Document:

exv10w7

EXHIBIT 10.7

IMPAX LABORATORIES, INC.

EXECUTIVE NON-QUALIFIED DEFERRED COMPENSATION PLAN

Effective August 15, 2002

Restated Effective January 1, 2005

 

 

IMPAX LABORATORIES, INC.

EXECUTIVE NON-QUALIFIED DEFERRED COMPENSATION PLAN

IMPAX LABORATORIES, INC. currently maintains the Impax Laboratories, Inc. 401(k) Plan, a tax
qualified retirement plan which allows for the deferral of compensation for retirement purposes and
which complies with
Section 401(k) of the Internal Revenue Code of 1986 (“Code”);

IMPAX LABORATORIES, INC. has established the Impax Laboratories, Inc. Executive Non-qualified
Deferred Compensation Plan (“Plan”), a non-qualified deferred compensation plan for a limited group
of executives which allows them to defer additional compensation and supplement retirement savings
under the Impax Laboratories, Inc. 401(k) Plan;

IMPAX LABORATORIES, INC. now intends to amend and restate the Plan to incorporate the requirements
of Section 409A of the Internal Revenue Code of 1986 as amended by the American Jobs Creations Act
of 2004; and

NOW, THEREFORE, to effectuate its intentions, Impax Laboratories, Inc. hereby amends and restates
the Impax Laboratories, Inc., Executive Non-qualified Deferred Compensation Plan effective as of
the 1st day of January 2005.

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IMPAX LABORATORIES, INC.

EXECUTIVE NON-QUALIFIED DEFERRED COMPENSATION PLAN

Table of Contents

	 	 	 	 	 	 	 
	ARTICLE I

	 	DEFINITIONS
	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II

	 	PARTICIPATION IN THE PLAN
	 	 	4	 
	 
	 	 	 	 	 	 
	ARTICLE III

	 	CONTRIBUTIONS
	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE IV

	 	PARTICIPANT ACCOUNTS
	 	 	7	 
	 
	 	 	 	 	 	 
	ARTICLE V

	 	BENEFITS
	 	 	8	 
	 
	 	 	 	 	 	 
	ARTICLE VI

	 	ADMINISTRATION
	 	 	10	 
	 
	 	 	 	 	 	 
	ARTICLE VII

	 	CLAIMS PROCEDURE
	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE VIII

	 	AMENDMENT AND TERMINATION
	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE IX

	 	MISCELLANEOUS
	 	 	16	 

 

 

ARTICLE I

DEFINITIONS

1.1 Account means a recordkeeping of the balance of Plan benefits attributable to a Participant.

1.2 Administrator means the individual or committee appointed to administer this Plan pursuant to
Article VI. In the absence of such appointment, the Employer shall be the Administrator.

1.3 Base Pay means an Eligible Employee’s annualized base compensation. For purposes of this
definition, base compensation shall include amounts which are deferred under the Impax 401(k) Plan.
With respect to an Eligible Consultant, Base Pay shall mean the base remuneration for services as
prescribed in his/her consulting agreement.

1.4 Beneficiary means the person, persons, trust or other entity that a Participant designates to
receive payments in the event of his/her death by a written revocable designation filed with the
Administrator.

1.5 Board means the Board of Directors of Impax Laboratories, Inc., a Delaware Corporation.

1.6 Bonus means any cash remuneration paid to an Eligible Employee as a specific incentive award
pursuant to any incentive plan or arrangement adopted by the Board, including any amount which
would have been paid but for the Participant’s election to make a contribution therefrom to this
Plan or the Impax 401(k) Plan.

1.7 Change in Control means an objectively determined event which impacts the Employer for whom the
Participant renders services and shall include:

(a) a change in ownership in which a person, group or entity acquires more than fifty percent (50%)
of the total fair market value or total voting power of the stock of the Employer;

(b) a change in effective control in which (1) a person, group or entity acquires (in a 12-month
period) ownership of stock with 35% or more of the total voting power of the stock of the Employer
or (2) a majority of the Employer’s Board is replaced in a 12-month period by directors whose
appointment or election was not endorsed by a majority of the Board before their appointment or
election; or

(c) a change in ownership of a substantial portion of the Employer’s assets in which a person group
or entity acquires 40% or more of the gross fair market value of the Employer’s assets.

1.8 Code means the Internal Revenue Code of 1986, as amended, and the same as may be further
amended from time to time.

 

 

	1.9	 	Deferral Agreement means a written agreement between a Participant and
the Employer under which a Participant agrees to defer a portion of
his/her Base Pay, Bonus and/or 401(k) Plan refunds.
	 
	1.10	 	Deferral Contribution means a Participant’s elective contribution
described in Article III.
	 
	1.11	 	Disability means an illness or injury which completely prevents a
Participant from performing the Participant’s occupation or which
otherwise entitles the Participant to receive long-term disability
benefits under a plan or program for such benefits sponsored by the
Employer. Disability shall be determined in a uniform manner by the
Administrator. The above notwithstanding, a Participant shall not be
deemed to have a Disability unless he/she is expected to be separated
from service for a period of at least twelve months as a direct result
of such illness or injury and has no reasonable prospect of returning to
service with the Employer.
	 
	1.12	 	Effective Date means August 15, 2002.
	 
	1.13	 	Eligible Consultant means any consultant to the Employer as designated
by the Board.
	 
	1.14	 	Eligible Employee means any executive-level employee of the Employer, as
designated by the Board.
	 
	1.15	 	Employer means Impax Laboratories, Inc., and any successor thereto, and
any affiliated company which is a Participant of a controlled group of
corporations within the meaning of Section 1563(a) of the Code with
Impax Laboratories, Inc. and which adopts this Plan with consent of the
Board.
	 
	1.16	 	Enrollment Period means the period from December 1st through December
31st occurring prior to the first day of a Plan Year.
	 
	1.17	 	Exempt Amounts means vested balance of a Participant’s Account as of
January 1, 2005 and earnings attributable to such amounts.
	 
	1.18	 	409A Amounts means that portion of a Participant’s Account which vests
on and after January 1, 2005 and earning attributable to such amounts.
	 
	1.19	 	Impax 401(k) Plan means the Impax Laboratories, Inc. 401(k) Plan, a
tax-qualified retirement plan maintained pursuant to Section 401(k) of
the Code.
	 
	1.20	 	Initial Enrollment Period shall mean the thirty (30) day period
following an individual’s designation as an Eligible Employee or
Eligible Consultant.
	 
	1.21	 	Investment Fund(s) means the investment option(s) designated by the
Employer from time to time which serve as a means to measure value
increases or decreases with respect to a Participant’s Accounts.
	 
	1.22	 	Participant means any Eligible Employee or Eligible Consultant who has
elected to participate in the Plan pursuant to Article II.

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	1.23	 	Plan means the Impax Laboratories Executive Non-qualified Deferred
Compensation Plan.
	 
	1.24	 	Plan Year means the twelve (12) consecutive month period beginning on
each January 1st and ending on the following December 31st. The Plan
Year which begins on September 1, 2002 shall end on December 31, 2002.
	 
	1.25	 	Restatement Effective Date means January 1, 2005.
	 
	1.26	 	Retirement means any severance from service by a Participant for any
reason other than death or Disability after: (a) attaining age 65; or
(b) attaining age 55 provided that the Participant has five (5) Years of
Service.
	 
	1.27	 	Specified Employee means any Participant who is (i) an officer of the
Employer and (ii) receives annual compensation from the Employer of
$130,000 or more. The term Specified Employee shall also include any
other individual who satisfies the definition of Specified Employee
under Code Section 409A.
	 
	1.28	 	Unforseeable Emergency shall mean severe financial hardship to the
Participant resulting from an illness or accident of the Participant,
the Participant’s spouse or a dependent (as defined in Section 152(a) of
the Code) of the Participant, loss of the Participant’s property due to
casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant.
	 
