MYLAN LABORATORIES INC.
1030 Century Building
130 Seventh Street
Pittsburgh, Pennsylvania 15222
Notice of Annual Meeting of Shareholders
Thursday, July 27, 2000
10:00 a.m., Eastern Time
at
David L. Lawrence Convention Center,
South Hall
1001 Penn Avenue
Pittsburgh, Pennsylvania
June 16, 2000
DEAR SHAREHOLDER:
You are cordially invited to attend the 2000 Mylan Laboratories Inc.
Annual Meeting of Shareholders to:
o [Proposal No. 1] Elect seven directors
o [Proposal No. 2] Approve an Employee Stock Purchase Plan
o [Proposal No. 3] Approve the appointment of Deloitte & Touche LLP as
independent auditors for 2001
o Conduct other business properly brought before the meeting
If you plan to attend, please complete and return the enclosed reservation
card. Shareholders of record at the close of business May 1, 2000 may vote at
the meeting.
Your vote is important. Whether you plan to attend or not, please sign,
date and return the enclosed proxy card in the envelope provided. If you attend
the meeting and prefer to vote in person, you may do so.
I look forward to seeing you at the meeting.
Sincerely,
MILAN PUSKAR
Chairman and Chief Executive Officer
<PAGE>
MYLAN LABORATORIES INC.
Proxy Statement
for
Annual Meeting of Shareholders
to be held on July 27, 2000
TABLE OF CONTENTS
Notice of Annual Meeting........................................... Cover
Attendance and Voting Matters........................................ 1
The Mylan Board of Directors......................................... 2
[Proposal No. 1--Elect Seven Directors].......................... 2
Performance Graph 4
Report of the Compensation Committee on Executive Compensation....... 5
Executive Compensation Tables........................................ 8
Employee Stock Purchase Plan......................................... 10
[Proposal No. 2--Approve an Employee Stock Purchase Plan]........ 10
Mylan Stock Owned by Officers and Directors.......................... 10
Persons Owning more than Five Percent of Mylan Stock................. 11
Appointment of Deloitte & Touche LLP................................. 11
[Proposal No. 3-- Approve the appointment of Deloitte & Touche LLP]
Other Matters ....................................................... 12
The approximate date of the mailing of this proxy statement is June 23, 2000.
ATTENDANCE AND VOTING MATTERS
Reservations
If you plan to attend the meeting, we request that you complete and return
the enclosed reservation card by July 13, 2000.
Voting Methods
You can vote on matters to come before the meeting in three ways:
o You can come to the Annual Meeting and cast your vote there; or
o You can vote electronically over the Internet; or
o You can vote by signing and returning the enclosed proxy card by
mail. If you do so, the individuals named on the card will vote your
shares in the manner you indicate.
Each share of Mylan stock you own entitles you to one vote. As of May 1,
2000, there were 130,329,602 shares of Mylan common stock outstanding.
Giving your Proxy to Someone Other than Individuals Designated on the Card
If you want to give your proxy to someone other than individuals noted on
the proxy card, you may do so by crossing out the names of those individuals and
inserting the name of the individual you are authorizing to vote. Either you or
that authorized individual must present the proxy at the Annual Meeting.
The Quorum Requirement
A quorum of shareholders is necessary to hold a valid meeting. If the
holders of a majority of Mylan common stock are present in person or by proxy, a
quorum will exist. Abstentions are counted as present for establishing a quorum.
Vote Necessary for Action
Directors are elected by a plurality vote of shares present at the meeting,
meaning that the director nominee with the most affirmative votes for a
particular slot is elected for that slot. In an uncontested election for
directors, the plurality requirement is not a factor. Other action is by an
affirmative vote of the majority of the shares present at the meeting.
1
<PAGE>
THE MYLAN BOARD OF DIRECTORS
Election of Directors
[Proposal No. 1--Elect Seven Directors]
We have a single class of directors who are elected to serve for one-year
terms. If a nominee is unavailable for election, proxy holders will vote for
another nominee proposed by the Board or, as an alternative, the Board may
reduce the number of directors to be elected at the meeting.
The following individuals have been nominated to serve on the Board of
Directors.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THESE NOMINEES.
