**Exhibit 10.31**

EXECUTION COPY

**EXECUTIVE EMPLOYMENT AGREEMENT**

          THIS AGREEMENT (the “Agreement”) is entered into as of the 21stday of February , 2003, by and among RIBAPHARM INC. (the “Company”) and MEL D. DEUTSCH, an individual (the “Executive”)(hereinafter collectively referred to as “the parties”).

PREAMBLE

          The Company desires to employ Executive and Executive desires to be employed by theCompany, all pursuant to the terms and conditions hereinafter set forth.

          NOW, THEREFORE, in consideration of the respective agreementsof the parties contained herein, it is agreed as follows:

          1.          Term.  The initial term of this Agreement shall be for the period commencing on January 23,2003 (the “Start Date”), and ending on the second anniversary of the Start Date (the “Initial Term”), provided, however, that the term of this Agreement shall be automatically extended for successive one (1) yearperiods thereafter (each, a “Renewal Period”) unless either the Company or Executive shall have given written notice to the other party at least ninety (90) days prior to the end of the Term of Agreement (as hereinafter defined), that theTerm of Agreement shall not be so extended.  The Initial Term together with each Renewal Period, if any, are collectively referred to herein as the “Term of Agreement”.  Executive’s employment hereunder shall be coterminouswith the Term of Agreement, unless sooner terminated as provided in Section 5 hereof.  

          2.          Employment.  During the term of Executive’s employment under this Agreement:

                        (a)          Subject to theterms and conditions of this Agreement, Executive shall be employed as Vice President and General Counsel of the Company.  Executive agrees to discharge all of the duties normally associated with such positions, to faithfully and to the best ofhis abilities perform such other services consistent with his position as a senior executive as may from time to time be assigned to him by the Company’s Chief Executive Officer, and to devote all of his business time, skill and attention tosuch services.  Executive agrees that he shall not engage in any other business activities of any kind which would give rise to a conflict of interest for Executive with respect to his duties and obligations to the Company.

                        (b)          Executiveshall report directly to the Company’s Chief Executive Officer.

          3.          Compensation.  During the term of Executive’s employment under thisAgreement:

                        (a)          BaseSalary.  The Company agrees to pay or cause to be paid to Executive during the Term of Agreement a base salary at the rate of $225,000 per annum or such increased amount as the Board may from time to time determine (hereinafter referred toas the “Base Salary”).  Such Base Salary shall be payable in accordance with the Company’s customary practices applicable to its executives.  

                        (b)          PerformanceBonus.  For each fiscal year of the Company ending during the Term of Agreement, beginning with the 2003 fiscal year, Executive shall be eligible to receive a target cash bonus of 40% of the Base Salary with the opportunity to receive amaximum cash bonus of 80% of the Base Salary, payable in accordance with the Company’s customary practices applicable to bonuses paid to its executives.  Any cash bonus will be based on performance by Executive and the Company and shall bewithin the sole discretion of the Board.  

                        (c)          StockOptions/Restricted Shares.

                                   (i)          Initial Grant.  On or prior to the date hereof, the Company shall grant to Executive an option (the “Initial Stock Option”) to purchase Two Hundred Thousand (200,000) sharesof common stock, par value $.01 per share, of the Company (the “Common Stock”) pursuant to the terms of the Company’s 2002 Stock Option and Award Plan (the “Plan”).  The Initial Stock Option shall become exercisablewith respect to 25% of such shares on each anniversary of the date of grant of the Initial Stock Option, and the exercise price per share shall be equal to the fair market value of the Common Stock, as determined under the Plan, on the date ofgrant.  

                                   (ii)          Future Grants.  Executive shall be entitled to participate in future stock option grants (the “Future Stock Options”) as determined by the compensation committee of theBoard.

                                   (iii)          Option Agreement.  The Initial Stock Option and any Future Stock Options shall be evidenced by agreements in customary form for grants of stock options under the Plan to executiveofficers of the Company, consistent with the terms and conditions of this Agreement.

          4.          Other Benefits.  During the term of Executive’s employment under thisAgreement:

                        (a)          EmployeeBenefits.  Executive shall be entitled to participate in all employee benefit plans, practices and programs maintained by the Company and made available to employees generally including, without limitation, all pension, retirement, profitsharing, savings, medical, hospitalization, disability, dental, life or travel accident insurance benefit plans.  Executive’s participation in such plans, practices and programs shall be on the same basis and terms as are applicable toemployees of the Company generally.

                        (b)          ExecutiveBenefits.  Executive shall be entitled to participate in all executive benefit or incentive compensation plans now maintained or hereafter established by the Company for the purpose of providing compensation and/or benefits to executives ofthe Company including, but not limited to, any supplemental retirement, salary continuation, stock

-2-

option, deferred compensation, supplemental medical or life insurance or other bonus or incentive compensation plans. Unless otherwise provided herein, Executive’sparticipation in such plans shall be on the same basis and terms, as other senior executives of the Company,  and shall be reasonably equivalent to the  benefit levels  and reward opportunities applicable to Executive as in effect onthe date hereof.  No additional compensation provided under any of such plans shall be deemed to modify or otherwise affect the terms of this Agreement or any of Executive’s entitlements hereunder.

