exv10w5






EXHIBIT 10.5




IMPAX LABORATORIES, INC.




2001 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN



1. Purpose of Plan.



The purpose of the Impax Laboratories, Inc. 2001 Non-Qualified Employee Stock Purchase Plan (the
“Plan”) is to enhance employee interest in the success and progress of the Company by encouraging
employee ownership of Common Stock, $.01 par value (“Common Stock”), of Impax Laboratories, Inc.
(the “Company”). The Plan provides the opportunity to purchase Impax Laboratories, Inc. Common
Stock at a 15% discount to the Fair Market Value (as defined herein) through payroll deductions or
lump-sum cash investments.



2. Eligible Employees.



Any employee (as determined by the Company in its sole discretion and without reference to any
definition of employee under the Internal Revenue Code or any other statutory or regulatory
definition) of the Company or its subsidiaries designated by the Plan Committee (as defined below)
for participation (except such executive officers of the Company or its subsidiaries as the Plan
Committee may determine) is eligible to participate in the Plan, provided the employee:



(a) has attained the age or 21;



(b) is employed by the Company or any of its subsidiaries on the first day of each Purchase Period
(as defined below);



(c) has been continuously employed by the Company or any of its subsidiaries (or any predecessor)
for one calendar year preceding the effective date of participation; and



(d) has customary employment of a minimum of 20 hours per week during at least five months of the
year.



Employee eligible to participate in the Plan as defined in this Section 2 are referred to as
“Eligible Employees.”



3. Election to Participate.



Participation in the Plan is voluntary. Each employee who is an Employee may participate in the
Plan by completing and delivering to the Company’s payroll department an Enrollment/ Withdrawal
Form. The completed Enrollment/Withdrawal Form must be received by the Payroll department no later
than fourteen days prior to the beginning of a payroll period in order to participate in the Plan
for that payroll period and subsequent payroll periods. Employees who elect to participate in the
plan in accordance with this Section 3 are referred to herein as “Participating Employees.”




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An election to participate in the Plan authorizes the Company to withhold from the Participating
Employee’s paycheck for the next and subsequent payroll periods after timely submission of the
Enrollment/Withdrawal Form. A Participating Employee may at any time increase or decrease his or
her payroll deduction effective with the next payroll period by timely filing a new
Enrollment/Withdrawal Form. So long as the Plan remains in effect, once an employee enrolls in the
Plan, he or she will automatically continue participation on the same basis, unless he or she
elects to change deduction amounts, withdraws from participation in the Plan, or becomes ineligible
to participate in the Plan. Changes in deduction amounts or participation in the Plan must be
communicated in writing to the Company’s payroll department through timely submission of a new
Enrollment/Withdrawal Form



A Participating Employee also may make a lump-sum investment by completing and delivering to the
payroll department an Enrollment/Withdrawal Form accompanied by a check or other monetary
instrument acceptable to the Company at lease fourteen days prior to the next payroll period in
which the investment is to be made.



4. Investing in the Plan.



Elections for Plan Investments must be made in whole dollar amounts and specified on the
Enrollment/Withdrawal Form. The minimum dollar amount for payroll deductions is $10.00 per pay
period for employees that are paid weekly and $20.00 per pay period for employees that are paid
bi-weekly or semimonthly. If a Participating Employee elects to make a lump-sum investment, the
minimum investment is $100.00 per payroll period.



5. Use of Funds; No Interest Paid.



All funds received by the Company under the Plan will be included in the general funds of the
Company and may be used by the Company for any corporate purpose. No separate account or trust fund
will be established to hold funds received under the Plan. No interest will be paid to any
Participating Employee for amounts invested in the Plan.



