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                                                                    EXHIBIT 10.1







                                 RIBAPHARM INC.

                        2002 STOCK OPTION AND AWARD PLAN

                          (As Adopted __________, 2002)
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                                 Ribapharm Inc.

                        2002 STOCK OPTION AND AWARD PLAN

         1.   Purpose.

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

         2.   Definitions.

              For purposes of the Plan:

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

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

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

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

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

              2.6 "Cause" means:


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

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

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

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

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

                   (b)  in all other cases,

                        (i)   an acquisition (other than directly from the
    Company in the case of voting securities of the Company or from the Parent
    (as defined below) in the case of voting securities of the Parent) of any
    voting securities (the "Voting Securities") of the Company or its Parent by
    any "Person" (as the term person is used for purposes of Section 13(d) or
    14(d) of the Exchange Act)


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    immediately after which such Person has "Beneficial Ownership" (within the
    meaning of Rule 13d-3 promulgated under the Exchange Act) of more than
    twenty-five percent (25%) of the then outstanding Shares or the then
    outstanding shares of common stock of its Parent (as applicable) or the
    combined voting power of the then-outstanding Voting Securities of the
    Company or its Parent (as applicable). For purposes of this Agreement,
    "Parent" shall mean an entity that owns, directly or indirectly, more than
    fifty percent (50%) of the then-outstanding Shares of the Company or the
    combined voting power of the then-outstanding Voting Securities of the
    Company (including ICN Pharmaceuticals, Inc. prior to (but only prior to)
    the Spin-Off); provided, however, in determining whether a Change in Control
    has occurred pursuant to this Section 8(b)(1), Shares or Voting Securities
    which are acquired in a "Non-Control Acquisition" (as hereinafter defined)
    shall not constitute an acquisition which would cause a Change in Control. A
    "Non-Control Acquisition" shall mean an acquisition by (1) an employee
    benefit plan (or a trust forming a part thereof) sponsored or maintained by
    (x) the Company or its Parent or (y) any corporation or other Person of
    which a majority of its voting power or its voting equity securities or
    equity interest is owned, directly or indirectly, by the Company (for
    purposes of this definition, a "Company Subsidiary") or its Parent (for
    purposes of this definition, a "Parent Subsidiary"), (2) the Company, a
    Parent, any Company Subsidiary, any Parent Subsidiary or any of their
    affiliates, (3) any underwriter temporarily holding securities pursuant to
    an offering of such securities, or (4) any Person in connection with a
    "Non-Control Transaction" (as hereinafter defined);

                   (ii)  The consummation of:

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

                               (x) the stockholders of the Company or such
    Parent immediately before such Merger own directly or indirectly immediately
    following such Merger at least fifty percent (50%) of the combined voting
    power of the outstanding voting securities of (A) the corporation resulting
    from such Merger (the "Surviving Corporation"), if the Surviving Corporation
    has no Parent immediately following such Merger, or (B) the ultimate Parent
    of the Surviving Corporation, if there is one or more Parents of the
    Surviving Corporation immediately following such Merger; and

                               (y) the members of the "Incumbent Board" (as
    defined below) or the "ICN Incumbent Board" (as defined below), as the case
    may be, immediately prior to the execution of the agreement providing for
    such


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    Merger, constitute at least a majority of the members of the board of
    directors of (A) the Surviving Corporation, if the Surviving Corporation has
    no Parent immediately following such Merger, or (B) the ultimate Parent of
    the Surviving Corporation, if there is one or more Parents of the Surviving
    Corporation immediately following such Merger;

                         (2)   a complete liquidation or dissolution of the
    Company or a Parent, as the case may be; or

                         (3)   the sale or other disposition of all or
    substantially all of the assets of the Company or a Parent, as the case may
    be, to any Person (other than (A) a transfer to a Company Subsidiary or
    Parent Subsidiary or (B) a transfer under conditions that would constitute a
    Non-Control Transaction (with the transfer of assets being regarded as a
    Merger for this purpose), (C) the Spin-Off or (D) any other distribution to
    the stockholders of the Company or a Parent of the stock of a Company
    Subsidiary or a Parent Subsidiary or any other assets); or

                   (iii) the individuals who, at the time of the initial public
    offering of the Company, are members of the Board (the "Incumbent Board")
    cease for any reason to constitute a majority of the members of the Board
    or, following a Merger which results in a Parent, the board of directors of
    the ultimate Parent; provided, however, that if the appointment or election,
    or nomination for election by the Company's stockholders, of any new
    director was approved by a vote of at least two-thirds (2/3) of the
    Incumbent Board, such new director shall, for purposes of this Agreement, be
    considered as a member of the Incumbent Board; provided further, however,
    that no individual shall be considered a member of the Incumbent Board if
    such individual initially assumed office as a result of either an actual or
    threatened "Election Contest" (as described in Rule 14a-11 promulgated under
    the Exchange Act) or other actual or threatened solicitation of proxies or
    consents by or on behalf of a Person other than the Board (a "Proxy
    Contest") including by reason of any agreement intended to avoid or settle
    any Election Contest or Proxy Contest; or