                        (c)          Fringe Benefitsand Perquisites.  Executive shall be entitled to all fringe benefits and perquisites (e.g. physical examinations, additional reimbursement for uncovered medical expenses, executive life insurance and tax advisory services) generally madeavailable by the Company to its senior executives.

                        (d)          EligibilityWaiver of Waiting Times.  Subject to the terms of this Agreement, Executive (and to the extent applicable under the terms and benefits of such plans which apply to family members, Executive’s family) shall have the right to participatein all employee plans and benefits currently existing or hereafter granted by the Company to its employees and all waiting periods under such plans and benefits arrangements will be waived to the full extent possible unless such waiver would requirethe Company to waive waiting periods for other employees.  In the event that the provisions of any such employee plans or benefit arrangements do not permit immediate waiver of waiting periods, comparable benefits will be provided to Executiveand his beneficiaries outside such plans and arrangements.

                        (e)          BusinessExpenses.  Upon submission of proper invoices in accordance with the Company’s normal procedures, Executive shall be entitled to receive prompt reimbursement of all reasonable out-of-pocket business, entertainment and travel expensesincurred by him  in connection with the performance of his duties hereunder or for promoting, pursuing or otherwise furthering the business or interest of the Company.

                        (f)          Office andFacilities.  Executive shall be provided with an appropriate office in Costa Mesa, California, with such secretarial and other support facilities as are commensurate with Executive’s status with the Company and adequate for theperformance of his duties hereunder.

                        (g)          Vacation andSick Leave.  Executive shall be entitled, without loss of pay, to absent himself voluntarily from the performance of his employment under this Agreement, pursuant to the following:

                                   (i)          Executive shall be entitled to annual vacation in accordance with the policies as periodically established by the Board for similarly situated executives of the Company, which shall in no event beless than four weeks per year;

                                   (ii)          in addition to the aforesaid paid vacations, Executive shall be entitled, without loss of pay, to absent himself voluntarily from the performance of his employment for such additional periods oftime and for such valid and legitimate reasons as the Board in its discretion may determine. Further, the Board shall be entitled to grant to Executive a

-3-

leave or leaves of absence with or without pay at such time or times and upon such terms and conditions as the Board in its discretion may determine; and

                                   (iii)          Executive shall be entitled to sick leave (without loss of pay) in accordance with the Company’s policies as in effect from time to time.

          5.          Termination.  Executive’s employment hereunder may be terminated under the followingcircumstances:

                        (a)          Death. Executive’s employment shall be terminated as of the date of Executive’s death and Executive’s beneficiaries shall be entitled to the benefits provided in Section 7(b) hereof.

                        (b)          Disability.  The Company may terminate Executive’s employment after having established Executive’s Disability, subject to the payment by the Company to Executive of the benefits provided in Section 7(b) hereof. Forpurposes of this Agreement,  “Disability” shall mean Executive’s inability to substantially perform his duties and responsibilities hereunder by reason of any physical or mental incapacity for two or more periods of ninety (90)consecutive days each in any three hundred and sixty (360) day period, as determined by a physician with no history of prior dealings with the Company or Executive, as reasonably agreed upon by the Company and Executive.  

                        (c)          Cause. The Company may terminate Executive’s employment for “Cause”, effective as of the date of the Notice of Termination (as defined in Section 6 below), subject to the payment by the Company to Executive of the benefits provided inSection 7(a) hereof.  A termination for Cause is a termination made because Executive has (A) committed an act of fraud or embezzlement against the Company or any affiliate thereof, an unauthorized disclosure of Confidential Information (asdefined in Section 10 below) of the Company which disclosure results in material damage to the Company, or a breach of one or more of the following duties to the Company which continues after written notice thereof and a reasonable opportunity tocure: (1) the duty not to take actions which would reasonably be viewed by the Company as placing Executive’s interest in a position adverse to the interests of the Company, or (2) the duty not to engage in self-dealing with respect to theCompany’s assets, properties or business opportunities; or (B) been convicted (or entered a plea of nolocontendere) for the commission of (1) a felony or (2) a crime involving fraud, dishonesty or moral turpitude; or (C) engagedin intentional misconduct as an employee of the Company, which misconduct or violation results in material damage to the Company or its reputation and continues after written notice thereof and a reasonable opportunity to cure (if such misconduct issusceptible to cure by Executive), including, but not limited to (1) intentional violations by Executive of written policies of the Company or specific directions of the Board or Chairman of the Board, which policies or directives are not illegal(or do not involve illegal conduct) nor do they require Executive to violate reasonable business ethical standards, or (2) intentional violations of the Company’s code of corporate conduct; or (D) failed, after written notice from the Companyto render services to the Company in accordance with this Agreement or Executive’s position and responsibilities with the Company in a manner that amounts to gross neglect in the performance of his duties to the Company.  The Company maysuspend Executive, without pay, upon Executive’s indictment for the commission of (1) a felony or (2) a crime involving fraud,

-4-

dishonesty or moral turpitude.   Such suspension may remain effective until such time as the indictment is either dismissed or a verdict of not guilty has beenentered, at which time Executive shall be reinstated with the Company.  Upon such reinstatement, Executive shall be entitled to payment by the Company of all Base Salary to which Executive would have otherwise been entitled to during the periodof such suspension.

