Exhibit 10.1

General Release and Waiver

This General Release and Waiver (this “Release”) is entered into effective as of
June 28, 2012, by Arthur A. Koch, Jr. (the “Executive”), on the one hand, and
Impax Laboratories, Inc. and its subsidiaries and affiliates (collectively, the
“Company”), on the other hand (the Executive and the Company are referred to
collectively as the “Parties”). Defined terms used but not defined herein shall
have the same meaning as set forth in the Employment Agreement between the
Executive and the Company dated January 1, 2010 (“Employment Agreement”).

1. Confirmation of Termination. The Executive’s employment with the Company is
terminated as of June 28, 2012 (the “Termination Date”). This Release sets forth
the payments, benefits, and other terms and conditions that the Company will
provide to Executive under, and serves as notice of, an election by the Company
of a termination pursuant to Section 5.1.6 of the Employment Agreement. If
Executive executes, delivers, and does not revoke this Release as set forth in
Section 13 below, Executive will be entitled to the payments and benefits
pursuant to the terms hereof. Except as set forth in this Release, the Executive
acknowledges and agrees that the Termination Date is the date of termination of
his employment for all purposes, including for purposes of participation in and
coverage under all benefit plans and programs sponsored by or through the
Company. The Executive acknowledges and agrees that the Company shall not have
any obligation to rehire the Executive, nor shall the Company have any
obligation to consider him for employment after the Termination Date. The
Executive acknowledges and agrees that he will not seek employment with the
Company at any time in the future, and that the Company’s refusal to employ
Executive in any future capacity will not subject the Company to liability on
any grounds. In the event that the Release does not become effective pursuant to
Section 13 of this Release or otherwise, then Company reserves the right to
claim that Executive’s employment was terminated pursuant to Section 5.1.5 of
the Employment Agreement.

2. Resignation. Effective as of the Termination Date, the Executive hereby
resigns as an officer and director of the Company and all of its subsidiaries
and affiliates and from any positions held with any other entities at the
direction or request of the Company. The Executive agrees to promptly execute
and deliver such other documents as the Company shall reasonably request to
evidence such resignations. In addition, the Executive acknowledges and agrees
that the Termination Date shall be the date of his termination from all other
offices, positions, trusteeships, committee memberships and fiduciary capacities
held with, or on behalf of, the Company. Executive agrees to make himself
available to assist and consult with the Company regarding matters relating to
his former duties for a period of six months after his Termination Date at no
additional cost to the Company and to use best efforts when (and if) called upon
to do so.

 

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3. Termination Benefits. If Executive executes and delivers this Release and
does not revoke this Release within the time set forth in Section 13 below, then
Executive will be entitled, subject to the terms and conditions set forth below
and in the plan documents, to the payments and benefits set forth in this
Section 3 (collectively the “Termination Benefits”), which together satisfy in
full the Company’s obligations with respect to payments and benefits under the
Employment Agreement or otherwise:

a. Separation Pay: The Company shall pay Executive $732,937.50 (representing one
and one half times the Executive’s Base Salary, (as defined in Section 2.1 of
the Employment Agreement)), paid in equal installments on the Company’s normal
payroll dates for a period of 12 consecutive months commencing from the
Termination Date in accordance with the normal payroll practice of the Company,
with each payment deemed to be a separate payment for purposes of IRS Code
§409A. The first payment shall be made on the next normal payroll day following
the Release Effective Date, as that term is defined in Section 13 below.

b. Separation Bonus: The Company shall pay Executive $419,734.35 (representing
one and one half times the average of the Target Bonus (as defined in
Section 2.2 of the Employment Agreement) the Executive received from the Company
for all fiscal years completed during the term of the Employment Agreement),
paid in equal installments on the Company’s normal payroll dates for a period of
12 consecutive months commencing from the Termination Date in accordance with
the normal payroll practice of the Company, with each payment deemed to be a
separate payment for purposes of IRS Code §409A. The first payment shall be made
on the next normal payroll day following the Release Effective Date, as that
term is defined in Section 13 below.