                   (iv)  prior to (but only prior to) the Spin-Off, the
    individuals who, as of May 1, 2001, are members of the board of directors of
    ICN Pharmaceuticals, Inc. (the "ICN Incumbent Board") cease for any reason
    to constitute a majority of the members of such board of directors or,
    following a merger, consolidation or reorganization with or into ICN
    Pharmaceuticals, Inc. that results in a Person owning, directly or
    indirectly, more than fifty percent (50%) of the then-outstanding Shares of
    ICN Pharmaceuticals, Inc. or the combined voting power of the
    then-outstanding Voting Securities of ICN Pharmaceuticals, Inc. (an "ICN
    Parent"), the board of directors of the ultimate ICN Parent; provided,
    however, that if the appointment or election, or nomination for


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    election by the stockholders of ICN Pharmaceuticals, Inc., of any new
    director was approved by a vote of at least two-thirds (2/3) of the ICN
    Incumbent Board, such new director shall, for purposes of this Agreement, be
    considered as a member of the ICN Incumbent Board; provided further,
    however, that no individual shall be considered a member of the ICN
    Incumbent Board if such individual initially assumed office as a result of
    either an actual or threatened Election Contest or other actual or
    threatened Proxy Contest, including by reason of any agreement intended to
    avoid or settle any Election Contest or Proxy Contest.

    Notwithstanding the foregoing, a Change in Control shall not be deemed to
    occur solely because any Person (the "Subject Person") acquired Beneficial
    Ownership of more than the permitted amount of the then-outstanding Shares
    or Voting Securities of the Company or a Parent as a result of the
    acquisition by the Company or by a Parent of its Shares or Voting Securities
    which, by reducing the number of Shares or Voting Securities then
    outstanding, increases the proportional number of shares Beneficially Owned
    by the Subject Person; provided, however, that, if a Change in Control would
    occur (but for the operation of this sentence) as a result of the
    acquisition of Shares or Voting Securities by the Company, and after such
    share acquisition by the Company or by such Parent, the Subject Person
    becomes the Beneficial Owner of any additional Shares or Voting Securities
    which increases the percentage of the then-outstanding Shares or Voting
    Securities of the Company or of such Parent Beneficially Owned by the
    Subject Person, then a Change in Control shall occur. In no event shall the
    Initial Public Offering or the Spin-Off, in and of themselves, either
    individually or together, constitute a "Change in Control" under this Plan.

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

              2.10 "Committee" means a committee, as described in Section 3.2,
appointed by the Board from time to time to administer the Plan and to perform
the functions set forth herein after the Initial Public Offering; provided,
however, that, during the period commencing on the Effective Date and ending on
the date of the Company's Initial Public Offering, Section 3.2 shall have no
effect and "Committee" shall mean the entire Board as described in Section 3.1.

              2.11 "Company" means Ribapharm Inc., a Delaware corporation.

              2.12 "Company Subsidiary" shall have the meaning assigned to it in
Section 2.8(b)(i).

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

              2.14 "Director" means a director of the Company.

              2.15 "Disability" means:


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

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

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


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

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

              2.18 "Election Contest" shall have the meaning assigned to it in
Section 2.8(b)(iii).

              2.19 "Eligible Individual" means any of the following individuals
who is designated by the Committee as eligible to receive Options or Awards
subject to the conditions set forth herein: (a) any director, officer or
employee of the Company or ICN, (b) any individual to whom the Company or ICN
has extended a formal, written offer of employment, or (c) any consultant or
advisor of the Company or ICN.

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

              2.21 "Fair Market Value" on any date shall mean (a) with respect
to any property other than Shares, the fair market value of such property on
such date as determined by such methods or procedures as shall be established
from time to time by the Committee, and (b) with respect to the Shares, the
reported closing price of the Shares as reported by The Nasdaq Stock Market at
the close of the primary trading session on


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such date, or if the Shares were not traded on such date, on the next preceding
day on which the Shares were traded. In the event Fair Market Value cannot be
determined in a manner described above, then Fair Market Value shall be
determined by the Committee in good faith and, in the case of an Incentive Stock
Option, in accordance with Section 422 of the Code.

              2.22 "First Exercise Date" shall mean the earlier to the
consummation of the Spin-Off and September 30, 2003.

              2.23 "Formula Option" means an Option granted pursuant to Section
6.

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

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

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

              2.27 "ICN Parent" shall have the meaning assigned to it in Section
2.8(b)(iv).

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

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

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

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

              2.32 "Non-Control Acquisition" shall have the meaning assigned to
it in Section 2.8(b)(i).

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

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


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Exchange Act; provided, however, that for purposes of Section 6, the term
"Nonemployee Director" means a director of the Company who is not an employee of
the Company.

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

              2.36 "Option" means a Nonqualified Stock Option, an Incentive
Stock Option, a Formula Option, or any or all of them.

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

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

              2.39 "Parent" means any corporation which is a parent corporation
within the meaning of Section 424(e) of the Code with respect to the Company,
except that for purposes of Section 2.8(b)(i), the term "Parent" shall have the
meaning assigned to it in such Section hereof.

              2.40 "Parent Subsidiary" shall have the meaning assigned to it in
Section 2.8(b)(i).

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

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

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

              2.44 "Performance Objectives" has the meaning set forth in Section
9.3.

