MYLAN LABORATORIES INC
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<TYPE>EX-10
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<FILENAME>0002.txt
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                            MYLAN LABORATORIES INC.

                        1997 INCENTIVE STOCK OPTION PLAN

                         (AS AMENDED THROUGH APRIL 2000)


<PAGE>





                             MYLAN LABORATORIES INC.

                        1997 INCENTIVE STOCK OPTION PLAN

1.       PLAN NAME

This Plan shall be known as the "MYLAN  LABORATORIES  INC. 1997 Incentive  Stock
Option Plan" (the "Plan").

2.       EFFECTIVE DATE

The  effective  date of the Plan shall be January 23, 1997;  provided,  however,
that if the shareholders of MYLAN  LABORATORIES INC. (the  "Corporation") do not
approve the Plan by January 22,  1998,  no Options (as defined in  paragraph  3)
granted under the Plan shall  constitute  Incentive Stock Options (as defined in
paragraph 5(c)).

3.       PURPOSE

The  purpose of this Plan is to provide a means  whereby  the  Corporation  may,
through the grant of options to purchase  Class A Common  Stock,  par value $.50
per  share  ("Common  Stock")  of  the  Corporation   ("Options")  to  employees
(including  officers  and  directors  who are also  employees)  and  nonemployee
consultants,  agents and advisors to attract,  retain and motivate these persons
to exert their best efforts on behalf of the Corporation  and its  subsidiaries.
Collectively, these persons are called "key employees."

4.       NUMBER OF SHARES AVAILABLE UNDER PLAN

Options may be granted by the Corporation  from time to time to key employees of
the  Corporation  and its  subsidiaries  to purchase an aggregate of Ten Million
(10,000,000)  shares  of  Common  Stock  of  the  Corporation  and  Ten  Million
(10,000,000)  shares of Common Stock shall be reserved for Options granted under
the Plan (subject to adjustment  as provided in paragraph  6(i)).  Shares issued
upon exercise of Options  granted under the Plan may be authorized  and unissued
shares or shares held by the Corporation in its treasury.  If any Option granted
under the Plan shall  terminate,  expire or be canceled  as to any  shares,  new
Options may thereafter be granted under the Plan covering those shares,  subject
to the limitations imposed under paragraph 5(a)(2).


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5.       ADMINISTRATION

The Plan shall be administered under the terms of this Section 5.

(a) STOCK OPTION  COMMITTEE.  Except as further provided in this paragraph 5(a),
the  Plan  shall  be  administered  by a Stock  Option  Committee  ("Committee")
consisting of at least two members of the Board of Directors of the  Corporation
who shall be appointed by, and serve at the pleasure of, the Board of Directors.
The composition of the Committee shall be controlled by the following provisions
of this paragraph 5(a).

(1) Each member of the Committee must be a  "non-employee  director"  within the
meaning  of Rule  16b-3,  as that Rule may be amended  from time to time  ("Rule
16b-3"),  under  the  Securities  Exchange  Act of 1934,  as  amended,  when the
Committee  is  acting  to grant  Options  to those  key  employees  who are also
directors or officers.  Those actions which require a Committee of  non-employee
directors include:

     (i)  Selecting the directors or officers to whom Options may be granted;

     (ii) Deciding or determining the timing,  price,  number or other terms and
          conditions  of,  or  shares  subject  to,  each  Option  made to a key
          employee who is also a director or officer; and

     (iii)Interpreting  the Plan or Option  agreements  with  regard to  Options
          granted to a director or officer.

An officer or director  who also has an  employment  status  described in clause
(i),  (ii) or (iii) of  paragraph  5(a)(2),  shall  also be limited to a maximum
number of Options under the Plan as provided under paragraph 5(a)(3).

         (2) Each member of the Committee must be an "outside  director"  within
the meaning of Regulation  ss.1.162-27 (e)(3), as that Regulation may be amended
from time to time (the  "Regulation"),  under the Internal Revenue Code of 1986,
as amended (the "Code"),  when the Committee is acting to grant Options to those
key employees who have the following employment status with the Corporation:

     (i)  The chief  executive  officer  of the  corporation  or the  individual
          acting in that capacity;

     (ii) One of the four  highest  compensated  officers  (other than the chief
          executive officer) of the Corporation; or

     (iii)In the  judgment  of the  Board of  Directors,  is  deemed  reasonably
          likely to become an employee  described  in clause (i) or (ii) of this
          paragraph  5(a)(2)  within  the  exercise  period of any  contemplated
          option.

