Document:

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EXHIBIT 10.6.9

PAR
PHARMACEUTICAL COMPANIES, INC.

TERMS OF RESTRICTED SHARES AWARD

(Effective for 2010 Awards)

This
document sets forth the terms of the award of Restricted Shares (as defined in
Section 1.1 below) granted by PAR PHARMACEUTICAL COMPANIES, INC. (the “Company”)
pursuant to a Certificate of Restricted Shares (the “Certificate”) displayed at
the website of Smith Barney Benefits Access®.  The Certificate, which
specifies the person to whom the Restricted Shares have been awarded (the
“Participant”), other specific details of the award, 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 Restricted Shares 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 Participant of
Restricted Shares, designated in the Certificate, on the terms and conditions
set forth in the Plan and in these Terms.  Capitalized terms used but not
defined in these Terms shall have the meanings set forth in the Plan.

NOW,
THEREFORE, the parties, intending to be legally bound, agree as follows: 

1.

RESTRICTED
SHARES

1.1

Grant
of Restricted Shares.

(a)

Subject
to the terms and conditions hereinafter set forth and set forth in the Plan, the
Company grants as of the date of grant specified on the Certificate (the “Date
of Grant”) to the Participant that number of shares of common stock, par value
$.01 per share (“Common Stock”), set forth on the Certificate, and subject to
the restrictions set forth in Section 1.2 of these Terms, the terms and
conditions of the Plan and the other terms and conditions contained in these
Terms (the “Restricted Shares”).  If and when the restrictions set forth in
Section 1.2 expire in accordance with these Terms, and upon the satisfaction of
all other applicable conditions as to the Restricted Shares, such shares (and
any related stock dividends or distributions accrued under Section 1.2(a)(iii))
not forfeited pursuant to Section 1.4 hereof shall no longer be considered
Restricted Shares for purposes of these Terms.

(b)

As
soon as practicable after the Date of Grant, the Company shall direct that a
stock certificate or certificates representing the applicable Restricted Shares
be registered in the name of, and issued to, the Participant.  Such
certificate or certificates shall be held in the custody of the Company or its
designee until such Shares have vested (or such applicable portion of the Shares
as may become vested) in accordance with the schedule in Section 1.3(a).
 On or before the date of acceptance of these Terms, the Participant has
delivered to the Company one or more stock powers endorsed in blank relating to
the Restricted Shares.

(c)

Each
certificate for the Restricted Shares shall bear the following legend (the
“Legend”):

The
ownership and transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the Par Pharmaceutical Companies, Inc. 2004 Performance Equity
Plan and the associated Terms of Restricted Shares Award entered into between
the registered owner and Par Pharmaceutical Companies, Inc.  Copies of such
Plan and Terms are on file in the executive offices of Par Pharmaceutical
Companies, Inc., 300 Tice Boulevard, Woodcliff Lake, NJ 07677.

In addition, the
stock certificate or certificates for the Restricted Shares shall be subject to
such stop-transfer orders and other restrictions as the Company may deem
advisable under the rules, regulations and other requirements of the Securities
and Exchange Commission, any stock exchange upon which Common Stock is then
listed, and any applicable federal or state securities law, and the Company may
cause a legend or legends to be placed on such certificate or certificates to
make appropriate reference to such restrictions.

(d)

As
soon as administratively practicable following the vesting of all or any portion
of the Restricted Shares, and upon the satisfaction of all other applicable
conditions as to such vested Restricted Shares, including the payment by the
Participant of all applicable withholding taxes, the Company shall deliver or
cause to be delivered to the Participant a certificate or certificates for the
applicable vested Restricted Shares that shall not bear the Legend.  

1.2

Restrictions.

