Document:

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                                                                    Exhibit 10.1

                           KING PHARMACEUTICALS, INC.

                                 INCENTIVE PLAN

                          RESTRICTED STOCK CERTIFICATE

     This Certificate, when executed by a duly authorized officer of King
Pharmaceuticals, Inc. (the "Company") and by Participant, evidences the grant to
the Participant named below of Restricted Common Stock of the Company.

1.   Name and Address of Participant: __________________________________________

                                      __________________________________________

                                      __________________________________________

2.   Date of Grant:                   __________________________________________

3.   Type of Grant:                   Restricted Stock

4.   Number of Shares:                __________________________________________

5.   Vesting Schedule:                The restrictions upon the Restricted Stock
                                      shall lapse upon the 3rd anniversary of
                                      ________________.

6.   Purchase Price:                  __________________________________________

This Restricted Stock is subject to and governed by the terms of this Restricted
Stock Certificate, the Restricted Stock Agreement attached hereto and
incorporated by reference herein and the Company's Incentive Plan.

                                        KING PHARMACEUTICALS, INC.

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        PARTICIPANT

                                        ----------------------------------------

This Restricted Stock Certificate may be executed in more than one counterpart,
each of which shall be deemed an original, but all of which together shall
constitute but one and the same instrument. Facsimile or photographic copies of
originally signed copies of this Restricted Stock Certificate will be deemed to
be originals.

FORM RS-1

<PAGE>

                        RESTRICTED STOCK GRANT AGREEMENT
                   PURSUANT TO THE KING PHARMACEUTICALS, INC.
                                 INCENTIVE PLAN

     This Restricted Stock Grant Agreement (the "Agreement") is made as of the
date set forth on the Restricted Stock Certificate attached hereto (the "Grant
Date") by King Pharmaceuticals, Inc. (the "Company") and the individual
identified on the Restricted Stock Certificate (the "Participant") to effect an
award of restricted stock by the Company to the Participant on the terms and
conditions set forth below:

     1.   AWARD OF RESTRICTED STOCK.

     As of the Grant Date, subject to the terms, conditions and restrictions set
forth herein, the Company grants and issues to the Participant the number of
shares of the Company's common stock indicated on the Restricted Stock
Certificate (the "Restricted Stock").

     2.   GOVERNING PLAN.

     The Restricted Stock shall be granted pursuant to and (except as
specifically set forth herein) subject in all respects to the applicable
provisions of the King Pharmaceutical, Inc. Incentive Plan ("Plan"), which are
incorporated herein by reference. Terms not otherwise defined in this Agreement
have the meanings ascribed to them in the Plan.

     3.   RESTRICTIONS ON THE RESTRICTED STOCK.

          (a) No Transfer. The shares of Restricted Stock (including any shares
     received by the Participant with respect to shares of Restricted Stock as a
     result of stock dividends, stock splits or any other form of
     recapitalization or a similar transaction affecting the Company's
     securities without receipt of consideration) may not be sold, assigned,
     transferred, pledged, hypothecated or otherwise disposed of, alienated or
     encumbered during the Restricted Period.

          (b) Vesting. The restrictions imposed under Section 3(a) will be
     removed from the Restricted Stock at the end of the applicable Restricted
     Period. Removal of the restrictions imposed under Section 3(a) from
     particular shares of Restricted Stock is referred to as "vesting" of those
     shares and shares from which the restrictions have been removed are
     referred to as "vested."

     4.   VOTING AND OTHER RIGHTS.

     During the period prior to vesting, except as otherwise provided herein,
the Participant will have all of the rights of a shareholder with respect to all
of the Restricted Stock, including without limitation the right to vote such
Restricted Stock and the right to receive all dividends or other distributions
with respect to such Restricted Stock. In connection with the payment of such

                                       2

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dividends or other distributions, the Company will be entitled to deduct from
any amounts otherwise payable by the Company to Participant (including without
limitation salary or other compensation) any taxes or other amounts required by
any governmental authority to be withheld and paid over to such authority for
Participant's account.

     5.   CERTIFICATION, ESCROW AND DELIVERY OF SHARES.

          (a) Certificates. Each certificate representing the Restricted Stock
     will be endorsed with a legend substantially as set forth below, as well as
     such other legends as the Company may deem appropriate to comply with
     applicable laws and regulations:

          The securities evidenced by this certificate are subject to certain
          limitations on transfer and other restrictions as set forth in that
          certain Restricted Stock Grant Agreement, dated as of
          ____________________, 2005, between the Company and the holder of such
          securities, pursuant to the King Pharmaceutical, Inc. Incentive Plan
          (copies of which are available for inspection at the offices of the
          Company).

