EXHIBIT 10.12(A)

                        PHARMACEUTICAL FORMULATIONS, INC.
                                AND SUBSIDIARIES
                             1994 STOCK OPTION PLAN
                             ADOPTED AUGUST 30, 1994
                            AMENDED OCTOBER 15, 1997

I. GENERAL PROVISIONS

          1. PURPOSE OF THE PLAN. This stock option plan (the "Plan") of
Pharmaceutical Formulations, Inc. and its subsidiaries (the "Company"), is
intended to provide incentives to employees and officers of the Company. The
Plan is also intended to encourage such persons to accept or continue
employment, and to attract to the Company individuals of experience and ability.
This Plan provides opportunities for such persons to purchase shares of common
stock of the Company pursuant to (i) Incentive Stock Options of the Company; and
(ii) Nonqualified Stock Options of the Company.

          2. DEFINITIONS.

          (a) "Board of Directors" shall mean the Board of Directors of the
Company.

          (b) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, or any successor tax law.

          (c) "Change of Control" shall be deemed to have occurred if (i) any
"person" or group of "persons" (as the term "person" is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) ("Person"), acquires (or has acquired during the twelve-month period
ending on the date of the most recent acquisition by such Person) the beneficial
ownership, directly or indirectly, of securities of the Company representing 20%
or more of the combined voting power of the then outstanding securities of the
Company; (ii) during any period of twelve months, individuals who at the
beginning of such period constitute the Board of Directors, and any new director
whose election or nomination was approved by the directors in office who either
were directors at the beginning of the period or whose election or nomination
was previously so approved, cease for any reason to constitute at least a
majority thereof; (iii) a Person acquires beneficial ownership of stock of the
Company that, together with stock held immediately prior to such acquisition by
such Person, possesses more than 50% of the total fair market value of total
voting power of the stock ("50% Ownership") of the Company, unless the
additional stock is acquired by a Person possessing, immediately prior to such
acquisition, beneficial ownership of 40% or more of the Common Stock; or (iv) a
Person acquires (or has acquired during the twelve-month period ending on the
date of the most recent acquisition by such Person) assets from the Company that
have a total fair market value equal to or more than one-third of the total fair
market value of all of the assets of the Company immediately prior to such
acquisition. Notwithstanding the foregoing, for purposes of clauses (i) and
(ii), a Change in Control will not be deemed to have occurred if the power to
control (directly or indirectly) the management and policies of the Company is
not transferred from a person to another person; and for purposes of clause
(iv), a Change in Control will not be deemed to occur if the assets of the
Company are transferred: (A) to a shareholder in exchange for his stock, (B) to
an entity in which the Company has (directly or indirectly) 50% ownership, or
(C) to a Person that has (directly or indirectly) at least 50% ownership of the
Company with respect to its stock outstanding, or to any entity in which such
Person possesses (directly or indirectly) 50% Ownership.

          (d) "Committee" shall mean the Stock Option Plan Committee of the
Board of Directors of the Company, or any other committee appointed by the
Board.

          (e) "Common Stock" shall mean shares of the common stock of the
Company.

          (f) "Date of Grant" has the meaning set forth in SECTION 7(A).

          (g) "Disability" shall mean the condition of an employee who 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 which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months.

          (h) "Employee" shall mean an individual (who may be an officer or a
director) employed by the Company (within the meaning of Section 3401 of the
Code and the regulations promulgated thereunder).

          (i) "Exercise Price" shall mean the price per Share of Common Stock,
determined by the Committee, at which an Option may be exercised.

          (j) "Fair Market Value" of a Share as of a specified date shall mean
the closing price of a Share on the principal securities exchange or NASDAQ on
which such Shares are traded on the day immediately preceding the date as of
which Fair Market Value is being determined, or on the next preceding date on
which such Shares are traded if no Shares were traded on such immediately
preceding day, or if the Shares are not traded on a securities exchange or on
NASDAQ, Fair Market Value shall be deemed to be the average of the high bid and
low asked prices of the Shares in the over-the-counter market on the date
immediately preceding the date as of which Fair Market Value is being determined
or on the next preceding date on which such high bid and low asked prices were
recorded. If the Shares are not publicly traded, Fair Market Value shall be
determined by the Committee or the Board.

