AKORN INC
INCENTIVE STOCK OPTION AGREEMENT
<DOCUMENT>
<TYPE>EX-10.37
<SEQUENCE>5
<FILENAME>c84130exv10w37.txt
<DESCRIPTION>INCENTIVE STOCK OPTION AGREEMENT
<TEXT>
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                                                                   EXHIBIT 10.37


                                                                      Grant ____

   THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES ISSUED
   PURSUANT TO THE AKORN INC 2003 STOCK OPTIONS PLAN, WHICH WILL BE REGISTERED
     UNDER THE SECURITIES ACT OF 1933 UPON SHAREHOLDER APPROVAL OF THE PLAN



                   AKORN INC. INCENTIVE STOCK OPTION AGREEMENT

Name
Address

                       RE: Options to purchase ______ shares of common stock of
                       Akorn, Inc. at $____ per share granted on the ____ day of
                       __(month)__, (year). ("Grant Date")


         THIS INCENTIVE STOCK OPTION AGREEMENT ("Agreement") is made by and
between Akorn, Inc., a Louisiana corporation, ("Corporation"), and ____________
("Optionee").

         NOW, THEREFORE, in consideration of the mutual benefit to be derived
herefrom, the Corporation and Optionee agree as follows:

         1. Grant of Option. The Corporation hereby grants to Optionee, subject

to all the terms and provisions of the Akorn, Inc. 2003 Stock Option Plan dated
November 6, 2003, as such Plan may be hereinafter amended, a copy of which is
attached hereto and incorporated herein by this reference (the "Plan"), the
right, privilege and option ("Option") to purchase __(written number)
____(number)_____shares of its common stock ("Stock") at $_____ per
share, in the manner and subject to the conditions provided hereinafter and in
the Plan and any amendments thereto and any rules and regulations thereunder.

         2. Time of Exercise of Option. Options are immediately exercisable with
respect to one-fourth (1/4th) of the shares covered thereby and become
exercisable with respect to an additional one-fourth (1/4th) of the shares
covered thereby on each of the first (1st), second (2nd) and third (3rd)
anniversary dates of the date of the grant. Any exercise may be with respect to
any part or all of the shares then exercisable pursuant to such Option, provided
that the minimum number of shares exercisable at any time shall not be less than
one hundred (100) shares or the balance of shares for which the Option is then
exercisable. Options will expire and may not be exercised after five (5) years
from the date of the grant except as set forth in Section 3 of the Plan, three
(3) months after Optionee's termination of employment without cause with either
the Corporation, or a Parent or Subsidiary thereof or immediately upon
termination for cause. However, such rights may be extended as more fully set
forth in Sections 3.1 and 3.2 of the Plan in the case of Optionee's disability,
leave or death. In no event shall the Corporation be required to transfer
fractional shares to Optionee or those entitled to Optionee's rights herein.

         3. Method of Exercise. The Option shall be exercised by Optionee as set
forth in Sections 5.4 and 5.5 of the Plan.



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         4. Restrictions on Exercise and Delivery. The exercise of each Option
shall be subject to the condition that, if at any time the Committee shall
determine, in its sole and absolute discretion,

                  (a) the satisfaction of any withholding tax or other
                      withholding liabilities, is necessary or desirable as a
                      condition of, or in connection with, such exercise or the
                      delivery or purchase of Stock pursuant thereto,

                  (b) the listing, registration, or qualification of any shares
                      deliverable upon such exercise is desirable or necessary,
                      under any state or federal law, as a condition of, or in
                      connection with, such exercise or the delivery or purchase
                      of shares pursuant thereto, or

                  (c) the consent or approval of any regulatory body is
                      necessary or desirable as a condition of, or in connection
                      with, such exercise or the delivery or purchase of shares
                      pursuant thereto.

In any such event, such exercise shall not be effective unless such withholding,
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Committee.
Optionee shall execute such documents and take such other actions as are
required by the Committee to enable it to effect or obtain such withholding,
listing, registration, qualification, consent or approval. Neither the
Corporation nor any officer or director, or member of the Committee, shall have
any liability with respect to the non-issuance or failure to sell shares as the
result of any suspensions of exercisability imposed pursuant to this Section.

