8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15 (d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): December 2, 2004

MYLAN LABORATORIES INC.

(Exact name of registrant as specified in its charter)

Pennsylvania
(State or other jurisdiction of
Incorporation) 1-9114
(Commission File
Number) 25-1211621
(I.R.S. Employer
Identification No.)

1500 Corporate Drive
Canonsburg, PA 15317
(Address of principal executive offices)

(724) 514-1800
(Registrant’s telephone number, including area code)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

TABLE OF CONTENTS

	Item 1.01 – Entry into a Material Definitive Agreement.
	Item 3.03 –Material Modification to Rights of Security Holders.
	Item 9.01 – Financial Statements and Exhibits.
SIGNATURE
EXHIBIT INDEX
Exhibit 4.1 Amendment No. 4 to Rights Agreement, dated as of December 2, 2004, by and between the registrant and American Stock Transfer & Trust Company
Exhibit 10.29 Executive Employment Agreement, dated as of July 1, 2004, between the registrant and John P. O'Donnell

Item 1.01 – Entry into a Material Definitive Agreement.

Adoption of a Broad-Based Severance Plan

     On December 2, 2004, the Board of Directors (the “Board”) of Mylan Laboratories Inc., a Pennsylvania corporation (“Mylan” or the “Company”) approved the adoption of the Mylan Laboratories Inc. Severance Plan (the “Severance Plan”). The Severance Plan incorporates the Company’s existing severance policy, which generally provides severance benefits to eligible employees whose employment is involuntarily terminated by the Company. The Severance Plan will also provide enhanced severance benefits to eligible employees upon any “qualifying termination” of employment within two years following the occurrence of a change in control (“CIC”). A qualifying termination of employment will occur if an eligible employee’s employment is terminated by the Company (other than for cause, death or disability) or if the eligible employee terminates his employment for “good reason.” A CIC for purposes of the Severance Plan is substantially similar to the definition of CIC contained in other agreements and plans of the Company, including the Retirement Benefit Agreements described below in this Item 1.01.

     The Severance Plan covers approximately 2,200 employees (all the Company’s full-time employees, except unionized employees). An employee who is a party to an individual employment agreement or who is eligible under any other severance plan, policy or arrangement of the Company or an affiliate will not be eligible under the Severance Plan unless the employee elects to waive his or her rights under the applicable agreement, plan, policy or arrangement. In addition, any executive who becomes entitled to severance benefits pursuant to a Transition and Succession Agreement will not be eligible to receive CIC-related benefits under the Severance Plan. As a condition to receiving severance under the Severance Plan, whether prior to or following a CIC, each severed employee must execute a general release of claims in favor of the Company. Severance under the Severance Plan, prior to a CIC, is determined based on the participant’s pay grade and years of service and a participant must have completed at least two years of service to qualify for severance benefits prior to a CIC. Pre-CIC severance benefits range from two to twelve months of salary continuation and severed employees are also offered subsidized COBRA premiums over the salary continuation period and in some cases outplacement benefits.

     Participants who incur a qualifying termination within two years following a CIC will generally receive, in a lump sum, two times the cash severance benefit they would have been entitled to receive upon a pre-CIC termination (for this purpose, participants with less than two years of service will be deemed to have completed two years of service). However, employees designated as Tier I employees (currently 37 employees, none of whom is an executive officer party to a Transition and Succession Agreement with the Company) will receive a lump sum severance benefit equal to two times the sum of their annual base salary and target annual bonus for the year of termination. Participants who incur a qualifying termination within two years following a CIC will also receive:

• continuation of welfare benefits for a period of time corresponding to the time they would have received salary continuation if severance had not been paid in a lump sum;

• outplacement benefits in some cases; and

• reimbursement of legal fees and expenses they incur in seeking to enforce rights under the Severance Plan, unless the claims are determined to be frivolous or not to have been brought in good faith.

     If a participant would be subject to excise tax contemplated by Section 4999 of the Internal Revenue Code of 1986, as amended, the benefits payable to such participant will be reduced to the extent necessary to avoid imposition of such tax.

