RETIREMENT BENEFIT AGREEMENT
This Retirement Benefit Agreement (the "Agreement") is entered into on this
14th day of March, 1995 (the "Effective Date") by and between:
Mylan Laboratories Inc.,
a Pennsylvania Corporation,
with offices located at
000 Xxxxxxxx Xxxxx Xxxx,
Xxxxxxxxxx, XX 00000
(hereinafter referred to as
"Mylan" or "Company").
and
Xxxx X. X'Xxxxxxx,
an employee of Mylan
who resides at
00 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
(hereinafter referred to as
"Employee" or "X'Xxxxxxx").
WHEREAS the Company and Employee, in recognition of Employee 's long and
valuable contribution to the success of the Company, entered into a Salary
Continuation Agreement on April 1, 1989; and
WHEREAS Employee continues to perform valuable services for the Company;
and
WHEREAS in recognition of his continuing service to Mylan, the Company
wishes to provide Employee with financial assistance with respect to certain
Contingencies, in addition to that provided for in said April 1, 1989 Agreement;
and
WHEREAS the Company and Employee wish to RESCIND, and to REPLACE said
Salary Continuation Agreement with this Agreement;
WITNESSETH THEREFORE that in consideration of the additional benefits
provided for hereunder, the premises and covenants set forth herein, and other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, the Company and Employee, intending to be legally bound, agree as
follows:
I. DEFINITIONS
Whenever used in the Agreement the following terms shall be defined as
follows:
(a) "Advisor" or "Advisors" shall mean with respect to Employee any person
including lawyers, accountants, estate planners and others, with whom
he may wish to review and discuss the matters set forth herein.
(b) "Agreement" shall mean this Retirement Benefit Agreement which is
entered into on the 14th day of March, 1995.
(c) "At-Will" shall mean with respect to the period of DeBone's employment
with Mylan, that the Company is under no obligation to continue to
employ DeBone for any period of time, and can terminate his employment
at any time without notice, subject to certain statutory and
regulatory requirements; and that Employee is under no obligation to
remain employed by the Company, and can terminate his employment with
Mylan at any time, without notice.
(d) "Change of Control" shall mean:
(1) The acquisition (other than from the Company) by any person,
entity or "group", within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange
Act"), excluding, for this purpose, the Company or its
subsidiaries, or any employee benefit plan of the Company or its
subsidiaries which acquires beneficial ownership of voting
securities of the Company (within the meaning of Rule 13d-3
promulgated under the Exchange Act), or legal ownership of 20% or
more of either the then outstanding shares of common stock or the
combined voting power of the Company's then outstanding voting
securities entitled to vote generally in the election of
directors; or
(2) Individuals who, as of the date hereof, constitute the Board (as
of the date hereof the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board, provided that any
person becoming a director subsequent to the date hereof whose
election, or nomination for election, by the Company's
shareholders was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an
election or nomination of an individual whose initial assumption
of office is in connection with an actual or threatened election
contest relating to the election of the Directors of the Company,
as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) shall be, for purposes of
this Agreement, considered as though such person were a member of
the Incumbent Board; or
(3) Approval by the shareholders of the Company of a reorganization,
merger, consolidation, or other action with respect to which
persons who were the shareholders of the Company immediately
prior to such reorganization, merger or consolidation, or other
action do not, immediately thereafter, own more than 50% of the
combined voting power entitled to vote generally in the election
of directors of the reorganized, merged or consolidated company's
then outstanding voting securities, or of the sale of all or
substantially all of the assets of the Company.
(e) "Contingency" shall mean Retirement or death.
(f) "Mylan" or "Company" shall mean Mylan Laboratories Inc., its
subsidiaries and affiliates.
(g) "Net Present Value" ("NPV") shall mean the present value at any given
time of the benefit to be paid, discounted at seven percent (7%) per
annum.
(h) "Party" or "Parties" shall mean the Company or Employee, or both the
Company and Employee depending upon which term is required by the
context in which it is used.
(i) "Retire" or "Retirement" shall mean the day and date on which DeBone's
employment with the Company is terminated by either Party for any
reason other than death of the Employee.