	1.29	 	Year of Service means each period of twelve consecutive months beginning
on the Employee’s first day of employment and each anniversary thereof
in which the Employee is an Eligible Employee.

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ARTICLE II

PARTICIPATION IN THE PLAN

2.1 Commencement of Participation — Eligible Employer. Each Eligible Employee shall become eligible
to participate in the Plan on the Effective Date provided that such Eligible Employee has satisfied
the requirements of Section 2.3. Any individual who becomes an Eligible Employee after the
Effective Date shall become a Participant as of the first day of any January, April, July or
October immediately following his/her satisfaction of the requirements of Section 2.3.

2.2 Commencement of Participation — Eligible Consultant. Each Eligible Consultant shall become
eligible to participate in the Plan during his/her Initial Enrollment Period. An Eligible
Consultant shall be permitted to participate in the Plan only if the terms of his/her consulting
agreement expressly provided for such participation and he/she satisfies the requirements of
Section 2.3.

2.3 Procedure For and Effect of Admission. Each Eligible Employee or Eligible Consultant who
desires to participate in this Plan shall complete such forms and provide such data as is
reasonably required by the Employer during his/her Initial Enrollment Period or any subsequent
Enrollment Period. By becoming a Participant, the Eligible Employee or Eligible Consultant shall be
deemed to have consented to the provisions of this Plan and all amendments hereto.

2.4 Cessation of Partnership. A Participant shall cease to be an active Participant on the earlier
of:

(a) the date on which the Plan terminates,

(b) the date on which he/she ceases to be an Eligible Employee, or

(c) the date on which he/she ceases to be an Eligible Consultant.

A former active Participant will be considered a Participant for all purposes, except with respect
to the right to make contributions, provided that he/she retains an Account.

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ARTICLE III

CONTRIBUTIONS

3.1 Deferral of Base Pay and Bonuses. Each Participant may authorize the Employer to reduce: (i)
his/her Base Pay with respect to a Plan Year; and/or (ii) his/her Bonus with respect to a Plan
Year; provided, however, that the total amount deferred under this Section will not exceed ten
percent (10%) of a Participant’s combined Base Pay and Bonus payable with respect to such Plan
Year. The Participant must complete and file a Deferral Agreement with the Administrator during the
Enrollment Period which precedes the Plan Year in which the Base Pay would have been be paid. With
respect to any Bonus payable after January 1, 2005 and which is not subject to a Deferral Election
as of January 1, 2005, the Participant must complete and file a Deferral Agreement with the
Administrator on or before the sixth month prior to the last day of period over which the Bonus
shall be determined. With respect to the Participant’s Initial Enrollment Period, the Deferral
Agreement shall apply to Base Pay and Bonus payable in the remainder of the Plan Year which
contains the Initial Enrollment Period. A deferral shall be made from either Base Pay or Bonus as
the Participant shall specify, however, to the extent the deferral is to be made from Bonus and if
no Bonus, or an insufficient Bonus, is payable, the deferral shall be reduced. The Deferral
Agreement shall state the amount to be deferred as a percentage of the Participant’s Base Pay or
Bonus.

3.2 Deferral of 401(k) Plan Refund. In addition to deferrals under Section 3.1, each Participant
may authorize the Employer to credit his/her Account with any excess deferrals which are to be
returned to the Participant from the Impax 401(k) Plan due to the application of Code
Section 401(k)(3). A Participant must complete and file a Deferral Agreement with the Administrator
during the Enrollment Period which proceeds the first day of the Plan Year of the 401(k) Plan with
respect to which such excess deferrals relate. If a Participant elects to allocate excess deferrals
to this Plan, such election shall apply to 100% of the Participant’s excess deferral.

3.3 Rules Governing Deferral Contributions.

(a) Each election to defer is irrevocable during the Plan Year or other period to which it applies.

(b) The amount that a Participant elects to defer shall be credited to the Participant’s Accounts
as soon as practicable, but no later than 30 days following the date on which the Participant is
paid the non-deferred portion of the compensation which is the source of the deferral. (In the case
of a Participant electing to defer his/her Bonus and/or 401(k) Plan refund, the amount shall be
credited to the Participant’s Account no later than 30 days following the date on which the Bonus
or 401(k) Plan refund would have been paid to the Participant had he/she not elected to defer such
amount.)

3.4 Matching Contributions. The Employer shall make a contribution for each Participant which shall
equal fifty percent (50%) of the Participant’s Deferred Contribution made

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from his/her Base Pay and Bonus; provided, however, that in no event shall the total Matching
Contribution exceed five percent (5%) of the Participant’s combined Base Pay and Bonus. The above
notwithstanding, the Employer, by action of its Board, may reduce the level of matching
contribution or eliminate the Matching Contribution at any time at its discretion.

3.5 Vesting. Benefits derived from Deferral Contributions are not subject to forfeiture for any
reason. Except as provided below, benefits derived from Matching Contribution shall vest in
accordance with the following schedule. The above notwithstanding benefit shall not be forfeited as
a result of the Participant’s separation from employment due to death, disability, termination of
the Plan or Change in Control.

	 	 	 	 	 
	Years of Service	 	Vesting Percentage
	Less than 1
	 	 	0	%
	1 but less than 2
	 	 	20	%
	2 but less than 3
	 	 	40	%
	3 but less than 4
	 	 	60	%
	4 but less than 5
	 	 	80	%
	5 or more
	 	 	100	%

The above notwithstanding, benefit derived from Matching Contributions shall not be forfeited as a
result of the Participant’s separation from employment due to death, disability, termination of the
Plan or Change in Control. In the event of any separation from employment, the Board may, at its
discretion, waive this Section 3.5 and fully vest the Participant in his/her benefit attributable
to Matching Contributions.

A Participant who is an Eligible Consultant shall be 100% vested in the Matching Contribution
allocated to his/her Account upon satisfaction of the terms of his/her consulting agreement. The
Board may, at its discretion, waive this provision and fully vest such Eligible Consultant
Participant in his/her benefit attributable to Matching Contributions.

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ARTICLE IV

PARTICIPANT ACCOUNTS

4.1 Establishment of Accounts. A separate notational Account shall be established with respect to
each Participant:

4.2 Directed Adjustment of Certain Accounts. A Participant may direct by written instruction
delivered to the Administrator that his/her Accounts be valued as if they were invested in one or
more of the Investment Funds below. Participants may change their selection of Investment Funds
from time to time in accordance with the procedure prescribed by the Plan Administrator. Any such
change, which must be submitted to the Plan Administrator in writing, will become effective as soon
as administratively practicable.

The portion of a Participant’s Account valued by reference to the Investment Funds shall be valued
daily based upon the performance of the Investment Fund(s) selected by the Participant.
Participant’s may select from among the Investment Funds set forth in Exhibit A. Such valuation
shall reflect the net asset value expressed per share of the designated Investment Fund(s). The
fair market value of an Investment Fund shall be determined by the Plan Administrator. A valuation
summary shall be prepared no less than quarterly. A Participant shall submit his investment
selection to the Plan Administrator in writing. If any Participant fails to file a designation he
shall be deemed to have designated the Alliance Money Market fund.

4.3 Election Limitation. The Plan Administrator may establish uniform rules limiting a
Participant’s eligibility to allocate contributions to an Account based on health, income or such
other factors the Administrator deems appropriate.

