Document:

EX-10.31

 

Exhibit 10.31

EXECUTIVE EMPLOYMENT AGREEMENT

     This Executive Employment Agreement (the “Agreement”) is dated as of January 31, 2007, by and
between Mylan Laboratories Inc. (the “Company”) and Rajiv Malik (“Executive”).

RECITALS:

     WHEREAS, Executive and Matrix Laboratories Limited, an Indian corporation (“Matrix”), are
party to that certain letter of appointment dated July 28, 2005 (the “Matrix Appointment Letter”),
relating to Executive’s employment as Chief Executive Officer of Matrix;

     WHEREAS, effective as of January 8, 2007. the Company acquired a controlling interest in
Matrix; and

     WHEREAS, the Company wishes to employ Executive as Head of Global Technical Operations of the
Company and likewise wishes Executive to serve as acting Chief Executive Officer of Matrix, in
each case effective as of the date hereof, but may be interested in utilizing Executive in other
capacities, in order to avail itself of Executive’s skills and abilities in light of the Company’s
business needs;

     WHEREAS, in connection herewith, the Matrix Appointment Letter will be terminated and
superseded by an agreement between Executive and Matrix relating to his service as acting Chief
Executive Officer of Matrix;

     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; Best Efforts. The Company agrees to employ
Executive, and Executive accepts employment by the Company, on the terms and
conditions provided herein. Effective as of the date hereof, Executive shall serve as Head
of Global Technical Operations of the Company and as acting Chief Executive Officer of
Matrix.

     2. Effective Date: Term of Employment. This Agreement shall commence and
be effective as of the date hereof and shall remain in effect, unless earlier terminated, or
extended or renewed, as provided in Section 9 of this Agreement, through the third
anniversary of the date hereof (the “Third Anniversary”).

 

 

     3. Performance
of Duties. (a) Best Efforts. During the term of this Agreement,
Executive shall devote his full working time and attention to the business and affairs of
the Company and its subsidiaries, parents and affiliates (collectively the “Mylan
Companies”) and the performance of his duties hereunder, serve Mylan faithfully and to
the best of his ability, and use his best efforts to promote the interests of the Mylan
Companies. Without limitation, Executive shall travel in connection with his
employment in accordance with the reasonable direction of the Chief Executive Officer
of the Company, commensurate with the activities of his position with the Company and
with Matrix. During the term of this Agreement, Executive agrees to promptly and fully
disclose to the Mylan Companies, 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 the Mylan Companies or any
business opportunities which otherwise should rightfully be afforded to the Mylan
Companies.

     (b) No Power to Bind in India. Notwithstanding anything to the contrary in this
Agreement, Executive shall not be authorized to bind the Company contractually in India or
otherwise to make commitments on behalf of the Company in India. While in India, Executive shall
not represent or hold out to any person or statutory authority that he is possessed of such
authority, and the scope of Executive’s authority and powers in India shall comprise solely in
making recommendations in respect of matters, which are assigned to him by the Company, to persons
designated and employed by the Company in this behalf. It is understood that no such recommendation
of Executive shall be binding on the Company, in any manner whatsoever.

     4. Executive’s
Compensation. Executive’s compensation shall include the following:

     (a) Minimum Annual Base Salary. The Executive’s minimum annual base salary
(the “Minimum Annual Base Salary”) shall be Four Hundred Fifty Thousand Dollars
($450,000), payable in accordance with the Company’s normal payroll practices for its
executive officers. The Minimum Annual Base Salary may be increased from time to
time at the discretion of the Compensation Committee of the Board of Directors of the
Company, any other committee authorized by the Board of Directors or any officer
having authority over executive compensation.

     (b) Annual Bonus. Executive shall have an annual discretionary bonus
opportunity of seventy-five percent (75%) of Executive’s then-current Minimum Annual Base Salary,
to be paid upon satisfaction of certain criteria established by the Compensation Committee of the
Board of Directors, or by any other committee or officer having authority over executive
compensation.

     (c) Non-Qualified Stock Options; Performance-Based Compensation. On the
date hereof, Executive shall receive non-qualified stock options to purchase one hundred twenty
thousand (120,000) shares of Mylan common stock under the 2003 Long-Term incentive Plan (the
“Plan”) in accordance with the following vesting schedule, provided

2

 

that Executive remains employed by Mylan on the following vesting dates: on the first
anniversary of the date hereof, Executive shall vest in the first 30,000 shares; on the second
anniversary of the date hereof, Executive shall vest in an additional 30,000 shares; on the third
anniversary of the date hereof, Executive shall vest in an additional 30,000 shares; and on the
fourth anniversary of the date hereof, Executive shall vest in the remaining 30,000 shares. These
options will be 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 options in, the event
Executive resigns for Good Reason or is Terminated Without Cause, as provided in Section 9 herein.

     (d) Restricted Stock. On the date hereof, Executive shall also receive a grant of
ten thousand (10,000) shares of restricted stock under the Plan, which shares shall vest on
the third anniversary of the date hereof, provided that Executive remains employed by
Mylan on such date. These options will be subject to all terms of the Plan and the
applicable restricted stock award agreement.

     (e) Fringe Benefits and Expense Reimbursement. The Executive shall receive
benefits and perquisites of employment similar to those as have been customarily
provided to the Company’s other executive officers including but not limited to, health
insurance coverage, short-term disability benefits, automobile usage and expense
reimbursement, and twenty (20) vacation days, in each case in accordance with the plan
documents or policies that govern such benefits. The Company shall reimburse
Executive for all ordinary and necessary business expenses in accordance with
established Company policy and procedures.