         Those actions which  require a Committee of outside  directors  include
the same actions as is described in the immediately  preceding  paragraph except
that the  employment  relationships  described in clauses (i), (ii) and (iii) of
this paragraph  5(a)(2) shall be  substituted  for the references to director or
officer. In addition, the provisions of paragraph 5(a)(3) shall apply.

         If an individual  who is being  considered for a grant of Options is an
officer or director and also has an employment  status  described in clause (i),
(ii) or (iii) of this  paragraph  5(a)(2),  the members of the  Committee  shall
consist  of  whichever  of  the  following  director   categories  is  the  more
restrictive, non-employee directors as defined in Section 5(a)(1), or of outside
directors as defined in this Section 5(a)(2).

         (3) In addition to any other limitation,  the Committee shall not award
to any  employee  described in clause (i),  (ii) or (iii) of  paragraph  5(a)(2)
Options  in any  calendar  year to  purchase  more than three  hundred  thousand
(300,000) shares of Common Stock,  plus any amount of shares that were available
within this limit in any prior year for which Options were not granted. Further,
any Options  awarded to such an employee  which are  thereafter  canceled  shall
continue to count against the maximum  number of Options which may be awarded to
that employee,  and any Option of such an employee which is later repriced shall
be deemed to be the  cancellation  of the original Option and the grant of a new
Option for purposes determining the number of Options awarded to that employee.

         (b) COMMITTEE  ACTION. A majority of the members of the Committee shall
constitute a quorum,  and the action (1) of a majority of the members present at
a meeting  at which a quorum is  present  or (2)  authorized  in  writing by all
members,  shall be the  action of the  Committee.  A member  participating  in a
meeting by telephone or similar communications equipment shall be deemed present
for this purpose if the member or members who are present in person can hear him
and he can hear them.

         (c) AUTHORITY OF THE COMMITTEE. The Committee shall have the power: (1)
to determine  and designate in its absolute  discretion  from time to time those
employees of the Corporation, its subsidiaries,  independent agents, consultants
and  attorneys  who by reason of the nature of their  duties,  their present and
potential contributions to the success of the Corporation and other factors, who
are eligible to  participate  in the Plan and to whom Options are to be granted;
provided,  however, no Option shall be granted after January 23, 2007, the tenth
(10th)  anniversary of the original  adoption date of the Plan; (2) to authorize
the granting of (i) Options which qualify as Incentive  Stock Options within the
meaning of Code  Section 422  ("Incentive  Stock  Option");  provided  that only
employees  of the  Corporation  may be granted  Incentive  Stock  Options,  (ii)
Options  which do not  qualify  under  Code  Section  422  ("Nonqualified  Stock
Option");  provided  that only  Nonqualified  Stock  Options  may be  granted to
persons  who are not  employees,  but who are  otherwise  eligible  for grant of
options;  (3) to determine the number of shares subject to each Option,  subject
to paragraph  5(a);  (4) to determine the time or times and the manner when each
Option shall be exercisable and the duration of the exercise period.

         The Committee may interpret the Plan, prescribe,  amend and rescind any
rules and  regulations  necessary or appropriate for the  administration  of the
Plan and make other  determinations  and take other action as it deems necessary
or advisable.  Without  limiting the  generality  of the foregoing  sentence the
Committee may, in its discretion,  treat all or any portion of any period during
which an  Optionee  is on  military  or an  approved  leave of absence  from the
Corporation as a period of employment of the Optionee by the Corporation, as the
case  may be,  for the  purpose  of  accrual  of  rights  under  an  Option.  An
interpretation,  determination  or other  action made or taken by the  Committee
shall be final, binding and conclusive.

         (d) INDEMNIFICATION OF COMMITTEE. In addition to other rights that they
may have as  Directors  or as  members  of the  Committee,  the  members  of the
Committee  shall  be  indemnified  by the  Corporation  against  the  reasonable
expenses,   including  attorney's  fees  actually  and  reasonably  incurred  in
connection with the defense of any action, suit or proceeding,  or in connection
with any appeal  therein,  to which they or any of them may be a party by reason
of any action  taken or failure to act under or in  connection  with the Plan or
any  Option  granted  thereunder,  and  against  all  amounts  paid  by  them in
settlement  thereof or paid by them in  satisfaction  of a judgment  in any such
action,  suit or proceeding,  except in relation to matters as to which it shall
be adjudged in the action, suit or proceeding that the Committee member's action
or failure to act constituted self-dealing,  willful misconduct or recklessness;
provided that within sixty (60) days after  institution  of any action,  suit or
proceeding  a  Committee  member  shall in  writing  offer the  Corporation  the
opportunity, at its own expense, to handle and defend the same.

