AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT 10.5
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Executive Employment Agreement (the “Agreement”) is dated as of
April 3, 2006, by and between Mylan Laboratories Inc. (the “Company”) and Xxxxxx X. Xxxxx (the
“Executive”).
RECITALS:
WHEREAS, the Company and the Executive are parties to a certain Executive Employment Agreement
dated as of July 22, 2002, as amended December 15, 2003 (the “Prior Agreement”).
WHEREAS, the parties wish to amend and restate the Prior Agreement effective as of the
Effective Date (as hereinafter defined).
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 the Executive agree as follows:
1. Employment of Executive; Position and Duties. The Executive shall continue to
serve as a member of the Board of Directors (the “Board”) of the Company and the Executive shall
continue to be employed by the Company as Chief Executive Officer of the Company. In the role of
Chief Executive Officer, the Executive shall have the duties, roles, and responsibilities
traditionally assigned to the chief executive officer of a public company. Unless the Executive
determines otherwise, the Executive’s principal office shall be in the Pittsburgh metropolitan
area. The Executive agrees to devote his full business time and attention to his duties, provided,
however, the Executive shall be permitted reasonable time to devote to personal investments,
service on corporate, professional and charitable boards and other philanthropic activities and
service as a fiduciary or administrator with respect to estates and trusts.
2. Effective Date; Term of Employment. This Agreement shall commence and be
effective as of April 1, 2006 (the “Effective Date”), and shall terminate at the close of business
on the third anniversary of the Effective Date unless sooner terminated in accordance with the
terms of this Agreement or extended as hereinafter provided. The term of this Agreement shall be
extended, without further action by the Company or the Executive, on the first anniversary of the
Effective Date (the “Extension Effective Date”) and on each subsequent anniversary of the Effective
Date (each also an “Extension Effective Date”), for successive periods of twelve months each,
unless either party shall have given written notice to the other party, in the manner set forth in
Section 12 below, prior to the Extension Effective Date in question, that the term of this
Agreement that is in effect at the time such written notice is given is not to be extended or
further extended, as the case may be (the period during which this Agreement is effective being
referred to as the “Term of Employment”).
3. Executive’s Compensation. During the Term of Employment, the Executive’s
“Compensation” shall include the following:
(a) Annual Base Salary. The Executive’s annual base salary as of the Effective Date
shall be equal to $1,500,000, payable in accordance with the Company’s normal payroll practices for
its executive officers. The Executive’s base salary may be increased from time to time at the
discretion of the Board (or any committee thereof having authority over executive compensation (the
“Committee”)) and once increased may not be decreased. The base salary as in effect from time to
time shall be referred to as the “Base Salary.”
(b) Annual Bonus. The Executive shall be eligible to participate in the Company’s
annual executive incentive or bonus plan as in effect from time to time, with the opportunity to
receive an annual award in respect of each fiscal year of the Company ending during the Term of
Employment in accordance with the terms and conditions of such plan, with a minimum target equal to
100% of the highest Base Salary during such year (or such higher percentage as the Board or the
Committee may prescribe).
(c) Fringe Benefits and Expense Reimbursement. The Executive shall receive such
benefits and perquisites of employment as have been customarily provided to the Company’s Chief
Executive Officer, including but not limited to, health insurance coverage, profit-sharing,
participation in the Company’s 401(k) plan, short-term disability benefits, thirty (30) vacation
days, expense reimbursement, and automobile usage in accordance with the plan documents or policies
that govern such benefits. Because of heightened security concerns, the Executive shall also be
entitled to personal usage of the Company’s aircraft for the Executive and the Executive’s family
for vacations and other personal purposes. To the extent that any income or employment taxes
(“Taxes”) are due with respect to the Executive’s use of an automobile or the Executive’s or his
family’s personal use of the Company’s aircraft, the Company shall provide the Executive with a
“gross up” of Taxes due on such use. The Company shall reimburse Executive for all ordinary and
necessary business expenses in accordance with established Company policy and procedures.
