EMPLOYMENT AGREEMENT


     THIS EMPLOYMENT  AGREEMENT is made and entered into effective this 24th day
of August, 1998 by and between Daniel L. Korpolinski (the "Employee") and COPLEY
PHARMACEUTICAL, INC. ("Company"), a Delaware corporation.

                                   WITNESSETH

     WHEREAS,  the  Company  wishes to employ  Employee as  President  and Chief
Executive Officer of the Company; and
     WHEREAS,  Employee  and the Company  desire to enter into an  Agreement  to
provide for Employee's  employment as President and Chief Executive Officer with
the Company as described in Exhibit A which is incorporated herein;

     NOW,  THEREFORE,  in  consideration  of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:

     1. Employment; Duties. During the term of the Employment Period (as defined
in Section 2), and subject to the terms and conditions hereof, the Company shall
employ the Employee as President  and Chief  Executive  Officer and the Employee
shall  perform  such  duties for the Company as are  incident to such  position,
together  with  such  other  duties,   consistent  with  Employee's   knowledge,
experience and position with the Company,  as he may be reasonably  requested to
perform by the Company from time to time in connection with such employment.  In
addition,  the Company  will  undertake  its best  efforts to nominate and elect
Employee a Company Director to serve on the Company's Board of Directors.

         Employee  accepts  such  employment,  and agrees to render the services
described herein and to devote his entire available business time, effort, skill
and attention to promote the best interests of the Company.

     2.  Employment  Period.  The term of this  Agreement  shall commence on the
effective date of this Employment  Agreement,  and shall end on the date two (2)
years after such date,  unless sooner  terminated  pursuant to Section 5 hereof.
Thereafter, this Agreement shall automatically be renewed for successive periods
of one (1) year,  unless the Company shall have given the Employee not less than
six (6) months'  written  notice of  non-renewal  and shall pay the Employee the
Severance  Payments  (as  defined  below)  that would be  payable if  Employee's
employment  were  terminated  in  accordance  with Section 5.4 hereof.  The term
"Employment Period" shall mean the period of the Employee's  employment with the
Company hereunder.

     3.  Salary.  As  compensation  for the  services to be rendered by Employee
during the  Employment  Period,  the Company  shall pay Employee the base annual
salary of $300,000,  payable  periodically  consistent with the Company's normal
payroll practices,  less such deductions and amounts to be withheld therefrom as
may be required under applicable law. The Base Salary may be increased from time
to time as agreed upon by the Company and Employee.

     4. Other  Benefits and Terms of Employment.  During the Employment  Period,
the following benefits and other terms of employment shall also apply:

         (a) Expenses.  The Company shall  reimburse  Employee for customary and
necessary expenses  reasonably  incurred by Employee in the course of performing
those duties  which are incident to his position or which he has been  requested
to  perform  by the  Company,  all  in  accordance  with  the  Company's  normal
reimbursement  policies. In addition, at the time of commencement of employment,
the Company shall pay Employee $50,000,  net of income taxes, for relocation and
housing allowance.

         (b) Bonus.  Employee shall receive such annual or other bonuses as may,
from time to time, be approved by the Company's  Board of Directors,  based upon
various  factors  reviewed  by the  Board and  based on the  achievement  of the
objectives  determined  by the  Board.  Such  bonuses  are  entirely  within the
discretion of the Board and the Company. Employee shall also participate in such
other incentive  compensation programs, if any, as the Company may establish for
key employees. The foregoing notwithstanding, for each of the Company's 1998 and
1999 fiscal years, Employee shall be entitled to a bonus of 30% of his base pay,
payable within three months of the fiscal year close, as follows:
                                                     (i) For  fiscal  year 1998,
                                    the  bonus  will  be  pro-rated  based  upon
                                    achievement of the following:

                  (x) Objectives (50%)
o  Completion  of a 1999  Business  Plan  acceptable  to Board of  Directors  by
11/30/98 o Completion of meetings with all of Copley's key customers by 12/31/98
o Completion of meetings with those key financial  analysts who follow Copley by
12/31/98
o Improvement  in Company morale  demonstrated  through  employee  turnover rate
reduction and effective Company-wide "town meetings" and

                  (y) Achievement of Copley's existing 1998 EPS Plan (50%)
                                                     (ii) For fiscal  year 1999,
                                    the bonus  will be upon  achievement  of the
                                    Company's  1999  Business  Plan,  which will
                                    include  specific  targets such as EPS, ANDA
                                    submissions,  and certain discrete  projects
                                    to be mutually agreed upon with the Board of
                                    Directors