6.       TERMS AND CONDITIONS

Each Option granted under the Plan shall be evidenced by an agreement, in a form
approved by the  Committee,  which shall be subject to the  following  expressed
terms and conditions and to other terms and conditions as the Committee may deem
appropriate,  including  those  imposed by Section 8 following  amendment of the
Plan requiring shareholder approval.

         (a) OPTION PERIOD.  Each Option  agreement shall specify the period for
which the Option  hereunder is granted  (which in no event shall exceed ten (10)
years  from the date of the  grant of the  Option)  and shall  provide  that the
Option shall expire at the end of that period.

         (b) OPTION PRICE. The Option price per share shall be determined by the
Committee at the time any Option is granted, and shall not be less than the fair
market  value  (but in no event  less than the par  value if any) of the  Common
Stock of the Corporation on the date the Option is granted, as determined by the
Committee.

         (c) AGGREGATE  OWNERSHIP AND EXERCISE  LIMITATIONS.  The aggregate fair
market  value  (determined  at the time the Option is granted) of the stock with
respect to which  Incentive  Stock Options are exercisable for the first time by
an Optionee during any calendar year (under all plans of the Corporation and its
subsidiaries and parents) shall not exceed $100,000.

         (d)  EXERCISE  OF  OPTION.  Subject in each case to the  provisions  of
paragraphs  (a),  (b),  (c),  (e) and (f) of this  Section  6, any Option may be
exercised,  to the extent  exercisable by its terms, at the time or times as may
be determined by the Committee at the time of grant;  subject,  however,  to the
following  limitations.  No portion of an Option  granted to an  employee of the
Corporation or its  subsidiaries  shall be  exercisable  unless the Optionee has
been  employed  by  the  Corporation  or  its  subsidiaries   until  the  second
anniversary  of the  date  of  the  grant  of the  Option.  Between  the  second
anniversary and the third anniversary of the date of the grant of the Option, if
the  Optionee is still  employed by the  Corporation  or its  subsidiaries,  the
Optionee may exercise up to twenty-five percent (25%) of the Option. Between the
third  anniversary  and the fourth  anniversary  of the date of the grant of the
Option,   if  the  Optionee  is  still  employed  by  the   Corporation  or  its
subsidiaries,  the Optionee may exercise  cumulatively up to fifty percent (50%)
of the Option.  On and after the fourth  anniversary of the date of the grant of
the Option (but in no event longer than the period provided in paragraph  6(a)),
if the Optionee is still employed by the  Corporation or its  subsidiaries,  the
Optionee  may  exercise  cumulatively  up to one hundred  percent  (100%) of the
Option. The Committee, in its sole discretion,  however, may reduce or eliminate
the limitations provided in the preceding four sentences ("Vesting Limitations")
for  Options  granted to any  employee  having at least two years of  continuous
service with the Corporation or its  subsidiaries.  Notwithstanding  the Vesting
Limitations,  if an Optionee's employment is terminated due to death,  Permanent
Disability  (as defined in paragraph  6(f)),  or retirement as determined in the
sole and  absolute  discretion  of the  Committee  ("Retirement"),  one  hundred
percent (100%) of the Optionee's  Option may be exercised in accordance with the
provisions of paragraph 6(f).  Vesting provisions  substantially  similar to the
Vesting  Limitations  may be imposed  upon any Option  granted to a  nonemployee
Optionee at the sole and absolute discretion of the Committee.

         (e) PAYMENT OF PURCHASE  PRICE AND TAXES UPON  EXERCISE.  The  purchase
price  of  Common  Stock  as to  which an  Option  shall  be  exercised  and any
employment taxes arising  therefrom shall be paid to the Corporation at the time
of  exercise in cash or, at the  discretion  of the  Committee,  in stock of the
Corporation;  payment in stock of the Corporation  shall include the right of an
Optionee to elect to receive the shares of Common Stock  issuable  upon exercise
of an Option  reduced  by that  number of shares of Common  Stock  necessary  to
satisfy the purchase price and/or the minimum statutory withholding requirements
for employment taxes (hereinafter "Net Exercise").


