SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|

Check the appropriate box:

|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Under 14a-12

IMPAX LABORATORIES, INC.
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(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box)

|X| No Fee Required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined.):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

|_| Fee paid previously with preliminary materials.

|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

IMPAX LABORATORIES, INC.
30831 Huntwood Avenue
Hayward, California 94544

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Dear Stockholder:

You are cordially invited to attend the Company's Annual Meeting of
Stockholders to be held on Monday, May 6, 2002 at 10:00 A.M., Pacific Savings
Time, at Crowne Plaza Hotel, 1221 Chess Drive, Foster City, CA 94404.

The formal Notice of Meeting and the accompanying Proxy Statement set
forth proposals for your consideration this year. You are being asked to elect
directors, approve the adoption of the 2002 Equity Incentive Plan and to ratify
the appointment of PricewaterhouseCoopers LLP as the independent accountants of
the Company.

At the meeting, the Board of Directors will also report on the affairs
of the Company, and a discussion period will be provided for questions and
comments of general interest to stockholders.

We look forward to greeting personally those of you who are able to be
present at the meeting. However, whether or not you are able to be with us at
the meeting, it is important that your shares be represented. Accordingly, you
are requested to sign, date and mail, at your earliest convenience, the enclosed
proxy in the envelope provided for your use.

Thank you for your cooperation.

Very truly yours,

Charles Hsiao, Ph.D.
Chairman and Co-Chief Executive Officer

April 8, 2002

IMPAX LABORATORIES, INC.
30831 Huntwood Avenue
Hayward, California 94544

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON May 6, 2002

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To the Stockholders of Impax Laboratories, Inc.:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Impax
Laboratories, Inc. (the "Company") will be held on Monday, May 6, 2002 at 10:00
A.M., Pacific Savings Time, at Crowne Plaza Hotel, 1221 Chess Drive, Foster
City, CA 94404, for the following purposes:

(1) To elect ten directors to serve for the ensuing year.

(2) To consider and act upon a proposal to approve the adoption of the
2002 Equity Incentive Plan, as more fully described in the accompanying Proxy
Statement.

(3) To consider and act upon a proposal to ratify the appointment of
PricewaterhouseCoopers LLP as the Company's independent accountants for the
fiscal year ending December 31, 2002.

(4) To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.

Only stockholders of record at the close of business on April 2, 2002
will be entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof.

All stockholders are cordially invited to attend the Annual Meeting in
person. However, whether or not you plan to attend the Annual Meeting in person,
each stockholder is urged to complete, date and sign the enclosed form of proxy
and return it promptly in the envelope provided. No postage is required if the
proxy is mailed in the United States. Stockholders who attend the Annual Meeting
may revoke their proxy and vote their shares in person.

By Order of the Board of Directors

CORNEL C. SPIEGLER
Secretary

Hayward, California
April 8, 2002

Impax Laboratories, Inc.
30831 Huntwood Avenue
Hayward, California 94544

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PROXY STATEMENT

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GENERAL INFORMATION

General

This Proxy Statement (first mailed to stockholders on or about April 8,
2002) is furnished to the holders of Common Stock, par value $.01 per share (the
"Common Stock") and Series 2 Convertible Preferred Stock, par value $.01 per
share (the "Series 2 Preferred"), of Impax Laboratories, Inc. (the "Company") in
connection with the solicitation by the Board of Directors of the Company of
proxies for use at the Annual Meeting of Stockholders (the "Annual Meeting"), or
at any adjournment thereof, pursuant to the accompanying Notice of Annual
Meeting of Stockholders. The Annual Meeting will be held on Monday, May 6, 2002
at 10:00 A.M., Pacific Savings Time, at Crowne Plaza Hotel, 1221 Chess Drive,
Foster City, CA 94404.

At the Annual Meeting stockholders will consider and vote upon: (i) the
election of ten directors to the Board of Directors, (ii) the adoption of the
2002 Equity Incentive Plan, and (iii) the ratification of the appointment of
PricewaterhouseCoopers LLP as the independent accountants of the Company for the
fiscal year ending December 31, 2002.

Management currently is not aware of any other matters that will come
before the Annual Meeting. If any other matters properly come before the Annual
Meeting, the persons designated as proxies intend to vote in accordance with
their best judgment on such matters.

Proxies for use at the Annual Meeting are being solicited by the Board
of Directors of the Company. Proxies will be solicited chiefly by mail; however,
certain officers, directors, employees and agents of the Company, none of whom
will receive additional compensation therefor, may solicit proxies by telephone,
telegram or other personal contact. The Company will bear the cost of the
solicitation of the proxies, including postage, printing and handling, and will
reimburse the reasonable expenses of brokerage firms and others for forwarding
material to beneficial owners of shares of Common Stock and Series 2 Preferred
(collectively, the "Capital Stock").

Revocability and Voting of Proxy

A form of proxy for use at the Annual Meeting and a return envelope for
the proxy are enclosed. Unless otherwise indicated on the form of proxy, shares
of Capital Stock represented by any proxy in the enclosed form, assuming the
proxy is properly executed and received by the Company prior to the Annual
Meeting, will be voted with respect to the following items on the agenda: (i)
the election of each of the nominees for director as shown on the form of proxy,
(ii) the adoption of the 2002 Equity Incentive Plan, and (iii) ratification of
the appointment of PricewaterhouseCoopers LLP as the independent accountants of
the Company.

Stockholders may revoke the authority granted by their execution of a
proxy at any time prior to the effective exercise of the powers conferred by
that proxy by filing with the Secretary of the Company a written notice of

revocation or a duly executed proxy bearing a later date or by voting in person
at the Annual Meeting. Shares of Capital Stock represented by executed and
unrevoked proxies will be voted in accordance with the instructions specified in
such proxies. If no specifications are given, the proxies intend to vote the
shares represented thereby "for" the election of each of the nominees for
director as shown on the form of proxy, "for" adoption of the 2002 Equity
Incentive Plan, and "for" the ratification of the appointment of
PricewaterhouseCoopers LLP as the independent accountants of the Company, and in
accordance with their best judgment on any other matters that may properly come
before the meeting.

The enclosed Proxy confers discretionary authority to vote with respect
to any and all of the following matters that may come before the Annual Meeting:
(i) matters which the Company did not receive notice by February 26, 2002 were
to be presented at the Impax Laboratories, Inc. Annual Meeting; (ii) approval of
the Minutes of a prior meeting of Stockholders, if such approval does not amount
to ratification of the action taken at the meeting; (iii) the election of any
person to any office for which a bona fide nominee named in this Proxy Statement
is unable to serve or for good cause will not serve; (iv) any proposal omitted
from this Proxy Statement and the form of proxy pursuant to Rules 14a-8 or 14a-9
under the Securities Exchange Act of 1934; and (v) matters incident to the
conduct of the Impax Laboratories, Inc. Annual Meeting. In connection with such
matters, the person named in the enclosed proxy will vote in accordance with
their best judgment.

Record Date and Voting Rights

On April 2, 2002, there were issued and outstanding 47,216,058 shares
of Common Stock and 75,000 shares of Series 2 Preferred. Only stockholders of
record at the close of business on April 2, 2002 (the "Record Date") are
entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof.

Each share of Common Stock is entitled to one vote upon each of the
matters to be presented at the Annual Meeting. The holders of shares of Series 2
Preferred vote, in general, as a single class with the holders of the Common
Stock, on all matters voted on by the stockholders of the Company, with each
holder of Series 2 Preferred entitled to the number of shares of Common Stock
into which that holder's shares would then be convertible. At the Record Date,
each share of Series 2 Preferred was convertible into 20 shares of Common Stock.
Accordingly, as of the Record Date, the holders of the shares of Common Stock
and Series 2 Preferred are entitled to cast a total of 48,716,058 votes.

The affirmative vote of the holders of a plurality of the shares
present in person or represented by proxy and entitled to vote at the Annual
Meeting is required for the election of directors. Accordingly, the ten nominees
receiving the highest number of affirmative votes of the shares present in
person or represented by proxy and entitled to vote for them shall be elected as
directors. Only votes cast for a nominee will be counted, except that the
accompanying proxy will be voted for all nominees in the absence of instructions
to the contrary.

The affirmative vote of the holders of a majority of the shares present
in person or represented by proxy and entitled to vote at the Annual Meeting is
required for the approval of the adoption of the 2002 Equity Incentive Plan and
the ratification of the appointment of PricewaterhouseCoopers LLP.

Abstentions and broker non-votes will be counted for purposes of
determining the presence or absence of a quorum, but will not be counted with
respect to the specific matter being voted upon. As a result, abstentions from
the vote to consider approval of the adoption of the 2002 Equity Incentive Plan
and the ratification of the appointment of PricewaterhouseCoopers LLP and broker
non-votes are effectively treated as votes against the proposals, making it more
difficult to obtain the necessary approval for these proposals. Abstentions,
broker non-votes and instructions on the accompanying proxy card to withhold
authority to vote for one or more nominees for director will not be counted as a
vote for any such nominee. "Broker non-votes" are shares held by brokers or
nominees which are present in person or represented by proxy, but which are not
voted on a particular matter because instructions have not been received from
the beneficial owner.

BENEFICIAL OWNERSHIP OF COMMON STOCK BY CERTAIN STOCKHOLDERS AND MANAGEMENT

The following table sets forth information as of March 5, 2002 (except
as otherwise noted in the footnotes) regarding the beneficial ownership of the
Company's Capital Stock of: (i) each person known by the Company to own
beneficially more than five percent of the outstanding Common Stock or Series 2
Preferred; (ii) each director and nominee for election as a director of the
Company; (iii) each executive officer named in the Summary Compensation Table
(see "Executive Compensation"); and (iv) all directors and executive officers of
the Company as a group. Except as otherwise specified, the named beneficial
owner has the sole voting and investment power over the shares listed.

Shares Beneficially Owned +
----------------------------------------------------------
Series 2
Common Stock Preferred Stock
-------------------------- ---------------------------
Name and Address of Beneficial Owner No. of Shares Percent No. of Shares Percent
------------------------------------ ------------- ------- ------------- -------

Leslie Z. Benet, Ph.D. ............................ -- * -- --
533 Parnassus Avenue, U-68
San Francisco, CA 94143

Robert L. Burr (1) ................................ 5,000 * -- --
Windcrest Discovery Capital Partners, LLC
122 East 42nd Street
New York, NY 10168

Barry R. Edwards (2) .............................. 173,616 * -- --
c/o Impax Laboratories, Inc.
3735 Castor Avenue
Philadelphia, PA 19124

David J. Edwards (3) .............................. 5,333 * -- --
Windcrest Discovery Capital Partners, LLC
122 East 42nd Street
New York, NY 10168

Nigel Fleming, Ph.D. .............................. 12,000 * -- --
2360 Pacific Avenue, #504
San Francisco, CA 94115

Charles Hsiao, Ph.D. (4) .......................... 5,138,967 10.8 -- --
c/o Impax Laboratories, Inc.
30831 Huntwood Avenue
Hayward, CA 94544

Larry Hsu, Ph.D. (5) .............................. 2,902,689 6.1 -- --
c/o Impax Laboratories, Inc.
30831 Huntwood Avenue
Hayward, CA 94544

Michael Markbreiter (6) ........................... 25,333 * -- --
1120 Park Avenue
New York, NY 10128

Oh Kim Sun (7) .................................... 14,509 * -- --
c/o Chemical Company of
Malaysia Berhad
Wisma Sine Darby
14 Jalan Faja Laut
50708 Kuala Lumpur, Malaysia

Michael G. Wokasch ................................ -- * -- --
5420 Bermer Road
McFarland, WI 53558

May Chu (8) ....................................... 106,844 * -- --
c/o Impax Laboratories, Inc.
30831 Huntwood Avenue
Hayward, CA 94544

