EXHIBIT 10.3

PAR PHARMACEUTICAL COMPANIES, INC.

TERMS OF 2012 LTI PROGRAM STOCK OPTION AWARD

This document sets forth the terms of the award of an Option (as defined in
Section 1 below) to purchase shares of common stock granted by PAR
PHARMACEUTICAL COMPANIES, INC. (the “Company”) pursuant to a Certificate of
Stock Option Grant (the “Certificate”) displayed at the website of Smith Barney
Benefits Access®.  The Certificate, which specifies the person to whom the
Option is granted (the “Optionee”) and other specific details of the grant, and
the electronic acceptance of the Certificate at the website of Smith Barney, are
incorporated herein by reference.

WHEREAS, the Board of Directors (the “Board”) of the Company has authorized and
approved the Par Pharmaceutical Companies, Inc. 2004 Performance Equity Plan
(the “Plan”), which has been approved by the stockholders of the Company;  

WHEREAS, the Plan, in part, provides for the grant of Options to certain
employees of the Company and any Subsidiary of the Company;

WHEREAS, pursuant to the Plan, the Committee has approved an award to the
Optionee designated in the Certificate of an option to purchase common stock of
the Company on the terms and subject to the conditions set forth in the Plan and
these Terms of 2012 LTI Program Stock Option Award (the “Terms”).  Capitalized
terms used but not defined in these Terms or the Certificate shall have the
meanings set forth in the Plan or, where such terms are not defined in the Plan,
in the employment agreement between the Company and the Participant (the
“Employment Agreement”).

NOW, THEREFORE, in consideration of the foregoing and of the terms and
conditions herein contained, the parties hereto agree as follows:

        1.        Grant of Options.  Subject to the terms and conditions
hereinafter set forth and set forth in the Plan, the Company hereby grants to
the Optionee, as a matter of separate agreement and not in lieu of salary, or
any other compensation for services, the right and option (the “Option”) to
purchase all or any part of an aggregate number of shares of Common Stock (the
“Option Shares”) set forth in the Certificate subject to the terms and
conditions set forth in the Plan and these Terms.

        2.        Nonqualified Option; Withholding Tax.  This Option shall not
be deemed an “Incentive Stock Option” under the Internal Revenue Code (“Code”).
 The Company shall be entitled, if the Compensation and Management Development
Committee of the Board of Directors of the Company (the “Committee”) deems it
necessary or desirable, to withhold (or secure payment from the Optionee in lieu
of withholding) the amount of any withholding or other tax required by law to be
withheld or paid by the Company in connection with the issuance of the Option
Shares.

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        3.       Grant Price.  The grant price of each Option Share shall be the
grant price specified on the Certificate, which is intended to be the Fair
Market Value of a share of Common Stock as of the Grant Date.

        4.       Exercise Period.

                  4.1      Grant Expiration Date; Vesting.  The Option shall be
exercisable during the period (the “Exercise Period”) commencing on the Grant
Date specified on the Certificate and terminating at the close of business on
the date (the “Grant Expiration Date”) specified on the Certificate.  All rights
to exercise the Option shall terminate on the Grant Expiration Date.  Subject to
this Section 4 and Section 5 hereof, this Option shall be exercisable in
cumulative installments, during the Exercise Period, as follows:

(i)

To the extent of 25% of the Option Shares any time after the first anniversary
of the Grant Date;

(ii)

To the extent of an additional 25% of the Option Shares any time after the
second anniversary of the Grant Date;

(iii)

To the extent of an additional 25% of the Option Shares any time after the third
anniversary of the Grant Date; and

(iv)

To the extent of the remaining 25% of the Option Shares any time after the
fourth anniversary of the Grant Date.