4.4 Investment Obligation of the Employer. Benefits are payable as they become due irrespective of
any actual investments the Employer may make to meet its obligations. Neither the Employer nor any
trustee (in the event the Employer elects to use a grantor trust to accumulate funds) shall be
obligated to purchase or maintain any asset, and any reference to investments or Investment Funds
is solely for the purpose of computing the value of benefits. To the extent a Participant or any
person acquires a right to receive payments from the Employer under this Plan, such right shall be
no greater than the right of any unsecured creditor of the Employer. Neither this Plan, nor any
action taken pursuant to the terms of this Plan, shall be considered to create a fiduciary
relationship between the Employer and the Plan Participants or any other persons, or to establish a
trust in which the assets are beyond the claims of any unsecured creditor of the Employer.
Notwithstanding the foregoing, a Participant may not make contributions to this Plan during any
period for which contributions must be suspended in accordance with regulation section
1.401(k)-1(d)(2)(iii)(B)(3) of the Code, as a condition of the Participant’s receipt of a hardship
withdrawal from any plan of the Employer which includes a qualified cash or deferred arrangement
pursuant to Section 401(k) of the Code.

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ARTICLE V

BENEFITS

5.1 Retirement Benefits.

(a) If a Participant terminates employment, or an Eligible Consultant ceases to render service to
the Employer, for any reason, including death, the Employer shall pay him/her a benefit in the form
determined under Subsection (b), equal to the value of the vested balance credited to his/her
Account. If the Participant is deceased, the balance of his/her Account shall be paid to his/her
Beneficiary(ies).

(b) Form of Payment:

(1) If the Participant’s termination of employment occurs due to Retirement, payment of the
Retirement Benefit shall begin within 90 days of Retirement in the form of monthly installments
payable over a fixed period of five
(5), ten (10) or fifteen (15) years as selected by the Participant pursuant to Subsection (c). The
above notwithstanding, in the case of a Participant who is a Specified Employee, the Retirement
Benefit shall be paid no earlier than the sixth month following such Participant’s Retirement.

(2) If the Participant’s termination of employment occurs due to Disability, the Retirement Benefit
described in Subsection (a) shall be paid in monthly installments commencing as of the first day of
the first month following the Participant’s termination of employment, and continuing for a fixed
period of five (5), ten (10) or fifteen (15) years as selected by the Participant pursuant to
Subsection (c).

(3) If the Participant’s termination of employment occurs due for any reason other than Retirement
or Disability, the portion of his/her Account which consists of Exempt Amounts shall be paid in the
form of a single sum within ninety (90) day of the Participant’s attainment of Age 65 unless the
Participant elects to change the form and commencement date of such payment in the manner described
in (c) below. The portion of his/her Account which consists of 409A Amounts shall be paid in the
form of a single sum within (90) days of the Participant’s separation from service unless such
Participant is a Specified Employee. In such case, the portion which consists of 409A amounts shall
be paid no earlier than the sixth month following such Participant’s separation from service.

(4) Notwithstanding any provision to the contrary, if the Participant’s Retirement Account has a
value that is less than $10,000 at the time the Retirement Benefit is to commence, the
Participant’s Retirement Benefit may, at the discretion of the Administrator, be paid in the form
of a single

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sum as soon as administratively feasible following the Participant’s termination.

(c) A Participant shall select the form and commencement date in which Retirement Benefits shall be
paid prior to the initial allocation to his/her Account. Upon mutual agreement between the
Participant and the Administrator, the Participant may change his/her initial selection of form of
distribution provided that
(i) such election is made at least one year prior to the Participant’s Retirement, (ii) such
election does not have the effect of accelerating any such payment; and (iii) if such election
delays the commencement date of any payment, such delayed commencement date is at least five years
after the original commencement date. The above notwithstanding, with respect to Exempt Amounts,
upon mutual agreement between the Participant and the Administrator, the Participant may change
his/her initial selection of the form of distribution. With respect to such Exempt Amounts, any
such changes shall not be limited to the forms specified in Subsection (b) and may include a single
sum.

5.2 Tax Withholding. The Employer shall withhold or cause to be withheld all appropriate taxes, to
the extent that a withholding obligation exists, with respect to Deferral Contributions and/or
benefit payments under this Plan.

5.3 Loan Offset. Upon termination from employment by a Participant, the Employer shall deduct any
amount then owed by such Participant to the Employer from such Participant’s Account. The
Participant shall be responsible for any taxation resulting from the satisfaction of such
Participant’s debt with his/her Plan Account.

5.4 Unforseeable Emergency. A Participant may request a distribution of his/her Account prior to
termination of employment if such distribution is needed to alleviate an Unforseeable Emergency.
The determination of whether a Participant qualifies for an Unforseeable Emergency distribution
shall be subject to the rules of Code Section 409A and regulation thereunder.

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ARTICLE VI

ADMINISTRATION

6.1 Appointment of Administrator. The Compensation Committee of the Board shall serve as
Administrator. The Administrator (or any member of the committee) may be removed by the Employer at
any time; and any individual may resign at any time by submitting his/her resignation in writing to
the Employer. A new Administrator (or committee member) shall be appointed as soon as practicable
in the event of a removal or resignation. Any person so appointed shall signify his/her acceptance
by filing a written acceptance with the Employer.

6.2 Administrator’s Responsibilities. The Administrator is responsible for the day to day
administration of the Plan. The Administrator may appoint other persons or entities to perform
certain of its functions. Such appointment shall be made and accepted by the appointee in writing
and shall be effective upon the written approval of the Employer. The Administrator and any such
appointee may employ advisors and other persons necessary or convenient to help him/her carry out
his/her duties. The Administrator shall have the right to remove any such appointee from his/her
position. Any person, group of persons or entity may serve in more than one capacity.

6.3 Records and Accounts. The Administrator shall keep all individual and group records relating to
Participants and Beneficiaries, and all other records necessary for the proper operation of the
Plan. Such records shall be made available to the Employer and to each Participant and Beneficiary
for examination during business hours except that a Participant or Beneficiary shall examine only
such records as pertain exclusively to the examining Participant or Beneficiary and those records
and documents relating to all Participants generally. The Administrator shall prepare and shall
file as required by law or regulation all reports, forms, documents and other items required by
ERISA, the Code, and every other relevant statute, each as amended, and all regulations thereunder.

6.4 Administrator’s Specific Powers and Duties. In addition to any powers, rights and duties set
forth elsewhere in the Plan, the Administrator shall have the following powers and duties:

(a) to adopt such rules and regulations consistent with the provisions of the Plan;

(b) to enforce the Plan in accordance with its terms and any rules and regulations it establishes;

(c) to maintain records concerning the Plan sufficient to prepare reports, returns and other
information required by the Plan or by law;

(d) to construe and interpret the Plan and to resolve all questions arising under the Plan;

 - 10 - 

 

(e) to direct the Employer to pay benefits under the Plan, and to give such other directions and
instructions as may be necessary for the proper administration of the Plan;

(f) to be responsible for the preparation, filing and disclosure on behalf of the Plan of such
documents and reports as are required by any applicable federal or state law; and

(g) to engage assistants and professional advisors.

6.5 Delegation. The Administrator may, by written majority decision, delegate to each or any one of
its number, or to its Secretary, authority to sign any documents on its behalf, or to perform
ministerial acts, but no person to whom such authority is delegated shall perform any act involving
the exercise of any discretion without first obtaining the concurrence of a majority of the
Participants of the committee, even though he/she alone may sign any document required by third
parties.

6.6 Construction of the Plan. The Administrator shall take such steps as are considered necessary
and appropriate to remedy any inequity that results from incorrect information received or
communicated in good faith or as the consequence of an administrative error. The Administrator
shall have the sole and absolute discretion to interpret the Plan and shall resolve all questions
arising in the administration, interpretation and application of the Plan. It shall endeavor to
act, whether by general rules or by particular decisions, so as not to discriminate in favor of, or
against, any person and so as to treat all persons in similar circumstances uniformly. The
Administrator shall correct any defect, reconcile any inconsistency, or supply any omission with
respect to this Plan. All such corrections, reconciliations, interpretations and completions of
Plan provisions shall be final and binding upon the parties.