---
<TABLE>
<S> <C> <C> <C>
Director
Name Principal Occupation Age Since
---- -------------------- --- -----
Milan Puskar Chairman of the Board and C.E.O. of Mylan 65 1976
Dana G. Barnett Executive Vice President of Mylan 59 1982
Laurence S. Delynn Retail Consultant 75 1975
John C. Gaisford, M.D. Director of Burn Research, West Penn Hospital 84 1992
Douglas J. Leech Chairman, President and C.E.O. Centra Bank, Inc. 45 2000
and Centra Financial Holdings, Inc.
Patricia A. Sunseri Vice President of Investor and Public Relations of Mylan 60 1997
C.B. Todd Retired; Formerly Senior Vice President of Mylan 66 1993
</TABLE>
Mr. Puskar was employed by Mylan from 1961 to 1972 and served in various
positions, including Secretary-Treasurer, Executive Vice President and a member
of the Board of Directors. Mr. Puskar served as Vice President and General
Manager of the Cincinnati division of ICN Pharmaceuticals Inc. from 1972 until
1975 and as a partner of Elan Corporation in Dublin, Ireland from 1975-1976. In
1976, Mr. Puskar returned to Mylan and served as President. In 1980 he became
Vice Chairman of the Board of Directors, in 1993 Mr. Puskar became Chairman of
the Board, Chief Executive Officer and President. As of March 2000, Mr. Puskar
serves as Chairman and Chief Executive Officer. Currently, Mr. Puskar is also a
Board member of the West Virginia University Foundation, Morgantown, West
Virginia and serves on the Board of Directors for Duquesne University,
Pittsburgh, Pennsylvania.
Mr. Barnett was employed by Mylan in 1966. Since that time he has held
various management positions with the manufacturing subsidiary of Mylan. His
responsibilities have covered production, quality control and product
development. Mr. Barnett became Vice President in 1974, Senior Vice President in
1978 and Executive Vice President in 1987. He was elected President and Chief
Executive Officer of Somerset Pharmaceuticals, Inc., a joint-venture of Mylan,
in June 1991, and in August of 1995 he was elevated to Chairman and Chief
Executive Officer of Somerset Pharmaceuticals, Inc.
Mr. Delynn, is a Retail Consultant, as well as Director Emeritus of One
Valley Bank, Morgantown, West Virginia.
Dr. Gaisford has been engaged for over five years as Director of Burn
Research at West Penn Hospital, Pittsburgh, PA.
Mr. Leech has served as Chairman, CEO and President of Centra Bank, Inc.
and Centra Financial Holdings, Inc. since June of 1999. Previously he served as
President-Southeast Region of Huntington National Bank.
Mrs. Sunseri has served as a Director of Mylan since April 1997, as the
Vice President of Investor and Public Relations of Mylan since 1989 and as the
Director of Investor Relations of Mylan from 1984 to 1989.
Mr. Todd was employed by Mylan from 1970 until his retirement in 1999.
Prior to assuming the position in 1987 as Senior Vice President, Mr. Todd served
as Vice President-Quality Control. He also served as President of Mylan
Pharmaceuticals Inc., a subsidiary of Mylan, until his retirement in 1999.
2
<PAGE>
Board Meetings and Committees
In fiscal 2000, our full Board met eight times. In addition to meetings of
the full Board, directors attended meetings of individual Board committees and
often considered issues separate from these meetings. All of the directors
attended at least 75% of the Board and committee meetings held in fiscal 2000.
The Board has an Audit Committee, a Compensation Committee, a Governance
and Nomination Committee and certain other committees.
The Audit Committee reviews the preparations for and scope of the annual
audit of Mylan's financial statements, makes recommendations as to the retention
of independent auditors and as to their fees, and other duties relative to the
financial statements of Mylan. The Audit Committee is comprised of Mr. Delynn,
Dr. Gaisford and Mr. Leech. The Audit Committee met on one occasion during
fiscal 2000.