<PAGE>


         (f) EXERCISE IN THE EVENT OF DEATH OR TERMINATION OF EMPLOYMENT. (1) If
any Optionee who is an employee of the Corporation or its subsidiaries shall die
(i) while an  employee of the  Corporation  or its  subsidiaries  or (ii) within
three  (3)  months  after  termination  of the  Optionee's  employment  with the
Corporation or its subsidiaries  because the Optionee is permanently and totally
disabled (within the meaning of Code Section 22(e)(3)) ("Permanent  Disability")
or because of  Retirement,  any Option of the  Optionee  may be exercised by the
person or persons to whom the Optionee's rights under the Option pass by will or
applicable law or if no person has that right,  by the  Optionee's  executors or
administrators, at any time, or from time to time, within one (1) year after the
date of the death,  but in no event later than the expiration  date specified in
paragraph  (a) of  this  Section  6.  (2)  If an  Optionee's  employment  by the
Corporation or its subsidiaries shall terminate because of Permanent Disability,
the Optionee  may exercise any Option of the Optionee at any time,  or from time
to time,  within one (1) year of the date of the termination of employment,  but
in no event later than the  expiration  date  specified in paragraph (a) of this
Section  6.  (3)  If  an  Optionee's   employment  by  the  Corporation  or  its
subsidiaries  shall terminate  because of indefinite  lay-off,  the Optionee may
exercise  any Option of the  Optionee  to the extent  that the  Optionee  may be
entitled to do so at the date of the  indefinite  lay-off,  at any time, or from
time to  time,  within  three  (3)  months  of the  date of the  termination  of
employment,  but in no  event  later  than  the  expiration  date  specified  in
paragraph  (a) of  this  Section  6.  (4)  If an  Optionee's  employment  by the
Corporation or its  subsidiaries  shall  terminate  because of  Retirement,  any
Option of the Optionee  may be  exercised  by the Optionee at any time,  or from
time to  time,  within  three  (3)  months  of the  date of the  termination  of
employment,  but in no  event  later  than  the  expiration  date  specified  in
paragraph  (a) of this  Section 6. (5) Except as  provided by (1) through (4) of
this  paragraph  (f) of Section 6, if an  Optionee's  employment  shall cease by
reason of a voluntary or involuntary termination,  either with or without cause,
any Option of the Optionee shall  terminate  immediately.  (6) If an Optionee is
not an employee of the  Corporation  or its  subsidiaries  when the  Optionee is
granted an Option,  that Option shall  terminate  one (1) year after the date of
the Optionee's  death,  but in no event later than the expiration date specified
in paragraph (a) of this Section 6. If such an Optionee  dies, any Option of the
Optionee may be exercised by the person to whom the Optionee's  rights under the
Option pass by will or  applicable  law or if no person has that  right,  by the
Optionee's executors or administrators, at any time, or from time to time within
one (1)  year  after  the date of the  death,  but in no  event  later  than the
expiration  date  specified in paragraph (a) of this Section 6.  Notwithstanding
the foregoing, for Options granted on or after January 26, 2000, the Options, to
the extent that the Options  have vested on the date of any  termination  of the
employment of the Optionee by the Corporation, shall be exercisable at any time,
or from time to time, but in no event later than the  expiration  date specified
in paragraph (a) of Section 4, so long as the  employment of the Optionee by the
Corporation has not been  voluntarily  terminated by the Optionee and so long as
that employment was not terminated by the Corporation for cause. Options held by
Optionees who voluntarily terminate employment or whose employment is terminated
for cause shall in any event expire on the Optionee's last day of employment.


<PAGE>


         (g)  PERMITTED  TRANSFERS.  Options  granted  under  the Plan  shall be
transferrable by will or by the laws of descent and  distribution.  In addition,
Nonqualified  Stock Options granted under the Plan can be transferred during the
lifetime of the Optionee only if all of the following  conditions are satisfied:
(1) the Stock Option  Committee  has approved the proposed  transfer in writing;
(2) the proposed transfer is to be made without consideration;  (3) the proposed
transferee is a member or members of the  Optionee's  immediate  family (i.e., a
child, or children,  a grandchild or  grandchildren,  or the Optionee's  spouse)
and/or to a trust  established for the benefit of an immediate  family member or
members,  or a family limited  partnership  which  includes the Optionee  and/or
members of the  Optionee's  immediate  family,  or a trust  established  for the
benefit of the  Optionee,  and/or an  immediate  family  member or members and a
charity  exempt from taxation  under Internal  Revenue Code  501(c)(3);  and (4)
after transfer,  each option transferred by the Optionee shall remain subject to
the provisions of the Plan under which it was granted.

