EXHIBIT 10
TRUST UNDER THE
KING PHARMACEUTICALS EXECUTIVE
DEFERRED COMPENSATION PLAN
THIS AGREEMENT is made this 27th day of July, 2005 by and
between King Pharmaceuticals, Inc. as a Corporation organized under the laws of
Tennessee (the "Company") and First Tennessee Bank National Association,
Trust Department, a trust organization under the laws of the United States of
America and having its principal office and place of business in Tennessee as
trustee (the "Trustee").
RECITALS
WHEREAS, the Company has adopted the deferred compensation plan(s)
listed in Appendix A which is/are (an) unfunded executive benefit plan(s)
providing deferred compensation benefits to a select group of its management or
highly compensated employees (the "Plan"); and
WHEREAS, the Plan contemplates that employees of the Company and
Adopting Employers (listed in Appendix B, if any) and any other affiliate
designated by the Board may become participants in the Plan (the Company and
each Adopting Employer that has employees who participate in the Plan are
collectively referred to as the "Employers" unless indicated otherwise); and
WHEREAS, the Company has incurred or expects to incur liability under
the terms of the Plan with respect to the employees who participate in the Plan
(the "Participants"); and
WHEREAS, the Company wishes to establish a trust (the "Trust") and to
contribute to the Trust assets that shall be held therein, subject to the claims
of the Company's creditors in the event of the Company's insolvency, as herein
defined, until paid to the Plan participants and their beneficiaries in such
manner and at such times as specified in the Plan or paid to the Company in
accordance herewith; and
WHEREAS, it is the intention of the parties that the Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plan
as an unfunded Plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
according to Title I of the Employee Retirement Income Security Act of 1974 as
amended; and
WHEREAS, it is the intention of the Company to make contributions to
the Trust to provide a source of funds to assist it in the meeting of its
liabilities under the Plan.
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:
SECTION 1. ESTABLISHMENT OF TRUST
(a) The Company hereby deposits with Trustee in trust $100.00, which
shall become the principal of the Trust to be held, administered and disposed of
by the Trustee as provided in this Trust Agreement. The Company shall have the
right to make additional deposits from time to time in its sole discretion.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which the Company
is the grantor, within the meaning of Subpart E, part I, subchapter J, chapter
I, subtitle A of the Internal Revenue Code of 1986, as amended (the "Internal
Revenue Code"), and shall be construed accordingly.
(d) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of the Company and shall be used exclusively
for the uses and purposes of Plan participants and general creditors of the
Company as herein set forth. The Participants and their beneficiaries shall have
no preferred claim on, or any beneficial ownership interest in, any assets of
the Trust. Any rights created under the Plan and this Trust Agreement shall be
mere unsecured contractual rights of the Participants and their beneficiaries
against their Employer. Any assets held by the Trust will be subject to the
claims of the Company's general creditors under federal and state law in the
event of Insolvency, as defined in Section 3(a) herein.
(e) The Trustee agrees to accept additional deposits made by the
Company pursuant to Section 1 (a) hereof, and contributions that are paid to it
by the Company in accordance with the terms of this Trust Agreement. Such
additional deposits and contributions shall be in cash or in such other form
that may be acceptable to the Trustee, including but not limited to policies of
life insurance. The Trustee shall have no duty to determine or collect
contributions under the Plan and shall have no responsibility for any property
until it is received and accepted by the Trustee. The Company shall have the
sole duty and responsibility for the determination of the accuracy and
sufficiency of the deposits and contributions to be made under the Plan, the
transmittal of the same to the Trustee and compliance with any statute,
regulation or rule applicable to contributions.
SECTION 2. PAYMENTS TO PARTICIPANTS AND THEIR BENEFICIARIES
(a) From time to time, the Company may deliver to the Trustee a
schedule (the "Payment Schedule") that indicates the amounts payable in respect
of each Participant (and his or her beneficiaries), that provides a formula or
other instructions for determining the amounts payable, the form in which such
amounts are to be paid (as
2
provided for or available under the Plan), and the time of commencement for
payment of such amounts. Except as otherwise provided herein, the Trustee shall
make payments to the Participants and their beneficiaries in accordance with
such Payment Schedule. The Trustee shall make provision for the reporting and
withholding of any federal, state or local taxes that may be required to be
withheld with respect to the payment of benefits pursuant to the terms of the
Payment Schedule and shall pay amounts withheld to the appropriate taxing
authorities or determine that such amount have been reported, withheld and paid
by the Company. If the principal of the Trust, and any earnings thereon, are not
sufficient to make payments of benefits in accordance with the terms of the
Payment Schedule, the Company shall make the balance of each such payment as it
falls due. The Trustee shall notify the Company where principal and earnings are
not sufficient.