          (b) Escrow. With respect to the Restricted Stock (including any shares
     received by Participant with respect to shares of Restricted Stock that
     have not yet vested as a result of stock dividends, stock splits or any
     other form of recapitalization or a similar transaction affecting the
     Company's securities without receipt of consideration), the Secretary of
     the Company, or such other escrow holder as the Secretary may appoint, will
     retain physical custody of the certificate representing such share until
     such share vests.

          (c) Delivery of Certificates. As soon as reasonably practicable after
     the vesting of any Restricted Stock, the Company will release the
     certificate(s) representing such vested Restricted Stock to Participant. If
     other still unvested shares of Restricted Stock are also represented by the
     same stock certificate as vested shares, then such certificate will be
     retired and new certificates representing the vested and unvested portions
     of the Restricted Stock will be issued in place of the existing
     certificate. The certificate representing the vested Restricted Stock will
     be delivered to Participant and the certificate representing the still
     unvested shares of Restricted Stock will be retained by the escrow holder.

     6.   ADDITIONAL AGREEMENTS.

          (a) Tax Matters. The Restricted Stock is subject to appropriate income
     tax withholding and other deductions required by applicable laws or
     regulations, and Participant and his successors will be responsible for all
     income and other taxes payable as a result of grant or vesting of the
     Restricted Stock or otherwise in connection with this Agreement. The
     Company is not required to provide any gross-up or other tax assistance.
     Participant understands that Participant may make an election pursuant to
     Section 83(b) of the Internal Revenue Code (the "Code") within thirty (30)
     days after the date Participant acquired the Restricted Stock hereunder, or
     comparable provisions of any state tax law, to include in Participant's
     gross income the fair market value (as of the date

                                       3

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     of acquisition) of the Restricted Stock. Participant may make such an
     election only if, prior to making any such election, Participant (a)
     notifies the Company of Participant's intention to make such election, by
     delivering to the Company a copy of the fully-executed Section 83(b)
     Election Form attached hereto as Exhibit A, and (b) pays to the Company an
     amount sufficient to satisfy any taxes or other amounts required by any
     governmental authority to be withheld or paid over to such authority for
     Participant's account, or otherwise makes arrangements satisfactory to the
     Company for the payment of such amounts through withholding or otherwise.
     Participant understands that if Participant does not make a proper and
     timely Section 83(b) election, generally under Section 83 of the Code, at
     the time the Restricted Period lapses with respect to any portion of the
     Restricted Stock, Participant will recognize ordinary income and be taxed
     in an amount equal to the fair market value (as of the date the forfeiture
     restrictions lapse) of the Restricted Stock less the purchase price paid
     for the Restricted Stock. PARTICIPANT ACKNOWLEDGES THAT IT IS PARTICIPANT'S
     SOLE RESPONSIBILITY, AND NOT THE COMPANY'S, TO FILE A TIMELY ELECTION UNDER
     SECTION 83(B). PARTICIPANT IS RELYING SOLELY ON PARTICIPANT'S ADVISORS WITH
     RESPECT TO THE DECISION AS TO WHETHER OR NOT TO FILE A SECTION 83(B)
     ELECTION.

          (b) Independent Advice; No Representations. Participant acknowledges
     that (i) (s)he was free to use professional advisors of his choice in
     connection with this Agreement, has received advice from her/his
     professional advisors in connection with this Agreement, understands its
     meaning and import, and is entering into this Agreement freely and without
     coercion or duress; and (ii) (s)he has not received and is not relying upon
     any advice, representations or assurances made by or on behalf of the
     Company or any Company affiliate or any employee of or counsel to the
     Company regarding any tax or other effects or implications of the
     Restricted Stock or other matters contemplated by this Agreement.

          (c) Value of Restricted Stock. No representations or promises are made
     to Participant regarding the value of the Restricted Stock or Company's
     business prospects. Participant acknowledges that information about
     investment in Company stock, including financial information and related
     risks, is contained in Company's SEC reports which have been made available
     for Participant's review at any time before Participant's acceptance of
     this Agreement. Further, Participant understands that the Company does not
     provide tax or investment advice and acknowledges Company's recommendation
     that Participant consult with independent specialists regarding such
     matters. Sale or other transfer of the Company stock may be limited by and
     subject to Company policies as well as applicable securities laws and
     regulations.

          (d) Adjustment in Capitalization. In the event of an Adjustment Event
     that is a merger, consolidation, reorganization, liquidation, dissolution
     or other similar transaction, then the Award pursuant to Section 1 of this
     Agreement shall be deemed to pertain to the securities and other property,
     including cash, to which a holder of the number of shares equal to the
     Restricted Stock would have been entitled to receive in connection with
     such Adjustment Event; provided, that any securities issued to Participant
     in respect of unvested Granted Shares will be subject to the same
     restrictions

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     and vesting provisions that were applicable to the Restricted Stock in
     exchange for which the securities were issued.