          (k) "Incentive Stock Option" shall mean an option to purchase Common
Stock of the Company within the meaning of Section 422A(b) of the Code.

          (l) "Key Employee" shall mean employees of the Company who are not
officers of the Company or members of the Board of Directors of the Company.

          (m) "Nonqualified Stock Option" shall mean an option to purchase
Common Stock of the Company not in conformity with Section 422A(b), Section
422(b), Section 423(b) or Section 424(b) of the Code.

          (n) "Option" shall mean a stock option granted pursuant to the Plan.

          (o) "Option Agreement" shall mean any agreement to provide Options
under the Plan.

          (p) "Optionee" shall mean an Employee to whom an Option has been
granted.

          (q) "Plan" shall mean this 1994 Stock Option Plan.

          (r) "Purchase Price" shall mean the Exercise Price times the number of
whole Shares with respect to which an Option is exercised.

          (s) "Share" shall mean a share of Common Stock.

          (t) "Subsidiary" shall mean any corporation which at the time of the
granting of an Option qualifies as a subsidiary of the Company under the
definition of "subsidiary corporation" in Section 425(f) of the Code, or any
similar provision hereinafter enacted.

          (u) "Ten Percent Shareholder" shall mean an individual who owns stock
possessing ten percent (10%) or more of the total combined voting power of all
classes of stock of the Company.

          3. EFFECTIVE DATE. This Plan shall become effective on the date of its
adoption by the Board; provided, however, that the Plan shall automatically
terminate and all Options granted under the Plan shall be deemed null and void
for all purposes in the event that, within one year from the date of the
adoption of the Plan by the Board, the Plan shall not have been approved by the
holders of a majority of outstanding Common Stock.

          4. STOCK SUBJECT TO THE PLAN.

          (a) Subject to adjustments in accordance with SECTION 9 hereof, one
million five hundred thousand (1,500,000) Shares are reserved for issuance upon
the exercise of the Options granted under this Plan. Upon the exercise of
Options, the Company may either issue authorized but unissued Shares of Common
Stock or transfer Shares of Common Stock held in its treasury.

          (b) In the event that any outstanding Option under the Plan for any
reason expires or is terminated prior to the end of the period during which the
Option may be exercised, the Shares allocable to the unexercised portion of such
Option may again be subjected to Options under the Plan.

          5. ADMINISTRATION.

          (a) The Plan shall be administered by the Committee. The Committee
shall consist of not less than two (2) members of the Board of Directors who are
not also employees of the Company, each of whom shall be, to the extent that
such persons are available, a "disinterested person" within the meaning of Rule
16b-3(c)(2) under the Securities Exchange Act of 1934, as from time to time
amended (the "Exchange Act"), and an "outside director" within the meaning of
Section 162(m) of the Code. (To the extent that members of the Committee are not
"disinterested persons", options granted under the Plan may not qualify under
Rule 16b-3 issued pursuant to the Exchange Act and to the extent that members of
the Committee are not "outside directors", options granted under the Plan may
not be deemed to be performance-based compensation under regulations issued
pursuant to Section 162(m) of the Code. The Board may from time to time remove
members from, or add members to, the Committee. Vacancies on the Committee,
however caused, shall be filled by the Board.

          (b) Subject to the provisions of the Plan, the Committee shall have
the power to (a) authorize the granting of Options; (b) determine and designate
from time to time those employees of the Company to whom Options are to be
granted; provided, however, that no employee who is at the time of grant a Ten
Percent Shareholder, shall be eligible to receive any Incentive Option under the
Plan except as may be permitted by Section 422A of the Code; (c) determine the
number of shares subject to each Option; (d) determine whether said Option is to
be considered an Incentive Option or a Nonqualified Option; and (e) determine
the time or times and the manner when each Option shall be exercisable and the
duration of the exercise period. No director of the Company who is not also an
employee of the Company shall be entitled to receive any Option under the Plan.
The Committee may condition the grant of any Option on the surrender of any
option under this or any other plan.

