the address on your account, please check the box at right and indicate your new address in the address space on the reverse side. Please note that changes to the registered name(s) on the account may not be submitted via this method.

 

 

¨

 

 

This proxy is solicited on behalf of the Board of Directors. This proxy, when properly executed, will be voted in accordance with the instructions given hereon. If no instructions are given, this proxy will be voted “FOR” election of all the Directors, “FOR”��FOR” Proposals 2, 3, 4, 5 and 6 and as said proxies deem advisable on such other matters as may properly come before the Annual General Meeting and any adjournment(s) or postponement(s) thereof.

 Name: [PLEASE PRINT NAME]                                                 Name: [PLEASE PRINT NAME]                                               
 Address:                                                                                  Address:                                                                                

 

Note: Please sign exactly as your name or names appear(s) on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. 

 

            
Signature [PLEASE SIGN WITHIN BOX] Date  Signature (Joint Owners) Date 


20162018 ANNUAL GENERAL MEETING ADMISSION TICKET

ENDO INTERNATIONAL PLC

20162018 ANNUAL GENERAL MEETING OF SHAREHOLDERS

Thursday, June 9, 20167, 2018

8:00 a.m. (Local Time)

ENDO INTERNATIONAL PLC

First Floor

Minerva House

Simmonscourt Road

Ballsbridge

Dublin 4, Ireland

Important Notice Regarding the Availability of Proxy Materials for the Annual General Meeting:

The Notice and Proxy Statement, Annual Report, Endo International plc Form 10-K, Shareholder Letter and

Irish Statutory Accounts

are available at www.proxyvote.com.

 

 

E05345-P72264E35283-P00842    

ENDO INTERNATIONAL PLC

20162018 ANNUAL GENERAL MEETING OF SHAREHOLDERS

THURSDAY, JUNE 9, 20167, 2018 8:00 A.M. (LOCAL TIME)

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned ordinary shareholder of Endo International plc, an Irish registered company, hereby (1) acknowledges receipt of the Notice of Annual General Meeting of Shareholders and accompanying Proxy Statement and (2) appoints, as proxies, Rajiv De SilvaPaul V. Campanelli and Suketu P. UpadhyayBlaise Coleman, each ofc/of c/o Endo International plc, First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland (or either of them)or, if the below table is completed by the undersigned ordinary shareholder, the person(s) named in the first column of the following table with an address as set out in the second column of the following table:

 

  

Name of Proxy

 

 

Address of Proxy

  
   

(If you choose to appoint alternative proxies, please complete the above table with the name and address of such proxies. In default of such completionRajiv De Silvacompletion Paul V. Campanelli and Suketu P. UpadhyayBlaise Coleman or either of them shall be your proxies.)

each with full power of substitution, to attend, speak and vote on behalf of the undersigned as designated on the reverse side, all the ordinary shares ofEndoof Endo International plc held of record by the undersigned at the close of business on April 14, 2016,13, 2018, at the Annual General Meeting of Shareholders to be held at First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland, on June 9, 2016,7, 2018, and at any adjournment or postponement thereof.

This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’Directors' recommendations.

 

  
Address Changes/Comments: 

 

 

 

(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)

(Continued and to be signed on the reverse side)