(d) Long-Term Compensation. During the Term of Employment, the Executive shall be
eligible to participate in long term incentive and equity plans of the Company as in effect from
time to time, on a basis at least as favorable as other senior executives.
4. Confidentiality. The Executive recognizes and acknowledges that the business
interests of the Company and its subsidiaries, parents and affiliates (collectively the “Affiliated
Companies”) require a confidential relationship between the Company and the 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 Affiliated 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 the Executive in the course of the Executive’s
employment with the Company. Accordingly, the Executive agrees to keep secret and treat as
confidential all Confidential Information whether or not copyrightable or patentable, and agrees
not to knowingly use or aid others in learning of or using any Confidential
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Information except in the ordinary course of business and in furtherance of the Company’s
interests. During the Term of Employment and at all times thereafter, except insofar as is
necessary disclosure consistent with the Company’s business interests:
(a) The Executive will not knowingly disclose any Confidential Information to anyone outside
the Affiliated Companies;
(b) The Executive will not make copies of or otherwise knowingly disclose the contents of
documents containing or constituting Confidential Information;
(c) As to documents which are delivered to the Executive or which are made available to him as
a necessary part of the working relationships and duties of the Executive within the business of
the Company, the Executive will treat such documents confidentially and will treat such documents
as proprietary and confidential, not to be knowingly reproduced, disclosed or used without
appropriate authority of the Company;
(d) The Executive will not knowingly advise others that the information and/or know-how
included in Confidential Information is known to or used by the Company; and
(e) The Executive will not in any manner knowingly disclose or use Confidential Information
for the Executive’s own account and will not knowingly 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.
5. Non-Competition and Non-Solicitation. The Executive agrees that during the Term
of Employment and for a period ending two (2) years after the Executive ceases to be employed by
the Affiliated Companies (a “Termination of Employment”) for any reason:
(a) The Executive shall not 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 Affiliated Companies, or which competes
or has announced an intention to compete in any line of business with the Affiliated Companies
within North America. Notwithstanding the foregoing, the 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 Affiliated
Companies, provided that the 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
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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 Affiliated Companies or its businesses or regarding the conduct of
businesses similar to those of the Affiliated 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 the
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) The Executive will not 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 Affiliated Companies.
(c) The Executive will not solicit, entice or otherwise induce any employee of the Affiliated
Companies to leave the employ of the Affiliated Companies for any reason whatsoever; nor will the
Executive knowingly aid, assist or abet any other person or entity in soliciting or hiring any
employee of the Affiliated Companies, nor will the Executive otherwise interfere with any
contractual or other business relationships between the Affiliated Companies and its employees.
6. Severabilityy. 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.
7. Injunctive Relief. The parties agree that in the event of the Executive’s
material violation of sections 4 and/or 5 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, the 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.
8. Termination of Employment.
(a) Resignation. The Executive may resign from employment without Good Reason (as
defined below) at any time upon thirty (30) days written notice to the Company. During the thirty
(30)-day notice period, the Executive will continue to perform duties and abide by all other terms
and conditions of this Agreement. Additionally, the Executive will use his best efforts to
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effect a smooth and effective transition to whoever will replace the Executive. The Company
reserves the right to accelerate the effective date of the Executive’s resignation. The Company
shall have no liability to the Executive under this subsection other than the Executive’s wages and
benefits through the effective date of the Executive’s resignation and any vested benefits payable
to the Executive under plans and agreements of the Company or any predecessor to the Company and
any amounts payable to Executive under any agreement between the Executive and any of the
Affiliated Companies, including but not limited to the Retirement Benefit Agreement entered into by
and between the Executive and the Company, as amended from time to time (collectively the “Accrued
Benefits”). The Executive will continue to be bound by all provisions of this Agreement that
survive the Executive’s Termination of Employment.