         5. Termination of Option. Except as otherwise provided in this
Agreement or the Plan, to the extent not previously exercised, the Option shall
terminate upon the first to occur of any of the following events:

                  (a) the dissolution or liquidation of the Corporation;

                  (b) The expiration of 5 year from the date of the grant of the
                      Option hereunder;

                  (c) the breach by Optionee of any provision of this Agreement;

                  (d) as more fully set forth in Section 3.2.1 of the Plan, 3
                      months after the occurrence of an event giving rise to
                      termination of employment other than for "cause";

                  (e) as more fully set forth in Section 3.2.2 of the Plan, upon
                      or as of the occurrence of an event giving rise to
                      termination of employment for "cause";

                  (f) as more fully set forth in Section 3.3 of the Plan, 6
                      months after an optionee's death; or


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                  (g) as more fully set forth in Section 6.2 of the Plan, in the
                      event of a Capital Transaction.

         6. Nonassignability. Options may not be sold, pledged, assigned or
transferred in any manner other than by will or by the laws of descent and
distribution, and may be exercised during the lifetime of Optionee only by
Optionee. Any transfer by Optionee of any Option granted under the Plan or this
Agreement shall void such Option and the Corporation shall have no further
obligation with respect to such Option. No Option shall be pledged or
hypothecated in any way, nor shall any Option be subject to execution,
attachment or similar process.

         7. Restrictions on Transfer of Shares Acquired. Optionee represents and
warrants to the Corporation that he will not transfer the Stock in violation of
the provisions of any applicable securities statute or regulation.

         8. Representation Letter. Upon execution of this Agreement, the
Optionee will deliver to the Corporation the grant representation letter set
forth on Exhibit "A" of the Plan, as such Exhibit may be amended by the
Committee from time to time. Upon exercise of the Option, the Optionee will
deliver to the Corporation the exercise representation letter set forth on
Exhibit "B" of the Plan, as such Exhibit may be amended by the Committee from
time to time. Optionee also agrees to make such other representations as are
deemed necessary or appropriate by the Corporation and its counsel.

         9. Rights as Shareholder. Neither Optionee nor his executor,
administrator, heirs or legatees, shall be, or have any rights or privileges of
a shareholder of the Corporation in respect of the Stock unless and until
certificates representing such Stock shall have been issued in Optionee's name.

         10. No Right of Employment. Neither the grant nor exercise of any
Option nor anything in the Plan or this Agreement shall impose upon the
Corporation or any other corporation any obligation to employ or continue to
employ any Optionee. The right of the Corporation and any other corporation to
terminate any employee shall not be diminished or affected because an Option has
been granted to such employee.

         11. Mandatory Arbitration. In the event of any dispute between the
Corporation and Optionee regarding this Agreement or the Plan, the dispute and
any issue as to the arbitrability of such dispute, shall be settled to the
exclusion of a court of law, by arbitration in Chicago, Illinois, by a panel of
three arbitrators (each party shall choose one arbitrator and the third shall be
chosen by the two arbitrators so selected) in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect. The
decision of a majority of the arbitrators shall be final and binding upon the
parties. All costs of the arbitration and the fees of the arbitrators shall be
allocated between the parties as determined by a majority of the arbitrators, it
being the intention of the parties that the prevailing party in such a
proceeding be made whole with respect to its expenses.

         12. Definitions. Capitalized terms shall have the meaning set forth in
the Plan unless otherwise defined herein.


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         13. Notices. Any notice to be given under the terms of this Agreement
shall be addressed to the Corporation in care of its Secretary at its principal
office, and any notice to be given to Optionee shall be addressed to such
Optionee at the address maintained by the Corporation for such person or at such
other address as the Optionee may specify in writing to the Corporation.

         14. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of Optionee, his heirs and successors, and of the Corporation, its
successors and assigns.

         15. Governing Law. This Agreement shall be governed by the laws of the
State of Louisiana.

         16. Descriptive Headings. Titles to Sections are solely for information
purposes.

         17. Application of Plan. The Corporation has delivered and the Optionee
hereby acknowledges receipt of a copy of the Plan. The parties agree and
acknowledge that the Option granted hereunder is granted pursuant to the Plan
and subject to the terms and provisions thereof, and the rights of the Optionee
are subject to modifications and termination in certain events as provided in
the Plan.

         IN WITNESS WHEREOF, this Agreement is effective as of, and the date of
grant shall be, _____(Grant Date)___.


                            AKORN, INC., a Louisiana corporation



                            By:_________________________________________________
                               Neill E. Shanahan, Vice-President Human Resources


                            OPTIONEE


                            ____________________________________________________


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