FORM OF RETENTION AGREEMENT

Exhibit 10.1

FORM OF RETENTION AGREEMENT

     RETENTION AGREEMENT (“ Agreement ”), dated as of ___, 2009 (the “ Effective Date ”), made and entered into by and between K-V Pharmaceutical Company, a Delaware corporation (the “ Company ”), and ___(the “ Executive ”).

RECITALS

           WHEREAS , the Company currently employs the Executive as the ___;

           WHEREAS , the Company believes that it is in the best interests of the Company to encourage the Executive’s continued employment with and dedication to the Company; and

           WHEREAS , to that end, the Company will provide certain benefits to the Executive if the Executive remains employed by the Company, subject to the terms set forth below.

           NOW, THEREFORE , in consideration of the premises and the mutual covenants contained in this Agreement, the parties agree as follows:

          1. Term . The term of this Agreement shall commence on ___, 2009 and the Agreement shall remain in effect until June 30, 2010 (the “ Term ”).

          [ 2. Stock Option Award . The Company, to carry out the purpose of the Company’s 2001 Incentive Stock Option Plan (the “ Plan ”), hereby agrees to grant to the Executive, within thirty days of the Effective Date (such date, the “ Grant Date ”), an incentive stock option (the “ Option ”) to purchase all or any part of an aggregate of ___shares of its Class A Common Stock, $.01 par value per share (the “ Common Stock ”). The purchase price of the shares of Common Stock issuable upon exercise of the Option (the “ Option Price ”) shall be the greater of (i) $1.00 per share and (ii) the closing price per share of Common Stock reported on the New York Stock Exchange at the close of trading on the Grant Date. The Option shall vest (A)(1) as to ___shares of Common Stock on December 31, 2009 if the Executive shall be an employee of the Company or any subsidiary on such date, and (2) as to ___shares of Common Stock on December 31, 2010 if the Executive shall be an employee of the Company or any subsidiary on such date, or (B) as to all shares of Common Stock on the date of the Executive’s termination from the Company or any subsidiary without Cause if the Executive is terminated from the Company or any subsidiary without Cause prior to December 31, 2010. The Option shall be granted pursuant to, and shall be subject to the terms and conditions set forth in, the Company’s form of incentive stock option agreement, attached hereto as Exhibit A . For the avoidance of doubt, however, the Executive acknowledges and agrees that the Company makes

KV: ______ Executive: ______

no representations that the Option will qualify as an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “ Code ”). ] 1

          [ 3. Retention Bonus.

          (a) Retention Bonus Amount . Subject to the terms of this Agreement, the Executive shall be entitled to receive a retention bonus in the amount of ___ (the “ Retention Bonus ”) from the Company for services previously rendered to the Company and any subsidiary.

          (b) Terms of the Retention Bonus .

               (i) If on March 31, 2010 (the “ Retention Date ”) the Executive is actively employed by the Company or any subsidiary, the Retention Bonus shall be paid to the Executive no later than June 30, 2010, as determined by the Company.

               (ii) If, prior to the Retention Date, the Executive shall cease to be an employee of the Company or any subsidiary as the result of the Executive’s dismissal without Cause, then the Retention Bonus shall be paid to the Executive within 60 days thereafter, as determined by the Company.

               (iii) If, prior to the Retention Date, the Executive shall cease to be an employee of the Company or any subsidiary as the result of the Executive’s dismissal for Cause, then the Executive shall no longer be eligible to receive the Retention Bonus.

               (iv) If, prior to the Retention Date, the Executive shall voluntarily terminate the Executive’s employment with the Company or any subsidiary, then the Executive shall no longer be eligible to receive the Retention Bonus.

               (v) If, prior to the Retention Date, the Executive shall cease to be an employee of the Company or any subsidiary as a result of the Executive’s death or Disability, then the Retention Bonus shall be paid to the Executive within 60 days of such termination, as determined by the Company.

          (c) Effect of Leave of Absence .

               (i) If, at any time prior to the Retention Date, the Executive takes a leave of absence but returns to work on or before the Retention Date and either (1) the Executive’s return to work rights are protected by applicable law, or (2) such leave of absence was for medical reasons and was approved by the Company, the Executive will remain eligible to receive the Retention Bonus.

               (ii) If the Executive is on a leave of absence described in Subsection (i) on the Retention Date and such Executive subsequently returns to active employment, the Executive will remain eligible to receive the Retention Bonus. If the Executive returns to active

employment after June 30, 2010, the Retention Bonus is to be paid within 60 days of the Executive’s return to active employment, as determined by the Company.

               (iii) If, at any time prior to the Retention Date, the Executive takes a Company-approved leave of absence for other than medical reasons but returns to work on or before the Retention Date, the Executive will be eligible to receive a Retention Bonus, pro-rated for the number of days the Executive was actively employed from the Effective Date through the Retention Date.

               (iv) If the Executive is on a leave of absence described in Subsection (iii) on the Retention Date and such Executive subsequently returns to active employment, the Executive will be eligible to receive a Retention Bonus, pro-rated for the number of days the Executive was actively employed from the Effective Date through the Retention Date. If the Executive returns to active employment after June 30, 2010, the Retention Bonus is to be paid within 60 days of the Executive’s return to active employment, as determined by the Company. ] 2

          4. Entire Agreement; Modification . This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes and cancels all prior oral or written a