Exhibit 10.3
* Confidential Treatment Requested Under
17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2
EXECUTIVE BONUS AGREEMENT
FOR
JEFFREY A. WHITNELL
     This Executive Bonus Agreement (the “Agreement”) is entered into between
Akorn, Inc., a Louisiana corporation (the “Corporation”), and Jeffrey A.
Whitnell (the “Participant”), effective April 27, 2006. The purpose of the
Agreement is to reward the service, performance, productivity and loyalty of the
Participant by providing the Participant with a prospective bonus to be paid in
accordance with the terms of this Agreement.
     IN CONSIDERATION of the mutual promises made and other good and valuable
consideration, receipt of which is hereby acknowledged, the Corporation and the
Participant agree as follows:
1. Amount of Payment. The Participant is eligible to receive a one-time cash
bonus equal to the sum of Sections 1.1 and 1.2, below:
     1.1 Bonus. A bonus up to $112,500 (45% of the Participant’s annual base
compensation rate (“Base Comp”)) for achieving all of the following performance
measurements in 2006, or, if one or more but not all of these performance
measurements are achieved, Participant is eligible to receive a portion of that
amount in accordance with the sum of the following:
          1.1.1 Financial Results.
               (a) Earnings Per Share. $18,750 (7.5% of Base Comp) will be
awarded for achieving earnings per share of at least $0.01.
               (b) EBIDTA. $18,750 (7.5% of Base Comp) will be awarded for
achieving an “EBITDA” of at least [...***...]. “EBITDA” means earning before
interest, taxes, depreciation and amortization.
               (c) Net Revenue. $18,750 (7.5% of Base Comp) will be awarded for
achieving net revenue of at least [...***...].
          1.1.2 Capital Raise. $18,750 (7.5% of Base Comp) will be awarded for
conducting a successful capital raise that is approved by the Board of Directors
of the Corporation (the “Board”).
          1.1.3 SOX Compliance/BDO Report. $18,750 (7.5% of Base Comp) will be
awarded for achieving compliance with the requirements of Section 404 of the
Sarbanes-Oxley Act of 2002 (as applicable based upon the criteria of the United
States Securities Exchange Commission).
          1.1.4 Manufacturing Variance. $18,750 (7.5% of Base Comp) will be
awarded for achieving budgeted manufacturing facility variance of zero on a
combined basis between
* CONFIDENTIAL TREATMENT REQUESTED — This language has been omitted and filed
separately with the Securities & Exchange Commission.

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* Confidential Treatment Requested Under
17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2
both of the Corporation’s manufacturing facilities (allowing for an overage at
one facility to be offset by an underage at the other facility).
     1.2 Over Achievement Bonus. If, and only if, all of the performance
measurements (and the entire bonus) set forth in Section 1.1 above have been
achieved in full, a bonus of up to $37,500 (15% of Base Comp) for over
achievement of the EBITDA performance measures in accordance with the sum of the
following:
          1.2.1 If the Corporation’s EBITDA is at least [...***...], Participant
shall receive an additional $18,750 (7.5% of Base Comp); and
          1.2.2 If the Corporation’s EBITDA is at least [...***...], Participant
will receive an additional $18,750 (for a total of $37,500, or 15% of Base
Comp).
2. Calculating the Bonus. All bonus calculations shall be made by the Chief
Financial Officer of the Corporation, subject to the review and approval of the
Compensation Committee of the Board (the “Committee”). The calculation and
payment of bonuses under this Agreement shall be made within 30 days from the
Corporation’s receipt of its audited financial statements. All bonuses under
this Agreement shall be payable in cash or in other consideration as determined
in the sole discretion of the Committee.
3. No Agreement to Employ. Nothing in this Agreement shall affect any right with
respect to continuance of the Participant’s employment by the Corporation or any
of its affiliates. The right of the Corporation or any of its affiliates to
terminate at will the Participant’s employment at any time (whether by
dismissal, discharge or otherwise), with or without cause, is specifically
reserved.
4. Unfunded and Unsecured Obligation. The amount payable to the Participant
hereunder is merely an unfunded and unsecured promise to pay money pursuant to
this Agreement. The Corporation is not required to segregate funds for this
purpose and all amounts payable hereunder are subject to the rights of all
secured and unsecured creditors of the Corporation. The Participant shall not
have any security interest in any asset of the Corporation as a result of this
Agreement, and the Participant shall be merely an unsecured creditor of the
Corporation with respect to amounts payable hereunder.
5. Tax Consequences. The Participant acknowledges that he has considered the
advisability of consulting with his or her own tax advisors as to the specific
tax consequences of participating in the Agreement, including the applicable
federal, state, local and foreign tax consequences, and that the Corporation has
no responsibility for the tax consequences related to the Participant’s
participation in the Agreement other than the Corporation’s duty to satisfy its
withholding obligations.
6. Administrator. The Committee, or such other committee or persons as the
Committee may designate from time to time, is designated as the “Administrator”
with authority to control and manage the operation and administration of this
Agreement.
* CONFIDENTIAL TREATMENT REQUESTED — This language has been omitted and filed
separately with the Securities & Exchange Commission.