          (e) Change of Control. Upon a Change of Control, vesting shall occur
     with respect to the Restricted Stock in accordance with Article 11 of the
     Plan.

          (f) Termination of Employment. Upon a Termination of Employment,
     vesting or forfeiture of the Restricted Stock shall be determined according
     to Section 8.7 of the Plan.

          (g) No Right to Continued Employment. This Agreement does not confer
     upon Participant any right to continue as an employee of the Company or its
     subsidiary or to any particular employment tenure, nor does it limit in any
     way the right of Company or its subsidiary to terminate Participant's
     services to the Company or its subsidiary at any time, with or without
     cause.

          (h) Spousal / Domestic Partner Consent. If the Participant is married
     or has a domestic partner, this Agreement shall be effective only upon the
     execution and delivery to the Company of the consent attached hereto as
     Exhibit B.

     7.   GENERAL.

          (a) Successors and Assigns. This Agreement is personal in its nature
     and Participant may not assign or transfer his/her rights under this
     Agreement.

          (b) Notices. Any notices, demands or other communications required or
     desired to be given by any party shall be in writing and shall be validly
     given to another party if served either personally or if deposited in the
     United States mail, certified or registered, postage prepaid, return
     receipt requested. If such notice, demand or other communication shall be
     served personally, service shall be conclusively deemed made at the time of
     such personal service. If such notice, demand or other communication is
     given by mail, such notice shall be conclusively deemed given forty-eight
     (48) hours after the deposit thereof in the United States mail addressed to
     the party to whom such notice, demand or other communication is to be given
     as hereinafter set forth:

                                       5

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To the Company:                         King Pharmaceuticals, Inc.
                                        501 Fifth Street
                                        Bristol, TN 37620
                                        Attention: _____________________________

     To Participant: At his/her address of record as maintained in the Company's
files.

Any party may change its address for the purpose of receiving notices, demands
and other communications by providing written notice to the other party in the
manner described in this paragraph.

          (c) Entire Agreement. Except as this Agreement may expressly provide
     otherwise, this Agreement, the Restricted Stock Certificate and the Plan
     constitute the entire agreement and understanding of the Company and
     Participant with respect to the subject matter hereof and thereof, and
     supersede all prior written or verbal agreements and understandings between
     Participant and the Company relating to such subject matter. This Agreement
     may only be amended by written instrument signed by Participant and an
     authorized officer of the Company.

          (d) Governing Law; Severability. This Agreement will be construed and
     interpreted under the laws of the State of Tennessee applicable to
     agreements executed and to be wholly performed within the State of
     Tennessee. If any provision of this Agreement as applied to any party or to
     any circumstance is adjudged by a court of competent jurisdiction to be
     void or unenforceable for any reason, the invalidity of that provision
     shall in no way affect (to the maximum extent permissible by law) the
     application of such provision under circumstances different from those
     adjudicated by the court, the application of any other provision of this
     Agreement, or the enforceability or invalidity of this Agreement as a
     whole. If any provision of this Agreement becomes or is deemed invalid,
     illegal or unenforceable in any jurisdiction by reason of the scope, extent
     or duration of its coverage, then such provision shall be deemed amended to
     the extent necessary to conform to applicable law so as to be valid and
     enforceable or, if such provision cannot be so amended without materially
     altering the intention of the parties, then such provision will be stricken
     and the remainder of this Agreement shall continue in full force and
     effect.

          (e) Remedies. All rights and remedies provided pursuant to this
     Agreement or by law shall be cumulative, and no such right or remedy shall
     be exclusive of any other. A party may pursue any one or more rights or
     remedies hereunder or may seek damages or specific performance in the event
     of another party's breach hereunder or may pursue any other remedy by law
     or equity, whether or not stated in this Agreement.

          (f) Interpretation. Headings herein are for convenience of reference
     only, do not constitute a part of this Agreement, and will not affect the
     meaning or interpretation of this Agreement. References herein to Sections
     are references to the referenced Section hereof, unless otherwise
     specified.

                                       6

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          (g) Waivers; Amendments. The waiver by either party of a breach of any
     provision of this Agreement shall not operate or be construed as a waiver
     of any later breach of that provision. This Agreement may be modified only
     by written agreement signed by Participant and the Company.

