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Exhibit 10.2
KING PHARMACEUTICALS, INC.
INCENTIVE PLAN
RESTRICTED UNIT CERTIFICATE
     This Certificate, when executed by a duly authorized officer of King
Pharmaceuticals, Inc. (the “Company”) and by Participant, evidences the grant by
the Company to the Participant named below of Restricted Units of the Company.

         
1.
  Name and Address of Participant:    
 
       
 
       
 
       
 
       
 
       
 
       
 
       
2.
  Date of Grant:    
 
       
 
       
3.
  Type of Grant:   Restricted Units
 
       
 
       
4.
  Number of Shares:    
 
       
 
       
5.
  Restricted Period:   The restrictions upon the Restricted Units shall lapse
upon the first anniversary of the date of grant.
 
       
6.
  Date of Payment:                       , except as otherwise set forth in the
Restricted Unit Grant Agreement.

This Restricted Unit grant is subject to and governed by the terms of this
Restricted Unit Certificate, the Restricted Unit Grant Agreement attached hereto
and incorporated by reference herein and the Company’s Incentive Plan.

              KING PHARMACEUTICALS, INC.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
            PARTICIPANT
 
             

This Restricted Unit Certificate may be executed in more than one counterpart,
each of which shall be deemed an original, but all of which together shall
constitute but one and the same instrument. Facsimile or photographic copies of
originally signed copies of this Restricted Unit Certificate will be deemed to
be originals.

 

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RESTRICTED UNIT GRANT AGREEMENT
PURSUANT TO THE KING PHARMACEUTICALS, INC.
INCENTIVE PLAN
     This Restricted Unit Grant Agreement (the “Agreement”) is made as of the
date set forth on the Restricted Unit Certificate attached hereto (the “Grant
Date”) by King Pharmaceuticals, Inc. (the “Company”) and the individual
identified on the Restricted Unit Certificate (the “Participant”) to effect an
award of restricted units by the Company to the Participant on the terms and
conditions set forth below:
     1. AWARD OF RESTRICTED UNITS.
     As of the Grant Date, subject to the terms, conditions and restrictions set
forth herein, the Company grants and issues to the Participant units
representing a contingent entitlement of the Participant to receive the number
of shares of Common Stock indicated on the Restricted Unit Certificate at the
end of the Restricted Period, provided the Participant continues to be a
Non-Employee Director of the Company (the “Restricted Units”).
     2. GOVERNING PLAN.
     The Restricted Units 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. RESTRICTIONS ON THE RESTRICTED UNITS.
(a) No Transfer. The Restricted Units (including any additional units received
by the Participant as a result of stock dividends, stock splits or any other
similar transaction affecting the Company’s securities without receipt of
consideration) may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of, alienated or encumbered during the Restricted Period.
(b) Restricted Period. At the end of the Restricted Period indicated on the
Restricted Unit Certificate, the Participant shall be entitled to receive the
number of shares of Common Stock as is set forth on the Restricted Unit
Certificate, provided that the Participant continues to be a Non-Employee
Director as of such date. Such shares of Common Stock shall thereafter be
delivered by the Company to the Participant in accordance with this Agreement
and the Plan.
(c) Forfeiture. Except as otherwise set forth in this Agreement, if the
Participant ceases to be a Non-Employee Director of the Company for any reason
other than death or Permanent Disability (as defined in Section 10.3 of the Plan
for Awards subject to Section 409A of the Code) prior to the end of the
Restricted Period, then as of the date on which the Participant ceases to be a
Non-

