Q-MED, INC.
                           1997 EQUITY INCENTIVE PLAN

1.       NAME AND PURPOSE.
         ----------------
         The name of this plan is the Q-MED,  INC.  1997 Equity  Incentive  Plan
(the "Plan").  The purpose of this Plan is to enable Q-MED, INC. (the "Company")
and its Subsidiaries and Affiliates to attract and retain employees, consultants
and  directors  who  contribute  to the  Company's  success  by  their  ability,
ingenuity  and  industry,   and  to  enable  such  employees  and  directors  to
participate in the long-term success and growth of the Company through an equity
interest in the Company.

2.       DEFINITIONS.
         -----------
         For purposes of this Plan, the following  terms shall be defined as set
forth below:

         "Affiliate"   means  any   corporation   (other  than  a   subsidiary),
partnership,  joint  venture  or any other  entity in which  the  Company  owns,
directly  or  indirectly,  at least a ten  percent  (10%)  beneficial  ownership
interest.

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

         "Cause" means a felony  conviction of a participant or the failure of a
participant to contest  prosecution for a felony, or a participant's  willful or
grossly  negligent  action  which is  demonstrably  inimical  to the  interests,
business or reputation of the Company or any Subsidiary or Affiliate.

         "Code" means the Internal Revenue Code of 1986, as  amended, or any 
successor thereto.

         "Committee"  means the  Stock  Option  Committee  of the  Board,  whose
members  shall be  appointed  from time to time by the Board.  If at any time no
Committee  shall be in existence,  the  functions of the Committee  specified in
this Plan shall be exercised by the Board.

         "Commission" means the Securities and Exchange Commission.

         "Company" means Q-MED, INC., a corporation  organized under the laws of
the State of Delaware (or any successor corporation).

         "Deferred  Stock"  means an award  made  pursuant  to Section 10 of the
right to receive Stock at the end of a specified deferral period.

         "Director  Stock Option"  means any option to purchase  shares of Stock
granted pursuant to Section 7. 


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<PAGE>

         "Disability"  means total and permanent  disability as determined under
the Company's long term disability program.

         "Disinterested  Person"  shall  have  the  meaning  set  forth  in Rule
16b-3(d)(3)  as  promulgated  by the  Commission  under the Exchange Act, or any
successor definition adopted by the Commission.

         "Exchange Act" means the  Securities  Exchange Act of 1934, as amended,
and any successor thereto.

         "Fair Market Value" means,  as of any given date,  the closing price of
the  Stock  on such  date on the  National  Association  of  Securities  Dealers
Automated  Quotation  System  (NASDAQ)  National  Market System,  or if not then
traded or listed  on that  system,  on the  securities  trading  system or stock
exchange on which the Stock is then primarily traded or listed;  or if the stock
is not traded or listed on an exchange  the average of the  reported bid and ask
price on such date.

         "Incentive  Stock  Option"  means any Stock  Option  intended to be and
designated  as an "incentive  stock  option"  within the meaning of Code Section
422.

         "Non-Qualified  Stock  Option"  means any Stock  Option  that is not an
Incentive Stock Option.

         "Normal  Retirement,"  solely  for  the  purpose  of  this  Plan  means
retirement  from active  employment with the Company,  any  Subsidiary,  and any
Affiliate on or after age 65.

         "Plan" means this 1992 Employee Stock Incentive Plan.

         "Restricted  Stock"  means an award of shares of Stock that are subject
to restrictions under Section 9.

         "Retirement" means Normal Retirement.

         "Stock" means the common stock of the Company.

         "Stock  Appreciation  Right" means a right  granted  under Section 8 to
surrender  to the Company all or a portion of a Stock  Option in exchange for an
amount equal to the difference between (i) the Fair Market Value, as of the date
such Stock Option or such portion thereof is surrendered, of the shares of Stock
covered by such Stock Option or such  portion  thereof,  and (ii) the  aggregate
exercise price of such Stock Option or such portion thereof.

         "Stock  Option"  means any option to purchase  shares of Stock  granted
pursuant to Section 6.


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<PAGE>

         "Subsidiary"  means any  corporation  (other  than the  Company)  in an
unbroken  chain  of  corporations  beginning  with  the  Company  if each of the
corporations  (other than the last corporation in the unbroken chain) owns stock
possessing  50% or more of the total  combined  voting  power of all  classes of
stock in one of the other corporations in the chain.

3.       ADMINISTRATION.
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         This Plan shall be  administered  by the  Committee  which shall at all
times consist of not less than three Disinterested  Persons,  each of whom shall
be members of the Board of the Directors. The Committee shall have the power and
authority  to grant to eligible  employees,  pursuant to the terms of this Plan:
(i) Stock Options,  (ii) Stock Appreciation  Rights,  (iii) Restricted Stock, or
(iv) Deferred Stock. In particular, the Committee shall have the authority to:

         3.1  Select  the  officers,  other  employees  and  consultants  of the
Company,  its  Subsidiaries,  and its  Affiliates to whom Stock  Options,  Stock
Appreciation Rights, Restricted Stock or Deferred Stock awards, or a combination
of the foregoing from time to time will be granted hereunder;

         3.2  Determine  whether and to what  extent  Incentive  Stock  Options,
Non-Qualified  Stock Options,  Stock  Appreciation  Rights,  Restricted Stock or
Deferred Stock, or a combination of the foregoing are to be granted hereunder;

         3.3  Determine the number of shares of Stock to be covered by each such
award granted hereunder;

         3.4  Determine  the  terms and  conditions,  not  inconsistent with the
terms of this Plan, of any award granted hereunder,  including,  but not limited
to, any  restriction  on any Stock  Option or other  award  and/or the shares of
Stock  relating  thereto based on  performance  and/or such other factors as the
Committee may determine,  in its sole discretion,  and any vesting  acceleration
features  based on  performance  and/or such other  factors as the Committee may
determine, in its sole discretion;