              2.45 "Performance Shares" means Shares issued or transferred to an
Eligible Individual under Section 9.2.

              2.46 "Performance Units" means Performance Units granted to an
Eligible Individual under Section 9.1.

              2.47 "Person" shall have the meaning assigned to it in Section
2.8(b)(i).


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              2.48 "Phantom Stock" means a right granted to an Eligible
Individual under Section 10.2 representing a number of hypothetical Shares.

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


              2.50 "Proxy Contest" shall have the meaning assigned to it in
Section 2.8(b)(iii).

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

              2.52 "Restricted Stock" means Shares issued or transferred to an
Eligible Individual pursuant to Section 8.

              2.53 "Share Award" means an Award of Shares granted pursuant to
Section 10.1.

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

              2.55 "Spin-Off" means the distribution by ICN of its remaining
interest in the Company to ICN's shareholders in a tax-free spin-off following
the Initial Public Offering.

              2.56 "Stock Appreciation Right" means a right to receive all or
some portion of the increase in the value of the Shares as provided in Section 7
hereof.

              2.57 "Subject Person" shall have the meaning assigned to it in
Section 2.8(b).

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


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

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

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

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

              2.63 "Voting Securities" shall have the meaning assigned to it in
Section 2.8(b)(i).

         3.   Administration.

              3.1 Prior to Initial Public Offering. During the period
commencing on the Effective Date and ending on the date of the Company's
Initial Public Offering, the Plan shall be administered by the entire Board in
accordance with any requirements set forth in the Company's charter or bylaws
or any other document that governs the conduct or function of the Board. During
such period, the Board shall have broad authority and powers to do that which
is necessary or appropriate under the Plan to effectuate its purposes (as
described in Section 1 hereof), which powers shall include, but shall not be
limited to, all of the powers set forth in Section 3.2(c) below.

              3.2 After Initial Public Offering.

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


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

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

              (c) Powers.  Subject to the express terms and conditions set forth
herein, the Committee shall have the power from time to time to:

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

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

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

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


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

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

         4.   Stock Subject to the Plan; Grant Limitations.

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

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

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

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

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

         5.   Option Grants for Eligible Individuals.

              5.1 Authority of Committee. Subject to the provisions of the Plan,
the Committee shall have full and final authority to select those Eligible
Individuals who will receive Options, and the terms and conditions of the grant
to such Eligible Individuals


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shall be set forth in an Agreement. Incentive Stock Options may be granted only
to Eligible Individuals who are employees of the Company or any Parent or
Subsidiary thereof.

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

              5.3 Maximum Duration. Options granted hereunder shall be for such
term as the Committee shall determine, provided that an Incentive Stock Option
shall not be exercisable after the expiration of ten (10) years from the date it
is granted (five (5) years in the case of an Incentive Stock Option granted to a
Ten-Percent Stockholder) and a Nonqualified Stock Option shall not be
exercisable after the expiration of ten (10) years from the date it is granted;
provided, however, that unless the Committee provides otherwise, an Option
(other than an Incentive Stock Option) may, upon the death of the Optionee prior
to the expiration of the Option, be exercised for up to one (1) year following
the date of the Optionee's death (or, if later, the First Exercise Date (unless
this restriction has lapsed pursuant to Section 19 hereof)) even if such period
extends beyond ten (10) years from the date the Option is granted. The Committee
may, subsequent to the granting of any Option, extend the term thereof, but in
no event shall the term as so extended exceed the maximum term provided for in
the preceding sentence.

              5.4 Exercisability. Subject to Section 5.10, each Option shall
become vested and exercisable in such installments (which need not be equal) and
at such times as may be designated by the Committee and set forth in the
Agreement; provided, however, that, subject to Section 19 hereof, an Option
shall not become exercisable prior to the First Exercise Date. To the extent not
exercised, installments shall accumulate and be exercisable, in whole or in
part, at any time after becoming exercisable, but not later than the date the
Option expires (except as provided in Section 5.3). Notwithstanding the
foregoing, the Committee may accelerate the vesting and/or exercisability of any
Option or portion thereof at any time.

              5.5 Deferred Delivery of Option Shares. The Committee may, in its
discretion permit Optionees to elect to defer the issuance of Shares upon the
exercise of one or more Nonqualified Stock Options granted pursuant to the Plan.
The terms and conditions of such deferral shall be determined at the time of the
grant of the Option or thereafter and shall be set forth in the Agreement
evidencing the Option.

              5.6 Limitations on Incentive Stock Options. To the extent that the
aggregate Fair Market Value (determined as of the date of the grant) of Shares
with respect to which Incentive Stock Options granted under the Plan and
"incentive stock


                                      -13-
<PAGE>
options" (within the meaning of Section 422 of the Code) granted under all other
plans of the Company or ICN (in either case determined without regard to this
Section 5.6) are exercisable by an Optionee for the first time during any
calendar year exceeds $100,000, such Incentive Stock Options shall be treated as
Nonqualified Stock Options. In applying the limitation in the preceding sentence
in the case of multiple Option grants, Options which were intended to be
Incentive Stock Options shall be treated as Nonqualified Stock Options according
to the order in which they were granted such that the most recently granted
Options are first treated as Nonqualified Stock Options.

