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                                                                    EXHIBIT 10.1















                                 RIBAPHARM INC.

                        2002 STOCK OPTION AND AWARD PLAN

                          (As Adopted __________, 2002)
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                                 RIBAPHARM INC.

                        2002 STOCK OPTION AND AWARD PLAN



      1.    Purpose.

            The purpose of this Plan is to strengthen Ribapharm Inc., a Delaware
corporation (the "Company") by providing an incentive to certain employees
(including future employees who have received a formal written offer of
employment), officers, consultants and directors of the Company, ICN
Pharmaceuticals, Inc., a Delaware corporation ("ICN Pharmaceuticals"), and any
affiliates of ICN Pharmaceuticals (such affiliates together with ICN
Pharmaceuticals shall hereinafter be referred to as "ICN"), thereby encouraging
such individuals to devote their abilities and industry to the success of the
Company's business enterprise. It is intended that this purpose be achieved by
extending to such individuals an added long-term incentive for high levels of
performance and unusual efforts through the grant of Incentive Stock Options,
Nonqualified Stock Options, Stock Appreciation Rights, Performance Units and
Performance Shares, Share Awards, Phantom Stock and Restricted Stock (as each
term is herein defined).

      2.    Definitions.

            For purposes of the Plan:

            2.1 "Affiliate" means any entity, directly or indirectly, controlled
by, controlling or under common control with the Company or any corporation or
other entity acquiring, directly or indirectly, all or substantially all the
assets and business of the Company, whether by operation of law or otherwise.

            2.2 "Agreement" means the written agreement between the Company and
an Optionee or Grantee evidencing the grant of an Option or Award and setting
forth the terms and conditions thereof.

            2.3 "Award" means a grant of Restricted Stock, Phantom Stock, a
Stock Appreciation Right, a Performance Award, a Share Award or any or all of
them.

            2.4 "Beneficial Ownership or "Beneficially Owned" or "Beneficial
Owner" shall have the meaning assigned in Section 2.8(a).

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

            2.6   "Cause" means:


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                  (a) in the case of an Optionee or Grantee whose employment
with the Company or ICN is subject to the terms of an employment agreement
between such Optionee or Grantee and the Company or ICN, as the case may be,
which employment agreement includes a definition of "Cause", the term "Cause" as
used in this Plan or any Agreement shall have the meaning set forth in such
employment agreement during the period that such employment agreement remains in
effect; or

                  (b) in all other cases, (i) intentional failure to perform
reasonably assigned duties, (ii) dishonesty or willful misconduct in the
performance of duties, (iii) involvement in a transaction in connection with the
performance of duties to the Company and/or ICN, which transaction is adverse to
the interests of the Company and/or ICN, and which is engaged in for personal
profit or (iv) willful violation of any law, rule or regulation in connection
with the performance of duties (other than traffic violations or similar
offenses); provided, however, that following a Change in Control, clause (i) of
this Section 2.6(b) shall not constitute "Cause."

            2.7 "Change in Capitalization" means any increase or reduction in
the number of Shares, or any change (including, but not limited to, in the case
of a spin-off, dividend or other distribution in respect of Shares, a change in
value) in the Shares or exchange of Shares for a different number or kind of
shares or other securities of the Company or another corporation, by reason of a
reclassification, recapitalization, merger, consolidation, reorganization,
spin-off, split-up, issuance of warrants or rights or debentures, stock
dividend, stock split or reverse stock split, cash dividend, property dividend,
combination or exchange of shares, repurchase of shares, change in corporate
structure or otherwise.

            2.8   A "Change in Control" shall mean the occurrence of any of
the following:

                  (a) in the case of an Optionee or Grantee whose employment
with the Company or ICN is subject to the terms of an employment agreement
between such Optionee or Grantee and the Company or ICN, as the case may be,
which employment agreement includes a definition of "Change in Control", the
term "Change in Control" as used in this Plan or any Agreement shall have the
meaning set forth in such employment agreement during the period that such
employment agreement remains in effect; or

                  (b) in all other cases,

                        (i) An acquisition (other than directly from the
      Company) of any voting securities of the Company (the "Voting Securities")
      by any "Person" (as the term person is used for purposes of Section 13(d)
      or 14(d) of the Exchange Act) immediately after which such Person has
      "Beneficial Ownership" (within the


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      meaning of Rule 13d-3 promulgated under the Exchange Act) of more than
      fifty percent (50%) of the then outstanding Shares or the combined voting
      power of the Company's then outstanding Voting Securities; provided,
      however, in determining whether a Change in Control has occurred pursuant
      to this Section 2.8(a), Shares or Voting Securities which are acquired in
      a "Non-Control Acquisition" (as hereinafter defined) shall not constitute
      an acquisition which would cause a Change in Control. A "Non-Control
      Acquisition" shall mean an acquisition by (i) an employee benefit plan (or
      a trust forming a part thereof) maintained by (A) the Company or ICN or
      (B) any corporation or other Person of which a majority of its voting
      power or its voting equity securities or equity interest is owned,
      directly or indirectly, by the Company (for purposes of this definition, a
      "Related Entity"), (ii) the Company, ICN or any Related Entity, or (iii)
      any Person in connection with a "Non-Control Transaction" (as hereinafter
      defined);

                        (ii)  The consummation of:

                              (A)   A merger, consolidation or reorganization
      with or into the Company or in which securities of the Company are issued
      (a "Merger"), unless such Merger is a "Non-Control Transaction." A
      "Non-Control Transaction" shall mean a Merger where:

                                    (1)   the stockholders of the Company,
      immediately before such Merger own directly or indirectly immediately
      following such Merger, at least fifty percent (50%) of the combined voting
      power of the outstanding voting securities of (x) the corporation
      resulting from such Merger (the "Surviving Corporation"), if fifty percent
      (50%) or more of the combined voting power of the then outstanding voting
      securities of the Surviving Corporation is not Beneficially Owned,
      directly or indirectly by another Person (a "Controlling Corporation"), or
      (y) if there are one or more Controlling Corporations, the ultimate
      Controlling Corporation; and

                                    (2)   the individuals who, as of
      _________, _____, are members of the Board (the "Incumbent Board")
      immediately prior to the execution of the agreement providing for such
      Merger, constitute at least a majority of the members of the board of
      directors of (x) the Surviving Corporation, if there is no Controlling
      Corporation, or (y) if there are one or more Parent Corporations, the
      ultimate Controlling Corporation.

                              (B)   A complete liquidation or dissolution of
      the Company; or


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                              (C)   The sale or other disposition of all or
      substantially all of the assets of the Company to any Person (other than a
      transfer to a Related Entity or ICN, or under conditions that would
      constitute a Non-Control Transaction with the disposition of assets being
      regarded as a Merger for this purpose or the distribution to the Company's
      stockholders of the stock of a Related Entity or any other assets); or

                        (iii) The individuals who are members of the Incumbent
      Board cease for any reason to constitute at least a majority of the
      members of the Board or, following a Merger which results in a Controlling
      Corporation, the board of directors of the ultimate Controlling
      Corporation; provided, however, that if the election, or nomination for
      election by the Company's common stockholders, of any new director was
      approved by a vote of at least two-thirds of the Incumbent Board, such new
      director shall, for purposes of this Plan, be considered as a member of
      the Incumbent Board; provided further, however, that no individual shall
      be considered a member of the Incumbent Board if such individual initially
      assumed office as a result of either an actual or threatened "Election
      Contest" (as described in Rule 14a-11 promulgated under the Exchange Act)
      or other actual or threatened solicitation of proxies or consents by or on
      behalf of a Person other than the Board (a "Proxy Contest") including by
      reason of any agreement intended to avoid or settle any Election Contest
      or Proxy Contest.

            Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the then outstanding
Shares or Voting Securities as a result of the acquisition of Shares or Voting
Securities by the Company which, by reducing the number of Shares or Voting
Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Persons, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of Shares or Voting Securities by the Company, and after such share
acquisition by the Company, the Subject Person becomes the Beneficial Owner of
any additional Shares or Voting Securities which increases the percentage of the
then outstanding Shares or Voting Securities Beneficially Owned by the Subject
Person, then a Change in Control shall occur.

            If an Eligible Individual's employment is terminated by the Company,
or ICN, as the case may be, without Cause prior to the date of a Change in
Control but the Eligible Individual reasonably demonstrates that the termination
(A) was at the request of a third party who has indicated an intention or taken
steps reasonably calculated to effect a Change in Control or (B) otherwise arose
in connection with, or in anticipation of, a Change in Control which has been
threatened or proposed, such termination shall be


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deemed to have occurred after a Change in Control for purposes of this Plan
provided a Change in Control shall actually have occurred.

            2.9   "Code" means the Internal Revenue Code of 1986, as amended.

            2.10 "Committee" means a committee, as described in Section 3.1,
appointed by the Board from time to time to administer the Plan and to perform
the functions set forth herein.

            2.11  "Company" means Ribapharm Inc., a Delaware corporation.
            2.12  "Controlling Corporation" shall have the meaning assigned
to it in Section 2.8(b).

            2.13  "Director" means a director of the Company.

            2.14  "Disability" means:

                  (a) in the case of an Optionee or Grantee whose employment
with the Company or ICN is subject to the terms of an employment agreement
between such Optionee or Grantee and the Company or ICN, as the case may be,
which employment agreement includes a definition of "Disability", the term
"Disability" as used in this Plan or any Agreement shall have the meaning set
forth in such employment agreement during the period that such employment
agreement remains in effect; or

                  (b) the term "Disability" as used in the Company's
long-term disability plan, if any; or

                  (c) in all other cases, the term "Disability" as used in this
Plan or any Agreement shall mean a physical or mental infirmity which impairs
the Optionee's or Grantee's ability to perform substantially his or her duties
for a period of one hundred eighty (180) consecutive days.

            2.15 "Division" means any of the operating units or divisions of the
Company designated as a Division by the Committee.

            2.16 "Dividend Equivalent Right" means a right to receive all or
some portion of the cash dividends that are or would be payable with respect to
Shares.

            2.17  "Election Contest" shall have the meaning assigned to it in
Section 2.8(c).

            2.18 "Eligible Individual" means any of the following individuals
who is designated by the Committee as eligible to receive Options or Awards
subject to the


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conditions set forth herein: (a) any director, officer or employee of the
Company or ICN, (b) any individual to whom the Company or ICN has extended a
formal, written offer of employment, or (c) any consultant or advisor of the
Company or ICN.

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

            2.20 "Fair Market Value" on any date means the closing sales prices
of the Shares on such date on the principal national securities exchange on
which such Shares are listed or admitted to trading, or, if such Shares are not
so listed or admitted to trading, the average of the per Share closing bid price
and per Share closing asked price on such date as quoted on the National
Association of Securities Dealers Automated Quotation System or such other
market in which such prices are regularly quoted, or, if there have been no
published bid or asked quotations with respect to Shares on such date, the Fair
Market Value shall be the value established by the Board in good faith and, in
the case of an Incentive Stock Option, in accordance with Section 422 of the
Code.

            2.21 "Grantee" means a person to whom an Award has been granted
under the Plan.

            2.22  "ICN" shall mean ICN Pharmaceuticals, Inc., a Delaware
corporation, and its Affiliates.

            2.23 "Incentive Stock Option" means an Option satisfying the
requirements of Section 422 of the Code and designated by the Committee as an
Incentive Stock Option.

            2.24 "Initial Public Offering" means the consummation of the first
public offering of Shares pursuant to a registration statement (other than a
Form S-8 or successor forms) filed with, and declared effective by, the
Securities and Exchange Commission.

            2.25  "Incumbent Board" shall have the meaning assigned to it in
Section 2.8(b).

            2.26  "Merger" shall have the meaning assigned to it in Section
2.8(b).

            2.27  "Non-Control Acquisition" shall have the meaning assigned
to it in Section 2.8(a).

            2.28  "Non-Control Transaction" shall have the meaning assigned
to it in Section 2.8(b).


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            2.29 "Nonemployee Director" means a director of the Company who is a
"nonemployee director" within the meaning of Rule 16b-3 promulgated under the
Exchange Act.

            2.30 "Nonqualified Stock Option" means an Option which is not an
Incentive Stock Option.

            2.31 "Option" means a Nonqualified Stock Option, an Incentive Stock
Option, or either or both of them.

            2.32 "Optionee" means a person to whom an Option has been granted
under the Plan.

            2.33 "Outside Director" means a director of the Company who is an
"outside director" within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder.

            2.34 "Parent" means any corporation which is a parent corporation
within the meaning of Section 424(e) of the Code with respect to the Company.

            2.35 "Performance Awards" means Performance Units, Performance
Shares, or either or both of them.

            2.36 "Performance-Based Compensation" means any Option or Award that
is intended to constitute "performance based compensation" within the meaning of
Section 162(m)(4)(C) of the Code and the regulations promulgated thereunder.

            2.37 "Performance Cycle" means the time period specified by the
Committee at the time Performance Awards are granted during which the
performance of the Company or a Division will be measured.

            2.38  "Performance Objectives" has the meaning set forth in
Section 8.3.

            2.39 "Performance Shares" means Shares issued or transferred to an
Eligible Individual under Section 8.2.

            2.40 "Performance Units" means Performance Units granted to an
Eligible Individual under Section 8.1.

            2.41  "Person" shall have the meaning assigned to it in Section
2.8(a).

            2.42 "Phantom Stock" means a right granted to an Eligible Individual
under Section 9.2 representing a number of hypothetical Shares.


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            2.43  "Plan" means the Ribapharm Inc. 2002 Stock Option and Award
Plan, as amended and restated from time to time.

            2.44 "Pooling Transaction" means an acquisition of the Company in a
transaction which is intended to be treated as a "pooling of interests" under
generally accepted accounting principles.

            2.45  "Proxy Contest" shall have the meaning assigned to it in
Section 2.8(c).

            2.46  "Related Entity" shall have the meaning assigned to it in
Section 2.8(a).

            2.47 "Restricted Stock" means Shares issued or transferred to an
Eligible Individual pursuant to Section 7.

            2.48 "Share Award" means an Award of Shares granted pursuant to
Section 9.1.

            2.49 "Shares" means the Common Stock of the Company, par value $.01
per share, and any other securities into which such shares are changed or for
which such shares are exchanged.

            2.50 "Spin-Off" means the distribution by ICN of its remaining
interest in the Company to ICN's shareholders in a tax-free spin-off following
the Initial Public Offering described in the Company's Form S-1 filed with the
Securities and Exchange Commission on _______.

            2.51 "Stock Appreciation Right" means a right to receive all or some
portion of the increase in the value of the Shares as provided in Section 6
hereof.

            2.52 "Subject Person" shall have the meaning assigned to it in
Section 2.8 hereof.

            2.53 "Subsidiary" means (i) except as provided in subsection (ii)
below, any corporation which is a subsidiary corporation within the meaning of
Section 424(f) of the Code with respect to the Company, and (ii) in relation to
the eligibility to receive Options or Awards other than Incentive Stock Options
and to continued employment for purposes of Options and Awards (unless the
Committee determines otherwise), any entity, whether or not incorporated, in
which the Company directly or indirectly owns 50% or more of the outstanding
equity or other ownership interests.


