KING PHARMACEUTICALS,
INC.
LONG-TERM PERFORMANCE UNIT AWARD
CERTIFICATE
(THREE YEAR PERFORMANCE CYCLE)
This Certificate,
when executed by a duly authorized officer of King Pharmaceuticals,
Inc. (the “Company”), evidences the grant by the
Company to the Participant named below of a Long-Term Performance
Unit Award.
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Name of
Participant:
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[Participant
Name]
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Social Security
Number of Participant:
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[Social
Security Number]
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Date of
Grant:
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[Grant
Date]
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Type of
Grant:
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[Grant
Type]
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Target Number
of
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Long-Term
Performance Units:
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[Number of
Shares Granted]
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Performance
Cycle:
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The Performance
Cycle shall begin on January 1, 2009 and end on December 31,
2011.
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Vesting
Date:
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December 31, 2011, except as otherwise set
forth in the Long-Term Performance Unit Award Agreement.
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Date of
Payment:
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Between January
1 and March 15, 2011, except as otherwise set forth in the
Long-Term Performance Unit Award Agreement.
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Performance
Goals:
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The number of
Long-Term Performance Units earned by the Participant
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shall be
determined in accordance with the following grid. If the actual
performance results fall between two of the categories listed
below, straight-line interpolation will be used to determine the
amount earned. Total Shareholder Return shall be calculated in the
manner set forth in Exhibit 1 hereto and compared to the peer
group identified in Exhibit 1.
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King Pharmaceuticals, Inc.
Percentile in
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Total Shareholder Return vs.
companies included in the Dow
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Payout-Percent of
Target
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Jones U.S. Pharmaceuticals
Index
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Long-Term Performance
Units
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During the Performance
Cycle
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Granted
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200%
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200%
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100%
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50%
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0% (no payout)
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This Long-Term
Performance Unit Award is subject to and governed by the terms of
this Long-Term Performance Unit Award Certificate, the Long-Term
Performance Unit Award Agreement attached hereto and incorporated
by reference herein and the Company’s Incentive
Plan.
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KING
PHARMACEUTICALS, INC.
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By:
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Name:
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Brian A.
Markison
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Title:
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President and
Chief Executive Officer
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2
LONG-TERM PERFORMANCE UNIT AWARD
AGREEMENT
(THREE YEAR PERFORMANCE CYCLE)
PURSUANT TO THE KING PHARMACEUTICALS, INC.
INCENTIVE PLAN
This Long-Term
Performance Unit Award Agreement (the “Agreement”) is
made as of the date set forth on the Long-Term Performance Unit
Award Certificate attached hereto (the “Grant Date”) by
King Pharmaceuticals, Inc. (the “Company”) and the
individual identified on the Long-Term Performance Unit Award
Certificate (the “Participant”) to grant a Long-Term
Performance Unit Award by the Company to the Participant on the
terms and conditions set forth below:
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1.
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LONG-TERM PERFORMANCE UNIT
AWARD.
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As of the Grant
Date, subject to the terms, conditions and restrictions set forth
herein, the Company grants and issues to the Participant a
Long-Term Performance Unit Award for such number of Long-Term
Performance Units as indicated on the Long-Term Performance Unit
Award Certificate (the “Long-Term Performance Units”)
which may be earned during the Performance Cycle as indicated on
the Long-Term Performance Unit Award Certificate if the Performance
Goals set forth on the Long-Term Performance Unit Award Certificate
are met.
The Long-Term
Performance Unit Award shall be granted pursuant to and (except as
specifically set forth herein) subject in all respects to the
applicable provisions of the King Pharmaceuticals, Inc. Incentive
Plan (“Plan”), which are incorporated herein by
reference. Terms not otherwise defined in this Agreement have the
meanings ascribed to them in the Plan.
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3.
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CALCULATION OF EARNED LONG-TERM
PERFORMANCE UNITS.
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The Committee, in
its sole discretion, will determine the number of Long-Term
Performance Units earned by the Participant at the end of the
Performance Cycle based on the attainment of the Performance Goals
as set forth on the Long-Term Performance Unit Award Certificate.
The number of shares of Common Stock ultimately earned and paid, if
any, for such Long-Term Performance Units will be determined based
on the number of Long-Term Performance Units actually earned and
vested at the end of the Performance Cycle as set forth in
Section 4 below, with one share of Common Stock granted to the
Participant for every earned and vested Long-Term Performance
Unit.
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4.
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VESTING OF LONG-TERM PERFORMANCE
UNITS.
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Long-Term
Performance Units earned will vest as set forth below:
(a) Provided
the Participant has continued employment through the end of the
Performance Cycle, one hundred percent (100%) of the earned
Long-Term Performance Units will vest on the last day of the
Performance Cycle as set forth in the Long-Term Performance Unit
Award Certificate; or
1
(b) In
the event of the Participant’s Separation from Service by
reason of death, Disability, Approved Retirement, Cause or
resignation during the Performance Cycle, the vesting, forfeiture
and payment of Long-Term Performance Units shall be determined
according to Section 9.2 and Section 13.5 of the Plan, which
requires that all payments comply with Section 409A of the
Code. The portion of any Long-Term Performance Units which vest
upon one of the events discussed above pursuant to Section 9.2
of the Plan shall be paid to the Participant as soon as reasonably
practicable, with the payment date determined by the Company in its
sole discretion. In the case of Approved Retirement, the payment
due to the Participant under Section 9.2(c)(iii) shall be
calculated as if the target performance for each Long-Term
Performance Unit had, in fact, been achieved.
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5.
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FORM AND TIMING OF
PAYMENT.
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All payments of
vested Long-Term Performance Units pursuant to this Agreement will
be made in the form of shares of Common Stock. Except as otherwise
provided in this Agreement, payment will be made by the Date of
Payment set forth in the Long-Term Performance Unit Award
Certificate; provided, however, if, the Participant is a
“specified employee” (as defined under
Section 409A of the Code) then a payment due upon his or her
Separation from Service, if required by Section 409A of the
Code, will be made six months after the date of such Separation
from Service.
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6.
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VOTING AND DIVIDEND
RIGHTS.
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Except as
specifically set forth in this Agreement, the Participant shall not
have voting or any other rights as a shareholder of the Company
with respect to Long-Term Performance Units. The Participant will
obtain full voting and other rights as a shareholder of the Company
upon the payment of the Long-Term Performance Units in shares of
Common Stock as provided in Section 5 above.
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7.
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ADDITIONAL
AGREEMENTS.
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(a)
Tax Matters . The Long-Term Performance Units granted are
subject to appropriate income tax withholding and other deductions
required by
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