                        (d)          WithoutCause.  The Company may terminate Executive’s employment without Cause.  The Company shall deliver to Executive a Notice of Termination (as defined in Section 6 below) not less than sixty (60) days prior to the termination ofExecutive’s employment without Cause and the Company shall have the option of terminating Executive’s duties and responsibilities (but not his employment) prior to the expiration of such sixty-day notice period, subject to the payment bythe Company of the benefits provided in either Section 7(c) or 7(e) hereof, as may be applicable.

                        (e)          GoodReason.  Executive may terminate his employment for “Good Reason” (as defined below) by delivering to the Company a Notice of Termination (as defined in Section 6 below) not less than sixty (60) days prior to the termination ofExecutive’s employment for Good Reason.  The Company shall have the option of terminating Executive’s duties and responsibilities (but not his employment) prior to the expiration of such sixty-day notice period, subject to the paymentby the Company of the benefits provided in either Section 7(c) or 7(e) hereof, as may be applicable.  For purposes of this Agreement, Good Reason shall mean the occurrence of any of the events or conditions described in Subsections (i) through(ii) hereof which are not cured by the Company within  a reasonable time after the Company has received written notice from Executive specifying the particular events or conditions which constitute Good Reason and the specific cure requested byExecutive. 

                                   (i)          Salary Reduction.  A reduction in Executive’s Base Salary; or

                                   (ii)          Discontinuation of Material Compensation or Benefit Plan.  The failure by the Company to  continue in effect any material compensation or benefit plan in which Executive wasparticipating, including, but not limited to, the Company’s deferred compensation plan and 401(k) plan without providing  Executive with compensation and benefits substantially equal (in terms of benefit levels and/or reward opportunities)to those provided for under such plan.

                        (f)          Without GoodReason.  Executive may voluntarily terminate his employment without Good Reason by delivering to the Company a Notice of Termination not less than sixty (60) days prior to the termination of Executive’s employment and the Company shallhave the option of terminating Executive’s duties and responsibilities (but not his employment) prior to the expiration of such sixty-day notice period, subject to the payment by the Company to Executive of the benefits provided in Section 7(a)hereof through the last day of such notice period.  

                        (g)          Non-Renewal ofTerm of Agreement.  Either party may elect not to extend the Term of Agreement pursuant to Section 1 hereof, subject to the payment by the Company to Executive of the benefits provided in Section 7(d) hereof.

-5-

          6.          Notice of Termination.  Any purportedtermination by the Company or by Executive shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which indicates a termination date,the specific termination provision in this Agreement relied upon and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated. For purposesof this Agreement, no such purported termination of Executive’s employment hereunder shall be effective without such Notice of Termination.

          7.          Compensation Upon Termination.  Upon termination of Executive’s employment during theTerm of Agreement, Executive shall be entitled to the following benefits:

                        (a)          Termination bythe Company for Cause or by Executive Without Good Reason.  If Executive’s employment is terminated by the Company for Cause or by Executive Without Good Reason, the Company shall pay Executive all amounts earned  hereunderthrough the termination date, including: 

                                   (i)          any accrued and unpaid Base Salary;

                                   (ii)          reimbursement for any and all monies advanced to Executive or expenses incurred in connection with Executive’s employment for reasonable and necessary expenses incurred by Executive on behalfof the Company for the period ending on the termination date; 

                                   (iii)          any accrued and unpaid vacation pay; and

                                   (iv)          any previous compensation which Executive has previously deferred (including any interest earned or credited thereon), subject to the terms and conditions of the applicable deferred compensationplans then in effect (the foregoing items in Section 7(a)(i) through 7(a)(iv) being collectively referred to as the “Accrued Compensation”). 

                        (b)          Termination UponDeath or Disability.  If Executive’s employment is terminated by the Company upon Executive’s Disability or by reason of Executive’s death, the Company shall pay Executive (or his beneficiaries, as applicable) the following :

                                   (i)          any Accrued Compensation through the date of termination of employment;

                                   (ii)          an amount equal to the target bonus or incentive award that Executive would have been entitled to receive in respect of the fiscal year in which Executive’s termination date occurs, had hecontinued in employment until the end of such fiscal year, calculated as if all performance targets and goals (if applicable) had been fully met by the Company and by Executive, as applicable, for such fiscal year, multiplied by a fraction (A) thenumerator of which is the number of days in such fiscal year through the termination date and (B) the denominator of which is 365 (a “Pro Rata Bonus”); and

-6-

          Executive’s entitlement to any other compensation or benefits hereunder shall be determined in accordance withthe Company’s employee benefit plans and other applicable programs and practices then in effect.

