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                                                                 EXHIBIT 10.1


July 15, 2004

Mr. Brian A. Markison
1742 Stuart Road West
Princeton, NJ  08540

Dear Mr. Markison:

I am pleased to send this letter confirming your acceptance of the full-time
position of President and Chief Executive Officer for King Pharmaceuticals, Inc.
("Company"). This letter will outline the basic terms of your employment.

The Chief Executive Officer is a salaried, exempt position and reports directly
to the Board of Directors of King Pharmaceuticals, Inc. ("Board"). As Chief
Executive Officer, you will be expected to properly perform such duties as may
reasonably be assigned to you from the Board consistent with your title. You
agree that you will be bound by all written Company policies in effect from time
to time, including the Code of Conduct.

This position is offered at a starting monthly salary of $62,500 for an annual
salary of $750,000. Additionally, you would be eligible to receive an annual
bonus under the Executive Management Incentive Award ("EMIA") as approved by the
Board, subject to attainment of the requisite performance criteria. For 2004,
the amount of such annual bonus would be determined pursuant to the EMIA,
pro-rated based on your commencement of employment during calendar year 2004
(including the period when you served as Chief Operating Officer or acting Chief
Executive Officer). For purposes of determining any amount payable to you under
the EMIA, your level of participation in the plan would be based upon a
weighted-average percentage that reflects the portion of 2004 during which you
served as Chief Executive Officer and the portion of 2004 during which you
served as acting Chief Executive Officer or Chief Executive Officer. The target
percentage applicable during the period you serve as acting Chief Executive
Officer or Chief Executive Officer will be 75% of your annual base salary for
2004 and 2005. The performance criteria applicable to you under the EMIA will
reflect the following adjustments: the EPS performance target will be 79 cents
for 2004 and 96 cents for 2005; the 96 cents target shall include a separate
required target of 33 cents attributable to management initiatives related to
cost reduction and/or operating efficiencies; and each of such targets may be
modified if the Compensation and Human Resources Committee approves the
modification.

In addition you will be eligible to participate in all other management
incentive programs, subject to the requirements thereof.

Subject to the approval of the Compensation and Human Resources Committee, the
terms of the 1997 Incentive and Non-Qualified Stock Option Plan for Employees of
King Pharmaceuticals, Inc. (the "Stock Option Plan"), and the terms and
conditions of a required Stock Option Subscription Agreement, you would be
granted an option to purchase 250,000 shares of Company common stock. The date
of the option grant would be today. The exercise price of such option would be
equal to today's fair market value of a share of our common stock determined
pursuant to the Stock Option Plan. The Stock Option Subscription Agreement would



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provide that the option would become exercisable with respect to one-half of the
shares subject thereto on each of the second and third anniversaries of the
grant date.

You would continue to be eligible for the benefits package described in your
December 19, 2003 offer letter, subject to your ability to satisfy the
eligibility requirements of the plans described in such letter and the Company's
decision to continue to maintain such plans in effect. The severance provisions
set forth below, however, supersede all other severance provisions that might
otherwise be applicable, including the Modified Severance Agreement dated April
23, 2004.

In the event that your employment were terminated by the Company without "Cause"
(as defined below) or you terminated your employment for "Good Reason" (as
defined below) in each case prior to a "Change in Control" (as defined below) or
following the second anniversary of a Change in Control, (as defined below) or
following the second anniversary of a Change in Control, contingent upon your
execution of the agreement and release applicable to top executives, as in
effect from time to time, including provisions as to non-competition,
non-solicitation and confidentiality ("Agreement and Release"), you would be
entitled to the following payments and benefits:

         -        A lump-sum cash severance payment equal to two times the sum
                  of (1) your base salary at the time of termination of your
                  employment and (2) your target bonus for the year of
                  termination (which amount would not be pro-rated based on the
                  date of your termination);

         -        The Company would continue to provide you with health and
                  welfare benefits generally made available to Company
                  executives until the second anniversary of your termination of
                  employment, provided that such obligation would cease if you
                  became covered by the employee benefits plans of a subsequent
                  employer;