     The Board may amend or terminate the Severance Plan, but may not terminate the Severance Plan or amend it in a manner adverse to participants during the pendency of a Potential CIC, for six months thereafter and for the two-year period following the occurrence of a CIC. For purposes of the Severance Plan, a “Potential CIC” will generally occur if (i) the Company enters into a definitive agreement, the consummation of which would result in a CIC; (ii) any third party acquires in excess of 15% of the Company’s outstanding voting securities; (iii) any third party commences a tender or exchange offer which, if consummated, would result in a CIC; (iv) any third party files a proxy statement relating to an election contest with respect to the election or removal of directors which solicitation, if successful, would result in a CIC; or (v) the Board adopts a resolution to the effect that a Potential CIC has occurred.

Retirement Benefit Agreements

     By the terms of their executive employment agreements, each of Messrs. Robert J. Coury, Edward J. Borkowski and Stuart A. Williams generally is entitled to, among other things, the same benefits and perquisites of employment as are provided to similarly-situated chief officers. Each of Mr. Louis J. DeBone and Dr. John P. O’Donnell, also chief officers, is party to a retirement benefit agreement with the Company (as described more fully below). Accordingly, on December 2, 2004, the Board authorized the Company to enter into a Retirement Benefit Agreement (“RBA”) with each of Messrs. Coury, Borkowski and Williams (each an “Executive”), in furtherance of the obligations contained in their respective employment agreements. The Board also authorized the Company to enter into an Amended Retirement Benefit Agreement (the “Amended RBAs”) with each of Mr. DeBone and Dr. O’Donnell

     Upon retirement following completion of ten or more years of service, Messrs. Borkowski and Williams will each receive an annual benefit equal to $150,000 for a period of fifteen years and Mr. Coury will receive an annual benefit equal to $400,000 for a period of fifteen years (the “Retirement Benefit”). An Executive who completes five years of service since his date of hire will be 50% vested in his Retirement Benefit, with an additional 10% of the Retirement Benefit vesting after each full year of service for up to five additional years (the “Partial Benefit”).

     The Retirement Benefit or, if applicable, the Partial Benefit, will generally be payable on a monthly basis on the first day of the seventh month following the month in which the Executive retires. However, monthly benefits will not commence prior to age 55, except in the case of death or upon the occurrence of CIC. A CIC for purposes of the RBAs and Amended RBAs will generally occur if (i) any person

or group acquires more than 20% of the Company’s voting securities, (ii) individuals who constitute the Company’s Board or their approved successors cease to constitute at least a majority of the Board, (iii) a business combination involving the Company is consummated, unless after such consummation (A) the Company’s voting securities continue to represent more than 50% of the voting securities of the resulting entity, (B) no person or group acquires more than 20% of the resulting entity’s voting securities, and (C) individuals who constituted the Company’s Board prior to the business combination continue to represent at least a majority of the board of the resulting entity or (iv) the Company’s stockholders approve a plan of complete liquidation or dissolution.

     Upon a CIC, each Executive will become fully vested in his Retirement Benefit and will receive a lump sum payment equal to the net present value of the Retirement Benefit as soon as practicable following any subsequent termination of employment.

     If an Executive dies while employed by the Company, the Executive’s beneficiary will receive, as soon as practicable following death, a lump sum payment equal to the greater of (i) two times the Executive’s base salary or (ii) the net present value of the Retirement Benefit. If an Executive dies following retirement, the Executive’s beneficiary will receive a lump sum payment equal to the net present value of all monthly payments not yet paid.

     The retirement benefit agreements to which the Company is currently party with Mr. DeBone and Dr. O’ Donnell provide for a retirement benefit of $100,000 per year for ten years, together with a death benefit of $1.25 million in the event of death prior to retirement. The Amended RBAs will provide each of these individuals with retirement benefits equal to those contemplated for Messrs. Borkowski and Williams (including extension of payments from ten to fifteen years). Except in the case of a CIC, the increased benefit will be contingent on Mr. DeBone and Dr. O’Donnell continuing to serve out the remainder of the term under their respective employment agreements (September 1, 2006 in the case of Mr. DeBone and March 31, 2007 in the case of Dr. O’Donnell).