                        (c)          Termination bythe Company Without Cause or by Executive for Good Reason.  If Executive’s employment by the Company shall be terminated by the Company without Cause, or if Executive terminates his employment for Good Reason, Executive shall beentitled to:

                                   (i)          any Accrued Compensation through the date of termination of employment; and

                                   (ii)          If Executive voluntarily elects and agrees not to engage in Prohibited Activities (as hereinafter defined) for a period of one (1) year after the date of such termination of employment, theCompany shall pay Executive as additional compensation for the periods subsequent to the termination date, an amount in cash equal to one-half the sum of (A) Executive’s Base Salary at the highest rate in effect at any time within the ninety(90) day period ending on the date the Notice of Termination is delivered, and (B) a Pro Rata Bonus for the fiscal year in which Executive’s termination date occurs (the “Severance Amount”), and provide Executive with OutplacementServices (as defined below).  The additional compensation provided in the previous sentence shall be payable in substantially equal monthly installments for a period of  six months.  If Executive does not so voluntarily elect andagree or otherwise engages in such Prohibited Activities, then Executive’s eligibility to receive the post-employment benefits provided for in this Section 7(c)(ii) shall immediately terminate.  Executive’s entitlement to any othercompensation or benefits hereunder shall be determined in accordance with the Company’s employee benefit plans and other applicable programs and practices then in effect.   For purposes of this Section 7(c)(ii), “OutplacementServices” shall mean outplacement services from a qualified senior executive outplacement firm for a period of time consistent with similar benefits provided to similarly situated senior executives, but in no event less than 3months.   For the purposes of this Agreement, the term “Prohibited Activities” means directly or indirectly engaging as an owner, employee, consultant or agent of any entity that manufactures, markets and distributes (directly orindirectly through related entities, joint ventures, strategic alliances or other affiliated entities) prescription or non-prescription pharmaceuticals or medical devices for treatments in the fields of dermatology, oncology or hepatology. Notwithstanding the foregoing, it shall not be considered a “Prohibited Activity” for Executive to own or purchase any corporate securities of any entity that is regularly traded on a recognized stock exchange or over-the-counter market solong as Executive does not own, in the aggregate, 5% or more of the voting equity securities of any such entity.

                        (d)          Termination Dueto Non-Renewal of Term of Agreement.  

                                   (i)          If the Company notifies Executive under Section 1 hereof that it shall not extend the Term of Agreement for any Renewal Period, subject to the provisions of Section 7(c) hereof, Executive shall beentitled to the benefits provided in Section 7(c) above.

-7-

                                   (ii)          If Executive notifies the Company under Section 1 hereof that he shall not extend the Term of Agreement for any Renewal Period, Executive shall be entitled to any Accrued Compensation through theeffective date of Executive’s termination.

                        (e)          Termination bythe Company Without Cause or by Executive for Good Reason Following a Change in Control.  If Executive’s employment by the Company shall be terminated by the Company without Cause or by Executive for Good Reason within twelve (12)months following a Change in Control (as defined in Section 8 below), then in addition to the amounts due under Sections 7(c) above (except as otherwise provided in Section 7(e)(iii) below), Executive shall be entitled to the benefits providedbelow, provided that, Executive voluntarily elects and agrees not to engage in Prohibited Activities for a period of one (1) year after the date of such termination of employment:

                                   (i)          all restrictions on any outstanding awards granted by the Company or any subsidiaries or parent of the Company (including restricted stock awards) granted to Executive shall lapse and such awardsshall become fully (100%) and immediately vested, and all stock options and stock appreciation rights granted to Executive shall become fully (100%) and immediately exercisable;  

                                   (ii)          if prior to a termination under this Section 7(e), the Company shall adopt a supplemental and excess retirement plan which covers Executive, then the Company shall pay in six (6) substantially equal monthly payments an amount in cash equal to the excess of (A) the actuarial equivalent of the aggregate retirement benefit Executive would have been entitled to receive under such supplemental and excess retirement plans (x) hadExecutive remained employed by the Company for an additional  six months of credited service (or until his 65th birthday, if earlier), (y) had Executive’s annual compensation during such period been equal to his Base Salary (at the rateused for purposes of Section 7(c)(ii)) plus the Pro Rata Bonus, and (z) had Executive been fully (100%) vested in his benefits under each such retirement plan with respect to his years of service prior to termination and such additional six (6)month period, over (B) the actuarial equivalent of the aggregate retirement benefit Executive is actually entitled to receive under such retirement plans. For purposes of this Subsection (ii), “actuarial equivalent” shall be determined inaccordance with the actuarial assumptions used for the calculation of benefits under any retirement plan as applied prior to the termination date in accordance with such plan’s past practices (but shall in any event take into account the valueof any subsidized early retirement benefit); and

                                   (iii)          In lieu of the cash payments otherwise due to Executive in accordance with Section 7(c)(ii), the Company shall pay Executive as additional compensation for the periods subsequent to thetermination date, an amount in cash equal to two (2) times the Severance Amount.  The additional compensation provided in the previous sentence shall be payable in substantially equal monthly installments for a period of  sixmonths.    

          If Executive does not so voluntarily elect and agree or otherwise engages in such Prohibited Activities, thenExecutive’s eligibility to continue to receive the post-employment benefits provided for in this paragraph shall immediately terminate.