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

              5.8 Method of Exercise. The exercise of an Option shall be made
only by a written notice delivered in person or by mail to the Secretary of the
Company at the Company's principal executive office, specifying the number of
Shares to be exercised and, to the extent applicable, accompanied by payment
therefor and otherwise in accordance with the Agreement pursuant to which the
Option was granted; provided, however, that Options may not be exercised by an
Optionee for six months following a hardship distribution to the Optionee under
any tax-qualified plan of the Company or ICN, to the extent such exercise is
prohibited under Treasury Regulation Section 1.401(k)-1(d)(2)(iv)(B)(4). The
exercise price for any Shares purchased pursuant to the exercise of an Option
shall be paid in either of the following forms (or any combination thereof): (a)
cash (or check) or (b) the transfer, either actually or by attestation, to the
Company of Shares that have been held by the Optionee for at least six (6)
months (or such lesser period as may be permitted by the Committee) prior to the
exercise of the Option, such transfer to be upon such terms and conditions as
determined by the Committee or (c) a combination of cash (or check) and the
transfer of Shares; provided, however, that the Committee may determine that the
exercise price shall be paid only in cash. In addition,


                                      -14-
<PAGE>
Options may be exercised through a registered broker-dealer pursuant to such
cashless exercise procedures which are, from time to time, deemed acceptable by
the Committee. Any Shares transferred to the Company as payment of the exercise
price under an Option shall be valued at their Fair Market Value on the day of
exercise of such Option. If requested by the Committee, the Optionee shall (i)
deliver the Agreement evidencing the Option to the Secretary of the Company who
shall endorse thereon a notation of such exercise and return such Agreement to
the Optionee, and/or (ii) provide satisfactory proof as to the right of such
Optionee to exercise the Option. No fractional Shares (or cash in lieu thereof)
shall be issued upon exercise of an Option and the number of Shares that may be
purchased upon exercise shall be rounded to the nearest number of whole Shares.

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

              5.10 Effect of Change in Control. Subject to Section 19 hereof, in
the event that (i) an Optionee's employment with the Company or ICN is
terminated by the Company or by ICN, as the case may be, without Cause following
a Change in Control, or (ii) in the case of a director of the Company or ICN,
his or her services as a director cease following a Change in Control, and in
either case the Optionee is not employed by, or otherwise does not provide
services to, the Company or ICN immediately following such termination of
employment or cessation of services, each Option held by the Optionee as of the
date of termination of the Optionee's employment or service shall (a) become
immediately and fully vested, (b) become fully exercisable on the later of the
date of the Change in Control and the First Exercise Date and (c)
notwithstanding any shorter period set forth in the Agreement evidencing the
Option, remain exercisable for a period of six (6) months after the later of the
date of termination of the Optionee's employment or service and the First
Exercise Date, but in no event after the expiration of the stated term of the
Option. In addition, the Agreement evidencing the grant of an Option may provide
for any other treatment of the Option in the event of a Change in Control.

         6.   Option Grants for Nonemployee Directors.

                  6.1 Grant. Formula Options shall be granted to all Nonemployee
Directors who are members of the Board as of the date of the consummation of the
Initial Public Offering and (ii) to a Nonemployee Director who becomes a member
of the Board


                                      -15-
<PAGE>
after the date of the consummation of the Initial Public Offering upon election
or appointment as follows:

                   (a) IPO Grant. Each Nonemployee Director who is an Director
as of the date of the consummation of the Initial Public Offering shall be
granted a Formula Option as of such date in respect of 15,000 shares.

                   (b) Initial Grant. Each Nonemployee Director who becomes a
Director after the date of the consummation of the Initial Public Offering
shall, upon becoming a Director, be granted a Formula Option in respect of
15,000 Shares.

                   (c) Annual Grant. Each Nonemployee Director shall be granted
a Formula Option in respect of 15,000 Shares on the first business day after the
annual meeting of the stockholders of the Company in each year that the Plan is
in effect provided that the Nonemployee Director is a Director on such date.

All Formula Options shall be evidenced by an Agreement containing such other
terms and conditions not inconsistent with the provisions of this Plan as
determined by the Board; provided, however, that such terms shall not vary the
price, amount or timing of Formula Options provided under this Section 6,
including provisions dealing with vesting, forfeiture and termination of such
Formula Options.

              6.2 Purchase Price. The purchase price for Shares under each
Formula Option granted under Section 6.1(a) shall be equal to the initial public
offering price per Share on the date of the Initial Public Offering. The
purchase price for Shares under each Formula Option granted pursuant to Section
6.1(b) or 6.1(c) shall be equal to 100% of the Fair Market Value of such Shares
on the date the Formula Option is granted.

              6.3 Vesting and Exercisability. Subject to Sections 6.4 and 6.5,
each Formula Option shall become fully vested with respect to 25% of the Shares
subject thereto on each of the first, second, third and fourth anniversaries of
the date of grant; provided, however, that the Optionee continues to serve as a
Director as of such date; provided, further, however, that if a Director dies
prior to such date and while a Director, the Formula Option shall become fully
vested and exercisable with respect to 100% of the Shares on that date. If an
Optionee ceases to serve as a Director for any reason, the Optionee shall have
no rights with respect to any Formula Option which has not then vested pursuant
to the preceding sentence, and the Optionee shall automatically forfeit any
Formula Option which remains unvested. Subject to Section 19 hereof, a Formula
Option shall not become exercisable prior to the First Exercise Date.

