Ex-10.4 Form of Restricted Unit Certificate/Grant



 





EXHIBIT
10.4




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 to occur of the
following events, and otherwise according to
the terms of the Incentive Plan: (1) one year
following the date of grant; (2) the
Participant, standing for reelection, is not
reelected; (3) the Participant completes his
or her term of office after declining to stand
for reelection; (4) the Participant completes
his or her term of office after not being
nominated to stand for reelection; (5) the
Participant completes his or her term of
office, having been ineligible to stand for
reelection under term limit provisions then in
effect.
	 
	 	 
	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.




 









 








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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