(b) Termination for Cause. The Company may terminate the Executive’s employment for
Cause. “Cause” shall mean: (1) the Executive’s willful and continued gross neglect of duties
(other than resulting from incapacity due to physical or mental illness or following the
Executive’s delivery of a Notice of Termination for Good Reason (as defined herein)), or (2) the
willful engaging by the Executive in illegal conduct that is materially and demonstrably injurious
to the Company or (3) the willful engaging by the Executive in gross misconduct that is materially
and demonstrably injurious to the Company which, in the case of clauses (1) and (3), has not been
cured within 30 days after a written demand for substantial performance is delivered to the
Executive by the Board that specifically identifies the manner in which the Board believes that the
Executive has grossly neglected his duties or has engaged in gross misconduct. No act, or failure
to act, on the part of the Executive shall be considered “willful” unless it is done, or omitted to
be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or
omission was in the best interests of the Company. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The cessation of employment of the Executive
shall not be deemed to be for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board (excluding the Executive, if the Executive is
a member of the Board) at a meeting of the Board called and held for such purpose (after reasonable
notice is provided to the Executive and the Executive is given an opportunity, together with
counsel for the Executive, to be heard before the Board), finding that, in the good faith opinion
of the Board, Cause exists and specifying the particulars thereof in detail. In the
event of a dispute concerning the existence of “Cause,” any claim by the Executive that “Cause”
does not exist shall be presumed correct unless the Company establishes by clear and convincing
evidence that Cause exists. The Company shall have no liability to the Executive in the event of a
Termination of Employment for Cause other than the Accrued Benefits.
(c) Termination of Employment With Good Reason or Without Cause. If the Executive
experiences a Termination of Employment with Good Reason or the Executive experiences a Termination
of Employment by the Company without Cause, then:
(i) the Executive shall be paid (a) the Accrued Benefits, (b) an amount (the “Severance
Amount”) equal to three (3) times the Executive’s “Annual Cash Compensation,” as hereafter
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defined, and (c) a prorated annual bonus for the fiscal year in which the Executive’s Termination
of Employment occurs (the “Pro Rata Bonus”), such Pro Rata Bonus to be determined by multiplying
the target bonus for the year in which Termination of Employment occurs by a fraction the numerator
of which shall be the number of days elapsed in such fiscal year through (and including) the date
on which the Executive’s Termination of Employment occurs and the denominator of which shall be the
number 365. The Severance Amount and the Pro-Rata Bonus shall be paid in a lump sum within ten
days after the date of the Executive’s Termination of Employment (or, if required by Section 409A
of the Internal Revenue Code (the “Code”) to avoid the imposition of additional taxes, on the date
that is six (6) months following the date on which the Executive’s Termination of Employment
occurs). For purposes of this section 8(c)(i), the Executive’s “Annual Cash Compensation” shall
mean the sum of (I) the Employee’s Base Salary as in effect at the time of the Executive’s
Termination of Employment, plus (II) the higher of (x) the average annual bonus awarded to the
Employee with respect to the three fiscal years immediately preceding the Executive’s Termination
of Employment (including, if applicable, fiscal years ending prior to the Effective Date) and (y)
the Executive’s target bonus for the year in which the Termination of Employment occurs.