         (h) INVESTMENT REPRESENTATION. Each Option agreement shall provide that
upon demand by the Committee, the Optionee (or any person acting under paragraph
6(f)) shall deliver a written representation to the Committee at the time of any
exercise of an Option that the shares to be acquired upon the exercise are to be
acquired for  investment  and not for resale or with a view to the  distribution
thereof.  Upon demand,  delivery of the representation  prior to the delivery of
any shares to be issued upon  exercise of an Option and prior to the  expiration
of the Option period shall be a condition precedent to the right of the Optionee
or other person to purchase any shares.

         (i) ADJUSTMENTS.  In the event of any change in the Common Stock of the
Corporation by reason of any stock dividend,  recapitalization,  reorganization,
merger, consolidation,  split-up,  combination, or exchange of shares, or rights
offering to purchase  Common  Stock at a price  substantially  below fair market
value, or any similar change  affecting the Common Stock, the number and kind of
shares which  thereafter  may be optioned and sold under the Plan and the number
and kind of shares  subject to option in outstanding  Option  agreements and the
purchase price per share thereof shall be appropriately adjusted consistent with
the  change  in a  manner  as  the  Committee  may  deem  equitable  to  prevent
substantial  dilution or enlargement of the rights granted to, or available for,
participants in the Plan.

         (j) INCENTIVE STOCK OPTIONS.  Each Option  agreement which provides for
the grant of an Incentive  Stock Option to an employee  shall  contain terms and
provisions  as the Committee may determine to be necessary or desirable in order
to qualify the Option as an Incentive  Stock  Option  within the meaning of Code
Section 422, or successor thereto and to meet the requirement of Rule 16b-3.

         (k) NO RIGHTS AS  SHAREHOLDERS.  No  Optionee  shall  have any  rights
as a shareholder with respect to any shares subject to an Option prior to the
date of issuance to the Optionee of a certificate or certificates for the
shares.

         (l) NO RIGHTS TO CONTINUED EMPLOYMENT.  The Plan and any Option granted
under the Plan  shall not confer  upon any  Optionee  any right with  respect to
continuance  of  employment  by  the   Corporation  or  any  subsidiary  of  the
Corporation,  nor  shall  they  interfere  in any  way  with  the  right  of the
Corporation to terminate the Optionee's employment at any time.

7.       COMPLIANCE WITH OTHER LAWS AND REGULATIONS

The Plan,  the grant and exercise of Options  thereunder,  and the obligation of
the  Corporation to sell and deliver  shares under Options,  shall be subject to
all applicable  Federal and state laws,  rules and  regulations  and to required
approvals of any government or regulatory  agency.  The Corporation shall not be
required to issue or deliver any  certificates  for shares of Common Stock prior
to the completion of any  registration or  qualification of the shares under any
Federal or state law, or any ruling or regulation of any  government  body which
the  Corporation  shall,  in its sole  discretion,  determine to be necessary or
advisable.

8.       AMENDMENT AND DISCONTINUANCE

The Board of Directors of the Corporation  may from time to time amend,  suspend
or discontinue the Plan;  provided,  however,  that subject to the provisions of
paragraph 6(i) or the approval of the  Corporation's  shareholders  no action of
the Board of Directors  or of the  Committee  may: (a) extend the period  during
which  Options may be granted as provided in  paragraph  4(c);  (b) increase the
number of shares  reserved  for  Options  pursuant  to Section 4; (c) permit the
granting  of any  Option  at an  Option  price  less  than  that  determined  in
accordance  with paragraph 6(b); (d) permit the granting of Options which expire
beyond the period  provided for in paragraph  6(a); (e) materially  increase the
benefits  accruing  to  participants  in the Plan;  (f)  materially  modify  the
requirements  for  eligibility for  participation  in the Plan; or (g) otherwise
cause Rule  16b-3 or the  requirements  for  Incentive  Stock  Options to become
inapplicable.  Without the  written  consent of an  Optionee,  no  amendment  or
suspension of the Plan shall diminish or impair any Option previously granted to
the Optionee under the Plan. Notwithstanding any other provision of the Plan, if
an   amendment  to  the  Plan   requires  the  approval  of  the   Corporation's
shareholders,  every Option granted after that amendment and before  approval of
the  shareholders  (and the Optionee's or other  person's  rights in every share
issued  upon an  exercise  of an  Option  granted  during  that  time)  shall be
conditional and contingent upon the approval of the Corporation's  shareholders.
Further,  those  Options (and shares  issued under those  options)  shall not be
subject to sale or transfer unless and until  shareholder  approval is obtained.
The Committee shall implement  procedures for compliance with these restrictions
when applicable.

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