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EXHIBIT 10.3.2


AMENDMENT NO. 2 TO IMPAX LABORATORIES, INC. 1995 STOCK INCENTIVE PLAN


     Paragraph (a) of Section 2 of the 1995 Stock Incentive Plan is amended
to read in its entirety as follows:



          “(a) Types of Awards. Under the Plan, the Company may in its
sole discretion grant, with respect to the Company’s common stock, par
value $.01 per share (“Common Stock”) Options (“Options”) to key
employees and consultants (together, the “Key Employees”) and to
directors of the Company (the “Directors”), each as authorized by
action of the Board of Directors of the Company (or, except in the case
of grants to Directors, a committee designated by the Board of
Directors), and in addition to the foregoing, the Company shall,
subject to the terms and conditions hereof, grant to each director of
the Company who is not an employee and who was not a director on or
before September 1, 1995 (an “Eligible Director”) and to each director
of the Company who is not an employee and who was a director on or
before September 1, 1995 (a “Pre-IPO Director”), Options in accordance
with the formula set forth in Section 7 hereof. As used in the Plan, an
“Award” shall mean an Option and an “Award Owner” shall mean the owner
of an Option. Options granted pursuant to the Plan to Key Employees
(including 10% stockholders of the Company and its Subsidiaries but
excluding consultants) may be either incentive stock options
(“Incentive Stock Options”) meeting the requirements of Section 422 of
the Internal Revenue Code of 1986, as amended (the “Code”), or
non-statutory options (“Non-Statutory Stock Options”), which are not
intended to or do not meet the requirements of Code Section 422. All
Options granted to Directors and consultants pursuant to the Plan shall
be only Non-Statutory Stock Options.”




     Subparagraph (ii) of paragraph (a) of Section 3 of the 1995 Stock
Incentive Plan is amended to read in its entirety as follows:



          “(ii) A Key Employee (other than a consultant) may be granted
Incentive Stock Options and/or Non-Statutory Stock Options.
Directors and consultants may only be granted Non-Statutory
Stock Options. A Key Employee or Director who has been granted
an Award may, if he or she is otherwise eligible, be granted
one or more additional Awards if the Committee shall so
determine.”




     Section 4 of the 1995 Stock Incentive Plan is amended to read in its
entirety as follows:



          “Subject to adjustment as provided in Section 13 below, the
maximum number of shares of Common Stock of the Company that
may be issued and sold pursuant to Options granted under the
Plan is 950,000 shares in the




 









 








aggregate (one share per Option). The maximum number of shares
of Common Stock with respect to which Options may be granted
under the Plan to any Key Employee shall not exceed 100,000
shares during any calendar year.”




     The 1995 Stock Incentive Plan is amended by adding the following new
paragraph (h) to Section 6 thereof:



               “(h) Except as set forth in Section 7, any Director
of the Company shall be granted Awards only if such
person has been selected for participation and the
terms and provisions of such Awards have been
determined by the Board of Directors. The purchase
price per share of stock issuable upon the exercise
of an Option granted pursuant to this Section 6(h)
shall be the Fair Value on the date that such Option
is granted. Each Award to a Director shall expire on
such date as the Board of Directors shall determine
on the date such Award is granted, but in no event
after the expiration of ten (10) years from the date
on which such Award is granted, and in all cases each
Award shall be subject to earlier termination as
provided in the Plan.



               An Award granted to a Director may be exercised, and
payment shall be made upon exercise of such Award,
only to the extent that such Award has vested. Awards
shall vest in accordance with the schedule or terms
set forth in the Award agreement executed by the
Award Owner and a duly authorized officer of the
Company. The Board of Directors may accelerate the
vesting of any Option granted pursuant to this
Section 6(h). Unless otherwise determined by the
Board of Directors, if a Director ceases to serve as
a director of the Company, the Options that have been
previously granted to that Director pursuant to this
Section 6(h) and that are vested as of the date of
such cessation may be exercised by the Director after
the date such Director ceases to be a director of the
Company or Subsidiary. If a Director dies while a
director of the Company, the Options that have been
previously granted to that Director and that are
vested as of the date of such death may be exercised
by the administrator of the Director’s estate, or by
the person to whom such Options are transferred by
will or the laws of descent and distribution. In no
event, however, may any Option be exercised after the
expiration date of such Option. Any Option or portion
thereof that is not exercised during the applicable
time period specified above shall be deemed
terminated at the end of the applicable time period
for purposes of Section 4 hereof.”



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     Paragraph (a) of Section 7 of the 1995 Stock Incentive Plan is restated
to read in its entirety as follows:



          
     “(a) Non-discretionary Grants. Notwithstanding
anything to the contrary contained in this Plan,
Eligible Directors shall be granted Options
(“Director Options”) as follows: (i) immediately
prior to the initial public offering of shares of
Common Stock, each Eligible Director shall be granted
30,000 Director Options to purchase 30,000 shares of
Common Stock in the aggregate, subject to vesting as
provided in Section 7(d) below, (ii) on the first
business day following the annual meeting of
stockholders of the Company to elect directors in
1996, and thereafter until the first business day
following the annual meeting of stockholders of the
Company to elect directors in 1998, each Eligible
Director shall be granted 10,000 Director Options to
purchase 10,000 shares of Common Stock in the
aggregate, subject to vesting as provided in Section
7(d) below, and (iii) on the first business day
following the annual meeting of stockholders of the
Company to elect directors in 1999, and thereafter on
the first business day following each successive
annual meeting of stockholders, so long as Director
Options remain available for grant, each person who
is elected as a director at that meeting and is an
Eligible Director, and each person who continues to
serve as a director after that meeting, and is an
Eligible Director, shall be granted 5,000 Director
Options to purchase 5,000 shares of Common Stock in
the aggregate, subject to vesting as provided in
Section 7(d) below, and (iv) on the first business
day following the annual meeting of stockholders to
elect directors in 1998, and thereafter on the first
business day following each successive annual meeting
of stockholders, so long as Director Options remain
available for grant, each Pre-IPO Director who
continues to serve as a director after that meeting
shall be granted 5,000 Director Options to purchase
5,000 shares of Common Stock in the aggregate,
subject to vesting as provided in Section 7(d) below.
Notwithstanding the foregoing, each person who is
elected as a director at any time after the date of
the annual meeting of stockholders and is an Eligible
Director shall be granted, on the effective date of
such election, 5,000 Director Options to purchase
5,000 shares of Common Stock in the aggregate,
subject to vesting as provided in Section 7(d) below,
so long as Director Options remain available for
grant. Such Director Options shall be granted in lieu
of the Director Options which would otherwise be
granted to such Eligible Director on the first
business day following



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the next annual meeting of the stockholders pursuant
to the first sentence of this Section 7(a).”



     The 1995 Stock Incentive Plan is further amended by replacing, except
to the extent appearing in the foregoing amendments, all occurrences of the
phrase “Key Employee” appearing in the 1995 Stock Incentive Plan and the
exhibits thereto with the phrases “Key Employee and Director” or “Key Employee
or Director” as the context shall reasonably dictate.



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