EX-10.32



 





Exhibit 10.32




TRANSITION AND SUCCESSION AGREEMENT




     THIS TRANSITION AND SUCCESSION AGREEMENT (this “Agreement”) is entered into as of this
31st day of January, 2007 (this “Agreement”), by and between Mylan Laboratories Inc., a
Pennsylvania corporation (the “Company”), and Rajiv Malik (the “Executive”).



     WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it is in the
best interests of the Company and its shareholders to assure that the Company will have the
continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a
Change of Control (as defined herein), to ensure the Executive’s full attention and dedication to
the Company in the event of any threatened or actual Change of Control and to provide the Executive
with compensation and benefits arrangements upon a Change of Control.



     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:




	1.	 	Certain Definitions.






	 	(a)	 	“Effective Date” means the first date during the Change of Control Period (as
defined herein) on which a Change of Control occurs. Notwithstanding anything in this
Agreement to the contrary, if a Change of Control occurs and if the Executive’s
employment with the Company is terminated prior to the date on which the Change of
Control occurs, and if it is reasonably demonstrated by the Executive that such
termination of employment (1) was at the request of a third party that has taken steps
reasonably calculated to effect a Change of Control or (2) otherwise arose in
connection with or anticipation of a Change of Control, then “Effective Date” means the
date immediately prior to the date of such termination of employment. For the sake of
clarity, it is understood that if the Executive’s employment terminates prior to the
Effective Date other than as described in the preceding sentence, this Agreement shall
thereupon be null and void and of no further force and effect.
	 
	 	(b)	 	“Change of Control Period” means the period commencing on the date hereof and
ending on the third anniversary of the date hereof; provided, however, that, commencing
on the date one year after the date hereof, and on each annual anniversary of such date
(such date and each annual anniversary thereof, the “Renewal Date”), unless previously
terminated, the Change of Control Period shall be automatically extended so as to
terminate three years from such Renewal Date, unless, at least 60 days prior to a
Renewal Date no less than three years from the date hereof, the Company shall give
notice to the Executive that the Change of Control Period shall not be so extended.
	 
	 	(c)	 	“Affiliated Company” means any company controlled by, controlling or under
common control with the Company.
	 
	 	(d)	 	“Change of Control” means:




 









 












	 	(1)	 	The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (A) the then-outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (B) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that, for purposes of this Section 1(d), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Affiliated Company or (iv) any acquisition by
any corporation pursuant to a transaction that complies with Sections
1(d)(3)(A), 1(d)(3)(B) and 1(d)(3)(C);
	 
	 	(2)	 	Individuals who, as of the date hereof, constitute the Board
(the “Incumbent Board”) cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual 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 two-thirds of the
directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board;
	 
	 	(3)	 	Consummation of a reorganization, merger, statutory share
exchange or consolidation or similar corporate transaction involving the
Company or any of its subsidiaries, a sale or other disposition of all or
substantially all of the assets of the Company, or the acquisition of assets or
stock of another entity by the Company or any of its subsidiaries (each, a
“Business Combination”), in each case unless, following such Business
Combination, (A) all or substantially all of the individuals and entities that
were the beneficial owners of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation that, as a
result of such transaction, owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions




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	 	 	 	as their ownership immediately prior to such Business Combination of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (B) no Person (excluding any employee
benefit plan (or related trust) of the Company or such corporation resulting
from such Business Combination) beneficially owns, directly or indirectly,
20% or more of, respectively, the then-outstanding shares of common stock of
the corporation resulting from such Business Combination or the combined
voting power of the then-outstanding voting securities of such corporation,
except to the extent that such ownership existed prior to the Business
Combination, and (C) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement or of the action of the Board providing for such Business
Combination; or






	 	(4)	 	Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.






	 	(e)	 	“Employment Agreement” means the Executive Employment Agreement dated as of
January 31, 2007, by and between the Company and the Executive, and any extension or
modification thereof or any successor agreement thereto.