                  4.2     Effect of Termination of Employment.

                  4.2.1  Termination Upon Death or Disability.  Upon the
termination of the Optionee’s employment by reason of the death or disability
(for purposes of the Plan) of the Optionee prior to the date that the Option
becomes fully vested and exercisable in accordance with the vesting schedule
specified on the Certificate, the Optionee shall be deemed vested as of the date
of such termination in that percentage of the Option Shares which the Optionee
would have become vested in if the Optionee had remained employed through the
next anniversary of the Grant Date that first occurs on or after the date of
such termination and the Option shall be exercisable with respect to such Option
Shares.  Further, upon the termination of the Optionee’s employment by reason of
the death or disability of the Optionee at any time during the Exercise Period,
this Option or any unexercised portion thereof, which was otherwise exercisable
on the date of such termination (including such portion of the Option Shares
that may become exercisable as a result of the preceding sentence), shall
terminate unless such Option, to the extent exercisable on such date, is
exercised by the Optionee or the executor or administrator of the Optionee’s
estate, as the case may be, within one year after the date of such termination
of the Optionee’s employment.  However, should the death of the Optionee occur
during the one-year period following the termination of the employment of the
Optionee by reason of his disability, the Option, to the extent exercisable on
the date of termination of employment, may be exercised by the executor or
administrator of the Optionee’s estate within one year following such death.
 The determination of whether the Optionee has terminated employment due to
disability shall be made in the good faith judgment of the Committee.  A
transfer of the Option by the Optionee by will or by laws of descent and
distribution shall not be effective to bind the

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Company unless the Company shall have been furnished with written notice thereof
and such other evidence as the Company may deem necessary or desirable to
establish the validity of the transfer and the acceptance by the transferee or
transferees of the terms and conditions of the Option.  Notwithstanding anything
herein to the contrary, in no event shall the Option be exercisable after the
Grant Expiration Date.

 

                  4.2.2    Termination With Cause .  If the Optionee’s
employment is terminated with Cause, this Option or any unexercised portion
thereof shall terminate and be of no further force and effect from the date of
termination.  

                  4.2.3     Termination Without Cause or Material Breach by the
Company.   If the Optionee’s employment is terminated (i) by the Company without
Cause (and such termination is not due to the Optionee’s Poor Performance), or
(ii) by the Optionee for the Company’s Material Breach (in accordance with
Section 3.2.6 of the Employment Agreement) prior to the date that the Option
becomes fully vested and exercisable in accordance with the vesting schedule
specified in Section 4.1 of this Agreement, the Optionee shall be deemed vested
as of the date of such termination in that percentage of the aggregate Option
Shares granted hereunder (which percentage shall include any Option Shares which
had previously vested in accordance with the schedule in Section 4.1 of this
Agreement) based on a fraction, the numerator of which equals the number of full
or partial months from the Grant Date through the termination date and the
denominator of which is forty-eight (48), and the Option shall be exercisable
with respect to such Option Shares to the extent not previously exercised.
 Further, upon the termination of the Optionee’s employment by the Company
without Cause (and such termination is not due to the Optionee’s Poor
Performance) or by the Optionee for the Company’s Material Breach at any time
during the Exercise Period, this Option or any unexercised portion thereof,
which was otherwise exercisable on the date of such termination (including such
portion of the Option Shares that may become exercisable as a result of the
preceding sentence), shall terminate unless such Option, to the extent
exercisable on such date, is exercised by the Optionee within three months after
the date of such termination of the Optionee’s employment; provided, however,
that nothing herein contained shall extend the Grant Expiration Date.  

                4.2.4     Termination Following a Change in
Control.  Notwithstanding Section 4.2.3, if the Optionee’s employment is
terminated by the Company without Cause or by the Optionee for the Company’s
Material Breach following a Change in Control of the Company, the Optionee’s
right to exercise the Option shall be immediately vested and accelerated in full
and the Optionee may exercise the remaining unexercised portion of the Option
within twenty-four (24) months after the date of such termination of the
Optionee’s employment; provided, however, that nothing herein contained shall
extend the Grant Expiration Date.

               4.2.5      Termination by Company for Poor Performance or by
Optionee Other Than for Material Breach.  If the employment of the Optionee with
the Company or any of its Subsidiaries is terminated (a) by the Company without
Cause due to the 

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Optionee’s Poor Performance prior to a Change in Control of the Company, or (b)
by the Optionee at any time for any reason other than the Company’s Material
Breach, this Option or any unexercised portion thereof which was otherwise
exercisable on the date of such termination, shall terminate unless such Option,
to the extent exercisable on the date of such termination, is exercised within
ninety (90) days of the date on which the Optionee ceases to be an employee.
 Notwithstanding anything herein to the contrary, in no event shall the Option
be exercisable after the Grant Expiration Date.