6.7 Employer’s Responsibility to Administrator. The Employer shall furnish the Administrator such
data and information as it may require. The records of the Employer shall be determinative of each
Participant’s period of employment, termination of employment and the reason therefor, leave of
absence, reemployment, Years of Service, personal data, and compensation reductions. Participants
and their Beneficiaries shall furnish to the Administrator such evidence, data, or information, and
execute such documents, as the Administrator requests.

6.8 Engagement of Assistants and Advisers; Plan Expenses. The Administrator shall have the right to
hire such professional assistants and consultants as it, in its sole discretion, deems necessary or
advisable, including, but not limited to:

(a) investment managers and/or advisers;

(b) accountants;

(c) actuaries;

(d) attorneys;

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	 	(e)	 	consultants;
	 
	 	(f)	 	clerical and office personnel; and
	 
	 	(g)	 	medical practitioners.

	 	 	The expenses incurred in connection with the operation of the Plan
and/or any trust relating to this Plan, including, but not limited to,
the expenses incurred by reason of the engagement of professional
assistants and consultants, shall be expenses of the Plan and shall be
charged in a reasonable manner against amounts credited to each
Participant’s Account at the direction of the Administrator. The
Employer shall have the option, but not the obligation, to pay any such
expenses, in whole or in part, and by so doing, to relieve the
Participants’ Accounts from the obligation of bearing such expenses.
Payment of any such expenses by the Employer on any occasion shall not
bind the Employer to thereafter pay any similar expenses.
	 
	6.9	 	Liability. Neither the Administrator nor the Employer shall be liable to
any person for any action taken or omitted in connection with the
administration of this Plan unless attributable to its own fraud or
willful misconduct; nor shall the Employer be liable to any person for
such action unless attributable to fraud or willful misconduct on the
part of a director, officer or employee of the Employer.
	 
	6.10	 	Indemnity of Administrator. The Employer shall indemnify the
Administrator or any individual who is a delegate against any and all
claims, loss, damage, expense or liability arising from any action or
failure to act, except when due to gross negligence or willful
misconduct.

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ARTICLE VII

CLAIMS PROCEDURE

7.1 Claim. If a Participant or Beneficiary is denied all or a portion of an expected Plan benefit
for any reason, he/she must file a written notification of his/her claim with the Administrator.
The Administrator shall notify the Participant or Beneficiary within sixty (60) days of allowance
or denial of the claim. If the Administrator fails to notify the claimant of his/her decision to
grant or deny the claim within sixty
(60) days, such claim shall be deemed to have been denied; and the review procedure described in
Section 7.2 shall become available to the claimant.

The notice provided by the Administrator under this Section shall be in writing, sent by mail to
the Participant’s last known address and, if a denial, must contain the following information:

(a) the specific reasons for the denial;

(b) the specific reference to the pertinent Plan provision on which the denial is based;

(c) if applicable, a description of any additional information or material necessary to perfect the
claim, and an explanation of why such information or material is necessary; and

(d) an explanation of the claims review procedure and the time limitations of the review procedure
applicable thereto.

7.2 Review Procedure. A Participant or Beneficiary is entitled to request a review of any denial of
his/her claim by the Named Appeals Fiduciary. The request for review must be submitted in writing
within sixty (60) days of mailing of the notice of the denial. Absent a request for review within
the 60-day period, the claim will be deemed to be conclusively denied. The Participant or
Beneficiary or his/her representative shall be entitled to review all pertinent documents and to
submit issues and comments in writing. The Named Appeals Fiduciary shall provide a full and fair
review of the claim and render the final decision.

7.3 Final Decision. Within sixty (60) days of mailing of a request for review, the Named Appeals
Fiduciary shall allow or deny the claim, unless special circumstances require an extension (such as
for a hearing); provided, however, that in no event shall the decision be delayed beyond one
hundred twenty (120) days after receipt of the request for review. The decision shall be
communicated in writing to the Participant or Beneficiary. The decision shall recite the facts and
reasons for denial, with specific reference to the pertinent Plan provisions.

7.4 Appointment of the Named Appeals Fiduciary. The Named Appeals Fiduciary shall be the person or
persons named as such by the Board, or, if no such person or persons be named, then the person or
persons named by the Administrator as the Named Appeals

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Fiduciary. The Named Appeals Fiduciary may at any time be removed by the Board, and any Named
Appeals Fiduciary named by the Administrator may be removed by the Administrator. All such removals
may be with or without cause and shall be effective on the date stated in the notice of removal.

 - 14 - 

 

ARTICLE VIII

AMENDMENT AND TERMINATION

8.1 Plan Amendment. The Plan may be amended in whole or in part by the Board at any time; provided,
that (i) no amendment shall deprive a Participant or Beneficiary of any benefit to which he/she is
entitled under this Plan with respect to Deferral Contributions or Matching Contributions made
prior to such amendment; and (ii) no amendment shall decrease a Participant’s vested interest in
his/her Account. Each amendment shall be approved by the Board by resolution.

8.2 No Premature Distribution. Subject to Article 8.3, no amendment hereto shall permit amounts
accumulated prior to the amendment to be paid to a Participant or Beneficiary prior to the time
he/she would otherwise be entitled thereto.

8.3 Termination of the Plan. The Employer reserves the right to terminate the Plan and/or the
Deferral Agreement pertaining to any Participant at any time prior to the commencement of benefits.
Such termination shall be approved by the Board by resolution; or, in the case of a termination by
an entity which is included in the term Employer, by the board of directors of such terminating
entity. In the event of any such termination, the Employer shall pay a benefit to the Participant
or the Beneficiary of any deceased Participant, in lieu of other benefits hereunder, equal to the
value of the Participant’s Accounts. Termination, in whole or in part, of the Plan by an entity
which is included in the term Employer shall have no effect on the continued operation of the Plan
with respect to other entities constituting Employer.

 - 15 - 

 

ARTICLE IX

MISCELLANEOUS

9.1 Supplemental Benefits. The benefits provided for the Participants under this Plan are in
addition to benefits provided by any other plan or program of the Employer and, except as otherwise
expressly provided herein, the benefits of this Plan shall supplement and shall not supersede any
plan or agreement between the Employer and any Participant or any provisions contained herein.

9.2 Investment Obligation of the Employer. Benefits are payable as they become due regardless of
any actual investments the Employer may make to meet its obligations under this Plan. Neither the
Employer nor any trustee (in the event the Employer elects to use a grantor trust to accumulate
funds) shall be obligated to purchase or maintain any asset, and any reference to investments or
Investment Funds is solely for the purpose of computing the value of Accounts. To the extent a
Participant or any person acquires a right to receive payments from the Employer under this Plan,
such right shall be no greater than the right of any unsecured creditor of the Employer. Neither
this Plan nor any action taken pursuant to the terms of this Plan shall be considered to create a
fiduciary relationship between the Employer and the Participants or any other persons, or to
establish a trust in which the assets are beyond the claims of any unsecured creditor of the
Employer.

9.3 Governing Law. The Plan shall be governed and construed under the laws of the Commonwealth of
Pennsylvania to the extent not preempted by Federal law which shall otherwise control. The Employer
intends that this Plan and benefits thereunder qualify for the deferral of Federal taxation
pursuant to Code Section 409A. Any provision inconsistent with Code Section 409A shall be severed
and the balance of this Plan shall remain in effect.

9.4 No Assignment Permitted. Except as otherwise provided in Section 5, no Participant, Beneficiary
or heir shall have any right to commute, sell, transfer, encumber, hypothecate, assign or otherwise
convey the right to receive any payment under the terms of this Plan. Any such attempted assignment
shall be considered null and void.

9.5 Binding Terms. The terms of this Plan shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, executors, administrators and successors.