	2.	 	Employment Period; Employment Agreement. The Company hereby agrees to continue the
Executive in its employ, subject to the terms and conditions of this Agreement, for the period
commencing on the Effective Date and ending on the second anniversary of the Effective Date
(the “Employment Period”), provided the Employment Period shall terminate sooner upon the
Executive’s termination of employment for any reason. Upon the Effective Date, the Employment
Agreement, with the exception of Section 10 thereof, which shall survive in all respects,
shall be null and void and of no further force or effect, provided the Executive shall be paid
all amounts earned and due to the Executive thereunder within twenty-four (24) hours of the
Effective Date, subject in all respects to Section 6 below.
	 
	3.	 	Terms of Employment.






	 	(a)	 	Position and Duties.






	 	(1)	 	During the Employment Period, (A) the Executive’s position
(including status, offices, titles and reporting requirements), authority,
duties and responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised and assigned at any
time during the 180-day period immediately preceding the Effective Date and (B)
the Executive’s services shall be performed at the office where the Executive
was employed immediately preceding the Effective Date or at any other location
less than 30 miles from such office.




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	 	(2)	 	During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time during normal business hours to
the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive’s reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period, it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that, to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive’s
responsibilities to the Company.






	 	(b)	 	Compensation.






	 	(1)	 	Base Salary. During the Employment Period, the Annual Base
Salary shall be reviewed at least annually, beginning no more than 12 months
after the Executive’s last salary review. The Annual Base Salary shall be paid
at such intervals as the Company pays executive salaries generally. During the
Employment Period, the Annual Base Salary shall be reviewed at least annually,
beginning no more than 12 months after the last salary increase awarded to the
Executive prior to the Effective Date. Any increase in the Annual Base Salary
shall not serve to limit or reduce any other obligation to the Executive under
this Agreement. The Annual Base Salary shall not be reduced after any such
increase and the term “Annual Base Salary” shall refer to the Annual Base
Salary as so increased.
	 
	 	(2)	 	Annual Bonus. In addition to the Annual Base Salary, the
Executive shall participate in a bonus program during the Employment Period and
have a bonus which is no less favorable than the bonus for other employees of
his level at the Company and its Affiliated Companies.
	 
	 	(3)	 	Incentive, Savings and Retirement Plans. During the Employment
Period, the Executive shall be entitled to participate in all cash incentive,
equity incentive, savings and retirement plans, practices, policies, and
programs applicable generally to other peer executives of the Company and the
Affiliated Companies (with such appropriate deviations by virtue of country of
residence, commensurate with deviations in place prior to the Effective Date),
but in no event shall such plans, practices, policies and programs provide the
Executive with incentive opportunities (measured




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	 	 	 	with respect to both regular and special incentive opportunities, to the
extent, if any, that such distinction is applicable), savings opportunities
and retirement benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company and the
Affiliated Companies for the Executive under such plans, practices, policies
and programs as in effect at any time during the 180-day period immediately
preceding the Effective Date or, if more favorable to the Executive, those
provided generally at any time after the Effective Date to other peer
executives of the Company and the Affiliated Companies.






	 	(4)	 	Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive’s family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit
plans, practices, policies and programs provided by the Company and the
Affiliated Companies (including, without limitation, medical, prescription,
dental, disability, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable generally to
other peer executives of the Company and the Affiliated Companies (with such
appropriate deviations by virtue of country of residence, commensurate with
deviations in place prior to the Effective Date), but in no event shall such
plans, practices, policies and programs provide the Executive with benefits
that are less favorable, in the aggregate, than the most favorable of such
plans, practices, policies and programs in effect for the Executive at any time
during the 180-day period immediately preceding the Effective Date or, if more
favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and the Affiliated
Companies. If, on or prior to the Executive’s Date of Termination (as defined
herein), the Executive has attained at least age 50 with at least 20 years of
service with the Company (including all cumulative service, notwithstanding any
breaks in service) the Executive shall be entitled to retiree medical and life
insurance benefits at least equal to those that were provided to peer
executives of the Company and the Affiliated Companies and their dependents
(taking into account any required employee contributions, co-payments and
similar costs imposed on the executives and the executives’ dependents and the
tax treatment of participation in the plans, programs, practices and policies
by the executive and the executives’ dependents) (with such appropriate
deviations by virtue of country of residence, commensurate with deviations in
place prior to the Effective Date), in accordance with the retiree medical
plans, programs, practices and policies of the Company and the Affiliated
Companies in effect as of the Date of Termination.
	 