         3.5  Determine  whether,  to what extent, and under what  circumstances
Stock and other  amounts  payable with respect to an award under this Plan shall
be deferred either automatically or at the election of a participant,  including
providing  for and  determining  the amount (if any) of deemed  earnings  on any
deferred amount during any deferral period;

         3.6  Adopt, alter, and repeal such administrative rules, guidelines, 
and practices governing this Plan as it shall, from time to time, deem 
advisable;

         3.7  Interpret  the  terms  and  provisions  of this Plan and any award
issued under this Plan (and any agreements relating thereto); and


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<PAGE>

         3.8  Otherwise supervise the administration of this Plan.

         All decisions made by the Committee  pursuant to the provisions of this
Plan shall be final and  binding  on all  persons,  including  the  Company  and
participants in this Plan.

4.       STOCK SUBJECT TO PLAN.
         ---------------------
         The  total  number  of  shares  of Stock  reserved  and  available  for
distribution under this Plan shall be 600,000. Such shares may consist, in whole
or in part, of authorized and unissued shares or treasury shares.  If any shares
of Stock that have been optioned cease to be subject to option, or if any shares
subject to any Restricted  Stock or Deferred  Stock award granted  hereunder are
forfeited  or such award  otherwise  terminates,  those  shares  shall  again be
available for distribution in connection with future awards under this Plan.

         In  the   event   of   any   merger,   reorganization,   consolidation,
recapitalization,  stock  dividend,  or  other  change  in  corporate  structure
affecting the Stock, a substitution or adjustment shall be made in the aggregate
number of shares reserved for issuance under this Plan, in the number and option
price of shares subject to outstanding  Stock Options and Director Stock Options
granted under this Plan, and in the number of shares subject to Restricted Stock
or  Deferred  Stock  awards  granted  under this Plan,  in such manner as may be
determined to be appropriate by the Committee, in its sole discretion,  provided
that the number of shares  subject to any award shall always be a whole  number.
Such adjusted option price shall also be used to determine the amount payable by
the Company upon the exercise of any Stock  Appreciation  Right  associated with
any Stock Option.

5.       ELIGIBILITY.
         -----------
         5.1  Officers,  other  employees  and  consultants  of the Company, its
Subsidiaries or its Affiliates  (but excluding  members of the Committee and any
person who serves only as a director) who are  responsible  for or contribute to
the management, growth, and/or profitability of the business of the Company, its
Subsidiaries,  or its Affiliates are eligible to be granted Stock Options, Stock
Appreciation Rights, Restricted Stock or Deferred Stock awards.

         5.2  Directors  of the  Company  (other  than  directors  who are  also
officers or employees of the Company,  its  Subsidiaries  or its Affiliates) are
eligible to be granted Director Stock Options pursuant to Section 7 of the Plan.

         5.3 The  optionees and  participants  under this Plan shall be selected
from time to time by the  Committee,  in its sole  discretion,  from among those
eligible, and the Committee shall determine, in its sole discretion,  the number
of shares covered by each award or grant to an optionee or participant.


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<PAGE>

6.       STOCK OPTIONS FOR EMPLOYEES.
         ---------------------------
         Stock  Options  may be granted  either  alone or in  addition  to other
awards  granted under this Plan.  Any Stock Option granted under this Plan shall
be in such form as the Committee  from time to time approve,  and the provisions
of Stock Option awards need not be the same with respect to each optionee.

         The Stock  Options  granted  under this Plan may be of two  types:  (i)
Incentive  Stock Options,  or (ii)  Non-Qualified  Stock Options.  The Committee
shall  have the  authority  to  grant  any  optionee  Incentive  Stock  Options,
Non-Qualified  Stock Options,  or both types of Stock Options (in each case with
or without Stock Appreciation  Rights) except that Incentive Stock Options shall
not be granted to employees of an Affiliate. To the extent that any Stock Option
does not qualify as an Incentive  Stock Option,  it shall  constitute a separate
Non-Qualified Stock Option.

         Anything in this Plan to the contrary notwithstanding,  no term of this
Plan  relating to Incentive  Stock  Options shall be  interpreted,  amended,  or
altered,  nor shall any  discretion  or authority  granted under this Plan be so
exercised,  so as to disqualify  either this Plan or any Incentive  Stock Option
under Code Section 422.  Notwithstanding the foregoing, in the event an optionee
voluntarily  disqualifies  an option as an  Incentive  Stock  Option  within the
meaning of Code Section 422, the  Committee  may, but shall not be obligated to,
make such  additional  grants,  awards,  or bonuses as the Committee  shall deem
appropriate,  to reflect the tax savings to the Company  which results from such
disqualification.

         Stock Options granted under this Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem desirable:

         6.1 Option Price. The option price per share of Stock purchasable under
             ------------
a Stock Option  shall be  determined  by the  Committee at the time of grant but
shall not be less than 100% of the Fair Market Value of the Stock on the date of
the grant of the Stock Option.

         6.2 Option  Term.  The term of each Stock  Option shall be fixed by the
             ------------
Committee,  but no Incentive  Stock Option  shall be  exercisable  later than 10
years after the date such Incentive Stock Option is granted and no Non-Qualified
Stock  Option  shall be  exercisable  later than 10 years and two days after the
date such Non-Qualified Stock Option is granted.