David S. Doll ..................................... 1,616 * -- --
c/o Impax Laboratories, Inc.
3735 Castor Avenue
Philadelphia, PA 19124

Cornel C. Spiegler (9) ............................ 69,453 * -- --
c/o Impax Laboratories, Inc.
3735 Castor Avenue
Philadelphia, PA 19124

Joseph A. Storella (10) ........................... 73,333 * -- --
c/o Impax Laboratories, Inc.
3735 Castor Avenue
Philadelphia, PA 19124

Chemical Company of Malaysia Berhad ............... 6,521,484 13.9 -- --
Wisma Sine Darby
14 Jalan Faja Laut
50708 Kuala Lumpur, Malaysia

Chiin Hsiao Children Irrevocable Trust ............ 2,601,924 5.6 -- --
c/o Laurie A. Miller, Esquire
3542 Oak Knoll Drive
Redwood City, CA 94062

J.P. Morgan Chase & Co. (11) ...................... 6,604,134 13.5 75,000 100.0
Fleming US Discovery Fund III, L.P. ............ 4,973,539 10.2 64,637 86.2
Fleming US Discovery Offshore Fund III, L. P. .. 797,295 1.6 10,363 13.8
J.P. Morgan Investment Management .............. 833,300 1.7 -- --
J.P. Morgan Chase & Co.
1221 Avenue of the Americas
New York, NY 10036

Laurie A. Miller, Esquire (12) .................... 3,939,246 8.4 -- --
3542 Oak Knoll Drive
Redwood City, CA 94062

All directors and executive officers as a group
(13 persons) (13) ................................. 8,528,693 17.4 -- --

- ---------

* Less than one percent
+ Beneficial Ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "SEC") and includes voting or
investment power with respect to the Capital Stock. Shares currently
exercisable or exercisable within 60 days of the date hereof are deemed
outstanding for computing the share ownership and percentage ownership of
the person holding such securities, but are not deemed outstanding for
computing the percentage of any other person.

(1) Consists of warrants to purchase 5,000 shares of common stock which may be
exercised immediately. Mr. Burr has a consulting agreement with J.P. Morgan
Chase & Co. under which he is the lead partner of Fleming US Discovery
Partners, L.P., a private equity sponsor affiliated with J.P. Morgan Chase
& Co. See also Note 11.
(2) Consists of options to purchase 172,000 shares of common stock which may be
exercised within 60 days.
(3) Consists of options to purchase 5,333 shares of common stock which may be
exercised within 60 days.
(4) Includes 500,370 shares of common stock held in trust for the benefit of
John Hsiao's children, 250,185 shares of common stock held in trust for the
benefit of Richard Hsiao's children, options to purchase 256,265 shares of
common stock which may be exercised within 60 days and warrants immediately
convertible into 667,160 shares of common stock. Does not include 2,601,924
shares of common stock held in the Chiin Hsiao Children Irrevocable Trust,
as to which shares Dr. Hsiao does not have voting or dispositive power.
(5) Includes options to purchase 255,185 shares of common stock which may be
exercised within 60 days and warrants immediately convertible into 667,160
shares of common stock. Does not include 1,254,320 shares of common stock
held in the Hsu Children Irrevocable Trust, as to which shares Dr. Hsu does
not have voting or dispositive power.
(6) Consists of options to purchase 25,333 shares of common stock which may be
exercised within 60 days.
(7) Consists of options to purchase 14,509 shares of common stock which may be
purchased within 60 days. Mr. Oh Kim Sum is an Executive Director with the
Chemical Company of Malaysia.
(8) Consists of options to purchase 66,510 shares of common stock which may be
exercised within 60 days.
(9) Consists of options to purchase 60,500 shares of common stock which may be
exercised within 60 days.
(10) Consists of options to purchase 72,333 shares of common stock which may be
exercised within 60 days.
(11) Includes warrants to purchase an aggregate of 625,000 shares of common
stock which may be exercised within 60 days and 75,000 shares of Series 2
Preferred Stock immediately convertible into 1,500,000 shares of common
stock.
(12) Includes 2,601,924 shares of common stock owned by the Chiin Hsiao Children
Irrevocable Trust and 1,254,320 shares of common stock owned by the Hsu
Children Irrevocable Trust, for which Laurie A. Miller, as corporate
counsel to Impax Pharmaceutical, serves as trustee, and therefore may be
deemed to beneficially own the shares held by the trust. Ms. Miller
disclaims beneficial ownership of these shares.
(13) Includes options and warrants to purchase 2,267,288 shares of common stock
which may be exercised within 60 days.

PROPOSAL NO. 1 - ELECTION OF DIRECTORS

Ten directors (constituting the entire Board) are to be elected at the
Annual Meeting. Unless otherwise specified, the enclosed proxy will be voted in
favor of the persons named below to serve until the next annual meeting of
stockholders and until their respective successors shall have been duly elected
and qualified. If any of these nominees becomes unavailable for any reason, or
if a vacancy should occur before the election, the shares represented by the
proxy will be voted for the person, if any, who is designated by the Board of
Directors to replace the nominee or to fill the vacancy on the Board. All
nominees have consented to be named and have indicated their intent to serve if
elected. The Board of Directors has no reason to believe that any of the
nominees will be unable to serve or that any vacancy on the Board of Directors
will occur.

The nominees, their ages and the year in which each become a director
and their principal occupations or employment during at least the past five
years are as follows:

Director
Name Age since Positions with Impax
- --------------------------- ----- ---------- ------------------------------------------------

Leslie Z. Benet, Ph.D. 64 2001 Director
Robert L. Burr 51 2001 Director
Barry R. Edwards 45 1999 Co-Chief Executive Officer and Director
David J. Edwards 36 1999 Director
Nigel Fleming, Ph.D. 48 1999 Director
Charles Hsiao, Ph.D. 59 1999 Chairman, Co-Chief Executive Officer and Director
Larry Hsu, Ph.D. 53 1999 President, Chief Operating Officer and Director
Michael Markbreiter 41 1997 Director
Oh Kim Sun 54 1999 Director
Michael G. Wokasch 50 2001 Director

Leslie Z. Benet, Ph.D. has been a Professor since 1978 of, and has also
served as Chairman of, the Department of Biopharmaceutical Sciences, University
of California, San Francisco. Dr. Benet received his A.B. (English), B.S.
(Pharmacy), M.S. from the University of Michigan and Ph.D. from the University
of California. Dr. Benet has received five honorary doctorates: Uppsala
University, Sweden (Pharm.D., 1987), Leiden University, The Netherlands (Ph.D.,
1995), University of Illinois at Chicago (D.Sc., 1997), Philadelphia College of
Pharmacy and Science (D.Sc., 1997) and Long Island University (D.Sc., 1999). Dr.
Benet's research interests, more than 400 publications, and nine patents are in
the areas of pharmacokinetics, biopharmaceutics, drug delivery and
pharmacodynamics. In 1985, Dr. Benet served as President of the APhA Academy of
Pharmaceutical Sciences. During 1986, Dr. Benet was a founder and first
President of the American Association of Pharmaceutical Scientists (AAPS). In
1987, Dr. Benet was elected to membership in the Institute of Medicine (IOM) of
the National Academy of Sciences. Dr. Benet has received the highest scientific
award of AAPS (1989 and 2000), Rho Chi (1990), American Association of Colleges
of Pharmacy (1991), American Society for Clinical Pharmacology and Therapeutics
(1995), American Pharmaceutical Association (2000) and the International
Pharmaceutical Federation (2001). Dr. Benet formerly served as Chair of the FDA
Expert Panel on Individual Bioequivalence and the FDA Center for Biologics Peer
Review Committee, and as a member of the FDA Science Board and the Generic Drugs
Advisory Committee. Dr. Benet presently serves as a member of the IOM Board of
Health Sciences Policy.

Robert L. Burr has been a partner of Windcrest Discovery Capital
Partners LLC, since October 2001 and has a consulting agreement with J.P. Morgan
Chase & Co. under which he is the lead partner of Fleming US Discovery Partners,
L.P., a private equity sponsor affiliated with J.P. Morgan Chase & Co. Fleming
US Discovery Partners, L.P. is the general partner of Fleming US Discovery Fund
III, L.P. and Fleming US Discovery Offshore Fund III, L.P. Mr. Burr was employed
by J.P. Morgan Chase & Co. from 1995 to 2001. From 1992 to 1995, Mr. Burr was
head of Private Equity at Kidder, Peabody & Co., Inc. Previously, Mr. Burr
served as the Managing General Partner of Morgan Stanley Ventures and General
Partner of Morgan Stanley Venture Capital Fund I, L.P. and was a corporate
lending officer with Citibank, N.A. Mr. Burr serves on the Board of Directors of
Displaytech, Inc. and Hudson Technologies, Inc.

Barry R. Edwards has been Co-Chief Executive Officer of the Company
since December 14, 1999, and a Director since January 1999. From August 1998
until January 1999, Mr. Edwards served as President of the Company and from
January 1999 until December 1999 Mr. Edwards served as Chief Executive Officer
of the Company. From 1996 to 1998, Mr. Edwards was Vice President, Marketing and
Business Development for Teva Pharmaceuticals USA, a leading manufacturer of
generic drugs. From 1991 to 1996, Mr. Edwards served as Executive Director of
Gate Pharmaceuticals, a brand marketing division of Teva Pharmaceuticals USA.

Prior to 1991, Mr. Edwards held a number of management functions in strategic
planning, corporate development, business development and marketing at Teva
Pharmaceuticals USA.

David J. Edwards has been a Partner of Windcrest Discovery Capital
Partners, LLC since October 2001. Previously he was a partner of Fleming US
Discovery Partners, L.P., a private equity sponsor affiliated with J.P. Morgan
Chase & Co. J.P. Morgan Chase & Co. had employed Mr. Edwards since 1994. Prior
to that time, Mr. Edwards was an Associate with Booz Allen & Hamilton, a
strategic management consulting company based in New York. From 1987 to 1990,
Mr. Edwards was a Process Engineer with Exxon Chemical Corporation. Mr. Edwards
received an MBA from Harvard Business School and a Masters in Engineering from
Cambridge University.

Nigel Fleming, Ph.D. has been Chief Financial Officer and a director of
Bay Area Psychological Testing (BAPTA) since January, 1999. He is a co-founder
of StepUp Inc., a start up education company. Dr. Fleming co-founded Biovision,
Inc. in 1996 and served as Managing Director and a director of Biovision from
1996 to 1999. Dr. Fleming also served as Chairman, President and Chief Executive
Officer of Agricola Technologies, Inc. from July 1996, to the present. In
November 1986, Dr. Fleming founded Genica Pharmaceuticals Corporation, where he
served at various times as Chairman, Chief Executive Officer, Board Member and
Vice-President - Business Development from 1986 through 1995, when the company
was sold to Athena Neuroscience (now Elan Pharmaceuticals), where Dr. Fleming
was Director of Business Development for approximately two years. Dr. Fleming
obtained his Ph.D. in Clinical Biochemistry form the University of Cambridge in
England, and was a lecturer at Harvard Medical School for a number of years.

Charles Hsiao, Ph.D. has been Chairman, Co-Chief Executive Officer and
Director of the Company since December 14, 1999. Dr. Hsiao co-founded Impax
Pharmaceuticals, Inc. in 1994, and has served as its Chairman, Chief Executive
Officer and a Director since its inception. Dr. Hsiao co-founded IVAX
Corporation in 1986 with two partners. By October 1994, when he left the
Vice-Chairman position at IVAX, this company had become the world's largest
generic pharmaceutical company with approximately 7000 employees and $1 billion
in worldwide sales. Dr. Hsiao's technical expertise is in the area of
formulation and development of oral controlled-release dosage form. Dr. Hsiao
obtained his Ph.D. in pharmaceutics from University of Illinois.