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            2.54 "Successor Corporation" means a corporation, or a Parent or
Subsidiary thereof within the meaning of Section 424(a) of the Code, which
issues or assumes a stock option in a transaction to which Section 424(a) of the
Code applies.

            2.55  "Surviving Corporation" shall have the meaning assigned to
it in Section 2.8(b).

            2.56 "Ten-Percent Stockholder" means an Eligible Individual, who, at
the time an Incentive Stock Option is to be granted to him or her, owns (within
the meaning of Section 422(b)(6) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company, or of a Parent or a Subsidiary thereof.

            2.57 "Transition Period" means the period beginning on the date that
the corporation becomes a separate publicly held corporation and ending on the
date prior to the first regularly scheduled meeting of the shareholders of the
new publicly held corporation that occurs more than 12 months after the date
that the corporation becomes a separate publicly held corporation.

            2.58  "Voting Securities" shall have the meaning assigned to it
in Section 2.8(a).

      3.    Administration.

            3.1 The Plan shall be administered by the Committee, which shall
hold meetings at such times as may be necessary for the proper administration of
the Plan. The Committee shall keep minutes of its meetings. A quorum shall
consist of not fewer than two (2) members of the Committee and a majority of a
quorum may authorize any action. Any decision or determination reduced to
writing and signed by a majority of all of the members of the Committee shall be
as fully effective as if made by a majority vote at a meeting duly called and
held. The Committee shall consist of at least two (2) Directors and may consist
of the entire Board; provided, however, that from and after the date of an
Initial Public Offering, (a) with respect to any Option or Award to an Eligible
Individual who is subject to Section 16 of the Exchange Act, the Committee shall
consist solely of at least two (2) Directors each of whom shall be a Nonemployee
Director and (b) to the extent necessary for any Option or Award intended to
qualify as Performance-Based Compensation to so qualify, the Committee shall
consist of at least two (2) Directors, each of whom shall be an Outside
Director. For purposes of the preceding sentence, if one or more members of the
Committee is not a Nonemployee Director and an Outside Director but recuses
himself or herself or abstains from voting with respect to a particular action
taken by the Committee, then the Committee, with respect to that action, shall
be deemed to consist only of the members of the Committee who have not


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recused themselves or abstained from voting. Subject to applicable law, the
Committee may delegate its authority under the Plan to any other person or
persons.

            3.2 No member of the Committee shall be liable for any action,
failure to act, determination or interpretation made in good faith with respect
to this Plan or any transaction hereunder. The Company hereby agrees to
indemnify each member of the Committee for all costs and expenses and, to the
extent permitted by applicable law, any liability incurred in connection with
defending against, responding to, negotiating for the settlement of or otherwise
dealing with any claim, cause of action or dispute of any kind arising in
connection with any actions in administering this Plan or in authorizing or
denying authorization to any transaction hereunder.

            3.3 Subject to the express terms and conditions set forth herein,
the Committee shall have the power from time to time to:

                  (a) determine those Eligible Individuals to whom Options shall
be granted under the Plan and the number of such Options to be granted and to
prescribe the terms and conditions (which need not be identical) of each such
Option, including the exercise price per Share, the vesting schedule and the
duration of each Option, and make any amendment or modification to any Option
Agreement consistent with the terms of the Plan;

                  (b) select those Eligible Individuals to whom Awards shall be
granted under the Plan and to determine the number of Shares in respect of which
each Award is granted, and to prescribe the terms and conditions (which need not
be identical) of each such Award, and to make any amendment or modification to
any Award Agreement consistent with the terms of the Plan;

                  (c) to construe and interpret the Plan and the Options and
Awards granted hereunder and to establish, amend and revoke rules and
regulations for the administration of the Plan, including, but not limited to,
correcting any defect or supplying any omission, or reconciling any
inconsistency in the Plan or in any Agreement, in the manner and to the extent
it shall deem necessary or advisable, including so that the Plan and the
operation of the Plan complies with Rule 16b-3 under the Exchange Act, the Code
to the extent applicable and other applicable law, and otherwise to make the
Plan fully effective. All decisions and determinations by the Committee in the
exercise of this power shall be final, binding and conclusive upon the Company,
the Optionees and the Grantees, and all other persons having any interest
therein;


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                  (d) to determine the duration and purposes for leaves of
absence which may be granted to an Optionee or Grantee on an individual basis
without constituting a termination of employment or service for purposes of the
Plan;

                  (e)   to exercise its discretion with respect to the powers
and rights granted to it as set forth in the Plan; and

                  (f) generally, to exercise such powers and to perform such
acts as are deemed necessary or advisable to promote the best interests of the
Company with respect to the Plan.

      4.    Stock Subject to the Plan; Grant Limitations.

            4.1 The maximum number of Shares that may be made the subject of
Options and Awards granted under the Plan is 22,500,000. The Company shall
reserve for the purposes of the Plan, out of its authorized but unissued Shares
or out of Shares held in the Company's treasury, or partly out of each, such
number of Shares as shall be determined by the Board.

            4.2 Upon the granting of an Option or an Award, the number of Shares
available under Section 4.1 for the granting of further Options and Awards shall
be reduced as follows:

                  (a) In connection with the granting of an Option or an Award
(other than the granting of a Performance Unit denominated in dollars), the
number of Shares shall be reduced by the number of Shares in respect of which
the Option or Award is granted or denominated; provided, however, that if any
Option is exercised by tendering Shares, either actually or by attestation, to
the Company as full or partial payment of the exercise price, the maximum number
of Shares available under Section 4.1 shall be increased by the number of Shares
so tendered.

                  (b) In connection with the granting of a Performance Unit
denominated in dollars, the number of Shares shall be reduced by an amount equal
to the quotient of (i) the dollar amount in which the Performance Unit is
denominated, divided by (ii) the Fair Market Value of a Share on the date the
Performance Unit is granted.

            4.3 Whenever any outstanding Option or Award or portion thereof,
expires, is canceled, is settled in cash (including the settlement of tax
withholding obligations using Shares) or is otherwise terminated for any reason
without having been exercised or payment having been made in respect of the
entire Option or Award, the Shares allocable to the expired, canceled, settled
or otherwise terminated portion of the Option or Award may again be the subject
of Options or Awards granted hereunder.


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      5.    Option Grants for Eligible Individuals.

            5.1 Authority of Committee. Subject to the provisions of the Plan,
the Committee shall have full and final authority to select those Eligible
Individuals who will receive Options, and the terms and conditions of the grant
to such Eligible Individuals shall be set forth in an Agreement. Incentive Stock
Options may be granted only to Eligible Individuals who are employees of the
Company or any Parent or Subsidiary thereof.

            5.2 Exercise Price. The purchase price or the manner in which the
exercise price is to be determined for Shares under each Option shall be
determined by the Committee and set forth in the Agreement; provided, however,
that the exercise price per Share under each Incentive Stock Option shall not be
less than 100% of the Fair Market Value of a Share on the date the Option is
granted (110% in the case of an Incentive Stock Option granted to a Ten-Percent
Stockholder).