     5. Confidentiality. Executive recognizes and acknowledges that the business interests
of 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;

3

 

     (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.

     6. Non-Competition and Non-Solicitation. Executive agrees that for a period ending one
(1) year 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. 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

4

 

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
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 5 and/or 6 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.

     9. Termination of Employment.

     (a) Resignation. (i) Executive may resign from employment at any time upon 90 days written
notice to the Chief Executive Officer. During the 90 days notice period

5

 

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 whoever 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) a
reduction of Executive’s annual base salary below the Minimum Annual Base Salary stipulated in this
Agreement, unless other executive officers of the Company are required to accept a similar
reduction; or (b) 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 his then-current Base Salary for 12 months
following his separation from the Company, payable in accordance with the Company’s normal payroll
practices (or, at the Company’s discretion, in a lump sum), plus an amount equal to the bonus that
Executive would have been entitled to receive for the fiscal year in which the termination occurs,
pro rated based on the portion of such year during which Executive
was employed by the Company.
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.

     (b) Termination for Cause. If Mylan determines to terminate Executive’s
employment during the term of this Agreement for Cause, as defined herein, Mylan will
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 the business or affairs of any of the Mylan Companies; (ii) Executive’s
insubordination, gross neglect of duties, dishonesty or deliberate disregard of any
material rule or policy of any of the Mylan Companies; (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.

     (c) Termination Without Cause. If Mylan discharges Executive without Cause,
Mylan will pay Executive his then-current Base Salary for 12 months following his
separation from the Company, payable in accordance with the Company’s normal payroll

6

 

practices (or, at the Company’s discretion, in a lump sum), plus a pro rata bonus equal to the
bonus that Executive would have been entitled to receive for the fiscal year in which the
termination occurs. Mylan shall also pay the cost of continuing Executive’s health insurance
benefits (including, as applicable, those benefits that cover eligible members of his immediate
family) 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, provided, however, that
such consideration, compensation and benefits shall be reduced by any death or disability
benefits (as applicable) that the Executive or his estate or beneficiaries (as applicable) are
entitled to pursuant to plans or arrangements of the Company.

     (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 his then-current
Base Salary for 12 months following the Third Anniversary, payable in accordance with
the Company’s normal payroll practices (or, at the Company’s discretion, in a lump sum),
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

7

 

contract and the amount of such payments and benefits shall not be reduced by any
compensation or benefits received by Executive from other employment.

     (h) Section 409A. Notwithstanding anything to the contrary in this Agreement, the payment of
consideration, compensation, and benefits pursuant to this Section 9 shall be interpreted and
administered in manner intended to avoid the imposition of additional taxes under Section 409A of
the Internal Revenue Code.

     10. Indemnification. The Company shall maintain D&O liability coverage
pursuant to which Executive shall be a covered insured. Executive shall receive indemnification in
accordance with the Company’s Bylaws in effect as of the date of this Agreement. Such
indemnification shall be contractual in nature and shall remain in effect notwithstanding any
future change to the Company’s Bylaws.

     To the extent not otherwise limited by the Company’s Bylaws in effect as of the date of this
Agreement, 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, (including those brought by or in the right of the
Company) 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 the Company or any
subsidiary of the Company, or is or was serving at the request of the Company 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 Company 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

8

 

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 10 to the contrary notwithstanding, the Company shall not be liable for
any settlement of any claim or action effected without its written consent.

     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:

	 	 	 	 	 
	 

	 	If to the Company:
	 	Mylan Laboratories Inc.
	 

	 	 	 	1500 Corporate Drive
	 

	 	 	 	Canonsburg, Pennsylvania 15317
	 

	 	 	 	Attention: Chief Executive Officer
	 
	 	 	 	 
	 

	 	If to Executive:
	 	at the most recent address on record at the Company.

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
rally, 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.

9

 

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 except that the parties shall be entitled to engage in all
forms of discovery permitted under the Pennsylvania Rules of Civil Procedure (as such
rules may be in effect from time to time). The hearing of any such dispute will be held in
Pittsburgh, Pennsylvania, and the losing party shall bear the costs, expenses and counsel
fees of such proceeding. Executive and Company agree for themselves, their, employees,
successors and assigns and their accountants, attorneys and experts that any arbitration
hereunder will be held in complete confidence and, without the other party’s prior written

10

 

consent, will not be disclosed, in whole or in part, to any other person or entity except as
may be required by law. 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.

[Signature page follows]

11

 

     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year
first above mentioned.

	 	 	 	 	 	 	 	 	 	 	 
	MYLAN LABORATORIES INC.	 	 	 	EXECUTIVE:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ Robert J. Coury	 	 	 	/s/ Rajiv Malik	 	 
	 	 	 	 	 	 	 
	By:	 	Robert J. Coury	 	 	 	Rajiv Malik	 	 
	Its:	 	Vice Chairman and CEO	 	 	 	 	 	 

12EX-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

2

 

	 	 	 	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.

3

 

	 	(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

4

 

	 	 	 	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

5

 

	 	 	 	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

6

 

	 	 	 	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

7

 

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

8

 

	 	 	 	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

9

 

	 	 	 	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

10

 

	 	 	 	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

11

 

	 	 	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

12

 

	 	 	 	“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,

13

 

	 	 	 	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

14

 

	 	 	 	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

15

 

	 	 	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:

16

 

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.

17

 

     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 	 	 
	 	 	 
	 

18

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}]]