              6.4 Duration. Each Formula Option shall terminate on the date
which is the tenth anniversary of the date of grant (or if later, the first
anniversary of the date of the


                                      -16-
<PAGE>
Director's death if such death occurs prior to such tenth anniversary), unless
terminated earlier as follows:

                   (a) Other than Disability, Death or Cause. Except as provided
in Section 6.5 below, and subject to Section 19 hereof, if an Optionee's service
as a Director terminates for any reason other than Disability, death or Cause,
the Optionee may, for a period of six (6) months after the later of the
termination of the Optionee's service and the First Exercise Date, but in no
event after the expiration of the stated term of the Option, exercise his or her
Option to the extent, and only to the extent, that such Option or portion
thereof was vested as of the date the Optionee's service as a Director
terminated, after which time the Option shall automatically terminate in full.

                   (b) Disability. Subject to Section 19 hereof, if an
Optionee's service as a Director terminates by reason of the Optionee's
resignation or removal from the Board due to Disability, the Optionee may, for a
period of one (1) year after the later of the termination of the Optionee's
service and the First Exercise Date, but in no event after the expiration of the
stated term of the Option, exercise his or her Option to the extent, and only to
the extent, that such Option or portion thereof was vested as of the date the
Optionee's service as a Director terminated, after which time the Option shall
automatically terminate in full.

                   (c) Cause. If an Optionee's service as a Director terminates
for Cause, any unexercised portion of an Option granted to the Optionee
hereunder shall immediately terminate in full and no rights thereunder may be
exercised.

                   (d) Death. Subject to Section 19 hereof, if an Optionee dies
while a Director or within the exercise period described in clause (a) or (b) of
this Section 6.4 or Section 6.5 hereof, the Option granted to the Optionee may
be exercised at any time within one (1) year after the later of the Optionee's
death and the First Exercise Date, but in no event after the expiration of the
stated term of the Option, by the person or persons to whom such rights under
the Option shall pass by will, or by the laws of descent or distribution, to the
extent, and only to the extent, that such Option or portion thereof was vested
as of the date of the Optionee's death or earlier termination (as applicable),
after which time the Option shall automatically terminate in full.

              6.5. Effect of Change in Control. The terms set forth in Section
5.10 shall apply to any Formula Options granted pursuant to this Section 6.

         7.   Stock Appreciation Rights.

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


                                      -17-
<PAGE>
determine) and shall, except as provided in this Section 7, be subject to the
same terms and conditions as the related Option.

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

              7.2 Stock Appreciation Right Related to an Option.

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

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

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

              7.3 Stock Appreciation Right Unrelated to an Option. The Committee
may grant to Eligible Individuals Stock Appreciation Rights unrelated to
Options. Subject to Section 7.7, Stock Appreciation Rights unrelated to Options
shall contain such terms and conditions as to exercisability, vesting and
duration as the Committee shall determine, but in no event shall they have a
term of greater than ten (10) years; provided, however, that the Committee may
provide that Stock Appreciation Rights may, upon the death of the Grantee, be
exercised for up to one (1) year following the date of the Grantee's death even
if such period extends beyond ten (10) years from the date the Stock
Appreciation Right is granted. Upon exercise of a Stock Appreciation Right
unrelated to


                                      -18-
<PAGE>
an Option, the Grantee shall be entitled to receive an amount determined by
multiplying (a) the excess of the Fair Market Value of a Share on the date of
exercise of such Stock Appreciation Right over the Fair Market Value of a Share
on the date the Stock Appreciation Right was granted, by (b) the number of
Shares as to which the Stock Appreciation Right is being exercised.
Notwithstanding the foregoing, the Committee may limit in any manner the amount
payable with respect to any Stock Appreciation Right by including such a limit
in the Agreement evidencing the Stock Appreciation Right at the time it is
granted.

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

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

              7.6 Form of Payment. Payment of the amount determined under
Section 7.2(b) or 7.3 may be made in the discretion of the Committee solely in
whole Shares in a number determined at their Fair Market Value on the date of
exercise of the Stock Appreciation Right, or solely in cash, or in a combination
of cash and Shares; provided, however, that (i) subject to Section 19 hereof,
payments made prior to the First Exercise Date shall be paid solely in the form
of cash, and (ii) where the Committee is otherwise permitted to make payment in
Shares and the amount payable results in a fractional Share, payment for the
fractional Share will be made in cash.

              7.7 Effect of Change in Control. Subject to Section 19 hereof, in
the event a Grantee's employment with the Company or ICN is terminated by the
Company or by ICN, as the case may be, without Cause following a Change in
Control, or in the case of a director of the Company or ICN, his or her services
as a director cease following a Change in Control, and in either case the
Grantee is not employed by, or otherwise does not provide services to, the
Company or ICN immediately following such termination of employment or cessation
of services, each Stock Appreciation Right held by the Grantee shall (a) become


                                      -19-
<PAGE>
immediately and fully vested, (b) become fully exercisable on the later of the
date of the Change in Control and the First Exercise Date and (c)
notwithstanding any shorter period set forth in the Agreement evidencing the
Stock Appreciation Right, remain exercisable for a period of six (6) months
after the later of the date of termination of the Grantee's employment or
service and the First Exercise Date, but in no event after the expiration of the
stated term of the Stock Appreciation Right. In addition, the Agreement
evidencing the grant of a Stock Appreciation Right unrelated to an Option may
provide for any other treatment of the Stock Appreciation Rights in the event of
a Change in Control.

