ACURA PHARMACEUTICALS, INC.
2005 RESTRICTED STOCK UNIT AWARD PLAN

1.    General Description.

The Plan provides for grants of restricted stock units to employees and
Non-Employee Directors of the Company and its Subsidiaries.

The purpose of the Plan is to attract, motivate and retain experienced and
knowledgeable employees by offering additional stock based compensation and
incentives to defer and potentially enhance their compensation and to encourage
stock ownership in the Company and to attract and retain qualified directors.

This Plan is intended to comply with Section 409A of the Internal Revenue Code
of 1986, as amended, in order to avoid compensation deferred under the Plan
which is subject to Code Section 409A from being included in the gross income of
Participants under Code Section 409A and the Plan shall be interpreted
consistent with such intent.
 
2.    Definitions.
 
The following definitions shall be applicable throughout the Plan:

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

"Cause" means, with respect to termination of a Participant's employment, or
service as a Non-Employee Director, the occurrence of any one or more of the
following:

(a) in the case of a (A) Non-Employee Director or (B) an employee where there is
no employment, change in control or similar agreement in effect between the
Participant and the Company or a Subsidiary at the time of the grant of the
Restricted Stock Unit award, or where there is such an agreement but the
agreement does not define "cause" (or similar words), the finding by the Board
or the Committee, in the exercise of good faith and reasonable judgment, that:
(1) except in the case of a Non-Employee Director, Participant breached his or
her employment or service contract or any other agreement (whether verbal or
written) with the Company, (2) Participant has been engaged in disloyalty to the
Company, including, without limitation, fraud, embezzlement, theft, or proven
dishonesty in the course of his or her employment or service with the Company;
(3) Participant has been convicted of a felony; (4) Participant has committed
gross negligence or willful misconduct in the course of his or her employment or
service with the Company, or (5) Participant has disclosed trade secrets or
confidential information of the Company to persons not entitled to receive such
information.

(b) in the case of an employee where there is a written employment, change in
control or similar agreement in effect between the Participant and the Company
or a Subsidiary at the time of the grant of the Restricted Stock Unit award that
defines "cause" (or similar words) the termination of an employment arrangement
that is or would be deemed to be for "cause" (or similar words) as defined in
such agreement.

"Change in Control - Plan" means in one or a series of related transactions any
of the following: (a) the acquisition (other than solely from the Company) by
any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) other than the Company or any Subsidiary of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of more than sixty-six and 2/3 percent (66.66%) of the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors (the “Voting Securities”); (b) a
reorganization, merger, consolidation, share exchange, recapitalization,
business combination or similar combination involving the Company or its capital
stock (a "Business Combination"), other than a Business Combination in which
more than thirty-three and 1/3 percent (33.33%) of the combined voting power of
the outstanding voting securities of the surviving or resulting entity
immediately following the Business Combination is held by the persons who,
immediately prior to the Business Combination, were the holders of the Voting
Securities; (c) a sale or other transfer (other than license) of all or
substantially all of the Company’s assets (measured by the value or earning
power of the assets), including, without limitation, the sale by the Company of
its rights under license agreements or similar agreements relating to its
technology (including the sale of royalty payment amounts payable to the Company
or its shareholders under such agreements); (d) the license or similar agreement
by the Company to a third party or third parties, in one or more transactions,
of all rights in and to the Company’s technology and, as a result of such
transactions, all or substantially all of the Company’s activities consist of
monitoring such arrangements and collecting fees and payments due thereunder; or
(e) a complete liquidation or dissolution of the Company.

 
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"Change in Control - Section 409A" shall mean a Change in Control - Plan, except
to the extent that (and only to the extent that) such Change in Control - Plan
does not qualify as a change (a) in the ownership or effective control of the
Company, or (b) in the ownership of a substantial portion of the assets of the
Company, under Section 409A of the Code.
 
"Code" means the Internal Revenue Code of 1986, as amended.