                                        7

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                                    EXHIBIT A
                       TO RESTRICTED STOCK GRANT AGREEMENT
                                 PURSUANT TO THE
                    KING PHARMACEUTICALS, INC. INCENTIVE PLAN

                ELECTION TO INCLUDE VALUE OF RESTRICTED PROPERTY
                       IN GROSS INCOME IN YEAR OF TRANSFER
                       INTERNAL REVENUE CODE SECTION 83(B)

     The undersigned hereby elects pursuant to Section 83(b) of the Internal
Revenue Code with respect to the property described below, and supplies the
following information in accordance with the regulations promulgated thereunder:

     1.   NAME, ADDRESS AND TAXPAYER IDENTIFICATION NUMBER OF THE UNDERSIGNED:

          __________________________________________
          __________________________________________
          __________________________________________
          Taxpayer SSN.: ___________________________

     2.   DESCRIPTION OF PROPERTY WITH RESPECT TO WHICH THE ELECTION IS BEING
          MADE:

     _______________ shares of common stock "(Common Stock") of King
Pharmaceuticals, Inc., a Tennessee corporation ("the Company")

     3.   DATE ON WHICH PROPERTY WAS TRANSFERRED: ___________________________

     4.   TAXABLE YEAR TO WHICH THIS ELECTION RELATES: _________________________

     5.   NATURE OF THE RESTRICTIONS TO WHICH THE PROPERTY IS SUBJECT:

     The Common Stock vests according to the following schedule: _______________

     The Common Stock is non-transferable in the taxpayer's hands, prior to
vesting and payment of any required consideration and tax-related amounts.

     6.   FAIR MARKET VALUE OF THE PROPERTY:

     The fair market value at the time of transfer (determined without regard to
any restrictions other than restrictions that by their terms will never lapse)
of the property with respect to which this election is being made is $ _________
per share.

     7.   AMOUNT PAID FOR THE PROPERTY:

     The amount paid by the taxpayer for said property is $_______________ per
     share.

                                        8

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     8.   FURNISHING STATEMENT TO EMPLOYER:

     A copy of this statement has been furnished to the Company.

Date:
      -------------------------------   ----------------------------------------
                                        Signature

                                        ----------------------------------------
                                        Printed Name

This election must be filed with the Internal Revenue Service Center with which
taxpayer files his or her Federal income tax returns and must be made within
thirty (30) days after the execution date of the Grant. This filing should be
made by registered or certified mail, return receipt requested. The taxpayer
must retain two (2) copies of the completed form for filing with his or her
Federal and state tax returns for the current tax year, send one copy to the
Company and retain an additional copy for his or her records.

                                        9

<PAGE>

                                    EXHIBIT B
                       TO RESTRICTED STOCK GRANT AGREEMENT
                                 PURSUANT TO THE
                    KING PHARMACEUTICALS, INC. INCENTIVE PLAN

                      CONSENT OF SPOUSE / DOMESTIC PARTNER

     I, ____________________________, spouse or domestic partner of
_________________________, acknowledge that I have read the RESTRICTED STOCK
GRANT AGREEMENT dated as of _______________ (the "Agreement") to which this
Consent is attached as Exhibit B and that I know its contents. Capitalized terms
used and not defined herein shall have the meanings assigned to such terms in
the Agreement. I am aware that by its provisions the Restricted Stock granted to
my spouse/domestic partner pursuant to the Agreement is subject to a Restricted
Period during which all or a portion of the Restricted Stock may be required to
be forfeited to King Pharmaceuticals, Inc. (the "Company") and that,
accordingly, I may be required to forfeit to the Company any or all of the
Restricted Stock of which I may become possessed as a result of a gift from my
spouse/domestic partner or a court decree and/or any property settlement in any
domestic litigation.

     I hereby agree that my interest, if any, in the Restricted Stock subject to
the Agreement shall be irrevocably bound by the Agreement and further understand
and agree that any community property interest I may have in the Restricted
Stock shall be similarly bound by the Agreement.

     I agree to the Restricted Period described in the Agreement and I hereby
consent to the forfeiture of the Restricted Stock to the Company by my
spouse/domestic partner or my spouse/domestic partner's legal representative in
accordance with the provisions of the Agreement. Further, as part of the
consideration for the Agreement, I agree that at my death, if I have not
disposed of any interest of mine in the Restricted Stock by an outright bequest
of the Restricted Stock to my spouse or domestic partner, then the Company shall
have the same rights against my legal representative to exercise its rights to
the Restricted Stock with respect to any interest of mine in the Restricted
Stock as it would have had pursuant to the Agreement if I had acquired the
Restricted Stock pursuant to a court decree in domestic litigation.