         8.   Restricted Stock.

              8.1 Grant. The Committee may grant Awards to Eligible Individuals
of Restricted Stock, which shall be evidenced by an Agreement between the
Company and the Grantee; provided, however, that, subject to Section 19 hereof,
no such grants shall be made prior to the First Exercise Date. Each Agreement
shall contain such restrictions, terms and conditions as the Committee may, in
its discretion, determine and (without limiting the generality of the foregoing)
such Agreements may require that an appropriate legend be placed on Share
certificates. Awards of Restricted Stock shall be subject to the terms and
provisions set forth below in this Section 8.

              8.2 Rights of Grantee. Shares of Restricted Stock granted pursuant
to an Award hereunder shall be issued in the name of the Grantee as soon as
reasonably practicable after the Award is granted provided that the Grantee has
executed an Agreement evidencing the Award, the appropriate blank stock powers
and, in the discretion of the Committee, an escrow agreement and any other
documents which the Committee may require as a condition to the issuance of such
Shares. If a Grantee shall fail to execute the Agreement evidencing a Restricted
Stock Award, or any documents which the Committee may require within the time
period prescribed by the Committee at the time the Award is granted, the Award
shall be null and void. At the discretion of the Committee, Shares issued in
connection with a Restricted Stock Award shall be deposited together with the
stock powers with an escrow agent (which may be the Company) designated by the
Committee. Unless the Committee determines otherwise and as set forth in the
Agreement, upon delivery of the Shares to the escrow agent, the Grantee shall
have all of the rights of a stockholder with respect to such Shares, including
the right to vote the Shares and to receive all dividends or other distributions
paid or made with respect to the Shares.

              8.3 Non-transferability. Until all restrictions upon the Shares of
Restricted Stock awarded to a Grantee shall have lapsed in the manner set forth
in Section 8.4, such Shares shall not be sold, transferred or otherwise disposed
of and shall not be pledged or otherwise hypothecated.

              8.4 Lapse of Restrictions.


                                      -20-
<PAGE>
                   (a) Generally. Restrictions upon Shares of Restricted Stock
awarded hereunder shall lapse at such time or times and on such terms and
conditions as the Committee may determine. The Agreement evidencing the Award
shall set forth any such restrictions.

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

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

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

         9.   Performance Awards.

              9.1 Performance Units. The Committee, in its discretion, may grant
Awards of Performance Units to Eligible Individuals, the terms and conditions of
which shall be set forth in an Agreement between the Company and the Grantee.
Performance Units may be denominated in Shares or a specified dollar amount and,
contingent upon the attainment of specified Performance Objectives within the
Performance Cycle, represent the right to receive payment as provided in Section
9.3(c) of (1) in the case of Share-denominated Performance Units, the Fair
Market Value of a Share on the date the Performance Unit was granted, the date
the Performance Unit became vested or any other date specified by the Committee,
(2) in the case of dollar-denominated Performance Units, the specified dollar
amount or (3) a percentage (which may be more than 100%) of


                                      -21-
<PAGE>
the amount described in clause (1) or (2) depending on the level of Performance
Objective attainment; provided, however, that, the Committee may at the time a
Performance Unit is granted specify a maximum amount payable in respect of a
vested Performance Unit. Each Agreement shall specify the number of Performance
Units to which it relates, the Performance Objectives which must be satisfied in
order for the Performance Units to vest and the Performance Cycle within which
such Performance Objectives must be satisfied.

                   (a) Vesting and Forfeiture. Subject to Sections 9.3(c) and
9.4, a Grantee shall become vested with respect to the Performance Units to the
extent that the Performance Objectives set forth in the Agreement are satisfied
for the Performance Cycle.

                   (b) Payment of Awards. Subject to Section 9.3(c), payment to
Grantees in respect of vested Performance Units shall be made as soon as
practicable after the last day of the Performance Cycle to which such Award
relates unless the Agreement evidencing the Award provides for the deferral of
payment, in which event the terms and conditions of the deferral shall be set
forth in the Agreement. Subject to Section 9.4, such payments may be made
entirely in Shares valued at their Fair Market Value, entirely in cash, or in
such combination of Shares and cash as the Committee in its discretion shall
determine at any time prior to such payment; provided, however, that (i) if the
Committee in its discretion determines to make such payment entirely or
partially in Shares of Restricted Stock, the Committee must determine the extent
to which such payment will be in Shares of Restricted Stock and the terms of
such Restricted Stock at the time the Award is granted, and (ii) subject to
Section 19 hereof, payments made prior to the First Exercise Date shall be paid
solely in the form of cash.