	 	(5)	 	Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the most favorable policies, practices




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	 	 	 	and procedures of the Company and the Affiliated Companies in effect for the
Executive at any time during the 180-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of
the Company and the Affiliated Companies.






	 	(6)	 	Fringe Benefits. During the Employment Period, the Executive
shall be entitled to fringe benefits, including, without limitation, tax and
financial planning services, payment of club dues, and, if applicable, use of
an automobile and payment of related expenses, in accordance with the most
favorable plans, practices, programs and policies of the Company and the
Affiliated Companies in effect for the Executive at any time during the 180-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and the Affiliated Companies.
	 
	 	(7)	 	Office and Support Staff. During the Employment Period, the
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and the Affiliated Companies at any
time during the 180-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as provided generally at any time thereafter
with respect to other peer executives of the Company and the Affiliated
Companies.
	 
	 	(8)	 	Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and the Affiliated Companies as
in effect for the Executive at any time during the 180-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives
of the Company and the Affiliated Companies.






	4.	 	Termination of Employment.






	 	(a)	 	Death or Disability. The Executive’s employment shall terminate
automatically if the Executive dies during the Employment Period. If either the
Company or the Executive (or his legal representative) determines in good faith that
the Disability (as defined herein) of the Executive has occurred during the Employment
Period, such party may give the other party written notice (“Disability Notice”) in
accordance with Section 12(b) of his or its intention that the Executive’s employment
be terminated. In such event, the Executive’s employment with the Company shall
terminate effective on the 30th day after receipt of the Disability Notice by the
Executive or by the Company, as the case may be (the “Disability Effective Date”),
provided that, within 30 days after such receipt, the Executive




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	 	 	 	shall not have returned to full-time performance of the Executive’s duties.
“Disability” means the absence of the Executive from the Executive’s duties with the
Company on a full-time basis for 180 consecutive business days as a result of
incapacity due to mental or physical illness that is determined to be total and
permanent by a physician selected by the party providing the Disability Notice and
reasonably acceptable to the other party.






	 	(b)	 	Cause. The Company may terminate the Executive’s employment during the
Employment Period for Cause. “Cause” means:






	 	(1)	 	the willful and continued failure of the Executive to perform
substantially the Executive’s duties (as contemplated by Section 3(a)(1)(A))
with the Company or any Affiliated Company (other than any such failure
resulting from incapacity due to physical or mental illness or following the
Executive’s delivery of a Notice of Termination for Good Reason (as defined
herein)), after a written demand for substantial performance is delivered to
the Executive by the Board or the Chief Executive Officer of the Company that
specifically identifies the manner in which the Board or the Chief Executive
Officer of the Company believes that the Executive has not substantially
performed the Executive’s duties, or
	 
	 	(2)	 	the willful engaging by the Executive in illegal conduct or
gross misconduct that is materially and demonstrably injurious to the Company
which, in the case of clauses (1) and (2), has not been cured within 30 days
after a written demand for substantial performance is delivered to the
Executive by the Company that specifically identifies the manner in which the
Company believes that the Executive has grossly neglected his duties or has
engaged in gross misconduct.