6. Purchases of Common Stock Under the Plan.



As of each Purchase Date (as defined in Section 7), each Participating Employee will be deemed to
have purchased, without any further action, a number of whole and fractional shares of Common Stock
determined by dividing the amount of his or her payroll deductions and lump-sum investments for the
preceding Purchase Period (as defined below) by eighty-five percent (85%) of the Fair Market Value
of a share of Common Stock as of the Purchase Date. Fractional shares purchased for a Purchase
Period will be combined with purchases for subsequent Purchase Periods to make whole shares.




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Purchase Periods begin on the first day of each of the Company’s accounting months beginning with
the accounting month commencing on or after May 1, 2001, and end on the day immediately preceding
the commencement date of the following Purchase Period, (each, a “Purchase Period”). The Plan
Committee has the power to change the commencement dates or duration of a Purchase Period with
respect to any future Purchase Period if the change is announced at least 14 days prior to the
scheduled beginning of the Purchase Period to be affected.



7. Purchase Price.



The purchase price for each whole or fractional share of Common Stock purchased under the Plan will
be eighty-five percent (85%) of the Fair Market Value of the whole or fractional share on the first
trading day of the Common Stock after the end of each calendar month (as opposed to accounting
month, if different) on which it is administratively practicable to execute a purchase of shares of
Common Stock (the “Purchase Date”).



“Fair Market Value” of the Common Stock as of a Purchase Date will be determined by the Plan
Committee by any fair and reasonable means, including (a) if the Common Stock is listed for trading
on a national securities exchange or is quoted in the over-the-counter market on the basis of last
sales prices, the average of the high and low sales prices on the exchange or over-the-counter
market on the Purchase Date or (b) if the Common Stock is not listed for trading on a national
securities exchange or quoted in the over-the-counter market on the basis of last sales prices, but
is traded in the over-the-counter market, the average of the bid and asked prices for the Common
Stock at the close of business on the Purchase Date.



8. Investment Accounts.



All shares purchased under the Plan will be maintained by the Company in separate investment
accounts (“Investment Accounts”) for each Participating Employee. Each Investment Account may be in
the name of the employee or if he or she so indicates on the Enrollment/Withdrawal form in the
employee’s name jointly with a member of the employee’s family, with right of survivorship. An
employee who is a resident of a jurisdiction that does not recognize a joint tenancy may have an
Investment Account as tenant in common with a family member, without right of survivorship.



9. Sale or Transfer of Common Stock.



A Participating Employee may sell or transfer any Common Stock in the employee’s Investment Account
at any time after purchase, subject to limitations, if any, imposed by applicable laws and
procedures instituted by the Company. A sale may be made through the Company or outside of the
Company by the employee’s own broker. Any sale or transfer is subject to any commission or other
sales or transfer charges, which must be paid by the Participating Employee.




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10. Limitation of Number of Shares that an Employee May Purchase.



No employee may invest in the Plan more than $25,000 through payroll deductions or lump-sum
investments to purchase Common Stock in one calendar year.



11. Shares Reserved for the Plan.



There will be reserved for issuance and purchase by employees under the Plan an aggregate of
500,000 shares of Common Stock, subject to adjustment as provided in Section 12. Shares subject to
the Plan may be shares authorized but unissued, or shares that were once issued and subsequently
reacquired by the Company (“treasury shares”). If reserved shares are not purchased by a
Participating Employee for any reason or if a right to purchase terminates as provided in the Plan,
the unpurchased shares will again become available for issuance under the Plan unless the Plan has
been terminated, but the unpurchased shares will not increase the aggregate number of shares
reserved for purchase under the Plan.



12. Adjustment in Case of Changes Affecting the Common Stock.



If the outstanding shares of Common Stock are subdivided or split, or a stock dividend is paid
thereon, the number of shares reserved under this Plan will be adjusted proportionately, and the
other provisions of the Plan may be adjusted as the Board of Directors of the Company may deem
necessary or equitable. If any other change affecting the Common Stock occurs, the Board of
Directors may make such adjustments as it deems equitable to give proper effect to such event.



