EX-10.2 Incentive Plan Restricted Stock



 





Exhibit 10.2




KING PHARMACEUTICALS, INC.




INCENTIVE PLAN




RESTRICTED STOCK CERTIFICATE




     This Certificate, when executed by a duly authorized officer of King Pharmaceuticals, Inc.
(the “Company”), evidences the grant to the Participant named below of Restricted Common Stock of
the Company.



	 	 	 	 	 	 	 	 	 
	1.
	 	Name of Participant:	 	[Participant Name]
	
	 		 	
	2.
	 	Social Security Number of Participant:	 	[Social Security Number]
	
	 		 	
	3.
	 	Date of Grant:	 	[Grant Date]
	
	 		 	
	4.
	 	Type of Grant:	 	Restricted Stock
	 
	 	 	 	 	 	 	 
	
	 		 	
	5.
	 	Number of Shares:	 	[Number of Shares Granted]
	
	 		 	
	6.
	 	Vesting Schedule:	 	The restrictions upon the Restricted Stock shall lapse upon the 3rd
	 
	 	 	 	 	 	anniversary of the date of grant.
	
	 		 	
	7.
	 	Purchase Price:	 	$	0.00	 






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




	 	 	 	 	 
	 	KING PHARMACEUTICALS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 



RESTRICTED STOCK GRANT AGREEMENT

PURSUANT TO THE KING PHARMACEUTICALS, INC.

INCENTIVE PLAN





     This Restricted Stock Grant Agreement (the “Agreement”) is made as of the date set forth on
the Restricted Stock Certificate attached hereto (the “Grant Date”) by King Pharmaceuticals, Inc.
(the “Company”) and the individual identified on the Restricted Stock Certificate (the
“Participant”) to effect an award of restricted stock by the Company to the Participant on the
terms and conditions set forth below:



     1. AWARD OF RESTRICTED STOCK. 



     As of the Grant Date, subject to the terms, conditions and restrictions set forth herein, the
Company grants and issues to the Participant the number of shares of the Company’s common stock
indicated on the Restricted Stock Certificate (the “Restricted Stock”).



     2. GOVERNING PLAN.



     The Restricted Stock 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 STOCK.




     (a) No Transfer. The shares of Restricted Stock (including any shares received
by the Participant with respect to shares of Restricted Stock as a result of stock
dividends, stock splits or any other form of recapitalization or a 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) Vesting. The restrictions imposed under Section 3(a) will be removed from
the Restricted Stock at the end of the applicable Restricted Period. Removal of the
restrictions imposed under Section 3(a) from particular shares of Restricted Stock is
referred to as “vesting” of those shares and shares from which the restrictions have been
removed are referred to as “vested.”



     4. VOTING AND OTHER RIGHTS. 



     During the period prior to vesting, except as otherwise provided herein, the Participant will
have all of the rights of a shareholder with respect to all of the Restricted Stock, including
without limitation the right to vote such Restricted Stock and the right to receive all dividends
or other distributions with respect to such Restricted Stock. In connection with the payment of
such



2









 





dividends or other distributions, the Company will be entitled to deduct from any amounts
otherwise payable by the Company to Participant (including without limitation salary or other
compensation) any taxes or other amounts required by any governmental authority to be withheld and
paid over to such authority for Participant’s account.




     5. CERTIFICATION, ESCROW AND DELIVERY OF SHARES.




     (a) Certificates. Each certificate representing the Restricted Stock will be
endorsed with a legend substantially as set forth below, as well as such other legends as
the Company may deem appropriate to comply with applicable laws and regulations:




The securities evidenced by this certificate are subject to certain limitations on
transfer and other restrictions as set forth in that certain Restricted Stock Grant
Agreement, dated as of ___, 200___, between the Company and the
holder of such securities, pursuant to the King Pharmaceutical, Inc. Incentive Plan
(copies of which are available for inspection at the offices of the Company).




     (b) Escrow. With respect to the Restricted Stock (including any shares
received by Participant with respect to shares of Restricted Stock that have not yet vested
as a result of stock dividends, stock splits or any other form of recapitalization or a
similar transaction affecting the Company’s securities without receipt of consideration),
the Secretary of the Company, or such other escrow holder as the Secretary may appoint, will
retain physical custody of the certificate representing such share until such share vests.




     (c) Delivery of Certificates. As soon as reasonably practicable after the
vesting of any Restricted Stock, the Company will release the certificate(s) representing
such vested Restricted Stock to Participant. If other still unvested shares of Restricted
Stock are also represented by the same stock certificate as vested shares, then such
certificate will be retired and new certificates representing the vested and unvested
portions of the Restricted Stock will be issued in place of the existing certificate. The
certificate representing the vested Restricted Stock will be delivered to Participant and
the certificate representing the still unvested shares of Restricted Stock will be retained
by the escrow holder.