"Committee" shall mean the Committee, if any, appointed by the Board under
Section 4 hereof.

"Company" means Acura Pharmaceuticals, Inc. and its successors.
 
"Disability" means

(a) in the case of a (A) Non-Employee-Director or (B) an employee where there is
no employment, change in control or similar agreement in effect between the
Participant and the Company or a Subsidiary at the time of the grant of the
Restricted Stock Unit award, or where there is such an agreement but the
agreement does not define "disability" (or similar words), then
“Disability”means the Participant: (1) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months; (2) is, by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months, receiving income replacement benefits for a
period of not less than three (3) months under an accident and health plan
covering employees and/or directors of the Company; (3) is determined to be
totally disabled by the Social Security Administration; or (4) any other
permitted definition of disability under Section 409A of the Code and the
regulations promulgated thereunder, and

(b) in the case where there is a written employment, change in control or
similar agreement in effect between the Participant and the Company or a
Subsidiary at the time of the grant of the Restricted Stock Unit award that
defines "disability" (or similar words) the termination of an employment
arrangement that is or would be deemed to be for "disability" (or similar words)
as defined in such agreement.

 
"Effective Date" shall be the date this Plan is adopted by the Board.
 
Eligible Participant” means a Non-Employee Director serving as a director on the
date of grant or an employee employed by the Company or its Subsidiaries on the
date of grant.

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

"Fair Market Value" means the average of the closing bid and closing ask price
of the Stock as reported on the OTC Bulletin Board or any successor principal
market for the Stock on the applicable date, or if the Stock is not trading on
the OTC Bulletin Board or an established securities market (within the meaning
of Section 409A of the Code and the regulations promulgated thereunder), the
fair market value of the Stock for the applicable date as determined by a
reasonable valuation method selected by the Board or the Committee.

“Non-Employee Director" has the definition set forth in Rule 16b-3(b)(3)(i) of
the Exchange Act.  

"Participant" means each person who has been granted a Restricted Stock Unit
award.

 
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"Plan" means the Acura Pharmaceuticals, Inc. 2005 Restricted Stock Unit Award
Plan, as set forth herein and as it may be amended from time to time.

“Restricted Stock Unit Award Agreement” means an agreement described in Section
5(a).
"Restricted Stock Units" or "RSUs" means an award of Stock Units credited
pursuant to Section 5, which Stock Units are subject to vesting and other
restrictions as set forth herein.
 
"Securities Act" means the Securities Act of 1933, as amended.
 
"Stock" means shares of common stock, par value $.01 per share, of the Company,
including any rights attendant thereto upon issuance of the shares, together
with any restrictions, limitations or conditions of and to such rights and such
other stock or other securities or property into which the Stock (or such
rights) may be converted or for which it is exchanged or substituted (and any
credits thereon), pursuant to Section 10.

"Stock Unit" means a non-voting unit of measurement that is (a) deemed for
bookkeeping purposes to be equivalent to one outstanding share of Stock solely
for purposes of determining benefits under the Plan, (b) credited to a
Participant's Stock Unit Account pursuant to the grant of Restricted Stock Units
under Section 5; and (c) payable solely in a share of Stock, on a one-for-one
basis.
 
"Stock Unit Account" means the bookkeeping account maintained by the Company for
each Eligible Participant that is credited with Stock Units in accordance with
the Plan.
 
"Subsidiary" means any entity of which a majority of the outstanding voting
stock or voting power is beneficially owned directly or indirectly by the
Company.
 
3.    Effective Date; Duration.

The Effective Date shall be the date on which the Board adopts this Plan. The
Plan shall continue in effect until all matters relating to Stock Units and the
administration of the Plan have been completed and all payments of such
compensation have been made.