(b) Upon the receipt by the Trustee of (i) a written notice from the
Company, indicating that the Plan has been completely terminated and (ii) a
Payment Schedule, indicating how payments shall be made as a result of the
termination of the Plan, the Trustee shall pay to each Participant his or her
account balance under the Plan in accordance with the terms of such Payment
Schedule. Notwithstanding the foregoing, upon the termination of the Plan the
Company shall be entitled to make payment of benefits directly to the
Participant or their beneficiaries in accordance with subsection (f) below.
(c) The Company hereby agrees that the Authorized Party (as defined
below) shall have the exclusive responsibility, and the Trustee shall not have
any responsibility or duty under this Trust Agreement for determining that the
Payment Schedule is in accordance with the terms of the Plan and applicable law,
including without limitation, the amount, timing or method of payment and the
identity of each person to whom such payments shall be made. The Trustee shall
have no responsibility or duty to determine the tax effect of any payment or to
see to the application of any payment.
(d) The entitlement of a Participant or his or her beneficiaries to the
benefits under the Plan shall be determined by the Company or such party as it
shall designate under the Plan, and any claim for such benefits shall be
considered and reviewed under the procedures set out in the Plan.
(e) The Company may make payment of benefits directly to the
Participants or their beneficiaries as they become due under the terms of the
Plan. The Company shall notify the Trustee of its decision to make payment of
benefits directly to Participants or their beneficiaries. If the Company makes
payments according to this subsection the Company shall make provision for the
reporting and withholding of any federal, state or local taxes that may be
required to be withheld with respect to the payment of benefits pursuant to the
terms of the Plan and shall pay amounts withheld to the appropriate taxing
authorities.
(f) Company shall furnish the Trustee with a written list of the names,
signatures and extent of authority of all persons authorized to direct Trustee
and otherwise act on behalf of the Company and the Participants under the terms
of this Trust
3
Agreement ("Authorized Party"). The Trustee shall be entitled to rely on and
shall be fully protected in acting upon direction from an Authorized Party until
notified in writing by the Company, as appropriate, of a change of the identity
of an Authorized Party.
(g) In accordance with the procedures mutually acceptable to the
Company and Trustee, all directions and instructions to the Trustee from an
Authorized Party, including but not limited to the Payment Schedule, shall be in
writing, transmitted by mail or by facsimile or shall be an electronic
transmission, provided the Trustee may, in its discretion, accept oral
directions and instructions and may require confirmation in writing ("Authorized
Instructions").
SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENT TO TRUST
BENEFICIARY WHEN COMPANY IS INSOLVENT
(a) The Trustee shall cease payment of benefits to the Participants who
are current or former employees of the Company and their beneficiaries if it
receives notice that the Company is Insolvent. The Company shall be considered
"Insolvent" for purposes of this Trust Agreement if (i) the Company is unable to
pay its debts as they become due, or (ii) the Company is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of the Company under federal and state law as set
forth below.
(1) The Board of Directors and the Chief Executive Officer of the
Company shall have the duty to inform the Trustee in writing of the Company's
Insolvency. If a person claiming to be a creditor of the Company alleges in
writing to the Trustee that the Company has become Insolvent, the Trustee shall
determine whether the Company is Insolvent and, pending such determination, the
Trustee may discontinue payment of benefits to the Participants or their
beneficiaries.
(2) Unless the Trustee has actual knowledge of the Company's
Insolvency, or has received notice from the Company or a person claiming to be a
creditor alleging that the Company is Insolvent, the Trustee shall have no duty
to inquire whether the Company is Insolvent. The Trustee may in all events rely
on such evidence concerning the Company's solvency as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis for making a
determination concerning the Company's solvency.
