EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 10.1
This Executive Employment Agreement (the “Agreement”) is dated as of January 8, 2007, by and
between Mylan Laboratories Inc. (the “Company”) and Xxxxxx Xxxxxxxxxx (“Executive”).
RECITALS:
WHEREAS, the Company wishes to employ Executive as Head of Global Strategies in the Office of
the CEO, and Executive wishes to accept such employment, in each case effective as of the date
hereof; and
WHEREAS, Executive is desirous of assisting the Company in whatever manner the Chairman, Chief
Executive Officer, and/or Board of Directors deem appropriate; and
NOW, THEREFORE, in consideration of the promises and mutual obligations of the parties
contained herein, and for other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and Executive agree as follows:
1. Employment of Executive; Best Efforts. The Company agrees to employ Executive,
and Executive accepts employment by the Company, on the terms and conditions provided herein.
2. Effective Date: Term of Employment. This Agreement shall commence and be
effective as of the date hereof and shall remain in effect, unless earlier terminated, or extended
or renewed, as provided in Section 9 of this Agreement, through the third anniversary of the date
hereof.
3. Performance of Duties.
(a) Best Efforts. During the term of this Agreement, Executive shall devote his full
working time and attention to the business and affairs of Mylan and the performance of his duties
hereunder, serve Mylan faithfully and to the best of his ability, and use his best efforts to
promote Mylan’s interests. Without limitation, Executive shall travel in connection with his
employment in accordance with the reasonable direction of the Chief Executive Officer of the
Company, commensurate with the activities of his position and his prior position with Matrix
Laboratories Limited. During the term of this Agreement, Executive agrees to promptly and fully
disclose to Mylan, and not to divert to Executive’s own use or benefit or the use or benefit of
others, any business opportunities involving any existing or prospective line of business,
supplier, product or activity of Mylan or any business opportunities which otherwise should
rightfully be afforded to Mylan.
(b) No Power to Bind. Notwithstanding anything to the contrary in this Agreement,
Executive shall not be authorized to bind the Company contractually or
otherwise to make commitments on behalf of the Company. Executive shall not represent or hold out to any person or
statutory authority that he is possessed of such authority. The scope of Executive’s authority and
powers shall comprise solely in making recommendations in respect of matters, which are assigned to
him by the Company, to persons designated and employed by the Company in this behalf. It is
understood that no such recommendation of Executive shall be binding on the Company, in any manner
whatsoever.
4. Executive’s Compensation. Executive’s compensation shall include the following:
(a) Minimum Annual Base Salary. The Executive’s minimum annual base salary (the
“Minimum Annual Base Salary”) shall be $750,000, payable in accordance with the Company’s normal
payroll practices for its executive officers. The Minimum Annual Base Salary may be increased from
time to time at the discretion of the Compensation Committee of the Board of Directors of the
Company, any other committee authorized by the Board of Directors or any officer having authority
over executive compensation.
(b) Annual Bonus. Executive shall have an annual discretionary bonus opportunity of
One Hundred percent (100%) of Executive’s then-current Minimum Annual Base Salary, to be paid upon
satisfaction of certain criteria established by the Compensation Committee of the Board of
Directors, or by any other committee or officer having authority over executive compensation.
(c) Non-Qualified Stock Options; Performance-Based Compensation. On the date hereof,
Executive shall receive non-qualified stock options to purchase shares of Mylan common stock under
the 2003 Long-Term Incentive Plan (the “Plan”) in accordance with the following vesting schedule,
provided that Executive remains employed by Mylan on the following vesting dates: on the first
anniversary of the date hereof, Executive shall vest in the first 66,667 shares; on the second
anniversary of the date hereof, Executive shall vest in an additional 66,666 shares; and on the
third anniversary of the date hereof, Executive shall vest in the remaining 66,667 shares. These
options will be subject to all terms of the Plan and the applicable stock option agreement.
Notwithstanding any term or provision to the contrary set forth elsewhere herein, Executive shall
be entitled to one hundred percent (100%) vesting of the above-referenced options in the event
Executive resigns for Good Reason or is Terminated Without Cause, or the Agreement is not extended
or renewed, as provided in Section 9 herein. In addition, Executive will be eligible to receive
performance-based equity grants made to other Company executives at the next annual grant at the
discretion of the Compensation Committee.