(a)

Beginning
with the Date of Grant, the Participant shall have all rights and privileges of
a stockholder as to the Restricted Shares, including the right to vote and
receive dividends or other distributions with respect to the Restricted Shares,
except that the following restrictions shall apply:

(i)
 the Participant shall not be entitled to delivery of the certificate or
certificates for the Restricted Shares until such Restricted Shares are deemed
vested in accordance with the schedule in Section 1.3(a), and are not otherwise

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forfeited
pursuant to Section 1.4 hereof and upon the satisfaction of all other applicable
conditions;

(ii) 
none of the Restricted Shares may be sold, transferred, assigned, pledged or
otherwise encumbered or disposed of prior to the date such Restricted Shares are
deemed vested in accordance with the schedule in Section 1.3(a), except as
provided in Section 8.3 of the Plan or as otherwise permitted by the Committee
in its sole discretion or pursuant to rules adopted by the Committee in
accordance with the Plan; 

(iii)
 all shares of Common Stock distributed as a dividend or distribution, if
any, with respect to the Restricted Shares prior to the date such Restricted
Shares are deemed vested in accordance with the schedule in Section 1.3(a) shall
be delivered to and held by the Company and subject to the same restrictions as
the related Restricted Shares until the vesting of such Restricted Shares, and
subject to the satisfaction of all other applicable conditions; and

(iv)
 all of the Restricted Shares shall be subject to forfeiture on the terms
and conditions set forth in Section 1.4 hereof; if forfeited, the Restricted
Shares shall be returned to the Company and all rights of the Participant with
respect to the Restricted Shares shall terminate in their entirety on the terms
and conditions set forth in Section 1.4 hereof.

(b)

Any
attempt to dispose of Restricted Shares or any interest in the Restricted Shares
in a manner contrary to the restrictions set forth in these Terms shall be void
and of no effect.

1.3

Vesting.
 

(a)

Such portion of the Restricted Shares shall be deemed
vested and no longer subject to forfeiture under Section 1.4 hereof or the
restrictions set forth in Section 1.2 hereof in accordance with the following
schedule:

Vesting
Date

Vested
Percentage

1st
 Anniversary of the Date of Grant

25%

2nd
Anniversary of the Date of
Grant                                       
50%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3rd
Anniversary of the Date of Grant

75%

4th
Anniversary of the Date of Grant

100%

(b)

Notwithstanding
paragraph (a) above, upon a “Change of Control” of the Company, all rights of the Participant to the
Restricted Shares that have not vested shall immediately vest and no longer be
subject to forfeiture under Section 1.4 hereof or the restrictions set forth in
Section 1.2 hereof.  

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1.4

Forfeiture.
 

(a)

Subject
to Section 1.7 hereof, if prior to the date such Restricted Shares are
deemed vested in accordance with the schedule in Section 1.3(a), (i) the
Participant’s employment with the Company, its Affiliates and/or its
Subsidiaries is terminated for any reason, including termination by reason of
resignation, other than due to death or disability, (ii) there occurs a
material breach of these Terms by the Participant or (iii) the Participant fails
to meet the tax withholding obligations described in Section 1.5(b) hereof, all
rights of the Participant to the Restricted Shares that have not vested in
accordance with Section 1.3(a) or 1.3(b) hereof as of the date of such event
shall terminate immediately and be forfeited in their entirety.  

(b)

In
the event that the Participant’s employment with the Company, its Affiliates
and/or its Subsidiaries is terminated due to the Participant’s death or
disability prior to the fourth anniversary of the Date of Grant, the Participant
shall be deemed vested as of the date of such termination in that percentage of
the Restricted Shares which the Participant would have become vested in if the
Participant had remained employed through the next anniversary of the Date of
Grant that first occurs on or after the date of such termination, and that
number of shares shall no longer be subject to forfeiture.  The remainder
of any Restricted Shares that have not vested in accordance with the terms of
Section 1.3 or this Section 1.4(b) as of the date of the Participant’s
termination shall terminate immediately and be forfeited in their entirety.
 The determination of whether the Participant has terminated employment due
to disability shall be made in the good faith judgment of the Committee.
 

(c)

In
the event of any forfeiture under this Section 1.4 hereof, the certificate or
certificates representing the forfeited Restricted Shares shall be canceled to
the extent of any Restricted Shares that were forfeited.

1.5

Withholding.

(a)

The
Committee shall determine the amount of any withholding or other tax required by
law to be withheld or paid by the Company with respect to any income recognized
by the Participant with respect to the Restricted Shares.

(b)

The
Participant shall be required to meet any applicable tax withholding obligation
in accordance with the provisions of Article 18 of the Plan.

(c)

The
Committee shall be authorized, in its sole discretion, to establish such rules
and procedures relating to the use of shares of Common Stock to satisfy tax
withholding obligations as it deems necessary or appropriate to facilitate and
promote the conformity of the Participant’s transactions under the Plan and
these Terms with Rule 16b-3 under the Securities Exchange Act of 1934, as
amended, if such Rule is applicable to transactions by the Participant.