The Compensation Committee (which also serves as the Stock Option
Committee) has responsibility for establishing compensation policies and
objectives, determining the compensation payable to the Chief Executive Officer
and awarding stock options to employees. The Compensation Committee is comprised
of Mr. Delynn and Dr. Gaisford. The Compensation Committee met twice during
fiscal 2000.
The Governance and Nomination Committee is responsible for nominating
candidates for election to the Board at the annual shareholders' meeting or upon
the occurrence of any vacancy on the Board. Mr. Puskar, Dr. Gaisford, and Mr.
Leech serve as members of the Nominating Committee. The Nominating Committee met
on two occasions during fiscal 2000.
Compensation of Directors
Three of Mylan's directors (Mr. Puskar, Mr. Barnett and Mrs. Sunseri) were
executive officers of Mylan throughout fiscal 2000 and did not receive any
additional compensation for serving as directors of Mylan. Mr. Todd, formerly
President of Mylan Pharmaceuticals Inc. until his retirement in April 1999,
received no compensation for serving on the board. The person who served as
Mylan's non-employee directors during fiscal 2000 (Mr. Delynn, Dr. Gaisford and
Mr. Smiley) earned director's fees of $18,000 in fiscal 2000 and Mr. Smiley
received an additional fee of $18,000 for serving on Mylan's Executive Committee
and as Secretary. Mr. Smiley resigned from Mylan's board effective December 31,
1999 but continues to serve as Mylan's Secretary. Mr. Smiley has been associated
with Doepkin Keevican & Weiss (counsel to Mylan) since 1992.
Under service benefit agreements entered into with Mylan, Mr. Delynn, Dr.
Gaisford and Mr. Smiley are entitled to receive $18,000 annually, payable in
monthly installments for a 10 year period from the date of their termination of
service to Mylan. Upon the death or at the election of the director, the
aggregate amount of any unpaid benefit is payable in a lump sum, discounted to
present value at the per annum rate of 7%.
Certain Transactions
Douglas J. Leech serves as the Chairman, CEO and President of Centra Bank,
Inc. The Company has deposited $10 million in a commercial account with Centra
Bank, Inc., which deposit represents in excess of 20% of the bank's total
deposits and capital. Milan Puskar serves on the board of directors of Centra
Bank, Inc.
3
<PAGE>
PERFORMANCE GRAPH
Set forth below is a performance graph comparing the cumulative total
returns (assuming reinvestment of dividends) for the five years ended March 31,
2000 of $100 invested March 31, 1995 in the Company's common stock and the
common stock of the companies comprising the Standard & Poor's 500 Composite
Index and the Dow Jones Pharmaceutical Index.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG MYLAN LABORATORIES INC., THE S&P 500 INDEX
AND THE DOW JONES PHARMACEUTICALS INDEX
March 31, 1995 1996 1997 1998 1999 2000
Mylan 100.00 99.93 70.87 111.41 133.63 134.87
S&P 500 100.00 132.11 158.30 234.27 277.52 327.32
Dow Jones 100.00 155.10 198.84 341.46 452.29 379.54
Pharmaceuticals Index
4
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
Compensation Policies
For fiscal 2000, Mylan's compensation program consisted of base salary,
short-term incentive compensation, stock options and long-term incentive
compensation.
The Committee believes this compensation program was a significant factor
contributing to Mylan's success this past year, including net earnings of
$154,246,000 or $1.18 per share diluted.
The Compensation Committee
The Compensation Committee is charged with responsibility for:
o establishing the objectives and policies governing the compensation of
Mylan's employees generally,
o determining the amount of compensation payable annually to the
Chairman and Chief Executive Officer and any other executive officer
of Mylan whose annual compensation is subject to the limitations of
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"),
o awarding stock options to employees of Mylan, and
o making such recommendations to the Board as it deems appropriate
concerning Mylan's compensation of employees and its award of stock
options.
Generally, the actions of the Compensation Committee do not require the
approval of the full Board to become effective.
Mylan's executive compensation policy is to:
o provide compensation to employees at such levels as will enable Mylan
to attract and retain employees of the highest caliber,
o compensate employees in a manner best calculated to recognize
individual, group and Company performances, and
o seek to align the interests of the employees with the interests of
Mylan's shareholders.
