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EXHIBIT 10.2




PAR
PHARMACEUTICAL COMPANIES, INC.




TERMS OF EXECUTIVE RETENTION STOCK OPTION AWARD







This
document sets forth the terms of an Option (as defined in Section 1 below) to
purchase shares of common stock granted by PAR PHARMACEUTICAL COMPAMIES, 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 Executive Retention Stock Option Award.  Capitalized terms
used but not defined in these Terms or the Certificate shall have the meanings
set forth in the Plan.




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 as of the date specified on the Certificate (the “Grant
Date”) 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”) specified on the Certificate on the terms and
conditions set forth herein and therein.

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.







3.

Grant
Price.

  The
grant price of each Option Share shall be the grant price specified on the
Certificate.

4.

Exercise
Period.

4.1

Grant
Expiration Date; Vesting.

  

4.1.1

Option
Term.  Subject to the vesting provisions of Section 4.1.2, the
Option shall be exercisable during the period (the “Exercise Period”) commencing
on the Grant Date 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.
 

4.1.2

Vesting.
 

(a)

Service-Based
Vesting Schedule.  Subject to this Section 4 and Section 5 hereof, this
Option shall be deemed vested and exercisable in accordance with the following
schedule:

		
	
Vesting
Date
	
Vesting
Percentage

	
Prior to
Third Anniversary of the Grant Date
	
0%

	
Third
Anniversary of the Grant Date
	
100%






(b)

Accelerated
Performance-Based Vesting.  Notwithstanding the vesting schedule in
Section 4.1.2(a), if both conditions of (i) and (ii) of this Section 4.1.2(b)
are satisfied, the Option shall be deemed vested and exercisable with respect to
a number of Option Shares equal to 66-2/3% of the total number of Option Shares
granted in the Certificate:

(i)
 the Committee determines that the Fair Market Value of the Company’s
Common Stock exceeds one hundred twenty percent (120%) of the Option Grant Price
(as specified in the Certificate) on at least twenty (20) business days during
the fiscal quarter ending on December 31, 2010, and 

(ii)
 the Optionee remains continuously employed with the Company or any of its
subsidiaries from the Grant Date through November 18, 2010 or until such time as
the condition set forth in (i) above is met.

Any
fractional share resulting from the above vesting calculation shall be rounded
up to the next whole share.

(c)

Forfeiture
of Option on Termination of Employment.  Any portion of the Option that
has not vested in accordance with the schedule in Section 4.1.2(a) or the
performance-based vesting provisions of Section 4.1.2(b) prior to the Optionee’s
termination of employment for any reason other than as specified in Sections
4.2.5(b) or 4.2.6 shall be forfeited and of no further effect upon such
termination.  





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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, 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
such date, is exercised by the Optionee or the executor or administrator of his
estate, as the case may be, within one year after the date of such termination
of his 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.  A transfer
of the Option by the Optionee by will or by laws of descent and distribution
shall not be effective to bind the 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
by Reason of Retirement.

  Should
the employment of the Optionee terminate during the term of the Option by reason
of retirement by the Optionee on or after age 65, or with the approval of the
Committee, from active employment with the Company or any subsidiary prior to
age 65 (“Retirement”), this Option or any unexercised portion thereof which was
otherwise exercisable on the date of such termination, shall terminate within
thirty (30) days of the date of such termination unless the Committee, at or
before the time of such Retirement, shall determine that the Option shall remain
exercisable by the Optionee for a period of one year following the effective
date of such termination of employment; provided, however, that if the Optionee
dies within such one-year period, the Option may be exercised by the executor or
administrator of the Optionee's estate within one year following such death.
 Notwithstanding anything herein to the contrary, in no event shall the
Option be exercisable after the Grant Expiration Date.

4.2.3

Termination
by Reason of Resignation.

  Should
the employment of the Optionee terminate during the term of the Option by reason
of resignation by the Optionee (for any reason other than Retirement), this
Option or any unexercised portion thereof which was otherwise exercisable on the
date of such resignation, shall terminate unless such Option, to the extent
exercisable on the date of such resignation, is exercised within thirty (30)
days of the date on which the Optionee resigns.  Notwithstanding anything
herein to the contrary, in no event shall the Option be exercisable after the
Grant Expiration Date.

4.2.4

Termination
For Cause.

  If
the Optionee's employment is terminated “for cause,” this Option or any
unexercised portion thereof shall terminate and be of no further force and
effect from the date of termination.  Termination “for cause” as used
herein means the termination of Optionee's employment by the Company (or, if
applicable, any subsidiary thereof), “for cause” as defined in any agreement
between the Company (or any such subsidiary) and the Optionee or, in the event
no such agreement exists, based upon objective factors determined in good faith
by the Company.





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4.2.5

Termination
Without Cause.

  

(a)

Termination
Prior to Second Anniversary.  If the employment of the Optionee with
the Company or any of its subsidiaries is terminated for any reason other than
death, disability, Retirement, resignation or discharge “for cause” at any time
prior to the second anniversary of the Grant Date, 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 in accordance with Section 4.1.2, is exercised
within ninety (90) days of the date on which he ceases to be an employee.
 Notwithstanding anything herein to the contrary, in no event shall the
Option be exercisable after the Grant Expiration Date.  