            5.3 Maximum Duration. Options granted hereunder shall be for such
term as the Committee shall determine, provided that an Incentive Stock Option
shall not be exercisable after the expiration of ten (10) years from the date it
is granted (five (5) years in the case of an Incentive Stock Option granted to a
Ten-Percent Stockholder) and a Nonqualified Stock Option shall not be
exercisable after the expiration of ten (10) years from the date it is granted;
provided, however, that unless the Committee provides otherwise, an Option
(other than an Incentive Stock Option) may, upon the death of the Optionee prior
to the expiration of the Option, be exercised for up to one (1) year following
the date of the Optionee's death even if such period extends beyond ten (10)
years from the date the Option is granted. The Committee may, subsequent to the
granting of any Option, extend the term thereof, but in no event shall the term
as so extended exceed the maximum term provided for in the preceding sentence.

            5.4 Exercisability. Subject to Section 5.10, each Option shall
become exercisable in such installments (which need not be equal) and at such
times as may be designated by the Committee and set forth in the Agreement;
provided, however, that in no event shall an Agreement permit the exercise of an
Option prior to the earlier of (i) the consummation of the Spin-Off, (ii) a
Change in Control, and (iii)            . To the extent not exercised,
installments shall accumulate and be exercisable, in whole or in part, at any
time after becoming exercisable, but not later than the date the Option expires.
The Committee may accelerate the exercisability of any Option or portion thereof
at any time.

            5.5 Deferred Delivery of Option Shares. The Committee may, in its
discretion permit Optionees to elect to defer the issuance of Shares upon the
exercise of one or more Nonqualified Stock Options granted pursuant to the Plan.
The terms and


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conditions of such deferral shall be determined at the time of the grant of the
Option or thereafter and shall be set forth in the Agreement evidencing the
Option.

            5.6 Limitations on Incentive Stock Options. To the extent that the
aggregate Fair Market Value (determined as of the date of the grant) of Shares
with respect to which Incentive Stock Options granted under the Plan and
"incentive stock options" (within the meaning of Section 422 of the Code)
granted under all other plans of the Company or ICN (in either case determined
without regard to this Section 5.6) are exercisable by an Optionee for the first
time during any calendar year exceeds $100,000, such Incentive Stock Options
shall be treated as Nonqualified Stock Options. In applying the limitation in
the preceding sentence in the case of multiple Option grants, Options which were
intended to be Incentive Stock Options shall be treated as Nonqualified Stock
Options according to the order in which they were granted such that the most
recently granted Options are first treated as Nonqualified Stock Options.

            5.7 Non-Transferability. No Option shall be transferable by the
Optionee otherwise than by will or by the laws of descent and distribution or,
in the case of an Option other than an Incentive Stock Option, pursuant to a
domestic relations order (within the meaning of Rule 16a-12 promulgated under
the Exchange Act), and an Option shall be exercisable during the lifetime of
such Optionee only by the Optionee or his or her guardian or legal
representative. Notwithstanding the foregoing, the Committee may set forth in
the Agreement evidencing an Option (other than an Incentive Stock Option) at the
time of grant or thereafter, that the Option may be transferred to members of
the Optionee's immediate family, to trusts solely for the benefit of such
immediate family members and to partnerships in which such family members and/or
trusts are the only partners, and for purposes of this Plan, a transferee of an
Option shall be deemed to be the Optionee. For this purpose, immediate family
means the Optionee's spouse, parents, children, stepchildren and grandchildren
and the spouses of such parents, children, stepchildren and grandchildren. The
terms of an Option shall be final, binding and conclusive upon the
beneficiaries, executors, administrators, heirs and successors of the Optionee.

            5.8 Method of Exercise. The exercise of an Option shall be made only
by a written notice delivered in person or by mail to the Secretary of the
Company at the Company's principal executive office, specifying the number of
Shares to be exercised and, to the extent applicable, accompanied by payment
therefor and otherwise in accordance with the Agreement pursuant to which the
Option was granted; provided, however, that Options may not be exercised by an
Optionee for six months following a hardship distribution to the Optionee under
any tax-qualified plan of the Company or ICN, to the extent such exercise is
prohibited under Treasury Regulation Section 1.401(k)-1(d)(2)(iv)(B)(4). The
exercise price for any Shares purchased pursuant to the exercise of an Option
shall be paid in either of the following forms (or any combination thereof): (a)


                                     - 13 -
<PAGE>
cash (or check) or (b) the transfer, either actually or by attestation, to the
Company of Shares that have been held by the Optionee for at least six (6)
months (or such lesser period as may be permitted by the Committee) prior to the
exercise of the Option, such transfer to be upon such terms and conditions as
determined by the Committee or (c) a combination of cash (or check) and the
transfer of Shares; provided, however, that the Committee may determine that the
exercise price shall be paid only in cash. In addition, Options may be exercised
through a registered broker-dealer pursuant to such cashless exercise procedures
which are, from time to time, deemed acceptable by the Committee. Any Shares
transferred to the Company as payment of the exercise price under an Option
shall be valued at their Fair Market Value on the day of exercise of such
Option. If requested by the Committee, the Optionee shall (i) deliver the
Agreement evidencing the Option to the Secretary of the Company who shall
endorse thereon a notation of such exercise and return such Agreement to the
Optionee, and/or (ii) provide satisfactory proof as to the right of such
Optionee to exercise the Option. No fractional Shares (or cash in lieu thereof)
shall be issued upon exercise of an Option and the number of Shares that may be
purchased upon exercise shall be rounded to the nearest number of whole Shares.

            5.9 Rights of Optionees. No Optionee shall be deemed for any purpose
to be the owner of any Shares subject to any Option unless and until (a) the
Option shall have been exercised pursuant to the terms thereof and the Optionee
shall have paid the full purchase price for the number of Shares in respect of
which the Option was exercised, (b) the Company shall have issued and delivered
Shares to the Optionee, and (c) the Optionee's name shall have been entered as a
stockholder of record on the books of the Company. Thereupon, the Optionee shall
have full voting, dividend and other ownership rights with respect to such
Shares, subject to such terms and conditions as may be set forth in the
applicable Agreement.

            5.10 Effect of Change in Control. Subject to the proviso set forth
in Section 5.4, in the event that (i) an Optionee's employment with the Company
or ICN is terminated by the Company or by ICN, as the case may be, without Cause
following a Change in Control, or (ii) in the case of a director of the Company
or ICN, his or her services as a director ceases following a Change in Control,
and in either case the Optionee is not employed by, or otherwise does not
provide services to, the Company or ICN immediately following such termination
of employment or cessation of services, each Option held by the Optionee as of
the date of termination of the Optionee's employment or service shall become
immediately and fully exercisable and shall, notwithstanding any shorter period
set forth in the Agreement evidencing the Option, remain exercisable for a
period ending not before the earlier of (a) the six (6) month anniversary of the
termination of the Optionee's employment or service, and (b) the expiration of
the stated term of the Option. In addition, the Agreement evidencing the


                                     - 14 -
<PAGE>
grant of an Option may provide for any other treatment of the Option in the
event of a Change in Control.

      6.    Stock Appreciation Rights.

            The Committee may in its discretion, either alone or in connection
with the grant of an Option, grant Stock Appreciation Rights in accordance with
the Plan, the terms and conditions of which shall be set forth in an Agreement.
If granted in connection with an Option, a Stock Appreciation Right shall cover
the same Shares covered by the Option (or such lesser number of Shares as the
Committee may determine) and shall, except as provided in this Section 6, be
subject to the same terms and conditions as the related Option.

            6.1   Time of Grant. A Stock Appreciation Right may be granted (a)
at any time if unrelated to an Option, or (b) if related to an Option, either at
the time of grant of the Option or at any time thereafter during the term of the
Option.

