<PAGE>
EXHIBIT 10.15
KING PHARMACEUTICALS, INC.
NON-EMPLOYEE DIRECTORS' DEFERRED COMPENSATION PLAN
PREAMBLE. The King Pharmaceuticals, Inc.,
Non-Employee Directors' Deferred
Compensation Plan (the "Plan") is an
unfunded, non-qualified deferred
compensation arrangement for non-employee
members of the Board of Directors of
King Pharmaceuticals, Inc. (the "Company").
Under the Plan, each Eligible
Director (defined below) may elect to defer
payment of part or all of his
compensation for serving as a Director by
purchasing hypothetical units of the
Company's common stock ("Phantom Stock
Units" or "Units") or investing in a
hypothetical money market fund ("Money
Market Account") as described in this
Plan.
SECTION 1. Definitions.
SECTION 1.1. "Account" means the Phantom Stock Unit Account or
Money
Market Account established by the Company
for each Participant, the performance
of which shall be measured by reference to
the Market Value of Common Stock in
the case of the Phantom Stock Unit Account
or the Schwab Domestic Money Market
Fund in the case of the Money Market
Account. The maintenance of individual
Accounts is for bookkeeping purposes
only.
SECTION 1.2. "Board" means the Board of Directors of the
Company.
SECTION 1.3. "Change in Control" means a change in control of
the
Company of a nature that would be required
to be reported (assuming such event
has not been "previously reported") in
response to Item 1(a) of a Current Report
on Form 8-K, as in effect on December 31,
2002, pursuant to Section 13 or 15(d)
of the Exchange Act; provided that, without
limitation, a Change in Control
shall be deemed to have occurred at such
time as (i) any "person" within the
meaning of Section 14(d) of the Exchange
Act, other than the Company, a
subsidiary of the Company, or any employee
benefit plan(s) sponsored by the
Company or any subsidiary of the Company,
is or has become the "beneficial
owner," as defined in Rule 13d-3 under the
Exchange Act, directly or indirectly,
of 25% or more of the combined voting power
of the outstanding securities of the
Company ordinarily having the right to vote
at the election of directors;
provided, however, that the following will
not constitute a Change in Control:
any acquisition by any corporation if,
immediately following such acquisition,
more than 75% of the outstanding securities
of the acquiring corporation
ordinarily having the right to vote in the
election of directors is beneficially
owned by all or substantially all of those
persons, who, immediately prior to
such acquisition, were the beneficial
owners of the outstanding securities of
the Company ordinarily having the right to
vote in the election of directors; or
(ii) individuals who constitute the Board
on January 1, 2003 (the "Incumbent
Board") have ceased for any reasons to
constitute at least a majority thereof,
provided that: any person becoming a
director subsequent to January 1, 2003
whose election, or nomination for election
by the Company's shareholders, was
approved by a vote of at least three
fourths (3/4) of the directors comprising
the Incumbent Board (either by a specific
vote or by approval of the proxy
statement of the Company in which such
person is named as a nominee for director
without objection to such nomination) shall
be, for purposes of the Plan,
considered as though such person were a
member of the Incumbent Board; or (iii)
upon approval by the Company's shareholders
of a reorganization, merger or
consolidation, other than one with respect
to which all or substantially all of
those persons who
1
<PAGE>
were the beneficial owners, immediately
prior to such reorganization, merger or
consolidation, of outstanding securities of
the Company ordinarily having the
right to vote in the election of directors
own, immediately after such
transaction, more than 75% of the
outstanding securities of the resulting
corporation ordinarily having the right to
vote in the election of directors; or
(iv) upon approval by the Company's
shareholders of a complete liquidation and
dissolution of the Company or the sale or
other disposition of all or
substantially all of the assets of the
Company other than to a subsidiary of the
Company. Notwithstanding the occurrence of
any of the foregoing, the Board may
determine, if it deems it to be in the best
interest of the Company, that an
event or events otherwise constituting a
Change in Control shall not be so
considered. Such determination shall be
effective only if it is made by the
Board prior to the occurrence of an event
that otherwise would be or probably
will lead to a Change in Control or after
such event if made by the Board, a
majority of which is composed of directors
who were members of the Board
immediately prior to the event that
otherwise would be or probably will lead to
a Change in Control.
SECTION 1.4. "Committee" means the Compensation Committee of the
Board.
SECTION 1.5. "Common Stock" means the common stock, no par value,
of
the Company.
SECTION 1.6. "Deferrable Amount" means an amount equal to the sum
of
the Eligible Director's cash compensation,
including meeting fees and any other
compensation otherwise payable in cash
arising from service on the Board.
SECTION 1.7. "Eligible Director" means a member of the Board of
the
Company who is not an employee of the
Company or any subsidiary of the Company.