The Board and the Compensation Committee have taken actions designed to
increase Mylan's opportunity to deduct all compensation paid to highly
compensated officers for federal income tax purposes. However, neither the Board
nor the Compensation Committee believes that any executive's compensation should
be limited to the amount deductible if such executive deserves compensation in
excess of $1 million and the compensation is not deductible.
Executive Bonus Plan
In a prior fiscal year, the Committee reviewed and considered numerous
proposals for establishing objective performance-based criteria to award the
Chairman and Chief Executive Officer of Mylan and any other executive officers
who are determined by the Committee to be eligible to receive a bonus based on
such criteria. Among the criteria considered by the Committee in establishing an
Executive Bonus Plan were (1) earnings per share above fixed benchmarks, (2)
earnings per share above prior year's earnings per share, (3) stock prices
reaching certain benchmarks, (4) percentage increases in stock prices, (5)
approval by the Food and Drug Administration ("FDA") of a fixed number of
applications submitted by Mylan, (6) sales above fixed benchmarks and (7) sales
above prior year's sales.
5
<PAGE>
The Committee concluded that using earnings per share above fixed
benchmarks provides the most meaningful objective measure of Mylan's performance
and provides an appropriate vehicle for rewarding the Chairman and Chief
Executive Officer and other executives participating in the Executive Bonus
Plan. The other alternatives considered were dismissed by the Compensation
Committee for the following reasons:
First, as to earnings per share in excess of prior year's earnings, factors
beyond the control of the executives (such as the onset of a recessionary
environment in the pharmaceutical industry or sharply higher costs resulting
from implementation of new government regulations relating to the approval or
marketing of drugs) could make a comparison with prior year's earnings
meaningless. For example, the exemplary performance by an executive in the face
of sharply higher costs due to new governmental burdens could go unrewarded if a
comparison with prior year's earnings were made. Further, the comparison of
current earnings with those of a prior period could operate as a disincentive
for the executive to approve new ventures, to enter into new markets, to
introduce new products or to seek new merger, acquisition or joint-venture
opportunities if the start-up costs associated therewith would reduce earnings
in the short term.
Second, as to stock prices, the Compensation Committee was concerned that
stock prices are subject to fluctuation based on general economic factors,
interest rates, the national and international political climate, trade balances
and other factors which bear no relationship to the effectiveness of an
executive or the performance of a particular corporation. Consequently, the
Compensation Committee did not believe that use of stock prices alone would be
an appropriate way to create incentives for its executives.
Third, measuring performance through FDA approvals appeared to the
Compensation Committee to be too imperfect a measure of performance in that the
groundwork for an approval could precede the approval by a considerable time,
the timing of approvals is too uncertain, and the number of expected approvals
in any period of time is too small a class.
Finally, the Compensation Committee felt that sales provided the best
method of measuring Mylan's performance next to earnings. However, in that a
measure based on sales alone does not provide an incentive to executives to
control costs, the Compensation Committee felt that this measure provided a less
satisfactory measure of performance than earnings.
Accordingly, the Compensation Committee approved the Executive Bonus Plan,
subsequently approved by the shareholders of Mylan, which provides for awards to
participating executives of cash bonuses of an amount fixed by the Compensation
Committee of up to $100,000 per $.01 by which earnings per share exceed
benchmarks fixed by the Compensation Committee. Although broad latitude is
afforded to the Compensation Committee to fix the benchmarks and amount of the
award per $.01 increase, the bonuses payable to any executive cannot exceed
$1,500,000 per annum under the Executive Bonus Plan and the aggregate amount of
bonuses payable thereunder in any fiscal year to all participating executives
cannot exceed $2,500,000.
Compensation of Executive Officers
During fiscal 2000, the salaries of executive officers other than the
Chairman and Chief Executive Officer were determined by Milan Puskar. Mr. Puskar
made his determinations based upon various subjective factors such as the
responsibilities, positions, qualifications, individual performances and years
of service with Mylan of such executives. In making this determination, Mr.
