AMENDED AND RESTATED
TRANSITION AND SUCCESSION AGREEMENT
AMENDED AND
RESTATED TRANSITION AND SUCCESSION AGREEMENT, dated as of the
3 rd
day of April, 2006 (this
“Agreement”), by and between Mylan Laboratories Inc., a
Pennsylvania corporation (the “Company”), and Stuart A.
Williams (the “Executive”).
WHEREAS, the
Company and the Executive are parties to a Transition and
Succession Agreement dated as December 15, 2003, as amended
December 2, 2004;
WHEREAS, the
Company and the Executive wish to amend and restate such Transition
and Succession Agreement effective as of the date
hereof;
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
the Executive agree as follows:
Section 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 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
2
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 July 1, 2004, by and between the Company
and the Executive, and any extension or modification thereof or any
successor agreement thereto.
Section 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 9 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.
Section 3. Terms of Employment.
(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.
(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.
3
(1) Base
Salary. During the Employment Period, the Executive shall
receive an annual base salary (the “Annual Base
Salary”) at an annual rate at least equal to 12 times the
highest monthly base salary paid or payable, including any base
salary that has been earned but deferred, to the Executive by the
Company and the Affiliated Companies in respect of the 12-month
period immediately preceding the month in which the Effective Date
occurs. 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
Executive’s last salary review. 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,
but in no event shall such plans, practices, policies and programs
provide the Executive with incentive opportunities (measured 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, 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;
.
4
(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 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.
Section 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 13(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 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
5
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; 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
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:
6
(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 responsibili
|
