XXXXXX X. XXXXXXXXX EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (the "Agreement"), is dated as March 4,
2002, by and between Mylan Laboratories Inc. ("Mylan" or "Company") and Xxxxxx
X. Xxxxxxxxx ("Executive"). In consideration of the promises and mutual
obligations of the parties contained herein, and for other valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
Mylan and Executive agree as follows:
1. Employment of Executive. Mylan agrees to employ Executive as Chief Financial
Officer, and Executive accepts employment by Mylan during the term of this
Agreement for the consideration and on the terms and conditions provided herein.
2. Effective Date: Term of Employment. This Agreement shall commence and be
effective for all purposes as of March 4, 2002, and shall remain in effect
through March 4, 2005, unless earlier terminated as provided in Section 9 of
this Agreement.
3. Best Efforts. During the Term of this agreement, Executive shall devote his
full working time and attention to the business and affairs of Mylan and the
performance of his duties hereunder, serve Mylan faithfully and to the best of
his ability, and use his best efforts to promote Mylan's interests. During the
term of this Agreement, Executive agrees to promptly and fully disclose to
Mylan, and not to divert to Executive's own use or benefit or the use or benefit
of others, any business opportunities involving any existing or prospective line
of business, supplier, product or activity of Mylan or any business
opportunities which otherwise should rightfully be afforded to Mylan.
4. Executive's Compensation.
(a) Base Salary. As Executive's base compensation for all services to be
performed, Mylan shall pay Executive an annual salary of three hundred thousand
dollars ($300,000) (the "Base Salary"), payable in accordance with Mylan's
normal payroll practices for its executive officers. This Base Salary may be
increased from time to time at the discretion of the Board of Directors or any
committee thereof having authority over executive compensation.
(b) Discretionary Bonus. Executive shall be eligible to receive an annual
discretionary bonus up to seventy-five percent (75%) of Executive's 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 thereof having authority over executive compensation.
(C) Non-Qualified Stock Options. Subject to approval of the Stock Option
Committee, Executive shall receive non-qualified options to purchase up to one
hundred fifty thousand (150,000) shares of Mylan Laboratories Inc. common stock
under the 1997 Mylan Laboratories Inc. Incentive Stock Option Plan (the "Plan")
in accordance with the following vesting schedule, provided that Executive
remains employed by Mylan on the following vesting dates: on March 4, 2003,
Executive shall vest in the first 50,000 shares; on March 4, 2004, Executive
shall vest an additional 50,000 shares; and on March 4, 2005 Executive shall
vest in the remaining 50,000 shares. These options will be subject to all terms
of the P1BD, as amended and the applicable stock option agreement.
Notwithstanding any term or provision to the contrary set forth elsewhere
herein, Executive shall be entitled to one hundred percent (100%) vesting of the
above-referenced option in the event Executive resigns for Good Reason or is
Terminated Without Cause as provided in Section 9 herein.
(d) Fringe Benefits. Executive shall receive fringe benefits of employment, such
as health insurance coverage, profit-sharing, short-term disability benefits, 25
days vacation, expense reimbursement, and participation in a 401(k) plan, as are
customarily provided to other senior executive employees of Mylan in accordance
with the plan documents or policies that govern such benefits. Mylan reserves
the right to unilaterally modify or terminate benefits provided under any plan,
and the Executive is entitled only to such benefits as are available under the
then-effective plan.
S. Confidentiality. Executive recognizes and acknowledges that the business
interests of Mylan 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
financia1 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 emp1Oyment with
the Mylan Companies. 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 Mylan Companies' interests. During the term of this Agreement
and at all times thereafter:
(a) Executive will not, directly or indirectly, disclose any Confidential
Information to anyone outside the Mylan Companies, without the approval of the
individual to whom Executive reports,
(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 Mylan Companies, Executive will treat such documents
confidentially and will treat such documents as proprietary and confidential,
not to be reproduced, disclosed or used without the approval of the individual
to whom Executive reports;
(d) Executive will not advise others that the information and/or know how
included in Confidential Information is known to or used by the Mylan Companies;
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 Mylan Companies.
The obligations set forth in this paragraph are in addition to any other
agreements the Executive may have with any of the Mylan Companies and any and
all rights the Mylan Companies may have under state or federal statutes or
common law.