         -        All unvested stock options awarded to you under the Stock
                  Option Plan would immediately become fully vested; and

         -        In the event that any payments you received were considered
                  "excess parachute payments" under Section 280G of the Internal
                  Revenue Code of 1986, as amended (the "Code"), you would be
                  entitled to a gross-up payment to make you whole for any
                  excise tax imposed on you under Section 4999 of the Code (and
                  such gross-up payment would include amounts to make you whole
                  for the Federal, state and local income and excise taxes owing
                  with respect to the gross-up payment.)

Notwithstanding anything contained herein to the contrary, any non-competition,
non-solicitation and confidentiality covenants contained in the Agreement and
Release shall (i) not be more restrictive than such covenants applicable to
other senior executive officers of the Company who have terminated employment;
(ii) with respect to any such non-competition or non-solicitation covenants,
apply for a period not to exceed one year following the date of your
termination; and


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(iii) not prevent you from earning a living in the pharmaceutical industry
during the period in which any such covenants apply.

In the event that your employment were terminated by the Company without Cause
or you terminated your employment for Good Reason in each case during the
two-year period following a Change in Control, contingent upon your execution of
the Agreement and Release, you would be entitled to the following payments and
benefits:

         -        A lump-sum cash severance payment equal to three times the sum
                  of (1) your base salary at the time of termination of your
                  employment and (2) your target bonus for the year of
                  termination (which amount would not be pro-rated based on the
                  date of your termination);

         -        The Company would continue to provide you with health and
                  welfare benefits generally made available to Company
                  executives until the third anniversary of your termination of
                  employment, provided that such obligation would cease if you
                  became covered by the employee benefits plans of a subsequent
                  employer;

         -        All unvested stock options awarded to you under the Stock
                  Option Plan would immediately become fully vested; and

         -        In the event that any payments you received were considered
                  "excess parachute payments" under Section 280G of the Code,
                  you would be entitled to a gross-up payment to make you whole
                  for any excise tax imposed on you under Section 4999 of the
                  Code (and such gross-up payment would include amounts to make
                  you whole for the Federal, state and local income and excise
                  taxes owing with respect to the gross-up payment).

"Cause" means (i) conviction of, or plea of guilty or no contest to, a felony,
(ii) embezzlement, (iii) the illegal use of drugs, (iv) a material violation of
law, regulation or written Company policy which, in the good faith belief of the
Board, is conduct so unacceptable as to prohibit the Board from continuing to
maintain you in the position of Chief Executive Officer or (v) if no Change of
Control has occurred, your failure to substantially perform your duties with the
Company (other than any such failure resulting from your physical or mental
illness or other physical or mental incapacity) as determined by the Board.
Notwithstanding the foregoing, Cause shall not be deemed to exist unless and
until (A) you have received written notice from the Board of its intention to
terminate you for Cause, such notice specifying in detail the conduct which the
Board believes such Cause termination could be based, (B) following receipt of
such notice, you have been given a reasonable opportunity to cure such conduct
(if curable) and (C) if such conduct remains uncured, there shall have been
delivered to you a copy of a resolution duly adopted by written consent of not
less than a majority of the number of directors then in office (after reasonable
notice to you and an opportunity for you, together with your counsel, to be
heard at a meeting of the Board called and held for that purpose) finding that
in the good faith opinion of the Board you are guilty of conduct set forth above
in clause (i), (ii), (iii), (iv) or (v) of the first sentence of the definition
and specifying the particulars thereof in detail.