13. Right as a Stockholder.



When at least one whole share of Common Stock is deemed purchased for a Participating Employee’s
account, the employee will have all of the rights or privileges of a stockholder of the Company
with respect to whole or fractional shares purchased under the Plan whether or not certificates
representing full shares are issued. Any cash or stock dividend or other distribution on Common
Stock held in a Participating Employee’s Investment Account will be credited to the account. Proxy
information will be provided for each meeting of the Company’s stockholders so that each
Participating employee may vote his or her shares in accordance with his or her instruction. If no
written instructions are received on a timely basis, the voting of shares in the account will be
governed by the rules and policies of the NASDAQ Stock Market and the Securities and Exchange
Commission.



14. Rights Not Transferable.



The right to participate in the Plan is not transferable by a Participating Employee and is
exercisable during his or her lifetime only by him or her.




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15. Withdrawing from the Plan.



A Participating employee may withdraw from the Plan at any time by properly completing and
delivering an Enrollment/Withdrawal Form to the payroll department at least 14 days prior to the
payroll period in which participation is to end, with the withdrawal being effective as of the end
of that payroll period and thereafter. After a Participant Employee properly withdraws from the
Plan, the Company will deliver to the withdrawing employee the whole shares of Common Stock
credited to the employee’s Investment Account under the Plan and will sell any fractional shares in
the open market and remit the net proceeds by check. A withdrawing employee may not participate in
the Plan again until two Purchase Periods after the one in which the employee withdrew. To rejoin
the Plan, a new Enrollment/Withdrawal Form must be submitted.



16. Death, Retirement or Termination of Employment.



If a Participating Employee dies or retires or if his or her employment is terminated for any
reason, the Participating Employee’s participation in the Plan will end effective immediately and
the amount of the employee’s uninvested payroll deductions and lump-sum investments will be
refunded to the employee, or in the case of death to his or her estate. The Company also will
deliver to the employee or his or her estate the whole shares of Common Stock credited to the
employee’s Investment Account under the Plan and will sell any fractional shares in the open market
and remit the net proceeds by check.



17. Administration of the Plan.



The Plan will be administered, at the Company’s expense, by the Compensation Committee of the Board
of Directors or any successor committee appointed by the Board of Directors (the “Plan Committee”).
Subject to the express provisions of the Plan, the Plan Committee will have authority to interpret
the Plan, to prescribe, amend and rescind rules and regulations relating to it, and to make all
other determinations necessary or advisable in administering the Plan, all of which determinations
will be final and binding upon all persons unless determined otherwise by the Board of Directors.
The Plan Committee may delegate the day-to-day administration of the Plan and may request advice or
assistance or employ such other persons as are necessary for proper administration of the Plan.



18. Amendment of the Plan.



The Board of Directors may at any time, or from time to time, amend the Plan in any respect, except
that no amendment shall by made (a) decreasing the number of shares to be reserved under the Plan
(other than as provided in Section 12), or
(b) permitting person other than employees (as determined by the Company in its sole discretion) to
participate in the Plan.




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19. Termination of the Plan.



The Plan and all rights of employees under the Plan will terminate: (a) on the Purchase Date that
Participating Employees become entitled to purchase a number of shares greater than the number of
reserved shares remaining available for purchase (and no such additional shares shall then be
purchased); or (b) at any time, at the discretion of the Board of Directors, after the completion
of any Purchase Period. If the Plan terminates under clause (a), reserved shares remaining as of
the termination date will be sold to Participating Employees on a pro rata basis.



20. Effective Date of Plan.



The Plan is effective as of May 1, 2001.



21. Laws and Regulations.



The laws of the Commonwealth of Pennsylvania shall govern all matters relating to this Plan, except
to the extent it is superseded by the laws of the United States. The Plan and all rights and
obligation of the Company and Participating Employees under the Plan are subject to all applicable
federal, state and foreign laws, rules and regulations, and to such approvals by and regulatory or
governmental agency as may, in the opinion of counsel for the Company, be required. Restrictions
may apply to the sale of shares of Common Stock by certain officers of the Company and those having
similar responsibilities whom are subject to federal insider trading and short-swing profit rules.