-8-

          Executive shall not be required to mitigate the amount of any payment provided for under this Section 7 by seekingother employment and no such payment shall be offset or reduced by the amount of any compensation or benefits provided to Executive in any subsequent employment.

          8.          Change in Control.  For purposes of this Agreement, a “Change in Control” shallmean any of the following events, unless, in the case of (a), (b) and (c) below, ICN Pharmaceuticals, Inc. (“ICN”)  holds a majority of the Company’s outstanding  voting securities:

                        (a)          the acquisition(other than from the Company) by any person (as such term is defined in Section 13(c) or 14(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated underthe 1934 Act) of thirty percent (30%) or more of the combined voting power of the Company’s then outstanding voting securities;

                        (b)          the individualswho, as of the date hereof, are members of the Board (the “Incumbent Board”), cease for any reason to constitute at least two thirds (2/3) of the Board, unless the election, or nomination for election by the Company’s stockholders, ofany new director was approved by a vote of at least two thirds (2/3) of the Incumbent Board, and such new director shall, for purposes of this Agreement, be considered as a member of the Incumbent Board; 

                        (c)          approval bystockholders of the Company of: 

                                   (i)          a merger or consolidation involving the Company and an independent third party if the stockholders of the Company, immediately before such merger or consolidation, do not, as a result of suchmerger or consolidation, own, directly or indirectly, more than seventy percent (70%) of the combined voting power of the then outstanding voting securities of the corporation resulting from such merger or consolidation in substantially the sameproportion as their ownership of the combined voting power of the voting securities of the Company outstanding immediately before such merger or consolidation; or 

                                   (ii)          an agreement for the sale or other disposition of all or substantially all of the assets of the Company to an independent third party; or

                        (d)          the liquidation ordissolution of ICN at such time as ICN holds a majority of the Company’s outstanding voting securities.

          Notwithstanding theforegoing, a Change in Control shall not be deemed to occur pursuant to Section 8(a), solely because thirty percent (30%) or more of the combined voting power of the Company’s then outstanding securities is acquired by (i) a trustee or otherfiduciary holding securities under one or more employee benefit plans maintained by the Company or any of its subsidiaries or (ii) any corporation which, immediately prior to such acquisition, is owned directly or indirectly by the stockholders ofthe Company in the same proportion as their ownership of stock in the Company immediately prior to such acquisition.  In no event shall any reduction in the equity interest of ICN  in the Company be deemed to constitute a “Change inControl” hereunder.

-9-

          9.          Acquisition by ICN.  If ICN acquires (i) additional shares of Common Stock of the Company or other securities of the Company which results in ICN holding 90% or more of the outstanding capital stock of the Company or (ii) all or substantially all of the Company’s assets(each, an “Acquisition”), then the Company shall exercise reasonable efforts so that the  unexercised portion of the Initial Stock Option and Future Stock Options, if any, outstanding as of the closing date of such transaction (the“Closing Date”) shall be  converted into stock options to purchase such number of shares of common stock of ICN, par value $.01 per share, under ICN’s 1998 Stock Option Plan (the “Converted Options”) determined bymultiplying the number of outstanding unexercised options identified above by a fraction, (A) the numerator of which shall be the Fair Market Value Shares (as defined below) and (B) the denominator of which shall be the Number of Shares (as definedbelow).  The exercise price of the Converted Options shall be established by multiplying the applicable exercise price of the outstanding unexercised option being converted by a fraction, (A) the numerator of which is the Number of Shares and(B) the denominator of which is the Fair Market Value Shares. The Converted Options will contain substantially similar  terms as the Initial Stock Options and the Future Stock Options, if any, including vesting, as of the ClosingDate.

          For purposes of this Section 9, “Fair Market Value Shares” shall mean the fair market value of the securities, cash,other assets or combination thereof offered to the Company’s stockholders in the Acquisition, divided by the average closing price of a share of common stock of ICN for the five trading days immediately preceding the public announcement of theAcquisition.  “Number of Shares” shall mean (A) that number of shares of Common Stock acquired by ICN in connection with the Acquisition, or (B) in the case of an Acquisition in which the Company’s assets are acquired by ICN, theequivalent number of shares as determined by dividing the fair market value of such assets divided by the average closing price of a share of Common Stock for the five trading days immediately preceding the public announcement of theAcquisition.  

          10.         Federal Excise Tax.

                        (a)          GeneralRule.  Executive’s payments and benefits under this Agreement and all other arrangements or programs related thereto shall not, in the aggregate, exceed the maximum amount that may be paid to Executive without triggering goldenparachute penalties under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and the provisions related thereto with respect to such payments.  If Executive’s benefits must be cut back to avoid triggeringsuch penalties, Executive’s benefits will be cut back in the priority order Executive designates or, if Executive fails to promptly designate an order, in the priority order designated by the Company.  If an amount in excess of the limitset forth in this Section is paid to Executive, Executive must repay the excess amount to the Company upon demand, with interest at the rate provided in Code Section 1274(b)(2)(B).  Executive and the Company agree to cooperate with each otherreasonably in connection with any administrative or judicial proceedings concerning the existence or amount of golden parachute penalties on payments or benefits Executive receives. 