              9.2 Performance Shares. The Committee, in its discretion, may
grant Awards of Performance Shares to Eligible Individuals, the terms and
conditions of which shall be set forth in an Agreement between the Company and
the Grantee; provided, however, that, subject to Section 19 hereof, no such
grants shall be made prior to the First Exercise Date. Each Agreement may
require that an appropriate legend be placed on Share certificates. Awards of
Performance Shares shall be subject to the following terms and provisions:

                   (a) Rights of Grantee. The Committee shall provide at the
time an Award of Performance Shares is made the time or times at which the
actual Shares represented by such Award shall be issued in the name of the
Grantee; provided, however, that no Performance Shares shall be issued until the
Grantee has executed an Agreement evidencing the Award, the appropriate blank
stock powers and, in the discretion of the Committee, an escrow agreement and
any other documents which the Committee may require as a condition to the
issuance of such Performance Shares. If a Grantee shall fail to execute the
Agreement evidencing an Award of Performance Shares, the appropriate blank stock
powers and, in the discretion of the Committee, an escrow


                                      -22-
<PAGE>
agreement and any other documents which the Committee may require within the
time period prescribed by the Committee at the time the Award is granted, the
Award shall be null and void. At the discretion of the Committee, Shares issued
in connection with an Award of Performance Shares shall be deposited together
with the stock powers with an escrow agent (which may be the Company) designated
by the Committee. Except as restricted by the terms of the Agreement, upon
delivery of the Shares to the escrow agent, the Grantee shall have, in the
discretion of the Committee, all of the rights of a stockholder with respect to
such Shares, including the right to vote the Shares and to receive all dividends
or other distributions paid or made with respect to the Shares.

                   (b) Non-transferability. Until any restrictions upon the
Performance Shares awarded to a Grantee shall have lapsed in the manner set
forth in Section 9.2(c) or 9.4, such Performance Shares shall not be sold,
transferred or otherwise disposed of and shall not be pledged or otherwise
hypothecated, nor shall they be delivered to the Grantee. The Committee may also
impose such other restrictions and conditions on the Performance Shares, if any,
as it deems appropriate.

                   (c) Lapse of Restrictions. Subject to Sections 9.3(c) and
9.4, restrictions upon Performance Shares awarded hereunder shall lapse and such
Performance Shares shall become vested at such time or times and on such terms,
conditions and satisfaction of Performance Objectives as the Committee may, in
its discretion, determine at the time an Award is granted.

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


                                      -23-
<PAGE>
                   (e) Delivery of Shares. Upon the lapse of the restrictions on
Performance Shares awarded hereunder, the Committee shall cause a stock
certificate to be delivered to the Grantee with respect to such Shares, free of
all restrictions hereunder.

              9.3 Performance Objectives

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

                   (b) Effect of Certain Events. At the time of the granting of
a Performance Award, or at any time thereafter, in either case to the extent
permitted under Section 162(m) of the Code and the regulations thereunder
without adversely affecting the treatment of the Performance Award as
Performance-Based Compensation, the Committee may provide for the manner in
which performance will be measured against the Performance Objectives (or may
adjust the Performance Objectives) to reflect the impact of specified corporate
transactions, accounting or tax law changes and other extraordinary or
nonrecurring events.

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

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

              9.5 Non-transferability. Until the vesting of Performance Units or
the lapsing of any restrictions on Performance Shares, as the case may be, such
Performance


                                      -24-
<PAGE>
Units or Performance Shares shall not be sold, transferred or otherwise disposed
of and shall not be pledged or otherwise hypothecated.

         10.  Other Share Based Awards.

              10.1 Share Awards. The Committee may grant a Share Award to any
Eligible Individual on such terms and conditions as the Committee may determine
in its sole discretion; provided, however, that, subject to Section 19 hereof,
no such grants shall be made prior to the First Exercise Date. Share Awards may
be made as additional compensation for services rendered by the Eligible
Individual or may be in lieu of cash or other compensation to which the Eligible
Individual is entitled from the Company or ICN, as the case may be.

              10.2 Phantom Stock Awards.

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

                   (b) Payment of Awards. Upon the vesting of a Phantom Stock
Award, the Grantee shall be entitled to receive a cash payment in respect of
each share of Phantom Stock which shall be equal to the Fair Market Value of a
Share as of the date the Phantom Stock Award was granted, or such other date as
determined by the Committee at the time the Phantom Stock Award was granted. The
Committee may, at the time a Phantom Stock Award is granted, provide a
limitation on the amount payable in respect of each share of Phantom Stock.
Following the First Exercise Date, in lieu of a cash payment, the Committee may
settle Phantom Stock Awards with Shares having a Fair Market Value equal to the
cash payment to which the Grantee has become entitled.

         11.  Effect of a Termination of Employment.

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

         12.  Adjustment Upon Changes in Capitalization.

         12.1 Generally. In the event of a Change in Capitalization, the
Committee shall conclusively determine the appropriate adjustments, if any, to
(a) the maximum number and class of Shares or other stock or securities with
respect to which Options or Awards may be granted under the Plan, (b) the
number and class of Shares or other stock


                                      -25-
<PAGE>
or securities which are subject to outstanding Options or Awards granted under
the Plan and the exercise price therefor, if applicable, (c) the number and
class of Shares or other securities in respect of which Formula Options are to
be granted under Section 6 and (d) the Performance Objectives.