9.6 Spendthrift Provision. The interest of any Participant or any beneficiary receiving payments
hereunder shall not be subject to anticipation, nor to voluntary or involuntary alienation, until
distribution is actually made.

9.7 Headings. All headings preceding the text of the several Sections hereof are inserted solely
for reference and shall not constitute a part of this Plan, nor affect its meaning, construction or
effect.

 - 16 - 

 

IN WITNESS WHEREOF, and
as evidence of its adoption of this Plan, the Employer has caused the
same to be executed this 28th day
of February, 2005.

ATTEST IMPAX LABORATORIES, INC.

 - 17 - 

 

EXHIBIT I

Investment Fund Options

Alliance Money Market

Alliance Inter. Gov’t Securities Alliance Quality Bond

Alliance High Yield

T. Rowe Price Equity Income

EQ/Putnam Growth & Income

Alliance Growth & Income

Alliance Equity Index

Alliance Technology

Mercury Basic Value Equity

Alliance Common Stock

MFS Research

MFS Growth with Income

EQ/Alliance Premier Growth

Capital Guardian Research

Capital Guardian U.S. Equity

Alliance Global

Alliance International

T. Rowe Price Int’l Stock

Morgan Stanley Emerging Mkts. Eq. EQ/Aggressive Stock

EQ/Evergreen

FI Small/Mid Cap Value

Alliance Small Cap Growth

MFS Emerging Growth Companies

Alliance Conservative Investors

EQ/Putnam Balanced

EQ/Evergreen Foundation

EQ/Balanced

Alliance Growth Investors

Mercury World Strategy

EQ/AXP New Dimensions

EQ/AXP Strategy Aggressive

FI Mid-Cap

EQ/Janus Large-Cap Growthexv10w8

EXHIBIT 10.8

EMPLOYMENT AGREEMENT

This Employment Agreement, effective as of this
14th day
of December, 1999 (the “Effective Date”),
is by and among IMPAX LABORATORIES, INC., a Delaware corporation, with a business address at 30831
Huntwood Ave., Hayward, California 94544 (the “Company”) and CHARLES HSIAO, Ph.D., with a mailing
address at 30831 Huntwood Avenue, Hayward, California 94544 (“Executive”).

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein set forth, the
Company and Executive agree as follows:

1. Nature of Employment.

1.1 Duties and Responsibilities. Executive shall serve as the Co-Chief Executive Officer of the
Company during the term of this Agreement, and use his best efforts to promote the interests of the
Company and shall devote his full time and efforts to its business and affairs. Executive shall
have general executive powers and active management over the property, business, and affairs of the
Company, subject always to the direction of the Board of Directors (the “Board”) or its designee.

1.2 Other Business Activities. Executive will devote his full professional time, attention and
effort to Company’s business. Notwithstanding the foregoing, Executive shall be entitled to
participate in other professional and business activities to the extent such activities are
reasonably likely to enhance Executive’s ability to perform his obligations hereunder, provided
that such activities do not compete with the business of the Company and do not unreasonably
interfere with the then performance of his duties hereunder.

1.3 Board of Directors Member. Each year during the term of this Agreement, the Board of Directors
of the Company (the “Board”) shall designate Executive as one of management’s slate of candidates
to the Board, shall recommend Executive as a Director to its shareholders, and shall otherwise use
its best efforts to have Executive elected as a Director and to have him remain as a Director
during the entire term of this Agreement, in all instances subject to satisfaction by the Board of
Directors of its fiduciary duties and obligations.

 

 

2. Compensation.

2.1 Salary. Executive’s salary shall be at an initial annual rate of One Hundred Seventy-Five
Thousand Dollars ($175,000.00), subject to withholding and further subject to discretionary
increases in accordance with the Company’s normal review procedures and policies. The salary shall
be paid in substantially equal installments in accordance with the Company’s standard payroll
practices, as in effect from time to time.

2.2 Bonus. Subject to the achievement of certain short-term and long-term performance goals
established by the Board of Directors of the Company from time to time, Executive shall be paid
quarterly and annual bonuses, payable in stock and/or cash, to be determined by the Board of
Directors of this Company or its Compensation Committee. Each such bonus shall be paid at the same
time as, and be equal to, the bonus paid to Larry Hsu, Ph.D., and Barry Edwards for such period.

2.3 Medical Insurance and Other Benefits. Executive shall be entitled to receive full health,
dental, vision, and disability insurance, as well as any other benefits customarily offered to
other senior executive officers of the Company, all upon terms no less favorable to Executive, with
all premiums and costs to be paid by the Company. The Company shall also provide to Executive, at
Company’s expense, life insurance coverage at standard premium rates having a death benefit payable
to a beneficiary selected by the Executive equal to $1,000,000 and disability insurance at standard
premium rates which provides salary replacement benefits, not to exceed $250,000 in the aggregate,
in the event Executive becomes incapacitated. Executive shall be required to undergo a yearly
physical examination, at Company’s expense, with a physician of Executive’s choosing, and upon
Company’s request, deliver a copy of such physician’s report from such examination.

2.4 Vacation. Executive shall be entitled to receive four (4) weeks of paid vacation time annually,
such vacation shall accrue daily, provided however, that in the event the total vacation accrual
ever reaches four (4) weeks, then no further vacation time will accrue until Executive has used his
current annual allotment. Executive may not receive pay rather than vacation except when Executive
leaves the Company. Executive may schedule his vacations at his discretion so long as the timing of
such vacations does not interfere with his responsibilities to the Company.

2.5 Reimbursement of Expenses. The Company shall reimburse Executive for all out-of-pocket expenses
incurred by Executive in performing his obligations hereunder within thirty (30) days after the
date on which Executive delivers to the Company an itemized statement, accompanied by appropriate
receipts to the extent available, describing the reimbursable expenses incurred. The expenses to be
reimbursed include, without limitation, telephone, fax, air freight and travel related expenses.

2

 

3. Term and Termination.

3.1 Term. The term of this Agreement shall commence on the Effective Date and, unless terminated in
accordance with this Section 3, shall continue until the third anniversary of the Effective Date,
and thereafter shall be automatically renewed for successive periods of one year each, unless
terminated by either party by written notice of termination delivered to the other party at least
six (6) months prior to the expiration date of the initial term or any renewal term of this
Agreement (the “Term”).

3.2 Termination by the Company. The Company shall have the right to terminate this Agreement (i)
for Cause, as defined below, at any time and without prior notice, or (ii) for any other reason on
thirty (30) days written notice to Executive.

3.2.1 Termination for Cause. The phrase “Cause” means any of the following:

(i) any material breach by Executive of any provision of Sections 5, 6, 7 or 8 of this Agreement;

(ii) any material breach of any other provision of this Agreement by Executive (other than any such
breach resulting from Executive’s incapacity due to physical or mental illness, which shall be
governed by Section 3.2.2 hereof), including without limitation the failure to satisfactorily
perform his duties as provided herein, if that breach is not remedied within thirty (30) days after
written notice to Executive describing the acts alleged to constitute Cause;

(iii) any act of fraud, misappropriation, embezzlement or similar willful and malicious conduct by
Executive against the Company; or

(iv) indictment of Executive for a felony or any conviction of, or guilty plea by Executive to, a
crime involving moral turpitude if that crime of moral turpitude tends or would reasonably tend to
bring the Company into disrepute.

3.2.2 Termination for Death or Disability. For purposes hereof, the term “disability” shall mean
such physical or mental illness as shall render Executive incapable of substantially performing his
duties hereunder on a regular basis at the Company’s offices for a period of three (3) consecutive
months or for a period of six (6) months in any twelve-month period, all as determined by a
physician or psychiatrist, as the case may be, selected by the Company.

3

 

3.3 Termination by the Executive. Executive may terminate this Agreement for any reason upon thirty
(30) days advance written notice to the Company.

