AMENDMENT NO. 1 TO RETIREMENT BENEFIT AGREEMENT
EXHIBIT 10.12(b)
AMENDMENT NO. 1 TO RETIREMENT BENEFIT AGREEMENT
THIS AMENDMENT NO. 1 TO RETIREMENT BENEFIT AGREEMENT (this “Amendment”) by and between Mylan
Laboratories Inc., a Pennsylvania corporation (the “Company”), and Xxxxxx X. Xxxxxxxxx (the
“Executive”), is made as of April 3, 2006.
WHEREAS, the Company and the Executive are parties to that certain Retirement Benefit
Agreement dated as of December 31, 2004 (the “Agreement”);
WHEREAS, the Company and the Executive wish to amend the Agreement, effective as of April 1,
2006, as set forth below;
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
| 1. | Section I(h) of the Agreement is hereby deleted and replaced in its entirety to read as follows: |
““NPV” shall mean the sum of the present value at any given time of the monthly benefits to be
paid, using a discount rate equal to the long-term applicable federal rate then in effect
(determined under Section 1274(d) of the Code), compounded semiannually. For purposes of
determining NPV of Executive’s Retirement Benefit (or Partial Retirement Benefit) where
Executive Retires prior to attaining age 55, it shall be assumed that Executive’s Retirement
Benefit (or Partial Retirement Benefit) would have commenced at the date on which Executive
would have attained age 55 and the NPV of such Retirement Benefit (or Partial Retirement
Benefit) shall equal the present value of such Benefit at age 55 discounted back to the
Executive’s actual age at Retirement using the rate prescribed in the preceding sentence.
Executive’s age for purposes of this Agreement shall be Executive’s age at his nearest
birthday.”
| 2. | Section 2.1 is hereby deleted and replaced in its entirety to read as follows: |
“Upon his Retirement from the Company after completion of at least ten or more continuous years
of service (the “Full Vesting Date”), Executive shall receive the NPV of an annual retirement
benefit equal to one hundred and fifty thousand dollars ($150,000) for a period of fifteen (15)
years (the “Retirement Benefit”), paid in accordance with Section 2.6 of this Agreement;
provided, however, that if Executive Retires on or after the completion of at least five years
of continuous service and prior to the Full Vesting Date, Executive shall be entitled to
receive the NPV of a portion of the Retirement Benefit determined as follows (“Partial
Retirement Benefit”) and paid in accordance with Section 2.6 of this Agreement:
(a) If such termination occurs on or after five years of continuous service but prior to
six years of continuous service, 50% of the Retirement Benefit;
(b) If such termination occurs on or after six years of continuous service but prior to
seven years of continuous service, 60% of the Retirement Benefit;
(c) If such termination occurs on or after seven years of continuous service but prior to
eight years of continuous service, 70% of the Retirement Benefit;
(d) If such termination occurs on or eight years of continuous service but prior to nine
years of continuous service, 80% of the Retirement Benefit;
(e) If such termination occurs on or after nine years of continuous service but prior to
the Full Vesting Date, 90% of the Retirement Benefit;
In computing years of service for purposes of this Section 2.1, a period of at least six full
months of employment and less than one year shall be deemed to be one full year, and a period
of less than six full months shall be deemed to be zero years. If Executive Retires in
connection with a Termination without Cause or a Termination for Good Reason (pursuant to the
Executive Employment Agreement entered into by and between the Company and Executive effective
as of July 1, 2004, as amended April 3, 2006 (the “Employment Agreement”)) (other than in the
event the Executive’s employment is terminated (i) by reason of disability or (ii) by reason of
the non-extension or non-renewal of the Employment Agreement), then Executive shall be credited
with additional years of service for purposes of vesting under this Section 2.1 equal to the
relevant multiplier applied for purposes of computing such severance benefits.”
| 3. | Section 2.6 of the Agreement shall be deleted and replaced in its entirety with the following: |
“Within ten (10) days following Executive’s Retirement, Executive’s Retirement Benefit or
Partial Retirement Benefit, as the case may be, shall be paid to Executive in a lump sum
payment equal to the NPV of the Retirement Benefit or Partial Retirement Benefit, as the case
may be. Notwithstanding the above, if required by Section 409A of the Code to avoid the
imposition of additional taxes, such payment shall be made on the date that is six (6) months
following the date of such Retirement.”
| 4. | This Amendment shall be governed by, interpreted under and construed in accordance with the laws of the Commonwealth of Pennsylvania. | ||
| 5. | This Amendment may be executed in counterparts, each of which shall be an original and all of which shall constitute the same document. | ||
| 6. | Except as modified by this Amendment, the Agreement is hereby confirmed in all respects. |
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IN WITNESS WHEREOF, this Amendment has been duly executed and delivered as of the date and the
year first written above.
| MYLAN LABORATORIES INC. | ||||
| /s/ Xxxxxx X. Xxxxx | ||||
| Name: Xxxxxx X. Xxxxx | ||||
| Title: Vice Chairman and CEO | ||||
| EXECUTIVE | ||||
| /s/ Xxxxxx X. Xxxxxxxxx | ||||
| Xxxxxx X. Xxxxxxxxx |
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