(d) Fringe Benefits and Expense Reimbursement. The Executive shall receive benefits
and perquisites of employment similar to those as have been customarily provided to the Company’s
other executive officers including but not limited to, health insurance coverage, short-term disability benefits and twenty-five (25) vacation days, in each
case in accordance with the plan documents or policies that govern such benefits.
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The Company shall reimburse Executive for all ordinary and necessary business expenses in accordance with
established Company policy and procedures.
5. Confidentiality. Executive recognizes and acknowledges that the business
interests of the Company and its subsidiaries, parents and affiliates (collectively the “Mylan
Companies”) require a confidential relationship between the Company and Executive and the fullest
protection and confidential treatment of the financial data, customer information, supplier
information, market information, marketing and/or promotional techniques and methods, pricing
information, purchase information, sales policies, employee lists, policy and procedure
information, records, advertising information, computer records, trade secrets, know how, plans and
programs, sources of supply, and other knowledge of the business of the Mylan Companies (all of
which are hereinafter jointly termed “Confidential Information”) which have or may in whole or in
part be conceived, learned or obtained by Executive in the course of Executive’s employment with
the Company. Accordingly, Executive agrees to keep secret and treat as confidential all
Confidential Information whether or not copyrightable or patentable, and agrees not to use or aid
others in learning of or using any Confidential Information except in the ordinary course of
business and in furtherance of the Company’s interests. During the term of this Agreement and at
all times thereafter, except insofar as is necessary disclosure consistent with the Company’s
business interests:
(a) Executive will not, directly or indirectly, disclose any Confidential Information to
anyone outside the Mylan Companies;
(b) Executive will not make copies of or otherwise disclose the contents of documents
containing or constituting Confidential Information;
(c) As to documents which are delivered to Executive or which are made available to him as a
necessary part of the working relationships and duties of Executive within the business of the
Company, Executive will treat such documents confidentially and will treat such documents as
proprietary and confidential, not to be reproduced, disclosed or used without appropriate authority
of the Company;
(d) Executive will not advise others that the information and/or know how included in
Confidential Information is known to or used by the Company; and
(e) Executive will not in any manner disclose or use Confidential Information for Executive’s
own account and will not aid, assist or abet others in the use of Confidential Information for
their account or benefit, or for the account or benefit of any person or entity other than the
Company.
The obligations set forth in this paragraph are in addition to any other agreements the Executive
may have with the Company and any and all rights the Company may have under state or federal
statutes or common law.
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6. Non-Competition and Non-Solicitation. Executive agrees that for a period ending
upon the later to occur of the third anniversary of the date hereof or two (2) years after
termination of Executive’s employment with the Company for any reason:
(a) Executive shall not, directly or indirectly, whether for himself or for any other person,
company, corporation or other entity be or become associated in any way (including but not limited
to the association set forth in i-vii of this subsection) with any business or organization which
is directly or indirectly engaged in the research, development, manufacture, production, marketing,
promotion or sale of any product the same as or similar to those of the Mylan Companies, or which
competes or intends to compete in any line of business with the Mylan Companies within North
America. Notwithstanding the foregoing, Executive may during the period in which this paragraph is
in effect own stock or other interests in corporations or other entities that engage in businesses
the same or substantially similar to those engaged in by the Mylan Companies, provided that
Executive does not, directly or indirectly (including without limitation as the result of ownership
or control of another corporation or other entity), individually or as part of a group (as that
term is defined in Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder) (i) control or have the ability to control the corporation
or other entity, (ii) provide to the corporation or entity, whether as an Executive, consultant or
otherwise, advice or consultation, (iii) provide to the corporation or entity any confidential or
proprietary information regarding the Mylan Companies or its businesses or regarding the conduct of
businesses similar to those of the Mylan Companies, (iv) hold or have the right by contract or
arrangement or understanding with other parties to hold a position on the board of directors or
other governing body of the corporation or entity or have the right by contract or arrangement or
understanding with other parties to elect one or more persons to any such position, (v) hold a
position as an officer of the corporation or entity, (vi) have the purpose to change or influence
the control of the corporation or entity (other than solely by the voting of his shares or
ownership interest) or (vii) have a business or other relationship, by contract or otherwise, with
the corporation or entity other than as a passive investor in it; provided, however, that Executive
may vote his shares or ownership interest in such manner as he chooses provided that such action
does not otherwise violate the prohibitions set forth in this sentence.