     I AM AWARE THAT THE LEGAL, FINANCIAL AND RELATED MATTERS CONTAINED IN THE
AGREEMENT ARE COMPLEX AND THAT I AM FREE TO SEEK INDEPENDENT PROFESSIONAL
GUIDANCE OR COUNSEL WITH RESPECT TO THIS CONSENT. I HAVE EITHER SOUGHT SUCH
GUIDANCE OR COUNSEL OR DETERMINED AFTER REVIEWING THE AGREEMENT CAREFULLY THAT I
WILL WAIVE SUCH RIGHT.

     Dated as of the _______ day of ________________, 200_.

                                        Signature:
                                                   -----------------------------
                                        Name:
                                              ----------------------------------

                                       10<PAGE>
                                                                    Exhibit 10.2

                           KING PHARMACEUTICALS, INC.

                                 INCENTIVE PLAN

                               OPTION CERTIFICATE

     This Certificate, when executed by a duly authorized officer of King
Pharmaceuticals, Inc. (the "Company") and by the Participant, evidences the
grant to the Participant named below of an Option to purchase shares of the
Common Stock of the Company.

1.   Name and Address of Participant:         __________________________________

                                              __________________________________

                                              __________________________________

2.   Date of Grant:                           __________________________________

3.   Type of Grant:                           Nonstatutory Stock Option

4.   Maximum Number of Shares for
     which this Option is exercisable:        __________________________________

5.   Exercise (purchase) price per share:     __________________________________

6.   Vesting Schedule: This Option shall become exercisable (and the Shares
     issued upon exercise shall be vested) as follows:

     On or after the first anniversary of ___________, up to 33% of the Shares

     On or after the second anniversary of ___________, an additional 33% of the
     Shares

     On or after the third anniversary of ___________, an additional 34% of the
     Shares

     The number of shares included in the first two tranches shall be rounded
     down to the nearest whole number, while the number of shares included in
     the third and final tranche shall be the remaining unvested balance of the
     Shares.

This Option is subject to and governed by the terms of this Option Certificate,
the Option Agreement attached hereto and incorporated by reference herein and
the Company's Incentive Plan.

This Option Certificate may be executed in more than one counterpart, each of
which shall be deemed an original, but all of which together shall constitute
but one and the same instrument. Facsimile or photographic copies of originally
signed copies of this Option Certificate will be deemed to be originals.

                                        KING PHARMACEUTICALS, INC.

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        PARTICIPANT

                                        ----------------------------------------

FORM SO-1

<PAGE>

                           KING PHARMACEUTICALS, INC.

                       NONSTATUTORY STOCK OPTION AGREEMENT

     AGREEMENT made as of the Date of Grant set forth on the Option Certificate
attached hereto, between King Pharmaceuticals, Inc. (the "Company"), a Tennessee
corporation having a principal place of business at 501 Fifth Street, Bristol,
Tennessee 37620, and the individual identified on the Option Certificate (the
"Participant").

     WHEREAS, the Company desires to grant to the Participant an Option to
purchase shares of its common stock, no par value per share (the "Shares"),
under and for the purposes set forth in the Company's Incentive Plan (the
"Plan") with the specific terms of such Option grant as set forth on the Option
Certificate attached hereto;

     WHEREAS, the Company and the Participant understand and agree that any
terms used and not defined herein have the same meanings as in the Plan; and

     WHEREAS, the Company and the Participant each intend that the Option
granted herein shall be a Nonstatutory Stock Option.

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:

     1.   GRANT OF OPTION.

     The Company hereby grants to the Participant the right and option to
purchase all or any part of an aggregate of the number of Shares listed on the
Option Certificate attached hereto, subject to adjustment upon an Adjustment
Event after the date hereof as provided in the Plan, on the terms and conditions
and subject to all the limitations set forth herein, under United States
securities and tax laws, and in the Plan, which is incorporated herein by
reference. The Participant acknowledges receipt of a copy of the Plan.

     2.   PURCHASE PRICE.

     The purchase price of the Shares covered by the Option shall be the price
per Share as set forth on the Option Certificate attached hereto, subject to
adjustment upon an Adjustment Event after the date hereof as provided in the
Plan (the "Purchase Price"). Payment shall be made in accordance with Section
6.4 of the Plan.

     3.   EXERCISABILITY OF OPTION.

     Subject to the terms and conditions set forth in this Agreement and the
Plan, the Option granted hereby shall become exercisable as set forth on the
Option Certificate attached hereto which rights are cumulative and are subject
to the other terms and conditions of this Agreement and the Plan.

                                       2

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     4.   TERM OF OPTION.

     The Option shall terminate ten years from the Date of Grant set forth on
the Option Certificate attached to this Agreement, but shall be subject to
earlier termination as provided herein or in the Plan.