          (c) The Board or the Committee shall have authority to interpret and
construe the Plan or any provision thereof, or any agreements entered into
pursuant to the Plan, and to make determinations with respect thereto. The Board
or the Committee may also prescribe, amend or rescind rules and regulations
relating to the Plan and make all other determinations necessary or advisable
for the administration of the Plan. Any interpretation, determination or other
action made or taken by the Board or the Committee shall be made in accordance
with its judgment as to the best interests of the Company and its shareholders,
in accordance with the purposes of the Plan and shall be final, binding and
conclusive. Any decision or determination reduced to writing and signed by all
members of the Committee shall be fully as effective as if made by unanimous
vote at a meeting duly called and held.

          (d) The Board or the Committee may authorize the modification,
extension or renewal of any Option outstanding under the Plan, or accept the
exchange of outstanding Options (to the extent not theretofore exercised) for
the granting of new Options in substitution therefor, when, and subject to such
conditions as are deemed to be in the best interests of the Company and in
accordance with the purposes of the Plan, provided that, notwithstanding the
foregoing, no such modification of an Option shall, without the consent of the
Optionee, increase the Purchase Price set forth in such Option, except for
antidilution adjustments made in accordance with SECTION 9 hereof, or alter or
impair any rights or obligations under an Option theretofore granted under the
Plan.

          (e) The Committee shall determine the nature and extent of the
restrictions, if any, to be imposed on the exercise of the Option and/or on the
Shares which may be purchased under each Option. Such restrictions may include,
without limitation, the right of the Company to repurchase Shares which have
been purchased under an Option in the event that the Optionee's employment by
the Company or any subsidiary terminates during the Option Period.

          (f) The Committee may employ such legal counsel, consultants and
agents as it may deem desirable for the administration of the Plan and may rely
upon any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent.

          (g) No member or former member of the Committee or of the Board shall
be liable for any action or determination made in good faith with respect to the
Plan or any Option awarded under it.

          (h) In addition to such other rights of indemnification as they may
have as directors or otherwise, the Board and the members (and former members)
of the Committee shall be indemnified and held harmless by the Company against
any costs and expenses (including attorney's fees, which fees may be advanced by
the Company) actually incurred in connection with defense of any action, suit or
proceeding, or in connection with any appeal therefrom, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan or any Option granted thereunder, unless arising out of
such member's or former member's own fraud or bad faith, and against all amounts
paid by them in settlement thereof (provided such settlement is approved by
independent legal counsel selected by the Company) or paid by them in
satisfaction of judgment in any action, suit or proceeding, provided that the
indemnification provided therein shall be effective so long as, within 60 days
after institution of any such action, suit or proceeding, the member of the
Committee shall in writing offer the Company the opportunity, at its own
expense, to handle and defend such action, suit or proceeding.

          (i) The maximum number of Shares which may be the subject of Options
granted to any individual in any calendar year shall not exceed 300,000 (three
hundred thousand) Shares. If the Shares that would be issued or transferred
pursuant to any Option are not issued or transferred and cease to be issuable or
transferable for any reason, the number of Shares subject to such Option will no
longer be charged against the limitation provided for herein and may again be
made subject to Options; provided, that the counting of Shares subject to
Options granted under the Plan against the number of Shares available for
further Options shall in all cases conform to the requirements of Rule 16b-3
under the Exchange Act; and provided, further, that with respect to any Option
granted to any person who is a "covered employee" as defined in Section 162(m)
of the Internal Revenue Code and the regulations promulgated thereunder that is
canceled, the number of Shares subject to such Option shall continue to count
against the maximum number of Shares which may be the subject of Options granted
to such Eligible Person.