Larry Hsu, Ph.D. has been President, Chief Operating Officer and
Director of the Company since December 14, 1999. Dr. Hsu co-founded Impax
Pharmaceuticals, Inc. in 1994 and served as its President, Chief Operating
Officer and a member of the Board of Directors since its inception. From 1980 to
1995, Dr. Hsu worked at Abbott Laboratories. During the last four years at
Abbott, Dr. Hsu was the Director of Product Development in charge of formulation
development, process engineering, clinical lot manufacturing and production
technical support of all dosage forms, managing a staff of approximately 250
people. Dr. Hsu obtained his Ph.D. in pharmaceutics from University of Michigan.

Michael Markbreiter is a private investor since October 2001.
Previously he has been a portfolio manager for Sofaer Capital, a global hedge
fund, since December 2000. From August 1995 to December 1998, Mr. Markbreiter
was a portfolio manager for private equity investments for Kingdon Capital
Management Corp., a New York hedge fund. In April 1994, Mr. Markbreiter
co-founded Ram Investment Corp., a venture capital company. From March 1993 to
January 1994, Mr. Markbreiter was an analyst at Alliance Capital Management
Corp. From July 1983 to September 1989, Mr. Markbreiter was an Executive Editor
for Arts of Asia magazine. Mr. Markbreiter graduated from Cambridge University
with a degree in Engineering.

Oh Kim Sun has been employed with Chemical Company of Malaysia Berhad
(CCM), since 1983 and currently serves as Group Executive Director of CCM, a
Malaysian corporation whose stock is listed on the Kuala Lumpur Stock Exchange.
Mr. Oh is also a director of Nortran Pharmaceuticals, Inc. and Immune Network
Research Ltd., both of which are Canadian corporations listed on the Vancouver
Stock Exchange. Mr Oh is a fellow member of The Institute of Chartered
Accountants of England and Wales and the Malaysian Association of Certified
Public Accountants.

Michael G. Wokasch has been President of Aurora Biosciences since March
2001 and President of PanVera Corporation since July 2001. Both companies are
subsidiaries of Vertex Pharmaceuticals Inc., a global biotechnology company.
Previously Mr. Wokasch has been President and Chief Executive Officer of Gala
Design, Inc., a privately held biotechnology company with proprietary technology
in the use of retroviral vectors for gene expression and production of
pharmaceutical proteins, since June 2000. From September 1999 to June 2000, Mr.
Wokasch was Vice President, Marketing and Sales at Promega Corporation, a
privately held multinational biotechnology company. From 1997 to 1999, Mr.
Wokasch was Corporate Senior Vice President and Group President at Covance Early
Drug Development, one of the largest multinational contract research laboratory
in the world. Mr. Wokasch served as President of the Laboratories Division of
Corning Pharmaceutical Services from 1995 to 1997. Mr. Wokasch has over 20 years
of senior management experience in the pharmaceutical industry at companies
including Merck & Company, Inc., Abbott Laboratories, Inc. and Bayer. Mr.
Wokasch has a Pharmacy degree from the University of Minnesota.

Committees

The Board of Directors of the Company has an Audit Committee and a
Compensation Committee. During the fiscal year ended December 31, 2001, except
for Jason Lin, each director then in office attended not less than 75% of the
aggregate number of meetings of the Board of Directors and meetings of the
committee of the Board on which he served which were held while such person
served in office. The Board of Directors held three regular and two special
meetings during the fiscal year ended December 31, 2000.

The Audit Committee, established in October 1995, currently consists of
Mr. David Edwards, as Chairman, and Messrs. Michael Markbreiter and Oh Kim Sun.
The members of the Audit Committee are independent (as independent is defined in
Rule 4200(a)(15) of the National Association of Securities Dealers, Inc. listing
standards). The Audit Committee reviews with the Company's independent
accountants the scope and timing of their audit services, any other services
they are asked to perform, the report of independent accountants on the
Company's financial statements following completion of their audit and the
Company's policies and procedures with respect to internal accounting and
financial controls. In addition, the Audit Committee makes an annual
recommendation to the Board of Directors concerning the appointment of
independent accountants for the ensuing year. The Audit Committee met six times
during the fiscal year ended December 31, 2000.

The Compensation Committee, established in October 1995, currently
consists of Dr. Nigel Fleming, as Chairman, and Messrs. Robert L. Burr, David J.
Edwards, and Michael G. Wokasch. The Compensation Committee reviews and makes
recommendations to the Board of Directors regarding the compensation and
benefits of all officers of the Company and reviews general policy matters
relating to compensation and benefits of all officers and employees of the
Company. The Compensation Committee also administers the 1999 Equity Incentive
Plan ("1999 Plan"). The Compensation Committee met three times during the fiscal
year ended December 31, 2000.

Audit Committee Report

In May, 2001, the Audit Committee met with management to review and
discuss the audited financial statements. The Audit Committee also conducted
discussions with its independent accountants, PricewaterhouseCoopers LLP,
regarding the matters required by the Statement on Auditing Standards No. 61
(SAS No. 61). As required by Independence Standards Board Standard No. 1,
"Independence Discussion with Audit Committees," the Audit Committee has
discussed with and receives annually the required written disclosures and
confirming letter from PricewaterhouseCoopers LLP regarding its independence and
has discussed with PricewaterhouseCoopers LLP its independence. Also, the Audit

Committee reviewed and discussed with its independent accountants the quarterly
financial reports. Additionally, on February 4, 2002, the Committee discussed
with the independent accountants the financial results and the matters required
by SAS No. 61. The Committee has reviewed the audited financial statements for
the year ended December 31, 2001. Based upon the review and discussions referred
to above, the Audit Committee recommended to the Board of Directors that the
audited financial statements be included in the Company's Annual Report on Form
10-K for the year ended December 31, 2001.

This Audit Committee Report shall not be deemed incorporated by
reference in any document previously or subsequently filed with the Securities
and Exchange Commission that incorporates by reference all or any portion of
this proxy statement, except to the extent that the Company specifically
requests that the Report be specifically incorporated by reference.

The Audit Committee

David J. Edwards, Chairman
Michael Markbreiter
Oh Kim Sun

Compensation Committee Report

The Compensation Committee of the Board of Directors establishes
general compensation policies, compensation plans, and specific compensation
levels of the Company's most highly compensated executive officers, and reviews
the design, administration, and effectiveness of compensation programs for other
key executives, as well as the company as a whole. The Compensation Committee's
executive compensation policies are designed to provide competitive levels of
compensation, integrate pay with the Company's annual and long-term performance
goals, reward above-average corporate performance, recognize individual
initiative and achievements, and assist the Company in attracting and retaining
qualified executives.

Base Salary and Incentive Compensation
- --------------------------------------

The Company's executive officer compensation program is comprised of
base salary, annual cash incentive compensation, and long-term incentive
compensation in the form of stock options and various benefits. The Company
seeks to be competitive with compensation programs offered by companies of a
similar size within the specialty pharmaceutical industry.

Prior to the beginning of each fiscal year, financial and other goals
are established for the Company. Each executive officer is responsible for
accomplishing the goals pertaining to his or her area of responsibility. Base
salaries are based on the results of individual performance as well as other
considerations, such as the executive officer's level of responsibility, years
of service with the Company, and professional background. Incentive compensation
is based upon the achievement of Company profit objectives as well as key
Company operating targets. As set forth in the Summary Compensation Table, each
executive officer of the Company received bonus compensation during 2001.

Stock Options
- -------------

The Company uses its 1999 Equity Incentive Plan (the "Plan") as a
long-term incentive plan for executive officers and key employees. The
objectives of the Plan with respect to executive officers are to align the
long-term interests of executive officers and shareholders by creating a direct
link between executive compensation and shareholder return and to enable
executives to develop and maintain a significant long-term equity interest in
the Company. The Plan authorizes the Compensation Committee to award stock
options to officers and key employees. Stock options granted to executive
officers are based upon the level and degree of responsibility of the positions
they hold, as well as performance. In general, under the Plan, options are
granted with an exercise price equal to the fair market value of the Company's

Common Stock on the date of grant and are exercisable according to a vesting
schedule determined by the Compensation Committee at the time of grant. In 2001,
2000, and 1999, the Board of Directors granted options to purchase an aggregate
of 593,000 shares, 859,501 shares, and 1,180,310 shares respectively, of the
Company's Common Stock under the Plan. Information concerning the option grants
to certain executive officers is set forth in the Summary Compensation Table.

Discussion of 2001 Compensation for the Chairman/Co-CEO, Co-CEO, and
President/Chief Operating Officer
- ----------------------------------------------------------------------

In considering the compensation for Dr. Charles Hsiao, Chairman/Co-CEO,
the Compensation Committee determined his compensation based on compensation
levels of comparable specialty pharmaceutical companies. The Compensation
Committee accordingly made the determination that the annual compensation for
the Chairman/Co-CEO for the year 2001 be established as $195,000 in the form of
salary and $102,395 in the form of bonus.

In considering the compensation for Barry R. Edwards, Co-CEO, the
Compensation Committee determined his compensation based on compensation levels
of comparable specialty pharmaceutical companies. The Compensation Committee
accordingly made the determination that the annual compensation for the Co-CEO
for the year 2001 be established as $195,000 in the form of salary and $102,395
in the form of bonus.

In considering the compensation for Dr. Larry Hsu, President/Chief
Operating Officer, the Compensation Committee determined his compensation based
on compensation levels of comparable specialty pharmaceutical companies. The
Compensation Committee accordingly made the determination that the annual
compensation for the President/Chief Operating Officer for the year 2001 be
established as $195,000 in the form of salary and $102,395 in the form of bonus.

The Compensation Committee

Nigel Fleming, Ph.D., Chairman
Robert L. Burr
David J. Edwards
Michael G. Wokasch

Compensation of Directors

Members of the Board of Directors of the Company received no annual
remuneration for acting in that capacity during the fiscal year ended December
31, 2001. The Company's non-employee directors were paid $500 (plus reasonable
expenses) for each attended meeting of the Board of Directors. Pursuant to the
terms of the 1999 Plan, each non-employee director is granted options to
purchase 2,000 shares of Common Stock annually. In addition, a non-employee
director, when first selected, is granted an option to purchase 10,000 shares.
All of these options vest ratably over three years commencing on the first
anniversary of the grant date and are exercisable at the fair value market value
on the date of grant. The Company reimbursed its directors for their respective
out-of-pocket expenses incurred in attending board and committee meetings. On
June 21, 2001, pursuant to the 1999 Plan, Dr. Benet and Mr. Wokasch were each
granted options to purchase 12,000 shares of common stock at an exercise price
of $10.19 per share. Mr. Burr was granted options to purchase 2,000 shares of
Common Stock at an exercise price of $10.19 per share.

Stock Performance Graph

The graph which follows indicates the cumulative total return on the
Company's Common Stock since December 31, 1996, compared with the cumulative
total return of companies included in the Nasdaq Stock Market Index and in the

Nasdaq Pharmaceutical Stock Index. Cumulative total return on the Company's
Common Stock or the index equals the total increase in value since December 31,
1996, assuming reinvestment of all dividends. The graph assumes that $100 was
invested on December 31, 1996 in the Company's Common Stock and in each of the
indexes. The Company paid no dividends during the period. The data points used
for the performance graph are listed in the chart below.