               4.2.6      Sale of Company.  Upon a Sale (as defined below), the
Board of Directors or the Committee may elect either (i) to continue the Option
without any payment or (ii) to cause to be paid to the Optionee, upon
consummation of the Sale, a payment equal to the excess, if any, of the Sale
Consideration receivable by the holders of shares of Common Stock in such a Sale
(the “Sale Consideration”) over the purchase price for this Option for each
share of Common Stock the Optionee shall then be entitled to acquire hereunder.
If the Board of Directors of the Company elects to continue the Option, then the
Company shall cause effective provisions to be made so that the Optionee shall
have the right, by exercising this Option prior to the Grant Expiration Date, to
purchase the kind and amount of shares of stock and other securities and
property receivable upon such a Sale by a holder of the number of shares of
Common Stock which might have been purchased upon exercise of the Option
immediately prior to the Sale.  The value of the Sale Consideration receivable
by the holder of a share of Common Stock, if it shall be other than cash, shall
be determined, in good faith, by the Board of Directors of the Company.  Upon
payment to the Optionee of the Sale Consideration, the Optionee shall have no
further rights in connection with the Option granted hereunder, this Option
shall be terminated and surrendered for cancellation and the Option shall be
null and void.  For the purposes hereof, a “Sale” shall occur, in any single
transaction or series of related transactions, upon the consummation of the
events set forth under subsection (b) of the definition of a “Change of Control”
in Section 2.8 of the Plan.

              5.     Covenants and Conditions on Awards and Recovery.

  

(a)

Covenants.  As a condition for participation in the Plan and the receipt of any
benefits under these Terms, the Optionee shall agree and covenant as follows:

(i)

at any time during the Optionee’s employment with the Company, its Affiliates or
its Subsidiaries and for a period of twenty-four (24) months following the
Optionee’s termination of such employment, the Optionee shall not, directly or
indirectly, either (A) personally or (B) as an employee, agent, partner,
stockholder, officer or director of, consultant to, or otherwise of any entity
or person engaged in any business in which the Company, its Affiliates or its
Subsidiaries is engaged, or is actively proposing to engage at the time of such
termination of employment, engages in conduct that breaches the Optionee’s duty
of loyalty to the Company, its Affiliates or its Subsidiaries or that is in
material competition with the Company, its Affiliates or its Subsidiaries or is
materially injurious to the Company, its Affiliates or its Subsidiaries,
monetarily or otherwise, which conduct shall include, but not be limited to:
 (1) disclosing or using any confidential information pertaining to the Company,
its Affiliates or its Subsidiaries; (2) any attempt, directly or indirectly, to
induce any employee of the Company, its Affiliates or its Subsidiaries to be
employed or perform

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> services elsewhere; or (3) any attempt, directly or indirectly, to solicit the
> trade of any customer or supplier or prospective customer or supplier of the
> Company, its Affiliates or its Subsidiaries; or (4) disparaging the Company,
> its Affiliates or its Subsidiaries or any of their respective officers or
> directors.  The determination of whether any conduct, action or failure to act
> falls within the scope of activities contemplated by this Section shall be
> made by the Committee, in its reasonable, good faith discretion, and shall be
> final and binding upon the Optionee.  A determination that any particular
> conduct, action or failure falls outside the scope of activities contemplated
> by this Section shall not imply that, or be determinative of whether, such
> conduct, action or failure is otherwise lawful or appropriate.  For purposes
> of this Section, the Optionee shall not be deemed to be a stockholder of a
> competing entity if the Optionee’s record and beneficial ownership of equity
> securities of said entity amount to not more than one percent (1%) of the
> outstanding equity securities of any company subject to the periodic and other
> reporting requirements of the Securities Exchange Act of 1934, as amended the
> “1934 Act”).