            6.2   Stock Appreciation Right Related to an Option.

                  (a) Exercise. A Stock Appreciation Right granted in connection
with an Option shall be exercisable at such time or times and only to the extent
that the related Options are exercisable, and will not be transferable except to
the extent the related Option may be transferable. A Stock Appreciation Right
granted in connection with an Incentive Stock Option shall be exercisable only
if the Fair Market Value of a Share on the date of exercise exceeds the exercise
price specified in the related Incentive Stock Option Agreement.

                  (b) Amount Payable. Upon the exercise of a Stock Appreciation
Right related to an Option, the Grantee shall be entitled to receive an amount
determined by multiplying (i) the excess of the Fair Market Value of a Share on
the date of exercise of such Stock Appreciation Right over the per Share
exercise price under the related Option, by (ii) the number of Shares as to
which such Stock Appreciation Right is being exercised. Notwithstanding the
foregoing, the Committee may limit in any manner the amount payable with respect
to any Stock Appreciation Right by including such a limit in the Agreement
evidencing the Stock Appreciation Right at the time it is granted.

                  (c) Treatment of Related Options and Stock Appreciation Rights
Upon Exercise. Upon the exercise of a Stock Appreciation Right granted in
connection with an Option, the Option shall be canceled to the extent of the
number of Shares as to which the Stock Appreciation Right is exercised, and upon
the exercise of an Option granted in connection with a Stock Appreciation Right,
the Stock Appreciation Right

                                     - 15 -
<PAGE>
shall be canceled to the extent of the number of Shares as to which the Option
is exercised or surrendered.

            6.3 Stock Appreciation Right Unrelated to an Option. The Committee
may grant to Eligible Individuals Stock Appreciation Rights unrelated to
Options. Subject to Section 6.7, Stock Appreciation Rights unrelated to Options
shall contain such terms and conditions as to exercisability, vesting and
duration as the Committee shall determine, but in no event shall they have a
term of greater than ten (10) years; provided, however, that the Committee may
provide that Stock Appreciation Rights may, upon the death of the Grantee, be
exercised for up to one (1) year following the date of the Grantee's death even
if such period extends beyond ten (10) years from the date the Stock
Appreciation Right is granted. Upon exercise of a Stock Appreciation Right
unrelated to an Option, the Grantee shall be entitled to receive an amount
determined by multiplying (a) the excess of the Fair Market Value of a Share on
the date of exercise of such Stock Appreciation Right over the Fair Market Value
of a Share on the date the Stock Appreciation Right was granted, by (b) the
number of Shares as to which the Stock Appreciation Right is being exercised.
Notwithstanding the foregoing, the Committee may limit in any manner the amount
payable with respect to any Stock Appreciation Right by including such a limit
in the Agreement evidencing the Stock Appreciation Right at the time it is
granted.

            6.4 Non-Transferability. No Stock Appreciation Right shall be
transferable by the Grantee otherwise than by will or by the laws of descent and
distribution or pursuant to a domestic relations order (within the meaning of
Rule 16a-12 promulgated under the Exchange Act), and such Stock Appreciation
Right shall be exercisable during the lifetime of such Grantee only by the
Grantee or his or her guardian or legal representative. The terms of such Stock
Appreciation Right shall be final, binding and conclusive upon the
beneficiaries, executors, administrators, heirs and successors of the Grantee.

            6.5 Method of Exercise. Stock Appreciation Rights shall be exercised
by a Grantee only by a written notice delivered in person or by mail to the
Secretary of the Company at the Company's principal executive office, specifying
the number of Shares with respect to which the Stock Appreciation Right is being
exercised. If requested by the Committee, the Grantee shall deliver the
Agreement evidencing the Stock Appreciation Right being exercised and the
Agreement evidencing any related Option to the Secretary of the Company who
shall endorse thereon a notation of such exercise and return such Agreement to
the Grantee.

            6.6 Form of Payment. Payment of the amount determined under Sections
6.2(b) or 6.3 may be made in the discretion of the Committee solely in whole
Shares in a number determined at their Fair Market Value on the date of exercise
of the


                                     - 16 -
<PAGE>
Stock Appreciation Right, or solely in cash, or in a combination of cash and
Shares; provided, however, that (i) payments made prior to the earlier of (a)
the consummation of the Spin-Off, (b) a Change in Control and (c)
shall be paid solely in the form of cash, and (ii) where the Committee is
otherwise permitted to make payment in Shares and the amount payable results in
a fractional Share, payment for the fractional Share will be made in cash.

            6.7 Effect of Change in Control. In the event a Grantee's employment
with the Company or ICN is terminated by the Company or by ICN, as the case may
be, without Cause following a Change in Control, or in the case of a director of
the Company or ICN, his or her services as a director ceases following a Change
in Control, and in either case the Grantee is not employed by, or otherwise does
not provide services to, the Company or ICN immediately following such
termination of employment or cessation of services, each Stock Appreciation
Right held by the Grantee shall become immediately and fully exercisable and
shall, notwithstanding any shorter period set forth in the Agreement evidencing
the Stock Appreciation Right, remain exercisable for a period ending not before
the earlier of (a) the six (6) month anniversary of the termination of the
Grantee's employment or service and (b) the expiration of the stated term of the
Stock Appreciation Right. In addition, the Agreement evidencing the grant of a
Stock Appreciation Right unrelated to an Option may provide for any other
treatment of the Stock Appreciation Rights in the event of a Change in Control.

      7.    Restricted Stock.

            7.1 Grant. The Committee may grant Awards to Eligible Individuals of
Restricted Stock, which shall be evidenced by an Agreement between the Company
and the Grantee; provided, however, that no such grants shall be made prior to
the earlier of the consummation of the Spin-Off, a Change in Control and
      . Each Agreement shall contain such restrictions, terms and conditions
as the Committee may, in its discretion, determine and (without limiting the
generality of the foregoing) such Agreements may require that an appropriate
legend be placed on Share certificates. Awards of Restricted Stock shall be
subject to the terms and provisions set forth below in this Section 7.

            7.2 Rights of Grantee. Shares of Restricted Stock granted pursuant
to an Award hereunder shall be issued in the name of the Grantee as soon as
reasonably practicable after the Award is granted provided that the Grantee has
executed an Agreement evidencing the Award, the appropriate blank stock powers
and, in the discretion of the Committee, an escrow agreement and any other
documents which the Committee may require as a condition to the issuance of such
Shares. If a Grantee shall fail to execute the Agreement evidencing a Restricted
Stock Award, or any documents which the Committee may require within the time
period prescribed by the Committee at


                                     - 17 -
<PAGE>
the time the Award is granted, the Award shall be null and void. At the
discretion of the Committee, Shares issued in connection with a Restricted Stock
Award shall be deposited together with the stock powers with an escrow agent
(which may be the Company) designated by the Committee. Unless the Committee
determines otherwise and as set forth in the Agreement, upon delivery of the
Shares to the escrow agent, the Grantee shall have all of the rights of a
stockholder with respect to such Shares, including the right to vote the Shares
and to receive all dividends or other distributions paid or made with respect to
the Shares.

            7.3   Non-transferability. Until all restrictions upon the Shares of
Restricted Stock awarded to a Grantee shall have lapsed in the manner set forth
in Section 7.4, such Shares shall not be sold, transferred or otherwise disposed
of and shall not be pledged or otherwise hypothecated.

            7.4   Lapse of Restrictions.

                  (a) Generally. Restrictions upon Shares of Restricted Stock
awarded hereunder shall lapse at such time or times and on such terms and
conditions as the Committee may determine. The Agreement evidencing the Award
shall set forth any such restrictions.

                  (b) Effect of Change in Control. The Committee may determine
at the time of the grant of an Award of Restricted Stock the extent to which the
restrictions upon Shares of Restricted Stock shall lapse upon a Change in
Control. The Agreement evidencing the Award shall set forth any such provisions.