[GRAPHIC OMITTED]

December-96 December-97 December-98 December-99 December-00 December-01
----------- ----------- ----------- ----------- ----------- -----------

Impax Laboratories 100.00 66.67 38.96 73.19 151.85 197.33
Nasdaq Index 100.00 122.48 172.70 320.87 193.00 153.15
Nasdaq Pharmaceutical Stock Index 100.00 103.05 130.81 246.64 307.65 262.19

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who beneficially own
more than 10% of the Company's Common Stock to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Officers,
directors and greater than 10% shareholders are required by regulation of the
Securities and Exchange Commission to furnish the Company with copies of all
Section 16(a) forms they file.

To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required during 2001, the Company's directors, officers and
beneficial owners of 10% or more of the Company's Common Stock are in compliance
with the reporting requirements of Section 16(a) under the Securities Exchange
Act of 1934, as amended.

THE BOARD OF DIRECTORS DEEMS THE ELECTION AS DIRECTORS OF THE TEN
NOMINEES LISTED ABOVE TO BE IN THE BEST INTERESTS OF THE COMPANY AND ITS
STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THESE NOMINEES.

EXECUTIVE COMPENSATION

The following table summarizes the compensation earned by or paid to
the Company's Chairman, each Co-Chief Executive Officer, the President and Chief
Operating Officer and the Company's other four most highly compensated executive
officers for 2001, 2000 and 1999.

Long-Term
Annual Compensation Compensation
-------------------------------------------- --------------------
Other Annual Common Stock
Compensation Underlying Options
Name and Principal Position Year Salary ($) Bonus ($) $ (#)
- ------------------------------------------- ------ ----------- ---------- ------------- --------------------

Charles Hsiao, Ph.D. 2001 195,000 102,395 7,971 (1) --
Chairman and Co-Chief Executive Officer 2000 175,000 52,500 8,064 (1) 60,800
1999 122,292 -- -- 333,580

Barry R. Edwards 2001 195,000 102,395 7,435 (2) --
Co-Chief Executive Officer 2000 174,962 52,500 2,598 (2) 50,000
1999 167,848 45,550 11,753 (3) 370,000

Larry Hsu, Ph.D. 2001 195,000 102,395 5,901 (1) --
President and Chief Operating Officer 2000 175,000 52,500 5,250 (1) 50,000
1999 122,292 -- -- 333,580

Cornel C. Spiegler 2001 160,000 40,800 8,717 (2) --
Chief Financial Officer 2000 150,135 20,257 3,516 (2) 55,000
1999 150,191 13,761 3,492 (2) 20,000

Joseph A. Storella 2001 150,500 23,835 13,750 (2) --
Vice President Operations 2000 148,673 18,155 5,126 (2) 50,000
1999 148,027 11,463 5,554 (2) 12,000

David S. Doll* 2001 120,946 22,400 4,513 (2) 115,000
Sr. Vice President, Sales and
Marketing

May Chu 2001 150,000 40,500 1,456 (1) --
Vice President, Quality Affairs 2000 134,167 14,500 276 (1) 31,000
1999 104,583 -- -- 66,716

- -----------------------
* Mr. Doll joined the Company in March 2001; his annual salary for 2001 was
$149,000.
(1) Represents life insurance along with gross-up tax payment with respect to
such insurance payment.
(2) Represents life insurance and long-term disability insurance along with
gross-up tax payments with respect to such insurance payments.
(3) Represents life insurance and long-term disability insurance along with
gross-up tax payments with respect to such insurance payments and $8,958 in
car allowance.

Option Grants In Last Fiscal Year

The following table sets forth information on option grants in the
fiscal year ended December 31, 2001 to the persons named in the Summary
Compensation Table. The exercise price per share of each option was equal to the
fair market value of the Common Stock at the grant date as determined by the
Board of Directors.

Individual Grants
---------------------------------------------------------------- Potential Realizable
% of Total Value at Assumed
Number of Options Annual Rates of
Securities Granted to Stock Price
Underlying Employees in Exercise Appreciation for
Name Options Granted Fiscal Year Price ($/SH) Expiration Date Option Term (1)
- ---------------------- ----------------- -------------- -------------- --------------- ---------------------
5% 10%
---------- ---------

Charles Hsaio, Ph.D. -- -- -- -- -- --
Barry R. Edwards -- -- -- -- -- --
Larry Hsu, Ph.D. -- -- -- -- -- --
Cornel C. Spiegler -- -- -- -- -- --
Joseph A. Storella -- -- -- -- -- --
David S. Doll 75,000 12.6 6.50 11/19/11 $306,750 $856,500
40,000 6.7 11.00 9/24/11 $234,400 $701,200
May Chu -- -- -- -- -- --

- ---------------------
(1) This column shows the hypothetical gain or option spreads of the options
based on assumed annual compound stock appreciation rates of 5% and 10% over
the full term of the options. The 5% and 10% assumed rates of appreciation
are mandated by the rules of the Securities and Exchange Commission and do
not represent the Company's estimate or projection of future Common Stock
prices. The gains shown are net of the option exercise price, but do not
include deductions for taxes or other expenses associated with the exercise
of the option or the sale of the underlying shares, or reflect
non-transferability, vesting or termination provisions. The actual gains, if
any, on the exercise of stock options will depend on the future performances
of the Common Stock.

Aggregated Option Exercises In Last Fiscal Year And Fiscal Year-End Option
Values

The following table sets forth information with respect to the number
and value of unexercised stock options held at December 31, 2001 by the persons
named in the Summary Compensation Table.

Number of Securities
Shares Value Underlying Unexercised Value of Unexercised
Acquired Received Options Held at in-the-Money Options
Name on Exercise ($) Fiscal Year End (#) at Fiscal Year End ($)(1)
- ---------------------------- ------------ --------- ---------------------- -----------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------

Charles Hsiao, Ph.D. ...... -- -- 172,870 221,510 2,156,205 2,566,727
Barry R. Edwards .......... 22,175 235,525 172,000 288,000 1,735,180 2,614,095
Larry Hsu, Ph.D. .......... -- -- 171,790 211,790 2,208,765 2,491,365
May Chu ................... 30,000 282,800 43,159 67,930 533,175 734,419
Cornel C. Spiegler ........ 10,870 122,180 58,723 51,277 598,750 428,965
Joseph A. Storella ........ -- -- 71,666 36,334 416,787 296,243
David S. Doll ............. -- -- -- 115,000 -- 618,000

- --------------------
(1) Based on the latest reported sale price on the Nasdaq National Market on
December 31, 2001 ($13.44 per share) less the option exercise price.

Employment Agreements

At the closing of the merger between Global Pharmaceutical Corporation
and Impax Pharmaceuticals, Inc., effective December 14, 1999, each of Mr. Barry
R. Edwards and Drs. Hsiao and Hsu entered into a new employment agreement with
the Company. Each of these employment agreements has substantially the same

terms. Mr. Edwards' and Dr. Hsiao's agreements provide that they will serve as
Co-Chief Executive Officers of the Company and, in the case of Dr. Hsiao,
Chairman of the Board. Dr. Hsu's Agreement provides that he will serve as
President and Chief Operating Officer of the Company. The other material terms
of these employment agreements are described below.

Each employment agreement will be for an initial term of three years,
and will be renewed automatically for successive one-year terms unless
terminated by either party at least six months prior to the expiration of the
initial term or any renewal term. Each of the executives will receive an annual
salary of $175,000, and will be entitled to a bonus based on criteria
established by the Board of the Company. Any bonus paid to one of these three
executives must be similarly paid at the same time to the other two executives.

Any of the executives may be terminated by the Company, either with or
without cause. The executive may terminate his own employment for any reason, or
for good reason. These terms are defined more fully in the employment
agreements. In general, cause means:

o a material breach of the provisions of the employment agreement
relating to proprietary information, trade secrets, confidentiality
and non-competition;

o a material breach of any other provision of the employment
agreement that is not remedied within 30 days of such breach;

o any act of fraud or embezzlement against the Company; or

o any indictment of the executive for a felony or other crime that
would cause injury to the reputation of the Company.

In general, good reason means:

o assignment of duties or a reduction in duties which is inconsistent
with the executive's position;

o a material reduction in executive's salary or benefits not agreed
to by the executive;

o a relocation that would require executive to have commute of more
than 50 miles; or

o a change in control of the Company.

In general, a change in control is defined as:

o the acquisition by any person or entity of ownership or control of
more than 50% of the voting power of the Company;

o a sale or disposition of assets totaling more than 50% of the value
of the Company;

o a merger or reorganization in which the Company's stockholders,
immediately prior to the merger, do not own a least 51% of the
voting power of the Company after the merger;

o any transaction where the Company's stockholders, immediately prior
to the transaction, do not own at least 51% of the voting power of
the Company after the transaction; or

o any other transaction that the Board determines would materially
alter the structure, ownership or control of the Company.

If the executive is terminated without cause or terminates his
employment for good reason, he will be entitled to receive a payment of all
accrued and unpaid salary and benefits plus salary and benefits for the next six
months or, if less, the remainder of the term of the employment agreement.

The executives have also agreed to keep all proprietary information of
the Company confidential and to assign all proprietary information or
intellectual property developed by the executive during the course of his
employment to the Company. Each executive has also agreed that during the term
of the employment agreement and for a period of two years following the
termination of his employment, he will not engage in a business competitive with
that of the Company or entice any of the Company's customers, suppliers or
business partners to end their relationship with the Company.

In addition to the terms previously described, Mr. Edwards' employment
agreement provides that he will receive an option to purchase 270,000 shares of
common stock at the prevailing market price at the time the option is granted.
The shares covered by this option vest and are exercisable on the following
schedule: (i) first year - 0%; (ii) second year - 10%; (iii) third year - 40%;
(iv) fourth year - 50%.

Certain Transactions

We believe that all transactions set forth below were made on terms no
less favorable to us than would have been obtained from unaffiliated third
parties.

Common Stock Financing. In connection with a private placement of an
aggregate of 2,187,500 shares of the Company's common stock for aggregate
proceeds of $17,500,000, in June 2001, the Company issued and sold 269,320 and
43,180 shares of its common stock to Fleming US Discovery Fund III, L.P. and
Fleming US Discovery Offshore Fund III, respectively. Robert L. Burr and David
J. Edwards, Directors of the Company, are members of Fleming US Discovery, LLC,
the general partner of Fleming US Discovery Partners, L.P., a private equity
sponsor affiliated with J.P. Morgan Chase & Co.

The number of shares of our common stock purchased and the aggregate
purchase price by each investor is as follows:

Aggregate
Number of Shares of Purchase Price
Common Stock Issued for Common
Investor for Cash Stock
- ------------------------------------------------------- --------------------- ----------------

Fleming US Discovery Fund III, L.P..................... 269,320 $2,154,560

Fleming US Discovery Offshore Fund III, L.P............ 43,180 $ 345,440

PROPOSAL NO. 2 - ADOPTION OF THE 2002 EQUITY INCENTIVE PLAN

The Impax Laboratories, Inc. 2002 Equity Incentive Plan (the "Plan")
was adopted by the Board of Directors of the Company in March 2002, subject to
approval by the stockholders of the Company. The purpose of the Plan is to
attract, retain, and motivate key personnel by providing a means whereby the
Company may grant (i) incentive stock options, (ii) nonstatutory stock options,
(iii) stock appreciation rights, and/or (iv) stock bonus awards to officers,
employees, directors, and consultants of the Company and its affiliates.

The Board believes that the Plan serves the best interests of the
Company and its stockholders by permitting the Company to establish a flexible
vehicle through which the Company can offer equity-based compensation incentives
to eligible personnel with a view toward promoting the long-term financial
success of the Company and enhancing stockholder value.

THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 2 TO BE IN THE BEST INTERESTS OF THE
COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.

The following is a summary of the provisions of the Plan. The summary
is qualified in its entirety by the detailed provisions of the text in the
actual Plan set forth as Appendix A to this Proxy Statement. A summary of
certain federal income tax consequences associated with the Plan is set forth in
"Federal Income Tax Consequences of the Plan."