         (c) Options.  At the  discretion  of the Board of  Directors,  Employee
shall be eligible to receive periodic grants of stock options to purchase shares
of the Company's Common Stock. Upon  commencement of employment,  Employee shall
be entitled to receive  options to purchase  150,000 shares at the closing price
of the shares on the effective date of this agreement. Any options to be granted
shall be subject to an appropriate option agreement in the form normally used by
the Company  with  respect to its key  employees.  The initial  grant of options
shall have 37,507 shares vest on the effective  date of this agreement and 4,891
shares vest monthly for each of the succeeding 23 months.

         (d) Insurance,  Other Benefits.  Employee shall participate in employee
health,  hospitalization,  disability,  group-term  life,  vacation,  and  other
benefit  programs  on the same  basis as that of other  Company  executives.  In
addition,  Employee shall be entitled to such other benefits as may be generally
maintained  or  provided  by the  Company  for the  benefit of other  employees.
Employee has been given copies of the Company's  current  insurance and employee
benefit plans.

     5.  Termination.

         5.1  General.  The  Employment  Period  shall  terminate  prior  to its
scheduled  expiration set forth in Section 2 upon the earliest of the following:
(i)  the  Employee's  death,  (ii) a  determination  that  Employee  has  become
disabled,  as defined in Section 5.2,  (iii)  termination  "for cause" under the
provisions  of Section  5.3, or (iv)  termination  without  cause as provided in
Section 5.4.

         5.2  Disability.  Employee shall be regarded as "disabled" for purposes
of this  Agreement if s/he has been unable to render the  services  required for
him/her  hereunder,  in a manner consistent with past practice,  for a period of
four (4)  consecutive  months or for any  period in the  aggregate  of eight (8)
months in any twelve  (12) month  period  because  of a serious  and  continuing
health  impairment;  provided,  however,  that thirty (30) days' prior notice of
termination for disability shall be given to Employee.

     If the Employee dies during the Employment  Period  (without  regard to the
Company's  right to  terminate  this  Agreement  thereupon),  or if the  Company
exercises  its right to terminate  the Employee  under this Section 5.2, then in
each such case the Employee or his estate shall be entitled to the same payments
and other  benefits  as are  provided  in the event of  termination  pursuant to
Section 5.4 (including  without  limitation the acceleration of Employee's stock
options as provided in Section 5.4).

         In the event that there should be any dispute between  Employee and the
Company  as to  whether  Employee  is  "disabled"  within  the  meaning  of this
Agreement or as to whether Employee has recovered from any such disability, such
matter shall be  conclusively  determined  by the written  report of a physician
acceptable to the Board and Employee (or, if they cannot reach  agreement,  by a
physician chosen by the Company's doctor and the Employee's  doctor),  who shall
set forth in his report the nature and seriousness of the impairment suffered by
Employee and the likely effect of such  impairment on Employee's  future ability
to  render  the  services  required  hereunder.  Employee  agrees  to  submit to
examination  by any such  physician  to the extent  reasonably  requested by the
Board for the purpose of  ascertaining  the extent of  Employee's  disability or
recovery  therefrom and the parties agree that any determination with respect to
Employee's  disability may be conclusively  resolved in the sole judgment of the
Board if Employee should fail to comply with any reasonable request by the Board
to submit to such an examination.

         5.3 For Cause.  The Company may  terminate  the  Employment  Period and
discharge  Employee for cause upon giving thirty (30) days (five (5) days in the
case  of   sub-paragraph   (iv)  below)  written  notice  to  Employee  of  such
termination.  Regardless  of any  broader  definition  of  "cause"  which  might
otherwise apply under  applicable law, the term "for cause" as used herein shall
be  defined  to  include  only  one  or  more  of  the  following  grounds:  (i)
misappropriation by Employee of any material amounts of money or other assets or
property  (tangible or intangible) of the Company;  (ii) the Employee's  willful
refusal to perform  reasonable  assignments given to Employee  commensurate with
such  Employee's  status,  functions  or  responsibilities  as a  key  employee,
provided, that (x) such refusal is material and repetitive, and (y) the Employee
shall have been given  reasonable  notice and  explanation of such refusal,  and
reasonable  opportunity  to cure  such  refusal,  and no cure has been  effected
within a reasonable time after notice; (iii) conviction of Employee of a felony;
or (iv) a breach of any of the  provisions  of  Section 6 hereof,  provided  the
Employee  shall  have been  given  reasonable  notice  and  explanation  of such
refusal,  and reasonable  opportunity to cure such refusal, and no cure has been
effected within a reasonable time after notice.