c. Pro Rata Bonus: No later than March 15, 2013, the Company shall pay Executive
a pro rata portion of the Executive’s Target Bonus for fiscal year 2012 based
solely on the Company’s actual results against the Company’s goals for the year
(determined by multiplying the amount of such Target Bonus which would be due
for the full fiscal year, as determined in good faith by the Board, by a
fraction, the numerator of which is the number of days up to the Termination
Date during the fiscal year of termination that the Executive was employed by
the Company and the denominator of which is 365).

d. Benefits

i. Medical Benefits: The Company will provide Executive with information
regarding eligibility to continue medical, dental, and vision benefits under the
Consolidated Omnibus Budget Reconciliation Act, as amended (“COBRA”), in
accordance with its terms. If the Executive timely and effectively elects under
COBRA to continue medical benefit coverage after the Termination Date under the
Company Independence Blue Cross medical plan (or any successor plan) for himself
or any of his dependents currently enrolled on his plan (the “Dependents”), then
the Company will pay the insurer such COBRA medical benefit premiums for as long
as the Executive and/or his Dependents remain eligible for and enrolled under
COBRA for up to 24 consecutive months commencing immediately after the
Termination Date. In the event Executive or his Dependents, after timely and
effectively electing to continue such medical benefit coverage under COBRA, and
after using all available COBRA, becomes ineligible to continue such medical
benefit coverage under COBRA through no fault of their own, Executive and/or his
Dependents (but only if they would be eligible to obtain coverage under the
Company Independence Blue Cross medical plan had the Executive been employed by
the Company at such time), as applicable, may be eligible to convert to an
individual Independence Blue Cross Individual Personal Choice medical plan (or
any successor plan as set forth in the then applicable group medical plan
documents) at the same cost to Executive for coverage as described under the
plan documents. In such event, the Company agrees to pay the insurer the premium
for such individual plan for the period commencing from such COBRA ineligibility
date and ending on the last day of the 24-month period commencing immediately
after the Termination Date.

 

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ii. Dental Benefits: The Executive will remain eligible to continue dental
benefit coverage under the Company Delta Dental dental plan (or any successor
plan) for himself and his Dependents for up to 24 consecutive months commencing
immediately after the Termination Date. The Company will pay the insurer for any
related dental benefit premiums under such group dental plan for as long as
Executive and/or his Dependents remain enrolled in such group dental benefit
plan, for up to 24 consecutive months commencing immediately after the
Termination Date.

iii. Vision Benefits: The Executive will remain eligible to continue vision
benefit coverage under the Company VSP vision plan (or any successor plan) for
himself and his Dependents for up to 24 consecutive months commencing
immediately after the Termination Date. The Company will pay the insurer for any
related vision benefit premiums under such vision plan for as long as Executive
and/or his Dependents remain enrolled in such group vision benefit plan, for up
to 24 consecutive months commencing immediately after the Termination Date.

iv. Payment for Benefit Continuation. If it is not possible or convenient for
the Company to pay the insurer directly for any medical, dental, or vision
insurance benefit coverage set forth in Sections 3(d) hereunder, then the
Executive will be solely responsible for timely making such payments and the
Company will reimburse Executive within 30 days of receipt from Executive of
reasonable proof that payment has been timely received by the insurer. Executive
agrees to notify the Company promptly in writing after Executive or his
Dependents become eligible for medical, dental or vision insurance benefits
under another employer’s plan, in which case any obligation by the Company under
this Section 3 or otherwise to extend such benefit(s) shall cease immediately.