(3) If at any time the Trustee has determined that the Company is
Insolvent, the Trustee shall discontinue payments of benefits to the
Participants and their beneficiaries and shall hold the assets of the Trust for
the benefit of the Company's general creditors. Nothing in this Trust Agreement
shall in any way diminish any rights of the Participants or their beneficiaries
to pursue their rights as general creditors of the Company with respect to
benefits due under the Plan or otherwise.
4
(4) The Trustee shall resume the payment of benefits to the
Participants or their beneficiaries in accordance with Section 2 of this Trust
Agreement only after the Trustee has determined that the Company is not
Insolvent (or is no longer Insolvent). The Trustee may rely on evidence
concerning Insolvency as may be furnished to the Trustee and that provides the
Trustee with a reasonable basis for making a determination concerning
Insolvency. If there is a dispute about Insolvency, the Trustee shall have the
right to require the Company to employ and pay for the services of an
independent expert to render a written opinion to the Trustee addressing the
question of Insolvency.
(c) Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to Section 3(a) and
(b) hereof and subsequently resumes such payments, the first payment following
such discontinuance shall include the aggregate amount of all payments due to
the Participants or their beneficiaries according to the terms of the Plan for
the period of such discontinuance, less the aggregate amount of any payments
made to Participants or their beneficiaries by the Company in lieu of the
payments provided for hereunder during any such period of discontinuance. The
Trustee may require a new Payment Schedule from the Company in such event.
SECTION 4. PAYMENTS TO COMPANY
(a) Except as provided in Sections 3 and in this Section 4(b), because
the Trust is irrevocable, in accordance with Section 1(b) hereof, the Company
shall not have the right or the power to direct the Trustee to return to the
Company or to divert to others any of the Trust assets before all payment of
benefits have been made to Participants or their beneficiaries pursuant to the
terms of the Plan.
(b) In the event the Company makes payment of benefits directly
pursuant to Section 1(e) hereof, the Company may file proof of such payment
with the Trustee and request to be reimbursed for said payment. The Trustee
shall reimburse the Company for amounts not exceeding the Company's costs of
making Plan payments. The Trustee shall not be obligated to verify the amount of
payment beyond receipt of reasonable proof (e.g. cancelled check).
SECTION 5. INVESTMENT AUTHORITY
(a) The Trustee shall invest and reinvest the principal and income of
the Trust as directed by Company or its properly designated agent which
directions may be changed from time to time. To the maximum extent permitted by
law, the Trustee shall have no duty or responsibility (i) to advise with respect
to, or inquire as to the propriety of, any such investment direction or (ii) for
any investment decisions made with respect to the Trust by the Company. In the
absence of investment direction, the Trustee shall have no obligation to invest
Trust assets, but may invest Trust assets in any manner permitted under Section
5(d).
5
(b) The Trustee may invest in securities (including stock or rights to
acquire stock) or obligations issued by the Company. All rights associated with
assets of the Trust shall be exercised by the Trustee and shall in no event be
exercised by or rest with Plan participants, except that voting rights with
respect to Trust assets will be exercised by the Company, unless an investment
adviser has been appointed pursuant to Section 5(a) and voting authority has
been delegated to such investment adviser.
(c) The Company shall have the right at any time, and from time to time
in its sole discretion, to substitute assets of equal fair market value, for any
asset held by the Trust. This right is exercisable by the Company in a
non-fiduciary capacity without the approval or consent of any person in a
fiduciary capacity.