Puskar did not undertake a formal survey or analysis of the compensation paid to
executives in other companies. These salaries are not tied to Mylan's
performance. The bonuses of executive officers other than the Chairman and Chief
Executive Officer were awarded by Mr. Puskar based upon his perception of each
officer's contribution to Mylan's success. Mr. Puskar neither undertook to
conduct a formal survey or analysis of the bonuses awarded (or total
compensation packages offered) by other pharmaceutical companies nor established
numerical goals or targets in determining these bonuses. See also "Employment
Contract and Termination of Employment and Change-in-Control Arrangements,"
below.
6
<PAGE>
Compensation of Chief Executive Officer
The Compensation Committee did not consider any adjustments to the salary
of Milan Puskar, Mylan's Chairman and Chief Executive Officer, in fiscal 2000,
which was continued at the fiscal 1999 level. In order to create a
performance-based reward intended to be fully deductible by Mylan for federal
income tax purposes, as well as serving as an incentive to Mr. Puskar to seek to
maximize earnings for the balance of the fiscal year, in June 1999 the
Compensation Committee awarded a bonus to Mr. Puskar under the Executive Bonus
Plan of $50,000 for each $.005 that earnings for the second, third and fourth
quarters for fiscal 2000 in the aggregate exceeded $.53 per share, not to exceed
$500,000. The Compensation Committee reported that it had selected this
benchmark in light of numerous factors and considerations, including identified
developments in the pharmaceutical industry, the status of Mylan's own efforts
to obtain FDA approvals and its negotiation of business arrangements. The
benchmark was met in fiscal year 2000 by Mylan, and Mr. Puskar was granted a
bonus of $500,000 for his services. See also "Employment Contract and
Termination of Employment and Change-in-Control Arrangements," below.
Submission of Report
This report on executive compensation is submitted by the members of the
Compensation Committee, Laurence S. Delynn and John C. Gaisford.
Compensation Committee Interlocks and Insider Participation
Laurence S. Delynn and John C. Gaisford are members of the Compensation
Committee and served in that capacity throughout fiscal 2000. There are no
interlocking relationships, as defined in the regulations of the Securities and
Exchange Commission, involving members of the Board of Directors or its
Compensation Committee.
Employment Contract and Termination of Employment and Change-in-Control
Arrangements
Mylan entered into an employment contract with Mr. Puskar on April 28, 1983
which specifies his respective duties and provides for ordinary insurance and
health benefits as provided for Mylan's salaried employees. This employment
contract originally called for a term expiring on March 31, 1988, and since this
date has been continued on a year-to-year basis subject to termination by either
Mylan or the executive at any time. Salary and bonuses under this employment
contract are determined by Mylan's Board of Directors. Mr. Puskar's employment
contract provides for continued payments of salary for a period of one year
following any termination of his employment contract by Mylan.
The Salary Continuation Plan referred to in the notes to the "Summary
Compensation Table" provides for the payment of post-retirement compensation
pursuant to agreements with key employees, including executive officers, over a
period not exceeding fifteen years, as more fully described in such Note. Mylan
has no other compensatory plan or arrangements resulting from the resignation,
retirement or other termination (including any termination or change in
responsibility following a change-in-control) of an executive officer's
employment with Mylan or its subsidiaries.
7
<PAGE>
EXECUTIVE COMPENSATION TABLES
Summary Compensation Table
The following table sets forth information regarding the compensation paid
by Mylan and its subsidiaries in the past three fiscal years to the Chief
Executive Officer and its four most highly compensated executive officers other
than the Chief Executive Officer (collectively, the "Named Executive Officers"):
<TABLE>
<S> <C> <C> <C> <C> <C>
Long-Term Compensation
Annual Compensation ------------------------
------------------ Options/ All Other
Fiscal Year Salary Bonus SARs(1) Compensation(2)
Name and Principal Position Ended March 31, ($) ($) # ($)
--------------------------- --------------- --------- ------- ------- -------
Milan Puskar, 2000 1,000,000 500,000 -0- 692,400
Chairman of the Board, C.E.O., 1999 1,000,000 500,000 -0- 686,000
President and Director 1998 1,000,000 500,000 100,000 681,500
Dana G. Barnett, 2000 200,000 -0- -0- 407,800
Executive Vice President and Director (3) 1999 200,000 -0- -0- 403,400
1998 200,000 -0- 80,000 402,400
Roderick P. Jackson, 2000 225,000 250,000 -0- 540,800
Senior Vice President 1999 225,000 250,000 -0- 85,600
1998 200,000 250,000 80,000 86,300
Louis J. DeBone, 2000 200,000 250,000 -0- 15,900
Senior Vice President 1999 175,000 175,000 -0- 85,600
1998 144,500 175,000 60,000 86,300
Patricia A. Sunseri, 2000 175,000 200,000 -0- 15,900
Vice President and Director 1999 175,000 175,000 -0- 85,600
1998 144,500 175,000 60,000 86,300
</TABLE>
(1) Mylan does not currently offer stock appreciation rights ("SARs") to its
employees.