         5.4  At the Election of the Company for Reasons Other
than For Cause. The Company may terminate the Employee's employment hereunder at
any time during the term of this  Agreement  without cause by giving ninety (90)
days' advance written notice to the Employee of an election to terminate.

     In the event the Company  exercises  its right to  terminate  the  Employee
under this Section  5.4,  the Company  agrees to pay the Employee (i) a lump sum
severance  or  termination  payment  equal to the greater of (x) one year's Base
Salary at the then current rate or (y) the Base Salary payable for the remaining
term under this Agreement,  (ii) medical and other health insurance benefits for
the severance  period set forth in (i) above;  and (iii) the pro rata portion of
any  bonus  to  which  the  Employee  is  otherwise   entitled  (the  "Severance
Payments"). Such Severance Payments shall be payable on the Employee's last date
of employment hereunder and shall be subject to all applicable federal and state
withholding and other taxes.

     In  addition,  notwithstanding  anything to the  contrary  contained in any
stock option  agreement  between the  Employee  and the Company,  if the Company
exercises its right to terminate  the Employee  under this Section 5.4, then all
stock  options  then held by the Employee  shall  automatically  accelerate  and
become fully exercisable as of the date on which the Employee receives notice of
termination.  Such stock options shall remain fully  exercisable until the close
of business on the 60th day after the last day of the Employee's employment with
the Company  hereunder.  The Company shall take any and all actions necessary to
effect the provisions of this paragraph.

     It shall be deemed to be a termination  "without  cause" if the  Employee's
responsibilities  and executive authority are reduced or diluted in any material
respect  without the  Employee's  consent  (which  reduction  or dilution is not
corrected  by the  Company  within 30 days  following  written  notification  by
Employee to the Company that Employee  intends to terminate his  employment  for
such reason) or the Employee is relocated to another  Company office or facility
more than 50 miles from Canton, Massachusetts without the Employee's consent.

     In the event that Employee would, except for the remainder of this Section,
be subject to a tax  pursuant to Section  4999 of the  Internal  Revenue Code of
1986, as amended, (the "Code") or any successor provision that may be in effect,
as a result of "parachute  payments" (as that term is defined in Section 280G(b)
(2) (A) and (d) (3) of the Code) made pursuant to this Agreement, or a deduction
would not be  allowed to the  Company  for all or any part of such  payments  by
reason of Section 280G(a) of the Code, or any successor provision that may be in
effect, such payments shall be reduced, eliminated, or postponed in such amounts
as are required to reduce the aggregate "present value" (as that term is defined
in Section  280G(d)(4)  of the Code) of such payments to one dollar less than an
amount equal to three times Employee's base amount," (as that term is defined in
Section  280G(b)(3)(a)  and (d)(1) and (2) of the Code) to the end that Employee
is not  subject  to tax  pursuant  to such  Section  4999  and no  deduction  is
disallowed  by reason  of such  Section  280G  (a).  To  achieve  such  required
reduction in aggregate  present  value,  Employee in his sole  discretion  shall
determine  what item(s)  constituting  the parachute  payments shall be reduced,
eliminated  or  postponed,  the amount of each such  reduction,  elimination  or
postponement,  and the period of each such  postponement.  To enable Employee to
make such determination,  the Company shall be required to provide Employee with
such information as is reasonably necessary for such determination.

     Prior to the making of any payment  under this  Section,  either  party may
request a determination as to whether such payment would constitute a "parachute
payment,"  and,  if so,  the  amount by which the  payment  must be  reduced  in
accordance  herewith.  If such a  determination  is requested,  it shall be made
promptly,  at the Company's expense,  by independent tax counsel selected by the
Employee and approved by the Company (which  approval shall not  unreasonably be
withheld),  and  such  determination  shall be  conclusive  and  binding  on the
parties.  The  Company  shall  provide  such  information  as such  counsel  may
reasonably request,  and such counsel may engage accountants or other experts at
the  Company's  expense to the extent that they deem  necessary  or advisable to
enable them to reach a determination.