(ii)

the Company would be irreparably injured in the event of a breach of any of the
Optionee’s obligations under Section 5(a)(i), monetary damages would not be an
adequate remedy for any such breach and the Company shall be entitled to
injunctive relief, in addition to any other remedies that it may have, in the
event of any such breach.

(b)

Recovery of Award Upon Violation of Covenants.  In the event that the Committee
determines that the Optionee has violated any of the covenants contained in
Section 5(a), then:

(i)

all of the Optionee’s unexercised Options shall terminate immediately;

(ii)

to the extent that the Optionee holds shares of Common Stock acquired upon
exercise of any vested Option, the Optionee upon notice from the Company of the
Optionee’s obligations under this Section 5(b)(ii), shall, at the option of the
Company, either: (1) immediately deliver to the Company an amount in cash equal
to the then-Fair Market Value of such Common Stock less the aggregate exercise
price paid by or on behalf of the Optionee with respect to such exercised
shares, or (2) sell such Common Stock to the Company for an amount equal to the
aggregate exercise price paid by or on behalf of the Optionee with respect to
such exercised shares; and

(iii)

to the extent that the Optionee has disposed of shares of Common Stock acquired
upon exercise of any vested Option, the Optionee upon notice from the Company of
the Optionee’s obligations under this Section 5(b)(iii), shall immediately pay
the Company an amount equal to the amount realized by the Optionee upon the
disposition of such Common Stock or, if the disposition was not an arm’s-length
transaction with an unrelated party, an amount equal to the then-Fair Market
Value of such Common Stock less the aggregate exercise price paid by or on
behalf of the Optionee with respect to such exercised shares.

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The notice described in subsections (ii) and (iii) above may be given at any
time within twelve months after the expiration of the applicable covenant period
under Section 5(a).  

(c)

Recovery of Compensation in Connection with Financial Restatement.
 Notwithstanding any other provision of these Terms, and in addition to the
recovery provisions of Section 20.1(b) of the Plan, if the Board determines that
the Company is required to restate its financial statements due to material
noncompliance with any financial reporting requirement under the law, whether
such noncompliance is the result of misconduct or other circumstances, the
Optionee shall be required to reimburse the Company for any amounts earned or
payable with respect to this Award, during the three (3)-year period preceding
the date on which the Company is required to prepare the accounting restatement,
that is in excess of what would have been earned or payable under the accounting
restatement, to the extent such reimbursement is required by and otherwise in
accordance with applicable law, including any clawback policy adopted or
implemented by the Board or Committee in respect of the Dodd-Frank Wall Street
Reform and Consumer Protection Act of 2010 and such regulations as are
promulgated thereunder from time to time.

            6.      Nontransferability of Option.  Except as provided in Section
4, this Option and the rights and privileges conferred hereby may not be
transferred, assigned, pledged or hypothecated in any way (whether by operation
of law or otherwise) and shall not be subject to execution, attachment or
similar process.  Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of this Option or any right or privilege conferred hereby,
contrary to the provisions hereof, or upon the levy of any attachment or similar
process on the rights and privileges conferred hereby, this Option and the
rights and privileges conferred hereby shall immediately become null and void.

           7.      Payment of Purchase Price.  The purchase price of the shares
of Common Stock as to which the Option is exercised shall be paid in full at the
time of exercise, as hereinafter provided.  The purchase price may be paid with
(i) Common Stock of the Company already owned by, and in the possession of, the
Optionee, or (ii) any combination of U.S. dollars or Common Stock of the
Company.  Anything herein to the contrary notwithstanding, any required
withholding tax shall be paid by the Optionee in full in U.S. dollars at the
time of exercise of the Option.  Payments in U.S. dollars may be made by wire
transfer, certified or bank check, or personal check, in each case payable to
the order of the Company; provided, however, that the Company shall not deliver
certificates representing any Option Shares purchased until the Company has
confirmed the receipt of good and available funds in payment of the purchase
price thereof.  Shares of Common Stock of the Company used to satisfy the grant
price of the Option shall be valued at the Fair Market Value on the date of
exercise (as defined in the Plan).  The Optionee shall not have any of the
rights of a shareholder with respect to the Option Shares until the Option
Shares have been issued after the due exercise of the Option.  Payment may also
be made, in the discretion of the Company, by (x) the delivery (including,
without limitation, by fax) to the Company or its designated agent of an
executed irrevocable option exercise form together with irrevocable instructions
to a broker-dealer to sell or margin a sufficient portion of the shares and
deliver the sale or margin loan proceeds directly to the Company to pay for the
grant price, or (y) by a “net exercise” method under which the Company reduces
the number of shares issued upon exercise of the Option by the largest whole
number of shares with a Fair Market Value as of the date of exercise that does
not exceed the aggregate Grant Price.  