For purposes of this Section 4(b), no act, or failure to act, on the part of the
Executive shall be considered “willful” unless it is done, or omitted to be done, by
the Executive in bad faith or without reasonable belief that the Executive’s action
or omission was in the best interests of the Company. Any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by the Board or
upon the instructions of the Chief Executive Officer of the Company or a senior
officer of the Company or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the Executive in good
faith and in the best interests of the Company. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the affirmative
vote of not less than three-quarters of the entire membership of the Board
(excluding the Executive, if the Executive is a member of the Board) at a meeting of
the Board called and held for such purpose (after reasonable notice is provided to
the Executive and the Executive is given an opportunity, together with counsel for
the Executive, to be heard before the Board), finding that, in the good faith
opinion of the Board, the Executive is



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guilty of the conduct described in Section 4(b)(1) or 4(b)(2), and specifying the
particulars thereof in detail.




	 	(c)	 	Good Reason. The Executive’s employment may be terminated by the
Executive for Good Reason or by the Executive voluntarily without Good Reason. “Good
Reason” means:






	 	(1)	 	the assignment to the Executive of any duties inconsistent in
any respect with the Executive’s position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities as
contemplated by Section 3(a), or any other diminution in such position (or
removal from such position), authority, duties or responsibilities (whether or
not occurring solely as a result of the Company’s ceasing to be a publicly
traded entity or becoming a subsidiary or a division of a publicly traded
entity), excluding for this purpose an isolated, insubstantial and inadvertent
action not taken in bad faith and that is remedied by the Company promptly
after receipt of notice thereof given by the Executive;
	 
	 	(2)	 	any failure by the Company to comply with any of the provisions
of Section 3(b), other than an isolated, insubstantial and inadvertent failure
not occurring in bad faith and that is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
	 
	 	(3)	 	the Company’s requiring the Executive (i) to be based at any
office or location other than as provided in Section 3(a)(1)(B), (ii) to be
based at a location other than the principal executive offices of the Company
if the Executive was employed at such location immediately preceding the
Effective Date, or (iii) to travel on Company business to a substantially
greater extent than required immediately prior to the Effective Date;
	 
	 	(4)	 	the failure by the Company to pay to the Executive any portion
of any installment of deferred compensation, or lump sum under any deferred
compensation program of the Company within 7 days after the Executive provides
the Company with written notice of the failure to pay such compensation when it
is due;
	 
	 	(5)	 	the failure by the Company to provide the Executive with the
number of paid vacation days and holidays to which the Executive was entitled
as of the Effective Date;
	 
	 	(6)	 	any purported termination by the Company of the Executive’s
employment otherwise than as expressly permitted by this Agreement;
	 
	 	(7)	 	any failure by the Company to comply with and satisfy Section
11(c);
	 
	 	(8)	 	if the Company (or the entity effectuating a Change of Control)
continues to exist and be a company registered under the Securities Exchange
Act of




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	 	 	 	1934, as amended, after the Effective Date and continues to have in effect
an equity-compensation plan, the failure of the Company to grant to the
Executive equity-based compensation with respect to a number of shares of
common stock of the Company (or the entity effectuating the Change of
Control) at least as great as the average annual percentage of the
outstanding common stock of the Company with respect to which the Executive
received such equity-based compensation during the three calendar years
immediately prior to the Effective Date, which equity-based compensation is
on terms, including pricing relative to the market price at the time of
grant, that is at least as favorable to the Executive as the terms of the
grant last made to the Executive prior to the Effective Date; or






	 	(9)	 	failure to include the Executive in any program or plan of
benefits (including, but not limited to, stock option and deferred compensation
plans), and failure to provide the Executive similar levels of benefit amounts
or coverage, which benefits are either provided or otherwise offered to peer
executives of the Company and the Affiliated Companies following the Effective
Date.