                        (b)          Exception.  Section 10(a) shall apply only if it increases the net amount Executive would realize from payments and benefits subject to Section 10(a), after payment of income and excise taxes by Executive on such payments andbenefits.

-10-

                        (c)          Determinations.  The determination of whether the golden parachute penalties under Code Section 280G and the provisions related thereto apply shall be made by counsel chosen by Executive and reasonably acceptable to the Company. Allother determinations needed to apply this Section 10 shall be made in good faith by the Company’s independent auditors.

          11.         Records and Confidential Data; Proprietary Inventions.

                        (a)          Executiveacknowledges that in connection with the performance of his duties during the Term of Agreement the Company will make available to Executive, or Executive will have access to, certain Confidential Information (as defined below) of the Company andits affiliates.  Executive acknowledges and agrees that any and all Confidential Information learned or obtained by Executive during the course of his employment by the Company or otherwise, whether developed by Executive alone or inconjunction with others or otherwise, shall be and is the property of the Company and its affiliates.

                        (b)          The ConfidentialInformation will be kept confidential by Executive, will not be used in any manner which is detrimental to the Company, will not be used other than in connection with Executive’s discharge of his duties hereunder, and will be safeguarded byExecutive from unauthorized disclosure.

                        (c)          For the purposes ofthis Agreement, “Confidential Information” shall mean all confidential and proprietary information of the Company and its affiliates that has been created, discovered or developed or has otherwise become known to the Company (including,without limitation, information created, discovered, developed or made known by or to Executive during the period of or arising out of his employment hereunder) or in which property rights have been assigned or otherwise conveyed to the Company,which information has commercial value in the business in which the Company is engaged; by way of illustration and not limitation, Confidential Information includes information derived from reports, investigations, experiments, research, work inprogress, drawing, designs, plans, proposals, codes, marketing and sales programs, client lists, client mailing lists, supplier lists, financial projections, cost summaries, pricing formula, marketing studies relating to prospective businessopportunities and all other concepts, ideas, materials, or information prepared or performed for or by the Company or its affiliates.  For purposes of this Agreement, the Confidential Information shall not include and Executive’sobligation’s shall not extend to (i) information which is, or becomes, without violation by Executive of this Agreement,  generally available to the public and (ii) information obtained by Executive other than pursuant to or in connectionwith this employment   Notwithstanding the foregoing, if Executive is required by law or legal process to disclose the Confidential Information, Executive shall provide the Company with prompt notice so that the Company may seek aprotective order or other appropriate remedy and/or waive compliance with this Section 11.   If, in the absence of a protective order or other remedy or the receipt of a waiver by the Company, Executive is nonetheless, in the opinion ofcounsel, legally compelled to disclose the Confidential Information, Executive may, without liability hereunder, disclose only that portion of the Confidential Information which such counsel advises is legally required to be disclosed, provided, however, that Executive exercise reasonable efforts to preserve the confidentiality of the Confidential Information, including without limitation, cooperating with the Company to obtain an appropriate protective order or

-11-

other reliable assurance that confidential treatment will be accorded the Confidential Information. 

                        (d)          Executive herebyassigns to the Company any rights he may acquire during his employment hereunder in all Confidential Information and agrees that all Inventions (as defined below) will be the sole property of the Company and its assigns, and the Company and itsassigns will be the sole owner of all the patents and other rights in connection therewith.  Executive hereby assigns to the Company any rights he may acquire during the period of his employment hereunder in all Inventions and agrees to assistthe Company in every proper way (but at the Company’s expense) to obtain and from time to time enforce patents on Inventions in any and all countries.  Executive shall execute all documents for use in applying for and obtaining suchpatents thereon and enforcing same, as the Company may desire, together with any assignments thereof to the Company or persons designated by it.  Executive’s obligation to assist the Company in obtaining and enforcing patents forInventions in any and all countries will continue beyond the termination of employment hereunder, but the Company will compensate Executive at a reasonable rate after such termination for time actually spent by him at the Company’s request onsuch assistance.  Executive acknowledges that, in accordance with Section 2872 of the California Labor Code, the assignment provisions in this paragraph (d), do not apply to Inventions for which no equipment, supplies, facility, or trade secretinformation of the Company was used, which were developed entirely on Executive’s own time, and (i) which do not relate (a) to the business of the Company or (b) to the Company’s actual or demonstrably anticipated research or developmentor (ii) which do not result from any work performed by Executive for the Company.  Executive has identified on Schedule I hereto all inventions or improvements relevant to the subject matter of Executive’s employment hereunder which havebeen made or conceived or first reduced to practice by Executive alone or jointly with others prior to the date hereof which Executive desires to remove from the operation of this Agreement; and Executive represents that such list is complete. If there is no such list on Schedule I, Executive represents that he has made no such inventions and improvements as of the date hereof.

                        (e)          For purposes ofthis  Agreement, “Inventions” shall mean all improvements, inventions, formulae, processes, techniques, know-how and data whether or not patentable, made or conceived or reduced to practice or learned by Executive, either alone orjointly with others, during Executive’s employment hereunder which are related to or useful in the business of the Company, or result from tasks assigned Executive by the Company, or result from use of premises owned, leased or contracted forby the Company.