(2) This column includes (i) Mylan's contributions to the Employees Profit
Sharing Plan and (ii) the amounts accrued by Mylan under the Salary
Continuation Plan described below. During fiscal 2000, contributions to the
Employees Profit Sharing Plan were made in the amount of $15,897 for each
of Mr. Puskar, Mr. Barnett, Mr. Jackson, Mr. DeBone and Mrs. Sunseri, and
amounts were accrued under the Salary Continuation Plan of $607,200,
$364,300 and $524,900 for Mr. Puskar, Mr. Barnett and Mr. Jackson,
respectively. Additionally, $69,300 and $27,600 of life insurance premiums
were paid by Mylan for Mr. Puskar and Mr. Barnett, respectively, pursuant
to split-dollar life insurance agreements with respective trusts. Neither
the executive officers nor their respective trusts have any interest in the
cash surrender value of the insurance policies subject to that agreement.
Under the Salary Continuation Plan approved by the Board of Directors,
Mylan entered into Retirement Benefit Agreements with various key
employees, including each of the Named Executive Officers. These agreements
provide for fixed annual payments to these executives over a 15-year
period, in the case of Mr. Puskar and Mr. Barnett, and over a 10-year
period, in the case of Mr. Jackson, Mr. DeBone and Mrs. Sunseri, commencing
upon their termination of employment with Mylan. Upon the death following
retirement or at the election of the executive, the aggregate amount of the
unpaid benefit is payable in a lump sum, discounted to present value at the
per annum rate of 7%.
8
<PAGE>
The annual benefits awarded to the Named Executive Officers are as follows:
Retirement Other than Retirement Due
Due to Disability to Disability
------------------ --------------
Milan Puskar............ $433,300 $500,000
Dana G. Barnett......... $260,000 $300,000
Roderick P. Jackson..... $100,000 $100,000*
Louis J. DeBone......... $100,000 $100,000*
Patricia A. Sunseri..... $100,000 $100,000*
*Or retirement following a change of control of Mylan.
If any of these executives dies prior to retirement, his or her
beneficiaries will receive (under life insurance policies purchased by
Mylan) lump sum payments; $1,645,000, in the case of Mr. Puskar,
$1,500,000, in the case of Mr. Barnett, and $1,250,000, in the case of Mr.
Jackson, Mr. DeBone and Mrs. Sunseri. In addition, if Mr. Puskar dies prior
to his retirement, Mylan will pay his beneficiaries the additional sum of
$1,600,000.
(3) The amounts for Mr. Barnett exclude payments made to Mr. Barnett by
Somerset Pharmaceuticals, Inc., in which Mylan owns a 50% interest and
operates as a joint-venture with another pharmaceutical company. Mr.
Barnett serves as Somerset Pharmaceuticals, Inc.'s Chairman and Chief
Executive Officer. In determining to include Mr. Barnett's compensation
information in this table, the Company considered his compensation in the
"All Other Compensation" column.
Option/SAR Grants in Fiscal 2000
Mylan did not award any options or SARs to any of the Named Executive
Officers in fiscal 2000.
Aggregated Option/SAR Exercises in Fiscal 2000 and Fiscal Year-End
Option/SAR Values
The following table sets forth information concerning the aggregate number
and value of options held by Named Executive Officers as of March 31, 2000.
Mylan does not currently offer SARs to its employees.