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1.6

Covenants
and Conditions on Awards and Recovery.

(a)

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

(i)

at
any time during the Participant’s employment with the Company, its Affiliates or
its Subsidiaries and for a period of twenty-four (24) months following the
Participant’s termination of such employment, the Participant shall not,
directly or indirectly, either (A) personally or (B) as an employee, agent,
partner, stockholder, officer or director of, consultant to, or otherwise of any
entity or person engaged in any business in which the Company, its Affiliates or
its Subsidiaries is engaged, or is actively proposing to engage at the time of
such termination of employment, engages in conduct that breaches the
Participant’s duty of loyalty to the Company, its Affiliates or its Subsidiaries
or that is in material competition with the Company, its Affiliates or its
Subsidiaries or is materially injurious to the Company, its Affiliates or its
Subsidiaries, monetarily or otherwise, which conduct shall include, but not be
limited to:  (1) disclosing or using any confidential information
pertaining to the Company, its Affiliates or its Subsidiaries; (2) any attempt,
directly or indirectly, to induce any employee of the Company, its Affiliates or
its Subsidiaries to be employed or perform services elsewhere; or (3) any
attempt, directly or indirectly, to solicit the trade of any customer or
supplier or prospective customer or supplier of the Company, its Affiliates or
its Subsidiaries; or (4) disparaging the Company, its Affiliates or its
Subsidiaries or any of their respective officers or directors.  The
determination of whether any conduct, action or failure to act falls within the
scope of activities contemplated by this Section shall be made by the Committee,
in its discretion, and shall be final and binding upon the Participant.  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 Participant shall not be
deemed to be a stockholder of a competing entity if the Participant’s record and
beneficial ownership of equity securities of said entity amount to not more than
one percent (1%) of the outstanding equity securities of any company subject to
the periodic and other reporting requirements of the Securities Exchange Act of
, as amended.

(ii)

the
Company would be irreparably injured in the event of a breach of any of the
Participant’s obligations under Section 1.6(a)(i), monetary damages would not be
an adequate remedy for any such breach and the Company shall be entitled to
injunctive relief, in addition to any other remedies that it may have, in the
event of any such breach.

(b)

Recovery
of Award Upon Violation of Covenants.  In the event that the Committee
determines that the Participant has violated any of the covenants contained in
Section 1.6(a), then:

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(i)

all
of the Participant’s unvested Restricted Shares shall be forfeited immediately
and such Shares shall be returned to the Company and all rights of the
Participant with respect to the Restricted Shares shall terminate;

(ii)

to
the extent that the Participant holds shares of Common Stock acquired upon
vesting of Restricted Shares, the Participant upon notice from the Company of
the Participant’s obligations under this Section 1.6(b)(ii), shall, at the
option of the Company, either: (1) immediately deliver to the Company an amount
in cash equal to the then-Fair Market Value of such Common Stock, or (2) deliver
all such shares of Common Stock to the Company; and 

(iii)

to
the extent that the Participant has disposed of shares of Common Stock acquired
upon vesting of any Restricted Shares, the Participant upon notice from the
Company of the Participant’s obligations under this Section 1.6(b)(iii), shall
immediately pay the Company an amount equal to the amount realized by the
Participant upon the disposition of such Common Stock or, if the disposition was
not an arm’s-length transaction with an unrelated party, an amount equal to the
then-Fair Market Value of such Common Stock.

The
notice described in subsections (ii) and (iii) above may be given at any time
within twelve months after the expiration of the applicable covenant period
under Section 1.6(a).  

1.7

Committee’s
Discretion.  Notwithstanding any provision of these Terms to the
contrary, the Committee shall have discretion under Section 17.1 of the Plan to
waive any forfeiture of the Restricted Shares as set forth in Section 1.4
hereof, the restrictions set forth in Section 1.2 hereof and any other
conditions set forth in these Terms.

 

2.

REPRESENTATIONS
OF THE PARTICIPANT

The
Participant hereby represents to the Company that the Participant has read and
fully understands the provisions of the Certificate, these Terms and the Plan
and the Participant’s decision to participate in the Plan is completely
voluntary.  Further, the Participant acknowledges that the Participant is
relying solely on his or her own advisors with respect to the tax consequences
of this restricted stock award.