(j) "Successor" shall mean any person, partnership, limited partnership,
joint-venture, corporation, trust or any other entity or organization
who, subsequent to the Effective Date, comes into possession of or
acquires, either directly or indirectly, all or substantially all of
the Company's business, assets or voting stock, or the right to direct
the business activities and practices of the Company. B
II. RESCISSION OF PRIOR AGREEMENT
The Salary Continuation Agreement entered into by the Parties on April 1,
1989 and any and all other agreements, express or implied, which may have been
entered into by them prior to the execution of this Agreement, including by way
of example and not of limitation, any agreement which addresses or is related to
salary continuation, deferred compensation, employment, or similar matters
(excluding agreements related to stock options) are hereby RESCINDED by the
mutual consent of the Parties hereto upon execution of this Agreement.
THEREFORE THE PARTIES ACKNOWLEDGE THAT ANY RIGHTS AND
OBLIGATIONS SET FORTH IN ANY SUCH AGREEMENT, WHETHER
EXPRESS OR IMPLIED, ARE FOREVER WAIVED, NULL AND VOID, AND
UNENFORCEABLE AT LAW OR IN EQUITY.
III. RETIREMENT
3.1 Upon his Retirement from the Company, and if he is eligible to receive
payments as provided for elsewhere herein, Employee shall receive an
annual retirement benefit equal to the amount set forth below.
3.2 Should Employee Retire after the Effective Date but on or before March
31, 1996 he shall receive thirty six thousand dollars ($36,000.00)
each year for ten (10) years.
3.3 Should Employee Retire after March 31, 1996 but on or before March 31,
1997 he shall receive seventy thousand dollars ($70,000.00) each year
for ten (10) years.
3.4 Should Employee Retire after March 31, 1997 but on or before March 31,
1998 he shall receive eighty thousand dollars ($80,000.00) each year
for ten (10) years.
3.5 Should Employee Retire after March 31, 1998 but on or before March 31,
1999 he shall receive ninety thousand dollars ($90,000.00) each year
for ten (10) years.
3.6 Should Employee Retire after March 31, 1999 he shall receive one
hundred thousand dollars ($100,000.00) each year for ten (10) years.
3.7 Should Employee become unable to perform the material and substantial
duties of his position prior to March 31, 1999, he shall receive,
pursuant to 4.1, one hundred thousand dollars ($100,000.00) each year
for ten (10) years in lieu of any benefit specified in Sections 3.2
through 3.6 hereof.
3.8 The Company shall pay the amount due hereunder in equal or
substantially equal monthly installments. The first of any such
payments shall be made on the first day of the month following the
month in which Employee Retires, and each subsequent payment shall be
made on the first day of each successive month until Mylan's
obligations with respect to such payments have been satisfied.
3.9 However, upon the written request of the Employee, Mylan may pay to
Employee the NPV of any amount, or of the balance of any such amount,
to which he is entitled hereunder in a lump-sum payment. If the
Company grants the request for a lump sum payment, said payment shall
be paid within thirty (30) days of the date of Employee's request.
IV. CAPACITY TO PERFORM DUTIES
4.1 The certification of a licensed physician selected by the Company as
to Employee's inability to perform the material and substantial duties
of his position shall be conclusive with respect to his status
regarding the application of 3.7 hereof.
V. DEATH BENEFIT
5.1 The Company shall maintain for Employee's benefit during his
employment with the Company life insurance policies in the aggregate
amount of one million two hundred fifty thousand dollars
($1,250,000.00).
5.2 If the Employee's death occurs after Retirement, but before having
received the entire benefit provided for under Article III hereof, the
balance of the payments due thereunder shall be paid to Employee's
beneficiary in a lump-sum payment equal to the NPV of the remaining
payments.
VI. EFFECT OF CHANGE OF CONTROL
6.1 Upon a Change of Control DeBone shall receive, in lieu of the annual
payments provided for under Article III, the NPV of One Hundred
Thousand Dollars ($100,000.00) per year for ten (10) years; provided
DeBone is employed by the Company at or immediately prior to the
Change of Control.