            7.5   Treatment of Dividends. At the time an Award of Shares of
Restricted Stock is granted, the Committee may, in its discretion, determine
that the payment to the Grantee of dividends, or a specified portion thereof,
declared or paid on such Shares by the Company shall be (a) deferred until the
lapsing of the restrictions imposed upon such Shares and (b) held by the Company
for the account of the Grantee until such time. In the event that dividends are
to be deferred, the Committee shall determine whether such dividends are to be
reinvested in Shares (which shall be held as additional Shares of Restricted
Stock) or held in cash. If deferred dividends are to be held in cash, there may
be credited at the end of each year (or portion thereof) interest on the amount
of the account at the beginning of the year at a rate per annum as the
Committee, in its discretion, may determine. Payment of deferred dividends in
respect of Shares of Restricted Stock (whether held in cash or as additional
Shares of Restricted Stock), together with interest accrued thereon, if any,
shall be made upon the lapsing of restrictions imposed on the Shares in respect
of which the deferred dividends were paid. Any dividends deferred (together with
any interest accrued thereon) in respect of any Shares of Restricted Stock shall
be forfeited upon the forfeiture of such Shares.


                                     - 18 -
<PAGE>
            7.6   Delivery of Shares. Upon the lapse of the restrictions on
Shares of Restricted Stock, the Committee shall cause a stock certificate to be
delivered to the Grantee with respect to such Shares, free of all restrictions
hereunder.

      8.    Performance Awards.

            8.1   Performance Units. The Committee, in its discretion, may grant
Awards of Performance Units to Eligible Individuals, the terms and conditions of
which shall be set forth in an Agreement between the Company and the Grantee.
Performance Units may be denominated in Shares or a specified dollar amount and,
contingent upon the attainment of specified Performance Objectives within the
Performance Cycle, represent the right to receive payment as provided in Section
8.3(c) of (1) in the case of Share-denominated Performance Units, the Fair
Market Value of a Share on the date the Performance Unit was granted, the date
the Performance Unit became vested or any other date specified by the Committee,
(2) in the case of dollar-denominated Performance Units, the specified dollar
amount or (3) a percentage (which may be more than 100%) of the amount described
in clause (1) or (2) depending on the level of Performance Objective attainment;
provided, however, that, the Committee may at the time a Performance Unit is
granted specify a maximum amount payable in respect of a vested Performance
Unit. Each Agreement shall specify the number of Performance Units to which it
relates, the Performance Objectives which must be satisfied in order for the
Performance Units to vest and the Performance Cycle within which such
Performance Objectives must be satisfied.

                  (a) Vesting and Forfeiture. Subject to Sections 8.3(c) and
8.4, a Grantee shall become vested with respect to the Performance Units to the
extent that the Performance Objectives set forth in the Agreement are satisfied
for the Performance Cycle.

                  (b) Payment of Awards. Subject to Section 8.3(c), payment to
Grantees in respect of vested Performance Units shall be made as soon as
practicable after the last day of the Performance Cycle to which such Award
relates unless the Agreement evidencing the Award provides for the deferral of
payment, in which event the terms and conditions of the deferral shall be set
forth in the Agreement. Subject to Section 8.4, such payments may be made
entirely in Shares valued at their Fair Market Value, entirely in cash, or in
such combination of Shares and cash as the Committee in its discretion shall
determine at any time prior to such payment; provided, however, that (i) if the
Committee in its discretion determines to make such payment entirely or
partially in Shares of Restricted Stock, the Committee must determine the extent
to which such payment will be in Shares of Restricted Stock and the terms of
such Restricted Stock at the time the Award is granted, and (ii) payments made
prior to the earlier of (a) the consummation of


                                     - 19 -
<PAGE>
the Spin-Off, (b) a Change in Control and (c)                 shall be paid
solely in the form of cash.

            8.2 Performance Shares. The Committee, in its discretion, may grant
Awards of Performance Shares to Eligible Individuals, the terms and conditions
of which shall be set forth in an Agreement between the Company and the Grantee;
provided, however, that no such grants shall be made prior to the earlier of the
consummation of the Spin-Off, a Change in Control and                . Each
Agreement may require that an appropriate legend be placed on Share
certificates. Awards of Performance Shares shall be subject to the following
terms and provisions:

                  (a) Rights of Grantee. The Committee shall provide at the time
an Award of Performance Shares is made the time or times at which the actual
Shares represented by such Award shall be issued in the name of the Grantee;
provided, however, that no Performance Shares shall be issued until the Grantee
has executed an Agreement evidencing the Award, the appropriate blank stock
powers and, in the discretion of the Committee, an escrow agreement and any
other documents which the Committee may require as a condition to the issuance
of such Performance Shares. If a Grantee shall fail to execute the Agreement
evidencing an Award of Performance Shares, the appropriate blank stock powers
and, in the discretion of the Committee, an escrow agreement and any other
documents which the Committee may require within the time period prescribed by
the Committee at the time the Award is granted, the Award shall be null and
void. At the discretion of the Committee, Shares issued in connection with an
Award of Performance Shares shall be deposited together with the stock powers
with an escrow agent (which may be the Company) designated by the Committee.
Except as restricted by the terms of the Agreement, upon delivery of the Shares
to the escrow agent, the Grantee shall have, in the discretion of the Committee,
all of the rights of a stockholder with respect to such Shares, including the
right to vote the Shares and to receive all dividends or other distributions
paid or made with respect to the Shares.

                  (b) Non-transferability. Until any restrictions upon the
Performance Shares awarded to a Grantee shall have lapsed in the manner set
forth in Sections 8.2(c) or 8.4, such Performance Shares shall not be sold,
transferred or otherwise disposed of and shall not be pledged or otherwise
hypothecated, nor shall they be delivered to the Grantee. The Committee may also
impose such other restrictions and conditions on the Performance Shares, if any,
as it deems appropriate.

                  (c) Lapse of Restrictions. Subject to Sections 8.3(c) and 8.4,
restrictions upon Performance Shares awarded hereunder shall lapse and such
Performance Shares shall become vested at such time or times and on such terms,
conditions and satisfaction of Performance Objectives as the Committee may, in
its discretion, determine at the time an Award is granted.


                                     - 20 -
<PAGE>
                  (d) Treatment of Dividends. At the time the Award of
Performance Shares is granted, the Committee may, in its discretion, determine
that the payment to the Grantee of dividends, or a specified portion thereof,
declared or paid on Shares represented by such Award which have been issued by
the Company to the Grantee shall be (i) deferred until the lapsing of the
restrictions imposed upon such Performance Shares and (ii) held by the Company
for the account of the Grantee until such time. In the event that dividends are
to be deferred, the Committee shall determine whether such dividends are to be
reinvested in Shares (which shall be held as additional Performance Shares) or
held in cash. If deferred dividends are to be held in cash, there may be
credited at the end of each year (or portion thereof) interest on the amount of
the account at the beginning of the year at a rate per annum as the Committee,
in its discretion, may determine. Payment of deferred dividends in respect of
Performance Shares (whether held in cash or in additional Performance Shares),
together with interest accrued thereon, if any, shall be made upon the lapsing
of restrictions imposed on the Performance Shares in respect of which the
deferred dividends were paid. Any dividends deferred (together with any interest
accrued thereon) in respect of any Performance Shares shall be forfeited upon
the forfeiture of such Performance Shares.

                  (e) Delivery of Shares. Upon the lapse of the restrictions on
Performance Shares awarded hereunder, the Committee shall cause a stock
certificate to be delivered to the Grantee with respect to such Shares, free of
all restrictions hereunder.