(d) In administering the Trust and carrying out the instructions of the
Company in accordance with Section 5(a) above, the Trustee shall be specifically
authorized to:
(1) To invest and reinvest the Trust assets, together with the income
therefrom, in common stock, preferred stock, convertible preferred stock, bonds,
debentures, convertible debentures and bonds, mortgages, notes, commercial paper
and other evidences of indebtedness (including those issued by the Trustee),
shares of mutual funds, guaranteed investment contracts, bank investment
contracts, other securities, policies of life insurance, other insurance
contracts, annuity contracts, options, options to buy or sell securities or
other assets, and all other property of any type (personal, real or mixed, and
tangible or intangible);
(2) To deposit or invest all or any part of the assets of the Trust in
savings accounts or certificates of deposit or other deposits in a bank or
savings and loan association or other depository institution, provided such
deposits bear a reasonable interest rate;
(3) To submit or cause to be submitted to the Company, all information
received by the Trustee regarding ownership rights pertaining to property held
in the Trust;
(4) To hold, manage, improve, repair and control all property, real or
personal, forming part of the Trust; to sell, convey, transfer, exchange,
partition, lease for any term, even extending beyond the duration of this Trust,
and otherwise dispose of the same from time to time;
(5) To make, execute and deliver any and all documents, agreements or
other instruments in writing as are necessary or desirable for the
accomplishment of any of the powers and duties set forth in this Trust
Agreement;
(6) To hold in cash, without liability for interest, such portion of
the Trust as is pending investment, or payment of expenses, or the distribution
of benefits;
(7) To take such actions as may be necessary or desirable to protect
the Trust from loss due to the default on mortgages held in the Trust including
with the consent of
6
an Authorized Party the appointment of agents or trustees in such other
jurisdictions as may seem desirable, the transfer of property to such agents or
trustees as is necessary, or the grant to such agents such powers as are
necessary or desirable to protect the Trust.
(8) To vote in person or by general or limited proxy, as directed by an
Authorized Party, any securities in which the Trust is invested and similarly to
exercise, personally or by general or limited power of attorney, as directed by
an Authorized Party, any right appurtenant to any authorized investment held in
the Trust.
(9) To maintain accounts at, execute transactions through, and lend on
an adequately secured basis stocks, bonds or other securities to, any brokerage
or other firm, including any firm which is an affiliate of Trustee;
(10) To exercise all of the further rights, powers, options and
privileges granted, provided for, or vested in trustees generally under the laws
of the state in which the Trustee has its principal place of business so that
the powers conferred upon the Trustee herein shall not be in limitation of any
authority conferred by law, but shall be in addition thereto.
The Trustee may exercise the powers described in this Section 5(d) with
or without Authorized Instructions, but where the Trustee acts on Authorized
Instructions, the Trustee shall be fully protected as described in Section 9.
SECTION 6. ADDITIONAL POWERS OF TRUSTEE.
(a) To the extent necessary or which it deems appropriate to implement
its powers under Section 5 or otherwise to fulfill any of its duties and
responsibilities as Trustee of the Trust, the Trustee shall have the following
additional powers and authority:
(1) To register securities, or any other property, in its name or in
the name of any nominee, including the name of any affiliate or the nominee name
designated by any affiliate, with or without indication of the capacity in which
property shall be held, or to hold securities in bearer form and to deposit any
securities or other property in a depository or clearing corporation;
(2) Upon receiving the consent of an Authorized Party, to designate and
engage the services of, and to delegate powers and responsibilities to, such
agents, representatives, advisers, counsel and accountants as the Trustee
considers necessary or appropriate and, as part of its expenses under this Trust
Agreement, to pay their reasonable expenses and compensation;
(3) To make, execute and deliver, as Trustee, any and all deeds,
leases, mortgages, conveyances, waivers, releases or other instruments in
writing necessary or appropriate for the accomplishment of any of the powers
listed in this Trust Agreement; and
(4) Generally to do all other acts which the Trustee deems necessary or
appropriate for the protection of the Trust.
7
(b) The Trustee at the direction of the Company may appoint a Custodian
to safeguard the assets of the Trust. The Company hereby authorizes and directs
the Trustee to enter into such agreements with the Custodian as may be necessary
to establish an account with the Custodian. For administrative purposes,
contributions deposited to the appointed Custodian shall be deemed as
contributions deposited with the Trustee on behalf of the Trust.
SECTION 7. DISPOSITION OF INCOME.
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
SECTION 8. ACCOUNTING BY TRUSTEE.
(a) The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions required to be
made, including such specific records as shall be agreed upon in writing between
the Company and the Trustee. Within 90 days following the close of each calendar
quarter and within 90 days after removal or resignation of the Trustee, the
Trustee shall deliver to the Company a written account of its administration of
the Trust during such year or during the period from the close of the last
preceding year to the date of such removal or resignation, setting forth all
investments, receipts, disbursements and other transactions effected by it,
including a description of all securities and investments purchased and sold
with the cost or net proceeds of such purchases or sales (accrued interest paid
or receivable being shown separately), and showing all cash, securities and
other property held in the Trust at the end of such year or as of the date of
such removal or resignation, as the case may be.