II.      INCENTIVE STOCK OPTIONS

          6. ELIGIBILITY FOR PARTICIPATION.

          (a) Incentive Stock Options may be granted to Employees of the
Company. An Optionee who has been granted an Option hereunder may be granted an
additional Option or Options.

          7. TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS. Incentive Stock
Options granted pursuant to the Plan shall be evidenced by written agreements in
such form as the Board or the Committee shall from time to time determine, which
agreements shall comply with and be subject to the following terms and
conditions:

          (a) DATE OF GRANT. Each Incentive Stock Option shall specify its
effective date (the "Date of Grant") which shall be the date specified by the
Board or the Committee, as the case may be, in its action relating to the grant
of the Option. Any grant of Incentive Stock Options made prior to obtaining the
approval of the Plan by the shareholders of the Company shall be made contingent
upon receiving said shareholder approval within one (1) year from August 30,
1994. Incentive Stock Options may be granted pursuant to the Plan until the
termination of the Plan on August 29, 2004.

          (b) OPTION AGREEMENT. The Option Agreement shall be subject to the
terms and conditions contained in this SECTION 7.

          (c) NUMBER OF SHARES. Each Incentive Stock Option shall state the
number of Shares to which it pertains and shall provide for the adjustment
thereof in accordance with the provisions of SECTION 9 hereof.

          (d) INCENTIVE STOCK OPTION PERIOD. Incentive Stock Options shall
become exercisable at such time or times as the Board or the Committee shall
determine. Each Incentive Stock Option agreement shall specify the period for
which the Option thereunder is granted and provide that the Option shall expire
at the end of such period. In no case shall such period exceed ten years from
the Date of Grant or, in the case of an Option granted to a Ten Percent
Shareholder, five years from the Date of Grant. No options granted to executive
officers, directors and Ten Percent Shareholders may be exercised in part or in
full prior to the later of six months from the date of grant of the Option or
six months from date of approval of the Plan by the shareholders of the Company.

          (e) EXERCISE PRICE. Each Incentive Stock Option shall state the
Exercise Price, which price shall be determined as set forth in SECTION 6(F)
below.

          (f) INCENTIVE STOCK OPTION PRICE. The Exercise Price shall be
determined by the Board or the Committee at the time any Incentive Stock Option
is granted, and shall not be less than (i) one hundred percent (100%) of the
Fair Market Value of a Share at the time the Option is granted, or (ii) in the
case of an Incentive Stock Option granted to a Ten Percent Shareholder, not less
than one hundred and ten percent (110%) of the Fair Market Value of one Share on
the Date of Grant as determined by the Committee.

          (g) EXERCISE OF INCENTIVE STOCK OPTION.

                    (i) Subject to SECTIONS 7(D) AND 7(G)(II) below, each
               Incentive Stock Option shall become exercisable immediately or in
               one or more installments at the time or times and upon the
               satisfaction of such conditions as may be provided in the Option
               Agreement.

                    (ii) In the event of a Change of Control of the Company, all
               Incentive Stock Options shall become immediately exercisable.

          (h) MANNER OF EXERCISE. Upon the exercise of an Incentive Stock
Option, the Purchase Price shall be payable (i) in United States dollars by
personal check, bank draft, or money order payable to the order of the Company,
or (ii) with the consent of the Board or the Committee, by the delivery or
attestation to the ownership of Shares with a Fair Market Value on the date of
exercise equal to the Purchase Price, or (iii) by a combination of the methods
described in (i) and (ii). The Option Agreement will describe the method of
exercising the Incentive Stock Option and payment of the Purchase Price. No
Shares shall be issued until full payment therefor has been made.

          (i) LIMITATION ON INCENTIVE STOCK OPTIONS. In the case of each
Incentive Stock Option granted to an employee, the aggregate Fair Market Value
(determined at the time the Incentive Stock Option is granted) of the Common
Stock with respect to which any Incentive Stock Options are exercisable for the
first time by such employee during any calendar year (under all plans of the
Company, and any subsidiary company thereof) may not exceed $100,000. Options
with respect to which no designation is made by the Committee shall be deemed to
be Incentive Stock Options to the extent that the $100,000 limitation described
in the preceding sentence is met. This paragraph shall be applied by taking
Options into account in the order in which they are granted.

