Document:

EX-10.04

 

Exhibit 10.04

KING PHARMACEUTICALS, INC.

INCENTIVE PLAN

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.

	 	 	 
	1. Name of Participant:
	 	 
	 
	 	 
	2. Social Security Number of Participant:
	 	 
	 
	 	 
	3. Date of Grant:
	 	 
	 
	 	 
	4. Type of Grant:
	 	 
	 
	 	 
	5. Target Number of Long-Term Performance Units:
	 	 
	 
	 	 
	6. Performance Cycle:

	 	The Performance Cycle shall begin on
___, 20___and end on
___, 20___.
	 
	 	 
	7. Vesting Date:

	 	___, 20___, except as
otherwise set forth in the Long-Term
Performance Unit Award Agreement.
	 
	 	 
	8. Date of Payment:

	 	On or before ___, 20___,
except as otherwise set forth in the
Long-Term Performance Unit Award
Agreement.
	 
	 	 
	9. Performance Goals:
	 	 

     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.

 

	 	 	 
	King Pharmaceuticals, Inc. Percentile in 

Total Shareholder Return vs. companies included in the Dow 

Jones U.S. Pharmaceuticals Index 

During the Performance Cycle
	 	Payout—Percent of Target

Long-Term Performance

Units Granted
	 	 	 
	70th percentile +
	 	200%
	 
	70th percentile
	 	200%
	 
	50th percentile
	 	100%
	 
	30th percentile
	 	50%
	 
	<30th percentile
	 	0% (no payout)
	 

 

 

     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.

	 	 	 	 	 
	 	KING PHARMACEUTICALS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Brian A. Markison 	 
	 	 	Title:  	President and Chief Executive Officer 	 

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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.

     2. GOVERNING PLAN.

     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

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          (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 rights as a shareholder of the Company
upon the payment of the Long-Term Performance Units in shares of Common Stock as provided in
Section 5 above.

     7. ADDITIONAL AGREEMENTS.

          (a) Tax Matters. The Long-Term Performance 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 Long-Term Performance 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. With respect to withholding
required upon any taxable event arising as a result of the Long-Term Performance 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, 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 her/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

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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
Long-Term Performance Units or other matters contemplated by this Agreement.

          (c) Value of Long-Term Performance Units. No representations or promises are made to
Participant regarding the value of the Long-Term Performance 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 Long-Term Performance Units
would have been entitled to receive in connection with such Adjustment Event.

          (e) Change of Control. Upon a Change of Control, vesting, forfeiture and payment
shall occur with respect to the Long Term Performance Units in accordance with Article 11 of the
Plan.

          (f) 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.

          (g) Nontransferability. Long-Term Performance Units awarded pursuant to this
Agreement may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated (a
“Transfer”) other than by will or by the laws of descent and distribution, except as provided in
the Plan. If any Transfer, whether voluntary or involuntary, of Long-Term Performance Units is
made, or if any attachment, execution, garnishment, or lien will be issued against or placed upon
the Long-Term Performance Units, the Participant’s right to such Long-Term Performance Units will
be immediately forfeited to the Company, and this Agreement will lapse.

          (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.

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     8. 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.
	 

	 	400 Crossing Boulevard
	 

	 	Bridgewater, NJ 08807
	 

	 	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 Long-Term Performance Unit Award 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

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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.

[Remainder of page intentionally left blank.]

5EX-10.3 SUMMARY OF COMPENSATION AGREEMENTS

 

Exhibit 10.3

Director* Compensation Summary

Meeting Fees

     Directors of Mountain National Bancshares, Inc. (the “Company”) are paid $650 for each Board
meeting attended. The Chairman of the Board receives a fee of $1,500 for each Board meeting
attended.

     Directors are reimbursed for their expenses incurred in connection with their activities as
the Company’s directors.

Committee Meeting Fees

     Each director receives $225 for each Executive Loan Committee meeting attended and $180 for
each other Board committee meeting attended.

Equity Compensation

     Each director is eligible to participate in the Company’s Stock Option Plan.

     The foregoing information is summary in nature. Additional information regarding director
compensation will be provided in the Company’s proxy statement to be filed in connection with the
2008 annual meeting of the Company’s shareholders.

 

			
	*	 	Includes directors that are also employees of the Company.

Named Executive Officer Compensation Summary

     The following table sets forth the current base salary paid to Dwight Grizzell, the Company’s
President and Chief Executive Officer, Grace D. McKinzie, the Company’s Executive Vice
President-Chief Lending Officer, and Michael Brown, the Company’s Executive Vice President-Chief
Operating Officer, during the year ended December 31, 2007.

	 	 	 	 	 	 	 	 	 
	Executive Officer	 	Current Salary	 	2007 Cash
	Dwight B. Grizzell, President
	 	$	187,000	 	 	$	0	 
	Grace D. McKinzie
	 	$	150,000	 	 	$	0	 
	Michael Brown
	 	$	150,000	 	 	$	0	 

 

 

     In addition to their base salary, Mr. Grizzell and Ms. McKinzie are also eligible to:

	 	•	 	Participate in the Company’s cash bonus plan;
	 
	 	•	 	Participate in the Company’s equity incentive programs, which currently
involves the award of stock options pursuant to the Company’s Stock Option Plan; and
	 
	 	•	 	Participate in the Company’s broad-based benefit programs generally available
to its employees, including health, disability and life insurance programs and the
Company’s 401(k) Plan.

The foregoing information in summary in nature. Additional information regarding the named
executive officer compensation will be provided in the Company’s proxy statement to be filed
in connection with the 2008 annual meeting of the Company’s shareholders.

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