4. Termination Payments.

4.1 No Payments. In the event of any termination of this Agreement by Company for Cause, or by
Executive without Good Reason, the Company shall have no further payment obligations to Executive
hereunder, except for wages and benefits accrued to date and/or provided by applicable law.

4.2 Continued Payments. If the Company terminates this Agreement for any reason other than for
Cause, or Executive terminates this Agreement for Good Reason and in accordance with Section 3.3,
then in lieu of any other payments otherwise required hereunder, the Company shall, subject to
Executive’s compliance with Sections 5, 6, 7 and 8 hereof, pay Executive, as liquidated damages and
not as a penalty, (a) within fifteen (15) days after the termination date, all accrued and unpaid
salary and benefits (including accrued but unused vacation time) through the termination date and
(b) the lesser of (i) an amount equal to his salary payments at the time of the termination, in
accordance with the Company’s then payment policy, and benefits provided for herein during the
six-month period following the termination date, and (ii) the entire amount of the salary remaining
due and payable from the date of such termination to the scheduled expiration of this Agreement;
provided, however, that if such termination occurs prior to the first anniversary of the Effective
Date, then in addition to items (a) and (b) above, Executive shall be entitled to continue to
receive, in accordance with the Company’s then payment policy, an amount equal to his salary
payments and, to the extent Executive is not otherwise employed, health benefits, until the first
anniversary of the Effective Date. In the event that this Agreement is terminated due to the death
or disability of Executive, Company shall pay to Executive a portion of any bonus otherwise payable
to Executive in accordance with Section 2.2 hereof, prorated to reflect any early termination of
this Agreement relative to the performance period to which the bonus relates.

4.3 Continued Medical Coverage. If the Company terminates this Agreement for any reason other than
for Cause, or Executive terminates this Agreement for Good Reason and in accordance with Section
3.3, then Company shall maintain, at Company’s cost, Executive’s health, dental, vision and
disability insurance described in Section 2.3 hereof until the first to occur of (i) the expiration
of eighteen (18) months following such termination; or (ii) Executive accepts employment which
provides health insurance. If the Company terminates this Agreement for Cause, or Executive
terminates this Agreement for any reason other than Good Reason, Executive shall have the right to
maintain, at Executive’s cost, the health, dental, vision and disability insurance described in
Section 2.3 hereof, for a period not to exceed eighteen (18) months or such longer period as may be
required by applicable law, all to the extent permitted by the applicable insurance carrier.

4

 

4.4 Certain Definitions.

4.4.1 Good Reason. For purposes of this Agreement, “Good Reason” means (i) the assignment to
Executive of any duties or the substantial reduction of Executive’s duties, either of which is
inconsistent with Executive’s position as Co-Chief Executive Officer; (ii) any change in
Executive’s reporting relationship which results in his not reporting to a member of the Board of
Directors of the Company; (iii) a material reduction in Executive’s salary or benefits not agreed
to by Executive; (iv) a requirement of Executive to relocate to an office that would increase
Executive’s one-way commute distance by more than fifty (50) miles; or (v) a Change in Control of
Company, as hereinafter defined.

4.4.2 Change in Control of Company. For purposes of this Agreement, “Change in Control of Company”
shall mean the occurrence of any of the following:

(i) Any person or entity acquires ownership or control, directly or indirectly, of securities of
the Company (or a successor to the Company) representing fifty percent (50%) or more of the
combined voting power of the then outstanding securities of the Company or such successor;

(ii) (a) a sale or disposition of assets of the Company involving fifty percent (50%) or more in
value of the assets of the Company; (b) any merger or reorganization of Company (whether or not
another entity is the survivor), in which the Company’s shareholders (immediately prior to the
transaction) do not own (immediately after the transaction), either directly or indirectly, at
least fifty-one percent (51%) of the voting power of the surviving or successor corporation; (c)
any transaction pursuant to which all of the shareholders of the Company immediately prior to the
transaction, hold (immediately after the transaction) less than fifty-one percent (51%) of the
combined voting power of the Company or any successor Company; (d) any other event or transaction
which the Board determines, in its discretion, would materially alter the structure, ownership or
control of the Company;

5

 

provided, however, that the consummation of the transactions contemplated by the Agreement and Plan
of Merger, dated as of                     , 1999, between Impax, Inc., a California corporation, and
Global, a Delaware corporation, shall not constitute a Change in Control.

5. Proprietary Information and Inventions. Executive acknowledges that during his employment he may
create, make, derive, produce, obtain, make known or learn about certain information which has
commercial value in the business in which the Company is engaged and which is treated by the
Company as confidential. This information may have been created, discovered or developed by the
Company or the Executive, in the course and scope of his employment, or otherwise received by the
Company from third parties subject to a duty to maintain the confidentiality of such information.
All such information is hereinafter called “Proprietary Information.”

5.1 Proprietary Information Defined. By way of illustration, but not limitation, Proprietary
Information includes trade secrets, ideas, processes, drawings, specifications, data, formulations,
computer programs, software, other original works of authorship, know-how, improvements,
discoveries, developments, designs, innovations, techniques, business development strategies,
marketing plans, strategies, forecasts, new products, unpublished financial statements, budgets,
projections, licenses, prices, costs, strategic alliances, ventures, and customer and supplier
lists. The foregoing obligations of confidentiality and non-use shall not apply to any Proprietary
Information that:

5.1.1 was known to the Executive prior to the date of disclosure pursuant to this Agreement and not
obtained or derived directly or indirectly from the Company;

5.1.2 is or becomes public or available to the general public otherwise than through the act or
default of the Executive;

5.1.3 is obtained subsequent to any disclosure under this Agreement from a third party who is
lawfully in possession of same and which information is not subject to any confidential or non-use
obligations owed to the Company or others;

5.1.4 has been furnished by the Company to a third party without similar restrictions on
disclosure; or

6

 

5.1.5 is required to be disclosed pursuant to requirements of Federal, state or local statute,
regulation or court order, provided that Executive delivers prior written notice to Company of such
pending disclosure, and gives Company a reasonable opportunity to oppose such disclosure with the
applicable authority.

5.2 Ownership of Proprietary Information. Executive acknowledges that all Proprietary Information
shall be the sole property of the Company and its assignees (or, in some cases, its clients,
suppliers or customers), and the Company and its assignees (or, in some cases, its clients,
suppliers or customers) shall be the sole owner of all patents, copyrights, trade secrets, and all
other intellectual property rights in connection therewith (collectively “Intellectual Property
Rights”). The Company’s ownership includes any and all modifications, corrections, updates,
changes, improvements, derivatives and enhancements to the Proprietary Information and the
Intellectual Property Rights therein.

5.3 Non-Disclosure. At all times, both during Executive’s employment and after his termination,
Executive shall keep in strictest confidence and trust all Proprietary Information, and shall not
reproduce or disclose any Proprietary Information, or use such Proprietary Information for his own
account or the account of any third party, without the written consent of the Company, except as
may be necessary in the ordinary course of performing duties as an employee of the Company.

5.4 Assignment of Inventions. Executive hereby assigns and transfers to the Company, Executive’s
entire right, title and interest, now or hereafter acquired, in and to all Proprietary Information
and Intellectual Property Rights therein, discovered, originated, made or conceived or learned by
Executive either alone or jointly with others, during the period of Executive’s employment which
result, directly or indirectly, from (i) the use of premises or equipment owned, leased or
contracted for by the Company or supplies or Proprietary Information of the Company, or (ii) work
conducted on the time of the Company, or (iii) work performed for the Company. Executive further
acknowledges that all original works of authorship which are made by Executive (solely or jointly
with others) within the scope of and during the period of his employment with the Company and which
are protectible by copyright are “works made for hire,” as that term is defined in the United
States Copyright Act. Executive understands and agrees that the decision whether or not to
commercialize or market any invention developed by him solely or jointly with others is within the
Company’s sole discretion and for the Company’s sole benefit and that no royalty will be due to him
as a result of the Company’s efforts to commercialize or market any such invention. Executive
hereby waives all moral rights which he may have or hereafter acquire in any Proprietary
Information and any Intellectual Property Rights therein. Executive will, at the Company’s request,
promptly execute a written assignment of title to the Company for any Proprietary Information and
Intellectual Property Rights therein, and a written waiver of all moral rights therein, and
Executive will preserve all such Proprietary Information as confidential information of the
Company.

