<PAGE> 1
U.S. Securities and Exchange Commission
Washington, D.C. 20449
Notice of Exempt Solicitation
submitted pursuant to Rule 14a-6(g)
1. Name of Registrant:
Mylan Laboratories Inc.
2. Name of person relying on exemption:
College Retirement Equities Fund
3. Address of person relying on the exemption:
730 Third Avenue, New York, NY 10017
4. Written materials. The following materials are attached:
Exhibit 1: Letter from Teachers Insurance and Annuity
Association - College Retirement Equities Fund to the
shareholders of Mylan Laboratories
Exhibit 2: Resolution, and supporting statement, to be proposed
by Teachers Insurance and Annuity Association -
College Retirement Equities Fund at the annual
meeting of Mylan Laboratories
Exhibit 3: Article published on Teachers Insurance and Annuity
Association - College Retirement Equities Fund's web
site
<PAGE> 1
Ex 99.1
LETTER
Exhibit 1
TEACHERS INSURANCE AND ANNUITY ASSOCIATION
COLLEGE RETIREMENT EQUITIES FUND
PETER C. CLAPMAN
Senior Vice President and Chief
Counsel, Investments
730 Third Avenue/New York, NY 10017-3206
212 490-9000
June 15, 1999
Dear Fellow Mylan Laboratories Shareholder:
TIAA-CREF is a long-time holder of significant equity in Mylan
Laboratories. At Mylan's July 23 annual meeting, we intend to propose a
resolution (set forth in Mylan's proxy statement) that requests the Board of
Directors to redeem the company's "dead hand" poison pill unless shareholders
vote otherwise. We are asking for your support of our proposal.
A poison pill (or "shareholder rights plan") is a powerful takeover
defense that, if triggered by an unsolicited bid for the company, would
substantially dilute the would-be acquiror's holdings. In our view, companies
should seek shareholder approval for such plans, since they can affect the value
of the stock. Mylan's board did not do this, imposing the pill unilaterally. But
the main concern we are raising with our shareholder resolution is that MYLAN'S
POISON PILL INCLUDES A DEAD HAND (OR "CONTINUING DIRECTOR") PROVISION, NOT FOUND
IN MOST POISON PILLS, THAT IS PARTICULARLY OBJECTIONABLE.
MYLAN'S DEAD HAND PILL DISENFRANCHISES SHAREHOLDERS
Mylan's dead hand poison pill can be redeemed only with the consent of
Mylan's CURRENT directors (or future directors approved by them). Therefore, if
Mylan's directors were to reject an attractive third-party acquisition offer
that shareholders favored, the shareholders would have no ability to replace
Mylan's directors with directors who would have the power to redeem the pill and
allow shareholders to accept that offer. We cannot accept the premise that only
Mylan's current directors (and their nominees) - and not other directors elected
by you and other shareholders - can accept or reject an acquisition bid for the
company. We believe that MYLAN'S DIRECTORS HAVE APPROPRIATED TO THEMSELVES A
POWER CONTRARY TO INTERESTS OF THE SHAREHOLDERS, THE OWNERS OF THE COMPANY.
It is noteworthy that dead hand pills have been declared illegal in
Delaware, the state in which the majority of U.S. public companies are
incorporated. Mylan is incorporated in Pennsylvania, where it is a matter of
company discretion. Our resolution is directed to how that discretion is
exercised.
MYLAN'S BOARD LACKS AN INDEPENDENT MAJORITY
We are particularly concerned about Mylan's poison pill because,
unlike most major U.S. companies, Mylan lacks a board with a majority of
independent directors. Three of the seven Mylan directors are employees. A
fourth director just stepped down as an executive, and a fifth is a member of a
law firm that provides legal services to the company. STOCKHOLDERS SHOULD BE
CONCERNED THAT A BOARD LACKING INDEPENDENCE, SUCH AS THIS ONE, MAY USE A DEAD
HAND POISON PILL TO ENTRENCH ITSELF AND MANAGEMENT, TO THE DETRIMENT OF
SHAREHOLDERS.
MYLAN'S ARGUMENTS MISS THE POINT
In its proxy statement, Mylan Laboratories argues against the TIAA-CREF
resolution in part by presenting the logic behind poison pills in general. This
misses the point. Our resolution is focused on
<PAGE> 2
a particular feature of Mylan's pill - the dead hand provision - that is not
included in the poison pills adopted by most other companies.
Mylan says the dead hand provision does not limit the right of
shareholders, including any potential acquiror, to elect directors, but merely
requires that any transaction be approved by directors not affiliated with the
acquiror. Again, this attempts to obscure the point. Our concern is about the
possibility of entrenchment by the board and management should the company
receive an unsolicited takeover bid. The only practical way a potential acquiror
could gain control of sufficient voting power to replace the board - and thereby
redeem the pill in the face of opposition by current directors - is by
soliciting and winning our votes. THE DEAD HAND IGNORES THE WILL OF THE
SHAREHOLDERS BY SUBVERTING THE VOTING PROCESS. A potential acquiror acting alone
or through voting agreements cannot replace the current board unless Mylan's
other shareholders approve the election of new directors. Shareholders are
entitled to freely elect directors who are able to make the critical decisions
on the future of the company. This is how corporate governance is supposed to
work.
OTHER COMPANIES HAVE REMOVED DEAD HAND PROVISIONS
TIAA-CREF, the world's largest pension fund and a significant investor
in virtually all major U.S. companies, has asked a number of other companies to
drop their dead hand provisions. Most of the companies receiving our resolution
have voluntarily amended their pills to remove the dead hand provisions.