         5.5  Effect of  Termination.  Notwithstanding  any  termination  of the
Employment  Period,  the Company shall  promptly pay Employee any amounts due to
Employee  with  respect to all accrued but unpaid  salary and accrued but unused
vacation time to the date of termination. If Employee is deceased, such payments
shall be made to such  individual  or entity as Employee may have  designated in
writing submitted to the Company or, in the absence of such written designation,
to Employee's estate.

     6. Covenants of the Employee.  In consideration of the Employee's continued
employment with the Company, Employee hereby agrees that:

         6.1 Noncompetition  Covenant.  During the Employment Period and for one
additional year thereafter the Employee will not, whether alone or as a partner,
officer, director, consultant,  principal, distributor,  representative,  agent,
employee or stockholder of any company or other commercial enterprise, engage in
any  business  or  other  commercial  activity  which  is  competitive  with the
products, services being marketed,  distributed or developed by the Company. The
foregoing  prohibition shall not prevent employment or engagement by any company
or business  organization not engaged in such business as long as the activities
of any such  employment or engagement,  in any capacity,  do not involve work on
matters  directly or indirectly  related to the  products,  services or strategy
being developed, manufactured or marketed by the Company. Ownership of less than
five percent (5%) of the outstanding shares of a company whose stock is publicly
traded shall not be a violation of this provision. If the Employee is terminated
without  "cause" (as defined  herein),  the provisions of this Section 6.1 shall
not apply unless the Company shall have  promptly made the payments  required to
be made by it pursuant to Section 5.4 hereof.

         6.2   Nonsolicitation.   During  the  Employment  Period  and  for  one
additional year thereafter the Employee will not, directly or indirectly, either
for  himself  or for any other  commercial  enterprise,  solicit,  or attempt to
solicit, any of the Company's customers,  business or prospective customers. For
the purpose of this  Agreement,  "prospective  customers"  shall  include  those
customers who have been solicited by the Company within one year before the date
Employee's  employment  with the Company  terminated.  Furthermore,  during such
period,  the  Employee  will not  solicit  any  employee  of the Company for the
retention of such Company employee for any commercial enterprise, other than for
the  Company,  nor recruit,  solicit,  attempt to recruit or solicit,  hire,  or
attempt to hire any such Company employee for any other  commercial  enterprise,
whether or not such enterprise may be a competitor of the Company.

         6.3  Nondisclosure  Obligation.  The  Employee  will  not at any  time,
whether during or after the term of this Agreement,  and regardless of any early
termination  thereof,  for any reason  whatsoever  (other  than to  promote  and
advance  the  business  of the  Company),  reveal to any person or entity  (both
commercial and non-commercial)  any of the trade secrets,  proprietary rights or
confidential  business  information  concerning  the Company,  including but not
limited to its research and development activities, product designs, prototypes,
technical  specifications,   processes,   formulae,   inventions,   methods  and
memoranda,  know-how and know-how,  marketing plans and strategies,  pricing and
costing  policies,  customer  and supplier  lists and  accounts,  and  business,
finances or  financial  information  of the Company so far as they have come and
may come to the Employee's knowledge,  except as may be required in the ordinary
course of performing his/her duties as an Employee. These restrictions shall not
apply to: (i)  information  that may be disclosed  generally or is in the public
domain  through no default of the  Employee;  (ii)  information  received from a
third  party who has not  violated  its own  confidentiality  obligation  to the
Company;  (iii) information approved for release by written authorization of the
Company;  or (iv)  information  that may be  required  by law or an order of any
court, agency or proceeding to be disclosed.  The Employee shall keep secret all
matters of such nature  entrusted  to him/her and shall not use or disclose  any
such information in any manner which causes loss to the Company.

         6.4  Assignment of  Inventions.  It is expressly  understood and agreed
that any and all right,  title and interest of the  Employee in any  inventions,
discoveries and patent rights  conceived or developed by the Employee during the
term of this  Agreement (and  thereafter if Employee  remains an employee of the
Company) which relate to or arise out of his employment services rendered to the
Company  are  "works  for hire" and are hereby  assigned  to the  Company by the
Employee and shall be the sole and exclusive property of the Company.

         6.5  Reformation  of Agreement.  In the event that any of the covenants
contained in this Section 6 may be found by a court of competent jurisdiction to
be invalid or unenforceable  as against public policy or otherwise,  the parties
hereto  expressly  authorize  such court to exercise its discretion in reforming
any such  covenant  to the end that  Employee  shall be subject to the  greatest
extent  permissible to  confidentiality  and  noncompetition  covenants that are
reasonable under the  circumstances  enforceable by the Company,  and consistent
with  the  Company's  legitimate  interests  (acknowledged  by the  parties)  in
protecting the Company's  goodwill  associated with the experience,  skills, and
loyalty of Employee and with  protecting the value of the business and assets of
the Company.