     Under the RBAs and the Amended RBAs, the executives are subject to a non-compete for a period of one year following their retirement; provided, that the non-competition covenant will not be applicable if the Company refuses or fails to make (or disputes the making of) the payments contemplated by the agreements following a CIC. In addition, the executives will be required, if requested by the Company, to provide monthly consulting services for a period of five years following their retirement, except that they shall not be required to provide consulting services following a CIC.

Trust Arrangement

     On December 2, 2004, the Board authorized the Company to enter into a trust agreement (the “Trust”), which would provide a source for the payment of benefits under the Transition and Succession Agreements (or related employment agreements), the RBAs (including RBAs with existing retirees) and the Amended RBAs, as well as for the payment or reimbursement of legal expenses incurred in the enforcement of rights under

these agreements. It is contemplated that, upon the occurrence of a Potential CIC, the Trust would be funded in an amount equal to 105% of the potential liabilities under these agreements. It is also contemplated that the Trust will prohibit the reversion of funds during the pendency of a Potential CIC (as defined above) and for six months thereafter, as well as following the occurrence of a CIC. The assets of the Trust would remain subject to the Company’s creditors.

Indemnification Agreement

     On December 2, 2004, the Board authorized the Company to enter into an indemnification agreement (“Indemnification Agreement”) with Rod Piatt, a non-employee director of the Company (the “Indemnitee”). The Indemnification Agreement is substantially similar to those previously entered into by the Company with its other directors. The Indemnification Agreement provides that the Company will, to the fullest extent permitted by law, indemnify the Indemnitee against all expenses, liability and loss actually incurred in connection with any criminal, civil, administrative or investigative action, suit or proceeding, whether brought by or in the name of the Company or otherwise, to which the Indemnitee is a party by reason of his relationship with the Company. In addition, the Indemnification Agreement provides for the advancement of expenses incurred by the Indemnitee in connection with any proceeding covered by the Indemnification Agreement.

     The foregoing description of the Indemnification Agreement is a general description only and is qualified in its entirety by reference to the Form of Indemnification Agreement, which is filed as exhibit 10.31 to the Company’s Form 10-Q/A filed for the period ended September 30, 2004, as filed with the Securities and Exchange Commission effective as of December 3, 2004 (“Form 10-Q/A”), and incorporated herein by reference.

Other

     The Company has corrected a typographical error in the Executive Employment Agreement, dated as of July 1, 2004, by and between the Company and Dr. O’Donnell, which was filed as Exhibit 10.29 to the Form 10-Q/A. The correction clarifies that the Minimum Base Salary (as defined in the Agreement) refers to an annual salary rather than a monthly salary. The corrected agreement is attached hereto as Exhibit 10.29.

Item 3.03 –Material Modification to Rights of Security Holders.

     On December 2, 2004, Mylan Laboratories Inc., a Pennsylvania corporation (the “Company”), pursuant to approval by the Company’s Board of Directors, entered into an amendment (the “Amendment”) to the Rights Agreement by and between the Company and American Stock Transfer & Trust Company, dated as of August 22, 1996, as amended as of November 8, 1999, August 13, 2004 and September 8, 2004 (as so amended, the “Rights Agreement”). The Amendment causes the 10% threshold (pursuant to Amendment No. 3 to the Rights Agreement), at which the Rights (as defined in the Rights Agreement) will become immediately exercisable, to remain at 10%

through December 31, 2005 and to automatically revert back to a 15% threshold at 12:01 a.m. (New York time) on January 1, 2006. Previously, the 10% threshold applied only during the pendency of a merger with King Pharmaceuticals, Inc. A copy of the Amendment is attached hereto as Exhibit 4.1.

