Employment Agreement - Barr Laboratories Inc. and Salah U. Ahmed


EMPLOYMENT AGREEMENT

AGREEMENT dated as of the 7th day of February, 2001 between Barr Laboratories,
Inc., a New York corporation having its principal executive offices at 300
Corporate Drive, Building #10, Bradley Corporate Park, Blauvelt, New York 10913
(the "Company"), and Salah U. Ahmed (the "Employee").

WITNESSETH:

WHEREAS, the Company wishes to assure itself of the services of the Employee and
provide an inducement for the Employee to remain in its employ; and

WHEREAS, the Employee is willing to remain in the employ of the Company for the
period and on the other terms and conditions hereafter set forth;

NOW, THEREFORE, the Company and the Employee hereby agree as follows:

1. Employment. The Company agrees to employ the Employee, and the Employee
agrees to remain in the employ of the Company, during the term of this Agreement
and on the other terms and conditions hereafter set forth.

2. Term. The term of this Agreement shall commence on February 7, 2001, (the
"Commencement Date") and shall terminate at the close of business on the third
anniversary of the Commencement Date unless sooner terminated in accordance with
the terms of this Agreement or extended as hereinafter provided. The term of
this Agreement shall be extended, without further action by the Company or the
Employee, on the date (the "Extension Effective Date") which is six months
before the third anniversary of the Commencement Date and on the date (also an
"Extension Effective Date") which is six months before each subsequent
anniversary of the Commencement Date, for successive periods of twelve months
each, unless either party shall have given written notice to the other party, in
the manner set forth in paragraph 8(e) or (f) below, prior to the Extension
Effective Date in question, that the term of this Agreement that is in effect at
the time such written notice is given is not to be extended or further extended,
as the case may be.

3. Positions and Responsibilities; Place of Performance. 

(a) Throughout the term of this Agreement, the Employee agrees to remain in the
employ of the Company, and the Company agrees to employ the Employee, as its
Senior Vice President, Research & Development, reporting to the Chief Executive
Officer of the Company (the "CEO"), and /or the President and Chief Executive
Officer (the "COO"). As the Senior Vice President, Research & Development of
the Company, the Employee shall be responsible for managing and supervising, and
shall have responsibility for the day-to-day conduct of, the research and
development activities of the Company, other than new proprietary drug discovery
and development activities, subject to the authority of the Board of Directors
of the Company (the "Board) and the CEO and the COO, and shall have all of the
powers, authority, duties and responsibilities usually incident to the position
and role of Senior Vice President, Research & Development (other than with
respect to new proprietary drug discovery and development activities), and shall
perform such other reasonable duties, consistent with the position of Senior
Vice President, Research & Development, as may lawfully be assigned to him by
the Board or the CEO or the COO.

(b) In connection with his employment by the Company, the Employee shall be
based at the principal executive offices of the Company in Rockland County, New
York and agrees to travel, to the extent reasonably necessary to perform his
duties and obligations under this Agreement, to Company facilities and other
destinations elsewhere.




(c) During the term of this Agreement, the Employee shall serve the Company on
an exclusive basis and shall devote all his business time, attention, skill and
efforts to the faithful performance of his duties hereunder; provided that the
Employee may engage in community service and charitable activities that do not
interfere with the performance of his duties and responsibilities hereunder.

4. Compensation. For all services rendered by the Employee in any capacity
during the term of this Agreement, and for his undertakings with respect to
confidential information set forth in paragraph 6 below, the Employee shall be
entitled to the following:

(a) a salary, payable in installments not less frequent than monthly, at the
annual rate of two hundred and twenty thousand dollars ($220,000.00), with such
increases in such rate, if any, as the Compensation Committee of the Board may
approve from time to time during the term of this Agreement (the annual salary
rate as increased from time to time during the term of this Agreement being
hereafter referred to as the "Base Salary");

(b) participation in the Company's annual executive incentive or bonus plan as
in effect from time to time, with the opportunity to receive an award in
accordance with the terms and conditions of such plan, for each fiscal year of
the Company that commences or terminates during the term of this Agreement, of
up to 40% of the Base Salary earned during such year (or such higher percentage
as the Board or a committee of the Board may prescribe from time to time during
the term of this Agreement), it being understood that any award for the fiscal
year of the Company in which the term of this Agreement commences or terminates
pursuant to the terms hereof shall be prorated based on the portion of such
fiscal year that coincides with the term of this Agreement, and that any award
for the fiscal year of the Company in which the term of this Agreement
terminates pursuant to the terms hereof shall be made at the same time as awards
(if any) are made to other participants with respect to such fiscal year;

(c) participation in the Company's stock incentive plan as from time to time in
effect, subject to the terms and conditions of such plan;

