Document:

Exhibit 4.2

                                   PROSPECTUS

                       1997 Leveraged Executive Asset Plan
                             for Key Executives of
                      Ciba Specialty Chemicals Corporation

                       324,410 AMERICAN DEPOSITORY SHARES
                EACH REPRESENTING ONE-HALF OF ONE ORDINARY SHARE,
                               AND ORDINARY SHARES
                      PAR VALUE 10 SWISS FRANCS PER SHARE,
                    OF CIBA SPECIALTY CHEMICALS HOLDING INC.

-------------------------------------------------------------------------------

This document constitutes part of a prospectus covering securities that have
been registered under the Securities Act of 1933, as amended.

-------------------------------------------------------------------------------

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon
the accuracy or adequacy of this prospectus. Any representation to the
contrary is a criminal offense.

-------------------------------------------------------------------------------

                       The date of this prospectus is

                                February 22, 2001

<PAGE>

                                TABLE OF CONTENTS

I.   PURPOSE OF THE PLAN......................................................1

II.  DESCRIPTION OF THE 1997 LEAP.............................................1
     General..................................................................1
     Stock Subject to the Plan................................................1
     Administration...........................................................2
     Eligibility..............................................................2
     Purchase of Registered Shares and Grant of LEAP
          Certificates........................................................2
     Payment for Shares.......................................................3
     Vesting of Rights........................................................4
     Exercise of Rights.......................................................5
     Nontransferability of Awards.............................................6
     Acceleration of Rights...................................................6
     Effect of Certain Changes................................................7
     Restrictions on Registered Shares........................................7
     Termination and Amendment................................................7
     Gross-Up for Parachute Payments or Other Tax
          Liability Triggered by Acceleration of Rights.......................7
     Tax Withholding..........................................................8
     Payments to Minors and Incompetents......................................9
     Applicable Laws; Severability............................................9

III. FEDERAL TAX CONSEQUENCES.................................................9
     Rights..................................................................10

IV.  IMPORTANT LEGAL INFORMATION; INCORPORATION OF CERTAIN
     DOCUMENTS BY REFERENCE..................................................10

V.   ADDITIONAL INFORMATION..................................................11

<PAGE>

I. PURPOSE OF THE PLAN

This prospectus (the "Prospectus") summarizes and explains the receipt of
awards under the 1997 Leveraged Executive Asset Plan for Key Executives of
Ciba Specialty Chemicals Corporation, as amended January 17, 2001 (the
"Plan").

The general purpose of granting awards under the Plan is to promote the
interests of Ciba Specialty Chemicals Corporation (the "Company") and its
subsidiaries by providing to their key employees incentives to enlarge
their proprietary interest in Ciba Specialty Chemicals Holding Inc. (the
"Parent"), and to continue and increase their efforts with respect to, and
to remain in the employ of, the Company, its subsidiaries or their
respective affiliates.

The Plan is not subject to any provisions of the Employee Retirement Income
Security Act of 1974, as amended, and is not qualified under Section 401(a)
of the Internal Revenue Code of 1986, as amended (the "Code"). This
Prospectus is intended to give an explanation of the 1997 LEAP; however,
the Plan is set up and operated under the terms of the Plan documents and
awards are generally evidenced by a written grant document. If there is any
conflict between the provisions of this Prospectus and the Plan documents,
the terms of the Plan documents will control.

II. DESCRIPTION OF THE 1997 LEAP

General. The Company adopted the Plan to provide an opportunity to key
employees of the Company and its subsidiaries to purchase shares of the
Parent and to receive certificates ("LEAP certificates") entitling such
participants to receive related stock appreciation rights ("rights").
Effective January 17, 2001, the Plan was amended and restated to provide
that upon exercise of the rights, participants will receive, at the option
of the Company, American Depository Shares ("ADSs"), each representing
one-half of a registered share with a nominal value of 10 Swiss francs of
the Parent (the "registered shares") or registered shares.

Stock Subject to the Plan. The participant will receive (i) from Credit
Suisse First Boston (pursuant to a contract entered into at the time the
LEAP certificates were issued) registered shares or ADSs as required for
the purchase by participants and (ii) from Credit Suisse First Boston

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                                                                             2

registered shares or ADSs for issuance upon the exercise of rights granted
under the LEAP certificates from time to time under the Plan. If any right
included under a LEAP certificate expires, terminates or is canceled for
any reason without having been exercised in full under the terms of the
Plan, such shares subject thereto will again be available for purposes of
the Plan.