<TABLE>
<S> <C> <C> <C> <C>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Shares Options/SARs at Options/SARs at
Acquired Fiscal Year End(#) Fiscal Year End($)
on Value Exercisable/ Exercisable/
Name Exercise(#) Realized($) Unexercisable(1) Unexercisable(1)
--------- ------------ ------------ ---------------------
Milan Puskar 0 0 100,000/0 $ 1,028,100/0
Dana G. Barnett 0 0 230,000/0 $ 3,147,480/0
Roderick P. Jackson 0 0 230,000/0 $ 3,147,480/0
Louis J. DeBone 0 0 97,500/0 $ 1,198,110/0
Patricia A. Sunseri 0 0 60,000/0 $ 616,860/0
</TABLE>
9
<PAGE>
EMPLOYEE STOCK PURCHASE PLAN
[Proposal No. 2--Approve an Employee Stock Purchase Plan]
Shareholder Approval
The Board has approved, subject to shareholder approval, the Mylan Employee
Stock Purchase Plan (the "ESPP"). We are requesting your approval of the ESPP.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
---
Purpose of ESPP
The ESPP is intended to encourage investment in Mylan by its employees. The
Board believes that employee ownership of Mylan will provide additional
motivation to employees to endeavor to achieve success.
Eligibility
All full-time/employees of Mylan or any of its subsidiaries who work at
least 20 hours per week and have at least six months of continuous service are
eligible to participate in the ESPP.
Manner of Investment
Under this ESPP, employees may purchase Mylan's common stock through
payroll deductions of 1% to 10% of the employee's base compensation. The amounts
withheld will be accumulated and, at the end of each six month offering period,
will be used to purchase Mylan's common stock. The purchase price will be 85% of
the closing price of Mylan's common stock on the first or last day of each six
month offering period, whichever is lower. Employees may elect to participate in
the ESPP within 15 days prior to the beginning of each six month offering
period.
Tax Aspects
Employees will pay income tax on the amount of their salaries they have
withheld to purchase Mylan stock, as well as on dividends reinvested through the
ESPP.
MYLAN STOCK OWNED BY OFFICERS AND DIRECTORS
The following table sets forth information regarding the amount and nature
of common stock ownership by all directors and named executive officers, and all
directors and executive officers as a group as of June 1, 2000.
Name Shares Beneficially Owned(1)
Milan Puskar (2) 2,550,000 1.97%
Dana G. Barnett (3) 305,972 *
Laurence S. Delynn (4) 358,000 *
John C. Gaisford, M.D. (5) 72,877 *
Douglas J. Leech (6) 10,000 *
Patricia A. Sunseri (7) 508,750 *
C.B. Todd (8) 595,339 *
Louis J. DeBone (9) 112,500 *
Roderick P. Jackson (10) 253,500 *
---------------------
All directors and executive officers as a Group 5,035,757 3.89%
* Less than 1%.
(1) For purposes of this table, shares are considered "beneficially owned" if
the person directly or indirectly has the sole or shares power to
10
<PAGE>
vote or
direct the voting of the securities or the sole or shares power to dispose
of or direct the disposition of the securities. A person is also considered
to beneficially own shares that such person has the right to acquire within
60 days, and options exercisable within such period are preferred to herein
as "currently exercisable."
(2) The shares beneficially owned by Mr. Puskar include (i) 2,450,000 shares
held of record by him, and (ii) 100,000 shares issuable to him upon
exercise of options at an exercise prices ranging from $16.688 to $17.75.
(3) The shares beneficially owned by Mr. Barnett, include (i) 75,972 shares
held of record by him, and (ii) 230,000 shares issuable to him upon
exercise of options at exercise prices ranging from $12.00 to $17.75.
(4) The shares beneficially owned by Mr. DeLynn include (i) 265,500 shares held
of record by him, and (ii) 92,500 shares issuable to him upon exercise of
options at exercise prices ranging from $12.00 to $25.00.
(5) The shares beneficially owned by Dr. Gaisford include (i) 8,877 shares held
of record by him, and (ii) 64,000 shares issuable to him upon exercise of
options at exercise prices range from $14.875 to $25.00.