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Employee Director the Restricted Units shall immediately be forfeited and the
Participant shall have no rights to receive any payout under this Agreement.
(d) Death and Permanent Disability. Notwithstanding subsection 3(c) above, in
the event a Non-Employee Director ceases to be a director by reason of death or
Permanent Disability, the Restricted Period shall immediately lapse and the
payment shall be made within 60 days of the date of death or Permanent
Disability.
(e) Change of Control. Upon a Change of Control, the Restricted Period shall
immediately lapse and the payment shall be made on the date of the Change of
Control in accordance with Article 11 of the Plan.
     4. FORM AND TIMING OF PAYMENT.
     All payments of Restricted 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 on the Date of Payment set forth in the
Restricted Unit 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 (as defined in Section 409A of the
Code).
     5. VOTING AND DIVIDEND RIGHTS.
     The Participant shall have no rights as a shareholder, including voting and
dividend rights, with respect to the Restricted Units. The Participant will
obtain full voting and other rights as a shareholder of the Company upon a
payment in shares of Common Stock as provided in Section 4 above.
     6. ADDITIONAL AGREEMENTS.
(a) Tax Matters. The Restricted Units granted are subject to appropriate income
tax withholding and other deductions required by applicable laws or regulations,
and Participant and his successors will be responsible for all income and other
taxes payable as a result of a payout under the Restricted Units or otherwise in
connection with this Agreement. The Company will have the power and the right to
deduct or withhold, or require the Participant or the Participant’s beneficiary
to remit to the Company, the minimum necessary amount to satisfy federal, state,
and local taxes, domestic or foreign, required by law or regulation to be
withheld with respect to any taxable event arising as a result of this
Agreement. The Company is not required to provide any gross-up or other tax
assistance. If withholding is required upon any taxable event arising as a
result of the Restricted Units granted hereunder, the Company, unless notified
otherwise by the Participant in writing within thirty (30) days prior to the
taxable event, will satisfy the tax withholding requirement by withholding
shares of Common Stock having a Fair Market Value, equal to the total minimum
statutory tax required to be withheld on the transaction. The Participant agrees
to pay to the Company and/or its Subsidiaries any amount of tax that the
Company,

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its and/or its Subsidiaries may be required to withhold as a result of the
Participant’s participation in the Plan that cannot be satisfied by the means
previously described.
(b) Independent Advice; No Representations. Participant acknowledges that (i)
(s)he was free to use professional advisors of his choice in connection with
this Agreement, has received advice from her/his professional advisors in
connection with this Agreement, understands its meaning and import, and is
entering into this Agreement freely and without coercion or duress; and (ii)
(s)he has not received and is not relying upon any advice, representations or
assurances made by or on behalf of the Company or any Company affiliate or any
employee of or counsel to the Company regarding any tax or other effects or
implications of the Restricted Units or other matters contemplated by this
Agreement.
(c) Value of Restricted Units. No representations or promises are made to
Participant regarding the value of the Restricted Units or Company’s business
prospects. Participant acknowledges that information about investment in Company
stock, including financial information and related risks, is contained in
Company’s SEC reports which have been made available for Participant’s review at
any time before Participant’s acceptance of this Agreement. Further, Participant
understands that the Company does not provide tax or investment advice and
acknowledges Company’s recommendation that Participant consult with independent
specialists regarding such matters. Sale or other transfer of the Company stock
may be limited by and subject to Company policies as well as applicable
securities laws and regulations.
(d) Adjustment in Capitalization. In the event of an Adjustment Event that is a
merger, consolidation, reorganization, liquidation, dissolution or other similar
transaction, then the Award pursuant to Section 1 of this Agreement shall be
deemed to pertain to the securities and other property, including cash, to which
a holder of the number of shares equal to the Restricted Units would have been
entitled to receive in connection with such Adjustment Event.
(e) Spousal/Domestic Partner Consent. If the Participant is married or has a
domestic partner, this Agreement shall be effective only upon the execution and
delivery to the Company of the consent attached hereto as Exhibit A.
     7. GENERAL.
(a) Successors and Assigns. This Agreement is personal in its nature and
Participant may not assign or transfer his/her rights under this Agreement.

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(b) Notices. Any notices, demands or other communications required or desired to
be given by any party shall be in writing and shall be validly given to another
party if served either personally or if deposited in the United States mail,
certified or registered, postage prepaid, return receipt requested. If such
notice, demand or other communication shall be served personally, service shall
be conclusively deemed made at the time of such personal service. If such
notice, demand or other communication is given by mail, such notice shall be
conclusively deemed given forty-eight (48) hours after the deposit thereof in
the United States mail addressed to the party to whom such notice, demand or
other communication is to be given as hereinafter set forth:

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To the Company:
  King Pharmaceuticals, Inc.
 