Administration. The Plan will be administered by the Board of Directors of the
Company (the "Board"). The Board will have plenary authority, in its
discretion, to determine the terms of all awards granted under the Plan (which
need not be identical) including, without limitation:

o    the number of registered shares to be offered for purchase to each
     participant,

o    the purchase price of such shares and

o    the individuals to whom awards will be granted.

In making such determinations, the Board may take into account the nature
of the services rendered by employees, their present and potential
contributions to the Company's success, any applicable legal restrictions
on the issuance of registered shares and such other factors as the Board in
its discretion deems relevant. The Board will have plenary authority to
interpret the Plan, to prescribe, amend and rescind the rules and
regulations relating to it and to make all other determinations deemed
necessary or advisable for the administration of the Plan. The Board may
delegate its authority, in all or in part, to the Chairman of the Board of
the Company. The determinations of the Board are conclusive.

Eligibility. The right to participate in the Plan may have been granted
only to salaried employees (which includes officers), of the Company, its
subsidiaries and affiliates. A director of the Company, a subsidiary or an
affiliate who is not also an employee of the Company, a subsidiary or an
affiliate is not be eligible to participate in the Plan. Awards may have
been granted to employees who hold or have held awards under other employee
benefit plans of the Company, any subsidiary or any affiliate.

Purchase of Registered Shares and Grant of LEAP Certificates. Each employee
designated by the Board was given the right to invest in registered shares
up to a specified amount set in Swiss francs, in such increments as
determined by the Board. The purchase price for each registered share was
equal to the price determined for the

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                                                                             3

global offering of registered shares occurring on or about March 13, 1997 (the
"purchase price"). The number of registered shares that a participant received
upon purchase was equal to the number of full registered shares determined by
dividing the amount in Swiss francs that the participant elected to invest by
the purchase price. Cash was reimbursed in lieu of any fractional shares.

For each registered share purchased under the Plan, the participant
received a right which entitled him to receive registered shares (in the
form of ADSs or, at the option of the Company, registered shares) with a
market value equal to the excess of the aggregate market value of four
registered shares, determined as of the date of exercise, over four times
the purchase price. Such rights are evidenced by a LEAP certificate. Upon
exercise of the rights, cash will be distributed in lieu of any fractional
shares.

The "Market Value" of a share on any date (the "specified date") will be the
last reported sales price of the American Depository Receipt(s) (the "ADRs")
evidencing the ADS(s) related to such share on the New York Stock Exchange
Composite Transaction Tape on the day prior to the specified date. The "Market
Value" of an ADS will be the last reported sales price of the ADR evidencing
such ADS on the New York Stock Exchange Composite Transaction Tape on the day
prior to the specified date. In either case, if ADRs are not traded on such
day, the next preceding day on which ADRs are traded will be used, and if the
ADRs are not publicly traded, the market value of the ADR will be determined
by the CEO.

Any conversion into United States dollars or other local currency pursuant
to the Plan will be based on the exchange rate determined by the Board to
be in effect on the specified date. For purposes of the foregoing
paragraph, the purchase price per registered share will be converted into
United States dollars by dividing 110 Swiss francs by the exchange rate
determined by the Board to be in effect on the date of exercise.

An employee who wished to become a participant and purchase registered shares
(and thereby obtain rights) under the Plan must have evidenced such intent by
completing a commitment agreement in accordance with terms established from
time to time by the Board.

Payment for Shares. Each participant must have tendered in cash or cash
equivalent (acceptable to the Board) an amount equal to the investment
specified in his commitment agreement. The Company may have, in its
discretion, offered

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                                                                             4

participants loans, either directly or through an arrangement with a financing
institution to enable them to purchase registered shares.

Vesting of Rights. The rights of a participant are now fully vested only if
the participant remained an employee of the Company, a subsidiary or an
affiliate continuously through March 1, 2000, or his employment terminated
prior to such date due to his

     o    retirement after age 65 or with the written consent of the Company,

     o    permanent disability (as defined in the Company's long-term
          disability plan) or

     o    death.

If a participant's employment was terminated involuntarily by the Company prior
to March 1, 2000, for reasons other than cause, the participant's rights will
have vested in accordance with the following:

        Date of Termination                           Vested Percentage
        -------------------                           -----------------

        Prior to March 1, 1998                                0%

        On or After March 1,
        1998 but Prior to
        March 1, 1999                                        25%

        On or After March 1,
        1999 but Prior to
        March 1, 2000                                        50%

If a participant's employment with the Company, a subsidiary or an affiliate
is terminated by the Company for cause or if the Company, subsidiary or
affiliate becomes aware of facts which would have resulted in the discharge of
the participant for cause if the participant were still so employed, then all
rights (whether or not then vested) held by such participant will terminate
immediately. "Cause" has the meaning established by the Board or, in the
absence thereof, will include, but not be limited to, insubordination,
dishonesty, incompetence, moral turpitude, other misconduct of any kind and
the refusal to substantially perform his or her duties and responsibilities
for any reason other than a documented illness or incapacity.