For purposes of this Section 4(c), any good faith determination of Good Reason made
by the Executive shall be conclusive. Anything in this Agreement to the contrary
notwithstanding, a termination by the Executive for any reason pursuant to a Notice
of Termination given during the 90-day period immediately following the first
anniversary of the occurrence of a Change in Control (other than a Change in Control
occurring solely under Section 1(d)(3) of this Agreement where all or substantially
all of the individuals and entities that were the beneficial owners of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to a Business Combination beneficially own, directly or
indirectly, more than 50% of the then-outstanding shares of common stock following
the Business Combination) shall be deemed to be a termination for Good Reason for
all purposes of this Agreement. The Executive’s mental or physical incapacity
following the occurrence of an event described above shall not affect the
Executive’s ability to terminate employment for Good Reason.




	 	(d)	 	Notice of Termination. Any termination by the Company for Cause, or by
the Executive for Good Reason (other than Disability, which is addressed in Section
4(a)), shall be communicated by Notice of Termination to the other party hereto given
in accordance with Section 12(b). “Notice of Termination” means a written notice that
(1) indicates the specific termination provision in this Agreement relied upon, (2) to
the extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment under the
provision so indicated, and (3) if the Date of Termination (as defined herein) is other
than the date of receipt of such notice, specifies the Date of Termination (which Date
of Termination shall be not more than 30 days




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	 	 	 	after the giving of such notice). The failure by the Executive or the Company to set
forth in the Notice of Termination any fact or circumstance that contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive or the
Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the Executive’s
or the Company’s respective rights hereunder.






	 	(e)	 	Date of Termination. “Date of Termination” means (1) if the Executive’s
employment is terminated by the Company for Cause, or by the Executive for Good Reason,
the date of receipt of the Notice of Termination or any later date specified in the
Notice of Termination (which date shall not be more than 30 days after the giving of
such notice), as the case may be, (2) if the Executive’s employment is terminated by
the Company other than for Cause or Disability, the Date of Termination shall be the
date on which the Company notifies the Executive of such termination, and (3) if the
Executive’s employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability Effective
Date, as the case may be.






	5.	 	Obligations of the Company upon Termination.






	 	(a)	 	Good Reason, Death or Disability; Other Than for Cause. If, during the
Employment Period, the Company terminates the Executive’s employment other than for
Cause or the Executive resigns for Good Reason or if the Executive’s employment is
terminated as a result of the Executive’s death or Disability:






	 	(1)	 	the Company shall pay to the Executive (or the Executive’s
estate or beneficiary, in the event of the Executive’s death), in a lump sum in
cash within 30 days after the Date of Termination (or, if required by Section
409A of the Code to avoid the imposition of additional taxes, on the date that
is six (6) months following the Date of Termination), the aggregate of the
following amounts:






	 	(A)	 	the sum of (i) the Executive’s Annual Base
Salary through the Date of Termination to the extent not theretofore
paid, and (ii) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon) and any
accrued vacation pay, in each case, to the extent not theretofore paid
(the sum of the amounts described in subclauses (i) and (ii) the
“Accrued Obligations”); and
	 
	 	(B)	 	the amount equal to three (3) times the sum of:
(i) the Executive’s then-current Annual Base Salary, plus (ii) an
amount equal to the highest bonus determined to date under Section 4(b)
of the Employment Agreement or paid to the Executive hereunder (in the
case of death or the Executive’s Disability, reduced (but not below
zero) by any disability or death benefits that the Executive or the




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	 	 	 	Executive’s estate or beneficiaries are entitled to pursuant to plans
or arrangements of the Company);






	 	(2)	 	for three years after the Executive’s Date of Termination (or
such shorter period as required by Section 409A of the Code to avoid the
imposition of additional taxes), the Company shall continue to provide benefits
to the Executive and/or the Executive’s dependents at least equal to those that
were provided to them (taking into account any required employee contributions,
co-payments and similar costs imposed on the Executive and the Executive’s
dependents and the tax treatment of participation in the plans, programs,
practices and policies by the Executive and the Executive’s dependents) by or
on behalf of the Company and or the Affiliated Companies in accordance with the
benefit plans, programs, practices and policies (including those provided under
the Employment Agreement) in effect immediately prior to a Change of Control
or, if more favorable to the Executive, as in effect any time thereafter with
respect to other peer executives of the Company and the Affiliated Companies
and their dependents; provided, however, that, if the Executive becomes
reemployed with another employer and is eligible to receive such benefits under
another employer provided plan, program, practice or policy, the medical and
other welfare benefits described herein shall be secondary to those provided
under such other plan, program, practice or policy during such applicable
period of eligibility; and
	 