"Change in Control" means any of the following events:


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         -        The sale of substantially all the assets of the Company;

         -        Any "person" or "group" (as such terms are used in Sections 13
                  (d) and 14(d) of the Securities Exchange Act of 1934, as
                  amended (the "Exchange Act")) is or becomes the "beneficial
                  owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
                  Act, except that a person shall be deemed to have "beneficial
                  ownership" of all securities that such person has the right to
                  acquire, whether such right is exercisable immediately or only
                  after the passage of time), directly or indirectly, of more
                  than fifty percent (50%) of the total voting stock of the
                  Company;

         -        The Company consolidates with, or merges with or into, another
                  person or sells, assigns, conveys, transfers, leases or
                  otherwise disposes of all or substantially all its assets, in
                  one transaction or a series of transactions, to any person, or
                  any person consolidates with, or merges with or into, the
                  company, in any such event pursuant to a transaction in which
                  any voting stock of the Company is reclassified or changed
                  into or exchanged for cash, securities or other property,
                  other than any such transaction where (A) any voting stock of
                  the Company is reclassified or changed into or exchanged for
                  nonredeemable voting stock of the surviving or transferee
                  corporation and (B) immediately after such transaction no
                  "person" or "group" (as such terms are used in Sections 13(d)
                  and 14(d) of the Exchange Act) is the "beneficial owner" (as
                  defined in Rules 13d-3 and 13d-5 under the Exchange Act,
                  except that a person shall be deemed to have "beneficial
                  ownership" of all securities that such person has the right to
                  acquire, whether such right is exercisable immediately or only
                  after the passage of time), directly or indirectly, of more
                  than fifty percent (50%) of the total voting stock of the
                  surviving or transferee corporation, or

         -        During any consecutive two-year period, individuals who at the
                  beginning of such period constituted the Board (together with
                  any new directors whose election by the shareholders of the
                  Company was approved by a vote of 66 2/3% of the directors
                  then still in office who were either directors at the
                  beginning of such period or whose election or nomination for
                  election was previously so approved so approved) cease for any
                  reason to constitute a majority of the Board then in office.

"Good Reason" means (i) a reduction of your compensation or benefits,
responsibilities, duties, authority, reporting, relationships, title and/or
position (in each case other than your position , if any, as director of the
Company or any subsidiary or as an officer of any subsidiary), unless other
similar situated senior executives of the Company are required to accept a
similar reduction, and excluding any isolated, insubstantial and inadvertent
action not taken in bad faith and that is remedied by the Company promptly after
receipt of notice from you; provided, however, that this clause (i) shall not be
deemed triggered merely as a result of the Company's ceasing to be a publicly
traded company in connection with a Change in Control or as a result of the
Company's (or its successor's) becoming a subsidiary of another company, (ii)
the Company shall, without your consent, require you to relocate (which term
shall not include travel) to a location more than fifty miles from your current
resident, (iii) the failure by the Company to pay to you any compensation or
benefits due you, other than an isolated, insubstantial and inadvertent failure
not occurring in bad faith and that is remedied by the Company promptly after
receipt of notice thereof given by you or (iv) the Company's material breach of
any provision set forth therein.


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The Board of Directors will consider negotiating and executing an employment
agreement setting forth the full terms of our arrangement with you prior to the
first anniversary of the date set forth above; provided, however, that the
foregoing shall not apply to the extent a Change in Control occurs prior
thereto.

The rights of the Company hereunder may be assigned by the Company to a person
or entity that is an affiliate or a successor in interest to substantially all
the business operations of the Company. Upon such assignment, the rights and
obligations of the Company hereunder shall become the rights and obligations of
such affiliate or successor person or entity.

Please contact me if you have questions concerning this offer of employment. As
with all our employees, your employment will be on an at-will basis, meaning
that should you accept and then change your mind, you may terminate your
employment at any time, as can the Company by a majority vote of the Board. By
accepting our offer of employment, you will be consenting to Tennessee being the
appropriate legal venue for resolving any employment disputes.

Brian, we are glad that you have decided to accept the position of Chief
Executive Officer of King Pharmaceuticals, Inc. Again, if you have any
questions, please do not hesitate to contact me immediately.

Sincerely,

KING PHARMACEUTICALS, INC.

/s/ Ted G. Wood

Ted G. Wood
Non-Executive Chairman of the Board