     If the Participant ceases to be an employee of the Company or of a
Subsidiary (for any reason other than the death, Disability or Approved
Retirement of the Participant or termination of the Participant for Cause (as
defined in the Plan)), the Option may be exercised, if it has not previously
terminated, at any time within three months of the date the Participant ceases
to be an employee of the Company or a Subsidiary, or within the originally
prescribed term of the Option, whichever is earlier, but may not be exercised
thereafter. In such event, the Option shall be exercisable only to the extent
that the Option has become exercisable and is in effect at the date of such
cessation of employment.

     Notwithstanding the foregoing, in the event of the Participant's Disability
or death within three months after the termination of employment, the
Participant or the Participant's Survivors may exercise the Option within one
year after the date of the Participant's termination of employment, but in no
event after the date of expiration of the term of the Option.

     In the event the Participant's employment is terminated by the Company or a
Subsidiary for Cause, the Participant's right to exercise any unexercised
portion of this Option shall cease immediately as of the time the Participant is
notified his or her employment is terminated for Cause, and this Option shall
thereupon terminate. Notwithstanding anything herein to the contrary, if
subsequent to the Participant's termination, but prior to the exercise of the
Option or any portion thereof, the Committee determines that, either prior or
subsequent to the Participant's termination, the Participant engaged in conduct
which would constitute Cause, then the Participant shall immediately cease to
have any right to exercise all or any portion of the Option and this Option
shall thereupon terminate.

     In the event of the Disability of the Participant, as determined in
accordance with the Plan, the Option shall become immediately vested in full and
may be exercised within one year after the Participant's termination of
employment or, if earlier, within the term originally prescribed by the Option.

     In the event of the death of the Participant while an employee of the
Company or of a Subsidiary, the Option shall become immediately vested in full
and may be exercised by the Participant's Survivors within two years after the
date of death of the Participant or, if earlier, within the originally
prescribed term of the Option.

     In the event a Participant's employment terminates by reason of Approved
Retirement in accordance with the Plan, the Participant may exercise the Option
at any time within the originally prescribed term of the Option. In such event,
the Option shall be exercisable only to the extent that the Option has become
exercisable and is in effect at the date of such cessation of employment.

                                       3

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     5.   METHOD OF EXERCISING OPTION.

     Subject to the terms and conditions of this Agreement, the Option may be
exercised by written notice to the Company or its designee, in substantially the
form of Exhibit A attached hereto. Such notice shall state the number of Shares
with respect to which the Option is being exercised and shall be signed by the
person exercising the Option. Payment of the purchase price for such Shares
shall be made in accordance with Section 6.4 of the Plan. The Company shall
deliver such Shares as soon as practicable after the notice shall be received,
provided, however, that the Company may delay issuance of such Shares until
completion of any action or obtaining of any consent, which the Company deems
necessary under any applicable law (including, without limitation, state
securities or "blue sky" laws). The Shares as to which the Option shall have
been so exercised shall be registered in the Company's share register in the
name of the person so exercising the Option (or, if the Option shall be
exercised by the Participant and if the Participant shall so request in the
notice exercising the Option, shall be registered in the Company's share
register in the name of the Participant and another person jointly, with right
of survivorship) and shall be delivered as provided above to or upon the written
order of the person exercising the Option. In the event the Option shall be
exercised, pursuant to Section 4 hereof, by any person other than the
Participant, such notice shall be accompanied by appropriate proof of the right
of such person to exercise the Option. All Shares that shall be purchased upon
the exercise of the Option as provided herein shall be fully paid and
nonassessable.

     6.   PARTIAL EXERCISE.

     Exercise of this Option to the extent above stated may be made in part at
any time and from time to time within the above limits, except that no
fractional share shall be issued pursuant to this Option.

     7.   NON-ASSIGNABILITY.

     The Option shall not be transferable by the Participant otherwise than by
will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act or the rules thereunder. However, the
Participant, with the approval of the Committee, may transfer the Option for no
consideration to or for the benefit of a Family Member, subject to such limits
as the Committee may establish, and the transferee shall remain subject to all
the terms and conditions applicable to the Option prior to such transfer and
each such transferee shall so acknowledge in writing as a condition precedent to
the effectiveness of such transfer. Except as provided in the previous sentence,
the Option shall be exercisable, during the Participant's lifetime, only by the
Participant (or, in the event of legal incapacity or incompetency, by the
Participant's guardian or representative) and shall not be 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. Any attempted transfer,
assignment, pledge, hypothecation or other disposition of the Option or of any
rights granted hereunder contrary to the provisions of this Section 7, or the
levy of any attachment or similar process upon the Option shall be null and
void.