Number of Shares and Adjustments

The number of shares of Common Stock, $.01 par value, of the Company as
to which options may be granted under the Plan is 4,000,000 (the "Shares"). This
number may be adjusted in the sole discretion of the Board to give effect to any
stock split, stock dividend, combination, recapitalization, or similar
transaction with respect to the Common Stock. Shares subject to awards under the
Plan that are canceled, expired, terminated, forfeited, settled in cash, or
withheld to satisfy the applicable purchase price or tax withholding obligations
shall again be available for issuance under the Plan.

Shares of common stock available for issuance under the Plan may be
either authorized and unissued, or held by the Company in its treasury.

Subject to adjustment to reflect stock dividends and other capital
changes, the maximum number of shares of common stock with respect to which
stock options or SARs may be granted under the Plan to any employee for any
calendar year will be 300,000 Shares.

Administration of the Plan

The Board of Directors of the Company administers the Plan. The Board
is permitted by the Plan to delegate its authority under the Plan, except with
respect to awards to non-employee directors, to the Compensation Committee of
the Board consisting of at least two directors appointed by and serving at the
pleasure of the Board. Subject to the provisions of the Plan and except with
respect to awards to non-employee directors, the Compensation Committee will
have the authority to grant awards under the Plan, to interpret the provisions
of the Plan, to fix and interpret the provisions of agreements governing awards
made under the Plan, to supervise the administration of the Plan, and to take
such other actions as may be necessary or desirable in order to carry out the
provisions of the Plan. The Plan will be administered by the Board of Directors
with respect to awards to non-employee directors. The Board of Directors has
delegated its authority to administer the Plan to the Compensation Committee of
the Board of Directors.

Eligibility

The Plan authorizes the grant of incentive stock options, nonstatutory
stock options, stock appreciation rights (commonly known as SARs), and stock
bonus awards to any member of the Company's Board of Directors, any officer or
other employee of the Company or its affiliates, or any consultant who performs,
or will perform, services for the Company or its affiliates.

The Company may also, from time to time, assume outstanding awards
granted by another company, whether in connection with an acquisition of such
other company or otherwise, by either granting an award under the Plan in
replacement of the award assumed by the Company or treating the assumed award as
if it had been granted under the Plan.

Terms and Conditions of Options

Each option granted under the Plan is required to be set forth in
writing in an Award Agreement, duly executed by the Company and by the person
receiving the option.

Under the Plan, the Administrator may grant stock options that are
intended to qualify as "incentive stock options" within the meaning of Section
422 of the Internal Revenue Code (commonly known as ISOs) and stock options

which do not qualify as incentive stock options (commonly known as nonstatutory
stock options). ISOs may only be granted to employees of the Company or its
affiliates that qualify as "subsidiaries" within the meaning of Section 424 of
the Code.

The exercise price for Common Stock covered by an ISO may not be less
than 100% of the fair market value of the Common Stock on the date of grant (or,
in the case of a grant to an employee who is a "10%" stockholder" of the Company
or certain subsidiaries, "110% of the fair market value). The exercise price for
Common Stock covered by a nonstatutory stock option may not be less than the par
value of the Common Stock on the date of grant. All options will, unless sooner
terminated, expire ten years (or, in the case of an incentive stock option
granted to a 10% stockholder, five years) from the date of grant.

Vesting and Exercise of Option

The Board may establish such vesting and other conditions and
restrictions on the exercise of an option and/or upon the issuance of Common
Stock in connection with the exercise of an option as it deems appropriate.
Generally, each option shall vest and become exercisable in annual one-fourth
increments or the first, second, third and fourth anniversaries of the date the
option is granted, provided that the participant remains in continuous employ of
the Company. Subject to satisfaction of applicable withholding requirements,
once vested and exercisable, an option may be exercised by transmitting to the
Company (i) a notice specifying the number of shares to be purchased, and (ii)
payment of the exercise price. The exercise price of an option may be paid in
cash and/or such other form of payment as the Company may permit.

Rights as a Shareholder

No person to whom an option has been granted (a "Participant") will
have rights as a shareholder with respect to any shares covered by such option
until after due exercise of the option and tender of the full purchase price for
the shares being purchased.

Assignability and Transferability of Options

Options granted under the Plan shall not be transferable or assignable
by a Participant, and may not be made subject to execution, attachment, or
similar process, otherwise than by will or by the laws of descent and
distribution, and shall be exercisable during the lifetime of a Participant only
by the Participant. Notwithstanding the foregoing, the Board may determine, at
the time of grant or thereafter, that a nonstatutory stock option is
transferable, in whole or in part, to such persons, under such circumstances,
and subject to such conditions as the Board may prescribe.

Stock Appreciation Rights

The Board may award stock appreciation rights to eligible personnel
upon such terms and conditions as it deems appropriate. A stock appreciation
right is an award entitling the Participant, upon exercise, to receive an
amount, in cash or shares of Common Stock or a combination thereof, as
determined by the Board in its sole discretion, determined with reference to the
appreciation, if any, in the fair market value of Common Stock during the period
beginning on the date the stock appreciation right is granted and ending on the
date the stock appreciation right is exercised.

Stock appreciation rights may be awarded under the Plan in conjunction
with an option ("tandem SARs") or independent of any option ("stand-alone
SARs"). Tandem SARs awarded in conjunction with a nonstatutory stock option may
be awarded either at or after the time the nonstatutory stock option is granted.
Tandem SARs awarded in conjunction with an incentive stock option may only be
awarded at the time the incentive stock option is granted.

A tandem SAR shall be exercisable only at the time and to the same
extent and subject to the same conditions as the related option is exercisable.
The exercise of a tandem SAR shall cancel the related option to the extent of
the shares of Common Stock with respect to which the stock appreciation right is
exercised, and vice versa. Tandem SARs may be exercised only when the fair
market value of the Common Stock to which it relates exceeds the option exercise
price. The Board may impose such additional service or vesting conditions upon
the exercise of a stock appreciation right (tandem or stand-alone), as it deems
appropriate.

A stock appreciation right may be exercised by giving written notice to
the Company identifying the stock appreciation right that is being exercised,
specifying the number of shares covered by the exercise, and containing such
other information or statements as the Board may require. The Board may
establish such rules and procedures as it deems appropriate for the exercise of
stock appreciation rights under the Plan. Upon the exercise of a stock
appreciation right, the Participant shall be entitled to receive an amount (in
cash and/or shares of Common Stock, as determined by the Board) equal to the
product of (i) the number of shares with respect to which the stock appreciation
right is being exercised and (ii) the difference between the fair market value
of a share of the Common Stock on the date the stock appreciation right is
exercised and the fair market value of a share of Common Stock on the date the
stock appreciation right is granted.

Stock appreciation rights shall not be transferable by a Participant
other than upon the Participant's death to a beneficiary designated by the
Participant in a manner acceptable to the Board or, if no designated beneficiary
shall survive the Participant, pursuant to the Participant's will or by the laws
of descent and distribution. All stock appreciation rights shall be
transferable, to the extent permitted above, only with the underlying option.

Effect of Termination of Employment or Service

The Plan generally provides that, unless otherwise determined by the
Administrator, following a participant's termination of employment or service:

o for any reason other than the death, disability, or cause (as
defined in the Plan), the Participant will have 180 days to
exercise all then exercisable options or SARs; and

o as the result of death or disability, the Participant (or his or
her beneficiary) will have one year to exercise all then
exercisable options or SARs, provided that, in each instance, no
options or SARs may be exercised beyond the expiration of its
stated term.

However, following a Participant's termination of employment or service
as the result of cause, any option or SAR held by the Participant (whether or
not otherwise then exercisable) shall immediately terminate.

"Cause" means (i) in the case where there is no employment or
consulting agreement between the Participant and the Company or its Affiliates,
or where such an agreement exists but does not define "Cause" (or words of like
import), a termination classified by the Company as a termination due to the
Participant's dishonesty, fraud, insubordination, willful misconduct, refusal to
perform services or materially unsatisfactory performance of his or her duties,
or (ii) in the case where there is an employment or consulting agreement between
the Participant and the Company or its Affiliates, a termination that is, or
would be, deemed for "cause" (or words of like import) under such agreement.

Stock Bonus Awards

The Plan allows the Administrator to grant stock bonus awards in
consideration for past services actually rendered to the Company or its
affiliates on such terms and conditions it deems appropriate. Shares subject to
stock bonus awards may, but need not, be subject to a vesting schedule.

Generally, unless otherwise determined by the Administrator, any
unvested shares of Common Stock received pursuant to a stock bonus award shall
be forfeited upon a Participant's termination of employment or service with the
Company or its affiliates.

Non-Employee Director Stock Option Awards

Under the Plan, each non-employee director of the Company will be
automatically granted an NQSO to purchase 12,000 shares of Common Stock upon his
or her commencement of service as a non-employee director of the Company. In
addition, each non-employee director of the Company will automatically be
granted an NQSO to purchase 7,500 shares of Common Stock under the Plan on the
day following each annual meeting of stockholders of the Company that occurs at
least one year after his or her commencement of service as a non-employee
director of the Company. The options will have a ten-year term and an exercise
price equal to the fair market value of the Common Stock on the date of grant.
The options granted upon a non-employee director's commencement of service will
vest as to one-third on each anniversary of the date of grant, provided that the
director remains in service during the vesting period. The options granted to
non-employee directors on an annual basis will generally become one-third vested
on each of the first three anniversaries of the grant date.

If a non-employee director's service terminates for any reason (other
than death or disability) or no reason, then any option held by the non-employee
director, to the extent not then exercisable, shall thereupon terminate. Any
option held by the non-employee director which is exercisable at the time of
such termination of service shall remain exercisable during the ninety (90) day
period following such termination or, if sooner, until the expiration of the
stated term of the option and, to the extent not exercised within such period,
shall thereupon terminate. In the event a non-employee director's service
terminates due to his or her death or disability, the non-employee director (or
his or her beneficiary) will have one year to exercise all the then exercisable
non-employee director stock option awards.

Adjustments Upon Changes in Common Stock

Upon the occurrence of any of the following events, a Participant's
rights with respect to any option which have not previously been exercised in
full will be adjusted as set forth below:

Capitalization - If the shares of Common Stock are subdivided or
combined into a greater or smaller number of shares, or if the Company issues
any shares of Common Stock as a stock dividend on its outstanding Common Stock,
the number of shares of Common Stock deliverable upon the exercise of an option
will be appropriately increased or decreased proportionately, and appropriate
adjustments will be made in the purchase price per share to reflect such
subdivision, combination, or stock dividend.

Dissolution or Liquidation of the Company - In the event of a
dissolution or liquidation of the Company, then Awards outstanding under the
Plan shall terminate if not exercised (if applicable) immediately prior to, or
simultaneous with, such event.

Asset Sales, Merger, Consolidations, or Reverse Merger - In the event
of (i) a sale of all or substantially all of the assets of the Company, (ii) a
merger in which the Company is not the surviving corporation, or (iii) a reverse
merger in which the Company is the surviving corporation but the shares of
Common Stock outstanding immediately preceding the merger are converted by
virtue of the merger into other property, whether in the form of securities,
cash, or otherwise, then any surviving corporation or acquiring corporation
shall assume any awards outstanding under the Plan or shall substitute similar
awards (including an award to acquire the same consideration paid to the
stockholders in such a transaction for those awards outstanding under the Plan).
In the event any surviving corporation or acquiring corporation refuses to
assume such awards or to substitute similar awards for those awards outstanding
under the Plan, then the vesting of all outstanding awards (and, if applicable,
the time during which such awards may be exercised) shall be accelerated in
full, and the awards shall terminate if not exercised (if applicable) at or
prior to such event.