         6.3  Exercisability.  Subject to Section 6.10 with respect to Incentive
              --------------
Stock  Options,  Stock  Options shall be  exercisable  at such time or times and
subject to such terms and  conditions as shall be determined by the Committee at
the date of grant; provided,  however, that, except as provided in Sections 6.6,
6.7, and 6.8,  unless  otherwise  determined by the Committee at grant, no Stock
Option shall be exercisable  prior to the first anniversary date of the granting
of the option.  If the Committee  provides,  in its  discretion,  that any Stock
Option is  


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<PAGE>

exercisable  only in  installments,  the  Committee  may waive such  installment
exercise  provisions at any time in whole or in part based on performance and/or
such other factors as the Committee may determine in its sole discretion.

         6.4 Method of Exercise.  Stock  Options may be exercised in whole or in
             ------------------
part at any time during the option period,  by giving written notice of exercise
to the Company  specifying the number of shares to be purchased,  accompanied by
payment  in  full of the  purchase  price,  in  cash,  by  check  or such  other
instrument  or  mode  of  payment  as may be  acceptable  to the  Committee.  As
determined by the Committee, in its sole discretion,  at or after grant, payment
in full or in part may also be made in the form of  unrestricted  Stock  already
owned by the optionee or, in the case of the exercise of a  Non-Qualified  Stock
Option, Restricted Stock or Deferred Stock subject to an award hereunder (based,
in each case,  on the Fair  Market  Value of the Stock on the date the option is
exercised,  as determined by the  Committee).  If payment of the option exercise
price of a Non-Qualified Stock Option is made in whole or in part in the form of
Restricted  Stock or Deferred  Stock,  the shares  received upon the exercise of
such  Stock  Option  shall be  restricted  or  deferred,  as the case may be, in
accordance  with the  original  term of the  Restricted  Stock award or Deferred
Stock award in question,  equal to the number of shares of  Restricted  Stock or
Deferred  Stock  surrendered  upon the  exercise  of that  option.  No shares of
unrestricted Stock shall be issued until full payment therefor has been made. An
optionee shall have the right to dividends or other rights of a stockholder with
respect to shares  subject to the option  when the  optionee  has given  written
notice of exercise and has paid in full for those shares.

         6.5   Non-transferability   of  Options.   No  Stock  Option  shall  be
               ---------------------------------
transferable  by the optionee  otherwise  than by will or by the laws of descent
and  distribution,  and all  Stock  Options  shall be  exercisable,  during  the
optionee's lifetime, only by the optionee.

         6.6 Termination by Death. Unless otherwise  determined by the Committee
             --------------------
at grant, if an optionee's employment with the Company, any Subsidiary,  and any
Affiliate  terminates by reason of his death, the Stock Option may thereafter be
exercised,  to the extent then exercisable (or on such accelerated  basis as the
Committee shall determine at or after grant), by the legal representative of the
estate or by the legatee of the  optionee  under the will of the  optionee or by
the heir of the  optionee  under the laws of  descent  and  distribution,  for a
period of one year from the date of such  death or until the  expiration  of the
stated term of such Stock Option, whichever period is the shorter.

         6.7 Termination by Reason of Disability. Unless otherwise determined by
             -----------------------------------
the  Committee at grant,  if an  optionee's  employment  with the  Company,  any
Subsidiary  and any  Affiliate  terminates  by reason of  Disability,  any Stock
Option held by such  optionee may  thereafter  be exercised to the extent it was
exercisable at the time of termination due to Disability (or on such accelerated
basis  as the  Committee  shall  determine  at or after  grant),  but may not be
exercised after one year from the date of such  termination of employment or the
expiration of the stated term or such Stock Option, whichever period is shorter;
provided,  however,  that, if the optionee dies within such one-year period, any
unexercised  Stock Option held by such optionee shall  thereafter be exercisable
to the extent to which it was  exercisable  at the time of death for a 


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<PAGE>

period of three  months  from the date of such death or for the  stated  term of
such Stock Option,  whichever period is the shorter. In the event of termination
of employment by reason of Disability, if an Incentive Stock Option is exercised
after the  expiration  of the  exercise  periods that apply for purposes of Code
Section 422,  such Stock Option will  thereafter  be treated as a  Non-Qualified
Stock Option.

         6.8 Termination by Reason of Retirement. Unless otherwise determined by
             -----------------------------------
the  Committee at grant,  if an  optionee's  employment  with the  Company,  any
Subsidiary  and any  Affiliate  terminates by reason of Normal  Retirement,  any
Stock Option held by such optionee may  thereafter be exercised to the extent it
was exercisable at the time of such Retirement (or on such accelerated  basis as
the Committee shall determine at or after grant), but may not be exercised after
one year from the date of such  termination  of employment or the  expiration of
the stated term of such Stock Option, whichever period is the shorter; provided,
however,  that, if the optionee dies within such one-year period any unexercised
Stock Option held by such  optionee  shall  thereafter  be  exercisable,  to the
extent to which it was  exercisable at the time of death,  for a period of three
months from the date of such death or for the stated  term of the Stock  Option,
whichever  period  is  the  shorter.  Notwithstanding  the  foregoing,  the  tax
treatment available pursuant to Section 422 of the Internal Revenue Code of 1986
upon the  exercise of an  Incentive  Stock  Option will not be  available  to an
optionee who exercises any Incentive Stock Options more than (i) 12 months after
the date of termination of employment due to permanent  disability or (ii) three
months after the date of termination of employment due to retirement.

         6.9 Other Termination.  Unless otherwise determined by the Committee at
             -----------------
grant,  if an optionee's  employment  with the Company,  any  Subsidiary and any
Affiliate  terminates  for any reason  other than  death,  Disability  or Normal
Retirement,  any Stock Option held by such optionee shall  thereupon  terminate,
except that such Stock  Option may be  exercised  for the lesser of three months
from the date of  termination  or the balance of such Stock Option's term if the
optionee's  employment  with the Company,  any  Subsidiary  and any Affiliate is
involuntarily terminated by the optionee's employer without Cause.

