EXHIBIT 10.27
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (the "Agreement") is dated as of July
1, 2004, by and between Mylan Laboratories Inc. ("Mylan" or "Company") and
Xxxxxx X. Xxxxxxxxx ("Executive").
RECITALS
WHEREAS, the Company and Executive are parties to that certain Executive
Employment Agreement dated as of March 4, 2002, as amended as of December 15,
2003 (the "Original Agreement");
WHEREAS, the Company wishes to continue to employ Executive as Chief
Financial 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;
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 the date hereof and shall remain in effect
through December 31, 2006, unless earlier terminated, or extended or renewed, 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 fifty
thousand dollars ($350,000) (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,
any committee that may be authorized by the Board or any officer having
authority over executive compensation.
(b) Discretionary Bonus. Executive shall be eligible to receive an annual
discretionary bonus targeted at one hundred percent (100%) 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 or officer having authority over executive compensation.
(c) Non-Qualified Stock Options. The remaining one-third (1/3) of the
non-qualified options granted to Executive in March 2002 pursuant to the 1997
Mylan Laboratories Inc. Incentive Stock Option Plan, as amended (the "Plan"),
shall vest on March 4, 2005, provided that Executive remains employed by Mylan
on that date. These options are subject to all terms of the Plan 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.
5. 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 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 Mylan Companies. Accordingly, Executive agrees to keep secret and treat as
confidential all Confidential Information whether or not copyrightable or
patentable, and
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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 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
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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.
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.
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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 shall 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 Agreement "Good Reason" shall mean a reduction of Executive's
Base Salary below the 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, 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 pay Executive, within 30 days of his separation from the Company, a lump
sum equal to his then-current Base Salary plus the Prior Bonus (as defined
below). Mylan shall also pay the cost of continuing Executive's health insurance
benefits for the 12 months following his separation from the Company; 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. 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.
(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; or (iv) Executive's conviction of any
felony. 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.
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(c) Termination Without Cause. If Mylan discharges Executive without
Cause, Mylan will pay Executive, within 30 days of his separation from the
Company, a lump sum equal to his then-current Base Salary plus the Prior Bonus.
Mylan shall also pay the cost of continuing Executive's health insurance
benefits for the 12 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. 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. 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 9(c) above,
and Executive, or Executive's estate, as applicable, shall receive all
consideration, compensation and benefits that would be due and payable to
Executive for a termination without Cause.
(e) 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 sooner terminated for
reasons stated in Section 9(a), (b), (c) or (d) of this Agreement, Executive
shall be paid severance, within 30 days of his separation from the Company, in
an amount equal to his then-current Minimum Base Salary plus the Prior Bonus,
and Executive's health insurance benefits shall be continued for 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 heath
insurance benefits.
(f) 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.
(g) No Duty to Mitigate. There shall be no requirement on the part of
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 any contract and the amount of such payments and
benefits shall not be reduced by any compensation or benefits received by
Executive from other employment.
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,
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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:
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.
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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.
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
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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.
19. 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/ Xxxxxx X. Xxxxxxxxx
----------------------------------- -------------------------------------
By: Xxxxxx X. Xxxxx Xxxxxx X. Xxxxxxxxx
Its: Vice Chairman and CEO
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