4.    Administration.

The Company’s Board of Directors or a Committee appointed by the Board shall
administer the Plan. If appointed by the Board, the Committee shall be
constituted so as to permit the Plan to continue to comply with Rule 16b-3, as
currently in effect or as hereafter modified or amended. The Committee appointed
by the Board of Directors shall consist of not less than two members of the
Board of Directors, to administer the Plan on behalf of the Board of Directors,
subject to such terms and conditions as the Board of Directors may prescribe.
Once appointed, the Committee shall continue to serve until otherwise directed
by the Board of Directors. From time to time, the Board of Directors may
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause), and appoint new members in substitution
therefor, fill vacancies however caused, or remove all members of the Committee
and thereafter directly administer the Plan; provided, however, that at no time
shall a Committee of less than two members administer the Plan. Notwithstanding
anything to the contrary contained herein, no member of the Committee shall
serve as such under this Plan unless such person is a "Non-Employee Director"
within the meaning of Rule 16b-3(b)(3)(i) of the Exchange Act.

A majority of the entire Committee shall constitute a quorum, and the action of
the majority of the Committee members present at any meeting at which a quorum
is present shall be the action of the Committee. The Committee shall have all of
the powers and duties set forth herein, as well as such additional powers and
duties as the Board of Directors may delegate to it; provided, however, that the
Board of Directors expressly retains the right in its sole discretion (i) to
elect and to replace the members of the Committee, and (ii) to terminate or
amend this Plan in any manner consistent with applicable law.
 
 
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The Committee shall have the authority, subject to the provisions of this Plan,
to establish, adopt and revise such rules, regulations and forms and agreements
and to interpret the Plan and make all such determinations relating to the Plan
as it may deem necessary or advisable. The Committee shall also have the
authority, subject to the provisions of the Plan, to delegate ministerial,
day-to-day administrative details and non-discretionary duties and functions to
officers and employees of the Company. The Committee's interpretation of the
Plan or any awards granted pursuant hereto and all decisions and determinations
by the Committee with respect to the Plan shall be final, binding, and
conclusive on all parties. Notwithstanding any provisions of this Plan or any
Restricted Stock Unit Award Agreement to the contrary, all discretionary
interpretations, decisions or determinations of the Board or the Committee with
respect to the Plan and all RSUs awarded under the Plan shall be made in
accordance with the express terms of the Plan and applicable Restricted Stock
Unit Award Agreement in the exercise of good faith and reasonable judgment.

Notwithstanding any contrary provision of this Section 4, the Board shall
administer the Plan, and the Committee shall exercise no discretion with respect
to any grants to Non-Employee Directors. In the administration of the Plan with
respect to Non-Employee Directors, the Board shall have all of the authority and
discretion otherwise granted to the Committee with respect to the administration
of the Plan.

5.    Restricted Stock Units.
 
(a) Restricted Stock Units may be granted at any time and from time to time as
determined by the Board or the Committee. Each Restricted Stock Units grant will
be evidenced by a Restricted Stock Award Agreement that will specify such other
terms and conditions as Board or the Committee, in its sole discretion, will
determine, including all other applicable terms, conditions and restrictions
related to the grant, vesting and the number of Restricted Stock Units not
otherwise set forth in this Plan.

(b) Vesting Period. The Board or the Committee shall determine the vesting of a
Restricted Stock Unit award granted under Section 5(a), and shall set forth such
vesting in the Restricted Stock Unit Award Agreement.

(c) Acceleration of Vesting. Notwithstanding Section 5(b), unless expressly
provided otherwise in the Restricted Stock Unit Award Agreement, each Restricted
Stock Unit award shall become fully and immediately vested and nonforfeitable to
the Participant upon the occurrence of any of the following events:
 
(1) a Participant's service as an employee of the Company is terminated by the
Company without Cause or due to Participant’s death or Participant’s Disability,
or in the case of a Non-Employee Director, Participant’s death or Disability or
Participant is not renominated as a director (other than for “Cause” or refusal
to stand for re-election) or is not elected by the Company’s stockholders, if
nominated; or

(2) a Change in Control - Plan.