         6.10  Limit  on Value  of  Incentive  Stock  Option  First  Exercisable
               -----------------------------------------------------------------
Annually.  The aggregate Fair Market Value  (determined at the time of grant) of
--------
the Stock for which "incentive stock options" within the meaning of Code Section
422 are  exercisable  for the first time by an optionee during any calendar year
under  this Plan  (and/or  any other  stock  option  plans of the  Company,  any
Subsidiary and any Affiliate) shall not exceed $100,000.

7.       DIRECTOR STOCK OPTIONS.
         ----------------------
         Director Stock Options  granted under this Plan shall be  Non-Qualified
Stock Options which are not intended to be "incentive  stock options" within the
meaning of Code Section 422.  Director  Stock  Options  granted  under this Plan
shall be in such form as the Committee may


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<PAGE>

from time to time approve, and the provisions of Director Stock Options need not
be the  same  with  respect  to each  optionee.  The  Committee  shall  have the
authority to grant any eligible optionee Director Stock Options.

         Director  Stock Options  granted under the Plan shall be evidenced by a
written agreement in such form as the Committee shall from time to time approve,
which  agreements  shall comply with and be subject to the  following  terms and
conditions:

         7.1 Option Price. The option price per share of Stock purchasable under
             ------------
a Director  Stock Option  shall be  determined  by the  Committee at the time of
grant but shall not be less than 100% of the Fair  Market  Value of the Stock on
the date of the grant of the Director Stock Option.

         7.2 Option  Term.  Each  Director  Stock  Option  shall be fixed by the
             ------------
Committee, but shall in no event be exercisable later than 10 years and two days
after  the  date  such  Director  Stock  Option  is  granted  (subject  to prior
termination as hereinafter provided).

         7.3 Exercisability. Director Stock Options shall be exercisable at such
             --------------
time or times and subject to such terms and conditions as shall be determined by
the  Committee  at  the  date  of  grant.  If  the  Committee  provides,  in its
discretion,  that any Director Stock Option is exercisable only in installments,
the  Committee  may waive such  installment  exercise  provisions at any time in
whole or in part based on performance and/or such other factors as the Committee
may determine in its sole discretion;  provided, however, that in the event of a
"Change  of  Control"  (as  defined  in  Section  14  below),  the  value of all
outstanding  Director Stock Options that have been  outstanding for at least six
months  shall be cashed out on the basis of the  "Change  of Control  Price" (as
defined in Section  14 below) as of the date the Change of Control  occurs,  and
all  Director  Stock  Options  that have not been  outstanding  for at least six
months shall be immediately exercisable.

         7.4 Method of  Exercise.  Director  Stock  Options may be  exercised in
             -------------------
whole or in part at any time during the option period,  by giving written notice
of  exercise  to the Company  specifying  the number of shares to be  purchased,
accompanied by payment in full of the purchase  price, in cash, by check or such
other  instrument  or mode of payment as may, be  acceptable  to the  Committee.
Payment in full or in part may also be made in the form of Stock  already  owned
by the  optionee  (based on the Fair  Market  value of the Stock on the date the
option is  exercised).  No shares of Stock  shall be issued  until full  payment
therefor has been made. An optionee  shall have the rights to dividends or other
rights of a  stockholder  with respect to shares  subject to the option when the
optionee  has given  written  notice of  exercise  and has paid in full for such
shares.

         7.5  Non-transferability  of Options. No Director Stock Option shall be
              -------------------------------
transferable  by the optionee  otherwise  than by will or by the laws of descent
and  distribution,  and all Director Stock Options shall be exercisable,  during
the optionee's lifetime, only by the optionee.


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<PAGE>

         7.6  Termination by Disability or Death. Upon an optionee's termination
              ----------------------------------
of service as a director by reason of  disability or death,  any Director  Stock
Options held by such  optionee may  thereafter be  immediately  exercised by the
optionee or, in the case of death, by the legal  representative or the estate or
by the  legatee  of the  optionee  under  the will of the  optionee,  until  the
expiration of the stated term of such Director Stock Options.

         7.7 Other Termination.  Upon an optionee's  termination of service as a
             -----------------
director  with the Company for any reason other than  disability  or death,  any
Director Stock Options held by such optionee may thereafter be exercised, to the
extent  exercisable at  termination,  until the expiration of the stated term of
such Director Stock Options.

8.       STOCK APPRECIATION RIGHTS.
         -------------------------
         8.1 Grant and  Exercise.  Stock  Appreciation  Rights may be granted in
             -------------------
conjunction with all or part of any Stock Option granted under this Plan. In the
case of a  Non-Qualified  Stock Option,  such rights may be granted either at or
after the time of the grant of such  Non-Qualified  Stock Option. In the case of
an Incentive  Stock  Option,  such rights may be granted only at the time of the
grant of such Incentive Stock Option.

                  A Stock  Appreciation  Right  or  applicable  portion  thereof
granted with respect to a given Stock  Option shall  terminate  and no longer be
exercisable upon the termination or exercise of the related Stock Option, except
that,  unless otherwise  provided by the Committee at the time of grant, a Stock
Appreciation  Right  granted with respect to less than the full number of shares
covered  by a related  Stock  Option  shall only be reduced if and to the extent
that the number of shares  covered by the exercise or termination of the related
Stock Option exceeds the number of shares not covered by the Stock  Appreciation
Right.

                  A Stock Appreciation Right may be exercised by an optionee, in
accordance  with  Section 8.2, by  surrendering  the  applicable  portion of the
related Stock Option.  Upon such exercise and  surrender,  the optionee shall be
entitled to receive amount  determined in the manner  prescribed in Section 8.2.
Stock Option have been so surrendered,  in whole or in part,  shall no longer be
exercisable  to the extent  the  related  Stock  Appreciation  Rights  have been
exercised.

