KING PHARMACEUTICALS, INC.
INCENTIVE PLAN
LONG-TERM PERFORMANCE UNIT AWARD CERTIFICATE
(ONE-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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1. Name of
Participant:
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2. Social Security
Number of Participant:
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3. Date of
Grant:
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4. Type of
Grant:
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5. Target Number
of
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Long-Term Performance Units:
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6. Performance
Cycle:
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The Performance Cycle shall begin on
January 1, 2007 and end on December 31, 2007. |
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7. Vesting
Period:
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The Vesting Period shall begin on
January 1, 2008 and end on December 31, 2009, except as
otherwise set forth in the Long-Term Performance Unit Award
Agreement. |
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8. Date of
Payment:
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On or before March 15, 2010,
except as otherwise set forth in the Long-Term Performance Unit
Award Agreement. |
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9. Performance
Goals:
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The number of Long-Term Performance
Units earned by the Participant 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. The
Financial Objectives shall be listed and shall be calculated in the
manner set forth in Exhibit 1 hereto.
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| King Pharmaceuticals, Inc.
Annual Performance v. stated |
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Payout—Percent of
Target |
| Financial Objectives |
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Long-Term Performance |
| During the Performance
Cycle |
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Units Granted |
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| Above Stretch |
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200% |
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| Stretch |
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200% |
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| Target |
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100% |
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| Threshold |
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50% |
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| Below Threshold |
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0% (no payout) |
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LONG-TERM PERFORMANCE UNIT AWARD AGREEMENT
(ONE 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:
1. LONG-TERM
PERFORMANCE UNIT AWARD.
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.
2. GOVERNING
PLAN.
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.
3. CALCULATION OF
EARNED LONG-TERM PERFORMANCE UNITS.
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 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.
4. VESTING OF
LONG-TERM PERFORMANCE UNITS.
Long-Term Performance Units earned
will vest as set forth below:
(a) Provided
the Participant has continued employment through the end of the
Vesting Period set forth in the Long-Term Performance Unit Award
Certificate, one hundred percent (100%) of the earned Long-Term
Performance Units shall vest on the last day of such Vesting
Period; or
1
(b) In
the event of the Participant’s Separation from Service by
reason of death, Disability, Approved Retirement, Cause,
resignation or any other reason 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.
5. FORM AND
TIMING OF PAYMENT.
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 such payment, if required by Section 409A of the Code,
will be made six months after the date of such Separation from
Service.
6. VOTING AND
DIVIDEND RIGHTS.
Except as specifically