3.

NOTICES

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

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To
the Company:

Par
Pharmaceutical Companies, Inc.

300
Tice Boulevard

Woodcliff
Lake, NJ  07677

Attention:
 General Counsel

To
the Participant:

Address
on file with the Company

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

4.

ASSIGNMENT;
BINDING AGREEMENT

These
Terms shall be binding upon and inure to the benefit of the heirs and
representatives of the Participant and the assigns and successors of the
Company, but neither these Terms nor any rights hereunder shall be assignable or
otherwise subject to hypothecation by the Participant.

5.

ENTIRE
AGREEMENT; AMENDMENT; TERMINATION

These
Terms, the Plan and the Certificate represent the entire agreement of the
parties with respect to the subject matter hereof, subject to any applicable
accelerated vesting provisions of a written employment, severance or similar
agreement between the Participant and the Company, its Affiliates and/or its
Subsidiaries.  The provisions of the Plan are incorporated in these Terms
in their entirety.  In the event of any conflict between the provisions of
these Terms and the Certificate and the Plan, the provisions of the Certificate
or the Plan, as the case may be, shall control.  These Terms may be amended
at any time by written agreement of the parties hereto.

6.

GOVERNING
LAW

The
Certificate and these Terms, and their validity, interpretation, performance and
enforcement, shall be governed by the laws of the State of Delaware other than
the conflict of laws provisions of such laws.

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7.

SEVERABILITY

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

8.

NO
RIGHT TO CONTINUED EMPLOYMENT OR PARTICIPATION; EFFECT ON OTHER
PLANS

These
Terms shall not confer upon the Participant any right with respect to continued
employment by the Company, its Affiliates or its Subsidiaries or continued
participation under the Plan, nor shall it interfere in any way with the right
of the Company, its Affiliates and its Subsidiaries to terminate the
Participant’s employment at any time.  Payments received by the Participant
pursuant to these Terms shall not be included in the determination of benefits
under any pension, group insurance or other benefit plan of the Company, its
Affiliates or any Subsidiaries in which the Participant may be enrolled or for
which the Participant may become eligible, except as may be provided under the
terms of such plans or determined by the Board. 

9.

NO
STRICT CONSTRUCTION

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

10.

USE
OF THE WORD “PARTICIPANT”

Wherever
the word “Participant” is used in any provision of these Terms under
circumstances where the provision should logically be construed to apply to the
executors, the administrators, or the person or persons to whom the Restricted
Shares may be transferred by will or the laws of descent and distribution, the
word “Participant” shall be deemed to include such person or persons.

11.

FURTHER
ASSURANCES

The
Participant agrees, upon demand of the Company or the Committee, to do all acts
and execute, deliver and perform all additional documents, instruments and
agreements (including, without limitation, stock powers with respect to shares
of Common Stock issued as a dividend or distribution on Restricted Shares) that
may be reasonably required by the Company or the Committee, as the case may be,
to implement the provisions and purposes of the Certificate, these Terms and the
Plan.

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IN
WITNESS WHEREOF, the parties have duly executed these Terms, as of the day and
year first above written.

PAR
PHARMACEUTICAL COMPANIES, INC.

Thomas
J. Haughey

Executive
Vice President and General Counsel

PARTICIPANT

(Acceptance
designated electronically at the

website
of Smith Barney)

- 9 -Converted by EDGARwiz

EXHIBIT 10.6.10

PAR
PHARMACEUTICAL COMPANIES, INC.

TERMS OF STOCK OPTION

 (Effective for 2010 Awards)

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

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

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

WHEREAS,
pursuant to the Plan, the Committee has approved an award to the Optionee
designated in the Certificate of an option to purchase common stock of the
Company on the terms and subject to the conditions set forth in the Plan and
these Terms of Stock Option.  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 to the Optionee, as a matter of separate agreement and not
in lieu of salary, or any other compensation for services, the right and option
(the “Option”) to purchase all or any part of an aggregate number of shares of
Common Stock (the “Option Shares”) set forth in the Certificate subject to the
terms and conditions set forth in the Plan and these Terms.

2.

Nonqualified
Option; Withholding Tax.

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

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.