         8.2 Terms and Conditions. Stock Appreciation Rights shall be subject to
             --------------------
such terms and conditions, not inconsistent with the provisions of this Plan, as
shall be determined from time to time by the Committee, including the following:

                  (a) Stock  Appreciation  Rights shall be  exercisable  only at
                  such time or times and to the extent that the Stock Options to
                  which they relate shall be exercisable in accordance  with the
                  provisions of Section 6 and this Section;  provided,  however,
                  that any Stock  Appreciation  Right granted  subsequent to the
                  grant of the related  Stock  Option  shall not be  exercisable
                  during  the  first  six  months  of  the   


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<PAGE>

                  term   of   the   Stock  Appreciation   Right,   except   that
                  this  additional  limitation  shall  not apply in the event of
                  death or Disability of the  optionee  prior  to the expiration
                  of the  six-month period.

         (b)      Upon the exercise of a Stock  Appreciation  Right, an optionee
                  shall be  entitled  to receive  up to,  but not more than,  an
                  amount in cash or shares of Stock equal in value to the excess
                  of the Fair Market Value of one share of Stock over the option
                  price  per  share   specified  in  the  related  Stock  Option
                  multiplied  by the number of shares with  respect to which the
                  Stock Appreciation  Right shall have been exercised,  with the
                  Committee having the sole and exclusive right to determine the
                  form of payment.

         (c)      Stock Appreciation  Rights shall be transferable only when and
                  to the  extent  that  the  underlying  Stock  Option  would be
                  transferable under Section 6.5.

         (d)      Upon the  exercise of a Stock  Appreciation  Right,  the Stock
                  Option or part thereof to which such Stock  Appreciation Right
                  is  related  shall be deemed to have  been  exercised  for the
                  purpose of the limitation set forth in Section 4 on the number
                  of shares of Stock to be issued under this Plan.

         (e)      A Stock  Appreciation  Right  granted  in  connection  with an
                  Incentive  Stock Option may be exercised  only if and when the
                  market  price of the  Stock  subject  to the  Incentive  Stock
                  Option exceeds the exercise price of such Stock Option.

         (f)      In its sole discretion, the Committee may provide, at the time
                  of grant of a Stock  Appreciation  Right  under this  Section,
                  that such Stock  Appreciation  Right can be exercised  only in
                  the event of a "Change of Control" and/or a "Potential  Change
                  of Control" (as defined in Section 14).

         (g)      The  Committee,  in  its  sole  discretion,  may  also provide
                  that, in   the  event  of  a  "Change  of  Control"  and/or  a
                  "Potential  Change  of  Control" (as defined  in Section  14),
                  the   amount  to  be  paid  upon  the  exercise  of  a   Stock
                  Appreciation  Right  shall  be based on the "Change of Control
                  Price" (as defined in Section 14).

         9.       RESTRICTED STOCK.
                  ----------------
                  9.1  Administration.  Shares of Restricted Stock may be issued
                       --------------
either  alone or in  addition  to other  awards  granted  under this  Plan.  The
Committee  shall determine the officers and key employees of the Company and its
Subsidiaries  and Affiliates to whom, and the time or times at which,  grants of
Restricted Stock will be made, the number of shares to be awarded, the price, if
any, to be paid by the  recipient of Restricted  Stock  (subject to Section 9.2,
the time or times within which such awards may be subject to forfeiture, and all
other  conditions of the awards.  The Committee may also  condition the grant of
Restricted  Stock upon the attainment of specified  performance  goals,  or such
other  criteria as the  Committee may  


                                       10
<PAGE>

determine,  in its sole  discretion.  The provisions of Restricted  Stock awards
need not be the same with respect to each recipient.

                  9.2 Awards and Certificates.  The prospective  recipient of an
                      -----------------------
award of shares of  Restricted  Stock shall not have any rights with  respect to
such award, unless and until such recipient has executed an agreement evidencing
the award (a  "Restricted  Stock  Award  Agreement")  and has  delivered a fully
executed copy thereof to the Company,  and has otherwise  complied with the then
applicable terms and conditions.

         (a)      Awards  of   Restricted   Stock   must  be  accepted  within a
                  period of 90 days (or such shorter period as the Committee may
                  specify) after the award date by executing a Restricted  Stock
                  Award   Agreement  and  paying  whatever  price,  if  any,  is
                  required.

         (b)      Each  participant  who is awarded  Restricted  Stock  shall be
                  issued a stock  certificate  with  respect to those  shares of
                  Restricted  Stock. The certificate  shall be registered in the
                  name of the participant,  and shall bear an appropriate legend
                  referring   to  the  terms,   conditions,   and   restrictions
                  applicable to such award, substantially in the following form:

         "The  transferability  of this  certificate  and the  shares  of  stock
         represented  hereby are subject to the terms and conditions  (including
         forfeiture)  of the  Q-MED,  INC.  1997  Equity  Incentive  Plan  and a
         Restricted  Stock Award  Agreement  entered into between the registered
         owner and Q-MED,  INC. Copies of the Plan and the Agreement are on file
         in the  offices  of Q-MED,  INC.,  100 Metro  Park  South,  3rd  Floor,
         Laurence Harbor, New Jersey 08878."

         (c)     The  Committee  shall  require  that  the  stock  certificates 
                 evidencing  such  shares  will  be  held  in  custody  by  the 
                 Company  until  the  restrictions thereon  shall  have  lapsed,
                 and that,  as a condition of any  Restricted  Stock award,  the
                 participant shall have delivered a stock  power to the Company,
                 endorsed in blank, relating to the Stock covered by such award.