(ii) for the remainder of the calendar year in which the Termination of Employment occurs and
during the two succeeding calendar years, the Company shall continue to provide benefits (other
than the benefits specifically provided for in the following sentence) to the Executive and/or the
Executive’s dependents at least equal to those that were provided to them (taking into account any
required employee contributions, co-payments and similar costs imposed on the Executive and the
Executive’s dependents and the tax treatment of participation in the plans, programs, practices and
policies by the Executive and the Executive’s dependents) by or on behalf of the Company and/or any
affiliate in accordance with the benefit plans, programs, practices and policies (including those
provided under this Agreement) in effect immediately prior to the Executive’s Termination of
Employment or, if more favorable to the Executive, as in effect any time thereafter with respect to
the chief executive officer of the Company and his or her dependents; provided, however, that, if
the Executive becomes reemployed with another employer and is eligible to receive such benefits
under another employer provided plan, program, practice or policy, the medical and other welfare
benefits described herein shall be secondary to those provided under such other plan, program,
practice or policy during such applicable period of eligibility (the “Welfare Benefit Continuation
Payments”). For a period of three years after the Executive’s Termination of Employment, the
Executive shall be entitled to access for the Executive to corporate aircraft comparable to that
made available to the Executive immediately prior to the Executive’s Termination of Employment for
his personal use for an aggregate of 70 hours per year (defined by wheels-up with the Executive
and/or the Executive’s family on the aircraft), with each hour valued at $8,650 (such value to be
increased by 8% per year (compounded) commencing in 2007), with such access in all other respects
to be provided in accordance with Section 3(c) of the this Agreement and the Company’s practice
immediately prior to the Executive’s Termination of Employment. As soon as practicable following
the end of each anniversary of the date of the Executive’s Termination of Employment, the Company
shall pay the Executive an amount equal to the excess, if any, of the value of the maximum aircraft
benefits provided pursuant to the preceding sentence over the value of the actual benefits used by
the Executive during the relevant twelve-month period, such value to be calculated consistent with
the preceding sentence.
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Notwithstanding the foregoing, if the Company and the Executive agree that it is required by
Section 409A of the Code to avoid the imposition of additional taxes, the provision of any benefits
pursuant to this subsection (ii) shall not begin until the date that is six (6) months following
the date on which the Executive’s Termination of Employment occurs and the Company shall reimburse
the Executive for reasonable costs incurred by the Executive to independently obtain such benefits
during the six (6) months following the date on which such Termination of Employment occurs (with
the cost of airplane use described above being deemed reasonable for this purpose). The benefits
and allowances referred to in this subsection (ii) (including the Welfare Benefit Continuation
Payments) are collectively referred to as the “Employee Benefit Continuation Payments.” Upon
publication of final treasury regulations under Section 409A of the Code, the Company and the
Executive shall consider in good faith amendments to this Section 8(c)(ii) which are consistent
with such final regulations and, if permitted, extend the period of coverage for all Employee
Benefit Continuation Payments to a period of three years following Termination of Employment.
(iii) all then outstanding equity-based awards held by the Executive (other than stock
options) shall become fully vested and free of restrictions, all then outstanding stock options
held by the Executive shall become fully vested and exercisable and shall remain exercisable for
the period of time prescribed under the terms of the applicable stock option grant.
(iv) the Executive will continue to be bound by all provisions of this Agreement that survive
Termination of Employment.
“Good Reason” shall mean: (1) the assignment to the Executive of any duties inconsistent in
any respect with the Executive’s position as Chief Executive Officer (including status, offices,
titles and reporting requirements), authority, duties or responsibilities as contemplated by
Section 1 of this Agreement, or any other diminution in such position (or removal from such
position), authority, duties, responsibilities or conditions of employment (whether or not
occurring solely as a result of the Company’s ceasing to be a publicly traded entity or becoming a
subsidiary or a division of a publicly traded entity), or the Executive determines in good faith
that a change in circumstances relating to his employment has rendered it substantially more
difficult for him to perform his duties and responsibilities hereunder as Chief Executive Officer
as compared to prior to such change in circumstances (other than by reason of Cause or his physical
or mental incapacity), in each case excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and that is remedied by the Company promptly after
receipt of notice thereof given by the Executive; (2) failure to nominate the Executive as a member
of the Board or removal of the Executive from (or failure to re-elect the Executive to) his
position as a member of the Board; (3) any failure by the Company to comply with any of the
provisions of Section 3 of this Agreement, other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and that is remedied by the Company promptly after receipt of
notice thereof given by the Executive; (4) the Company’s requiring the Executive to be based at any
office or location other than as provided in Section 1 of this Agreement; (5) any failure by the
Company to comply with and satisfy Section 16 of this Agreement; (6) the Company’s giving written
notice to the Executive that the term of this Agreement that is in effect at the time such written
notice is given is not to be extended or further extended; (7) any other breach of this Agreement
by the Company, excluding for this purpose an isolated, insubstantial and inadvertent
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breach that is not taken in bad faith and that is remedied by the Company promptly after receipt of
notice thereof given by the Executive.