                                       4

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     8.   NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.

     The Participant shall have no rights as a stockholder with respect to
Shares subject to this Agreement until registration of the Shares in the
Company's share register in the name of the Participant. Except as is expressly
provided in the Plan with respect to certain changes in the capitalization of
the Company, no adjustment shall be made for dividends or similar rights for
which the record date is prior to the date of such registration.

     9.   CHANGE OF CONTROL.

     Section 11 of the Plan contains provisions covering the vesting of and
treatment of Options upon a Change of Control and is incorporated herein by
reference.

     10.  TAXES.

     The Participant acknowledges that upon exercise of the Option the
Participant will be deemed to have taxable income measured by the difference
between the then fair market value of the Shares received upon exercise and the
price paid for such Shares pursuant to this Agreement. The Participant
acknowledges that any income or other taxes due from him or her with respect to
this Option or the Shares issuable pursuant to this Option shall be the
Participant's responsibility.

     The Participant agrees that the Company may withhold from the Participant's
remuneration, if any, the minimum statutory amount of federal, state and local
withholding taxes attributable to such amount that is considered compensation
includable in such person's gross income. At the Company's discretion, the
amount required to be withheld may be withheld in cash from such remuneration,
or in kind from the Shares otherwise deliverable to the Participant on exercise
of the Option. The Participant further agrees that, if the Company does not
withhold an amount from the Participant's remuneration sufficient to satisfy the
Company's income tax withholding obligation, the Participant will reimburse the
Company on demand, in cash, for the amount under-withheld.

     11.  PURCHASE FOR INVESTMENT.

     Unless the offering and sale of the Shares to be issued upon the particular
exercise of the Option shall have been effectively registered under the
Securities Act of 1933, as now in force or hereafter amended (the "1933 Act"),
the Company shall be under no obligation to issue the Shares covered by such
exercise unless and until the following conditions have been fulfilled:

     (a)  The person(s) who exercise the Option shall warrant to the Company, at
          the time of such exercise, that such person(s) are acquiring such
          Shares for their own respective accounts, for investment, and not with
          a view to, or for sale in connection with, the distribution of any
          such Shares, in which event the person(s) acquiring such Shares shall
          be bound by the provisions of the following legend which shall be
          endorsed upon the certificate(s) evidencing the Shares issued pursuant
          to such exercise:

                                       5

<PAGE>

               "The shares represented by this certificate have been taken for
               investment and they may not be sold or otherwise transferred by
               any person, including a pledgee, unless (1) either (a) a
               Registration Statement with respect to such shares shall be
               effective under the Securities Act of 1933, as amended, or (b)
               the Company shall have received an opinion of counsel
               satisfactory to it that an exemption from registration under such
               Act is then available, and (2) there shall have been compliance
               with all applicable state securities laws;" and

     (b)  If the Company so requires, the Company shall have received an opinion
          of its counsel that the Shares may be issued upon such particular
          exercise in compliance with the 1933 Act without registration
          thereunder. Without limiting the generality of the foregoing, the
          Company may delay issuance of the Shares until completion of any
          action or obtaining of any consent, which the Company deems necessary
          under any applicable law (including without limitation state
          securities or "blue sky" laws).

     12.  RESTRICTIONS ON TRANSFER OF SHARES.

     The Participant acknowledges and agrees that neither the Company, its
shareholders nor its directors and officers, has any duty or obligation to
disclose to the Participant any material information regarding the business of
the Company or affecting the value of the Shares before, at the time of, or
following a termination of the employment of the Participant by the Company,
including, without limitation, any information concerning plans for the Company
to make a public offering of its securities or to be acquired by or merged with
or into another firm or entity.

     13.  NO OBLIGATION TO MAINTAIN RELATIONSHIP.

     The Company is not by the Plan or this Option obligated to continue the
Participant as an employee of the Company or a Subsidiary. The Participant
acknowledges: (i) that the Plan is discretionary in nature and may be suspended
or terminated by the Company at any time; (ii) that the grant of the Option is a
one-time benefit which does not create any contractual or other right to receive
future grants of options, or benefits in lieu of options; (iii) that all
determinations with respect to any such future grants, including, but not
limited to, the times when options shall be granted, the number of shares
subject to each option, the option price, and the time or times when each option
shall be exercisable, will be at the sole discretion of the Company; (iv) that
the Participant's participation in the Plan is voluntary; (v) that the value of
the Option is an extraordinary item of compensation which is outside the scope
of the Participant's employment contract, if any; and (vi) that the Option is
not part of normal or expected compensation for purposes of calculating any
severance, resignation, redundancy, end of service payments, bonuses,
long-service awards, pension or retirement benefits or similar payments.