          (j) RESTRICTION ON DISPOSITION OF SHARES. To qualify as an Incentive
Stock Option, no disposition of Shares issued to the Optionee pursuant to the
exercise of an Incentive Stock Option shall be made by the Optionee within two
(2) years from the Date of Grant, or within one (1) year after the transfer of
such Shares to him.

          (k) TERMINATION OF EMPLOYMENT. In the event that an Optionee's
employment by the Company is terminated due to death, disability, retirement, or
any other reason, the following provisions shall apply as the case may be:

                    (i) DEATH OF OPTIONEE. If an Optionee dies, any Option
               previously granted to the Optionee may be exercisable by the
               personal representative or administrator of the deceased
               Optionee's estate, or by any trustee, heir, legatee or
               beneficiary who shall have acquired the Option directly from the
               Optionee by will or by the laws of descent and distribution at
               any time or times within three (3) months after the Optionee's
               death, provided that the deceased Optionee was entitled to
               exercise such Option at the time of such death and provided that
               any exercise must occur within the period of time that the
               decedent, if alive, could have exercised the Option.

                    (ii) RETIREMENT. If an Optionee's employment with the
               Company terminates by reason of retirement, any Option previously
               granted to such Optionee shall be exercisable within three (3)
               months after the date of such termination, provided that the
               Option was exercisable at the time of such termination by
               retirement and provided that any exercise must occur within the
               period of time that the Option originally was exercisable.
               However, if the Optionee dies within three months after the
               termination by retirement, any unexercised Incentive Stock
               Option, to the extent to which it was exercisable at the time of
               such death shall thereafter be exercisable in accordance with
               SECTION 7(K)(I).

                    (iii) DISABILITY. If an Optionee becomes "disabled" as that
               term is defined in SECTION 2(G) hereof, and at the time of such
               disability, the Optionee is entitled to exercise such Option, the
               Optionee shall have the right to exercise such Option within one
               year after such disability, provided that the Option was
               exercisable at the time of such disability and provided that any
               exercise must occur within the period of time that the Option
               originally was exercisable. However, if the Optionee dies within
               one year after termination by disability, any unexercised
               Incentive Stock Option, to the extent to which it was exercisable
               at the time of such death, shall thereafter be exercisable in
               accordance with SECTION 7(K)(I).

                    (iv) OPTIONEE'S TERMINATION. If an Optionee's employment by
               the Company is terminated for any reason other than death,
               retirement, disability, or for cause, any option previously
               granted to the Optionee shall be exercisable within thirty (30)
               days after the date of such termination, provided that the Option
               was exercisable at the time of such termination and provided that
               any exercise must occur within the period of time that the Option
               originally was exercisable. However, if the Optionee dies within
               thirty (30) days after the termination, any unexercised Option,
               to the extent to which it was exercisable at the time of such
               death, shall thereafter be exercisable in accordance with SECTION
               7(K)(I). If an Optionee's employment by the Company is terminated
               for cause, the existence of which shall be determined by the
               Committee in its sole discretion (which determination by the
               Committee shall be conclusive), any Option previously granted to
               the Optionee shall immediately terminate upon such termination.

                    (l) NONTRANSFERABILITY OF INCENTIVE STOCK OPTION. No
               Incentive Stock Option granted under the Plan shall be
               transferable by the Optionee other than by will or the laws of
               descent and distribution. During the lifetime of the Optionee,
               the Incentive Stock Option shall be exercisable only by the
               Optionee.