6.    Dividend and Voting Rights.

Unless expressly provided for in a Participant’s Restricted Stock Unit Award
Agreement, a Participant shall have no rights as a stockholder of the Company,
no dividend rights and no voting rights, with respect to the RSUs and any shares
of Common Stock underlying or issuable in respect of such RSUs until such shares
of Common Stock are actually issued to and held of record by the Participant. No
adjustments will be made for dividends or other rights of a holder for which the
record date is prior to the date of issuance of the stock certificate for such
RSU.

7.    Restrictions, Distributions and Changes to Distributions; Payment of
Units.
 
(a) Time and Manner of Distribution. Payment of vested Stock Units in a
Participant's Stock Unit Account in accordance with Section 7(b) shall be made
on the earlier of (i) a Change in Control - Section 409A, or (ii) January 1,
2011. In the event of a payment pursuant to a Change in Control - Section 409A
under Section 7(a)(i), such payment shall be made in a lump sum payment as soon
as administratively practicable following consummation of said Change in Control
- Section 409A. In the event of a payment due to Section 7(a)(ii), such payment
shall be made in four equal installments (twenty-five percent on each
installment) on each of January 1, 2011, January 1, 2012, January 1, 2013 and
January 1, 2014; provided, however, that in the event of a Change in Control -
Section 409A at any time after January 1, 2011 but prior to payment of all of
Participant’s Stock Units in the Participant’s Stock Unit Account, all of
Participant’s undistributed Stock Units as of consummation of said Change in
Control - Section 409A shall be paid to Participant in a lump sum as soon as
administratively practicable.
 
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(b) Payment of Units. Upon the occurrence of the distribution events set forth
in Section 7(a), the Company shall deliver a number of shares of Stock equal to
the number of vested Stock Units to which the Participant is then entitled under
the terms of the Plan and the Restricted Stock Unit Award Agreement upon receipt
from Participant of the par value of such shares of Stock. In lieu of requiring
cash payment of such par value, the Company may, in the Participant’s sole
discretion, accept payment of any such par value by withholding from Stock
payments a number of whole shares of Stock whose value is equal to the amount of
such par value. Valuation for this purpose shall be the Fair Market Value on the
date of distribution.

(c) Forfeiture of Unvested Units. Except as provided in Section 5(c) of the Plan
or in a Participant’s Restricted Stock Unit Award Agreement, to the extent any
portion or a Participant's RSUs have not become vested upon the date the
Participant's services as an employee terminate, such RSUs shall be forfeited
and the unvested portion of the RSU award shall automatically terminate without
any other action by the Participant or the Participant’s Beneficiary as the case
may be and without payment of consideration by the Company.

8.    Shares Subject To The Plan; Share Limits.

Shares Available for Issuance. Subject to adjustment under Section 10, the
aggregate number of shares of Stock that may be issued under the Plan shall not
exceed thirty million (30,000,000) shares. Stock delivered by the Company to
satisfy payment provisions under Section 7 of the Plan shall be shares of
authorized and unissued shares of Stock and/or previously issued Stock held as
treasury shares and shall be fully paid and non-assessable when issued. Shares
issuable on payment of Stock Units shall be reserved for issue, and to the
extent that awards terminate or are forfeited without payment in shares, the
shares will be available for subsequent awards.
 
9.    General.
 
(a) Government and Other Regulations. The obligation of the Company to credit
Stock Units, issue or deliver Stock or otherwise make payments under the Plan
are subject to compliance with all applicable laws, rules, and regulations
(including, without limitation, federal and state securities laws), and to such
approvals by any listing, agency, or regulatory or governmental authorities as
may, in the opinion of counsel for the Company, be necessary or advisable in
connection therewith. Any securities issued or delivered under the Plan shall be
subject to such restrictions, and the person acquiring such securities shall, if
requested by the Company, provide such assurances and representations to the
Company, as the Company may deem necessary or advisable to assure compliance
with all applicable legal requirements.
 