SECTION 1.8. "Enrollment Period" means the period designated by
the
Committee each year for participation in
the Plan the succeeding year; provided
however, that such period will end on or
before December 31 of each year or as
provided in Section 3.1 hereof.
SECTION 1.9. "Exchange Act" means the Securities Exchange Act of
1934,
as amended.
SECTION 1.10. "Market Value" means the closing price of the shares
of
Common Stock on the New York Stock Exchange
on the day on which such value is to
be determined or, if no such shares were
traded on such day, said closing price
on the next business day on which such
shares are traded; provided, however,
that if at any relevant time the shares of
Common Stock are not traded on the
New York Stock Exchange, then "Market
Value" shall be determined by reference to
the closing price of the shares of Common
Stock on another national securities
exchange, if applicable, or if the shares
are not traded on an exchange but are
traded in the over-the-counter market, by
reference to the last sale price or
the closing "asked" price of the shares in
the over-the-counter market as
reported by the NASDAQ Stock Market or
other national quotation service.
SECTION 1.11. "Participant" means an Eligible Director who elects
for
one or more years to defer compensation
pursuant to this Plan.
2
<PAGE>
SECTION 1.12. "Valuation Date" means each business day.
SECTION 2. Deferral of Compensation. An
Eligible Director may elect to defer 0%,
25%, 50%, 75% or 100% of his Deferrable
Amount to his Account. No deferral shall
be made of any compensation payable after
termination of the Eligible Director's
service on the Board.
SECTION 3. Time of Election of
Deferral.
SECTION 3.1. Enrollment Period. An Eligible Director who wishes
to
defer compensation must irrevocably elect
to do so during the applicable
Enrollment Period. The Enrollment Period
shall end on or before December 31 of
the calendar year immediately preceding the
year in which the Eligible
Director's applicable Deferrable Amount
will be earned. Elections shall be made
annually. Notwithstanding the foregoing,
the Enrollment Period for participation
in the Plan for 2003 shall end on March 31,
2003.
SECTION 3.2. Year of Initial Service of an Eligible Director.
An
Eligible Director who is elected as a
member of the Board may begin
participation in the Plan contemporaneously
with the beginning of his service by
completing an election form.
SECTION 4. Hypothetical Accounts.
SECTION 4.1 Phantom Stock Unit Account. Amounts in a
Participant's
Phantom Stock Unit Account are
hypothetically invested in Units. Amounts
deferred into an Account are recorded as
Units, and fractions thereof, with one
Unit equating to a single share of Common
Stock. Thus, the value of one Unit
shall be the Market Value of a single share
of Common Stock. The use of Units is
merely a bookkeeping convenience; the Units
are not actual shares of Common
Stock. The Company will not reserve or
otherwise set aside any Common Stock for
or to any Account.
SECTION 4.2 Money Market Account. Amounts in a Money Market
Account
replicate the performance of Schwab
Domestic Money Market Fund with respect to
investment performance (i.e. increases or
decreases in value in the same amounts
and at the same time as the underlying
actual mutual fund or other actual
investment vehicle). The Participant has no
real or beneficial ownership in the
Schwab Domestic Money Market Fund.
SECTION 5. Deferrals and Crediting Amounts
to Accounts.
SECTION
5.1. Manner of Electing Deferral. An Eligible Director may
elect to defer compensation by executing
and returning to the Committee a
deferred compensation form provided by the
Company indicating the Deferrable
Amount. An election to defer shall be
irrevocable, and not modifiable, following
the end of the applicable Enrollment
Period.
SECTION 5.2. Crediting of Amounts to the Account. Amounts to be
deferred shall be credited to the
Participant's Account as of the last day of
the quarter which is a trading day for the
common stock of the Company on the
New York Stock Exchange.
3
<PAGE>
SECTION 6. Deferral Period. Subject to
Sections 9, 10, and 17 hereof, the
compensation which a Participant elects to
defer under this Plan shall be
deferred until the Participant ceases to
serve as a member of the Board. Any
such election shall be made during the
applicable Enrollment Period on the
deferred compensation form referenced in
Section 5 above. The payment of a
Participant's Account shall be governed by
Sections 8, 9, 10 and 17, as
applicable.
SECTION 7. Investment in the Account.
SECTION 7.1. Election into the Phantom Stock Unit Account. A
Participant's Phantom Stock Unit Account
shall be credited, as of the date
described in Section 5.2, with that number
of Units, and fractions thereof,
obtained by dividing the Deferred Amount
allocated to the Phantom Stock Unit
Account by the Market Value of the Common
Stock as of such date.
SECTION 7.2. Transfers Between Accounts. A Participant may direct
that
all or any portion, designated as a whole
dollar amount, of the existing balance
of one of his Accounts be transferred to
his other Account, effective as of (i)
the date such ele
