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 and
Address of Participant:
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Date of
Grant:
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Type of
Grant:
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Long-Term
Performance Unit Award
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Target Number
of
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Long-Term
Performance Units:
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Performance
Cycle:
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The Performance
Cycle shall being on ___, 200___and end on ___, 200_.
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Vesting
Date:
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___, 200___,
except as otherwise set forth in the Long-Term Performance Unit
Award Agreement.
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Date of
Payment:
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___ ___,
200___, 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 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
Total Shareholder Return vs. companies
included in the Dow
Jones U.S. Pharmaceuticals Index
During the Performance Cycle
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Payout—Percent of
Target
Long-Term Performance
Units Granted
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70 th percentile +
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200%
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70 th percentile
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200%
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50 th percentile
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100%
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30 th percentile
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50%
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<30 th percentile
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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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____________________________
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Title:
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_____________________________
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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:
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.
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 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.
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
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,
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 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 r
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