(d) the business and personal use of an automobile at Company expense including,
without limitation, payment or reimbursement of automobile insurance and
maintenance expenses in accordance with the Company's automobile policy
applicable to senior officers on the date of this Agreement;

(e) participation in all Company health, welfare, savings and other employee
benefit and fringe benefit plans (including vacation pay plans or policies and
life and disability insurance plans) in which other senior officers of the
Company participate during the term of this Agreement, subject in all events to
the terms and conditions of such plans as in effect from time to time. Nothing
in this paragraph (e) shall preclude the Company from amending or terminating
any such plan at any time. The plans covered by this paragraph (e) shall not
include the annual incentive or stock incentive plans, which are covered by
paragraphs (b) and (c) above.

5.Termination of Employment.

(a) Termination by the Company without Good Cause or by the Employee for Good
Reason.

(i) If during the term of this Agreement the Employee's employment with the
Company is terminated by the Company without Good Cause or is terminated by the
Employee for Good Reason other than at or after the expiration of the term of
this Agreement as the same may have been extended in accordance with the
provisions of paragraph 2 above, the Company, subject to compliance by the
Employee with the provisions of paragraph 6 below, relating to confidential
information, shall, as liquidated damages, and as additional consideration for
the Employee's 




undertakings under paragraph 6 below, pay the Employee a lump sum amount of
money equal to 1.5 times the Employee's Base Salary.

(ii) If the term of this Agreement as the same may have been extended in
accordance with the provisions of paragraph 2 above is not extended or further
extended because the Company gives written notice of non-extension to the
Employee as provided in paragraph 2 above, and the Company does not have Good
Cause for termination of the Employee's employment at the time of giving such
notice, then the Company, subject to fulfillment by the Employee of his
obligations under this Agreement during the balance of the term and his
compliance with the provisions of paragraph 6 below, relating to confidential
information, shall, as non-renewal compensation, and as additional consideration
for the Employee's undertakings under this Agreement including paragraph 6
below, pay the Employee a lump sum amount of money equal to 1.0 times the
Employee's Base Salary. The Company shall pay such amount upon the expiration of
the term that is in effect at the time the Company gives such written notice of
non-extension to the Employee.

(iii) The foregoing provisions of (including any payments under) this paragraph
5(a) shall be in lieu of any severance pay that may be payable under any plan or
practice of the Company. Subparagraphs 5(a)(i) and 5(a)(ii) above are intended
to be mutually exclusive, and in no event shall such subparagraphs, either
individually or collectively, be construed to require the Company to pay an
amount of money in excess of 1.5 times the Employee's Base Salary under such
subparagraphs, either individually or collectively.

(b) Termination by the Company for Good Cause or by the Employee without Good
Reason. If, during the term of this Agreement, the Employee's employment by the
Company is terminated by the Company for Good Cause or by the Employee without
Good Reason, the Employee shall not be entitled to receive any compensation
under paragraph 4 above acruing after the date of such termination or any
payment under paragraph 5(a) above. The provisions of this paragraph 6(b) shall
be in addition to, and not in lieu of, any other rights and remedies the Company
may have at law or in equity or under any other provision of this Agreement in
respect of such termination of employment.

(c) Good Cause Defined. For purposes of this Agreement, the Company shall have
"Good Cause" to terminate the Employee's employment during the term of this
Agreement if:

(i) the Employee fails to substantially perform his duties hereunder for any
reason or fails to devote substantially all his business time exclusively to the
affairs of the Company, and such failure is not discontinued within a reasonable
period of time, in no event to exceed 30 days, after the Employee receives
written notice from the Company of such failure; or

(ii) the Employee commits an act of dishonesty resulting or intended to result
directly or indirectly in gain or personal enrichment at the expense of the
Company; or

(iii) the Employee is grossly negligent or engages in willful misconduct or
insubordination in the performance of his duties hereunder; or

(iv) the Employee breaches his obligations under paragraph 6 below, relating to
confidential information.

(d) Good Reason Defined. For purposes of this Agreement, the Employee shall have
"Good Reason" to terminate his employment during the term of this Agreement only
if:




(i) the Company fails to provide compensation or benefits that the Company is
obligated to provide under paragraph 4 above and the failure is not remedied
within 30 days after the Company receives written notice from the Employee of
such failure; or

(ii) the Company assigns the Employee duties, responsibilities or reporting
relationships not contemplated by paragraph 3 above without his consent, or
limits his duties or responsibilities contemplated by paragraph 3 above in any
respect materially detrimental to him, and in either case the situation is not
remedied within 30 days after the Company receives written notice from the
Employee of the situation; or

(iii) he is removed from, or not elected or reelected to, the position of Senior
Vice President, Research & Development of the Company, and the Company does not
have Good Cause for doing so; or 

(iv) the Company relocates his office outside of either the Company's principal
executive offices or the greater New York City metropolitan area without his
written consent (given in a personal rather than representative capacity) and
the situation is not remedied within 30 days after the Company receives written
notice from the Employee of the situation.