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     6.1 Powers of the Administrator. The Administrator shall have full
discretionary power to administer the Agreement in all of its details. For this
purpose the Administrator’s discretionary power shall include, but shall not be
limited to, the following authority:
          6.1.1 to make and enforce such rules and regulations as it deems
necessary or proper for the efficient administration of the Agreement or
required to comply with applicable law;
          6.1.2 to interpret the Agreement;
          6.1.3 to decide all questions concerning the Agreement and the
eligibility of any person to participate in the Agreement;
          6.1.4 to compute the amounts to be distributed under the Agreement,
and to determine the person or persons to whom such amounts will be distributed;
          6.1.5 to authorize payments under the Agreement;
          6.1.6 to keep such records and submit such filings, elections,
applications, returns or other documents or forms as may be required under the
Internal Revenue Code of 1986, as amended (the “Code”), and applicable
regulations, or under other federal, state or local law and regulations; and
          6.1.7 to allocate and delegate its ministerial duties and
responsibilities and to appoint such agents, counsel, accountants and consultant
as may be required or desired to assist in administering the Agreement.
     6.2 Effect of Interpretation or Determination. Any interpretation of the
Agreement or other determination with respect to the Agreement by the
Administrator shall be final and conclusive on all persons in the absence of
clear and convincing evidence that the Administrator acted arbitrarily and
capriciously.
     6.3 Reliance on Information or Advice. In administering the Agreement, the
Administrator shall be entitled, to the extent permitted by law, to rely
conclusively on all tables, valuations, certificates, opinions and reports which
are furnished by any accountant, counsel or other expert who is employed or
engaged by the Corporation or by the Administrator on the Corporation’s behalf.
     6.4 Limitation on Rights and Authority of Participants. The Participant
expressly acknowledges that nothing contained herein shall be construed to:
(i) grant the Participant any ownership interest or other rights as a
shareholder of the Corporation or any other entity; (ii) create a partnership;
or (iii) give the Participant any right or authority with respect to the
property except as expressly provided herein.
7. Amendment. The Committee reserves the power at any time or times to amend the
provisions of the Agreement to any extent and in any manner that it may deem
advisable.

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However, the Committee shall not have the power to amend the Agreement
retroactively in such a manner as would reduce the accrued vested benefit of the
Participant, except as otherwise permitted or required by law.
8. Savings Clause. The parties intend for this Agreement to comply in form and
in operation with Section 409A of the Code. Notwithstanding any other provision
of this Agreement, the Committee shall be permitted to amend or eliminate any
provision or term of this Agreement to the extent that such provision or term
violates or conflicts with the requirements of Section 409A or the compliance by
the Corporation or Participant with such provision or term will result in a
violation of Section 409A.
9. Limitation of Rights. The establishment of the Agreement, any amendments
thereof, the creation of any fund or account or the payment of any benefits
shall not be construed as giving to the Participant or other person any legal or
equitable right against the Corporation or the Administrator, except as provided
herein, and in no event shall the terms of employment or service of any
Participant be modified or in any way be affected hereby.
10. Entire Agreement. The Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof, and supersedes all prior agreements, understandings, inducements
or conditions, express or implied, oral or written, relating to the subject
matter hereof. The express terms of the Agreement control and supersede any
course of performance and/or usage of trade inconsistent with any of the terms
hereof.
11. Assignment by the Corporation. The rights and obligations of the Corporation
hereunder are fully assignable at the sole discretion of the Corporation.
12. Severability. The provisions of the Agreement are severable. Except as
otherwise provided herein, in the event that one or more of the provisions
contained in the Agreement or in any other agreement referred to herein shall,
for any reason, be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not effect the remaining
provisions of the Agreement. Further a court of competent jurisdiction shall
have the authority to rewrite, interpret or construe the terms of the Agreement
so as to render them enforceable to the maximum extent allowed by law,
consistent with the intent of the parties as evidenced hereby.
13. Attorney Fees. If any legal action is necessary to enforce the terms of the
Agreement, the prevailing party shall be entitled to recover, in addition to
other amounts to which the prevailing party may be entitled, actual attorneys’
fees and costs.
14. Counterparts. The Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original as against any party whose
signature appears thereon, and all of which shall together constitute one and
the same instrument.
15. Governing Law. The Agreement shall be construed, administered and enforced
according to the laws of the State of Illinois, without regard to its conflicts
of laws rules.
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     IN WITNESS HEREOF, the parties have executed this Agreement as of the date
set forth above.

              AKORN, INC.:
Corporation       PARTICIPANT:
 
           
By:
       /s/ Arthur S. Przybyl             /s/ Jeffrey A. Whitnell
 
           
Its:
  Chief Executive Officer       Jeffrey A. Whitnell

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