            8.3   Performance Objectives

                  (a) Establishment. Performance Objectives for Performance
Awards may be expressed in terms of (i) earnings per Share, (ii) Share price,
(iii) pre-tax profits, (iv) net earnings, (v) return on equity or assets, (vi)
sales, or (vii) any combination of the foregoing. Performance Objectives may be
in respect of the performance of the Company, any of its Divisions or any
combination thereof. Performance Objectives may be absolute or relative (to
prior performance of the Company or to the performance of one or more other
entities or external indices) and may be expressed in terms of a progression
within a specified range. The Performance Objectives with respect to a
Performance Cycle shall be established in writing by the Committee by the
earlier of (x) the date on which a quarter of the Performance Cycle has elapsed
or (y) the date which is ninety (90) days after the commencement of the
Performance Cycle, and in any event while the performance relating to the
Performance Objectives remains substantially uncertain.

                  (b) Effect of Certain Events. At the time of the granting of a
Performance Award, or at any time thereafter, in either case to the extent
permitted under Section 162(m) of the Code and the regulations thereunder
without adversely affecting the treatment of the Performance Award as
Performance-Based Compensation, the Committee may provide for the manner in
which performance will be measured against


                                     - 21 -
<PAGE>
the Performance Objectives (or may adjust the Performance Objectives) to reflect
the impact of specified corporate transactions, accounting or tax law changes
and other extraordinary or nonrecurring events.

                  (c) Determination of Performance. Prior to the vesting,
payment, settlement or lapsing of any restrictions with respect to any
Performance Award that is intended to constitute Performance-Based Compensation
made to a Grantee who is subject to Section 162(m) of the Code, the Committee
shall certify in writing that the applicable Performance Objectives have been
satisfied to the extent necessary for such Award to qualify as Performance-Based
Compensation.

            8.4   Effect of Change in Control. The Agreements evidencing
Performance Shares and Performance Units may provide for the treatment of such
Awards (or portions thereof) in the event of a Change in Control, including, but
not limited to, provisions for the adjustment of applicable Performance
Objectives.

            8.5   Non-transferability. Until the vesting of Performance Units or
the lapsing of any restrictions on Performance Shares, as the case may be, such
Performance Units or Performance Shares shall not be sold, transferred or
otherwise disposed of and shall not be pledged or otherwise hypothecated.

      9.    Other Share Based Awards.

            9.1   Share Awards. The Committee may grant a Share Award to any
Eligible Individual on such terms and conditions as the Committee may determine
in its sole discretion; provided, however, that no such grants shall be made
prior to the earlier of the consummation of the Spin-Off, a Change in Control
and                . Share Awards may be made as additional compensation for
services rendered by the Eligible Individual or may be in lieu of cash or other
compensation to which the Eligible Individual is entitled from the Company or
ICN, as the case may be.

            9.2   Phantom Stock Awards.

                  (a) Grant. The Committee may, in its discretion, grant shares
of Phantom Stock to any Eligible Individuals. Such Phantom Stock shall be
subject to the terms and conditions established by the Committee and set forth
in the applicable Agreement.

                  (b) Payment of Awards. Upon the vesting of a Phantom Stock
Award, the Grantee shall be entitled to receive a cash payment in respect of
each share of Phantom Stock which shall be equal to the Fair Market Value of a
Share as of the date the Phantom Stock Award was granted, or such other date as
determined by the Committee at the time the Phantom Stock Award was granted. The
Committee may, at the time a


                                     - 22 -
<PAGE>
Phantom Stock Award is granted, provide a limitation on the amount payable in
respect of each share of Phantom Stock. Following the earlier of the
consummation of the Spin-Off, a Change in Control and               , in lieu of
a cash payment, the Committee may settle Phantom Stock Awards with Shares having
a Fair Market Value equal to the cash payment to which the Grantee has become
entitled.

      10.   Effect of a Termination of Employment.

            The Agreement evidencing the grant of each Option and each Award
shall set forth the terms and conditions applicable to such Option or Award upon
a termination or change in the status of the employment of the Optionee or
Grantee by the Company or ICN (including a termination or change by reason of
the sale of a Division), which shall be as the Committee may, in its discretion,
determine at the time the Option or Award is granted or thereafter.

      11.   Adjustment Upon Changes in Capitalization.

                  (a) In the event of a Change in Capitalization, the Committee
shall conclusively determine the appropriate adjustments, if any, to (i) the
maximum number and class of Shares or other stock or securities with respect to
which Options or Awards may be granted under the Plan, (ii) the number and class
of Shares or other stock or securities which are subject to outstanding Options
or Awards granted under the Plan and the exercise price therefor, if applicable,
and (iii) the Performance Objectives.

                  (b) Any such adjustment in the Shares or other stock or
securities (i) subject to outstanding Incentive Stock Options (including any
adjustments in the exercise price) shall be made in such manner as not to
constitute a modification as defined by Section 424(h)(3) of the Code and only
to the extent otherwise permitted by Sections 422 and 424 of the Code, or (ii)
subject to outstanding Options or Awards that are intended to qualify as
Performance-Based Compensation shall be made in such a manner as not to
adversely affect the treatment of the Option or Award as Performance-Based
Compensation.

                  (c) If, by reason of a Change in Capitalization, a Grantee of
an Award shall be entitled to, or an Optionee shall be entitled to exercise an
Option with respect to, new, additional or different shares of stock or
securities of the Company or any other corporation, such new, additional or
different shares shall thereupon be subject to all of the conditions,
restrictions and performance criteria which were applicable to the Shares
subject to the Award or Option, as the case may be, prior to such Change in
Capitalization.


                                     - 23 -
<PAGE>
      12.   Effect of Certain Transactions.

            Subject to Sections 5.10, 6.7, 7.4(b) and 8.4 or as otherwise
provided in an Agreement, in the event of (a) the liquidation or dissolution of
the Company or (b) a merger or consolidation of the Company (a "Transaction"),
the Plan and the Options and Awards issued hereunder shall continue in effect in
accordance with their respective terms, except that following a Transaction
either (i) each outstanding Option or Award shall be treated as provided for in
the agreement entered into in connection with the Transaction or (ii) if not so
provided in such agreement, each Optionee and Grantee shall be entitled to
receive in respect of each Share subject to any outstanding Options or Awards,
as the case may be, upon exercise of any Option or payment or transfer in
respect of any Award, the same number and kind of stock, securities, cash,
property or other consideration that each holder of a Share was entitled to
receive in the Transaction in respect of a Share; provided, however, that such
stock, securities, cash, property, or other consideration shall remain subject
to all of the conditions, restrictions and performance criteria which were
applicable to the Options and Awards prior to such Transaction. The treatment of
any Option or Award as provided in this Section 12 shall be conclusively
presumed to be appropriate for purposes of Section 11.

      13.   Interpretation.

            Following the required registration of any equity security of the
Company pursuant to Section 12 of the Exchange Act:

                  (a) The Plan is intended to comply with Rule 16b-3 promulgated
under the Exchange Act and the Committee shall interpret and administer the
provisions of the Plan or any Agreement in a manner consistent therewith. Any
provisions inconsistent with such Rule shall be inoperative and shall not affect
the validity of the Plan.

                  (b) Unless otherwise expressly stated in the relevant
Agreement, each Option, Stock Appreciation Right and Performance Award granted
under the Plan is intended to be Performance-Based Compensation. The Committee
shall not be entitled to exercise any discretion otherwise authorized hereunder
with respect to such Options or Awards if the ability to exercise such
discretion or the exercise of such discretion itself would cause the
compensation attributable to such Options or Awards to fail to qualify as
Performance-Based Compensation.