     6. ADDITIONAL AGREEMENTS.




     (a) Tax Matters. The Restricted Stock is 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
grant or vesting of the Restricted Stock or otherwise in connection with this Agreement.
The Company is not required to provide any gross-up or other tax assistance. Participant
understands that Participant may make an election pursuant to Section 83(b) of the Internal
Revenue Code (the “Code”) within thirty (30) days after the date Participant acquired the
Restricted Stock hereunder, or comparable provisions of any state tax law, to include in
Participant’s gross income the fair market value (as of the date



3









 






		 	of acquisition) of the Restricted Stock. Participant may make such an election only
if, prior to making any such election, Participant (a) notifies the Company of Participant’s
intention to make such election, by delivering to the Company a copy of a fully-executed
Section 83(b) Election Form such as the Company may from time to time prescribe, and (b)
pays to the Company an amount sufficient to satisfy any taxes or other amounts required by
any governmental authority to be withheld or paid over to such authority for Participant’s
account, or otherwise makes arrangements satisfactory to the Company for the payment of such
amounts through withholding or otherwise. Participant understands that if Participant does
not make a proper and timely Section 83(b) election, generally under Section 83 of the Code,
at the time the Restricted Period lapses with respect to any portion of the Restricted
Stock, Participant will recognize ordinary income and be taxed in an amount equal to the
fair market value (as of the date the forfeiture restrictions lapse) of the Restricted Stock
less the purchase price paid for the Restricted Stock. Participant acknowledges that it is
Participant’s sole responsibility, and not the Company’s, to file a timely election under
Section 83(b). Participant is relying solely on Participant’s advisors with respect to the
decision as to whether or not to file a Section 83(b) election.






     (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 Stock or other matters contemplated by this Agreement.




     (c) Value of Restricted Stock. No representations or promises are made to
Participant regarding the value of the Restricted Stock 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 Stock would have been entitled to receive in
connection with such Adjustment Event; provided, that any securities issued to Participant
in respect of unvested Granted Shares will be subject to the same restrictions



4









 






	 	 	 	and vesting provisions that were applicable to the Restricted Stock in exchange for
which the securities were issued.






     (e) Change of Control. Upon a Change of Control, vesting shall occur with
respect to the Restricted Stock in accordance with Article 11 of the Plan.




     (f) Termination of Employment. Upon a Termination of Employment, vesting or
forfeiture of the Restricted Stock shall be determined according to Section 8.7 of the Plan;
provided, however, that in the event of a Participant’s Separation from Service for Good
Reason then the Restricted Period will lapse as to a pro-rata portion of the Restricted
Stock as provided in Section 8.7(f) of the Plan. “Good Reason” shall mean the occurrence of
any one or more of the following circumstances, unless such circumstances are corrected by
the Company within ten (10) days following written notice thereof given by the Participant:
(i) Implementation of a material demotion or diminution in the nature or status of the
Participant’s authorities, duties, responsibilities, reporting relationships, title and/or
position from those in effect as of the Grant Date, determined in the context of the
individual’s relative position in the overall controlled group of corporations which
includes the Company as of the Grant Date as compared to the individual’s position in the
overall controlled group of corporations which includes the Company immediately before the
Separation from Service; (ii) Failure to pay promptly any material compensation when due;
(iii) Reduction in the rate of annual base salary without the Participant’s consent; (iv)
Material breach of any employment contract or other agreement as to the terms and conditions
of employment; (v) Requiring the Participant to be based at a work location in excess of
fifty (50) miles from the Participant’s principal job location or office as of the Grant
Date. The Participant’s right to effect a Separation from Service for Good Reason must be
exercised by the Participant within six (6) months after the date on which the Participant
knows or reasonably should have known of the occurrence that constitutes Good Reason,
otherwise the right to a Separation from Service on the basis of that occurrence shall be
deemed to have been waived. The Participant’s right to a Separation from Service for Good
Reason shall not be affected by the Participant’s temporary incapacity due to a physical or
mental/psychological condition. However, a Disability will not qualify as a Good Reason
unless accompanied by one or more “good reasons” hereinabove listed.




     (g) No Right to Continued Employment. This Agreement does not confer upon
Participant any right to continue as an employee of the Company or its subsidiary or to any
particular employment tenure, nor does it limit in any way the right of Company or its
subsidiary to terminate Participant’s services to the Company or its subsidiary at any time,
with or without cause.




     (h) Approved Retirement. “Approved Retirement” means, with respect to the
interpretation of the Plan and this Agreement, with the express consent of the Company at or
before the time of such Approved Retirement, any voluntary termination of employment by the
Participant after having reached the age of fifty-five (55) years and after having completed
at least fifteen (15) years of continuous employment with the Company.



5









 





     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.




     (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:



	 	 	 
	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 Stock 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,



6









 






	 	 	 	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 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.




7