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            8.     Exercise of Option.  Subject to the terms and conditions set
forth herein, the Option may be exercised by written notice to the Company
pursuant to Section 14.1 hereof.  Such notice shall state the election to
exercise the Option and the number of Option Shares with respect to which it is
being exercised, and shall be signed by the person or persons so exercising the
Option.  Such notice may also contain such investment representations as the
Company may from time to time require.  Such notice shall be accompanied by
payment of the full purchase price of the Option Shares, and the Company shall
issue a certificate or certificates evidencing the Option Shares as soon as
practicable after the notice is received (subject to receipt of good and
available funds as provided in Section 7 above).  Payment of the purchase price
shall be made in U.S. dollars, by delivery of securities of the Company, or by a
combination of U.S. dollars and securities, as provided in Section 7 above.  The
certificate or certificates evidencing the Option Shares shall be registered in
the name of the person or persons so exercising the Option.  In the event the
Option is being exercised by any person or persons other than the Optionee as
provided in Section 4.2 above, the notice shall be accompanied by appropriate
proof of the right of such person or persons to exercise the Option.
 Notwithstanding the foregoing, the obligation of the Company to sell and
deliver shares of Common Stock with respect to the Option granted hereunder
shall be subject to, as deemed necessary or appropriate by counsel for the
Company, and the Committee shall have the sole discretion to impose such
conditions, restrictions and limitations (including suspending exercises of the
Option and the tolling of any applicable exercise period during such suspension)
on the issuance of Common Stock with respect to the Option unless and until the
Committee determines that such issuance complies with (i) all applicable laws,
rules and regulations and such approvals by any governmental agencies as may be
required, including, without limitation, the effectiveness of a registration
statement under the Securities Act of 1933 (the “1933 Act”), and (ii) the
condition that such shares shall have been duly listed on such stock exchanges
as the Common Stock is then listed.

            9.     Transfer of Option Shares.   Anything in these Terms to the
contrary notwithstanding, the Optionee hereby agrees that he shall not sell,
transfer by any means or otherwise dispose of the Option Shares acquired by him
without registration under the 1933 Act, or in the event that they are not so
registered, unless (i) an exemption from the 1933 Act is available thereunder,
and (ii) the Optionee has furnished the Company with notice of such proposed
transfer and the Company’s legal counsel, in its reasonable opinion, shall deem
such proposed transfer to be so exempt.

            10.    Anti-Dilution Provisions.  In the event of a stock dividend,
subdivision, combination or reclassification of shares, or any other change in
the corporate structure or shares of the Company, the number of Option Shares
covered by any unexercised portion of the Option and the related purchase price
per share shall be adjusted proportionately; provided, however, that upon the
dissolution or liquidation of the Company, or upon any merger, consolidation or
other form of reorganization, the Option may be terminated and be of no further
effect.

            11.    Company Representations.  The Company hereby represents and
warrants to the Optionee that:

                     (a) the Company, by appropriate and all required action, is
duly authorized to enter into these Terms and consummate all of the transactions
contemplated hereunder; and

 

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                     (b)  the Option Shares, when issued and delivered by the
Company to the Optionee in accordance with the terms and conditions hereof, will
be duly and validly issued and fully paid and non-assessable.