         6.6 Injunctive Relief. In the event of a breach or threatened breach by
Employee of any of the covenants  contained in this Section 6,  Employee  agrees
that  the  Company  shall  be  entitled  to  injunctive  relief  in a  court  of
appropriate jurisdiction to remedy any such breach or threatened breach.

     7.  Indemnification.  The  Company  hereby  agrees to defend and  indemnify
Employee to the maximum  extent  permitted by applicable  law against all costs,
charges,  and  expenses  incurred or  sustained  by him in  connection  with any
action,  suit,  or other  proceeding to which he may be a party by reason of his
being an employee of the Company or by reason of any action  taken or omitted to
be  taken  in good  faith by  Employee  in such  capacity,  to the  extent  that
Employee's  actions or omissions  are  consistent  with and not in breach of the
provisions  of this  Agreement.  The  provisions  of this Section 7 shall not be
interpreted  to limit any right to  indemnification  that the  Employee may have
under the Certificate of Incorporation or By-laws of the Company, by contract or
otherwise or under applicable law.

     8.  Nonassignability.  This  Employment  Agreement  may not be  assigned by
either Company or Employee,  except that, with the Employee's consent (which may
not be  unreasonably  withheld),  the Company  may assign its rights  under this
Agreement to any  affiliated  corporation  by means of  assignment,  merger,  or
otherwise;  and no such assignment shall impair the rights or obligations of the
parties as provided herein.

     9.  Miscellaneous.

         9.1 Notices. All notices and other communications required or permitted
to be given  hereunder shall be in writing and shall be deemed to have been duly
given when  delivered by hand,  sent by overnight  courier  service or facsimile
transmission,  or dispatched  by certified  mail to the parties at the following
addresses or to such other address for a party as such party may have designated
to the other in a prior notice given in accordance herewith:

              (a) If to the Company, to:

                  Copley Pharmaceutical, Inc.
                  25 John Road
                  Canton, MA  02021
                      Attention: General Counsel
                  Fax:  (781) 575-7374

              (b) If to Employee, to:

                  Mr. Daniel L. Korpolinski
                  c/o  Copley Pharmaceutical, Inc.
                  25 John Road
                  Canton, MA  02021


         9.2 Entire  Agreement.  This Agreement sets forth the entire  agreement
and understanding of the parties hereto concerning the subject matter hereof and
supersedes any prior  understandings and agreements relating to the terms of the
Employee's employment by the Company.

         9.3  Amendments;  Waivers.  This  Agreement  may be amended,  modified,
superseded, or canceled and the terms or covenants hereof may be waived, only by
a written  instrument  specifically  referring to this Agreement and executed by
both of the parties hereto,  or, in the case of a waiver,  by the party entitled
to the benefit of such provision. The failure of the Company at any time or from
time to time to require  performance  of any Employee's  obligations  under this
Agreement  shall  in no  manner  affect  the  Company's  right  to  enforce  any
provisions of this Agreement at a subsequent time; and the waiver by the Company
of any right arising out of any breach shall not be construed as a waiver of any
right arising out of any subsequent breach.

         9.4  Severability.   If  any  provision  of  this  Agreement,   or  the
application thereof to any person or circumstance, should, for any reason and to
any extent, be invalid or unenforceable,  the remainder of this Agreement should
not be affected thereby.

         9.5 Governing Laws;  Disputes.  This Agreement shall be governed by and
construed  in  accordance  with the laws of the  Commonwealth  of  Massachusetts
applicable  to  contracts  made  and  to  be  performed   entirely  within  such
Commonwealth.  The Company  consents to  personal  jurisdiction  in the State of
California  and  agrees  not to raise a defense  of forum non  conviens.  In any
dispute  between the Company and the  Employee,  the  prevailing  party shall be
entitled to recover its attorney's fees and expenses.

         9.6  Headings.  The section  headings  contained in this  Agreement are
intended solely for convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.

                                    (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)



<PAGE>



     IN WITNESS  WHEREOF,  the parties have duly executed this Agreement on this
date first written above, effective as of such date.


                           EMPLOYEE:


                           ---------------------------------
                           Daniel L. Korpolinski
                           Social Security # COPLEY PHARMACEUTICAL, INC.

                           By: _____________________________


                           Title: __________________________