Amendment and Termination of the Plan

The Board may amend or terminate the Plan, provided, however, that no
such action may adversely affect the rights of a Participant under any
outstanding award without the consent of the Participant. Except as otherwise
previously discussed, any amendment which would increase the number of shares of
Common Stock for which awards may be granted under the Plan (in the aggregate or
on an individual basis) or modify the class of employees eligible to receive
awards under the Plan shall be subject to the approval of the stockholders of
the Company. The Board may amend the terms of any Award Agreement at any time
and from time to time, provided, however, that any amendment which would
adversely affect the rights of the Participant may not be made without the
consent of the Participant.

Applicability of ERISA

The Plan is not subject to any provisions of the Employee Retirement
Income Security Act of 1974, as amended.

Federal Income Tax Consequences of the Plan

The following information is not intended to be a complete discussion
of the federal income tax consequences of participation of the Plan and is
qualified in its entirety by reference to the Code and the regulations adopted
pursuant thereto. The provisions of the Code described in this section include
current tax law only and do not reflect any proposals to revise current tax law.
Each Participant who acquires shares of Common Stock under the Plan should
consult his or her own tax advisor with respect to his or her individual tax
position and the effect of any legislative revisions on such position.

Incentive Stock Option - Generally, under the Code, an optionee will
not realize taxable income by reason of the grant or exercise of an ISO (see,
however, discussion of alternative minimum tax below) granted pursuant to the
Plan. If an optionee exercises an ISO and does not dispose of the shares until
the later of (i) two years from the date the option was granted and (ii) one
year from the date of exercise, the entire gain, if any, realized upon
disposition of such shares will be taxable to the optionee as long-term capital
gain, and the Company will not be entitled to any deduction. The reduced rate of
tax (20%) on certain capital gains requires a holding period of more than one
year. If an optionee disposes of the shares within the period of two years from
the date of grant or one year from the date of exercise (a "disqualifying
disposition"), the optionee generally will realize ordinary income in the year
of disposition and the Company will receive a corresponding deduction in an
amount equal to the excess of (i) the lesser of (a) the amount, if any, realized
on the disposition and (b) the fair market value of the shares on the date the
option was exercised over (ii) the option price. Any additional gain realized on
the disposition will be long-term or short-term capital gain and any loss will
be long-term or short-term capital loss. The optionee will be considered to have
disposed of a share if he sells, exchanges, makes a gift of, or transfers legal
title to the share (except transfers, among others, by pledge, on death, or to a
spouse). If the disposition is by sale or exchange, the optionee's tax basis
will equal the amount paid for the share plus any ordinary income realized as a
result of the disqualifying disposition.

The exercise of an ISO may subject the optionee to the alternative
minimum tax. The amount by which the fair market value of the shares purchased
at the time of the exercise exceeds the option exercise price is an adjustment
for purposes of computing the so-called alternative minimum tax. In the event of
a disqualifying disposition of the shares in the same taxable year as exercise
of the ISO, no adjustment is then required for purposes of the alternative
minimum tax, but regular income tax, as described above, may result from such
disqualifying disposition.

An optionee who surrenders shares as payment of the exercise price of
his ISO generally will not recognize gain or loss on his surrender of such
shares. The surrender of shares previously acquired upon exercise of an ISO in
payment of the exercise price of another ISO is, however, a "disposition" of

such stock. If the ISO holding period requirements described above have not been
satisfied with respect to such stock, such disposition will be a disqualifying
disposition that may cause the optionee to recognize ordinary income as
discussed above.

Under the Code, all of the shares received by an optionee upon exercise
of an ISO by surrendering shares will be subject to the ISO holding period
requirements. Of those shares, a number of shares (the "Exchange Shares") equal
to the number of shares surrendered by the optionee will have the same tax basis
for capital gains purposes (increased by any ordinary income recognized as a
result of a disqualifying disposition of the surrendered shares if they were ISO
shares) and the same capital gains holding period as the shares surrendered. For
the purposes of determining ordinary income upon a subsequent disqualifying
disposition of the Exchange Shares, the amount paid for such shares will be
deemed to be the fair market value of the shares surrendered. The balance of the
shares received by the optionee will have a tax basis (and a deemed purchase
price) of zero and a capital gains holding period beginning on the date of
exercise. The ISO holding period for all shares will be the same as if the
option had been exercised for cash.

Nonstatutory Stock Options - Generally, there will be no federal income
tax consequences to either the optionee or the Company on the grant of
nonstatutory stock options pursuant to the Plan. On the exercise of a
nonstatutory stock option, the optionee (except as described below) has taxable
ordinary income equal to the excess of the fair market value of the shares
acquired on the exercise date over the option price of the shares. The Company
will be entitled to a federal income tax deduction (subject to the limitations
contained in Section 162(m)) in an amount equal to such excess, provided that
the Company complies with applicable reporting rules.

Upon the sale of stock acquired by exercise of a nonstatutory stock
option, optionees will realize long-term or short-term capital gain or loss
depending upon their holding period for such stock. The reduced rate of tax
(20%) on certain capital gains requires a holding period of more than one year.
Capital losses are deductible only to the extent of capital gains for the year
plus $3,000 for individuals.

An optionee who surrenders shares in payment of the exercise price of a
nonstatutory stock option will not recognize gain or loss with respect to the
shares so delivered unless such shares were acquired pursuant to the exercise of
an ISO and the delivery of such shares is a disqualifying disposition. See
"Incentive Stock Options." The optionee will recognize ordinary income on the
exercise of the nonstatutory stock option as described above. Of the shares
received in such an exchange, that number of shares equal to the number of
shares surrendered have the same tax basis and capital gains holding period as
the shares surrendered. The balance of shares received will have a tax basis
equal to their fair market value on the date of exercise and the capital gains
holding period will begin on the date of exercise.

Stock Appreciation Rights - A participant who is awarded a stock
appreciation right will not have taxable income upon the grant of such stock
appreciation right and the Company will not be entitled to a tax deduction by
reason of such grant. Upon the exercise of a stock appreciation right, a
participant will recognize fully taxable ordinary income equal to the amount of
cash and the fair market value of any shares received. The Company may generally
claim a deduction at that time equal to the amount recognized as ordinary income
by the Participant.

Limitation on the Company's Deduction - In general, the Company is
entitled to a deduction in such amount and at such time as ordinary income is
recognized by a participant under the Plan. Section 162(m) of the Code will
generally limit to $1,000,000 the Company's federal income tax deduction for
compensation paid in any year to each of its Chief Executive Officer and its
four highest paid executive officers, to the extent that such compensation is
not performance based. Under Treasury regulations, a stock option will, in
general, qualify as "performance based" compensation if its (i) has an exercise
price of not less than the fair market value of the underlying stock on the date
of grant, (ii) is granted under a plan that limits the number of shares for
which options may be granted to an employee during a specified period, which
plan is approved by a majority of the stockholders entitled to vote thereon, and

(iii) is granted by a compensation committee consisting solely of at least two
independent directors. If a stock option to an executive referred to above is
not "performance based," the amount that would otherwise be deductible by the
Company in respect of such stock option will be disallowed to the extent that
the executive's aggregate non-performance based compensation in the relevant
year exceeds $1,000,000.

PROPOSAL NO. 3 - RATIFICATION OF APPOINTMENT
OF INDEPENDENT ACCOUNTANTS

The stockholders will be asked to ratify the appointment of
PricewaterhouseCoopers LLP as the independent accountants of the Company for the
fiscal year ending December 31, 2002. PricewaterhouseCoopers LLP audited the
financial statements of the Company for the fiscal year ended December 31, 2001.
A representative of PricewaterhouseCoopers LLP is expected to be present at the
Annual Meeting, will have an opportunity to make a statement if he or she
desires to do so and is expected to be available to respond to appropriate
questions from stockholders.

Audit Fees

PricewaterhouseCoopers LLP billed aggregate fees of $182,500 for
professional services rendered for the audit of the Company's annual financial
statements for the year ended December 31, 2001 and for the reviews of the
financial statements included in the Company's forms 10-QSB for that year.

Financial Information Systems Design and Implementation Fees

No such services were provided by PricewaterhouseCoopers LLP for the
most recent fiscal year.

All Other Fees

PricewaterhouseCoopers LLP billed aggregate fees of $240,300 for
services rendered by it to the Company, other than for the services described
above, for the year ended December 31, 2001. The Audit Committee has considered
whether the services rendered for these fees is compatible with maintaining the
independence of PricewaterhouseCoopers LLP.

THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 3 TO BE IN THE BEST INTERESTS
OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL
THEREOF.

STOCKHOLDER PROPOSALS

All stockholder proposals which are intended to be presented at the
Annual Meeting of Stockholders of the Company to be held in 2003 must be
received by the Company no later than December 9, 2002 for inclusion in the
Board of Directors' proxy statement and form of proxy relating to that meeting.
Any such proposal must also comply with the proxy rules under the Securities
Exchange Act of 1934, including Rule 14a-8. Any notice of a shareholder proposal
for consideration at the 2002 Annual Meeting that is submitted to the Company
outside the processes of Rule 14a-8 will be considered untimely for purposes of
Rule 14a-4(c)(1) if it is submitted after February 22, 2003. Rule 14(a)-4(c)(1)
provides that discretionary voting authority may be exercised with respect to
such untimely proposals.

OTHER BUSINESS

The Board of Directors knows of no other business to be acted upon at
the Annual Meeting. However, if any other business properly comes before the
Annual Meeting, it is the intention of the persons named in the enclosed proxy
to vote on such matters in accordance with their best judgment.

Appendix A

IMPAX LABORATORIES, INC.
2002 EQUITY INCENTIVE PLAN

1. Purpose. The purpose of the Plan is to attract, retain and motivate
key personnel by providing a means whereby the Company may grant (i) Incentive
Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Appreciation Rights
and/or (iv) Stock Bonuses to officers, employees, directors and consultants of
the Company and its Affiliates. In addition, Non-Employee Directors shall
receive automatic grants of Nonstatutory Stock Options under the Plan.

2. Administration

2.1 Administration by Board. The Board shall administer the Plan
unless and to the extent that the Board delegates its power and authority to a
Committee as provided in Section 2.3.

2.2 Power of Board. Subject to the provisions of the Plan, the
Board, acting in its sole discretion, shall have the following power and
authority:

2.2.1. to determine to which of the eligible individuals, and
the times at which, Awards shall be granted;

2.2.2. to determine the number of shares of Common Stock subject
to Awards granted under the Plan and, where applicable, the price to be paid for
the shares of Common Stock subject to each Award;

2.2.3. to determine the terms and conditions of each Award
(which need not be identical);

2.2.4. to interpret the terms of the Plan and Awards granted
under it, and to establish, amend and revoke rules and regulations for its
administration (and, in the exercise of this power, may correct any defect,
omission or inconsistency in the Plan or in any Award Agreement, in a manner and
to the extent it deemed necessary or desirable);

2.2.5. to accelerate the terms of the Plan or any Award;

2.2.6. to amend the terms of the Plan or any Award;

2.2.7. to adopt forms of Award Agreements for use under the
Plan;

2.2.8. to allow Participants to satisfy the minimum withholding
tax obligations by electing to have the Company withhold from the shares covered
by an Award that number of shares having a Fair Market Value equal to the amount
required to be withheld; and

2.2.9. to make all determinations deemed necessary or advisable
for the administration of the Plan.