The Executive’s continued employment shall not constitute consent to, or a waiver of rights with
respect to, any act or failure to act constituting Good Reason hereunder. In connection with any
dispute regarding the existence of Good Reason, any claim by the Executive that Good Reason exists
shall be presumed to be correct unless the Company establishes by clear and convincing evidence
that Good Reason does not exist.
(d) Death. The employment of the Executive shall automatically terminate upon the
Executive’s death. Upon such Termination of Employment as a result of death, the Company shall pay
or provide to the Executive’s estate or beneficiaries (i) the Accrued Benefits, (ii) the Pro Rata
Bonus, (iii) the Severance Amount reduced (but not below zero) by any death benefits to which the
Executive’s estate or beneficiaries are entitled pursuant to plans or arrangements of the Company
(the “Modified Severance Amount”), and (iv) the Welfare Benefit Continuation Payments. Upon the
Executive’s Termination of Employment as a result of the Executive’s death, the Pro Rata Bonus and
the Modified Severance Amount shall be paid in a lump sum to the Executive’s estate or
beneficiaries within ten (10) days after the Executive’s Termination of Employment.
(e) Disability. The employment of the Executive shall automatically terminate upon
the Executive’s Disability. Upon such Termination of Employment as a result of Disability, the
Company shall pay or provide to the Executive (i) the Accrued Benefits, (ii) the Pro Rata Bonus,
(iii) the Severance Amount reduced (but not below zero) by any disability benefits to which the
Executive is entitled pursuant to plans or arrangements of the Company (the “Disability Severance
Amount”) and (iv) the Employee Benefit Continuation Payments. Upon the Executive’s Termination of
Employment as a result of Disability, the Pro Rata Bonus shall be paid in a lump sum to the
Executive within ten (10) days after the Executive’s Termination of Employment (or, if required by
Section 409A of the Code to avoid the imposition of additional taxes, on the date that is six (6)
months following the date on which the Executive’s Termination of Employment occurs). Upon the
Executive’s Termination of Employment as a result of Disability, the Disability Severance Amount
shall be paid over a period of three (3) years following such Termination of Employment in
accordance with regular payroll practices or, if required by Section 409A of the Code to avoid the
imposition of additional taxes, the Company shall pay to the Executive a lump sum payment on the
date that is six (6) months following the date on which the Executive’s Termination of Employment
occurs equal to one-sixth (1/6th) of the Disability Severance Amount and then, for a period of two
and one-half years following such lump sum payment date, shall continue to pay to the Executive the
remainder of the Disability Severance Amount in accordance with regular payroll practices.
“Disability” shall mean the inability to perform normal functions of a member of the Board or as
Chief Executive Officer due to mental, physical or emotional disability which is expected to last
more than one year.
(f) Return of Company Property. Upon the Executive’s Termination of Employment for
any reason, the Executive shall immediately return to the Company all records, memoranda, files,
notes, papers, correspondence, reports, documents, books, diskettes, hard drives, electronic files,
and all copies or abstracts thereof that the Executive has concerning the Company’s business.
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The 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 the 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 the Executive is otherwise entitled under the contract, and
the amount of such payments and benefits shall not be reduced by any compensation or benefits
received by the Executive from other employment.
(h) Cooperation. Upon the Executive’s Termination of Employment for any reason, the
Company and the Executive shall mutually cooperate with each other in connection with the
preparation of a press release or other public announcement relating to such Termination of
Employment.