                  9.3  Restrictions  and  Conditions.  The shares of  Restricted
                       -----------------------------
Stock  awarded  pursuant  to this  Section  shall be  subject  to the  following
restrictions and conditions:

         (a)      Subject  to the  provisions  of this  Plan and the  Restricted
                  Stock  Award  Agreements,  during such period as may be set by
                  the Committee  commencing on the grant date (the  "Restriction
                  Period"),  the  participant  shall not be  permitted  to sell,
                  transfer,  pledge or assign shares of Restricted Stock awarded
                  under this Plan.  Within these limits,  the Committee  may, in
                  its  sole   discretion,   provide   for  the   lapse  of  such
                  restrictions in installments  and may accelerate or waive such
                  restrictions  in whole or in part based on performance  and/or
                  such other factors as the Committee may determine, in its sole
                  discretion.


                                       11
<PAGE>

         (b)      Except as provided in Section 9.3(a),  the  participant  shall
                  have, with respect to the shares of Restricted  Stock,  all of
                  the rights of a  stockholder  of the  Company,  including  the
                  right to receive any dividends. Dividends paid in stock of the
                  Company or stock  received  in  connection  with a stock split
                  with respect to Restricted  Stock shall be subject to the same
                  restrictions as on such  Restricted  Stock.  Certificates  for
                  shares  of  unrestricted  Stock  shall  be  delivered  to  the
                  participant  promptly  after,  and only  after,  the period of
                  forfeiture shall expire without  forfeiture in respect of such
                  shares of Restricted Stock.

         (c)      Subject  to the  provisions  of  the  Restricted  Stock  Award
                  Agreement and this Section, upon the participant's termination
                  of employment  for any reason during the  Restriction  Period,
                  all shares still subject to restriction  shall be forfeited by
                  the  participant,  and the participant  shall only receive the
                  amount,  if any, paid by the  participant  for such  forfeited
                  Restricted Stock.

         (d)      In  the  event  of  special   hardship   circumstances   of  a
                  participant  whose  employment  is  involuntarily   terminated
                  (other  than  for  Cause),  the  Committee  may,  in its  sole
                  discretion,  waive in  whole  or in part any or all  remaining
                  restrictions  with  respect  to such  participant's  shares of
                  Restricted Stock.

         10.      DEFERRED STOCK AWARDS.
                  ---------------------
                  10.1  Administration.  Deferred  Stock may be  awarded  either
                        --------------
alone or in addition to other  awards  granted  under this Plan.  The  Committee
shall determine the officers and key employees of the Company,  its Subsidiaries
and Affiliates to whom, and the time or times at which,  Deferred Stock shall be
awarded,  the  number  of  shares  of  Deferred  Stock  to  be  awarded  to  any
participant,  the duration of the period (the "Deferral  Period")  during which,
and the  conditions  under which,  receipt of the Stock will be deferred and the
terms and  conditions  of the award in  addition  to those set forth in  Section
10.2.  The  Committee may also  condition  the grant of Deferred  Stock upon the
attainment  of  specified  performance  goals,  or such  other  criteria  as the
Committee shall determine,  in its sole  discretion.  The provisions of Deferred
Stock awards need not be the same with respect to each recipient.

                  10.2  Terms  and  Conditions.  The  shares of  Deferred  Stock
                        ----------------------
awarded  pursuant to this Section  shall be subject to the  following  terms and
conditions:

         (a)      Subject  to  the   provisions  of  this  Plan  and  the  award
                  agreement,  Deferred  Stock awards may not be sold,  assigned,
                  transferred,  pledged,  or  otherwise  encumbered  during  the
                  Deferral Period.  At the expiration of the Deferral Period (or
                  Elective   Deferral   Period,    where   applicable),    share
                  certificates  shall be  delivered to the  participant,  or his
                  legal representative,  in a number equal to the shares covered
                  by the Deferred Stock award.


                                       12
<PAGE>

         (b)      At the  time of the  award,  the  Committee  may,  in its sole
                  discretion,  determine  that  amounts  equal to any  dividends
                  declared during the Deferral Period with respect to the number
                  of shares  covered by a Deferred Stock award will be: (a) paid
                  to the  participant  currently,  (b) deferred and deemed to be
                  reinvested,  or (c) forfeited  because the  participant has no
                  rights with respect thereto.

         (c)      Subject  to the  provisions  of the award  agreement  and this
                  Section,  upon termination of employment for any reason during
                  the Deferral  Period for a given award,  the Deferred Stock in
                  question  including  any  deferred  and  reinvested  dividends
                  thereon shall be forfeited by the participant.

         (d)      Based  on  performance  and/or  such  other  criteria  as  the
                  Committee may  determine,  the Committee  may, at or after the
                  grant,  accelerate  the  vesting  of all or  any  part  of any
                  Deferred Stock award and/or waive the deferral limitations for
                  all or any part of such award.

         (e)      In  the  event  of  special   hardship   circumstances   of  a
                  participant  whose  employment  is  involuntarily   terminated
                  (other  than  for  Cause),  the  Committee  may,  in its  sole
                  discretion,  waive  in  whole  or in  part  any  or all of the
                  remaining deferral  limitations imposed hereunder with respect
                  to any or all of the participant's Deferred Stock.

         (f)      A participant  may elect to defer further receipt of the award
                  for a  specified  period  or  until  a  specified  event  (the
                  "Elective  Deferral  Period"),  subject  in  each  case to the
                  Committee's  approval and to such terms as are  determined  by
                  the  Committee,  all in its sole  discretion.  Subject  to any
                  exceptions  adopted by the  Committee,  such  election must be
                  made at  least  six  months  prior  to the  completion  of the
                  Deferral  Period  for  a  Deferred  Stock  award  (or  for  an
                  installment of such an award).