(b) Executive will not, either directly or indirectly, either for himself or for any other
person, partnership, firm, company, corporation or other entity, contact, solicit, divert, or take
away any of the customers or suppliers of the Mylan Companies.
(c) Executive will not solicit, entice or otherwise induce any employee of the Mylan
Companies to leave the employ of the Mylan Companies for any reason whatsoever; nor will Executive
directly or indirectly aid, assist or abet any other person or entity in soliciting or hiring any
employee of the Mylan Companies, nor will Executive otherwise interfere with any contractual or
other business relationships between the Mylan Companies and its employees.
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7. Severability. Should a court of competent jurisdiction determine that any section
or sub-section of this Agreement is unenforceable because one or all of them are vague or overly
broad, the parties agree that this Agreement may and shall be enforced to the maximum extent
permitted by law. It is the intent of the parties that each section and sub-section of this
Agreement be a separate and distinct promise and that unenforceability of any one subsection shall
have no effect on the enforceability of another.
8. Injunctive Relief. The parties agree that in the event of Executive’s violation
of Sections 5 and/or 6 of this Agreement or any subsection thereunder, that the damage to the
Company will be irreparable and that money damages will be difficult or impossible to ascertain.
Accordingly, in addition to whatever other remedies the Company may have at law or in equity,
Executive recognizes and agrees that the Company shall be entitled to a temporary restraining order
and a temporary and permanent injunction enjoining and prohibiting any acts not permissible
pursuant to this Agreement. Executive agrees that should either party seek to enforce or determine
its rights because of an act of Executive which the Company believes to be in contravention of
Sections 5 and/or 6 of this Agreement or any subsection thereunder, the duration of the
restrictions imposed thereby shall be extended for a time period equal to the period necessary to
obtain judicial enforcement of the Company’s rights.
9. Termination of Employment.
(a) Resignation. (i) Executive may resign from employment at any time upon 90 days
written notice to the Chief Executive Officer. During the 90 days notice period Executive will
continue to perform duties and abide by all other terms and conditions of this Agreement.
Additionally, Executive will use his best efforts to effect a smooth and effective transition to
whomever will replace Executive. Mylan reserves the right to accelerate the effective date of
Executive’s resignation, provided that Executive shall receive Executive’s salary and benefits
through the ninety (90) day period. (ii) If Executive resigns without “Good Reason” (as defined
below), Mylan shall have no liability to Executive under this Agreement other than that the Company
shall pay Executive’s wages and benefits through the effective date of Executive’s resignation.
Executive, however, will continue to be bound by all provisions of this Agreement that survive
termination of employment. For purposes of this Agreement “Good Reason” shall mean a reduction of
Executive’s annual base salary below the Minimum Annual Base Salary stipulated in this Agreement,
unless all other Chief officers of the Company (other than the CEO) are required to accept a
similar reduction, or the assignment of duties to the Executive which are inconsistent with those
of an executive officer. (iii) If Executive resigns with Good Reason and complies in all respects
with his obligations hereunder, Mylan will pay Executive, within 30 days of his separation from the
Company, a lump sum equal to his then-current Minimum Annual Base Salary plus the Prior Bonus (as
defined below). Mylan shall also pay the cost of continuing Executive’s health insurance benefits
for the 12 months following his separation from the Company; provided, however, that in the case of
health insurance continuation, Mylan’s obligation to provide health insurance benefits shall end at
such time as Executive obtains health
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insurance benefits through another employer or otherwise in connection with rendering services
for a third party. Executive will continue to be bound by all provisions of this Agreement that
survive termination of employment. As used herein, “Prior Bonus” means the higher of: (i) the
average of the annual bonuses paid to Executive in the three fiscal years (or fewer, if applicable)
prior to his separation from the Company; or (ii) the annual bonus applicable for the prior fiscal
year, provided that if Executive was not employed by the Company during such prior year(s), then
“Prior Bonus” shall refer to the target bonus described in Section 4(b) above, pro rated in based
on the portion of the year in which Executive was employed by the Company.