<PAGE>

                                                                             5

In the case of a participant who was employed by the Performance Polymers
Division of the Company immediately prior to the sale of such division, his
employment with the Company will not be considered terminated until his
employment with Avanti USA, Inc. (or any successor) (the "Buyer") terminates.
Thus, until such termination, his rights will continue to vest and the period
during which such rights will be exercisable will be determined as if such
continued employment with the Buyer were employment with the Company. A
holder's eligibility for "retirement" under the Plan will be based on the
holder's combined service with the Company and the Buyer and the requirements
for retirement under the Pension Plan for Salaried Employees of Ciba Specialty
Chemicals Corporation ("Pension Plan") as in effect on the closing date of the
sale of the Performance Polymers Division.

The Board may determine, in its discretion, whether any given leave of absence
constitutes a termination of employment. The vesting of rights will not be
affected by any change of employment so long as the participant continues to
be an employee of the Company, a subsidiary or an affiliate.

In the event of a participant's voluntary termination of employment for any
reason not described above, all unvested rights held by such participant will
terminate immediately unless the Board decides otherwise.

Vested rights may only be exercised if the conditions and terms in the Plan
are satisfied.

Exercise of Rights. Vested rights may only be exercised on or after March 15,
2002, if the registered shares purchased by the participant under the Plan
have been held continuously by him (or in the event of his death, his
beneficiary) through March 15, 2002. A transfer of any of the registered
shares or ADSs prior to such date will result in the cancellation of all
rights of such participants. The granting of interests in registered shares
and rights as collateral, pursuant to loan agreements with Credit Suisse First
Boston, will not constitute a transfer, unless Credit Suisse First Boston
disposes of the participant's ownership interest in such shares and/or rights
upon the nonpayment of, or default under, such loan.

All or any outstanding vested rights may be exercised on the 15th day of any
calendar month through and including March 15, 2005. Any outstanding rights
that are not exercised by March 15, 2005, will be deemed to be exercised and
the value of such rights will be distributed in ADSs or,

<PAGE>

                                                                             6

at the option of the Company, registered shares, to the participant. Cash will
be distributed in lieu of fractional shares.

A right may be exercised only by written notice to the Company on a form
approved by the Board. Such notice must state that the holder of the right
elects to exercise the right and the number of shares in respect of which it is
being exercised and the date of exercise. The notice must be received by the
Board no later than the eighth day of any calendar month to be exercised on the
fifteenth day of such month, but not earlier than the first day of any month
preceding the fifteenth day of such month. In no case may a right be exercised
at any time for less than 10 shares (or the remaining shares covered by the
rights if then less than 10).

The holder of a right will have none of the rights of a shareholder with
respect to the shares subject to the right until ADSs or registered shares are
transferred to the holder upon the exercise of the right.

Nontransferability of Awards. No right granted under the Plan will be
transferable otherwise than by will or by the laws of descent and
distribution, or, if so designated by a participant, to his spouse or other
beneficiary on his death. A right may be exercised, during the lifetime of the
participant, only by such participant (or, in the event of his incapacity, by
his legal representative).

Acceleration of Rights. In the event of any Change in Control:

     o    the restrictions on disposition of registered shares will lapse and
          each holder, at his or her election, shall either receive the value of
          the registered shares in cash at the prevailing market price, as
          determined in good faith by the CEO or receive registered shares which
          may be disposed of as any such participant may choose; and

     o    each outstanding right granted under the Plan will immediately become
          fully vested and each holder thereof will have the right to either

          o    receive a cash payment in United Sates dollars within 30 days
               following the Change in Control equal to the Market Value of four
               registered shares over four times the purchase price in respect
               of the aggregate number of shares covered by the right, or

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                                                                             7

          o    continue to hold such rights and to exercise them at any time,
               but not later than March 15, 2005.

A Change in Control will be deemed to occur if there has been a Change in
Control under the Leveraged Executive Asset Plan of the Parent.

Effect of Certain Changes. If there is any change in the number of outstanding
registered shares by reason of any stock dividend, stock split,
recapitalization, combination, exchange of shares, merger, consolidation,
liquidation, split-up, spin-off or other similar change in capitalization, any
distribution to common shareholders, including a rights offering, other than
cash dividends, or any like change, then the number of registered shares and
ADSs covered by outstanding rights, and the purchase price per share used to
determine the value of a right will be proportionately adjusted by the Board
to reflect such change or distribution. Any fractional shares resulting from
such adjustment will be eliminated. In the event of a change in the registered
shares of the Parent as presently constituted, the shares resulting from any
such change will be deemed to be registered shares under the Plan.