(b) Tax and Withholding. The Company has the right to require the person
receiving Stock to pay to the Company the amount of any federal, state and local
taxes which the Company is required to withhold upon the delivery of Stock. In
lieu of requiring cash payment of any such taxes, the Company shall, in the
Participant’s sole discretion, instead withhold from said Participant’s Stock
payments a number of shares of Stock whose value is equal to the amount of such
taxes. Valuation for this purpose shall be the Fair Market Value on the date of
distribution.

(c) Beneficiaries.
 
(1) Beneficiary Designation. Each Eligible Participant may designate in writing
the Beneficiary or Beneficiaries (as defined in Section 9(c)(2)) whom such
Eligible Participant desires to receive any amounts payable under the Plan after
his or her death. Beneficiary designations shall be effective on the date such
written designation is received by the Corporate Secretary. An Eligible
Participant may from time to time change his or her designated Beneficiary or
Beneficiaries without the consent of such Beneficiary or Beneficiaries by filing
a new designation in writing with the Corporate Secretary. However, if a married
Eligible Participant wishes to designate a person other than his or her spouse
as Beneficiary, such designation shall be consented to in writing by the spouse.
The Eligible Participant may change any election designating a Beneficiary or
Beneficiaries without any requirement of further spousal consent if the spouse's
consent so provides. Notwithstanding the foregoing, spousal consent shall not be
necessary if it is established that the required consent cannot be obtained
because the spouse cannot be located or because of other circumstances
prescribed by the Board or the Committee. The Company and the Board or the
Committee may rely on the Eligible Participant's designation of a Beneficiary or
Beneficiaries last filed in accordance with the terms of the Plan.
 
 
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(2) Definition of Beneficiary. An Eligible Participant's "Beneficiary" or
"Beneficiaries" shall be the person, persons, trust or trusts so designated by
the Eligible Participant or, in the absence of such designation, entitled by
will or the laws of descent and distribution to receive the Eligible
Participant's benefits under the Plan in the event of the Eligible Participant's
death, and shall mean the Eligible Participant's executor or administrator if no
other Beneficiary is identified and able to act under the circumstances.

(d) Non-transferability. Except as provided in Section 9(c), a Participant's
rights and interests under the Plan in respect of Stock Units, including Stock
deliverable under or in respect thereof, may not be assigned, pledged, or
transferred.
 
(e) Expenses. All expenses incurred by the Company associated with adoption and
administration of this Plan, including all legal expenses related to drafting
this Plan and related documents, shall be borne solely by the Company.

(f) Titles and Headings. The titles and headings of the sections in the Plan are
for convenience of reference only, and in the event of any conflict, the text of
the Plan, rather than such titles or headings, shall control.

(g) Governing Law. The validity of the Plan or any of its provisions and any
agreements entered into under the Plan shall be construed, administered and
governed in all respects under the laws of the State of New York. If any
provisions of the Plan shall be held by a court of competent jurisdiction to be
invalid or unenforceable, the remaining provisions hereof shall continue to be
fully effective.

  (h) Limitation on Participants' Rights; Unfunded Plan. Participation in the
Plan shall not give any person the right to continued employment or any rights
or interests other than as expressly provided herein. No Participant shall have
any right to any payment or benefit hereunder except to the extent provided
herein. The Plan shall create only a contractual obligation on the part of the
Company as to such amounts and shall not be construed as creating a trust or
fiduciary relationship between the Company, the Board, the Committee, and any
Participant or other person. Participants and their Beneficiaries shall have no
legal or equitable rights, claims, or interest in any specific property or
assets of the Company. No assets of the Company shall be held under any trust,
or held in any way as collateral security for the fulfilling of the obligations
of the Company under this Plan. Any and all of the Company's assets shall be,
and remain, the general unpledged, unrestricted assets of the Company. The
Company's obligation under the Plan shall be merely that of an unfunded and
unsecured promise of the Company to pay benefits in the future, and the rights
of the Participants and Beneficiaries shall be no greater than those of
unsecured general creditors.
 