                  (c) To the extent that any legal requirement of Section 16 of
the Exchange Act or Section 162(m) of the Code as set forth in the Plan ceases
to be required under Section 16 of the Exchange Act or Section 162(m) of the
Code, that Plan provision shall cease to apply.


                                     - 24 -
<PAGE>
      14.   Pooling Transactions.

            Notwithstanding anything contained in the Plan or any Agreement to
the contrary, in the event of a Change in Control which is also intended to
constitute a Pooling Transaction, the Committee shall take such actions, if any,
as are specifically recommended by an independent accounting firm retained by
the Company to the extent reasonably necessary in order to assure that the
Pooling Transaction will qualify as such, including but not limited to (a)
deferring the vesting, exercise, payment, settlement or lapsing of restrictions
with respect to any Option or Award, (b) providing that the payment or
settlement in respect of any Option or Award be made in the form of cash, Shares
or securities of a successor or acquirer of the Company, or a combination of the
foregoing, and (c) providing for the extension of the term of any Option or
Award to the extent necessary to accommodate the foregoing, but not beyond the
maximum term permitted for any Option or Award.

      15.   Termination and Amendment of the Plan or Modification of
            Options and Awards.

            15.1 Plan Amendment or Termination. The Plan shall terminate on the
day preceding the tenth anniversary of the date of its adoption by the Board,
and no Option or Award may be granted thereafter. The Board may sooner terminate
the Plan and the Board may at any time and from time to time amend, modify or
suspend the Plan; provided, however, that:

                  (a) no such amendment, modification, suspension or termination
shall impair or adversely alter any Options or Awards theretofore granted under
the Plan, except with the consent of the Optionee or Grantee, nor shall any
amendment, modification, suspension or termination deprive any Optionee or
Grantee of any Shares which he or she may have acquired through or as a result
of the Plan; and

                  (b) to the extent necessary under any applicable law,
regulation or exchange requirement no amendment shall be effective unless
approved by the stockholders of the Company in accordance with applicable law,
regulation or exchange requirement.

            15.2 Modification of Options and Awards. No modification of an
Option or Award shall adversely alter or impair any rights or obligations under
the Option or Award without the consent of the Optionee or Grantee, as the case
may be.

      16.   Non-Exclusivity of the Plan.

            The adoption of the Plan by the Board shall not be construed as
amending, modifying or rescinding any previously approved incentive arrangement
or as creating


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<PAGE>
any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under the Plan, and such arrangements
may be either applicable generally or only in specific cases.

      17.   Limitation of Liability.

            As illustrative of the limitations of liability of the Company and
ICN, but not intended to be exhaustive thereof, nothing in the Plan shall be
construed to:

                  (a) give any person any right to be granted an Option or Award
other than at the sole discretion of the Committee;

                  (b) give any person any rights whatsoever with respect to
Shares except as specifically provided in the Plan;

                  (c) limit in any way the right of the Company or ICN to
terminate the employment of any person at any time; or

                  (d) be evidence of any agreement or understanding, expressed
or implied, that the Company or ICN will employ any person at any particular
rate of compensation or for any particular period of time.

      18.   Regulations and Other Approvals; Governing Law.

            18.1  Except as to matters of federal law, the Plan and the
rights of all persons claiming hereunder shall be construed and determined in
accordance with the laws of the State of Delaware without giving effect to
conflicts of laws principles thereof.

            18.2 The obligation of the Company to sell or deliver Shares with
respect to Options and Awards granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Committee.

            18.3 The Board may make such changes as may be necessary or
appropriate to comply with the rules and regulations of any government
authority, or to obtain for Eligible Individuals granted Incentive Stock Options
the tax benefits under the applicable provisions of the Code and regulations
promulgated thereunder.

            18.4 Each Option and Award is subject to the requirement that, if at
any time the Committee determines, in its discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities


                                     - 26 -
<PAGE>
exchange or under any state or federal law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the grant of an Option or Award or the issuance of Shares, no
Options or Awards shall be granted or payment made or Shares issued, in whole or
in part, unless listing, registration, qualification, consent or approval has
been effected or obtained free of any conditions as acceptable to the Committee.

            18.5 Notwithstanding anything contained in the Plan or any Agreement
to the contrary, in the event that the disposition of Shares acquired pursuant
to the Plan is not covered by a then current registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), and is not otherwise
exempt from such registration, such Shares shall be restricted against transfer
to the extent required by the Securities Act and Rule 144 or other regulations
thereunder. The Committee may require any individual receiving Shares pursuant
to an Option or Award granted under the Plan, as a condition precedent to
receipt of such Shares, to represent and warrant to the Company in writing that
the Shares acquired by such individual are acquired without a view to any
distribution thereof and will not be sold or transferred other than pursuant to
an effective registration thereof under said Act or pursuant to an exemption
applicable under the Securities Act or the rules and regulations promulgated
thereunder. The certificates evidencing any of such Shares shall be
appropriately amended or have an appropriate legend placed thereon to reflect
their status as restricted securities as aforesaid.

      19.   Miscellaneous.

            19.1 Multiple Agreements. The terms of each Option or Award may
differ from other Options or Awards granted under the Plan at the same time, or
at some other time. The Committee may also grant more than one Option or Award
to a given Eligible Individual during the term of the Plan, either in addition
to, or in substitution for, one or more Options or Awards previously granted to
that Eligible Individual.

            19.2 Withholding of Taxes.

                  (a) At such times as an Optionee or Grantee recognizes taxable
income in connection with the receipt of Shares or cash hereunder (a "Taxable
Event"), the Optionee or Grantee shall pay to the Company (or to its designee)
an amount equal to the federal, state and local income taxes and other amounts
as may be required by law to be withheld by the Company (or to its designee) in
connection with the Taxable Event (the "Withholding Taxes") prior to the
issuance, or release from escrow, of such Shares or the payment of such cash.
The Company (or to its designee) shall have the right to deduct from any payment
of cash to an Optionee or Grantee an amount equal to the Withholding Taxes in
satisfaction of the obligation to pay Withholding Taxes. The Committee may
provide in an Agreement evidencing an Option or Award at the time of grant or


                                     - 27 -
<PAGE>
thereafter, that the Optionee or Grantee, in satisfaction of the obligation to
pay Withholding Taxes to the Company (or to its designee), may elect to have
withheld a portion of the Shares issuable to him or her pursuant to the Option
or Award having an aggregate Fair Market Value equal to the Withholding Taxes.

                  (b) If an Optionee makes a disposition, within the meaning of
Section 424(c) of the Code and regulations promulgated thereunder, of any Share
or Shares issued to such Optionee pursuant to the exercise of an Incentive Stock
Option within the two-year period commencing on the day after the date of the
grant or within the one-year period commencing on the day after the date of
transfer of such Share or Shares to the Optionee pursuant to such exercise, the
Optionee shall, within ten (10) days of such disposition, notify the Company
thereof, by delivery of written notice to the Company at its principal executive
office.

            19.3 Effective Date. The effective date of this Plan shall be as
determined by the Board, subject only to the approval by the holders of a
majority of the securities of the Company entitled to vote thereon, in
accordance with the applicable laws within twelve (12) months of the adoption of
the Plan, by the Board.

            19.4 Post-Transition Period. Following the Transition Period, any
Option, Stock Appreciation Right or Performance Award granted under the Plan
which is intended to be Performance-Based Compensation shall be subject to the
approval of the material terms of the Plan by a majority of the shareholders of
the Company in accordance with Section 162(m) of the Code and the regulations
promulgated thereunder.


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