ATTENTION:
THIS PERFORMANCE BASED RESTRICTED STOCK UNIT AWARD
SHALL NOT BECOME EFFECTIVE UNLESS AND UNTIL IT IS
"ACCEPTED" BY THE EMPLOYEE
IN THE MANNER DESCRIBED IN SECTION 1(b) BELOW.
PERFORMANCE BASED RESTRICTED STOCK UNIT AWARD
AGREEMENT
This PERFORMANCE BASED RESTRICTED STOCK UNIT AWARD
Agreement (this " Agreement " ) is made as of the
Grant Date (defined below), by and between Alpharma Inc., a
Delaware (USA) corporation with an address at 440 Route 22 East,
3rd Floor, Bridgewater NJ, 08807 USA (the " Company "
), and the Employee (defined below), pursuant and subject to the
Company's 2003 Omnibus Incentive Compensation Plan (the "
Plan " ), the terms of which are incorporated herein by
reference, on the following terms and conditions:
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DEFINITIONS : The following terms shall have the
following meanings when used in this Agreement.
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" Employee
":
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" Performance
Commencement Date ":
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January 1, 2007
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" Performance End
Date ":
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December 31, 2009
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" Grant Date
":
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March 28, 2007
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" Target Number of
Restricted Units ":
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" Vesting
Schedule ":
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3 year cliff, subject to the Sections 2 and 3
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" Full Vesting
Date ":
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The date upon which the Company files its first 10-K Report with
the SEC after the Performance End Date, subject to the Sections 2
and 3
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1.
Grant and Acceptance of Restricted Stock Unit Award .
(a)
The Company hereby grants to the Employee, subject to the
restrictions, forfeiture risks and other terms and conditions set
forth herein and in the Plan, the Performance Based Restricted
Stock Unit Award (the "Restricted Stock Unit Award"), which shall
consist of restricted units in the amount of that Target Number of
Restricted Units (defined above) (each, a " Restricted
Unit " ). Each Restricted Unit represents the Employee's
right to receive, under the terms and conditions described in this
Agreement, payment of one share of the Company's Class A Common
Stock (the " Common Stock " ) upon vesting of such
Restricted Unit.
(b)
The Restricted Stock Unit Award shall not be considered granted
unless and until the Employee accepts the terms of this Agreement
in writing. By so accepting the Restricted Stock Unit Award, the
Employee is memorializing that he or she has accepted the
Restricted Stock Unit Award as of the Grant Date. Thereafter, the
Restricted Stock Unit Award shall vest in accordance with the
Vesting Schedule (defined above) and subject to Sections 2 and
3 . (If the Company has no record of the Employee's acceptance
of the terms of this Agreement, or any other document required by
the Company in connection with the Restricted Stock Unit Award, the
Restricted Stock Unit Award shall be ineffective and the Employee
shall have no rights in the Restricted Stock Unit Award).
2.
Performance Period, Performance Goals and Vesting
(a)
Performance Period . The Performance Period commences as of
the start of business on January 1, 2007 (the "Period Commencement
Date") and ends as of the close of business on December 31, 2009
(the "Period End Date").
(b)
Achievement of Performance Measure . The number of
Restricted Units that the Employee shall be entitled to on the Full
Vesting Date under this Restricted Stock Unit Award shall be based
on the cumulative Company's earnings before interest, taxes,
depreciation and amortization ("EBITDA") goal during the
Performance Period, measured against a Performance Period EBITDA
Target of $ 477 million.
(c)
Threshold, Target and Maximum EBITDA Goals .
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EBITDA GOAL
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Performance Period
EBITDA
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Performance vs.
Target
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Payout vs.
Target
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Maximum
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$ 644 million
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135%
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200%
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Target
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$ 477 million
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100%
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100%
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Threshold
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$ 382 million
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80%
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50%
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Less than $ 382
million
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< 80%
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0%
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*
Straight-line interpolation will determine awards between threshold
and target and between target and maximum.
(d)
Vesting of Restricted Units . The number of Restricted Units
that the Employee shall be entitled to on the Full Vesting Date
shall be based on the goals set for threshold, target and maximum
EBITDA goals (as described above).
(i)
If the Threshold cumulative EBITDA goal for the Performance Period
is achieved, the number of Restricted Units shall be equal to 50%
of the Target Number of Restricted Units.
(ii)
If the Target cumulative EBITDA goal for the Performance Period is
achieved, the number of Restricted Units shall be equal to 100% of
the Target Number of Restricted Units.
(iii) If
the Maximum cumulative EBITDA goal for the Performance Period is
achieved, the number of Restricted Units shall be equal to 200% of
the Target Number of Restricted Units.