	 	(3)	 	to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any Other Benefits (as defined in
Section 6).






	 	(b)	 	Cause; Other Than for Good Reason. If the Executive’s employment is
terminated for Cause during the Employment Period, the Company shall provide to the
Executive (1) the Executive’s Annual Base Salary through the Date of Termination, (2)
the amount of any compensation previously deferred by the Executive, and (3) the Other
Benefits, in each case, to the extent theretofore unpaid, and shall have no other
severance obligations under this Agreement. If the Executive voluntarily terminates
employment during the Employment Period, excluding a termination for Good Reason, the
Company shall provide to the Executive the Accrued Obligations and the timely payment
or delivery of the Other Benefits, and shall have no other severance obligations under
this Agreement. In such case, all the Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of Termination.






	6.	 	Employment Agreement; Non-Exclusivity of Rights. The Executive shall be entitled to
the higher of the benefits and compensation payable under this Agreement or those payable
under the Employment Agreement as if the Change of Control were deemed a termination without
Cause (as defined therein). It is the intent of the parties that nothing in this Agreement or
in the Employment Agreement shall affect any right the Executive may have with respect to: (i)
any vested or other Benefits that the Executive is entitled to




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	 	 	receive under any plan, policy, practice or program of or any other contract or agreement
with the Company or the Affiliated Companies at or subsequent to a Change of Control (“Other
Benefits”); and (ii) continuing or future participation in any plan, program, policy or
practice provided by the Company or the Affiliated Companies and for which the Executive may
qualify. If the Executive’s employment is terminated by reason of the Executive’s Disability
(or death), with respect to the provision of the Other Benefits, the term “Other Benefits”
shall include, and the Executive (or the estate or beneficiary of the Executive, in the
event of the Executive’s death) shall be entitled after the Disability Effective Date (or
upon the Executive’s death) to receive, disability (or death) benefits and other benefits at
least equal to the most favorable of those generally provided by the Company and the
Affiliated Companies to disabled executives (or to the estates and beneficiaries of deceased
executives) and/or their families in accordance with such plans, programs, practices and
policies relating to disability (or death), if any, as in effect generally with respect to
other peer executives of the Company and the Affiliated Companies and their families at any
time during the 180-day period immediately preceding the Effective Date or, if more
favorable to the Executive and/or the Executive’s family, as in effect at any time
thereafter generally with respect to other peer executives of the Company and the Affiliated
Companies and their families. .






	7.	 	No Set-Off; Company’s Obligations; Mitigation. The Company’s obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations hereunder
shall not be affected by any set-off, counterclaim, recoupment, defense, or other claim, right
or action that the Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Executive under any of the provisions of this Agreement, and
such amounts shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred (within 10 days following the Company’s receipt of an
invoice from the Executive), to the full extent permitted by law, all legal fees and expenses
that the Executive may reasonably incur as a result of any contest or disagreement (regardless
of the outcome thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by the Executive about the amount of
any payment pursuant to this Agreement), plus, in each case, interest on any delayed payment
at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue
Code of 1986, as amended (the “Code”). No obligation of the Company under this Agreement to
pay the Executive’s fees or expenses shall in any manner confer upon the Company any right to
select or approve any of the attorneys or accountants engaged by the Executive.






	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




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	 	 	 	“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 8(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,




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	 	 	 	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.