2.3 Delegation. Except with regard to Awards to Non-Employee
Directors, the Board may delegate any or all of its powers and authority
relating to the administration of the Plan (but not the power to amend or
terminate the Plan) to a Committee of two (2) or more members of the Board. If
and to the extent that administrative responsibility is delegated to a

Committee, the Committee shall have, in connection with the administration of
the Plan, the powers and authority theretofore possessed by the Board, including
the power to delegate to a subcommittee any of the administrative powers the
Committee is authorized to exercise (and, as appropriate, references in the Plan
to the Board shall be deemed to be the Committee or subcommittee). If a
Committee is appointed, then, unless the Board determines otherwise, its members
shall consist solely of individuals who qualify as "non-employee directors"
under Rule 16b-3 promulgated under Section 16 of the Exchange Act and as
"outside directors" under Section 162(m) of the Code. If for any reason the
Committee does not satisfy the "non-employee director" requirements of Rule
16b-3 or the "outside director" requirements of Section 162(m) of the Code, such
non-compliance shall not affect the validity of the awards, interpretations or
other actions of the Committee. The Board may delegate nondiscretionary
administrative duties to such employees of the Company as it deems proper.

2.4 Indemnification. The Company shall indemnify and hold harmless
to the fullest extent permitted by law each member of the Board and the
Committee and any employee or director of the Company to whom any duty or power
relating to the administration or interpretation of the Plan is delegated from
and against any loss, cost, liability (including any sum paid in settlement of a
claim with the approval of the Board), damage and expense (including legal and
other expenses incident thereto) arising out of or incurred in connection with
the Plan, unless and except to the extent attributable to such person's fraud or
willful misconduct.

2.5 Decisions. All decisions, determinations and interpretations of
the Board shall be final, binding and conclusive on all persons.

3. Share Reserve. Subject to adjustment pursuant to Section 11, the
aggregate number of shares of Common Stock that may be issued pursuant to the
Plan is 4,000,000 shares. If any Option or Stock Appreciation Right expires or
is terminated without being exercised in whole or in part, the unexercised or
released shares from such Option or Stock Appreciation Right shall be available
for future issuance under the Plan. Shares that are subject to an Award that is
forfeited or cancelled or that are withheld in order to pay the purchase price
for shares of Common Stock covered by any Award or to satisfy the tax
withholding obligations associated with any Award under the Plan shall be
available for future issuance under the Plan. Shares of Common Stock available
for issuance under the Plan may be authorized and unissued, held by the Company
in its treasury or otherwise acquired for purposes of the Plan. No fractional
shares of Common Stock shall be issued under the Plan. Subject to adjustment
pursuant to Section 11, the maximum number of shares of Common Stock with
respect to which Options or Stock Appreciation Rights may be granted during any
calendar year to any employee may not exceed 300,000 shares.

4. Eligibility. Awards may be granted under the Plan to officers,
employees, directors and consultants of the Company or its Affiliates. Incentive
Stock Options may be granted only to employees of the Company or its Affiliates.
Non-Employee Directors shall receive automatic grants of Nonstatutory Stock
Options pursuant to Section 8 of the Plan. The Company may also, from time to
time, assume outstanding awards granted by another company, whether in
connection with an acquisition of such other company or otherwise, by either (i)
granting an Award under the Plan in replacement of the award assumed by the
Company, or (ii) treating the assumed award as if it had been granted under the
Plan.

5. Options.

5.1 Option Grant. Subject to the provisions hereof, the Board may
grant Incentive Stock Options and Nonstatutory Stock Options to eligible
personnel on such terms and conditions as the Board deems appropriate.

5.2 Exercise Price. The exercise price of an Option shall not be
less than the par value of the Common Stock, provided that (i) the exercise
price of an Incentive Stock Option shall not be less than the Fair Market Value
of the Common Stock on the date the Option is granted, and (ii) the exercise
price of an Incentive Stock Option granted to a Ten Percent Stockholder shall
not be less than 110% of the Fair Market Value of the Common Stock on the date
the Option is granted.

5.3 Option Term. No Option granted under the Plan may be exercisable
(if at all) more than ten (10) years after the date the Option is granted (or,
in the case of an Incentive Stock Option granted to a Ten Percent Stockholder,
five (5) years.)

5.4 Vesting and Exercise of Options. The Board may establish such
vesting and other conditions and restrictions on the exercise of an Option
and/or upon the issuance of Common Stock in connection with the exercise of an
Option as it deems appropriate. Subject to satisfaction of applicable
withholding requirements, once vested and exercisable, an Option may be
exercised by transmitting to the Company: (i) a notice specifying the number of
shares to be purchased and (ii) payment of the exercise price. The exercise
price of an Option may be paid in cash and/or such other form of payment as the
Company may permit.

5.5 Rights as a Stockholder. No shares of Common Stock shall be
issued in respect of the exercise of an Option until full payment of the
exercise price and the applicable tax withholding obligations with respect to
such exercise has been made or provided for. The holder of an Option shall have
no rights as a stockholder with respect to any shares covered by an Option until
the date such shares are issued. Except as otherwise provided herein, no
adjustments shall be made for dividend distribution or other rights for which
the record date is prior to the date such shares are issued.

5.6 Buy Out and Settlement. The Board, on behalf of the Company, may
at any time offer to buy out any Option on such terms and conditions as the
Board shall establish.

5.7 Options Non-Transferable. Options granted under the Plan shall
not be transferable or assignable by a Participant, and may not be made subject
to execution, attachment or similar process, otherwise then by will or by the
laws of descent and distribution, and shall be exercisable during the lifetime
of a Participant only by the Participant. Notwithstanding the foregoing, the
Board may determine at the time of grant or thereafter that a Nonstatutory Stock
Option is transferable in whole or in part to such persons, under such
circumstances, and subject to such conditions as the Board may prescribe.

5.8 Assumed Options. In the event the Company assumes an option
granted by another company, the exercise price and the number and nature of
shares issuable upon exercise of such assumed option shall be adjusted
appropriately as determined by the Board. In the event the Company elects to
grant a new Option rather than assuming an existing option, such new Option need
not be granted at Fair Market Value on the date of grant and may instead be
granted with a similarly adjusted exercise price.

5.9 Replacement Options. Without in any way limiting the authority
of the Board to make or not to make grants of Options, the Board shall have the
authority (but not an obligation) to include as part of any Award Agreement a
provision entitling the Participant to a replacement Option in the event the
Participant exercises the Option evidenced by the Award Agreement, in whole or
in part, by surrendering other shares of Common Stock in accordance with the
Plan and the terms and conditions of the Award Agreement.

6. Stock Appreciation Rights.

6.1 Stock Appreciation Right Grant. Subject to the provisions
hereof, the Board may award Stock Appreciation Rights to eligible personnel upon
such terms and conditions as it deems appropriate. A Stock Appreciation Right is
an Award entitling the Participant, upon exercise, to receive an amount, in cash
or shares of Common Stock or a combination thereof, as determined by the Board
in its sole discretion, determined with reference to the appreciation, if any,
in the fair market value of Common Stock during the period beginning on the date
the Stock Appreciation Right is granted and ending on the date the Stock
Appreciation Right is exercised.

6.2 Types of Stock Appreciation Rights. Stock Appreciation Rights
may be awarded under the Plan in conjunction with an Option ("tandem SARs") or
independent of any Option ("stand-alone SARs"). Tandem SARs awarded in
conjunction with a Nonstatutory Stock Option may be awarded either at or after
the time the Nonstatutory Stock Option is granted. Tandem SARs awarded in
conjunction with an Incentive Stock Option may only be awarded at the time the
Incentive Stock Option is granted.

6.3 Exercisability. Except as otherwise provided herein, a tandem
SAR shall be exercisable only at the time and to the same extent and subject to
the same conditions as the related Option is exercisable. The exercise of a
tandem SAR shall cancel the related Option to the extent of the shares of Common
Stock with respect to which the Stock Appreciation Right is exercised, and vice
versa. Tandem SARs may be exercised only when the Fair Market Value of the
Common Stock to which it relates exceeds the Option exercise price. The Board
may impose such additional service or vesting conditions upon the exercise of a
Stock Appreciation Right (tandem or stand-alone) as it deems appropriate.

6.4 Exercise. A Stock Appreciation Right may be exercised by giving
written notice to the Company identifying the Stock Appreciation Right that is
being exercised, specifying the number of shares covered by the exercise and
containing such other information or statements as the Board may require. The
Board may establish such rules and procedures as it deems appropriate for the
exercise of Stock Appreciation Rights under the Plan. Upon the exercise of a
Stock Appreciation Right, the Participant shall be entitled to receive an amount
(in cash and/or shares of Common Stock as determined by the Board) equal to the
product of (i) the number of shares with respect to which the Stock Appreciation
Right is being exercised and (ii) the difference between the Fair Market Value
of a share of the Common Stock on the date the Stock Appreciation Right is
exercised and the Fair Market Value of a share of Common Stock on the date the
Stock Appreciation Right is granted.

6.5 SARs Non-Transferable. Stock Appreciation Rights shall not be
transferable by a Participant other than upon the Participant's death to a
beneficiary designated by the Participant in a manner acceptable to the Board,
or, if no designated beneficiary shall survive the Participant, pursuant to the
Participant's will or by the laws of descent and distribution. All Stock
Appreciation Rights shall be transferable, to the extent permitted above, only
with the underlying option.

7. Stock Bonus Awards. Subject to the provisions hereof, the Board may
grant Stock Bonus Awards to eligible personnel upon such terms and conditions as
the Board deems appropriate. The terms and conditions of Stock Bonus Awards may
change from time to time, and the terms and conditions of each Award Agreement
need not be identical.

7.1 Consideration. A Stock Bonus Award shall be awarded in
consideration for part or future services rendered to the Company or its
Affiliates.

7.2 Vesting. Shares of Common Stock awarded pursuant to a Stock
Bonus may, but need not, be subject to a vesting schedule determined by the
Board.

7.3 Transferability. Shares of Common Stock received pursuant to a
Stock Bonus Award shall be transferable by the Participant only upon such terms
and conditions as are set forth in the Award Agreement, as the Board shall
determine in its discretion, so long as shares remain subject to the terms of
the Award Agreement.

8. Non-Employee Director Stock Option Awards. Subject to the provisions
hereof and without further action by the Board, during the term of the Plan, (i)
each Non-Employee Director then in service shall be granted a Nonstatutory Stock
Option to purchase 12,000 shares of Common Stock on the trading day following
the date of his or her commencement of service as a Non-Employee Director, and
(ii) each Non-Employee Director then in service shall be granted a Nonstatutory
Stock Option to purchase 7,500 shares of Common Stock on the trading day
following each annual meeting of the Company's stockholders that occurs at least
one year after his or her commencement of service as a Non-Employee Director.
Unless otherwise determined by the Board, each Option granted pursuant to this
Section 8 shall be subject to the following terms and conditions:

8.1 Exercise Price. The purchase price per share shall be equal to
the Fair Market Value of the Common Stock on the date the Option is granted.

8.2 Vesting Conditions. Each Option shall vest and become
exercisable in annual one-third increments on the first, second and third
anniversaries of the date the Option is granted, provided that the Participant
remains in the continuous service on the Board through each applicable
anniversary date.

8.3 Effect of Termination of Service. If a Non-Employee Director's
service terminates for any reason (other than death or Disability) or no reason,
then any Option held by the Non-Employee Director, to the extent not then
exercisable, shall thereupon terminate. Any Option held by the Non-Employee
Director which is exercisable at the time of such termination of service shall
remain exercisable during the ninety (90) day period following such termination
or, if sooner, until the expiration of the stated term of the Option and, to the
extent not exercised within such period, shall thereupon terminate. The
provisions of Section 9.1.1 shall apply in the event a Non-Employee Director's
service terminates due to his or her death or Disability.

8.4 Capital Transactions; Change in Control. The provisions of
Section 11 shall apply.

8.5 Expiration. Except as otherwise provided herein, if not
previously exercised, each Option shall expire on the tenth anniversary of the
date the Option is granted.