Item 9.01 – Financial Statements and Exhibits.

(c) Exhibits.

Exhibit No.	Description
4.1	Amendment No. 4 to Rights Agreement, dated as of December 2, 2004, by and between the registrant and American Stock Transfer & Trust Company.
10.29	Executive Employment Agreement, dated as of July 1, 2004, between the registrant and John P. O’Donnell.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MYLAN LABORATORIES INC.
Date: December 3, 2004	By:	/s/ Edward J. Borkowski
		Edward J. Borkowski
		Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
4.1	Amendment No. 4 to Rights Agreement, dated as of December 2, 2004, by and between the registrant and American Stock Transfer & Trust Company.
10.29	Executive Employment Agreement, dated as of July 1, 2004, between the registrant and John P. O’Donnell.

EX-4.1

Exhibit 4.1

AMENDMENT NO. 4 TO RIGHTS AGREEMENT

     This Amendment No. 4 to Rights Agreement, dated as of December 2, 2004 (this “Amendment”), is entered into by and between Mylan Laboratories Inc., a Pennsylvania corporation (the “Company”), and American Stock Transfer & Trust Company (the “Rights Agent”).

     WHEREAS, the Company and the Rights Agent are party to that certain Rights Agreement dated as of August 22, 1996, as amended as of November 8, 1999, as of August 13, 2004 and as of September 8, 2004 (as so amended, the “Rights Agreement”);

     WHEREAS, the Board of Directors of the Company has approved and adopted this Amendment at a meeting of the directors duly called and held; and

     WHEREAS, pursuant to and in accordance with Section 27 thereof, the parties desire to further amend the Rights Agreement as set forth in this Amendment.

     NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth herein and in the Rights Agreement, the parties hereto agree as follows:

     1. The proviso in paragraph 1 of Amendment No. 3 to Rights Agreement is hereby amended and restated in its entirety to read as follows:

     “provided, however, that at 12:01 a.m. (New York time) on January 1, 2006, each such reference to 10% shall automatically revert to 15%.”

     2. The term “Agreement” as used in the Rights Agreement shall be deemed to refer to the Rights Agreement as amended hereby.

     3. (a) The parties acknowledge and agree that this Amendment is an integral part of the Rights Agreement. Notwithstanding any provision of the Rights Agreement to the contrary, in the event of any conflict between this Amendment and the Rights Agreement or any part of either of them, the terms of this Amendment shall control.

         (b) Except as expressly set forth herein, the terms and conditions of the Rights Agreement are and shall remain in full force and effect and shall be otherwise unaffected hereby.

         (c) The Right Agreement, as amended by this Amendment, sets forth the entire understanding of the parties with respect to the subject matter thereof and hereof.

         (d) This Amendment shall be governed by, interpreted under and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to laws that might otherwise govern under applicable conflicts of laws principles.

         (e) This Amendment may be executed in any number of counterparts, each of which shall be an original and all of which shall constitute one and the same document.

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and attested, all as of the day and year first above written.

MYLAN LABORATORIES INC.
By:	/s/ Edward J. Borkowski
	Name:	Edward J. Borkowski
	Title:	Chief Financial Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:	/s/ Paula Caroppoli
	Name:	Paula Caroppoli
	Title:	Vice President

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EX-10.29

Exhibit 10.29

EXECUTIVE EMPLOYMENT AGREEMENT

     This Executive Employment Agreement (the “Agreement”) is dated as of July 1, 2004, by and between Mylan Laboratories Inc. (the “Company”) and John P. O’Donnell (“Executive”).

RECITALS:

     WHEREAS, the Company and Executive are parties to that certain Executive Employment Agreement dated July 22, 2002, as amended as of December 15, 2003 (the “Original Agreement”);

     WHEREAS, the Company wishes to continue to employ Executive as Chief Scientific Officer, and Executive desires to continue such employment; and

     WHEREAS, the parties wish to terminate the Original Agreement and to enter into this Agreement in its stead;

     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. The Company agrees to employ Executive, and Executive accepts employment by the Company, on the terms and conditions provided herein.