                        (f)          Executive’sobligations under this Section 11 shall survive the termination of the Term of Agreement.

          12.         Covenant Not to Solicit.  

                        (a)          Covenant Not toSolicit.  To protect the Confidential Information and other trade secrets of the Company, Executive agrees, during the term of this Agreement and for a period of twelve months after Executive’s cessation of employment with the Company,not to solicit or participate in or assist in any way in the solicitation of any employees or consultants of the Company. For purposes of this covenant, “solicit” or “solicitation” means directly or

-12-

indirectly influencing or attempting to influence employees or consultants of the Company to become employed with any other person, partnership, firm, corporation or otherentity.  Executive agrees that the covenants contained in this Section 12 are reasonable and desirable to protect the Confidential Information of the Company.

                        (b)          It is the intentand desire of Executive and the Company that the restrictive provisions of this Section 12 be enforced to the fullest extent permissible under the laws and public policies as applied in each jurisdiction in which enforcement is sought.  If anyparticular provision of this Section 12 shall be determined to be invalid or unenforceable, such covenant shall be amended, without any action on the part of either party hereto, to delete therefrom the portion so determined to be invalid orunenforceable, such deletion to apply only with respect to the operation of such covenant in the particular jurisdiction in which such adjudication is made.  

                        (c)          Executive’sobligations under this Section 12 shall survive the termination of the Term of Agreement.

          13.         Remedies for Breach of Obligations under Sections 11 or 12 hereof.  Executive acknowledges thatthe Company will suffer irreparable injury, not readily susceptible of valuation in monetary damages, if Executive breaches his obligations under Sections 11 or 12 hereof.  Accordingly, Executive agrees that the Company will be entitled, inaddition to any other available remedies, to obtain injunctive relief against any breach or prospective breach by Executive of his obligations under Sections 11 or 12 hereof.  The Company shall seek such relief in any Federal or state court inthe State of California where venue would be appropriate based upon Executive’s principal residence or his principal place of business, or, at the Company’s election, in any other state in which Executive maintains his principal residenceor his principal place of business as provided for in Section 14(g) below. Executive hereby submits to the non-exclusive jurisdiction of all those courts for the purposes of any actions or proceedings instituted by the Company to obtain thatinjunctive relief, and Executive agrees that process in any or all of those actions or proceedings may be served by registered mail, addressed to the last address provided by Executive to the Company, or in any other manner authorized by law. Notice in such proceedings shall be given in the manner required by law.  Executive further agrees that, in addition to any other remedies available to the Company by operation of law or otherwise, in the event Executive willfully andmaterially breaches any of his obligations under Sections 11 or 12 hereof, he shall not be entitled to any amounts which may otherwise be payable under the terms of Sections 7(b), 7(c), 7(d) and 7(e) hereof and under the terms of the benefit plansof the Company in which he participates and to which he might otherwise then be entitled by virtue hereof.  Nothing in Sections 11 or 12 hereof shall operate as a diminution of Executive’s obligations under the Company’s standardagreements pertaining to the subject matter of such sections.

          14.         Miscellaneous.

                        (a)          Successors andAssigns.  

                                   (i)          This Agreement shall be binding upon and shall inure to the benefit of the Company, its successors and assigns and the Company shall require any successor or assign to expressly assume and agreeto perform this Agreement in the same manner and to the

-13-

same extent that the Company would be required to perform if no such succession or assignment had taken place. The term “the Company” as used herein shall mean acorporation or other entity acquiring all or substantially all the assets and business of the Company (including this Agreement) whether by operation of law or otherwise.

                                   (ii)          Neither this Agreement nor any right or interest hereunder shall be assignable or transferable by Executive, his beneficiaries or legal representatives, except by will or by the, laws of descentand distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal personal representatives.

                        (b)          Fees andExpenses; Legal Counsel.  The Company shall pay all reasonable legal fees and related expenses, up to a maximum amount of $20,000, incurred by Executive in connection with the negotiation of this Agreement and related employmentarrangements; provided, that Executive may instead, in his sole discretion, elect to receive a lump sum payment of $10,000 in full satisfaction of the Company’s foregoing obligation.  Executive acknowledges that he has hadthe opportunity to consult with legal counsel of his choice in connection with the drafting, negotiation and execution of this Agreement and related employment arrangements.

                        (c)          Notice.  For the purposes of this Agreement, notices and all other communications provided for in the Agreement (including the Notice of Termination) shall be in writing and shall be deemed to have been duly given when personally delivered or sent byCertified mail, return receipt requested, postage prepaid, addressed to the respective addresses last given by each party to the other, provided that all notices to the Company shall be directed to the attention of the Chairman of the Board with acopy to the Secretary of the Company. All notices and communications shall be deemed to have been received on the date of delivery thereof or on the third business day after the mailing thereof, except that notice of change of address shall beeffective only upon receipt.