            12.     Optionee Representations.  The Optionee hereby represents
and warrants to the Company that:

                     (a) The Company has made available to the Optionee a copy
of all reports and documents required to be filed by the Company with the
Securities and Exchange Commission pursuant to the 1934 Act within the last
twelve (12) months and all reports issued by the Company to its stockholders
during such period;

                     (b) The Optionee must bear the economic risk of the
investment in the Option Shares, which cannot be sold by him unless they are
registered under the 1933 Act or an exemption therefrom is available thereunder;

                     (c) The Optionee has had both the opportunity to ask
questions of and receive answers from the Company and all persons acting on its
behalf concerning the terms and conditions of the offer made hereunder;

                     (d) The Optionee is aware that the Company shall place stop
transfer orders with its transfer agent against the transfer of the Option
Shares in the absence of registration under the 1933 Act or an exemption
therefrom as provided herein; and

                     (e) The Optionee is aware that nothing in these Terms shall
confer upon the Optionee any right to continue in the employ or as a director or
agent of the Company or shall affect the right of the Company to terminate the
employment or relationship of the Optionee with the Company.

              13.    Amendments to Plan; Conflicts.  No amendment or
modification of the Plan shall be construed as to terminate the Option granted
under these Terms.  In the event of a conflict between the provisions of the
Plan and the provisions of these Terms, the provisions of the Plan shall in all
respects be controlling.

             14.     Miscellaneous.

             14.1   Notices.  All notices or communications under these Terms
shall be in writing, addressed as follows:

If to Company:

Par Pharmaceutical Companies, Inc.

300 Tice Boulevard

Woodcliff Lake, NJ  07677

Attention: General Counsel

If to Optionee:

Address of Optionee on file with the Company.

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Any such notice or communication shall be (a) delivered by hand (with written
confirmation of receipt) or sent by a nationally recognized overnight delivery
service (receipt requested), (b) registered electronically through the
Smith-Barney website or other online administrator, subject to any applicable
confirmation process established by the online administrator, or (c) sent
certified or registered mail, return receipt requested, postage prepaid,
addressed as above (or to such other address as such party may designate in
writing from time to time), and the actual date of receipt shall determine the
time at which notice was given.

            14.2     Waiver.  The waiver by any party hereto of a breach of any
provision of the Certificate or these Terms shall not operate or be construed as
a waiver of any other or subsequent breach.

            14.3     Entire Agreement.  The Plan is incorporated herein by
reference.  The Plan, these Terms and the Certificate constitute the entire
agreement between the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company
and Optionee with respect to the subject matter hereof, and may not be modified
except by means of a writing signed by the Company and Optionee.

            14.4     Binding Effect; Successors.  These Terms and the
Certificate shall inure to the benefit of and be binding upon the parties hereto
and to the extent not prohibited herein, their respective heirs, successors,
assigns and representatives.  Nothing in these Terms or the Certificate,
expressed or implied, is intended to confer on any person other than the parties
hereto and as provided above, their respective heirs, successors, assigns and
representatives, any rights, remedies, obligations or liabilities.

            14.5    Governing Law.  These Terms and the Certificate, and their
validity, interpretation, performance and enforcement, shall be governed by and
construed in accordance with the laws of the State of Delaware.

            14.6    Headings.  The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or affect
the meaning of or interpretation of any of the terms or provisions of these
Terms.

            14.7    Severability.  Whenever possible, each provision in these
Terms shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of these Terms shall be held to be
prohibited by or invalid under applicable law, then (a) such provision shall be
deemed amended to accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (b) all other provisions of
these Terms shall remain in full force and effect.

            14.8    No Strict Construction.  No rule of strict construction
shall be implied against the Company, the Committee or any other person in the
interpretation of any of the terms of the Plan, these Terms or any rule or
procedure established by the Committee.

            14.9 Further Assurances.  The Optionee agrees, upon demand of the
Company or the Committee, to do all acts and execute, deliver and perform all
additional documents, instruments and agreements that may be reasonably required
by the Company or the Committee, as the case may be, to implement the provisions
and purposes of the Certificate, these Terms and the Plan.

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IN WITNESS WHEREOF, the parties hereunto set their hands as of the date the
Certificate is accepted on the website of Smith Barney.

PAR PHARMACEUTICAL COMPANIES, INC.

Michael A. Tropiano

Executive Vice President & Chief Financial Officer

OPTIONEE

(Acceptance designated electronically

at the website of Smith Barney)

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