9. Indemnification. The Company shall maintain D&O liability coverage pursuant to
which the Executive shall be a covered insured. The 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 the 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 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, the 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 the 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 the Executive in his capacity as a director or
officer (and not in any other capacity in which service was or is rendered by the 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 the Executive, to repay all amounts to Company so advanced if it
should be determined ultimately that the Executive is not entitled to be indemnified under this
section or otherwise.
Promptly after receipt by the Executive of notice of the commencement of any action, suit or
proceeding for which the Executive may be entitled to be indemnified, the Executive shall notify
the Company in writing of the commencement thereof (but the failure to notify the Company
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shall not relieve it from any liability which it may have under this Section 9 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 the
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 the Executive
promptly after receiving the aforesaid notice from the Executive, to assume the defense thereof
with counsel reasonably satisfactory to the Executive, which may be the same counsel as counsel to
the Company. Notwithstanding the foregoing, the 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 the
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 the Executive
to take charge of the defense of such action within a reasonable time after notice of commencement
of the action or (iii) the Executive shall have reasonably concluded, after consultation with
counsel to the 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 the Executive), in any of which events such fees and
expenses of one additional counsel shall be borne by the Company.
Anything in this Section 9 to the contrary notwithstanding, the Company shall not be liable for any
settlement of any claim or action effected without its written consent.
10. Legal Fees. Notwithstanding anything to the contrary in Section 9 of this
Agreement, the Company shall reimburse the Executive for all costs (including but not limited to
reasonable legal fees and expenses) incurred by the Executive in disputing in good faith any issue
hereunder relating to the termination of the Executive’s employment, in seeking in good faith to
obtain or enforce any benefit or right provided by this Agreement, or, to the extent attributable
to the application of Section 4999 of the Internal Revenue Code to any payment or benefit provided
hereunder, in connection with any tax audit or proceeding. Such reimbursements shall be made
promptly upon delivery of the Executive’s written request for payment accompanied by appropriate
evidence of the costs so incurred.
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.
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 (receipt confirmed),
addressed to the respective parties at the following addresses:
COMPANY:
Mylan Laboratories Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Legal Officer or General Counsel
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Legal Officer or General Counsel
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Fax: 000-000-0000
EXECUTIVE:
The Executive’s most recent home address or fax number on file with 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 the
Executive or his 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 orally,
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 the Executive. No right or interest to or in any payments or benefits hereunder shall
be assignable by the 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 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.
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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. The parties irrevocably submit to the jurisdiction
of the state and federal courts located in the Commonwealth of Pennsylvania solely in respect of
the interpretation and enforcement of the provisions of this Agreement and of the documents
referred to in this Agreement, and in respect of the transactions contemplated by this Agreement
and by those documents, and hereby waive, and agree not to assert, as a defense in any action, suit
or proceeding for the interpretation or enforcement of this Agreement or of any such document, that
it is not subject to this Agreement or that such action, suit or proceeding may not be brought or
is not maintainable in said courts or that the venue thereof may not be appropriate or that this
Agreement or any such document may not be enforced in or by such courts, and the parties hereto
irrevocably agree that all claims with respect to such action or proceeding shall be heard and
determined in such a court. The parties hereby consent to and grant any such court jurisdiction
over the person of such parties and over the subject matter of such dispute and agree that mailing
of process or other papers in connection with any such action or proceeding in the manner provided
in Section 12 or in such other manner as may be permitted by law, shall be valid and sufficient
service thereof.
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.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year first
above mentioned.
| MYLAN LABORATORIES INC. | ||||||
| By | /s/ Xxx Xxxxx | |||||
| Name: Xxx Xxxxx | ||||||
| Title: Chairman, Compensation Committee | ||||||
| /s/ Xxxxxx X. Xxxxx | ||||||
| Xxxxxx X. Xxxxx | ||||||
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