(b) Termination for Cause. If Mylan determines to terminate Executive’s employment
during the term of this Agreement for Cause, as defined herein, Mylan will give Executive written
notice of its belief that acts or events constituting Cause exist. Executive has the right to cure
within five (5) days of Mylan’s giving of such notice, the acts, events or conditions which led to
such notice being given. For purposes of this Agreement, “Cause” shall mean: (i) Executive’s
willful and gross misconduct with respect to Mylan’s business or affairs; (ii) Executive’s
insubordination, gross neglect of duties, dishonesty or deliberate disregard of any material rule
or policy of Mylan, (iii) Executive’s conviction of a crime involving moral turpitude; or (iv)
Executive’s conviction of any felony. If Mylan terminates Executive’s employment for Cause, the
Company shall have no liability to Executive other than to pay Executive’s wages and benefits
through the effective date of Executive’s termination. Executive, however, will continue to be
bound by all provisions of this Agreement that survive termination of employment.
(c) Termination Without Cause. If Mylan discharges Executive without Cause, Mylan
will pay Executive, within 30 days of his separation from the Company, a lump sum equal to two
times the aggregate of his then-current Minimum Annual Base Salary and the Prior Bonus. Mylan
shall also pay the cost of continuing Executive’s health insurance benefits (including, as
applicable, those benefits that cover eligible members of his immediate family) for the 24 months
following such termination without Cause; provided, however, that in the case of health insurance
continuation, Mylan’s obligation to provide health insurance benefits shall end at such time as
Executive obtains health insurance benefits through another employer or otherwise in connection
with rendering services for a third party. Executive will continue to be bound by all provisions
of this Agreement that survive termination of employment.
(d) Death or Incapacity. The employment of Executive shall automatically terminate
upon Executive’s death or upon the occurrence of a disability that renders Executive incapable of
performing the essential functions of his position within the meaning of the Americans With
Disabilities Act of 1990. For all purposes of this Agreement, any such termination shall be
treated in the same manner as a termination without Cause, as described in Section 9(c) above, and
Executive, or Executive’s estate, as applicable, shall receive all consideration, compensation and
benefits that would be due and payable to Executive for a termination without Cause, provided,
however, that such consideration, compensation and benefits shall be reduced by any death or
disability
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benefits (as applicable) that the Executive or his estate or beneficiaries (as applicable) are
entitled to pursuant to plans or arrangements of the Company.
(e) Extension or Renewal. The Term of Employment may be extended or renewed upon
mutual agreement of Executive and the Company. If the Term of Employment is not extended or
renewed on terms mutually acceptable to Executive and the Company, and if this Agreement has not
been sooner terminated for reasons stated in Section 9(a), (b), (c) or (d) of this Agreement,
Executive shall be paid severance, within 30 days of his separation from the Company, in an amount
equal to his then-current Minimum Annual Base Salary plus the Prior Bonus, and Executive’s health
insurance benefits shall be continued for 12 months at the Company’s cost; provided, however, that
in the case of health insurance continuation, the Company’s obligation to provide health insurance
benefits shall end at such time as Executive, at his option, voluntarily obtains heath insurance
benefits.
(f) Return of Company Property. Upon the termination of Executive’s employment for
any reason, Executive shall immediately return to Mylan all records, memoranda, files, notes,
papers, correspondence, reports, documents, books, diskettes, hard drives, electronic files, and
all copies or abstracts thereof that Executive has concerning any or all of the Mylan Companies’
business. Executive shall also immediately return all keys, identification cards or badges and
other company property.
(g) No Duty to Mitigate. There shall be no requirement on the part of Executive to
seek other employment or otherwise mitigate damages in order to be entitled to the full amount of
any payments and benefits to which Executive is otherwise entitled under any contract and the
amount of such payments and benefits shall not be reduced by any compensation or benefits received
by Executive from other employment.