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

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

         13.  Effect of Certain Transactions.

              Subject to Sections 5.10, 7.7, 8.4(b) and 9.4 or as otherwise
provided in an Agreement, in the event of (a) the liquidation or dissolution of
the Company or (b) a merger or consolidation of the Company (a "Transaction"),
the Plan and the Options and Awards issued hereunder shall continue in effect in
accordance with their respective terms, except that following a Transaction
either (i) each outstanding Option or Award shall be treated as provided for in
the agreement entered into in connection with the Transaction or (ii) if not so
provided in such agreement, each Optionee and Grantee shall be entitled to
receive in respect of each Share subject to any outstanding Options or Awards,
as the case may be, upon exercise of any Option or payment or transfer in
respect of any Award, the same number and kind of stock, securities, cash,
property or other consideration that each holder of a Share was entitled to
receive in the Transaction in respect of a Share; provided, however, that such
stock, securities, cash, property, or other consideration shall remain subject
to all of the conditions, restrictions and performance criteria which were
applicable to the Options and Awards prior to such Transaction. The treatment of
any Option or Award as provided in this Section 13 shall be conclusively
presumed to be appropriate for purposes of Section 12.


                                      -26-
<PAGE>
         14.  Interpretation.

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

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

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

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



                                      -27-
<PAGE>
         15.  Termination and Amendment of the Plan or Modification of Options
              and Awards.

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

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

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

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

         16.  Non-Exclusivity of the Plan.

              The adoption of the Plan by the Board shall not be construed as
amending, modifying or rescinding any previously approved incentive arrangement
or as creating any limitations on the power of the Board to adopt such other
incentive arrangements as it may deem desirable, including, without limitation,
the granting of stock options otherwise than under the Plan, and such
arrangements may be either applicable generally or only in specific cases.

         17.  Limitation of Liability.

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

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

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


                                      -28-
<PAGE>
                   (c) limit in any way the right of the Company or ICN to
terminate the employment of any person at any time; or

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

         18.  Regulations and Other Approvals; Governing Law.

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

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

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

              18.4  Registration or Approval.  Each Option and Award is subject
to the requirement that, if at any time the Committee determines, in its
discretion, that the listing, registration or qualification of Shares issuable
pursuant to the Plan is required by any securities exchange or under any state
or federal law, or the consent or approval of any governmental regulatory body
is necessary or desirable as a condition of, or in connection with, the grant of
an Option or Award or the issuance of Shares, no Options or Awards shall be
granted or payment made or Shares issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or obtained
free of any conditions as acceptable to the Committee.

              18.5  Restrictions on Transfer.  Notwithstanding anything
contained in the Plan or any Agreement to the contrary, in the event that the
disposition of Shares acquired pursuant to the Plan is not covered by a then
current registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), and is not otherwise exempt from such registration, such
Shares shall be restricted against transfer to the extent required by the
Securities Act and Rule 144 or other regulations thereunder. The Committee may
require any individual receiving Shares pursuant to an Option or Award granted
under the Plan, as a condition precedent to receipt of such Shares, to represent
and warrant to the Company in writing that the Shares acquired by such
individual are acquired without a view to any distribution


                                      -29-
<PAGE>
thereof and will not be sold or transferred other than pursuant to an effective
registration thereof under said Act or pursuant to an exemption applicable under
the Securities Act or the rules and regulations promulgated thereunder. The
certificates evidencing any of such Shares shall be appropriately amended or
have an appropriate legend placed thereon to reflect their status as restricted
securities as aforesaid.

         19.  Lapse of Restrictions on Exercise Prior to First Exercise Date.

              The restriction relating to the prohibition of exercise of an
Option or a Stock Appreciation Right prior to the First Exercise Date (set forth
in Sections 5, 6 and 7), and the restriction relating to granting of stock
awards and the payment of awards in stock prior to the First Exercise Date (set
forth in Sections 7, 8, 9 and 10), shall lapse if, prior to September 30, 2003,
ICN Pharmaceuticals, Inc. abandons its plans to proceed with or complete the
Spin-Off (as such abandonment is described in Section 3.4 of that certain
Affiliation and Distribution Agreement by and between ICN Pharmaceuticals, Inc.
and the Company (the "Distribution Agreement")). In the event of any such
lapse, any Option or Stock Appreciation Right shall become exercisable when
such Option or Stock Appreciation Right (or portion thereof) vests pursuant to
the terms of the Agreement or the Plan without regard to any such restriction
on exercise prior to the First Exercise Date. The effective date of any such
lapse of the restriction shall be the date of the written notice provided by
ICN Pharmaceuticals, Inc. to the Company indicating its determination to
abandon the Spin-Off, provided that no "Distribution Date" (as defined in the
Distribution Agreement) has occurred as of such date.

         20.  Miscellaneous.

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

              20.2 Withholding of Taxes.

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

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

              20.3 Effective Date. The effective date of this Plan shall be as
determined by the Board, subject only to the approval by the holders of a
majority of the


                                      -30-
<PAGE>
securities of the Company entitled to vote thereon, in accordance with the
applicable laws within twelve (12) months of the adoption of the Plan, by the
Board.

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





                                      -31-