         (g)      Each award shall be confirmed by, and subject to the terms of,
                  a Deferred Stock award  agreement  executed by the Company and
                  the participant.

         11. LOAN PROVISIONS. With the consent of the Committee, the Company may
             ---------------
make, guarantee,  or arrange for, a loan or loans to an employee with respect to
the exercise of any Stock Option  granted under this Plan and/or with respect to
the payment of the  purchase  price,  if any, of any  Restricted  Stock  awarded
hereunder  and/or with  respect to the payment by optionee of any or all federal
and/or  state  income  taxes due on account of the  granting  or exercise of any
stock option or other awards hereunder.  The Committee shall have full authority
to decide whether to make a loan or loans hereunder and to determine the amount,
terms and  provisions of any such loan or loans,  including the interest rate to
be charged in respect of any such loan or loans,  whether  the loan or loans are
to be with or without recourse against the borrower, the terms on which the loan
is to be repaid and the conditions, if any, under which the loan or loans may be
forgiven.


                                       13
<PAGE>

         12.      AMENDMENTS AND TERMINATION.
                  --------------------------
                  The Board may amend,  alter, or discontinue  this Plan, but no
amendment,  alteration,  or discontinuation shall be made which would impair the
right of an optionee or participant under a Stock Option, Director Stock Option,
Stock Appreciation  Right,  Restricted Stock or Deferred Stock award theretofore
granted,  without the optionee's or participant's  consent, or which without the
approval of the stockholders would:

                  12.1 Except as expressly  provided in this Plan,  increase the
total number of shares reserved for the purpose of this Plan;

                  12.2 Extend the maximum option period under Section 6.2 or 7.2
 of the Plan.

                  The  Committee  may  amend  the  terms of any  award or option
(other than  Director  Stock  Options)  theretofore  granted,  prospectively  or
retroactively,  but no such  amendment  shall  impair  the  rights of any holder
without his consent.  The  Committee may also  substitute  new Stock Options for
previously granted Stock Options having higher option prices.

         13.      UNFUNDED STATUS OF PLAN.
                  -----------------------
                  This Plan is intended to  constitute  an  "unfunded"  plan for
incentive and deferred  compensation.  With respect to any payments not yet made
to a Participant or optionee by the Company, nothing set forth herein shall give
any such  participant  or optionee  any rights that are greater than those of an
unsecured,  general  creditor  of the  Company.  In  its  sole  discretion,  the
Committee may authorize the creation of trusts or other arrangements to meet the
obligations  created  under this Plan to deliver Stock or payments in lieu of or
with respect to awards hereunder;  provided, however, that the existence of such
trusts or other  arrangements  is  consistent  with the unfunded  status of this
Plan.

         14.      CHANGE OF CONTROL.
                  -----------------
                  The  following  acceleration  and valuation  provisions  shall
apply in the event of a "Change of Control" or "Potential Change of Control," as
defined in this Section:

                  14.1 In the event of a "Change  of  Control,"  as  defined  in
Section  14.2,  unless  otherwise  determined  by the  Committee or the Board in
writing at or after grant, but prior to the occurrence of the Change of Control,
or, if and to the extent so  determined by the Committee or the Board in writing
at or after grant  (subject to any right of approval  expressly  reserved by the
Committee  or the  Board at the time of such  determination)  in the  event of a
"Potential Change of Control," as defined in Section 14(c):


                                       14
<PAGE>

         (a)      Any Stock Appreciation Rights outstanding for at least six (6)
                  months  and any  Stock  Options  awarded  under  this Plan not
                  previously   exercisable   and  vested   shall   become  fully
                  exercisable and vested;

         (b)      The  restrictions and deferral  limitations  applicable to any
                  Restricted  Stock and  Deferred  Stock  awards under this Plan
                  shall lapse and such shares and awards  shall be deemed  fully
                  vested; and

         (c)      All  outstanding  Stock Options,  Stock  Appreciation  Rights,
                  Restricted  Stock and Deferred  Stock  awards,  shall,  to the
                  extent  determined  by the  Committee  at or after  grant,  be
                  canceled and the holder thereof shall be paid in cash therefor
                  on the basis of the  "Change of Control  Price" (as defined in
                  Section 14.4) as of the date that the Change of Control occurs
                  or Potential Change of Control is determined to have occurred,
                  or such other date as the Committee may determine prior to the
                  Change of Control or Potential Change of Control.

                  14.2     For  Purposes of Section 14.2, a "Change of  Control"
means the  happening  of any of the following:

         (a)      When any  "person" as such term is used in Sections  13(d) and
                  14(d) of the  Exchange  Act (other  than the  Company,  or any
                  Company  employee  benefit plan,  including its trustee) is or
                  becomes the "beneficial owner" (as defined in Rule 13d-3 under
                  the Exchange Act), directly or indirectly of securities of the
                  Company representing 25 percent or more of the combined voting
                  power of the Company's then outstanding securities;

         (b)      The  occurrence of any  transaction  or event  relating to the
                  Company required to be described  pursuant to the requirements
                  of  Item  6(e)  of  Schedule  14A  of  Regulation  14A  of the
                  Commission under the Exchange Act;

         (c)      The occurrence of a transaction requiring stockholder approval
                  for the acquisition of the company by an entity other than the
                  Company or a  Subsidiary,  through  purchase of assets,  or by
                  merger, or otherwise;

         (d)      The dissolution of the Company; or

         (e)      The sale by the Company of substantially all of its assets.