e. Stock Option and Restricted Stock Awards: If Executive executes, delivers,
and does not revoke this Release within the time set forth in Section 13 below,
then (i) there shall be a 12 month acceleration of vesting for those stock
options and shares of restricted stock described in Table 1 of Exhibit A hereof
and Executive shall be entitled to exercise such stock options described in
Table 1 of Exhibit A hereof during the 12 month period immediately following the
Termination Date, and (ii) Executive shall be entitled to exercise those
vested stock options described in Table 2 of Exhibit A hereof during the 12
month period immediately following the Termination Date. Each of these stock
options and shares of restricted stock shall otherwise remain subject in all
respects to the restrictions of the applicable stock option grant or stock bonus
award agreements between Executive and the Company and the Amended and Restated
2002 Equity Incentive Plan. Except as set forth in this Section 3(e) and Exhibit
A; all other stock options and shares of restricted stock held by Executive that
are unvested shall terminate and be forfeited.

f. Subject to Section 3(e) above, any changes to the terms and conditions of the
Company’s benefit plans that apply generally to employees or to the Amended and
Restated 2002 Equity Incentive Plan shall also apply to Executive and his
entitlement under this Release (e.g., changes to the premiums, changes to
coverage, changes in insurers, changes to the equity incentive plans, etc.).

 

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g. Notwithstanding any other provision of this Release or the Employment
Agreement, Executive acknowledges and agrees that the Termination Benefits set
forth in this Section 3 together with the Amounts and Benefits (as defined in
Section 5.4.1 of the Employment Agreement), are the sole wages, payments, stock,
stock options, insurance, and benefits to which Executive is entitled, under the
Employment Agreement or otherwise, and that no other wages, payments, stock,
stock options, insurance, benefits or other monies of any nature are due from
the Company. The Executive acknowledges and agrees that the Termination Benefits
exceed any wages, payment, stock, stock options, insurance, benefit, or other
thing of value to which the Executive might otherwise be entitled under any
policy, plan or procedure of the Company and/or any other agreement between the
Executive and the Company.

h. All payments made to Executive pursuant to this Section 3 shall be subject to
all applicable or required deductions, taxes, and withholdings.

4. Acknowledgement of Payments Provided. Notwithstanding anything herein to the
contrary, the Amounts and Benefits (as defined in Section 5.4.1 of the
Employment Agreement) shall not be subject to the Executive’s execution of this
Release. Executive acknowledges and agrees that the Company has paid Executive’s
final wages (including any accrued, unused Paid Time Off) and all other Amounts
and Benefits in full and that Executive has submitted and been reimbursed in
full for all reasonable and necessary business expenses incurred through the
Termination Date.

5. Tax Liability. Although the Company shall make applicable tax withholdings
from the Termination Benefits and the Amounts and Benefits, Executive
acknowledges and agrees that any and all tax liability, penalties and interest
(including under Code Section 409A), if any, which may become due from Executive
or assessed against Executive because of the Termination Benefits or Amounts and
Benefits, and/or any other payments or benefits referenced in this Release is
Executive’s sole responsibility, and Executive will timely pay any taxes,
penalties and interest which may become due on it. Executive shall indemnify and
hold harmless the Company from any tax, tax penalty, interest, attorneys’ fees
or other costs related to the failure by Executive to pay any tax liability
assessed against Executive, including under Code Section 409A because of the
payment of the Termination Benefits, Amounts and Benefits, and/or any other
payments or benefits referenced in this Release.

 