(b) The Trustee shall be entitled to rely on the Recordkeeper (the
provider of recordkeeping services for the Plan Administrator) or the Custodial
Agent (the custodian of investments), if any other than Trustee, for the
maintenance and provision of all records specified in this Section 8.
SECTION 9. RESPONSIBILITY AND INDEMNITY OF THE TRUSTEE.
(a) The Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that the
Trustee shall incur no liability to any person for any action taken pursuant to
a direction, request or approval given by the Company which is contemplated by,
and in conformity with, the terms of the Plan(s) and this Trust and is given in
writing by the Company or in such other manner prescribed by the Trustee. In the
absence of direction, request or approval from the Company, the Trustee
8
shall also incur no liability to any person for any failure to perform an act
not contemplated by or in conformity with, the terms of this Trust. In the event
of a dispute between the Company and a party, the Trustee may apply to a court
of competent jurisdiction to resolve the dispute.
(b) The Company hereby indemnifies the Trustee and each of its
affiliates (collectively, the "Indemnified Parties") against, and shall hold
them harmless from, any and all loss, claims, liability, and expense, including
reasonable attorneys' fees, imposed upon or incurred by any Indemnified Party as
a result of any acts taken, or any failure to act, in accordance with the
directions from the Company or any designee of the Company, or by reason of the
Indemnified Party's good faith execution of its duties with respect to the
Trust, including, but not limited to, its holding of assets of the Trust. The
Company's obligations in the foregoing regard to be satisfied promptly by the
Company, provided that in the event the loss, claim, liability or expense
involved is determined by a no longer appealable final judgment entered in a
lawsuit or proceeding to have resulted from the gross negligence or willful
misconduct of the Trustee, the Trustee shall promptly on request thereafter
return to the Company any amount previously received by the Trustee under this
Section 9(b) with respect to such loss, claim, liability or expense. If the
Company does not pay such costs, expenses and liabilities in a reasonably timely
manner, the Trustee may obtain payment from the Trust without direction from the
Company.
(c) The Trustee shall incur no liability to anyone for any action that
it or the Custodian as its delegate takes pursuant to a direction, request or
approval given by the Company, Participants, the Investment Committee, the
Administrator or by any other party (including, without limitation, the
Recordkeeper and any of its agents) to whom authority to give such directions,
requests or approvals is delegated under the powers conferred upon the Company,
Participants, the Investment Committee, the Administrator or such other party
under this Agreement.
(d) The Trustee, upon receipt of the consent of an Authorized Party, at
the expense of the Trust or the Company, may consult with legal counsel (who may
also be counsel for Company generally) with respect to any of its duties or
obligations hereunder.
(e) The Trustee, upon receipt of the consent of an Authorized Party,
may hire agents, accountants, actuaries, investment advisers, financial
consultants or other professionals to assist it in performing any of its duties
or obligations hereunder.
(f) The Trustee shall have, without exclusion, all powers conferred on
the Trustee by applicable law, unless expressly provided herein, provided,
however, that if an insurance policy is held as an asset of the Trust, the
Trustee shall not have the power to name a beneficiary of the policy other than
the Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor trustee, or to loan to any person the
proceeds of any borrowing against such policy.
(g) Notwithstanding any powers granted to the Trustee pursuant to this
Trust Agreement or applicable law, the Trustee shall not have any power that
could give this
9
Trust the objective of carrying on a business and dividing the gains therefrom,
within the meaning of section 301.7701-2 of the Procedure and Administrative
Regulations promulgated pursuant to the Internal Revenue Code.