22. Rules for Officers of the Company.



Because the federal securities laws and the Company’s Insider Trading Policy impose certain
restriction on the ability of officers of the Company and its subsidiaries to purchase Common Stock
other than during certain “window periods”, these officers will be allowed to only make lump-sum
investments in the Plan, and the Plan will purchase Common Stock on their behalf, as follows:



(a) Officers of the Company or its subsidiaries designated by the Plan Committee (“Designated
Officer”) will be entitled to make lump-sum investments to the Plan at any time during a “window
period”, as determined by the Plan Committee. An appropriate Enrollment/Withdrawal Form must be
submitted to the Corporate Secretary.



(b) The Plan will purchase Common Stock for those Designated Officers making a lump-sum investment
during a “window period” as soon as practicable after receipt of a check or other monetary
instruments acceptable to the Company.



(c) Designated Officers may not make investments in the Plan other than as permitted in Section 22.




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(d) Designated Officers may not sell or otherwise transfer any of the Common Stock purchased on
their behalf except in full compliance with applicable securities laws and the Company’s Insider
Trading Policy.



(e) Except as otherwise described in this Section 22, the other provisions of the Plan will apply
to purchases of Common Stock under the Plan by Designated Officers.



23. Limitations Arising from Compliance with Nasdaq Stock Market Requirements.



The Company has represented to the Nasdaq Stock Market that (i) at least a majority of the shares
of Common Stock purchased under the Plan, during the shorter of the three-year period commencing on
the effective date of the Plan, will be purchased by employees who are not officers of the Company,
and (ii) if the term of the Plan is greater than three years, the Company will administer the Plan
so that in each subsequent year a majority of the shares of Common Stock purchased under the Plan
are purchased by employees who are not officers of the Company. The Company will monitor purchases
made under the Plan for purposes of making certain that the Company is in compliance with its
representations to the Nasdaq Stock Market. The Company may limit purchases by officers of the
Company under the Plan if the Company determines that purchases need to be limited to assure that
the Company maintains compliance with its representations to the Nasdaq Stock Market.



24. Tax Status of Plan.



The purchase of shares of Common Stock under the Plan will be made with “after-tax” dollars of
Participating Employees. the amount deducted from a Participating Employee’s paycheck or invested
in a lump-sum will have been subject previously to withholding of applicable income and employment
taxes.



The Plan is not a qualified plan under the Internal Revenue Code. Consequently, Participating
Employees will realize income equal to the amount of the difference between the Fair Market Value
of the Common Stock on the Purchase Date and the purchase price. Participating employees also may
realize a gain or loss on the sale of any Common Stock purchased under the Plan. Each employee is
advised to consult with his or her own tax advisers prior to participation in the Plan.



The Company may make such provisions as it deems appropriate for withholding by the Company
pursuant to federal or state tax laws of such amounts as the company determines it is required to
withhold in connection with the purchase or sale by a Participating Employee of any Common Stock
acquired pursuant to the Plan. The Company may require a Participating Employee to satisfy any
relevant tax requirements before authorizing any issuance of Common Stock to the Participating
Employee.




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25. ERISA.



The Plan is not subject to the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”).



26. No Continued Employment.



The Plan does not confer any rights of continued employment upon any employee of the Company or any
of its subsidiaries and it shall not be deemed to interfere in any way with the Company’s or its
subsidiaries’ right to terminate, or otherwise modify, an employee’s employment at any time.



27. Effect of Plan.



The provisions of this Plan shall, in accordance with its terms, be binding upon, and inure to the
benefit of, all successors of each employee participating in the Plan, including, without
limitation, such employee’s estate and the executors, administrators or trustees thereof, heirs and
legatees, and any receiver, trustee in bankruptcy or representative of creditors of such employee.