                  14.3 For  purposes of Section  14.1,  a  "Potential  Change of
Control" means the happening of any of the following:

         (a)      The  entering   into  an   agreement   by  the  Company,   the
                  consummation  of which would  result in a Change of Control of
                  the Company as defined in Section 14.2;


                                       15
<PAGE>

         (b)      The public  announcement by any person (including the Company)
                  of an intention to take or consider  taking actions which,  if
                  consummated, would constitute a Change in Control; or

         (c)      The adoption by the Board of Directors of a resolution  to the
                  effect that a  Potential  Change of Control of the Company has
                  occurred for purposes of this Plan.

                  14.4 For purposes of this Section,  "Change of Control  Price"
means the highest  price based upon the Fair Market Value per share or the price
paid or offered in any  transaction  related to a potential or actual  Change of
Control of the  Company at any time  during  the  preceding  sixty day period as
determined  by the  Committee,  except that (i) in the case of  Incentive  Stock
Options and Stock Appreciation Rights relating to Incentive Stock Options,  such
price  shall be based only on  transactions  reported  for the date on which the
Committee  decides to cash out such  options,  and (ii) in the case of  Director
Stock Options, the sixty day period shall be the period immediately prior to the
Change of Control.

         15.      GENERAL PROVISIONS.
                  ------------------
                  15.1 All certificates for shares of Stock delivered under this
Plan shall be subject to such stock transfer  orders and other  restrictions  as
the  Committee  may deem  advisable  under  the  rules,  regulations,  and other
requirements  of  the  Commission  or the  National  Association  of  Securities
Dealers,  Inc., any stock exchange upon which the Stock is then listed,  and any
applicable federal or state securities law, and the Committee may cause a legend
or legends to be placed on any such  certificates to make appropriate  reference
to such restrictions.

                  15.2  Nothing  set forth in this Plan shall  prevent the Board
from  adopting  other  or  additional  compensation  arrangements,   subject  to
stockholder approval if such approval is required;  and such arrangements may be
either  generally  applicable or applicable only in specific cases. The adoption
of this Plan shall not confer upon any employee of the Company,  any  Subsidiary
or any  Affiliate,  any  right to  continued  employment  (or,  in the case of a
director,  continued  retention as a director) with the Company, a Subsidiary or
an  Affiliate,  as the case may be, nor shall it  interfere  in any way with the
right of the Company,  a Subsidiary or an Affiliate to terminate the  employment
of any of its employees at any time.

                  15.3  Each  participant  shall,  no later  than the date as of
which the value of an award first becomes  includable in the gross income of the
participant  for  federal  income  tax  purposes,  pay to the  Company,  or make
arrangements  satisfactory to the Committee  regarding  payment of, any federal,
state, or local taxes of any kind required by law to be withheld with respect to
the award.  The  obligations of the Company under this Plan shall be conditioned
on such payment or  arrangements  and the Company (and,  where  applicable,  its
Subsidiaries  and Affiliates)  shall,  to the extent  permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
participant.  If permitted by the Committee, a 


                                       16
<PAGE>

participant may irrevocably  elect to have the withholding tax obligation or, in
the case of all awards  hereunder  except Stock Options which have related Stock
Appreciation  Rights,  if  the  Committee  so  determines,  any  additional  tax
obligation with respect to awards  hereunder by (a) having the Company  withhold
shares of Stock  otherwise  deliverable to the  participant  with respect to the
award, or (b) delivering to the Company shares of unrestricted Stock;  provided,
however,  that any such  election  shall be made  either  (i)  during one of the
"window"  periods  described in section (e) (3) (iii) of Rule 16b-3  promulgated
under the Exchange  Act, or (ii) at least six months prior to the date income is
recognized with respect to the award.

                  15.4 At the time of  grant  or  purchase,  the  Committee  may
provide in  connection  with any grant or purchase made under this Plan that the
shares of Stock  received as a result of such grant or purchase shall be subject
to a right of first refusal, pursuant to which the participant shall be required
to offer to the Company any shares that the participant wishes to sell, with the
price being the then Fair Market Value of the Stock,  subject to the  provisions
of Section 14 and to such other terms and conditions as the Committee my specify
at the time of grant.

                  15.5 No member of the Board or the Committee,  nor any officer
or employee of the Company acting on behalf of the Board or the Committee, shall
be personally liable for any action,  determination,  or interpretation taken or
made in good faith with  respect to this Plan,  and all  members of the Board or
the  Committee  and each and any officer or  employee  of the Company  acting on
their behalf shall,  to the extent  permitted by law, be fully  indemnified  and
protected  by the Company  with  respect to any such  action,  determination  or
interpretation.

         16.      EFFECTIVE DATE OF PLAN.
                  ----------------------
                  This Plan shall be  effective  on the date it is approved by a
majority  of the votes  cast at a duly  held  shareholders'  meeting  at which a
quorum  representing  a majority of all  outstanding  voting stock is, either in
person or by proxy, present and voting on the Plan.

         17.      TERM OF PLAN.
                  ------------
                  No Stock Option,  Director  Stock Option,  Stock  Appreciation
Right,  Restricted  Stock or Deferred  Stock award shall be granted  pursuant to
this Plan on or after July 31, 2007, but awards  theretofore  granted may extend
beyond that date.


                                       17
<PAGE>

         CERTIFICATION OF ADOPTION
         -------------------------
                  I, Herbert H. Sommer, Secretary of Q-MED, INC., hereby certify
that the foregoing is a true and correct copy of the 1997 Equity Incentive Plan
of the Company as adopted by the Board of Directors of the Company at a special
meeting held on March, 1997 and by the Stockholders of the Company at an annual
meeting held on May 30, 1997.

         IN WITNESS WHEREOF, I have hereunto  subscribed my name and affixed the
seal of the Company this May 30, 1997.


                  /s/ Herbert H. Sommer
                  ------------------------------
                  Herbert H. Sommer, Secretary


                                       18