III.     NONQUALIFIED STOCK OPTIONS

          8. TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTIONS.

          (a) GRANT OF NONQUALIFIED STOCK OPTIONS. Each Option shall specify its
Date of Grant, which shall be the date specified by the Board or the Committee,
as the case may be, in its action relating to the grant of the Option. Any grant
of Options made prior to obtaining the approval of the Plan by the shareholders
of the Company shall be made contingent upon receiving shareholder approval from
within one (1) year of August 30, 1994. Nonqualified Stock Options may be
granted pursuant to the Plan until the termination of the Plan on August 29,
2004. Nonqualified Stock Options may be granted under this Plan to any Employee
of the Company, at such times and for such number of Shares as the Board or the
Committee shall designate.

          (b) OPTION AGREEMENT. The Option Agreement shall be subject to the
terms and conditions contained in this SECTION 8.

          (c) NUMBER OF SHARES. Each Nonqualified Stock Option shall state the
number of Shares to which it pertains and shall provide for the adjustments
thereof in accordance with the provisions of SECTION 9 hereof.

          (d) NONQUALIFIED STOCK OPTION PERIOD. Nonqualified Stock Options shall
become exercisable at such times as the Board or the Committee may decide. Each
Nonqualified Stock Option agreement shall specify the period for which the
Option thereunder is granted and provide that the Option shall expire at the end
of such period. In no case shall such period exceed ten years from the Date of
Grant.

          (e) EXERCISE PRICE. Each Option shall state the Exercise Price, which
price shall be determined as set forth in SECTION 8(F) below.

          (f) NONQUALIFIED STOCK OPTION PRICE. The Exercise Price shall be
determined by the Board or the Committee at the time the Nonqualified Stock
Option is granted and may be less than, equal to or greater than the Fair Market
Value of one Share of Common Stock on the date the Option is granted.

          (g) EXERCISE OF NONQUALIFIED STOCK OPTION.

                    (i) Subject to SECTION 8(G)(II) below, each Nonqualified
               Stock Option shall become exercisable immediately or in one or
               more installments at the time or times and upon the satisfaction
               of such conditions as may be provided in the Option Agreement;

                    (ii) In the event of a Change of Control of the Company, all
               Nonqualified Stock Options shall become immediately exercisable.

          (h) MANNER OF EXERCISE. Upon the exercise of an Option, the Purchase
Price shall be payable (i) in United States Dollars by personal check, bank
draft, or money order payable to the order of the Company, or (ii) with the
consent of the Board or the Committee, by the delivery or attestation to the
ownership of Shares of Common Stock of the Company with a Fair Market Value
equal to the Purchase Price, or (iii) by a combination of the methods described
in (i) and (ii). The Option Agreement will describe the methods of exercising
the Option and payment of the Purchase Price. No Shares shall be issued until
full payment therefor has been made.

          (i) TERMINATION OF EMPLOYMENT. In the event that an Optionee's
employment by the Company is terminated due to death, disability, retirement, or
any other reason, the following provisions shall apply as the case may be:

                         (A) DEATH OF OPTIONEE. If an Optionee dies, any Option
                    previously granted to the Optionee may be exercisable by the
                    personal representative or administrator of the deceased
                    Optionee's estate, or by any trustee, heir, legatee or
                    beneficiary who shall have acquired the Option directly from
                    the Optionee by will or by the laws of descent and
                    distribution at any time or times within three (3) months
                    after the Optionee's death, provided that the deceased
                    Optionee was entitled to exercise such Option at the time of
                    such death and provided that any exercise must occur within
                    the period of time that the decedent, if alive, could have
                    exercised the option.

                         (B) RETIREMENT. If an Optionee's employment with the
                    Company terminates by reason of retirement, any Option
                    previously granted to such Optionee shall be exercisable
                    within three (3) months after the date of such termination,
                    provided that the Option was exercisable at the time of such
                    termination by retirement and provided that any exercise
                    must occur within the period of time that the Option
                    originally was exercisable. However, if the Optionee dies
                    within three (3) months after the termination by retirement,
                    any unexercised Option, to the extent to which it was
                    exercisable at the time of such death shall thereafter be
                    exercisable in accordance with SECTION 8(I)(A).