     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 8 of this Agreement, through March 31, 2007.

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

     (a) Minimum Base Salary. The Executive’s minimum base salary (the “Minimum Base Salary”) shall be an annual rate of $400,000, payable in accordance with the Company’s normal payroll practices for its executive officers. The Minimum Base Salary may be increased from time to time at the discretion of the Board of Directors of the Company, any committee authorized by the Board or any officer having authority over executive compensation.

     (b) Annual Bonus. Executive shall be eligible to receive an annual discretionary bonus targeted at one hundred percent (100%) of Executive’s then-current Minimum Base Salary. Executive’s eligibility for a bonus and the amount of the bonus, if any, shall be determined by the Board of Directors in its sole discretion, or by any committee or officer having authority over executive compensation.

     (c) Non-Qualified Stock Options. The remaining one-third (1/3) of the fully vested non-qualified options granted to Executive in July 2002 pursuant to the 1997 Mylan Laboratories Inc. Incentive Stock Option Plan, as amended (the “Plan”), shall be exercisable on July 22, 2004. These options are subject to all terms of the Plan and the applicable stock option agreement.

     (d) Fringe Benefits and Expense Reimbursement. The Executive shall receive such benefits and perquisites of employment as have been customarily provided to the Company’s Senior Officers including but not limited to, health insurance coverage, profit-sharing, participation in the Company’s 401(k) plan, short-term disability benefits, twenty-five (25) vacation days, expense reimbursement, and automobile usage 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.

     4. Confidentiality. Executive recognizes and acknowledges that the business interests of the Company and its subsidiaries, parents and affiliates (collectively the “Mylan Companies”) require a confidential relationship between the Company and Executive and the fullest protection and confidential treatment of the financial data, customer information, supplier information, market information, marketing and/or promotional techniques and methods, pricing information, purchase information, sales policies, employee lists, policy and procedure information, records, advertising information, computer records, trade secrets, know how, plans and programs, sources of supply, and other knowledge of the business of the Mylan Companies (all of which are hereinafter jointly termed “Confidential Information”) which have or may in whole or in part be conceived, learned or obtained by Executive in the course of Executive’s employment with the 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;

     (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

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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.

     5. Non-Competition and Non-Solicitation. Executive agrees that during the term of this Agreement and for a period ending two (2) years 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 within North America. 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 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.

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     (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.

     6. 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.

     7. Injunctive Relief. The parties agree that in the event of Executive’s violation of sections 4 and/or 5 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 4 and/or 5 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.

     8. Termination of Employment.

     (a) Resignation. Executive may resign from employment at any time upon ninety (90) days written notice to the Company. During the ninety (90) days notice period Executive will continue to perform duties and abide by all other terms and conditions of this Agreement. Additionally, Executive will use his best efforts to effect a smooth and effective transition to whomever will replace Executive. The Company reserves the right to accelerate the effective date of Executive’s resignation. Except as provided in Section 8(c), the Company shall have no liability to Executive under this subsection other than that the Company shall pay Executive’s wages and benefits through the effective date of

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Executive’s resignation. Executive, however, will continue to be bound by all provisions of this Agreement that survive termination of employment.

     (b) Termination For Cause. The Company may terminate Executive’s employment for Cause, as defined herein, at any time. Notice of a Termination For Cause shall be in writing. In the event of a Termination For Cause, the Company shall have no liability to Executive other than that the Company shall 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.

     “Cause” shall mean: (i) Executive’s willful and substantial misconduct with respect to the Company’s business or affairs; (ii) Executive’s gross neglect of duties, (iii) Executive’s conviction of a crime involving moral turpitude; (iv) Executive’s conviction of any felony; or (v) Executive’s material breach of any provision of this Agreement.