                        (d)          Withholding.  The Company shall be entitled to withhold the amount, if any, of all taxes of any applicable jurisdiction required to be withheld by an employer with respect to any amount paid to Executive hereunder.  TheCompany, in its sole and absolute discretion, shall make all determinations as to whether it is obligated to withhold any taxes hereunder and the amount hereof.

                        (e)          Release ofClaims.  The Company may condition payment of the cash termination benefits described in Sections 7(b), 7(c), 7(d) and 7(e) of this Agreement upon the delivery by Executive of a signed release of claims in a form customarily employed by theCompany; provided, however, that Executive shall not be required to release any rights Executive may have to be indemnified or held harmless by the Company under the certificate of incorporation or by-laws of the Company.

                        (f)          Modification.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Executive and the Company.  No waiver by either partyhereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at thesame or at any prior or subsequent time.

-14-

                        (g)          Arbitration.  If any legally actionable dispute arises under this Agreement or otherwise which cannot be resolved by mutual discussion between the parties, then the Company and Executive each agree to resolve that dispute by bindingarbitration before an arbitrator experienced in employment law.  Said arbitration will be conducted in accordance with the rules applicable to employment disputes of the Judicial Arbitration and Mediation Services (“JAMS”) and the lawapplicable to the claim.  The parties shall have 30 calendar days after notice of such arbitration has been given to attempt to agree on the selection of an arbitrator.  In the event the parties are unable to agree in such time, JAMS willprovide a list of nine available arbitrators and an arbitrator will be selected from such nine-member panel provided by JAMS by the parties alternately striking out one name of a potential arbitrator until only one name remains.  The partyentitled to strike an arbitrator first shall be selected by a toss of a coin.  The parties agree that this agreement to arbitrate includes any such disputes that the Company may have against Executive, or Executive may have against the Companyand/or its related entities and/or employees, arising out of or relating to this Agreement, or Executive’s employment or Executive’s termination including, but not limited to, any claims of discrimination or harassment in violation ofapplicable law and any other aspect of Executive’s compensation, employment, or Executive’s termination.  The parties further agree that arbitration as provided for in this Section 14(g) is the exclusive and binding remedy for anysuch dispute and will be used instead of any court action, which is hereby expressly waived, except for any request by either party for temporary or preliminary injunctive relief pending arbitration in accordance with applicable law or for breachesby Executive of Executive’s obligations under Sections 11 or 12 above or an administrative claim with an administrative agency.  The parties agree that the arbitration provided herein shall be conducted in Orange County, California unlessotherwise mutually agreed or unless Executive’s primary place of employment is a different location.  The Company shall pay the cost of any arbitration brought pursuant to this paragraph, including filing fees, administrative fees and thecosts of the arbitrator, excluding, however, the filing fees of Executive if he is the moving party to the extent such fees are equal to or less than those that would applicable to file a complaint in the Orange County Superior Court and the cost ofrepresentation of Executive unless such cost is awarded in accordance with law or otherwise awarded by the arbitrators.

                        (h)          GoverningLaw.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California applicable to contracts executed in and to be performed entirely within such State, without giving effect to theconflict of law principles thereof.

                        (i)          NoConflicts.  Executive represents and warrants to the Company that he is not a party to or otherwise bound by any agreement or arrangement (including, without limitation, any license, covenant, or commitment of any nature), or subject to anyjudgment, decree, or order of any court or administrative agency, that would conflict with or will be in conflict with or in any way preclude, limit or inhibit Executive’s ability to execute this Agreement or to carry out his duties andresponsibilities hereunder.

                        (j)          Trade Secrets ofOthers.  The Company acknowledges that Executive, as a current and/or former employee or independent contractor of another company, may previously have been privy to trade secrets and/or confidential information of such othercompany, and may be under an obligation to such other company to maintain the confidentiality of such trade

-15-

secrets or confidential information.  Accordingly, to the extent Executive is under such an obligation, Executive shall not: (a) bring any records, notes,files, drawings, documents, plans and like items, provided to him in confidence by such other company, or any copies thereof, relating to or containing or disclosing confidential information or trade secrets of any such other company on thepremises of the Company or otherwise use such documents and items in the performance of services for the Company; or (b) disclose any confidential information or trade secrets provided to Executive in confidence by such other company to anyother employee of the Company; provided, however, that this prohibition only applies to documents or information that Executive obtained or learned before the beginning of his relationship with the Company. 

                        (k)          Severability.  The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof

                        (l)          EntireAgreement.  This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreements, if any, understandings and arrangements, oral or written, between the parties hereto with respect to the subjectmatter hereof.   No agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.

**[Signature Page Follows]**

-16-

          IN WITNESS WHEREOF, the parties have  caused this Agreement to be executed  as of the day and year firstabove written.

 

RIBAPHARM INC.

 

 

 

By:

 /s/  KIMD.LAMON     

 

 

 

 

 

Name:

**Kim D. Lamon, M.D., Ph.D.**

 

 

Title:

**President and Chief Executive Officer**

 

 

 

 

 

 

EXECUTIVE

 

 

 

By:

 /s/   MEL D. DEUTSCH    

 

 

 

 

 

Name:

**Mel D. Deutsch**

 

-17-