6. Confidential Information. The Employee agrees not to disclose, either while
in the Company's employ or at any time thereafter, to any person not employed by
the Company, or not engaged to render services to the Company, except with the
prior written consent of an authorized officer of the Company or as necessary or
appropriate for the performance of his duties hereunder, any confidential
information obtained by him while in the employ of the Company, including,
without limitation, information relating to any of the inventions, processes,
formulae, plans, devices, compilations of information, research, methods of
distribution, suppliers, customers, client relationships, marketing strategies
or trade secrets of the Company or any subsidiary thereof; provided, however,
that this provision shall not preclude the Employee from use or disclosure of
information known generally to the public or of information not considered
confidential by persons engaged in the businesses conducted by the Company or
any subsidiary thereof, or from disclosure required by law or court order. The
Employee also agrees that upon leaving the Company's employ he will not take
with him, without the prior written consent of an authorized officer of the
Company, and he will surrender to the Company, any record, list, drawing,
blueprint, specification or other document or property of the Company or any
subsidiary thereof, together with any copy or reproduction thereof, mechanical
or otherwise, which is of a confidential nature relating to the Company or any
subsidiary thereof, or without limitation, relating to its or their methods of
distribution, suppliers, customers, client relationships, marketing strategies
or any description of any formulae or secret processes, or which was obtained by
him or entrusted to him during the course of his employment with the Company.

7. Severability

(a) In the event that any provision of this Agreement shall be determined to be
invalid or unenforceable for any reason, the remaining provisions of this
Agreement not so invalid or unenforceable shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law; and

(b) Any provision of this Agreement which may for any reason be invalid or
unenforceable in any jurisdiction shall remain in effect and be enforceable in
any jurisdiction in which such provision shall be valid and enforceable.

8. General Provisions.




(a) No right or interest to or in any payments to be made under this Agreement
shall be subject to anticipation, alienation, sale, assignment, encumbrance,
pledge, charge or hypothecation or to execution, attachment, levy or similar
process, or assignment by operation of law. All payments to be made by the
Company hereunder shall be subject to the withholding of such amounts as the
Company may determine it is required to withhold under the laws or regulations
of any governmental authority, whether foreign, federal, state or local.

(b) To the extent that the Employee acquires a right to receive payments from
the Company under this Agreement, such right shall be no greater than the right
of an unsecured general creditor of the Company. All payments to be made
hereunder shall be paid from the general funds of the Company and no special or
separate fund shall be established and no segregation of assets shall be made to
assure payment of any amount hereunder.

(c) This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of New York, without giving effect to the principles
of conflicts of laws of that State.

(d) This Agreement shall be binding upon and inure to the benefit of the
Company, its successors and assigns, and the Employee, his heirs, devisees,
distributees and legal representatives.

(e) Any notice or other communication to the Company pursuant to any provision
of this Agreement shall be given in writing and will be deemed to have been
delivered:

(i) when delivered in person to the Corporate Secretary or Chief Executive
Officer of the Company; or

(ii) one week after it is deposited in the United States certified or registered
mail, postage prepaid, addressed to the Corporate Secretary of the Company at
300 Corporate Drive, Building #10, Bradley Corporate Park, Blauvelt, New York
10913 or at such other address of which the Company may from time to time give
the Employee written notice in accordance with paragraph 8(f) below.

(f) Any notice or other communication to the Employee pursuant to any provision
of the Agreement shall be given in writing and will be deemed to have been
delivered:

(i) when delivered to the Employee in person, or

(ii) one week after it is deposited in the United States certified or registered
mail, postage prepaid, addressed to the Employee at his address as it appears on
the records of the Company or at such other address of which the Employee may
from time to time give the Company written notice in accordance with paragraph
8(e) above.

(g) No provision of this Agreement may be amended, modified or waived unless
such amendment, modification or waiver shall be agreed to in a writing signed by
the Employee and an authorized officer of the Company.

(h) This instrument contains the entire agreement of the parties relating to the
subject matter of this Agreement and supersedes and replaces all prior
agreements and understandings with respect to such subject matter, and the
parties have made no agreements, representations or warranties relating to the
subject matter of this Agreement which are not set forth herein.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

BARR LABORATORIES, INC.

By:
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[SEAL]
Attest:

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Secretary
          --------------------------
Employee