Exhibit 10.3



 






Exhibit 10.3




AMENDMENT NO. 1 TO TRANSITION AND SUCCESSION AGREEMENT




     THIS AMENDMENT NO. 1 TO TRANSITION AND SUCCESSION AGREEMENT (this “Amendment”) by and between
Mylan Laboratories Inc., a Pennsylvania corporation (the “Company”), and Louis J. DeBone (the
“Executive”), is made as of December 2, 2004.



     WHEREAS, the Company and the Executive are parties to that certain Transition and Succession
Agreement dated as of December 15, 2003 (the “Agreement”); and



     WHEREAS, the Company and the Executive wish to amend the Agreement, as set forth below;



     NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:




	1.  	Section 8 of the Agreement is hereby amended and restated in its entirety to read as
follows:






Section 8. Certain Additional Payments by the Company.




(a) Whether or not the Executive becomes entitled to any payments hereunder, if
any of the payments or benefits received or to be received by the Executive (including
any payment or benefits received in connection with a Change of Control or the
Executive’s termination of employment, whether pursuant to the terms of this Agreement
or any other plan, arrangement or agreement) (all such payments and benefits, excluding
the Gross-Up Payment, being hereinafter referred to as the “Total Payments”) will be
subject to the excise tax (“the Excise Tax”) imposed under Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”), the Company shall pay to the Executive
an additional amount (the “Gross-Up Payment”) such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total Payments and any federal,
state and local income and employment taxes and Excise Tax upon the Gross-Up Payment,
and after taking into account the phase out of itemized deductions and personal
exemptions attributable to the Gross-Up Payment, shall be equal to the Total
Payments.




(b) For purposes of determining whether any of the Total Payments will be subject
to the Excise Tax and the amount of such Excise Tax, (i) all of the Total Payments
shall be treated as “parachute payments” (within the meaning of Section 280G(b)(2) of
the Code) unless, in the opinion of tax counsel (“Tax Counsel”) reasonably acceptable
to the Executive and selected by the accounting firm which was, immediately prior to
the Change of Control, the Company’s independent auditor (the “Auditor”), such payments
or benefits (in whole or in part) do not constitute parachute payments, including by
reason of Section 280G(b)(4)(A) of the Code, (ii) all “excess parachute payments”



 









 






within the meaning of Section 280G(b)(l) of the Code shall be treated as subject to
the Excise Tax unless, in the opinion of Tax Counsel, such excess parachute payments
(in whole or in part) represent reasonable compensation for services actually rendered
(within the meaning of Section 280G(b)(4)(B) of the Code) in excess of the Base Amount
(as defined in Section 280G(b)(3) of the Code) allocable to such reasonable
compensation, or are otherwise not subject to the Excise Tax, and (iii) the value of
any noncash benefits or any deferred payment or benefit shall be determined by the
Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
For purposes of determining the amount of the Gross-Up Payment, the Executive shall be
deemed to pay federal income tax at the highest marginal rate of federal income
taxation in the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state and locality
of the Executive’s residence on the Date of Termination (or if there is no Date of
Termination, then the date on which the Gross-Up Payment is calculated for purposes of
this Section 3(b)), net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes.




(c) In the event that the Excise Tax is finally determined to be less than the
amount taken into account hereunder in calculating the Gross-Up Payment, the Executive
shall repay to the Company, within five (5) business days following the time that the
amount of such reduction in the Excise Tax is finally determined, the portion of the
Gross-Up Payment attributable to such reduction (plus that portion of the Gross-Up
Payment attributable to the Excise Tax and federal, state and local income and
employment taxes imposed on the Gross-Up Payment being repaid by the Executive), to the
extent that such repayment results in a reduction in the Excise Tax and a
dollar-for-dollar reduction in the Executive’s taxable income and wages for purposes of
federal, state and local income and employment taxes, plus interest on the amount of
such repayment at 120% of the rate provided in Section 1274(b)(2)(B) of the Code. In
the event that the Excise Tax is determined to exceed the amount taken into account
hereunder in calculating the Gross-Up Payment (including by reason of any payment the
existence or amount of which cannot be determined at the time of the Gross-Up Payment),
the Company shall make an additional Gross-Up Payment in respect of such excess (plus
any interest, penalties or additions payable by the Executive with respect to such
excess) within five (5) business days following the time that the amount of such excess
is finally determined. The Executive and the Company shall each reasonably cooperate
with the other in connection with any administrative or judicial proceedings concerning
the existence or amount of liability for Excise Tax with respect to the Total
Payments.




	2.  	This Amendment shall be governed by, interpreted under and construed in accordance with the
laws of the Commonwealth of Pennsylvania.




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	3.  	This Amendment may be executed in counterparts, each of which shall be an original and all of
which shall constitute the same document.
	 
	4.  	Except as modified by this Amendment, the Agreement is hereby confirmed in all respects.





     IN WITNESS WHEREOF, this Amendment has been duly executed and delivered as of the day and
year first above written.



	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	     
	 	 	MYLAN LABORATORIES INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	/s/ Robert J. Coury	 	 
	 	 	 	 	 
	 	 	By: Robert J. Coury	 	 
	 	 	Title: Vice Chairman and	 	 
	

	 	 	 	 	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	/s/ Louis J. DeBone	 	 
	 	 	 	 	 
	 	 	Louis J. DeBone	 	 







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