7

 

5.5 Notice of Inventions; Execution of Documents. Executive agrees to give Company prompt written
notice of his acquisition or creation of any Proprietary Information. Executive further agrees as
to all Proprietary Information to assist the Company in every proper way (but at the Company’s
expense) to obtain and from time to time enforce patents, copyrights and other rights and
protections relating to inventions in any and all countries, and to that end agrees to execute all
documents for use in applying for and obtaining such patents, copyrights and other rights and
protections on and enforcing inventions as the Company may desire, together with any assignments
thereof to the Company or persons designated by it. Executive’s obligations to assist the Company
in obtaining and enforcing patents, copyrights and other rights and protections relating to
Proprietary Information in any and all countries shall continue beyond the termination of
employment, but the Company shall compensate Executive at a reasonable rate after such termination
for time actually spent, at the Company’s request, on such assistance. In the event the Company is
unable, after reasonable effort, to secure signatures on any documents needed to effect any
assignment hereunder or to apply for or prosecute any patent, copyright or other right or
protection relating to an invention, whether because of physical or mental incapacity or for any
other reason whatsoever, Executive hereby irrevocably designates and appoints the Company and its
duly authorized officers and agents as his agent and attorney-in-fact, to act for and in his behalf
and stead, to execute and file any such application or applications and to do all other lawfully
permitted acts to further the prosecution and issuance of patents, copyrights or similar
protections thereon with the same legal force and effect as if executed by him.

5.6 Return of Proprietary Information. All Proprietary Information, including, without limitation,
all written materials, records and documents or other tangible materials made by Executive or
coming into his possession as a result of his employment with Company concerning the business or
affairs of Company shall be the sole property of Company; and, upon the termination of his
employment with Company or upon the request of Company, Executive shall promptly deliver the same
to Company.

8

 

5.7 Third Party Information. Executive recognizes that the Company has received and in the future
will receive from third parties their confidential or proprietary information subject to a duty on
the Company’s part to maintain the confidentiality of such information and to use it only for
certain limited purposes. Executive agrees that Executive owes the Company and such third parties,
during the term of this Agreement and thereafter, a duty to hold all such confidential or
proprietary information in the strictest confidence and not to disclose it to any person, firm or
corporation or to use it except as necessary in carrying out the services for the Company
consistent with the Company’s agreement with such third party.

6. Prior Inventions. Executive understands that all inventions, if any, patented or unpatented,
which Executive made prior to Executive’s employment are excluded from the scope of this Agreement.
To preclude any possible uncertainty, Executive has set forth on item 1 of Exhibit A attached
hereto a complete list of all of Executive’s prior inventions, including numbers of all patents and
patent applications, and a brief description of all unpatented inventions which are not the
property of a previous employer. Executive represents and covenants that the list is complete and
that, if no items are on the list, Executive has no such prior inventions. Executive agrees to
notify the Company in writing before Executive makes any disclosure or performs any work on behalf
of the Company which appears to threaten or conflict with proprietary rights which Executive claims
in any invention or idea. Executive agrees that if in the course of performing services hereunder,
Executive incorporates into the Company’s Proprietary Information or otherwise utilizes any
invention, improvement, development, concept, discovery or other proprietary information owned by
Executive or in which Executive has an interest, the Company is hereby granted and shall have a
non-exclusive, royalty-free, perpetual, irrevocable, worldwide license to make, have made, modify,
use and sell such item as part of or in connection with such Proprietary Information.

7. Conflicting Obligations.

7.1 Trade Secrets of Others. Executive represents that he has not brought, and will not bring with
him to Company, disclose to Company, or use in the performance of his responsibilities, any
devices, materials or documents of a former employer or other party that are proprietary or are not
generally available to the public, unless he has obtained express written authorization from such
party for their possession and use. The only devices, materials or documents of a former employer
or other party that are proprietary or are not generally available to the public that Executive
will bring to the Company, if any, are identified on item 2 of Exhibit A attached hereto, and as to
each such item, Executive represents that Executive has obtained express written authorization for
their possession and use and has delivered a copy of such written authorization to the Company.

9

 

7.2 Conflicting Confidentiality Agreements. Executive agrees that during this employment, Executive
will not breach any obligation of confidentiality Executive has to former employers, clients, and
others. Executive represents that Executive’s performance under the terms of this Agreement, as
Executive to the Company, does not and will not breach any agreement to keep in confidence
proprietary information acquired by Executive in confidence or in trust. Executive has neither
entered into, nor shall enter into, any agreement, either written or oral, in conflict herewith.

8. Covenant Not to Compete; Non-Interference.

8.1 During the term of this Agreement, Executive shall not, directly or indirectly, engage or
participate in any business, which is in competition with any business in which the Company
conducts or pursues during the term of this Agreement. Moreover, in view of Executive’s access to
the Company’s trade secrets and proprietary information and know-how, Executive further agrees that
Executive will not, without the Company’s prior written consent, design or develop identical or
substantially similar designs as those developed for the Company during his employment for himself
or any third party during the term of this Agreement and for a period of twelve (12) months
following the termination of this Agreement.

8.2 Executive covenants and agrees that he will not, during the term of this Agreement and
continuing until the second anniversary of the termination of this Agreement, whether for his own
account or for the account of any other person, interfere with the relationship of the Company
with, or endeavor to entice away from the Company, any person who at any time during the term of
Executive’s engagement with the Company was an employee of the Company. Furthermore, Executive
covenants and agrees that he will not, whether during the term of this Agreement or thereafter,
whether for his own account or for the account of any other person, interfere with the relationship
of the Company with, or endeavor to entice away from the Company, any person who at any time during
the term of Executive’s engagement with the Company was a customer, supplier or business partner of
the Company.

10

 

9. Key Man Insurance. The Company may, in its sole discretion, at any time after the date hereof,
apply for and procure as owner for its benefit, life insurance on Executive, in such amount and in
such form or forms as the Corporation may determine. Executive shall, at the Company’s request,
subject to such medical examinations, supply such information and execute such documents as may be
required by the insurance company or companies to whom the Company has applied for such insurance.

10. General Provisions.

10.1 Mediation and Arbitration.

10.1.1 Mediation. No party to this Agreement may initiate litigation or arbitration with regard to
any dispute with respect to this Agreement until after all remedies set forth in this Section have
been exhausted. In the event of any dispute arising over this Agreement, any party shall have the
right by giving written notice to the other parties hereto (the “Mediation Notice”) to initiate
non-binding mediation to be conducted by a mediator mutually agreed to by the parties or, in the
event the parties are unable to reach such agreement within thirty (30) days following the delivery
of the Mediation Notice, by a mediator appointed by the American Arbitration Association (“AAA”) in
accordance with the rules and regulations of the AAA, or by any other body mutually agreed upon by
the parties. Mediation shall take place at Hayward, California or any other location mutually
agreeable to the parties. In the event the parties resolve their dispute in mediation, they shall
enter into a written agreement, which shall be binding on all parties thereto.