                         (C) DISABILITY. If an Optionee becomes disabled as that
                    term is defined in SECTION 2(G) hereof, and at the time of
                    such disability the Optionee is entitled to exercise such
                    Option, the Optionee shall have the right to exercise such
                    Option within one year after such disability, provided that
                    the Option was exercisable at the time of such disability
                    and provided that any exercise must occur within the period
                    of time that the Option originally was exercisable. However,
                    if the Optionee dies within one year after termination by
                    disability, any unexercised Option, to the extent to which
                    it was exercisable at the time of such death, shall
                    thereafter be exercisable in accordance with SECTION
                    8(I)(A).

                         (D) OPTIONEE'S TERMINATION. If an Optionee's employment
                    by the Company is terminated for any reason other than
                    death, retirement, disability or cause, any Option
                    previously granted to him shall be exercisable within thirty
                    (30) days after the date of such termination, provided that
                    the Option was exercisable at the time of such termination
                    and provided that any exercise must occur within the period
                    of time that the Option was exercisable. However, if the
                    Optionee dies within thirty (30) days after the termination,
                    any unexercised Option, to the extent to which it was
                    exercisable at the time of such death, shall thereafter be
                    exercisable in accordance with SECTION 8(I)(A). If an
                    Optionee's employment with the Company is terminated for
                    cause, the existence of which shall be determined by the
                    Committee in its sole discretion (which determination by the
                    Committee shall be conclusive), any Option previously
                    granted to the Optionee shall thereupon terminate.

          (j) NONTRANSFERABILITY OF OPTION. No Nonqualified Stock Option granted
under this Plan shall be transferable by the Optionee other than by will or the
laws of descent and distribution. During the lifetime of the Optionee, the
Nonqualified Stock Options shall be exercisable only by the Optionee.

IV.      MISCELLANEOUS PROVISIONS

          9. RECAPITALIZATION.

          (a) In the event that the outstanding Shares which are eligible for
the granting of Options hereunder, or subject to Options theretofore granted,
shall at any time be changed or exchanged by declaration of a stock dividend,
split-up, subdivision or combination of Shares, recapitalization, merger,
consolidation or other corporate reorganization in which the Company is the
surviving corporation, the number and kind of Shares subject to the Plan or
subject to any Options previously granted, and the Exercise Prices, shall be
appropriately and equitably adjusted, so as to maintain the proportionate number
of Shares without changing the aggregate Purchase Price.

          (b) Except as heretofore expressly provided in this SECTION 9, the
Optionee shall have no rights by reason of any subdivision or consolidation of
Common Stock or stock of any class, stock split, or the payment of any stock
dividend or any other increase or decrease in the number of shares of any class
or by reason of any dissolution, liquidation, merger, or consolidation or
spin-off of assets or stock of another corporation, any issue by the Company of
shares of any class or securities convertible into Shares of any class, shall
not affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of Shares subject to the Option.

          (c) The grant of an Option pursuant to the Plan shall not affect in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.

          10. SUBSTITUTION OR ASSUMPTION OF OPTIONS. Notwithstanding any
provision of the Plan to the contrary (but subject to the provisions of SECTION
3), by action of the Board, the Company may as an incident to or by reason of
any corporate merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation, substitute new Options on Common
Stock of the Company for Options granted by another employer to its employee on
stock of such employer or may assume Options granted by another employer to its
employees, at such purchase prices and under such conditions, as may be
permitted by Section 425(a) of the Code, and the Board or the Committee is
hereby expressly authorized to take such action as may be required to effectuate
any such issuance or assumption. Shares subject to any Option so issued or
assumed shall be charged against the total number of Shares available for
issuance under the Plan.

          11. USE OF PROCEEDS. Proceeds from the sale of Common Stock pursuant
to Options granted under the Plan shall constitute general funds of the Company.