(iv) If
the cumulative EBITDA for the Performance Period is greater than
the Threshold EBITDA goal but less than the Target EBITDA goal,
straight-line interpolation shall be used to determine the number
of Restricted Units.
(v)
If the cumulative EBITDA for the Performance Period is greater than
the Target EBITDA goal but less than the Maximum EBITDA goal,
straight-line interpolation shall be used to determine the number
of Restricted Units.
(vi) If
the Threshold cumulative EBITDA goal for the Performance Period is
not achieved, all of the Employee's Restricted Units shall be
forfeited.
(vii) In no event
shall the number of Restricted Units exceed 200% of the Target
Number of Restricted Units.
(e)
Vesting of Restricted Units . The Employee shall become 100%
vested in the Restricted Units on the Full Vesting Date, subject to
the other terms and conditions of this Agreement, including
Section 2 and 3 , and shall receive that number of shares of
Common Stock represented by the then-vested Restricted Units (the
" Vested Shares " ) (as determined in Section
2(d) .
(f)
EBITDA shall be determined by the Company. The Compensation
Committee of the Company's Board of Directors shall have the right
to amend the EBITDA goals, upward or downward, in the event of any
business-related transaction.
3.
Restrictions / Rights of Company and Employee .
(a)
Forfeiture Rights of the Company Upon Termination . Subject
to the further provisions of this Agreement, and except as
otherwise provided in Section 3(b) below, prior to the Full
Vesting Date, in the event that the Employee ceases to be a
continuing employee of the Company as a result of a termination of
his or her Employment, other than as a result of the death,
Disability, or Retirement of the Employee, the entire Restricted
Stock Unit Award shall automatically be forfeited by the Employee,
and shall, with no further action on the part of the Employee,
revert to the full beneficial and record ownership of the Company
(the " Forfeiture Event " ). (The terms "
Employment " , " Retirement " and "
Disability " are defined in Section 4 below.)
(b)
The Death or Disability of the Employee . In the event that
the Employee dies, or an event of Disability of the Employee,
occurs prior to the Full Vesting Date, the Employee (or
Beneficiary, in the case of death of the Employee) shall
nonetheless become vested in the Target Number of Restricted Units.
As soon as practicable following the Employee's termination from
employment as a result of death or Disability, the Employee (or
Beneficiary, in the case of death of the Employee) shall receive
the number of Vested Shares, determined as if the Target EBITDA
goal was achieved. The Employee and the beneficiary shall have no
further rights under this Agreement.
(c)
The Retirement of the Employee . This Section 3(c)
shall apply in lieu of Section 3(a) in the event that the
Employee terminates employment with the Company as a result of
Retirement prior to the Full Vesting Date. On the Full Vesting
Date, the retired Employee will be treated as if he were employed
on such date for purposes of this Agreement provided, however, that
such retired Employee shall only become vested in a pro rata
portion of the Restricted Units underlying the Restricted Stock
Unit Award, as follows:
(i)
If the Employee's Retirement date is prior to the first
anniversary of the Grant Date, his entire Restricted Stock Unit
Award shall be forfeited.
(ii)
If the Employee's Retirement date is on or after the first
anniversary of the Grant Date and prior to second anniversary of
the Grant Date, such retired Employee shall be 1/3 vested in the
Restricted Units underlying his Restricted Unit Award.
(iii) If
the Employee's Retirement date is on or after the second
anniversary of the Grant Date and prior to the Full Vesting Date,
such retired Employee shall be 2/3 vested in the Restricted Units
underlying his Restricted Unit Award.
In the event that the Threshold EBITDA goal is not achieved
during the Performance Period, the retired Employee's rights in
such Restricted Units shall be forfeited.
(d)
Change in Control . In the event that a Change in Control
(as defined in the Alpharma Inc. Change in Control Plan, as amended
from time to time (the " Change in Control Plan " ))
occurs, the Restricted Stock Unit Award shall be governed by the
Change in Control Plan and the provisions of this Agreement that
contradict such Change in Control Plan shall become ineffective.
For the Employee's reference, a copy of the Change in Control Plan
is publicly available as an exhibit to the Company's securities
filings, and is also available for review upon request.
4.
Definitions . For purposes of this Agreement:
(a)
An event of " Disability " shall mean the Employee's
termination in good standing from the employ of the Company for
reasons of disability under the then-established rules of the
Company, consistent with all applicable federal, state and local
(including international) laws.
(b)
An event of " Retirement " shall mean the Employee's
voluntary termination of his