9. Termination of Employment or Service. Except as specifically
provided in Section 8, and unless otherwise determined by the Board at grant or,
if no rights of the Participant are thereby reduced, thereafter, and subject to
earlier termination in accordance with the provisions hereof, the following
rules apply with regard to Awards held by a Participant (other than Awards
covered by Section 8) at the time of his or her termination of employment or
other service with the Company and its Affiliates.

9.1 Stock Options and Stock Appreciation Rights.

9.1.1. If a Participant's employment or service terminates due
to his or her death or Disability, then (i) any Option or Stock Appreciation
Right held by the Participant which is not then exercised shall terminate, and
(ii) any such Option or Stock Appreciation Right may be exercised, to the extent
otherwise exercisable on the date his or her employment or service terminates,
by the Participant (or in the event of death, his or her legal representative)
at any time within one year from the date his or her employment or service
terminates, but in no event after expiration of the stated term, and, to the
extent not exercised within such time period, shall thereupon terminate.

9.1.2. If a Participant's employment or service is terminated by
the Company or its Affiliates for Cause or if, at the time of a Participant's
termination, grounds for termination for Cause exist, then notwithstanding
anything to the contrary contained herein, any Option or Stock Appreciation
Right held by the Participant (whether or not otherwise vested) shall
immediately terminate and cease to be exercisable. "Cause" means (i) in the case
where there is no employment or consulting agreement between the Participant and
the Company or its Affiliates or where such an agreement exists but does not
define "Cause" (or words of like import), a termination classified by the
Company as a termination due to the Participant's dishonesty, fraud,
insubordination, willful misconduct, refusal to perform services or materially
unsatisfactory performance of his or her duties, or (ii) in the case where there
is an employment or consulting agreement between the Participant and the Company
or its Affiliates, a termination that is or would be deemed for "cause" (or
words of like import) under such agreement.

9.1.3. If a Participant's employment or service terminates for
any reason (other than death, Disability or Cause at a time when Cause exists)
or no reason, then any Option or Stock Appreciation Right held by the
Participant, to the extent not then exercisable, shall thereupon terminate. Any
Option or Stock Appreciation Right held by the Participant which is exercisable
at the time of such termination of employment or service shall remain
exercisable during the thirty (30) days period following such termination of
employment or service or, if sooner, until the expiration of the stated term of
the Option or Stock Appreciation Right and, to the extent not exercised within
such period, shall thereupon terminate.

9.2 Stock Bonuses. If a Participant's employment or service
terminates, then any shares of Common Stock held by the Participant which have
not vested as of the date of termination under the terms of the Award Agreement
shall be forfeited.

10. Miscellaneous.

10.1 No Employment or other Service Rights. Nothing in the Plan or
any instrument executed or Award granted pursuant thereto shall confer upon any
Participant or other holder of Awards any right to continue to be employed by or
serve the Company or an Affiliate in the capacity in effect at the time the
Award was granted or shall affect the right of the Company or an Affiliate to
terminate such employment or service.

10.2 Investment Assurance. The Company may, upon advice of counsel
to the Company, place legends on stock certificates issued under the Plan as
such counsel deems necessary or appropriate in order to reflect conditions
imposed under an Award or to comply with applicable securities laws, including,
but not limited to, legends restricting the transfer of the stock.

10.3 Withholding Obligations. As a condition to the exercise of any
Award or the delivery of any shares of Common Stock pursuant to any Award or the
lapse of restrictions on any Award, or in connection with any other event that
gives rise to a federal or other governmental tax withholding obligation on the
part of the Company relating to an Award, (i) the Company may deduct or withhold
(or cause to be deducted or withheld) from any payment or distribution to a
Participant whether or not pursuant to the Plan or (ii) the Company shall be
entitled to require that the Participant remit cash to the Company (through
payroll deduction or otherwise), in each case in an amount sufficient in the
opinion of the Company to satisfy such withholding obligation. If the event
giving rise to the withholding obligation involves a transfer of shares of
Common Stock, then, unless the applicable Award Agreement provides otherwise, at
the discretion of the Board, the Participant may satisfy the withholding
obligation described under this Section 10.3 by electing to have the Company
withhold shares of Common Stock (which withholding shall be at a rate not in
excess of the statutory minimum rate) or by tendering previously owned shares of
Common Stock, in each case having a Fair Market Value equal to the amount of tax
to be withheld (or by another mechanism as may be required or appropriate to
conform with local tax and other rules).

11. Adjustments Upon Changes in Common Stock.

11.1 Capitalization Adjustments. If any change is made in the Common
Stock subject to the Plan, or subject to any Award, without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan shall be appropriately
adjusted in the class(es) and maximum number of securities subject to the Plan
and the maximum number of securities that may be awarded to any employee, and
the outstanding Awards shall be appropriately adjusted in the class(es) and
number of securities and price per share of stock subject to such outstanding
Awards. The Board, the determination of which shall be final, binding and
conclusive, shall make such adjustments. The conversion of any convertible
securities of the Company shall not be treated as a transaction "without receipt
of consideration" by the Company.

11.2 Change in Control - Dissolution or Liquidation. In the event of
a dissolution or liquidation of the Company, then Awards outstanding under the
Plan shall terminate if not exercised (if applicable) immediately prior to, or
simultaneous with, such event.

11.3 Change in Control - Asset Sale, Merger, Consolidation or
Reverse Merger. In the event of (i) a sale of all or substantially all of the
assets of the Company, (ii) a merger in which the Company is not the surviving
corporation or (iii) a reverse merger in which the Company is the surviving
corporation but the shares of Common Stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise, then any surviving corporation or
acquiring corporation shall assume any Awards outstanding under the Plan or
shall substitute similar awards (including an award to acquire the same
consideration paid to the stockholders in the transaction described in this
Section 11.3 for those Awards outstanding under the Plan). In the event any
surviving corporation or acquiring corporation refuses to assume such Awards or
to substitute similar awards for those Awards outstanding under the Plan, then
the vesting of all outstanding Awards (and, if applicable, the time during which
such Awards may be exercised) shall be accelerated in full, and the Awards shall
terminate if not exercised (if applicable) at or prior to such event.

12. Amendment and Termination. The Board may amend or terminate the
Plan, provided, however, that no such action may adversely affect the rights of
a Participant under any outstanding Award without the consent of the
Participant. Except as otherwise provided in Section 11, any amendment which
would increase the number of shares of Common Stock for which Awards may be
granted under the Plan (in the aggregate or on an individual basis) or modify
the class of employees eligible to receive Awards under the Plan shall be
subject to the approval of the stockholders of the Company. The Board may amend
the terms of any Award Agreement at any time and from time to time, provided,
however, that any amendment which would adversely affect the rights of the
Participant may not be made without the consent of the Participant.

13. Effective Date of Plan. The Plan shall become effective on the date
of its adoption by the Company's Board of Directors, subject however to approval
by the holders of the Company's Common Stock in the manner as prescribed in the
Code and the resolutions thereunder. Options may be granted under this Plan
prior to obtaining Shareholder approval, provided such options shall not be
exercisable before such Shareholder approval is obtained.

14. Definitions.

14.1 "Affiliate" means any parent corporation or subsidiary
corporation of the Company, whether now or hereafter existing, as those terms
are defined in Section 424(e) and (f), respectively, of the Code.

14.2 "Award" means any Option, Stock Appreciation Right or Stock
Bonus granted under the Plan.

14.3 "Award Agreement" means a written agreement or other instrument
between the Company and a holder of an Award evidencing the terms and conditions
of an individual Award.

14.4 "Board" means the Board of Directors of the Company.

14.5 "Code" means the Internal Revenue Service Code of 1986, as
amended.

14.6 "Committee" means a committee appointed by the Board in
accordance with Section 2.3.

14.7 "Common Stock" means the common stock, par value $.01, of the
Company.

14.8 "Company" means Impax Laboratories, Inc., a Delaware
corporation.

14.9 Disability" means the dates and permanent disability of a
person within the meaning of Section 22(e) of the Code.

14.10 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

14.11 "Fair Market Value" means, as of any date, the value of the
Common Stock determined as follows: (i) if the Common Stock is listed on any
established stock exchange or traded on the NASDAQ National Market System or the
NASDAQ SmallCap Market, the Fair Market Value of a share of Common Stock shall
be the closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or market (or the exchange or market with
the greatest volume of trading in the Common Stock) on the last market trading
day prior to the day of determination, as reported in The Wall Street Journal or
such other source as the Board deems reliable; and (ii) in the absence of such
markets for the Common Stock, the Fair Market Value shall be determined in good
faith by the Board.

14.12 "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code.

14.13 "Non-Employee Director" means a member of the Board who is not
also an employee of, or consultant to, the Company or its Affiliates.

14.14 "Nonstatutory Option" means an Option that does not qualify as
an Incentive Stock Option.

14.15 "Option" means an Incentive Stock Option or a Nonstatutory
Stock Option granted pursuant to the Plan.

14.16 "Participant" means a person to whom an Award is granted
pursuant to the Plan or, if applicable, such other person who holds an Award.

14.17 "Plan" means this Impax Laboratories, Inc. 2002 Equity
Incentive Plan.

14.18 "Securities Act" means the Securities Act of 1933, as amended.

14.19 "Stock Appreciation Right" means a stock appreciation right
granted pursuant to Section 6 of the Plan.

14.20 "Stock Bonus" means a stock bonus granted pursuant to Section
7 of the Plan.

14.21 "Ten Percent Stockholder" means a person who owns (or is
deemed to own pursuant to Section 424(d) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or any of its Affiliates.

Impax Laboratories, Inc.

This Proxy is solicited by the Board of Directors for the Annual Meeting
of Stockholders to Be Held on May 6, 2002.

The undersigned, a stockholder of Impax Laboratories, Inc. (the
"Corporation"), hereby constitutes and appoints Charlie Hsiao, Ph.D. and Cornel
C. Spiegler, and each of them, the true and lawful proxies and attorneys-in-fact
of the undersigned, with full power of substitution in each of them, to vote all
shares of Common Stock and Series 2 Preferred Stock of the Corporation which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of the
Corporation to be held on Monday, May 6, 2002, and at any and all adjournments
or postponements thereof, as follows:

(1) ELECTION OF DIRECTORS
|_| FOR the nominees listed below |_| WITHHOLDING AUTHORITY
(except as marked to the to vote for all nominees
contrary below) listed below

(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below).

Nominees: Leslie Z. Benet, Ph.D., Robert L. Burr, Barry R. Edwards,
David J. Edwards, Nigel Fleming, Ph.D., Charles Hsiao, Ph.D.,
Larry Hsu, Ph.D., Michael Markbreiter, Oh Kim Sun, and
Michael G. Wokasch

(2) PROPOSAL TO ADOPT THE 2002 EQUITY INCENTIVE PLAN
|_| FOR |_| AGAINST |_| ABSTAIN

(3) PROPOSAL TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE
COMPANY'S INDEPENDENT ACCOUNTANTS
|_| FOR |_| AGAINST |_| ABSTAIN

(4) In their discretion, upon such other business as may properly come before
the meeting and any and all adjournments and postponements thereof.
(Continued on reverse side.)

(Continued)

Shares represented by this Proxy will be voted in accordance with the
instructions indicated in items 1, 2 3 and 4 above. If no instruction is
indicated, this Proxy will be voted FOR all listed nominees for directors and
FOR Proposals 2 and 3.

A majority of the attorneys and proxies named herein present and acting at
the meeting in person or by their substitutes (or if only one is present and
acting then that one) may exercise all the powers conferred hereby.
Discretionary authority is conferred hereby as to certain maters as may properly
come before the meeting.

Any and all proxies heretofore given by the undersigned are hereby
revoked.

Receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement dated
April 8, 2002 is hereby acknowledged.

Dated:
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hereon. If shares are held by two or more
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