(h) The Trustee shall not be liable for any expense, loss, claim or
damage (including counsel fees) suffered by the Participants arising out of or
caused by any delay in, or failure of, performance by the Trustee, in whole or
in part, arising out of, or caused by, circumstances beyond the Trustee's
control, including without limitation: acts of God, interruption, delay in, or
loss (partial or complete) of electrical power or external computer (hardware or
software) or communication services (including access to book-entry securities
systems maintained by Federal Reserve Bank of New York and/or any clearing
corporation); act of civil or military authority; sabotage; natural emergency;
epidemic; war or other government actions; civil disturbance; flood, earthquake,
fire, other catastrophe; strike or other labor disturbance by employees of
nonaffiliates; governmental, judicial, or self regulatory organization order,
rule or regulation; riot; energy or natural resource difficulty or shortage; and
inability to obtain materials, equipment or transportation.
(i) If (1) there is any disagreement or dispute in connection with the
Trust or the subject matter hereof, including any dispute between the Trustee,
the Company or any Participant, or between the Company, any Participant or any
person not a party to the Trust or (2) there are adverse or inconsistent claims
or demands upon, or inconsistent with instructions to the Trustee, or (3) the
Trustee in good faith is in doubt as to what action to take pursuant to the
Trust, the Trustee may at its election refuse to comply with any such claims,
demands or instructions, or refuse to take any other action pursuant to this
Trust until (i) the rights of all persons involved in the dispute have been
fully and finally adjudicated by a court of competent jurisdiction or the
Trustee has resolved any such doubts to its good faith satisfaction; or (ii) all
disputes have been resolved between the persons involved and the Trustee has
received written notice thereof satisfactory to it from all such persons.
Without limiting the generality of the foregoing, the Trustee may at its
election interplead the subject matter of this Trust Agreement with a court of
competent jurisdiction, or commence judicial proceedings for a declaratory
judgment, and the Trustee shall be entitled to recover from the Company or the
Trust, both collectively and individually, the Trustee's attorneys' fees,
expenses and costs in connection with any such interpleader or declaratory
judgment action.
(j) The Trustee is not a party to, and has no duties or
responsibilities under, the Plan other than those that may be expressly
contained in this Trust Agreement. In any case, in which a provision of this
Trust Agreement conflicts with any provision of the Plan, the Plan shall
control. The Trustee shall have no duties, responsibilities or liability with
respect to the acts or omissions of any prior or successor trustee.
10
SECTION 10. COMPENSATION AND EXPENSES OF TRUSTEE
The Company shall pay all administrative and Trustee's fees and expenses under
this Trust Agreement as mutually agreed and, if not so paid, such fees and
expenses may be withdrawn from the Trust by the Trustee. If the Trustee advances
cash or securities for any purpose, including the purchase or sale of foreign
exchange or of contracts for foreign exchange, or in the event that the Trustee
shall incur or be assessed taxes, interest, charges, expenses, assessments, or
other liabilities in connection with the performance of this Trust Agreement,
except such as may arise from its own negligent action, negligent failure to act
or willful misconduct, any property at any time held for the Trust shall be
security therefor and the Trustee shall be entitled to collect from the Company
or, if not paid, from the Trust sufficient cash for reimbursement of such taxes,
interest, charges, expenses, assessments or other liabilities. If cash is
insufficient, the Trustee may dispose of the assets of the Trust to the extent
necessary to obtain the aforesaid reimbursement. To the extent the Trustee
advances funds to the Trust for disbursements or to effect the settlement of
purchase transactions, the Trustee shall be entitled to collect from the Company
or, if not so paid, from the Trust either (i) with respect to domestic assets,
an amount equal to what would have been earned on the sums advanced (an amount
approximating the "federal funds" interest rate) or (ii) with respect to
non-domestic assets, the rate applicable to the appropriate foreign market.
SECTION 11. RESIGNATION AND REMOVAL OF TRUSTEE
(a) The Trustee may resign at any time by written notice to the
Company, which shall be effective sixty (60) days after receipt of such notice
unless the Company and the Trustee agree otherwise.
(b) The Trustee may be removed by the Company on sixty (60) days notice
or upon shorter notice accepted by the Trustee. However, upon a Change of
Control, as defined herein, the Trustee may not be removed by the Company for
four years after the Change of Control unless the persons who are then
Participants agree to the removal.
(c) If the Trustee resigns within four years after a Change of Control,
as defined herein, the Company shall apply to a court of competent jurisdiction
for the appointment of a successor Trustee or for instructions, unless the then
Participants and the Company agree to the selection of a successor trustee.