6. Non-Competition and Non-Solicitation. Executive agrees that during the term
of this Agreement and for a period ending one (1) year after termination of
Executive's employment 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. 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
substantia11y similar to those engaged in by the Mylan Companies provided that
Executive does not, directly or indirectly (including without limitation as the
result of ownership or control of another corporation or other entity),
individually or as part of a group (as that term is defined in Section 13 (d) of
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder) (i) control or have the ability to control the
corporation or other entity, (ii) provide to the corporation or entity, whether
as an Executive, consultant or otherwise, advice or consultation, (iii) provide
to the corporation or entity any confidential or proprietary information
regarding the Mylan Companies or its businesses or regarding the conduct of
businesses similar to those of the Mylan Companies, (iv) hold or have the right
by contract or arrangement or understanding with other parties to hold a
position on the board of directors or other governing body of the corporation or
entity or have the right by contract or arrangement or understanding with other
parties to elect one or more persons to any such position, (v) hold a position
as an officer of the corporation or entity, (vi) have the purpose to change or
influence the control of the corporation or entity (other than solely by the
voting of his shares or ownership interest) or (vii) have a business or other
relationship, by contract or otherwise, with the corporation or entity other
than as a passive investor in it; provided, however, that Executive may vote his
shares or ownership interest in such manner as he chooses provided that such
action does not otherwise violate the prohibitions set forth in this sentence.
(b) Executive will not, either directly or indirectly, either for himself or for
any other person, partnership, firm, company, corporation or other entity,
contact, solicit, divert, or take away any of the customers or suppliers of the
Mylan Companies.
(c) Executive will not solicit, entice or otherwise induce any employee of the
Mylan Companies to leave the employ of the Mylan Companies for any reason
whatsoever; nor will Executive directly or indirectly aid, assist or abet any
other person or entity in soliciting or hiring any employee of the Mylan
Companies, nor will Executive otherwise interfere with any contractua1 or other
business relationships between the Mylan Companies and its employees.
7. Severability. Should a court of competent jurisdiction determine that any
section or sub-section of this Agreement is unenforceable because one or all of
them are vague or overly broad, the parties agree that this Agreement may and
shall be enforced to the maximum extent permitted by law. It is the intent of
the parties that each section and sub-section of this Agreement be a separate
and distinct promise and that unenforceability of any one subsection shall have
no effect on the enforceability of another.
8. Injunctive Relief. The parties agree that in the event of Executive's
violation of sections 5 and/or 6 of this Agreement or any subsection thereunder,
that the damage to Mylan will be irreparable and that money damages will be
difficult or impossible to ascertain Accordingly, in addition to whatever other
remedies Mylan may have at law or in equity, Executive recognizes and agrees
that Mylan 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.
9. Termination of Employment.
(a) Resignation. (i) Executive may resign from employment at any time upon 90
days written notice to the Chairman of the Board of Directors and the Chief
Executive Officer. During the 90 days notice period Executive will continue to
perform duties and abide by all other terms and conditions of this Agreement.
Additionally, Executive will use his best efforts to effect a smooth and
effective transition to whomever will replace Executive. Mylan reserves the
right to accelerate the effective date of Executive's resignation, provided that
Executive sha11 receive Executive's salary and benefits through the ninety (90)
day period. (ii) If Executive resigns without "Good Reason" (as defined below),
Mylan shall have no liability to Executive under this Agreement other than that
the Company shall pay Executive's wages and benefits through the effective date
of Executive's resignation. Executive, however, will continue to be bound by all
provisions of this Agreement that survive termination of employment. For
purposes of this Agreemer4 "Good Reason" shall mean a reduction of Executive's
Base Salary below the Base Salary stipulated in this Agreement, unless other
similarly situated senior executives of Mylan are required to accept a similar
reduction, or the assignment of duties to the Executive which are inconsistent
with those of an executive officer. (iii) If Executive resigns with Good Reason
and complies in all respects with his obligations hereunder, Mylan will continue
to pay Executive his Base Salary, less applicable withholding, through normal
payroll procedures in equal monthly installments, and shall pay the cost of
continuing Executive's health insurance benefits, in both cases for the six (6)
months following expiration of the 90 days notice period provided, however, that
in the case of health insurance continuation, Mylan's obligation to provide
health insurance benefits shall end at such time as Executive obtains health
insurance benefits through another employer or otherwise in connection with
rendering services for a third party. Should Executive remain employed on
September 4, 2002, the six months shall be extended an additional six months and
Executive will also be entitled to a bonus, commensurate with the average bonus
(if any), awarded to other similarly situated senior executives of Company.
Executive will continue to be bound by all provisions of this Agreement that
survive termination of employment.