10.1.2 EXCEPT AS PROVIDED IN SECTIONS 10.1 AND 10.10 HEREOF, EXECUTIVE AND COMPANY AGREE THAT ANY
DISPUTE OR CONTROVERSY ARISING OUT OF, OR RELATING TO THIS AGREEMENT SHALL BE SETTLED BY
ARBITRATION TO BE HELD IN ALAMEDA COUNTY, CALIFORNIA, IN ACCORDANCE WITH THE EMPLOYMENT DISPUTE
RESOLUTION RULES THEN IN EFFECT OF THE AMERICAN ARBITRATION ASSOCIATION. THE ARBITRATOR MAY GRANT
INJUNCTIONS OR OTHER RELIEF IN SUCH DISPUTE OR CONTROVERSY. THE DECISION OF THE ARBITRATOR SHALL BE
FINAL, CONCLUSIVE AND BINDING ON THE PARTIES TO THE ARBITRATION. JUDGMENT MAY BE ENTERED ON THE
ARBITRATOR’S DECISION IN ANY COURT HAVING JURISDICTION.

10.1.3 THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND
RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE
RELATIONSHIP (EXCEPT AS PROVIDED IN SECTION 7 HEREOF), INCLUDING, WITHOUT LIMITATION, THE FOLLOWING
CLAIMS:

11

 

10.1.3(a) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT, BREACH OF CONTRACT, EXPRESS OR
IMPLIED, BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, NEGLIGENT OR INTENTIONAL INFLICTION
OF EMOTIONAL DISTRESS, MISREPRESENTATION, INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC
ADVANTAGE, DEFAMATION AND LIBEL;

10.1.3(b) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL, STATE OR MUNICIPAL STATUTE, INCLUDING,
WITHOUT LIMITATION, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE
AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR
LABOR STANDARDS ACT; AND

10.1.3(c) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO EMPLOYMENT
OR EMPLOYMENT DISCRIMINATION.

10.1.4 EXECUTIVE UNDERSTAND THAT EACH PARTY’S COVENANT TO RESOLVE DISPUTES BY ARBITRATION, AS
OPPOSED TO THE JUDICIAL SYSTEM IS CONSIDERATION FOR THE OTHER PARTY’S PROMISE. EXECUTIVE FURTHER
UNDERSTANDS THAT HE HAS BEEN OFFERED EMPLOYMENT BY THE COMPANY IN CONSIDERATION OF HIS PROMISE TO
ARBITRATE DISPUTES.

10.2. Notification of New Employer. In the event that Executive leaves the employ of the Company,
Executive hereby consents to notification by the Company to Executive’s new employer about his
rights and obligations under this Agreement.

10.3 Notices. Except as expressly provided herein, all notices, requests or other communications
required hereunder shall be in writing and shall be given personal delivery, national overnight
courier service, or by U.S. mail, certified or registered, postage prepaid, return receipt
requested, addressed to the respective party at the applicable address set forth above, or to any
party at such other addresses as shall be specified in writing by such party to the other parties
in accordance with the terms and conditions of this Section. All notices, requests or
communications shall be deemed effective upon personal delivery, or five (5) days following deposit
in the United States mail, or two (2) business days following deposit with any national overnight
courier service.

10.4 Jurisdiction, Venue and Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California (regardless of that jurisdiction or
any other jurisdiction’s choice of law principles). To the extent permitted by law and except as
otherwise provided in Section 10.1 hereof, the parties hereto agree that all actions or proceedings
arising in connection herewith, shall be litigated in the state and federal courts located in the
State of California, and each party hereby waives any right it may have to assert the doctrine of
Forum Non Conveniens or to object to venue. The parties each hereby stipulate that the state and
federal courts located in the County of Alameda, State of California, shall have personal
jurisdiction and venue over each party for the purpose of litigating any such dispute, controversy
or proceeding arising out of or related to this Agreement. To the extent permitted by law, service
of process sufficient for personal jurisdiction in any action against either party may be made by
registered or certified mail, return receipt requested.

12

 

10.5 No Assignment. This Agreement is personal to Executive, and Executive may not assign any
rights or delegate any responsibilities hereunder without the prior approval of the Company.

10.6 Entire Agreement. This Agreement, including the exhibit which is referenced herein and
incorporated by this reference, is the entire agreement between the Company and Executive with
respect to the subject matter hereof and cancels and supersedes any and all prior agreements
regarding the subject matter hereof between the parties, including without limitation that certain
Employment Agreement, dated September 30, 1996, between Impax Pharmaceuticals, Inc., and Executive.
This Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors, heirs and permitted assigns. This Agreement may not be altered, modified, changed or
discharged except in writing signed by both the parties.

10.7 Survival. Sections 4.2, 4.3, 5, 6, 7, 8 and 10, each inclusive, shall survive termination or
expiration of this Agreement.

10.8 Validity. If any one or more of the provisions (or any part thereof) of this Agreement shall
be held to be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions (or any part thereof) shall not in any way be affected
or impaired thereby.

10.9 No Waiver of Rights. The delay or failure of either party to enforce at any time any provision
of this Agreement shall in no way be considered a waiver of any such provision, or any other
provision, of this Agreement. No waiver of, or delay or failure to enforce any provision of this
Agreement shall in any way be considered a continuing waiver or be construed as a subsequent waiver
of any such provision, or any other provision of this Agreement.

13

 

10.10 Equitable Remedies. Employee specifically acknowledges that any violation of Section 5, 6, 7
or 8 of this Agreement could cause irreparable injury to Company and its business and property.
Employee, therefore, agrees that in the event of his breach of any of the terms and conditions of
Section 5, 6, 7 or 8 of this Agreement, Company shall be entitled, if it so elects, to institute
and prosecute proceedings in any court of competent jurisdiction, either at law or in equity, to
enjoin him from further violation of such provisions. The remedies provided herein shall be
cumulative and in addition to any and all other remedies which either party may have at law or in
equity.

10.11 Attorneys’ Fees. The prevailing party shall be entitled to recover from the losing party its
attorneys’ fees and costs incurred in any action or proceeding, including arbitration, brought to
interpret this Agreement or to enforce any right arising out of this Agreement. For purposes of
this Section, the prevailing party shall be that party that most closely obtains the relief sought
by it.

10.12 EXECUTIVE ACKNOWLEDGES THAT HE HAS HAD THE OPPORTUNITY TO CONSULT WITH THE ADVISOR OF HIS
CHOICE AND THAT HE HAS FREELY AND VOLUNTARILY ENTERED INTO THIS AGREEMENT.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written below.

	 	 	 	 	 	 	 	 	 	 	 	 
	 	IMPAX LABORATORIES, INC.
	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 
	

	 	Date:
	 	December 14, 1999	 	 	 	By:	 	/s/ Barry Edwards	 	 
	 	 
	 	
 
	 	 	 	 	 	
 
	 	 
	 	 
	 	 	 	 	 	 	 	Barry Edwards, CO-CEO	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 

	 	 	 	 	 	 	 	(Print Name and Title)	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 
	 	Date:
	 	December 14, 1999	 	 	 	/s/ Charles Hsiao, Ph.D.	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 

	 	 	 	 	 	 	 	Charles Hsiao, Ph.D.	 	 
	

14

 

EXHIBIT A

IMPAX LABORATORIES, INC.,

a Delaware corporation

30831 Huntwood Ave.

Hayward, CA 94544

Dear Sir or Madam:

1. The following is a complete list of all inventions or improvements relevant to the subject
matter of my employment with Impax Laboratories, Inc., a Delaware corporation (the “Company”), that
have been made or conceived or first reduced to practice by me, alone or jointly with others, prior
to my engagement by the Company:

o No inventions or improvements.

o See below:

o Additional sheets attached.

2. I propose to bring to my employment (or consulting, if applicable) the following devices,
materials and documents of a former employer or other party that are proprietary or are not
generally available to the public, which materials and documents may be used in my employment
pursuant to the express written authorization of my former employer or other party (a copy of which
is attached hereto):

o No materials.

o See below:

15

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