(h) Section 409A. Notwithstanding anything to the contrary in this Agreement, the
payment of consideration, compensation, and benefits pursuant to this Section 9 shall be
interpreted and administered in manner intended to avoid the imposition of additional taxes under
Section 409A of the Internal Revenue Code.
10. Indemnification. The Company shall maintain D&O liability coverage pursuant to
which Executive shall be a covered insured. Executive shall receive indemnification in accordance
with the Company’s Bylaws in effect as of the date of this Agreement. Such indemnification shall
be contractual in nature and shall remain in effect notwithstanding any future change to the
Company’s Bylaws.
To the extent not otherwise limited by the Company’s Bylaws in effect as of the date of this
Agreement, in the event that Executive is made a party or is threatened to be made a party to or is
involved in any action, suit or proceeding, (including those brought by or in the right of the
Company) whether civil, criminal, administrative or investigative (“proceeding”), by reason of the
fact that he is or was an officer, employee or agent of or is or was serving the Company or any
subsidiary of the Company, or is or was serving at the request of the Company or another
corporation, or of a partnership, joint venture, trust
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or other enterprise, including service with respect to employee benefit plans, whether the
basis of such proceeding is alleged action in an official capacity as a director, officer, employee
or agent or in any other capacity while serving as a director, officer, employee or agent,
Executive shall be indemnified and held harmless by the Company to the fullest extent authorized by
law against all expenses, liabilities and losses (including attorneys fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or
suffered by Executive in connection therewith. Such right shall be a contract right and shall
include the right to be paid by the Company expenses incurred in defending any such proceeding in
advance of its final disposition; provided, however, that the payment of such expenses incurred by
Executive in his capacity as a director or officer (and not in any other capacity in which service
was or is rendered by Executive while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of such proceeding will be made
only upon delivery to the Company of an undertaking, by or on behalf of Executive, to repay all
amounts to Company so advanced if it should be determined ultimately that Executive is not entitled
to be indemnified under this section or otherwise.
Promptly after receipt by Executive of notice of the commencement of any action, suit or
proceeding for which Executive may be entitled to be indemnified, Executive shall notify the
Company in writing of the commencement thereof (but the failure to notify the Company shall not
relieve it from any liability which it may have under this Section 10 unless and to the extent that
it has been prejudiced in a material respect by such failure or from the forfeiture of substantial
rights and defenses). If any such action, suit or proceeding is brought against Executive and he
notifies the Company of the commencement thereof, the Company will be entitled to participate
therein, and, to the extent it may elect by written notice delivered to Executive promptly after
receiving the aforesaid notice from Executive, to assume the defense thereof with counsel
reasonably satisfactory to Executive, which may be the same counsel as counsel to the Company.
Notwithstanding the foregoing, Executive shall have the right to employ his own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of Executive unless (i) the
employment of such counsel shall have been authorized in writing by the Company, (ii) the Company
shall not have employed counsel reasonably satisfactory to Executive to take charge of the defense
of such action within a reasonable time after notice of commencement of the action or (iii)
Executive shall have reasonably concluded, after consultation with counsel to Executive, that a
conflict of interest exists which makes representation by counsel chosen by the Company not
advisable (in which case the Company shall not have the right to direct the defense of such action
on behalf of Executive), in any of which events such fees and expenses of one additional counsel
shall be borne by the Company. Anything in this Section 10 to the contrary notwithstanding, the
Company shall not be liable for any settlement of any claim or action effected without its written
consent.
11. Other Agreements. The rights and obligations contained in this Agreement are in
addition to and not in place of any rights or obligations contained in any other agreements between
the Executive and the Company.
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12. Notices. All notices hereunder to the parties hereto shall be in writing sent by
certified mail, return receipt requested, postage prepaid, and by fax, addressed to the respective
parties at the following addresses:
| If to the Company: | Mylan Laboratories Inc. | |||
| 0000 Xxxxxxxxx Xxxxx | ||||
| Xxxxxxxxxx, Xxxxxxxxxxxx 00000 | ||||
| Attention: Chief Executive Officer | ||||
| If to Executive: | at the most recent address on record at the Company. |
Either party may, by written notice complying with the requirements of this section, specify
another or different person or address for the purpose of notification hereunder. All notices shall
be deemed to have been given and received on the day a fax is sent or, if mailed only, on the third
business day following such mailing.