     (c) Resignation With Good Reason or Termination Without Cause. If Executive provides ninety (90) days notice and resigns with Good Reason, as defined herein, and complies in all respects with his obligations hereunder, or if the Company terminates Executive without Cause, then Executive shall be paid, within 30 days of his separation from the Company, a lump sum equal to his then-current Minimum Base Salary plus the Prior Bonus (as defined below). If the Executive resigns with Good Reason that is a Disability and complies in all respects with his obligations hereunder, the Company will pay Executive, within 30 days of his separation from the Company, a lump sum equal to his then-current Minimum Base Salary plus the Prior Bonus. In either case, Employee Benefits shall be continued for the 12 months following his separation from the Company; 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 health insurance benefits through another employer or otherwise in connection with rendering services for a third party. Executive shall also be entitled to exercise immediately one hundred percent (100%) of all stock options described in this Agreement in the event of a Resignation With Good Reason or Termination Without Cause. Executive will continue to be bound by all provisions of this Agreement that survive termination of employment. As used herein, “Prior Bonus” means the higher of: (i) the average of the annual bonuses paid to Executive in the three fiscal years prior to his separation from the Company; or (ii) the annual bonus applicable for the prior fiscal year.

     “Good Reason” shall mean a reduction of Executive’s Minimum Base Salary below the Minimum Base Salary stipulated in this Agreement, unless all other Chief officers of the Company (other than the CEO) are required to accept a similar reduction, a relocation of Executive’s principal place of work to a location more than thirty (30) miles from Morgantown, WV, or the Executive’s Disability (as defined herein).

     “Disability” means the inability to perform normal functions of the positions due to mental, physical or emotional disability which is expected to last more than one year.

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     (d) 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 already terminated for reasons stated in Section 8 (a), (b), or (c) of this Agreement, Executive shall be paid, within 30 days of his separation from the Company, a lump sum equal to his then-current Minimum Base Salary plus the Prior Bonus. In addition, Executive’s health insurance benefits shall be continued for twelve (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 health insurance benefits through another employer or otherwise in connection with rendering services for a third party. Executive, however, will continue to be bound by all provisions of this Agreement that survive termination of employment.

     (e) Return of Company Property. Upon the termination of Executive’s employment for any reason, Executive shall immediately return to the Company 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 the Company’s business. Executive shall also immediately return all keys, identification cards or badges and other Company property.

     (f) No Duty to Mitigate. There shall be no requirement on the part of the 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 the contract, and the amount of such payments and benefits shall not be reduced by any compensation or benefits received by Executive from other employment.

     (g) Death. The employment of Executive shall automatically terminate upon Executive’s death. 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 8(c) of this Agreement, and Executive’s estate shall receive all consideration, compensation and benefits that would be due and payable to Executive for a termination without Cause.

     9. 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

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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 9 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 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 9 to the contrary notwithstanding, the Company shall not be liable for any settlement of any claim or action effected without its written consent.

     10. Efforts. During the Term of Employment, Executive shall: (i) devote his full working time and attention to the business and affairs of the Company and to the performance of his duties hereunder; (ii) serve the Company faithfully and to the best of

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his ability, and use his best efforts to promote the interests of the Company; and (iii) follow and implement the policies and directions of the Chief Executive Officer and Board of Directors.

     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.
	781 Chestnut Ridge Road
	Morgantown, West Virginia 26504-4310
	Attention: Chairman of the Board
	With a noted copy to the Chief Executive Officer
If to Executive:	at the most recent address on record at the Company.

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 orally, nor shall any change, termination or attempted waiver of any of the provisions contained in this Agreement be binding unless in writing and signed by the party against whom the same is sought to be enforced, nor shall this section itself by waived verbally. This Agreement may be amended only by a written instrument duly executed by or on behalf of the parties hereto.

     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,

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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 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.

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     20. Original Agreement. The parties agree that the Original Agreement is terminated and superseded in all respects upon the effectiveness of this Agreement.

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

MYLAN LABORATORIES INC.	EXECUTIVE:
/s/ Robert J. Coury	/s/ John P. O’Donnell
By:  Robert J. Coury	John P. O’Donnell
Its:  Vice Chairman and CEO

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