(i) Rights with Respect to Stock Units. A Participant's Stock Unit Account shall
be a memorandum account on the books of the Company. The Stock Units credited to
such account shall be used solely as a device to determine the number of shares
of Stock to be eventually distributed to the Participant, subject to applicable
vesting requirements, in accordance with the Plan. The Stock Units shall not be
treated as property or as a trust fund of any kind. No Participant shall be
entitled to any voting dividend, or other stockholder rights with respect to
Stock Units credited under the Plan.
 
(j) Restricted Stock Unit Award Agreements. Each Restricted Stock Unit award
granted to an Eligible Participant under the Plan shall be evidenced by a
writing approved by the Board or the Committee and will contain the terms and
conditions consistent with the Plan as approved by the Board or the Committee
relating to the RSUs. This Plan and each Restricted Stock Unit Award Agreement
granted to an Eligible Participant under the Plan shall be binding upon, and
inure to the benefit of, any successor or successors of the Company, except to
the extent that the Board or the Committee and each Participant having executed
a Restricted Stock Unit Award Agreement determine otherwise as evidenced by a
writing signed by both parties.
 
(k) Plan Construction. By its approval of the Plan, the Board intends that the
transactions contemplated by the Plan satisfy and be interpreted in a manner
that satisfies the applicable requirements of Rule 16b-3 promulgated under the
Exchange Act so that, among other transactions, the crediting of Stock Units and
payment in Stock will be entitled to the benefits of Rule 16b-3 or other
exemptive rules under Section 16 of the Exchange Act.

 
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(l) Notices. Any notice to be given under the terms of this Plan shall be in
writing and addressed to the Company at its principal office, to the attention
of the Corporate Secretary, and to the Participant at his or her last address of
record, or at such other address as either party may designate in writing to the
other for the purposes of notices in respect of RSUs.

10.    Changes in Capital Structure.
 
Upon or in contemplation of any reclassification, recapitalization, stock split
(including a stock split in the form of a stock dividend) or reverse stock
split; any merger, combination, consolidation or other reorganization; any
split-up; spin-off, or similar extraordinary dividend distribution in respect of
the Stock (whether in the form of securities or property); any exchange of Stock
or other securities of the Company, or any similar, unusual or extraordinary
corporate transaction in respect of the Stock; or a sale of substantially all
the assets of the Company as an entirety; then the Board shall, in such manner,
to such extent (if any) and at such time as it deems appropriate and equitable
in the circumstances in the Board’s exercise of good faith and reasonable
judgment, proportionately adjust any or all of (a) the number and type of shares
of Stock (or other securities or property) that thereafter may be made the
subject of Stock Units and Stock Unit Accounts (including the specific maximum
and numbers of shares set forth elsewhere in the Plan), (b) the number, amount
and type of shares of Stock (or other securities or property) payable in respect
of Stock Units, and (c) and the number and type of Stock Units (both credited
and vested) under the Plan.

11.    Amendments and Termination.

The Board shall have the right to amend the Plan (including outstanding awards)
in whole or in part from time to time or may at any time suspend or terminate
the Plan; provided, however, that no amendment or termination shall cancel or
otherwise adversely affect in any way, without his or her written consent, any
Participant's rights with respect to Stock Units credited to his or her Stock
Unit Account and no amendment or termination shall accelerate payment of any
benefit which is subject to the rules of Section 409A of the Code in a manner
that would violate the distribution rules of Section 409A of the Code.
Notwithstanding the foregoing, Participant consent shall not be required to the
extent that the Board determines that applicable law requires amendment or
termination of the Plan to preserve the intended tax benefits to the
Participants and the Company hereunder. Any amendments authorized hereby shall
be stated in an instrument in writing, and all Participants (subject to any
applicable consent requirement above) shall be bound thereby upon receipt of
notice thereof. Changes contemplated by Section 10 shall not be deemed to
constitute changes or amendments for purposes of this Section 11.

 
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