(b)

Termination
After Second Anniversary.  Notwithstanding the provisions of Section
4.2.5(a), (i) if the employment of the Optionee with the Company or any of its
subsidiaries is terminated for any reason other than death, disability,
Retirement, resignation or any other termination by the Optionee, or discharge
“for cause” and (ii) such termination occurs on or after the second anniversary
of the Grant Date and prior to the third anniversary of the Grant Date, the
Optionee’s right to exercise the Option with respect to that number of Option
Shares equal to the total number of Option Shares granted in the Certificate
multiplied by the “Ratio.”  In that event, this Option or any unexercised
portion thereof which was otherwise exercisable on the date of the Optionee’s
termination, shall terminate unless such Option, to the extent exercisable on
the date of such termination in accordance with Section 4.1.2 or this Section
4.2.5, 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.
 As used herein, “Ratio” shall mean a fraction, the numerator of which is
the total number of full calendar months occurring between the Grant Date and
the date of the Optionee’s termination of employment, and the denominator of
which is thirty-six (36).  Any fractional Option Share that becomes
exercisable as a result of the above calculation shall be rounded up to the next
whole share.  

4.2.6

Change
of Control.

  Upon
a “Change of Control” of the Company, the Optionee's right to exercise the
Option shall be immediately vested and accelerated in full and the Optionee may,
during the  Exercise Period, exercise the Option for the remaining
unexercised portion of the Option (notwithstanding that such portion of the
Option had not yet otherwise become fully exercisable under Section 4.1 with
respect to all or part of the Option Shares at the date of such Change of
Control); provided, however, that nothing herein contained shall extend the
Grant Expiration Date.  

4.2.7

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 elect 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 





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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 (c) of the definition of a
“Change of Control” in Section 2.8 of the Plan.





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5.

Forfeiture
Provisions Following a Termination of Employment.

  Notwithstanding
any provision under these Terms or in the Plan to the contrary, in any instance
where the rights of the Optionee to exercise any unexercised portion of the
Option extend past the date of termination of the Optionee's employment, all of
such rights shall immediately and automatically terminate and be forfeited if,
in the determination of the Committee, the Optionee at any time during a
twenty-four month period following his or her termination of employment,
directly or indirectly, either (i) personally or (ii) 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 or any of its
subsidiaries is engaged, or is actively proposing to engage at the time of such
termination of employment, engages in conduct that breaches his or her duty of
loyalty to the Company or any of its subsidiaries or that is in material
competition with the Company or any of its subsidiaries or is materially
injurious to the Company or any of its subsidiaries, monetarily or otherwise,
which conduct shall include, but not be limited to:  (i) disclosing or
using any confidential information pertaining to the Company or any of its
subsidiaries; (ii) any attempt, directly or indirectly, to induce any employee
of the Company or any of its subsidiaries to be employed or perform services
elsewhere; or (iii) any attempt, directly or indirectly, to solicit the trade of
any customer or supplier or prospective customer or supplier of the Company or
any or its subsidiaries; or (iv) disparaging the Company or any of 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 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 1934 Act.  In the
event the existence of any circumstance which would trigger the forfeiture of an
award pursuant to this Section 5 but for the fact that the Optionee has
previously been converted into or exercised for other securities of the Company
(e.g., upon the exercise of stock options), or converted into cash or other
property (e.g., upon the sale by or for the account of the Optionee of Common
Stock acquired by him or her upon the exercise of Stock Options), whether before
or after the termination of employment, then, in such event, said securities, or
cash or other property, as the case may be, shall be deemed to be held in trust
for the Company and shall be promptly paid over to the Company upon demand (net
of any amounts that may have been theretofore actually paid by the Optionee to
the Company in respect thereof (i.e., as the cash grant price of an option)).
 The Optionee further recognizes that (i) the Company would be irreparably
injured in the event of a breach of any of his obligations under this Section 5;
(ii) monetary damages would not be an adequate remedy for any such breach; and
(iii) 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.





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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 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.  

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.





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9.

Transfer
of Option Shares.

9.1

Restriction.

  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.

9.2

Notification
to Company.

  The
Optionee agrees that if he should dispose of any Option Shares, including a
disposition by sale, exchange, gift or transfer of legal title within twelve
(12) months from the date such Option Shares are transferred to him, he shall
notify the Company promptly of such disposition or transfer.

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

(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;





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(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 required or permitted hereunder shall be in writing and shall be deemed
to be properly given when personally delivered to the party entitled to receive
the notice or when sent by certified or registered mail, postage prepaid,
properly addressed to the party entitled to receive such notice at the address
stated below:




If
to Company:

Par
Pharmaceutical Companies, Inc.

300
Tice Boulevard

Woodcliff
Lake, NJ  07677




If
to Optionee:

Address
of Optionee on file with the Company.

14.2

Waiver.

  The
waiver by any party hereto of a breach of any provision of 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 shall be governed by and construed in accordance with the laws of the
State of Delaware.





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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.

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.

Thomas
J. Haughey

Executive
Vice President and General Counsel

OPTIONEE

(Acceptance
designated electronically 

at
the website of Smith Barney)








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