Exhibit 10.29
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (the "Agreement") is dated as of
July 1, 2004, by and between Mylan Laboratories Inc. (the "Company") and Xxxx X.
X'Xxxxxxx ("Executive").
RECITALS:
WHEREAS, the Company and Executive are parties to that certain
Executive Employment Agreement dated July 22, 2002, as amended as of December
15, 2003 (the "Original Agreement");
WHEREAS, the Company wishes to continue to employ Executive as Chief
Scientific Officer, and Executive desires to continue such employment; and
WHEREAS, the parties wish to terminate the Original Agreement and to
enter into this Agreement in its stead;
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. 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 8 of this
Agreement, through March 31, 2007.
3. Executive's Compensation. Executive's compensation shall include the
following:
(a) Minimum Base Salary. The Executive's minimum base salary (the
"Minimum Base Salary") shall be a monthly rate of $400,000, payable in
accordance with the Company's normal payroll practices for its executive
officers. The Minimum Base Salary may be increased from time to time at the
discretion of the Board of Directors of the Company, any committee authorized by
the Board or any officer having authority over executive compensation.
(b) Annual Bonus. Executive shall be eligible to receive an annual
discretionary bonus targeted at one hundred percent (100%) of Executive's
then-current Minimum Base Salary. Executive's eligibility for a bonus and the
amount of the bonus, if any, shall
be determined by the Board of Directors in its sole discretion, or by any
committee or officer having authority over executive compensation.
(c) Non-Qualified Stock Options. The remaining one-third (1/3) of the
fully vested non-qualified options granted to Executive in July 2002 pursuant to
the 1997 Mylan Laboratories Inc. Incentive Stock Option Plan, as amended (the
"Plan"), shall be exercisable on July 22, 2004. These options are subject to all
terms of the Plan and the applicable stock option agreement.
(d) Fringe Benefits and Expense Reimbursement. The Executive shall
receive such benefits and perquisites of employment as have been customarily
provided to the Company's Senior Officers including but not limited to, health
insurance coverage, profit-sharing, participation in the Company's 401(k) plan,
short-term disability benefits, twenty-five (25) vacation days, expense
reimbursement, and automobile usage in accordance with the plan documents or
policies that govern such benefits. The Company shall reimburse Executive for
all ordinary and necessary business expenses in accordance with established
Company policy and procedures.
4. 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
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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.
5. Non-Competition and Non-Solicitation. Executive agrees that during
the term of this Agreement and for a period ending 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
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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.
6. 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.
7. Injunctive Relief. The parties agree that in the event of
Executive's 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, 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 4 and/or 5 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.
8. Termination of Employment.
(a) Resignation. Executive may resign from employment at any time upon
ninety (90) days written notice to the Company. During the ninety (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. The Company reserves the right to accelerate the effective
date of Executive's resignation. Except as provided in Section 8(c), the Company
shall have no liability to Executive under this subsection other than that the
Company shall pay Executive's wages and benefits through the effective date of
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Executive's resignation. Executive, however, will continue to be bound by all
provisions of this Agreement that survive termination of employment.
(b) Termination For Cause. The Company may terminate Executive's
employment for Cause, as defined herein, at any time. Notice of a Termination
For Cause shall be in writing. In the event of a Termination For Cause, the
Company shall have no liability to Executive other than that the Company shall
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.
"Cause" shall mean: (i) Executive's willful and substantial misconduct
with respect to the Company's business or affairs; (ii) Executive's gross
neglect of duties, (iii) Executive's conviction of a crime involving moral
turpitude; (iv) Executive's conviction of any felony; or (v) Executive's
material breach of any provision of this Agreement.
(c) Resignation With Good Reason or Termination Without Cause. If
Executive provides ninety (90) days notice and resigns with Good Reason, as
defined herein, and complies in all respects with his obligations hereunder, or
if the Company terminates Executive without Cause, then Executive shall be paid,
within 30 days of his separation from the Company, a lump sum equal to his
then-current Minimum Base Salary plus the Prior Bonus (as defined below). If the
Executive resigns with Good Reason that is a Disability and complies in all
respects with his obligations hereunder, the Company will pay Executive, within
30 days of his separation from the Company, a lump sum equal to his then-current
Minimum Base Salary plus the Prior Bonus. In either case, Employee Benefits
shall be continued for the 12 months following his separation from the Company;
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 health insurance benefits
through another employer or otherwise in connection with rendering services for
a third party. Executive shall also be entitled to exercise immediately one
hundred percent (100%) of all stock options described in this Agreement in the
event of a Resignation With Good Reason or Termination Without Cause. 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 prior to his separation from the Company; or (ii) the annual bonus
applicable for the prior fiscal year.
"Good Reason" shall mean a reduction of Executive's Minimum Base Salary
below the Minimum 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, a relocation of Executive's principal place of work to a
location more than thirty (30) miles from Morgantown, WV, or the Executive's
Disability (as defined herein).
"Disability" means the inability to perform normal functions of the
positions due to mental, physical or emotional disability which is expected to
last more than one year.
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(d) 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 already terminated for
reasons stated in Section 8 (a), (b), or (c) of this Agreement, Executive shall
be paid, within 30 days of his separation from the Company, a lump sum equal to
his then-current Minimum Base Salary plus the Prior Bonus. In addition,
Executive's health insurance benefits shall be continued for twelve (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 health
insurance benefits through another employer or otherwise in connection with
rendering services for a third party. Executive, however, will continue to be
bound by all provisions of this Agreement that survive termination of
employment.
(e) Return of Company Property. Upon the termination of Executive's
employment for any reason, 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 Executive has concerning the Company's business. Executive shall
also immediately return all keys, identification cards or badges and other
Company property.
(f) 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 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
Executive from other employment.
(g) Death. The employment of Executive shall automatically terminate
upon Executive's death. 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 8(c) of this Agreement, and Executive's estate shall receive all
consideration, compensation and benefits that would be due and payable to
Executive for a termination without Cause.
9. 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
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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, 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 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 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 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. Efforts. During the Term of Employment, Executive shall: (i) devote
his full working time and attention to the business and affairs of the Company
and to the performance of his duties hereunder; (ii) serve the Company
faithfully and to the best of
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his ability, and use his best efforts to promote the interests of the Company;
and (iii) follow and implement the policies and directions of the Chief
Executive Officer and Board of Directors.
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, addressed to the respective parties at the following addresses:
If to the Company: Mylan Laboratories Inc.
000 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000-0000
Attention: Chairman of the Board
With a noted copy to the 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 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,
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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 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.
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20. Original Agreement. The parties agree that the Original Agreement
is terminated and superseded in all respects upon the effectiveness of this
Agreement.
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/ Xxxx X. X'Xxxxxxx
----------------------------------- ---------------------------
By: Xxxxxx X. Xxxxx Xxxx X. X'Xxxxxxx
Its: Vice Chairman and CEO
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