EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (the "Agreement"), is dated as of March
1, 2002, by and between Mylan Laboratories Inc. (the "Company") and Xxxxxx X.
Xxxxxxxx ("Executive").
RECITALS:
WHEREAS, the Company wishes to employ Executive as Chief Legal Officer but
may be interested in utilizing Executive in capacities other than as Chief Legal
Officer in order to avail itself of Executive's skills and abilities in light of
the Company's business needs; and
WHEREAS, Executive is desirous of assisting the Company in whatever manner
the Chairman, Chief Executive Officer, and/or Board of Directors deem
appropriate;
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,
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 1, 2002 and shall remain in effect, unless earlier terminated, or
extended or renewed, as provided in Section 8 of this Agreement, through
December 31, 2004.
3. Executive's Compensation. Executive's "Compensation" shall include
the following: (a) Base Salary. During the term of this Agreement, as
Executive's base compensation for all services to be performed, the Company
shall pay Executive an annual salary of $350,000.00 (the "Base Salary"),
payable in accordance with the Company'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 of the Company or any committee
thereof having authority over executive compensation.
(b) Bonus. During the term of this Agreement, Executive shall be
eligible to receive an annual discretionary bonus up to seventy-five
percent (75%) of Executive's Base Salary.
(c) Non-Qualified Stock Options. Executive shall receive non-qualified
options to purchase up to 200,000 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 the Company on the following vesting
dates: on March 1, 2002, Executive shall receive an option to purchase
100,000 shares; on March 1, 2003, Executive shall receive an option to
purchase an additional 50,000 shares; and on March 1, 2004, Executive shall
receive an option to purchase an additional 50,000 shares. These options
will be subject to all terms of the Plan, as amended and the applicable
stock option agreement.
(d) Fringe Benefits and Other Agreements. During the term of
Employment, Executive shall receive such benefits of employment as are
granted senior executive employees at the Chief Legal Officer level,
including but not limited to, health insurance coverage, profit-sharing,
participation in the Company's 401(k) plan, short-term disability benefits,
25 vacation days, expense reimbursement, and automobile usage in accordance
with the plan documents or policies that govern such benefits. The Company
will also pay for or reimburse Executive for professional fees and/or dues
including fees and travel expenses associated with continuing legal
education requirements. Executive shall also be considered eligible under
such other agreements as are available to senior executives at the Chief
Legal Officer level such as the change in control agreement.
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 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 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 Without Good Reason. Executive may resign from
employment at any time upon 90 days written notice to the Company.
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. The
Company reserves the right to accelerate the effective date of
Executive's resignation. If Executive resigns without "Good Reason"
(as defined below), the Company 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 Agreement, "Good Reason" shall mean a reduction
of Executive's Compensation or responsibilities, unless all other
similarly situated senior executives of the Company are required to
accept a similar reduction, or a relocation of Executive's principal
place of work to a location more than thirty miles from Morgantown,
West Virginia (with the exception of a relocation within 30 miles of
Pittsburgh, PA which would be permissible unless and until Executive
moves to Morgantown, West Virginia). If Executive resigns with Good
Reason and complies in all respects with his obligations hereunder,
the Company will continue to pay Executive his Compensation including
bonuses commensurate with the bonuses, if any, awarded to other
similarly situated senior executives of the Company, for twenty-four
(24) months following expiration of the 90 days notice period
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 one hundred percent (100%) vesting of all stock
options described in this Agreement in the event of a Resignation with
Good Reason.
(b) Termination for Cause. The Company 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 fourteen (14) days of the Company'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 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 death. If the Company 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 the Company discharges
Executive without Cause, the Company will continue to pay Executive
his Compensation including bonuses commensurate with the bonuses, if
any, awarded to other similarly situated senior executives of the
Company, for twenty four (24) months 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 one hundred
percent (100%) vesting of all stock options described in this
Agreement in the event of a Termination Without Cause. Executive,
however, will continue to be bound by all provisions of this Agreement
that survive termination of employment.
(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 9 (a), (b), or
(c) of this Agreement, Executive shall be paid severance in an amount
equal to Executive's 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 twenty four (24) months 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.
9. 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 the Company 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 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 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 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 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 11 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 and Transition. During the Term of Employment, Executive
shall: serve the Company to the best of his ability, and use his best
efforts to promote the interests of the Company. In furtherance of this
objective the Company expects and understands that Executive will maintain
an "of counsel" relationship with his former firm under the terms and
conditions set forth in the agreement dated as of March 1, 2002 (attached
hereto as Exhibit A) or maintain an of counsel relationship with another
private law firm under substantially similar terms. The Company also
recognizes that Executive is engaged in certain legal representations that
will need to be transitional over time. Said legal representations may not
affect performance of Executive's obligations under this Agreement.
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:
MYLAN: Mylan Laboratories Inc.
000 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000-0000
Attention: Chairman of the Board
EXECUTIVE: Xxxxxx X. Xxxxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
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, 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. The hearing of any such dispute will be held in
Pittsburgh, Pennsylvania, 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. 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.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above mentioned.
MYLAN LABORATORIES INC. EXECUTIVE:
By:_____________________________ \s\ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Its:_____________________________