(b) Termination for Cause. Mylan agrees not to terminate Executive's employment
during the term of this Agreement except for Cause, as defined herein, and
agrees to give Executive written notice of its belief that acts or events
constituting Cause exist. Executive has the right to cure within five (5) days
of Mylan's giving of such notice, the acts, events or conditions which led to
such notice being given. For purposes of this Agreement, "Cause" shall mean: (i)
Executive's willful and gross misconduct with respect to Mylan's business or
affairs; (ii) Executive's gross neglect of duties, dishonesty or deliberate
disregard of any material rule or policy of Mylan, (iii) Executive's conviction
of a crime involving moral turpitude; (iv) Executive's conviction of any felony;
or (v) Executive's death or inability to perform the essential functions of his
position, with or without reasonable accommodation. If Mylan terminates
Executive's employment for Cause, the Company shall have no liability to
Executive other than to pay Executive's wages and benefits through the effective
date of Executive's termination. Executive, however, will continue to be bound
by all provisions of this Agreement that survive termination of employment.
(c) Termination Without Cause. If Mylan discharges Executive without Cause
before March 4, 2005, Mylan will continue to pay Executive his Base Salary, less
applicable withholding, through normal payroll procedures in equal monthly
installments, and shall pay the cost of continuing Executive's health insurance
benefits in both cases for the six (6) months following such termination without
Cause; provided, however, that in the case of health insurance continuation,
Mylan's obligation to provide health insurance benefits shall end at such time
as Executive obtains health insurance benefits through another employer or
otherwise in connection with rendering services for a third party. Should
Executive remain employed on September 4, 2002, the six months shall be extended
an additional six months and Executive will also be entitled to a bonus,
commensurate with the average bonus (if any), awarded to other similarly
situated senior executives of Company. Executive will continue to be bound by
all provisions of this Agreement that survive termination of employment.
(d) Death or Incapacity. The employment of Executive shall automatically
terminate upon Executive's death or upon the occurrence of a disability that
renders Executive incapable of performing the essential functions of his
position within the meaning of the Americans With Disabilities Act of 1990. Upon
such termination, Executive or his estate shall receive only such amounts as are
earned and due to Executive under this Agreement as the result of Executive's
activities prior to Executive's death or disability, and thereafter no further
consideration or compensation shall be owed by Mylan to Executive or to
Executive's estate.
(e) Return of Company Property. Upon the termination of Executive's employment
for any reason, Executive shall immediately return to Mylan all records,
memoranda, files, notes, papers, correspondence, reports, documents, books,
diskettes, hard drives, electronic files, and all copies or abstracts thereof
that Executive has concerning any or all of the Mylan Companies' business.
Executive shall also immediately return all keys, identification cards or badges
and other company property.
10. Indemnification. 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, 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 at the request of Mylan as a director or officer,
employee or agent 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 Mylan 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 Mylan 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 Mylan of an understanding, by or on behalf of Executive, to repay
all amounts to 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 Mylan in writing of the commencement thereof (but the
failure to notify Mylan shall not relieve it from any liability which it may
have under this Section 10 unless and to the extent that it has been prejudiced
in a material respect by such failure or from the forfeiture of substantial
rights and defenses). If any such action, suit or proceeding is brought against
Executive and he notifies Mylan of the commencement thereof, Mylan 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 of its choosing, which may
be the same counsel as counsel to Mylan. Mylan shall not be liable for any
settlement of any claim or action effected without its written consent.
11. 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:
MYLAN: 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
EXECUTIVE: Xxxxxx X. Xxxxxxxxx
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. A11 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.
12. Withholding. All payments required to be made by Mylan 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.
13. 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.
14. 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.
15. 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 Mylan's successors and assigns. This Agreement may be assigned by Mylan to
any person, firm or corporation which shall become the owner of substantially
all of the assets of Mylan or which shall succeed to the business of Mylan. 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.
16. 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 State 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 Mylan 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. The hearing of any such dispute will be held in Morgantown, West
Virginia, or Pittsburgh, Pennsylvania, at Mylan's discretion and the parties
shall bear their own costs, expenses and counsel fees. The decision of the
arbitrator(s) will be final and binding on all parties and any award rendered
shall be enforceable upon confirmation by a court of competent jurisdiction.
Executive and Mylan expressly consent to the jurisdiction of any such arbitrator
over them.
17. 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.
18. 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. EXECUTIVE:
/s/ Xxxxxx X. Xxxxxxxxx
By: ------------------------
its: Xxxxxx X. Xxxxxxxxx