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

(i)

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

(ii)

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

(iii)

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

(iv)

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

4.2

Effect
of Termination of Employment.

4.2.1

Termination
Upon Death or Disability.

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

2

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.

4.2.5

Termination
Without Cause.

  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”), this Option or any unexercised portion thereof which
was otherwise exercisable on the date of such termination, shall terminate
unless such Option, to the extent exercisable on the date of such termination,
is exercised within ninety (90) days of the date on which the Optionee ceases to
be an employee.  Notwithstanding anything herein to the contrary, in no
event shall the Option be exercisable after the Grant Expiration Date.

4.2.6

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 

3

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 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.

5.

Forfeiture
Provisions Following a Termination of Employment.

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

(i)

at
any time during the Optionee’s employment with the Company, its Affiliates or
its Subsidiaries and for a period of twenty-four (24) months following the
Optionee’s termination of such employment, the Optionee shall not, directly or
indirectly, either (A) personally or (B) as an employee, agent, partner,
stockholder, officer or director of, consultant to, or otherwise of any entity
or person engaged in any business in which the Company, its Affiliates or its
Subsidiaries is engaged, or is actively proposing to engage at the time of such
termination of employment, engages in conduct that breaches the Optionee’s duty
of loyalty to the Company, its Affiliates or its Subsidiaries or that is in
material competition with the Company, its Affiliates or its Subsidiaries or is
materially injurious to the Company, its Affiliates or its Subsidiaries,
monetarily or otherwise, which conduct shall include, but not be limited to:
 (1) disclosing or using any confidential information pertaining to the
Company, its Affiliates or its Subsidiaries; (2) any attempt, directly or
indirectly, to induce any employee of the Company, its Affiliates or its
Subsidiaries to be employed or perform services elsewhere; or (3) any attempt,
directly or indirectly, to solicit the trade of any customer or supplier or
prospective customer or supplier of the Company, its Affiliates or its
Subsidiaries; or (4) disparaging the Company, its Affiliates or its Subsidiaries
or any of their respective officers or directors.  The determination of
whether any conduct, action or failure to act falls within 

4

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 Securities Exchange Act of
1934, as amended the “1934 Act”).

(ii)

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

(b)

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

(i)

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

(ii)

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

(iii)

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

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

5

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.  Notwithstanding
the foregoing, the obligation of the Company to sell and deliver shares of
Common Stock with respect to the Option granted hereunder shall be subject to,
as deemed necessary or appropriate by counsel for the Company, and the Committee
shall have the sole discretion to impose such conditions, restrictions and
limitations (including suspending exercises of the Option and the tolling of any

6

applicable
exercise period during such suspension) on the issuance of Common Stock with
respect to the Option unless and until the Committee determines that such
issuance complies with (i) all applicable laws, rules and regulations and such
approvals by any governmental agencies as may be required, including, without
limitation, the effectiveness of a registration statement under the Securities
Act of 1933 (the “1933 Act”), and (ii) the condition that such shares shall have
been duly listed on such stock exchanges as the Common Stock is then listed.

9.

Transfer
of Option Shares.

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

10.

Anti-Dilution
Provisions.

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

11.

Company
Representations.

  The
Company hereby represents and warrants to the Optionee that:

(a)

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

(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;

7

(d)

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

(e)

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

13.

Amendments
to Plan; Conflicts.

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

14.

Miscellaneous.

14.1

Notices.

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

If
to Company:

Par
Pharmaceutical Companies, Inc.

300
Tice Boulevard

Woodcliff
Lake, NJ  07677

Attention:
General Counsel

If
to Optionee:

Address
of Optionee on file with the Company.

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

14.2

Waiver.

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

14.3

Entire
Agreement.

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

14.4

Binding
Effect; Successors.

  These
Terms and the Certificate shall inure to the benefit of and be binding upon the
parties hereto and to the extent not prohibited herein, their respective heirs,
successors, assigns and representatives.  Nothing in these Terms or the
Certificate, expressed or implied, is intended to confer on any person other

8

than
the parties hereto and as provided above, their respective heirs, successors,
assigns and representatives, any rights, remedies, obligations or
liabilities.

14.5

Governing
Law.

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

14.6

Headings.

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

14.7

Severability.

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

14.8

No
Strict Construction.

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

14.9

Further
Assurances.

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

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)

9

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