6.2 If a Change of Control occurs after his retirement, but before having
received the entire benefit provided for under Article III hereof, the
balance of the payments due thereunder shall be paid to Employee in a
lump-sum payment equal to the NPV of the remaining payments.
VII. SUCCESSORSHIP
This Agreement in its entirety shall be binding upon and enforceable
against the Company and its Successors.
VIII. NO DUPLICATION OF PAYMENTS
Notwithstanding anything to the contrary which may be set forth
elsewhere herein, under no circumstances is Employee or his beneficiary
entitled to take benefits under more than any one article included in this
Agreement.
IX. EMPLOYEE CONDUCT WITH RESPECT TO COMPETITORS
9.1 Employee agrees that he will not, without the prior written consent of
the Company, directly or indirectly, whether as an employee, officer,
director, independent contractor, consultant, stockholder, partner or
otherwise, engage in or assist others to engage in or have any
interest in any business which competes with the Company in any
geographic area in which the Company markets or has marketed its
products during the year preceding termination of DeBone's employment
for the greater of:
(a) the period during which Employee receives monthly payments under
this Agreement; or
(b) three (3) years following his receipt of a lump-sum payment
hereunder.
9.2 Notwithstanding anything to the contrary set forth elsewhere herein,
stock ownership in a competing business shall not be a breach of this
Agreement, provided such stock is traded on a national exchange.
9.3 The Parties agree and acknowledge that the time, scope and geographic
area and other provisions of this Agreement have been specifically
negotiated by the Parties, and Employee specifically hereby agrees
that such time, scope and geographic area and other provisions are
reasonable under these circumstances. Employee further agrees that if,
despite the express agreement of the Parties to this Agreement, a
court should hold any portion of this Agreement unenforceable for any
reason, the maximum restrictions of time, scope and geographic area
reasonable under the circumstances, as determined by the court, will
be substituted for the restrictions herein which such court may find
to be unreasonable or unenforceable.
9.4 The Parties acknowledge that the breach of 10.1 will be such that the
Company will not have an adequate remedy at law because the rights of
the Company under this Agreement are of a specialized and unique
character, and that immediate and irreparable damage will result to
the Company if Employee breaches his obligations under 10.1. The
Company may, in addition to any other remedies and damages available,
seek an injunction in the courts of the State of West Virginia and the
United States District Court for the Northern District of West
Virginia to restrain any such breach. Employee represents and warrants
that his expertise and capabilities are such that his obligations
under 10.1 will not prevent him from earning a living.
X. CONSULTING SERVICES
10.1 During the five (5) year period beginning on the day following
Employee's Retirement he shall, at the request of the Company, act in
the capacity of a consultant for the Company, performing such services
as may be consistent with those performed by him during his Employee's
employment. These services may be designated by the President of the
Company, or his authorized representative, and shall be reasonable in
scope duration and frequency.
10.2 The Company shall pay the Employee for such consulting services an
hourly rate to be determined by the Parties at such time, but not less
than one hundred fifty dollars ($150.00) per hour, payable monthly.
10.3 In addition to the foregoing, the Company shall reimburse the Employee
monthly for any and all out-of-pocket expenses incurred by the
Employee directly for the benefit of the business of the Company.
XI. ELIGIBILITY FOR PAYMENT
11.1 Any and all payments due hereunder, may be denied if not already
begun, or terminated if they have begun, if in the Company's sole
judgment Employee is either not eligible for such payments, or once
such payments have begun is found to be or found to have been
ineligible.
11.2 Employee shall not be eligible for any payments hereunder if the
Company, in its sole discretion, finds that during or subsequent to
his employment with the Company he:
(a) breaches, or has breached any term, provision or obligation
enumerated herein;
(b) committed any act by commission or omission which materially and
substantially adversely affects the Company's business or
reputation; or
(c) is convicted of any violation of the Federal Food, Drug and
Cosmetic Act, or the violation of any other statute of material
relevance to the Company's business.
11.3 Should Employee be paid any benefits hereunder and thereafter be found
ineligible, or to have been ineligible, he must return to the Company
that portion of the benefit paid to him for the period of his
ineligibility.