(6) The shares beneficially owned by Mr. Leech include (i) 2,500 shares held of
record by him, (ii) 7,500 shares issuable to him upon exercise of options
at an exercise price of $25.00.
(7) The shares beneficially owned by Mrs. Sunseri include (i) 448,750 shares
held of record by her, and (ii) 60,000 shares issuable to her upon exercise
of options at exercise prices ranging from $16.688 to $17.75.
(8) The shares beneficially owned by Mr. Todd include (i) 365,339 shares held
of record by him, and (ii) 230,000 shares issuable to him upon exercise of
options at exercise prices ranging from $12.00 to $17.75.
(9) The shares beneficially owned by Mr. DeBone include (i) 15,000 shares held
of record by him, and (ii) 97,500 shares issuable to him upon exercise of
options at exercise prices ranging from $12.00 to $17.75.
(10) The shares beneficially owned by Mr. Jackson include (i) 23,500 shares held
of record by him, and (ii) 230,000 shares issuable to him upon exercise of
options at exercise prices ranging from $12.00 to $17.75.
PERSONS OWNING MORE THAN FIVE PERCENT OF MYLAN STOCK
The following table sets forth information regarding the amount and nature
of common stock ownership by all persons known by management to beneficially own
5% or more of the common stock as of June 1, 2000. Mylan has no other classes of
capital stock outstanding.
Name and Address Shares Beneficially Owned
(1)
American Express Financial Advisors 13,569,293
IDS Tower 10
Minneapolis, MN 55440
(1) To the knowledge of Mylan, American Express Financial Advisors owns all of
these shares of record and holds the sole power to vote them.
APPOINTMENT OF DELOITTE & TOUCHE LLP
[Proposal No. 3--Approve Appointment of Deloitte & Touche LLP
as Independent Auditors for Fiscal 2001]
The Board of Directors seeks from the shareholders an indication of their
approval or disapproval of the Board's appointment of Deloitte & Touche LLP as
independent auditors for fiscal 2001.
Deloitte & Touche LLP served as the independent auditors of Mylan during
fiscal 2000, and no relationship exists other than the usual relationship
between independent public accountant and client.
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If the appointment of Deloitte & Touche LLP as independent auditors for
fiscal 2001 is not approved by the shareholders, the adverse vote will be
considered a direction to the Board of Directors to consider other auditors for
next year. However, because of the difficulty in making any substitution of
auditors so long after the beginning of the current year, the appointment for
fiscal 2001 will stand unless the Board finds other good reason for making a
change.
Representatives of Deloitte & Touche LLP will be available at the annual
meeting of shareholders to respond to questions.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
---
OTHER MATTERS
Matters raised at the Meeting not Included in this Statement
We do not know of any matters to be acted upon at the meeting other than
those discussed in this statement. If any other matter is presented, proxy
holders will vote on the matter in their discretion.
Section 16(a) Beneficial Ownership Reporting Compliance
Based upon a review of our records, all reports required to be filed
pursuant to Section 16(a) of the Exchange Act were filed on a timely basis.
Shareholder Proposals for the 2001 Annual Meeting
If you want to submit proposals for possible inclusion in Mylan's 2001
Proxy Statement, you must do so on or before February 23, 2001.
Solicitation
Mylan is soliciting this proxy on behalf of its Board of Directors. This
solicitation is being made by mail but also may be made by telephone or in
person.
Shareholder List
A shareholder list will be available for your examination during normal
business hours at Mylan's offices at 1030 Century Building, 130 Seventh Street,
Pittsburgh, PA 15222, at least 10 days prior to the annual meeting.
Revocability of Proxy
You may revoke the enclosed proxy by filing a written notice of revocation
with Mylan or by providing a later executed proxy.
Copies of Report
Upon written request to the undersigned Secretary (at the address specified
under "Shareholder List," above) by any shareholder whose proxy is solicited
hereby, Mylan will furnish a copy of its Annual Report on Form 10-K for the
fiscal year ended March 31, 2000 as filed with the Securities and Exchange
Commission, together with financial statements and schedules thereto, without
charge to the shareholder requesting same.
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