	9.	 	Covenants of Executive.






	 	(a)	 	Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or the Affiliated Companies, and their
respective businesses, which information, knowledge or data shall have been obtained by
the Executive during the Executive’s employment by the Company or the Affiliated
Companies and which information, knowledge or data shall not be or become public
knowledge (other than by acts by the Executive or representatives of the Executive in
violation of this Agreement). After termination of the Executive’s employment with the
Company, the Executive shall not, without the prior written consent of the Company or
as may otherwise be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those persons
designated by the Company. In no event shall an asserted violation of the provisions of
this Section 9 constitute a basis for deferring or withholding any amounts otherwise
payable to the Executive under this Agreement.
	 
	 	(b)	 	Non-Competition. In consideration for the protections provided to the
Executive under this Agreement, the Executive agrees that from the Date of Termination
until the first anniversary thereof (the “Covenant Period”), the Executive will not,
directly or indirectly, own, manage, operate, control or participate in the ownership,
management, operation or control of, or be connected as an officer, employee, partner,
director or otherwise with, or (other than through the ownership of not more than five
percent (5%) of the voting stock of any publicly held corporation) have any financial
interest in, or aid or assist anyone else in the conduct of, a business which at the
time of such termination competes in the United States with a business conducted by the
Company or any group, division or subsidiary of the Company (“Company Group”) as of the
Date of Termination. Notwithstanding the foregoing, the Executive’s employment by a
business that competes with the business of the Company, or the retention of the
Executive as a consultant by any such business shall not violate this Section 9(b) if
the Executive’s duties and actions for the business are solely for groups, divisions or
subsidiaries that are not engaged in a business that competes with a business




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	 	 	 	conducted by the Company. No business shall be deemed to be a business conducted by
the Company unless the Company was engaged in the business as of the Date of
Termination and continues to be engaged in the business and at least twenty-five
percent (25%) of the Company’s consolidated gross sales and operating revenues, or
net income, is derived from, or at least twenty-five percent (25%) of the Company’s
consolidated assets are devoted to, such business and no business shall be deemed to
compete with a business conducted by the Company unless at least twenty-five percent
(25%) of the consolidated gross sales and operating revenues, or net income, of any
consolidated group that includes the business, is derived from, or at least
twenty-five percent (25%) of the consolidated assets of any such consolidated group
are devoted to, such business.






	 	(c)	 	Non-Solicitation. During the Covenant Period, the Executive shall not
solicit on the Executive’s behalf or on behalf of any other person the services, as
employee, consultant or otherwise of any person who on the Date of Termination is
employed by the Company Group, whether or not such person would commit any breach of
his contract of service in leaving such employment, except for any employee (i) whose
employment is terminated by the Company or any successor thereof prior to such
solicitation of such employee, (ii) who initiates discussions regarding such employment
without any solicitation by the Executive, (iii) who responds to any public
advertisement unless such advertisement is designed to target, or has the effect of
targeting, employees of the Company, or (iv) who is initially solicited for a position
other than by the Executive and without any suggestion or advice from the Executive.
Nothing herein shall restrict businesses that employ the Executive or retain the
Executive as an executive from soliciting from time to time employees of the Company,
if (A) such solicitation occurs in the ordinary course of filling the business’s
employment needs, and (B) the solicitation is made by persons at the business other
than the Executive who have not become aware of the availability of any specific
employees as a result of the advice of the Executive.
	 
	 	(d)	 	Continuation of Employment. The Executive agrees not to voluntarily
terminate employment with the Company (other than (i) as a result of an event that
would constitute Good Reason that is at the request of a third party that has taken
steps reasonably calculated to effectuate a Change of Control or otherwise arose in
connection with or in anticipation of a Change of Control or (ii) by reason of
non-extension or non-renewal of the Employment Agreement or such other employment
agreement entered into by and between the Executive and the Company from time to time)
from such time as the Company has entered into an agreement that would result in a
Change of Control until the Change of Control; provided, that such provision shall
cease to apply upon the termination of such agreement or if the Change of Control has
not occurred within one year following the execution of such agreement






	10.	 	Arbitration. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the




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	 	 	arbitrator’s award in any court having jurisdiction; provided, however, that the Executive
shall be entitled to seek specific performance of the Executive’s right to be paid any
amounts or provided with any benefits due to the Executive hereunder during the pendency of
any dispute or controversy arising under or in connection with this Agreement.