          12. SECURITIES LAW REQUIREMENTS.

          (a) No Shares shall be issued upon the exercise of any Option unless
and until the Company has determined that:

                         (i) it and the Optionee have taken all actions required
                    to register the Shares under the Securities Act of 1933, as
                    amended (the "Act"), or perfect an exemption from the
                    registration requirements thereof;

                         (ii) any applicable listing requirements of any stock
                    exchange on which the Common Stock is listed (or similar
                    requirement of Nasdaq) have been satisfied; and

                         (iii) any other applicable provision of state or
                    federal law has been satisfied.

          Nothing herein is deemed nor shall be construed to confer any
registration rights upon the Optionee for an Option or the Shares, and, except
as set forth to the contrary in the Option Agreement, no such registration right
with respect to any Option or Share is provided to any Optionee by the Company.

          Without limiting the generality of the foregoing, the Company may
require from the Optionee, upon exercise, such investment representations or
agreements, if any, as counsel for the Company may consider necessary to comply
with federal and state securities laws before issuing Shares.

          (b) Unless the offering of such Shares is registered under the Act,
all Shares acquired by an Optionee upon exercise of an Incentive Stock Option or
Nonqualified Stock Option granted under the Plan and issued by the Company shall
be deemed to be "restricted securities" as defined in Rule 144 promulgated under
the Act and may be subject to stop orders, and the certificate evidencing such
Shares shall contain a legend substantially as follows:

                    "The securities presented by this certificate may not be
                    offered for sale, sold or otherwise transferred except
                    pursuant to an effective registration statement under the
                    Securities Act of 1933, as amended (the "Act"), or pursuant
                    to an exemption from registration under the Act, the
                    availability of which is to be established to the
                    satisfaction of the Company."

          13. ADDITIONAL RIGHTS.

          (a) NO RIGHTS AS SHAREHOLDER. The Optionee shall have no rights as a
shareholder of the Company with respect to any Shares subject to an Incentive
Stock Option or a Nonqualified Stock Option prior to the date of issuance to
such Optionee of a certificate or certificates for such shares.

          (b) NO RIGHT TO CONTINUED EMPLOYMENT. The Options granted under this
Plan shall not confer upon the Optionee any right with respect to continuance of
employment by the Company, nor shall it interfere in any way with the right of
the Company to terminate the Optionee's employment at any time.

          (c) NO OBLIGATION TO EXERCISE. The granting of an Option shall impose
no obligation upon the Optionee to exercise the Option.

          14. AMENDMENTS.

          (a) Insofar as permitted by law, the Board of Directors may amend,
alter, suspend, abandon or terminate the Plan, but no amendment, alteration,
suspension or abandonment shall be made which would impair the rights of any
Optionee under any Options previously granted, without the Optionee's consent,
or which (except for the adjustments under SECTIONS 9 AND 10 above), without the
approval of the shareholders of the Company, would:

                         (i) Increase the total number of Shares issuable under
                    the Plan or to any individual employee;

                         (ii) Decrease the Exercise Price of the Common Stock on
                    the date of the granting of an Option;

                         (iii) Change the persons (or class or persons) eligible
                    to receive Options under the Plan; or

                         (iv) Amend this SECTION 14 to defeat the Plan's
                    purposes.

          (b) Subject to the limitations set forth in this SECTION 14, the Board
may make such changes and revisions in and additions to the Plan as it may deem
proper and in the best interests of the Company or as may be necessary to comply
with Sections 421-425 of the Code and the regulations promulgated thereunder, or
other applicable laws or regulations.

          15. GOVERNING LAW. This Plan shall be governed by the laws of the
State of New Jersey.

          16. WITHHOLDING. The holder of an Incentive Stock Option or a
Non-Qualified Stock Option shall, upon notification of the amount due, and prior
to or concurrently with delivery to such holder of a certificate representing
such shares of Common Stock, pay promptly any amount necessary to satisfy
applicable federal, state, local or other tax requirements.

          17. NAME. The Plan shall be known as the Pharmaceutical Formulations
1994 Stock Option Plan.