(d) Upon resignation or removal of the Trustee and appointment of a
successor trustee, all assets shall subsequently be transferred to the successor
trustee. The transfer shall be completed within one hundred twenty (120) days
after receipt of notice of resignation, removal or transfer, unless the Company
extends the time limit.
(e) If Trustee resigns or is removed, a successor shall be appointed,
in accordance with Section 12 hereof, by the effective date of resignation or
removal under
11
paragraphs (a) or (b) of this Section. If no such appointment has been made, the
Trustee may apply to a court of competent jurisdiction for appointment of a
successor or for instructions. All expenses of the Trustee in connection with
the proceeding shall be allowed as administrative expenses of the Trust.
SECTION 12. APPOINTMENT OF SUCCESSOR.
(a) If the Trustee resigns or is removed in accordance with Section
11(a) or (b) hereof, subject to the requirements of Section 11, the Company may
appoint any third party, such as a bank trust department or other entity that
may be granted corporate trustee powers under state law, as a successor to
replace the Trustee upon resignation or removal. The appointment shall be
effective when accepted in writing by the new trustee, who shall have all of the
rights and powers of the former trustee, including ownership rights in the Trust
assets. The former trustee shall execute any instrument necessary or reasonably
requested by the Company or the successor trustee to evidence the transfer.
(b) The successor trustee need not examine the records and acts of any
prior trustee and may retain or dispose of existing Trust assets, subject to
Sections 8 and 9 hereof. The successor trustee shall not be responsible for and
the Company shall indemnify and defend the successor trustee from any claim or
liability resulting from any action or inaction of any prior trustee or from any
other past event, or any condition existing at the time it becomes successor
trustee.
SECTION 13. AMENDMENT OR TERMINATION
(a) This Trust Agreement may be amended by a written instrument
executed by the Trustee and the Company. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Plan or shall make the Trust
revocable.
(b) The Trust shall not terminate until the date on which the
Participants and their beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plan. Upon termination of the Trust, any assets remaining in
the Trust shall be returned to the Company.
(c) Upon written approval of the Participants or beneficiaries entitled
to payment of benefits pursuant to the terms of the Plan, the Company may
terminate this Trust prior to the time all benefit payments under the Plan have
been made. All assets in the Trust at termination shall be returned to the
Company.
12
SECTION 14. MISCELLANEOUS.
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to Participants and their beneficiaries under this
Trust Agreement may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee.
(d) For purposes of this Trust Agreement, a Change of Control is
determined pursuant to Section 2.6 of the Plan.
(e) Neither the Company nor the Trustee may assign this Trust Agreement
without the prior written consent of the other. This Trust Agreement shall be
binding upon, and inure to the benefit of, the Company, the Trustee and their
respective successors and permitted assigns. Any entity, which shall by merger,
consolidation, purchase, or otherwise, succeed to substantially all the trust
business of the Trustee shall, upon each succession and without any appointment
or other action by the Company, be and become successor trustee hereunder, upon
notification to Company.
(f) The provisions of this Trust Agreement are intended to benefit only
the parties hereto, their respective successors and assigns, and the
Participants and their beneficiaries under the Plan. There are no other third
party beneficiaries.
(g) The Company and the Trustee hereby each represents and warrants to
the other that it has full authority to enter into this Trust Agreement upon the
terms and conditions hereof and that the individual executing this Trust
Agreement on its behalf has the requisite authority to bind the Company or the
Trustee to this Trust Agreement.
(h) This Trust Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, and such counterparts shall
constitute but one and the same instrument and may be sufficiently evidenced by
one counterpart.
SECTION 15. EFFECTIVE DATE
(a) The effective date of this Trust Agreement shall be July 27,
2005.
IN WITNESS WHEREOF, the Company and the Trustee have executed this
Trust Agreement each by action of a duly authorized person.
13
King Pharmaceuticals, Inc. (Company)
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------------- (Signature)
Name/Title: President and Chief Executive Officer
-------------------------------------
Date: July 27, 2005
-------------------------------------------
First Tennessee Bank National Association, Trust Department (Trustee)
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------------------------- (Signature)
Name/Title: Senior Vice President
-------------------------------------
Date: July 27, 2005
--------------------------------------------
14