13. Withholding. All payments required to be made by the Company hereunder to
Executive or hi dependents, beneficiaries, or estate will be subject to the withholding of such
amounts relating to tax and/or other payroll deductions as may be required by law.
14. Modification and Waiver. This Agreement may not be changed or terminated rally,
nor shall any change, termination or attempted waiver of any of the provisions contained in this
Agreement be binding unless in writing and signed by the party against whom the same is sought to
be enforced, nor shall this section itself by waived verbally. This Agreement may be amended only
by a written instrument duly executed by or on behalf of the parties hereto.
15. Construction of Agreement. This Agreement and all of its provisions were subject
to negotiation and shall not be construed more strictly against one party than against another
party regardless of which party drafted any particular provision.
16. Successors and Assigns. This Agreement and all of its provisions, rights and
obligations shall be binding upon and inure to the benefit of the parties hereto and the Company’s
successors and assigns. This Agreement may be assigned by the Company to any person, firm or
corporation which shall become the owner of substantially all of the assets of the Company or which
shall succeed to the business of the Company; provided, however, that in the event of any such
assignment the Company shall obtain an instrument in writing from the assignee in which such
assignee assumes the obligations of the Company hereunder and shall deliver an executed copy
thereof to Executive. No right or interest to or in any payments or benefits hereunder shall be
assignable by Executive; provided, however, that this provision shall not preclude him from
designating one or more beneficiaries to receive any amount that may be payable after his death and
shall not preclude the legal representative of his estate from assigning any right hereunder to the
person or persons entitled thereto under his will or, in the case of intestacy, to the person or
persons entitled thereto under the laws of intestacy applicable to his estate. The
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term “beneficiaries” as used in this Agreement shall mean a beneficiary or beneficiary or
beneficiaries so designated to receive any such amount, or if no beneficiary has been so
designated, the legal representative of the Executive’s estate. No right, benefit, or interest
hereunder, shall be subject to anticipation, alienation, sale, assignment, encumbrance, charge,
pledge, hypothecation, or set-off in respect of any claim, debt, or obligation, or to execution,
attachment, levy, or similar process, or assignment by operation of law. Any attempt, voluntary or
involuntary, to effect any action specified in the immediately preceding sentence shall, to the
full extent permitted by law, be null, void, and of no effect.
17. Choice of Law and Forum. This Agreement shall be construed and enforced
according to, and the rights and obligations of the parties shall be governed in all respects by,
the laws of the Commonwealth of Pennsylvania. Any controversy, dispute or claim arising out of or
relating to this Agreement, or the breach hereof, including a claim for injunctive relief, or any
claim which, in any way arises out of or relates to, Executive’s employment with the Company or the
termination of said employment, including but not limited to statutory claims for discrimination,
shall be resolved by arbitration in accordance with the then current rules of the American
Arbitration Association respecting employment disputes except that the parties shall be entitled to
engage in all forms of discovery permitted under the Pennsylvania Rules of Civil Procedure (as such
rules may be in effect from time to time). The hearing of any such dispute will be held in
Pittsburgh, Pennsylvania, and the losing party shall bear the costs, expenses and counsel fees of
such proceeding. Executive and Company agree for themselves, their, employees, successors and
assigns and their accountants, attorneys and experts that any arbitration hereunder will be held in
complete confidence and, without the other party’s prior written consent, will not be disclosed, in
whole or in part, to any other person or entity except as may be required by law. The decision of
the arbitrator(s) will be final and binding on all parties. Executive and the Company expressly
consent to the jurisdiction of any such arbitrator over them.
18. Headings. The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall in no way affect the interpretation of any of the terms or
conditions of this Agreement.
19. Execution in Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
[Signature Page Follows]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year first
above mentioned.
| MYLAN LABORATORIES INC. | EXECUTIVE: | ||
| /s/ Xxxxxx X. Xxxxx
|
/s/ Xxxxxx Xxxxxxxxxx
|
||
| Its: Vice Chairman and CEO |
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