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6. General Release and Waiver. In consideration of the Termination Benefits
and/or any other payments or benefits referenced in this Release, and for other
good and valuable consideration, receipt of which is hereby acknowledged, the
Executive for himself and for his heirs, executors, administrators, trustees,
legal representatives and assigns (collectively, the “Releasors”), hereby
releases, remises, and acquits the Company and its subsidiaries and affiliates
and all of their respective past, present and future parent entities,
subsidiaries, divisions, affiliates and related business entities, any of their
successors and assigns, assets, employee benefit plans or funds, and any of
their respective past and/or present directors, officers, fiduciaries, agents,
trustees, administrators, managers, supervisors, shareholders, investors,
employees, legal representatives, agents, counsel and assigns, whether acting on
behalf of the Company or its subsidiaries or affiliates or, in their individual
capacities (collectively, the “Releasees” and each a “Releasee”) from any and
all claims, known or unknown, which the Releasors have or may have against any
Releasee arising on or prior to the date that Executive executes this Release
and any and all liability which any such Releasee may have to the Releasors,
whether denominated claims, demands, causes of action, obligations, damages or
liabilities arising from any and all bases, however denominated, including but
not limited to (a) any claim under the Age Discrimination in Employment Act of
1967 (“ADEA”), the Americans with Disabilities Act of 1990, the Family and
Medical Leave Act of 1993, the Civil Rights Act of 1964, the Civil Rights Act of
1991, Section 1981 of the Civil Rights Act of 1866, the Equal Pay Act, the Lilly
Ledbetter Fair Pay Act, the Immigration Reform and Control Act of 1986, the
Employee Retirement Income Security Act of 1974, (excluding claims for accrued,
vested benefits under any employee benefit or pension plan of the Company,
subject to the terms and conditions of such plan and applicable law), the
Uniform Trade Secrets Act, the Sarbanes-Oxley Act of 2002, the Fair Labor
Standards Act, all as amended; (b) any and all claims arising from or relating
to the Executive’s employment relationship with Company and his service
relationship as an officer or director of the Company or any of its subsidiaries
or affiliates, or as a result of the termination of such relationships; (c) all
claims related to Executive’s compensation or benefits from the Company or the
Releasees, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company or the Releasees; (d) all claims for
breach of contract, wrongful termination and breach of the implied covenant of
good faith and fair dealing; (e) all tort claims, including claims for fraud,
defamation, privacy rights, emotional distress, and discharge in violation of
public policy; and (f) all federal, state (including but not limited to the
States of Delaware, California and Pennsylvania), and local statutory or
constitutional claims, including claims for compensation, discrimination,
harassment, whistleblower protection, retaliation, attorneys’ fees, costs,
disbursements, or other claims (referred to collectively as the “Released
Claims”).

This Release does not release claims that cannot be released as a matter of law,
or the right to file a charge with or participate in a charge by the Equal
Employment Opportunity Commission (“EEOC”), or any other local, state, or
federal administrative body or government agency that is authorized to enforce
or administer laws related to employment, against the Company. However, by
executing this Release, the Executive hereby waives the right to recover in any
proceeding the Executive may bring before the EEOC or any state human rights
commission or in any proceeding brought by the EEOC or any state human rights
commission on the Executive’s behalf. This Release is for any relief, no matter
how denominated, including, but not limited to, injunctive relief, wages, back
pay, front pay, compensatory damages, or punitive damages.

This Release shall not apply to (i) the Executive’s rights to indemnification
from the Company, if any, or rights, if any, to be covered under any applicable
insurance policy with respect to any liability the Executive incurred or might
incur as an employee, officer or director of the Company including, without
limitation, the Executive’s rights under Section 8 of the Employment Agreement;
or (ii) any right the Executive may have to obtain contribution as permitted by
law in the event of entry of judgment against the Executive as a result of any
act or failure to act for which the Executive, on the one hand, and Company or
any other Releasee, on the other hand, are jointly liable.

 

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7. Continuing Covenants. Notwithstanding any other provisions of this Release,
the Executive acknowledges and agrees that he remains subject to the provisions
of Section 7 of the Employment Agreement and the Employee Invention and
Proprietary Information Agreement (“Invention Agreement”), both of which shall
remain in full force and effect for the periods set forth therein and are deemed
part of this Release. Executive acknowledges and agrees that he has made a
diligent search for any Company property in his possession or control and that
he has returned all such property to the Company. Executive acknowledges and
agrees that any action for injunctive relief brought for claims arising out of
Section 7 of the Employment Agreement or the Invention Agreement, as well as any
related claims for trade secret misappropriation, breach of fiduciary duty,
unfair competition, or other related business tort claims, shall be brought
exclusively in Delaware state court or Delaware federal court. Executive shall
submit to and accept the exclusive jurisdiction of such suit, legal action, or
proceeding in Delaware state court or Delaware federal court. Executive
acknowledges and agrees to accept personal jurisdiction in Delaware and also
acknowledges and agrees not to challenge the mandatory Delaware forum on any
grounds whatsoever, including lack of jurisdiction or forum non-conveniens.

