Employee Incentive Arrangemt

Impax Group PLC
11 January 2005



Following the statement in the preliminary results issued on 9 December 2004,
the Company has today issued a circular seeking shareholder approval for the
establishment by the Company of the Impax Group Employee Benefit Trust 2005
('EBT' or 'Incentive Arrangement') for the purposes, inter alia, of the grant of
awards of Ordinary Shares to employees of the Group. The purpose of establishing
the Incentive Arrangement is to motivate and incentivise eligible participants
to achieve value for Shareholders.

Background to and reasons for the Employee Benefit Trust

It is appropriate that the long-term interests of Shareholders and employees are
aligned.  Employees should be encouraged to think of themselves as proprietors
of the business and the best way to achieve this is through share ownership.

Giving key employees a stake in the business should make it easier to attract
and retain good people.  A company with settled and well rewarded employees is
likely to perform better than one that does not and should increase the wealth
of Shareholders more than would otherwise be the case.

Proposed Incentive Arrangement
If the Proposal is approved, the Company will establish the Incentive
Arrangement. The Incentive Arrangement will be implemented by means of an
employee benefit trust, to be known as the 'Impax Group Employee Benefit Trust
2005' or the 'EBT'. The purpose of the Incentive Arrangement is to motivate and
incentivise eligible participants to achieve value for Shareholders. Key
employees (including executive directors) will be eligible to participate in the
Incentive Arrangement.

The Incentive Arrangement is intended to provide benefits and incentives for
employees and their families. In particular, it is intended that under the
Incentive Arrangement Ordinary Shares will be used to incentivise the executive
team to achieve value for Shareholders in terms of share price improvements and
relative share price performance. The Incentive Arrangement is also intended to
assist staff retention.

The Company intends to issue new Ordinary Shares at nominal value to the trustee
of the EBT for the purpose of making share awards. The trustee of the EBT will
fund the purchase of such Ordinary Shares with a loan from a person outside the
Group. The new Ordinary Shares will be issued in three tranches. It is expected
that the three tranches will be issued to the EBT by September 2005, September
2006 and September 2007.

The Incentive Arrangement provides the opportunity for the key employees to
achieve a substantial benefit over the short to medium term reflecting the
importance to the Group of their recruitment and retention. The level of the
potential benefits available under the Incentive Arrangement is in excess of
normal benefits under standard corporate governance criteria but reflects the
Board's view of the potential benefits to the Group of having an experienced
executive team to lead the Company through its current stage of development.

The number of new Ordinary Shares to be issued under the Incentive Arrangement
will not in aggregate exceed 18.25 million Ordinary Shares. In addition, the
number of Ordinary Shares held by the trustee of the EBT will not at any time
exceed 29.9% of the issued share capital of the Company.

The Incentive Arrangement provides for awards of Ordinary Shares to be made in
respect of the three financial years ending September 2005, September 2006 and
September 2007, each with demanding performance criteria:

The First Period: Year ending 30 September 2005
For awards in respect of the financial year ending 30 September 2005, the
Company performance target requires that the average mid-market share price
increases to at least 9.5 pence per share for the 60 business days following the
announcement of the results for that financial year ending 30 September 2005 and
that Total Shareholder Return over the year exceeds that of the FTSE All Share
Index over the same period.

The Second Period: Year ending 30 September 2006
For awards in respect of the financial year ending 30 September 2006, the
Company performance target requires that the average mid-market share price
increases to at least 12 pence per share for the 60 business days following the
announcement of the results for that financial year and that Total Shareholder
Return over the year exceeds that of the FTSE All Share Index over the same
period.

The Third Period: Year ending 30 September 2007
For awards in respect of the financial year ending 30 September 2007, the
Company performance target requires that the average mid-market share price
increases to at least 14 pence per share for the 60 business days following the
announcement of the results for that financial year and that Total Shareholder
Return over the year exceeds that of the FTSE All Share Index over the same
period.

The Directors believe that achieving the criteria in full will be challenging.
For the maximum award to be made the Ordinary Share price will have to increase
by over 100% from its current price of 6.375 pence (as at the close of business
on 10 January 2005).

No Ordinary Shares shall be held under the EBT for the benefit of the family of
a specific employee unless the Company share price target and the Company Total
Shareholder Return target are satisfied. In addition, the remuneration committee
of the Company shall only recommend to the trustee of the EBT that Ordinary
Shares are held under the EBT for the benefit of the family of a specific
employee if that employee has met demanding targets in relation to his own
performance. Such performance targets are to be determined by the remuneration
committee of the Company in due course taking into account the employee's
position and role in the Company.

Furthermore, generally any Ordinary Shares held under the EBT for the benefit of
the family of any employee shall revert to the EBT for distribution to other
employees and their families if the employee leaves his employment with the
Group within 2 years of the end of the relevant period. For example for Ordinary
Shares awarded in respect of the financial year ending 30 September 2005, the
employee must remain in employment with the Group until 30 September 2007.

It is proposed that the Company will be granted an option to repurchase at
nominal value any of the Ordinary Shares issued to the trustee of the EBT
pursuant to the Incentive Arrangement which are not held by the trustee of the
EBT for the benefit of the family of a specific employee as a result of the
performance targets not being satisfied.

The issue and award of Ordinary Shares under the Incentive Arrangement may
impact distributable reserves and may result in a charge to the profit and loss
account. Ordinary Shares issued to the EBT may initially be regarded for
accounting purposes as not having totally left the Company's control until the
employment condition is satisfied and may therefore be treated as a deduction
from share capital and reserves. In addition, the allocation of the Ordinary
Shares for the benefit of the family of a specific employee will result in a
charge to the profit and loss account based on the value of the Ordinary Shares
at the date of allocation.

An extraordinary general meeting of the Company for the purpose, inter alia, of
considering a resolution to approve the establishment of the EBT is being
convened for 4 February 2004.

For further information please contact

Keith Falconer, Chairman                                         020 7434 1122
Impax Group plc

Capitalised terms have the meanings set out in the circular dated 11 January
2005. Copies of the circular may be obtained from the Company's registered
office, Broughton House, 6-8 Sackville Street, London W1S 3DG.




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