	11.	 	Successors.






	 	(a)	 	This Agreement is personal to the Executive, and, without the prior written
consent of the Company, shall not be assignable by the Executive; provided, however,
the Executive may designate one or more beneficiaries to receive amounts payable
hereunder after his death. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s legal representatives.
	 
	 	(b)	 	This Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns. Except as provided in Section 11(c), without the prior
written consent of the Executive this Agreement shall not be assignable by the Company.
	 
	 	(c)	 	The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would be required
to perform it if no such succession had taken place. “Company” means the Company as
hereinbefore defined and any successor to its business and/or assets as aforesaid that
assumes and agrees to perform this Agreement by operation of law or otherwise.






	12.	 	Miscellaneous.






	 	(a)	 	This Agreement shall be governed by and construed in accordance with the laws
of the Commonwealth of Pennsylvania, without reference to principles of conflict of
laws. The captions of this Agreement are not part of the provisions hereof and shall
have no force or effect. This Agreement may not be amended or modified other than by a
written agreement executed by the parties hereto or their respective successors,
permitted assigns and legal representatives.
	 
	 	(b)	 	All notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:




if to the Executive:



at the most recent address on record at the Company;



if to the Company:




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Mylan Laboratories Inc.

1500 Corporate Drive

Canonsburg, PA 15317

Attention: Chief Legal Officer





or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective when
actually received by the addressee.




	 	(c)	 	The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement. Any
invalid or unenforceable provision shall be deemed severed from this Agreement to the
extent of its invalidity or unenforceability, and this Agreement shall be construed and
enforced as if the Agreement did not contain that particular provision to the extent of
its invalidity or unenforceability, provided that in lieu of any such invalid or
unenforceable term or provision, the parties hereto intend that there shall be added as
a part of this Agreement a provision as similar in terms to such invalid or
unenforceable provision as may be possible and be valid and enforceable.
	 
	 	(d)	 	The Company may withhold from any amounts payable under this Agreement such
United States federal, state or local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
	 
	 	(e)	 	The Executive’s or the Company’s failure to insist upon strict compliance with
any provision of this Agreement or the failure to assert any right the Executive or the
Company may have hereunder, including, without limitation, the right of the Executive
to terminate employment for Good Reason under Section 4(c), shall not be deemed to be a
waiver of such provision or right or any other provision or right of this Agreement.
	 
	 	(f)	 	The Executive and the Company acknowledge that, except as provided in the
Employment Agreement or any other written agreement between the Executive and the
Company, the employment of the Executive by the Company is “at will” and, subject to
Section 1(a), prior to the Effective Date, the Executive’s employment may be terminated
by either the Executive or the Company at any time prior to the Effective Date, in
which case the Executive shall have no further rights under this Agreement. From and
after the date of the Effective Date, except for any agreements providing for
retirement benefits and as otherwise specifically provided herein (including without
limitation in Section 6), this Agreement shall supersede any other agreement between
the parties with respect to the subject matter hereof.




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     IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and the Company has
caused these presents to be executed in its name on its behalf, all as of the day and year first
above written.



	 	 	 	 	 	 
	 	MYLAN LABORATORIES INC.

 	 	 
	 	 	/s/  Robert J. Coury
 	 
	 	 	By:             Robert J. Coury 	 
	 	 	Title:  	Vice Chairman and CEO 	 
	 
	 	EXECUTIVE

 	 	 
	 	/s/  Rajiv Malik
 	 
	 	Rajiv Malik 	 	 
	 	 	 
	 




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