XII. RIGHT TO CONFER
12.1 Employee shall have the right, but not the obligation to:
(a) Confer with any Advisor of his choice prior to signing the
Agreement; and
(b) Provide his Advisors with a true and complete copy of the
Agreement, and any other pertinent documents which may be of
assistance to his Advisors.
12.2 Should Employee decline the right to confer with his Advisors prior to
executing this Agreement he shall execute an acknowledgement of same
which shall then be incorporated herein by reference. (See Exhibit A)
XIII. NO PROMISE OF CONTINUED EMPLOYMENT
13.1 Employee acknowledges his employment with the Company is AT-WILL.
13.2 Nothing set forth herein shall constitute or be construed as a
contract of employment except in so far as provided for under 13.1
hereof.
XIV. RESTRICTION OF ALIENABILITY
Benefits payable to the Employee or beneficiary shall not be subject
to assignment, transfer, attachment, execution, garnishment, sequestration,
or any other seizure under any legal or equitable process, whether on
account of the Employee's or beneficiary's act or by operation of the law.
XV. CONTRACT ADMINISTRATOR
The Director of Taxation and Accounting of the Company, or other
officer of Mylan designated by the Executive Committee of the Company is
hereby named the Contract Administrator for purposes of assuring compliance
with the terms and conditions set forth herein.
XVI. MODIFICATION
This Agreement may not be changed, amended or otherwise modified other
than by a written statement; Provided, such statement is signed by both
Parties, expresses their intent to change the Agreement, and specifically
describes such changes.
XVII. HEADINGS
Except when referenced in the body of this Agreement article headings
are set forth herein for the purpose of convenience only. Such headings
shall not be considered or otherwise referred to when any question or issue
arises with respect to the application or interpretation of any term or
condition set forth herein.
XVIII. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which is to be considered an original, and taken together as one and the
same document.
XIX. GOVERNING LAW
Any an all actions between the Parties regarding the interpretation or
application of any term or provision set forth herein shall be governed by
and interpreted in accordance with the substantive laws, and not the law of
conflicts, of the State of West Virginia. The Company and Employee each do
hereby respectively consent and agree that the courts of the State of West
Virginia shall have jurisdiction, and venue shall properly lie with the
courts of the State of West Virginia, with respect to any and all actions
brought hereunder.
XX. SINGULAR OR PLURAL
The singular form of any noun or pronoun shall include the plural when
the context in which such word is used is such that it is apparent the
singular is intended to include the plural and vice versa.
XXI. ASSIGNMENT
The Agreement may not be assigned by either Party, without the written
authorization of the other Party. A Successor shall not be considered an
assignee for purposes of this Article.
XXII. ENTIRE AGREEMENT
The terms and conditions set forth herein contain the entire agreement
between the Company and Employee, and supersede any and all prior
agreements or understandings (whether express or implied) between the
Parties with respect to the matters set forth herein.
XXIII. SURVIVAL
Articles I, II, IX, X, XI, XIX, and XXIII shall survive any expiration
or termination of this Agreement.
XXIV. TERM
The term of this Agreement shall begin on the Effective Date and shall
end on the date on which Mylan makes the last payment to which it is
obligated hereunder.
IN WITNESS of their agreement to the terms and conditions set forth
herein the Company and Employee have caused the following signatures to be
affixed hereto:
MYLAN LABORATORIES INC. Xxxx X. X'Xxxxxxx
BY:________________________ BY:________________________
TITLE:_____________________ DATE:______________________
DATE:______________________
ACKNOWLEDGEMENT
I, Xxxx X. X'Xxxxxxx, hereby acknowledge and understand that I have
been given the opportunity to review and discuss the terms of the Agreement
with an Advisor of my choice prior to signing the Agreement. I have decided
that it is not necessary for me to discuss this matter with an Advisor, and
therefore I decline the opportunity to do so.
No one has discouraged me or otherwise attempted to influence me with
regard to my decision to decline the opportunity to discuss this matter
with my Advisors. My refusal of this offer is entirely my own and is made
without any reservation or conditions whatsoever.
WITNESSED BY:
__________________ DATE:_________ BY:__________________ DATE:________
__________________ DATE:_________
