KING PHARMACEUTICALS,
INC.
This Certificate,
when executed by a duly authorized officer of King Pharmaceuticals,
Inc. (the “Company”), evidences the grant to the
Participant named below of an Option to purchase shares of the
Common Stock of the Company.
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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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Maximum Number
of Shares for which this Option is exercisable:
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[Number of
Shares Granted]
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Exercise
(purchase) price per share:
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[Grant
Price]
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7.
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Vesting
Schedule: This Option shall become exercisable (and the Shares
issued upon exercise
shall be vested) as follows:
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On or after the
first anniversary of the date of grant, up to 33% of the
Shares
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On or
after the second anniversary of the date of grant, an additional
33% of the Shares
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On or
after the third anniversary of the date of grant, an additional 34%
of the Shares
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The number of
shares included in the first two tranches shall be rounded down to
the nearest whole number, while the number of shares included in
the third and final tranche shall be the remaining unvested balance
of the Shares.
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This Option is
subject to and governed by the terms of this Option Certificate,
the Option 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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1
KING PHARMACEUTICALS,
INC.
NONSTATUTORY STOCK OPTION
AGREEMENT
AGREEMENT made as
of the Date of Grant set forth on the Option Certificate attached
hereto, between King Pharmaceuticals, Inc. (the
“Company”), a Tennessee corporation having a principal
place of business at 501 Fifth Street, Bristol, Tennessee 37620,
and the individual identified on the Option Certificate (the
“Participant”).
WHEREAS, the
Company desires to grant to the Participant an Option to purchase
shares of its common stock, no par value per share (the
“Shares”), under and for the purposes set forth in the
Company’s Incentive Plan (the “Plan”) with the
specific terms of such Option grant as set forth on the Option
Certificate attached hereto;
WHEREAS, the
Company and the Participant understand and agree that any terms
used and not defined herein have the same meanings as in the Plan;
and
WHEREAS, the
Company and the Participant each intend that the Option granted
herein shall be a Nonstatutory Stock Option.
NOW, THEREFORE, in
consideration of the mutual covenants hereinafter set forth and for
other good and valuable consideration, the parties hereto agree as
follows:
The Company hereby
grants to the Participant the right and option to purchase all or
any part of an aggregate of the number of Shares listed on the
Option Certificate attached hereto, subject to adjustment upon an
Adjustment Event after the date hereof as provided in the Plan, on
the terms and conditions and subject to all the limitations set
forth herein, under United States securities and tax laws, and in
the Plan, which is incorporated herein by reference. The
Participant acknowledges receipt of a copy of the Plan.
The purchase price
of the Shares covered by the Option shall be the price per Share as
set forth on the Option Certificate attached hereto, subject to
adjustment upon an Adjustment Event after the date hereof as
provided in the Plan (the “Purchase Price”). Payment
shall be made in accordance with Section 6.4 of the
Plan.
3.
EXERCISABILITY OF OPTION .
Subject to the
terms and conditions set forth in this Agreement and the Plan, the
Option granted hereby shall become exercisable as set forth on the
Option Certificate attached hereto which rights are cumulative and
are subject to the other terms and conditions of this Agreement and
the Plan.
2
The Option shall
terminate ten years from the Date of Grant set forth on the Option
Certificate attached to this Agreement, but shall be subject to
earlier termination as provided herein or in the Plan.
If the Participant
ceases to be an employee of the Company or of a Subsidiary (for any
reason other than the death, Disability or Approved Retirement of
the Participant or termination of the Participant for Cause (as
defined in the Plan)), the Option may be exercised, if it has not
previously terminated, at any time within three months of the date
the Participant ceases to be an employee of the Company or a
Subsidiary, or within the originally prescribed term of the Option,
whichever is earlier, but may not be exercised thereafter. In such
event, the Option shall be exercisable only to the extent that the
Option has become exercisable and is in effect at the date of such
cessation of employment.
Notwithstanding
the foregoing, in the event of the Participant’s Disability
or death within three months after the termination of employment,
the Participant or the Participant’s Survivors may exercise
the Option within one year after the date of the
Participant’s termination of employment, but in no event
after the date of expiration of the term of the Option.
In the event the
Participant’s employment is terminated by the Company or a
Subsidiary for Cause, the Participant’s right to exercise any
unexercised portion of this Option shall cease immediately as of
the time the Participant is notified his or her employment is
terminated for Cause, and this Option shall thereupon terminate.
Notwithstanding anything herein to the contrary, if subsequent to
the Participant’s termination, but prior to the exercise of
the Option or any portion thereof, the Committee determines that,
either prior or subsequent to the Participant’s termination,
the Participant engaged in conduct which would constitute Cause,
then the Participant shall immediately cease to have any right to
exercise all or any portion of the Option and this Option shall
thereupon terminate.
In the event of
the Disability of the Participant, as determined in accordance with
the Plan, the Option shall become immediately vested in full and
may be exercised within one year after the Participant’s
termination of employment or, if earlier, within the term
originally prescribed by the Option.
In the event of
the death of the Participant while an employee of the Company or of
a Subsidiary, the Option shall become immediately vested in full
and may be exercised by the Participant’s Survivors within
two years after the date of death of the Participant or, if
earlier, within the originally prescribed term of the
Option.
In the event a
Participant’s employment terminates by reason of Approved
Retirement in accordance with the Plan, the Participant may
exercise the Option at any time within the originally prescribed
term of the Option. In such event, the Option shall be exercisable
only to the extent that the Option has become exercisable and is in
effect at the date of such cessation of employment.
3
5. METHOD
OF EXERCISING OPTION .
Subject to the
terms and conditions of this Agreement, the Option may be exercised
by written notice to the Company or its designee, in such form or
by such electronic method as the Company shall from time to time
determine. Such notice shall state the number of Shares with
respect to which the Option is being exercised and shall be signed
by the person exercising the Option. Payment of the purchase price
for such Shares shall be made in accordance with Section 6.4
of the Plan. The Company shall deliver such Shares as soon as
practicable after the notice shall be received, provided, however,
that the Company may delay issuance of such Shares until completion
of any action or obtaining of any consent, which the Company deems
necessary under any applicable law (including, without limitation,
state securities or “blue sky” laws). The Shares as to
which the Option shall have been so exercised shall
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