8. No Claims. Executive acknowledges and agrees that there are no claims or
actions currently filed or pending relating to the subject matter of the
Release, the Employment Agreement, or any Released Claims. Executive
acknowledges and agrees that the Executive will not file or permit to be filed
on the Executive’s behalf any such claims or actions. Executive hereby requests
all administrative agencies having jurisdiction over employment and labor law
matters and courts to honor Executive’s release of claims under this Release.
Should the Company ever request Executive to execute any administrative
dismissal forms, Executive shall immediately execute the form and return it to
the Company. Should Executive file any claim or action relating to the subject
matter of this Release, the Employment Agreement, or any Released Claims, such
filing shall be considered an intentional breach of the Release and Executive
will be subject, among other rights Company may have, to all damages and costs
available under law and equity, including without limitation, the amount of
consideration paid hereunder. Executive further acknowledges and agrees that
Executive has not failed to report any work-related occupational injuries or
diseases arising out of or in the course of employment with the Company.

9. No Admission. This Release does not constitute an admission of liability or
wrongdoing of any kind by the Company or any other Releasee. This Release is not
intended, and shall not be construed, as an admission that any Releasee has
violated any federal, state or local law (statutory or decisional), ordinance or
regulation, breached any contract or committed any wrong whatsoever against any
Releasor.

10. Heirs and Assigns. The terms of this Release shall be binding upon and inure
to the benefit of the Parties named herein and their respective successors and
permitted assigns.

 

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11. Miscellaneous. This Release will be construed and enforced in accordance
with the laws of the State of Delaware without regard to the principles of
conflicts of law. If any provision of this Release is held by a court of
competent jurisdiction to be illegal, void or unenforceable, such provision
shall have no effect; however, the remaining provisions will be enforced to the
maximum extent possible. The parties acknowledge and agree that, except as
otherwise set forth herein, this Release constitutes the entire agreement and
complete understanding of the parties with regard to the matters set forth
herein and, except as otherwise set forth in this Release, supersedes any and
all agreements (including without limitation the Employment Agreement),
understandings, and discussions, whether written or oral, between the parties.
No other promises or agreements are binding unless in writing and signed by each
of the Parties after the Release Effective Date (as defined below). Should any
provision of this Release require interpretation or construction, it is agreed
by the Parties that the entity interpreting or constructing this Release shall
not apply a presumption against one party by reason of the rule of construction
that a document is to be construed more strictly against the Party who prepared
the document. The Parties agree to bear their own attorneys’ fees and costs with
respect to this Release.

12. Knowing and Voluntary Waiver. Executive acknowledges and agrees that he:
(a) has carefully read this Release in its entirety; (b) has had an opportunity
to consider it for at least 21 calendar days; (c) is hereby advised by the
Company in writing to consult with an attorney of his choosing in connection
with this Release; (d) fully understands the significance of all of the terms
and conditions of this Release and has discussed them with his independent legal
counsel, or had a reasonable opportunity to do so; (e) has had answered to his
satisfaction any questions he has asked with regard to the meaning and
significance of any of the provisions of this Release and has not relied on any
statements or explanations made by any Releasee or their counsel;
(f) understands that he has seven calendar days in which to revoke this Release
(as described in Section 13) after signing it and (g) is signing this Release
voluntarily and of his own free will and agrees to abide by all the terms and
conditions contained herein.