     14.  NOTICES.

     Any notices required or permitted by the terms of this Agreement or the
Plan shall be given by recognized courier service, facsimile, registered or
certified mail, return receipt requested, addressed as follows:

                                       6

<PAGE>

If to the Company:     at its principal business office listed on the first page
                       of this Agreement

If to the Participant: at the address set forth on the Option Certificate
                       attached hereto

or to such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given upon
the earlier of receipt, one business day following delivery to a recognized
courier service or three business days following mailing by registered or
certified mail.

     15.  GOVERNING LAW.

     This Agreement shall be construed and enforced in accordance with the law
of the State of Tennessee, without giving effect to the conflict of law
principles thereof. For the purpose of litigating any dispute that arises under
this Agreement, the parties hereby consent to exclusive jurisdiction in the
State of Tennessee and agree that such litigation shall be conducted in the
state courts of Tennessee or the federal courts of the United States for the
District of Tennessee.

     16.  BENEFIT OF AGREEMENT.

     Subject to the provisions of the Plan and the other provisions hereof, this
Agreement shall be for the benefit of and shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.

     17.  ENTIRE AGREEMENT.

     This Agreement, together with the Option Certificate and the Plan, embodies
the entire agreement and understanding between the parties hereto with respect
to the subject matter hereof and supersedes all prior oral or written agreements
and understandings relating to the subject matter hereof. No statement,
representation, warranty, covenant or agreement not expressly set forth in this
Agreement shall affect or be used to interpret, change or restrict, the express
terms and provisions of this Agreement, provided, however, in any event, this
Agreement shall be subject to and governed by the Plan.

     18.  MODIFICATIONS AND AMENDMENTS.

     The terms and provisions of this Agreement may be modified or amended as
provided in the Plan.

                                       7

<PAGE>

     19.  WAIVERS AND CONSENTS.

     Except as provided in the Plan, the terms and provisions of this Agreement
may be waived, or consent for the departure therefrom granted, only by written
document executed by the party entitled to the benefits of such terms or
provisions. No such waiver or consent shall be deemed to be or shall constitute
a waiver or consent with respect to any other terms or provisions of this
Agreement, whether or not similar. Each such waiver or consent shall be
effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.

     20.  DATA PRIVACY.

     By entering into this Agreement, the Participant: (i) authorizes the
Company and each Subsidiary, and any agent of the Company or any Subsidiary
administering the Plan or providing Plan recordkeeping services, to disclose to
the Company or any of its Subsidiaries such information and data as the Company
or any such Subsidiary shall request in order to facilitate the grant of options
and the administration of the Plan; (ii) waives any data privacy rights he or
she may have with respect to such information; and (iii) authorizes the Company
and each Subsidiary to store and transmit such information in electronic form.

                                        8

<PAGE>

                                    EXHIBIT A
                  TO NONSTATUTORY STOCK OPTION GRANT AGREEMENT
                                 PURSUANT TO THE
                    KING PHARMACEUTICALS, INC. INCENTIVE PLAN

                 NOTICE OF EXERCISE OF NONSTATUTORY STOCK OPTION

TO: King Pharmaceuticals, Inc.

Ladies and Gentlemen:

     I hereby exercise my Nostatutory Stock Option to purchase _________ shares
(the "Shares") of the common stock, no par value, of King Pharmaceuticals, Inc.
(the "Company"), at the exercise price of $________ per share, pursuant to and
subject to the terms of that certain Nonstatutory Stock Option Agreement between
the undersigned and the Company dated _______________, 200_.

     I understand the nature of the investment I am making and the financial
risks thereof. I am aware that it is my responsibility to have consulted with
competent tax and legal advisors about the relevant national, state and local
income tax and securities laws affecting the exercise of the Option and the
purchase and subsequent sale of the Shares.

     I am paying the option exercise price for the Shares as follows:

               ____________________________________

     Please issue the Shares (check one):

     [ ]  to me; or

     [ ]  to me and ____________________________, as joint tenants with right of
          survivorship,

     at the following address:
     __________________________________________
     __________________________________________
     __________________________________________

                                       A-1

<PAGE>

     My mailing address for shareholder communications, if different from the
address listed above, is:

     ------------------------------------------

     ------------------------------------------

     ------------------------------------------

                                        Very truly yours,

                                        ----------------------------------------
                                        Participant (signature)

                                        ----------------------------------------
                                        Print Name

                                        ----------------------------------------
                                        Date

                                        ----------------------------------------
                                        Social Security Number

                                       A-2

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