We are so concerned about Mylan's dead hand pill that we are bringing
this very important issue to our fellow shareholders. We would be happy to
discuss this matter with you in more detail. Please contact Ken Bertsch of
TIAA-CREF at (212) 916-4972 with any questions you might have.
Sincerely,
Peter C. Clapman
- --------------------------------------------------------------------------------
PLEASE VOTE "FOR" THE SHAREHOLDER PROPOSAL ON MYLAN'S PROXY CARD
TIAA-CREF is requesting that you cast your votes FOR the shareholder proposal on
the proxy card sent out by Mylan Laboratories. Please note that if you leave the
proxy card blank and return it, the company will count your votes against our
proposal. TIAA-CREF, which will not be sending out a separate proxy card, is
taking no public position on any other item being considered at the annual
meeting.
- --------------------------------------------------------------------------------
<PAGE> 1
EX 99.2
RESOLUTIONS
Exhibit 2
TIAA-CREF'S SHAREHOLDER PROPOSAL AND SUPPORTING STATEMENT
TIAA-CREF is making the following proposal at Mylan's July 23 annual meeting:
Proposal
WHEREAS, the Company's Board of Directors, without shareholder approval,
has adopted a plan, commonly known as a "poison pill", with a "dead hand"
provision which permits only the board members that adopted the poison pill
to redeem the pill;
WHEREAS, this type of poison pill, unlike most poison pills, not only
allows the current Board to effectively thwart acquisition offers which may
be favored by a majority of shareholders, but also denies shareholders the
right to replace this Board with new directors empowered to redeem the
poison pill, permitting such offers to go forward;
WHEREAS, a "dead hand" poison pill has a coercive effect on the
shareholders' basic right to freely elect a new Board and also takes away
normal decision-making authority in this important area from a newly
elected Board;
WHEREAS, such a "dead hand" poison pill interferes with good corporate
governance and can reduce the value of the company's shares to the
detriment of shareholders;
RESOLVED, that the shareholders request that the Board of Directors;
Redeem the "dead hand" poison pill, unless approved by the affirmative vote
of a majority of shares of the Company entitled to vote at a meeting of
shareholders held as soon as practicable.
Supporting Statement
By adopting the poison pill without shareholder approval, the current Board
unilaterally deprived shareholders of the traditional right to sell their
shares to potential bidders. By adding the "dead hand" feature, this Board
also denies appropriate decision making authority to a new Board, elected
by shareholders, to decide what is in the best interests of shareholders on
this important subject.
Traditional poison pills have been defended with the argument that
directors can generally be trusted to act in the shareholders' interest,
and if they do not, they can be replaced by the shareholders with other
directors.
Adoption of "dead hand" poison pills, however, is different. The purpose is
"entrenchment," by coercing shareholders into voting for incumbent
directors to preserve the possibility of redemption of the pill. Their
intended effect is to preclude proxy contests for corporate control, which
are an appropriate means to challenge incumbent management.
We believe that the right of shareholders freely to elect a board of
directors with full power to represent the shareholders' interests is the
foundation-stone of good corporate governance. Yet this Board has
unilaterally deprived shareholders of their only real protection against a
board that acts against their interests -- the ability to freely elect a
board of their choosing with full powers to represent them in all respects.
In our view, this Board by its actions has violated its fiduciary
responsibility to shareholders.
By supporting this resolution, shareholders can protect the value of their
investment by sending a message to the Company that we value our right to
elect a Board that is prepared and able to represent shareholder interests
on all proper matters; and that we will not support unilateral actions by
the Board that restrict our ability to meaningfully exercise our voting
rights.
<PAGE> 1
EX-99.3
ARTICLE
Exhibit 3
TIAA-CREF URGES MYLAN LAB. SHAREHOLDERS TO HELP REMOVE POISON PILL
TIAA-CREF announced today that it has written a letter to fellow shareholders of
Mylan Laboratories Inc. (NYSE: MYL), urging them to support TIAA-CREF's
shareholder proposal requesting the Mylan board to redeem or put to shareholder
vote the company's "dead hand" poison pill defense. TIAA-CREF is a long-time
shareholder of Mylan Laboratories.
Dead hand poison pills are a takeover defense that can prevent an acquisition of
a company even if a majority of shareholders favor it. In contrast to typical
poison pills, which can be removed by newly-appointed directors, dead hand
poison pills can only be removed by directors in place before a proxy fight, or
by their hand-picked successors. So, even if an existing board was replaced with
directors favoring an acquisition, it couldn't go through. Poison pills have
been declared illegal in Delaware, the state in which the majority of U.S.
public companies are incorporated. Mylan is incorporated in Pennsylvania, where
the adoption of dead hand poison pills is a matter of company discretion.
TIAA-CREF says it is particularly concerned about the dead hand feature of
Mylan's poison pill given that the company's board lacks an independent
majority. "Stockholders should be concerned that a board lacking independence,
such as this one, may use a dead hand poison pill to entrench itself and
management, to the detriment of shareholders," said Peter C. Clapman,
TIAA-CREF's Senior Vice President and Chief Counsel, Investments, in the letter
to Mylan shareholders. Three current Mylan executives serve on the seven member
board, along with a recently retired Mylan executive. Another director is a
member of a law firm that provides legal services to Mylan.
Earlier this year, TIAA-CREF resolutions opposing dead hand poison pills won
strong support from shareholders of The Lubrizol Corporation (NYSE: LZ) and
Bergen Brunswig Corporation (NYSE:BBC). The resolutions were supported by
holders of 68 percent of the shares voted at Lubrizol and 74 percent at Bergen.
A number of other companies have eliminated the dead hand provisions of their
poison pills at the request of TIAA-CREF.
Mylan shareholders can contact Ken Bertsch, TIAA-CREF's director of corporate
governance, at (212) 916-4972, with any questions.