13. Effective Time of Release. The Executive may accept this Release by signing
it and delivering it to the Company as provided in Section 15 of this Release
within 21 days of his receipt hereof.. After executing this Release, the
Executive will have seven calendar days (the “Revocation Period”) to revoke this
Release by indicating his desire to do so in writing delivered to the Company as
provided in Section 15 of this Release by no later than 12:00 p.m. EST on the
seventh calendar day following the date on which he executes and delivers this
Release. The effective date of this Release shall be the eighth day after the
Executive executes and delivers this Release (the “Release Effective Date”). If
the last day of the Revocation Period falls on a Saturday, Sunday or holiday,
the last day of the Revocation Period will be deemed to be the next business
day. If the Executive does not execute this Release or exercises his right to
revoke hereunder, he shall forfeit his right to receive any of the Termination
Benefits set forth in Section 3 above and any other payments or benefits
referenced in this Release with the sole exception of the Amounts and Benefits,
and to the extent such Termination Benefits have already been provided, the
Executive agrees that he will immediately reimburse the Company for the amounts
of such payment

14. Confidentiality. The provisions of this Release shall be held in strictest
confidence by Executive. Executive shall not publicize or disclose it in any
manner whatsoever; provided, however, that Executive may disclose this Release
in confidence to his immediate family, attorney, accountant, tax preparer, and
financial advisor and Executive may also disclose this Release insofar as such
disclosure may be necessary to enforce its terms or as otherwise required by
law.

 

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15. Notices. All notices or communications hereunder shall be in writing, and
shall be addressed and delivered as follows (or to such other address as either
Party may have furnished to the other in writing by like notice): (a) To the
Company: Impax Laboratories, Inc., 31047 Genstar Road, Hayward, CA 94544, Attn:
Vice President of Human Resources, (b) To the Executive: Arthur A. Koch, Jr.,
xxxxxxxxx. All such notices and/or communications shall be conclusively deemed
to be received and shall be effective (i) if sent by hand delivery, upon
receipt, (ii) if sent by telecopy or facsimile transmission, upon confirmation
of receipt by the sender of such transmission, (iii) if sent by overnight
courier, one business day after being sent by overnight courier, or (iv) if sent
by registered or certified mail, postage prepaid, return receipt requested, on
the fifth day after the day on which such notice or correspondence is mailed.
All payments shall be made so that the recipient shall have immediately
available US denominated funds on the due date for such payment, and shall be
sent to the same addresses listed above.

16. Breach of Release. If Executive violates any of his obligations under this
Release, then the Company may at its option terminate Executive’s rights to any
and all Termination Benefits under Section 3 or any other payments or benefits
referenced in this Release (with the sole exception of the Amounts and
Benefits); provided, however, the Company may, in addition to any other rights
it may have and in accordance with applicable law, demand a monetary payment
equal to all Termination Benefits and other payments and benefits received by
Executive or any other payments or benefits referenced in this Release (with the
sole exception of the Amounts and Benefits) and Executive agrees to make such
payment promptly upon such demand.

17. Dispute Resolution. Except as otherwise set forth herein, the Parties hereby
agree that any and all claims, disputes, demands, or controversies of any nature
whatsoever arising out of, or relating to, this Release, or its interpretation,
enforcement, breach, performance or execution, Executive’s employment with the
Company, or the termination of such employment, including but not limited to any
statutory claims, shall be resolved, to the fullest extent permitted by law, by
final, binding and confidential arbitration in San Francisco, California
(applying Delaware law) in accordance with the Commercial Arbitration Rules and
Procedures of the American Arbitration Association then in effect. The decision
of the arbitrator will be final and binding upon the parties thereto. Judgment
may be entered on the arbitrator’s award in any court having jurisdiction. The
Parties acknowledge and agree that in connection with any such arbitration and
regardless of outcome: (a) each party shall bear its own costs and expenses,
including without limitation its own legal fees and expenses, and (b) joint
expenses shall be born equally among the parties. EACH PARTY WAIVES ITS RIGHT TO
TRIAL BY JURY. Nothing in this Release is intended to prevent either Executive
or the Company from obtaining injunctive relief in court to prevent irreparable
harm pending the conclusion of any arbitration, including but not limited to
injunctive relief sought pursuant to Section 7 of this Release.

 

Dated: July 9, 2012      

/s/ Arthur A. Koch, Jr.

      Arthur A. Koch, Jr. Dated: July 9, 2012      

/s/ Larry Hsu

     

Larry Hsu

President & Chief Executive Officer

      Impax Laboratories, Inc.

 

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