  501 Fifth Street
 
  Bristol, TN 37620
 
  Attention:                                         

     To Participant: At his/her address of record as maintained in the Company’s
files.
Any party may change its address for the purpose of receiving notices, demands
and other communications by providing written notice to the other party in the
manner described in this paragraph.
(c) Entire Agreement. Except as this Agreement may expressly provide otherwise,
this Agreement, the Restricted Unit Certificate and the Plan constitute the
entire agreement and understanding of the Company and Participant with respect
to the subject matter hereof and thereof, and supersede all prior written or
verbal agreements and understandings between Participant and the Company
relating to such subject matter. This Agreement may only be amended by written
instrument signed by Participant and an authorized officer of the Company.
(d) Governing Law; Severability. This Agreement will be construed and
interpreted under the laws of the State of Tennessee applicable to agreements
executed and to be wholly performed within the State of Tennessee. If any
provision of this Agreement as applied to any party or to any circumstance is
adjudged by a court of competent jurisdiction to be void or unenforceable for
any reason, the invalidity of that provision shall in no way affect (to the
maximum extent permissible by law) the application of such provision under
circumstances different from those adjudicated by the court, the application of
any other provision of this Agreement, or the enforceability or invalidity of
this Agreement as a whole. If any provision of this Agreement becomes or is
deemed invalid, illegal or unenforceable in any jurisdiction by reason of the
scope, extent or duration of its coverage, then such provision shall be deemed
amended to the extent necessary to conform to applicable law so as to be valid
and enforceable or, if such provision cannot be so amended without materially
altering the intention of the parties, then such provision will be stricken and
the remainder of this Agreement shall continue in full force and effect.
(e) Remedies. All rights and remedies provided pursuant to this Agreement or by
law shall be cumulative, and no such right or remedy shall be exclusive of any
other. A party may pursue any one or more rights or remedies hereunder or may
seek damages or specific performance in the event of another party’s breach
hereunder or may pursue any other remedy by law or equity, whether or not stated
in this Agreement.
(f) Interpretation. Headings herein are for convenience of reference only, do
not constitute a part of this Agreement, and will not affect the

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meaning or interpretation of this Agreement. References herein to Sections are
references to the referenced Section hereof, unless otherwise specified.
(g) Waivers; Amendments. The waiver by either party of a breach of any provision
of this Agreement shall not operate or be construed as a waiver of any later
breach of that provision. This Agreement may be modified only by written
agreement signed by Participant and the Company.

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EXHIBIT A
to Restricted Unit Grant Agreement
pursuant to the
King Pharmaceuticals, Inc. Incentive Plan
CONSENT OF SPOUSE / DOMESTIC PARTNER
     I,                                         , spouse or domestic partner of
                                        , acknowledge that I have read the
RESTRICTED UNIT GRANT AGREEMENT dated as of                      (the
“Agreement”) to which this Consent is attached as Exhibit A and that I know its
contents. Capitalized terms used and not defined herein shall have the meanings
assigned to such terms in the Agreement. I am aware that by its provisions the
Restricted Units granted to my spouse/domestic partner pursuant to the Agreement
is subject to a Restricted Period during which all or a portion of the
Restricted Units may be required to be forfeited to King Pharmaceuticals, Inc.
(the “Company”) and that, accordingly, I may be required to forfeit to the
Company any or all of the Restricted Units of which I may become possessed as a
result of a gift from my spouse/domestic partner or a court decree and/or any
property settlement in any domestic litigation.
     I hereby agree that my interest, if any, in the Restricted Units subject to
the Agreement shall be irrevocably bound by the Agreement and further understand
and agree that any community property interest I may have in the Restricted
Units shall be similarly bound by the Agreement.
     I agree to the Restricted Period described in the Agreement and I hereby
consent to the forfeiture of the Restricted Units to the Company by my
spouse/domestic partner or my spouse/domestic partner’s legal representative in
accordance with the provisions of the Agreement. Further, as part of the
consideration for the Agreement, I agree that at my death, if I have not
disposed of any interest of mine in the Restricted Units by an outright bequest
of the Restricted Units to my spouse or domestic partner, then the Company shall
have the same rights against my legal representative to exercise its rights to
the Restricted Units with respect to any interest of mine in the Restricted
Units as it would have had pursuant to the Agreement if I had acquired the
Restricted Units pursuant to a court decree in domestic litigation.
     I AM AWARE THAT THE LEGAL, FINANCIAL AND RELATED MATTERS CONTAINED IN THE
AGREEMENT ARE COMPLEX AND THAT I AM FREE TO SEEK INDEPENDENT PROFESSIONAL
GUIDANCE OR COUNSEL WITH RESPECT TO THIS CONSENT. I HAVE EITHER SOUGHT SUCH
GUIDANCE OR COUNSEL OR DETERMINED AFTER REVIEWING THE AGREEMENT CAREFULLY THAT I
WILL WAIVE SUCH RIGHT.
     Dated as of the               day of                     , 200__.

         
 
  Signature:    
 
       
 
       
 
  Name:
 
 
     

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