Restrictions on Registered Shares. No registered shares or ADSs may be issued
and delivered upon the exercise of rights unless and until any applicable
Federal or state registration, listing and qualification requirements and any
other requirements of law or of any regulatory agencies having jurisdiction
shall have been fully complied with.

The Board may impose such other terms, conditions, and restrictions upon any
right, including any right theretofore granted, that the Board concludes, in
its discretion, are necessary or desirable to ensure compliance with any
applicable law, regulation or rule.

Termination and Amendment. The Plan will terminate on, and no rights may be
exercised after March 15, 2005. The Plan may be terminated, modified or
amended at any time by the shareholders of the Company or by the Board. No
termination, modification or amendment of the Plan may, without the consent of
the employee to whom any right shall theretofore have been granted, adversely
affect the rights of such employee under such right.

Gross-Up for Parachute Payments or Other Tax Liability Triggered by Acceleration
of Rights. Any additional taxes

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                                                                             8

(including payroll taxes) which may be imposed on a participant as a result of
an acceleration of rights will be paid by the Company. In this context,
"additional" includes such taxes and similar duties which may be imposed in
excess of those which would have been paid by a participant under the ordinary
vesting and restriction period of the Plan. In the event that it is determined
that any payment or distribution under the Plan would be subject to the excise
tax imposed by Section 4999 of the Code, or that any interest or penalties are
incurred by a participant with respect to such excise tax, then the
participant will be entitled to receive a gross-up payment in an amount such
that, after payment by the participant of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income and employment taxes (and any interest and penalties imposed with
respect to such taxes) and excise tax imposed upon the gross-up payment, the
participant retains an amount of the gross-up payment equal to the excise tax
imposed upon the payments. The determination of the amount of any gross-up
payment will be determined by a nationally recognized accounting firm,
mutually acceptable to the Company and the participant and all costs will be
paid by the Company.

Tax Withholding. In connection with the transfer of ADSs or registered shares
as a result of the exercise by a participant of a right or upon the payment to
a participant of a cash settlement of his rights following a Change in
Control, the Company will have the right to require the participant to pay an
amount in cash or to retain or sell without notice, or to demand surrender of,
registered shares or ADSs in value sufficient to cover any tax, including any
Federal, state or local income tax, required by any governmental entity to be
withheld or otherwise deducted and paid with respect to such transfer
("withholding tax"), and to make payment (or to reimburse itself for payment
made) to the appropriate taxing authority of an amount in cash equal to the
amount of such withholding tax, remitting any balance to the participant. The
value of registered shares or ADSs so retained or surrendered will be the
Market Value on the date that the amount of the withholding tax is to be
determined, and the value of registered shares or ADSs so sold will be the
actual net sale price per share (after deduction of commissions) received by
the Company.

Notwithstanding the foregoing, the participant will be entitled to satisfy the
obligation to pay any withholding tax, in whole or in part, by providing the
Company with funds sufficient to enable the Company to pay such withholding
tax or by requesting the Company to retain or to accept upon delivery thereof
registered shares or ADSs

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                                                                             9

sufficient in value (determined in accordance with the last sentence of the
preceding paragraph) to cover the amount of such withholding tax. Each
election by a participant to have ADSs retained or to deliver ADSs or
registered shares for this purpose will be subject to the following
restrictions: (i) the election must be in writing and made on or prior to the
date the withholding tax is determined and (ii) the election will be subject
to the disapproval of the Board.

Payments to Minors and Incompetents. If a person entitled to receive any
payments or distributions under the Plan is a minor or is deemed by the Board
or is adjudged to be legally incapable of giving valid receipt and discharge
for such payments or distributions, the Board may direct payments to the legal
representative of such person, or, if none, to a person designated by the
Board for the benefit of such person, or the Board may direct application of
the payment for the benefit of such person in such manner as the Board
considers advisable. Such payment will, to the extent made, be deemed a
complete discharge of any liability for such payment under the Plan.

Applicable Laws; Severability. The Plan will be construed, administered and
governed in all respects under and by the laws of the United States and, to
the extent applicable, under and by the laws of the State of New York. If any
provision of the Plan is held by a court or governmental agency of competent
jurisdiction to be invalid or unenforceable, the remaining provisions of the
Plan will continue to be fully effective.

III. FEDERAL TAX CONSEQUENCES

The material Federal income tax consequences of participation in the Plan by
United States employees are summarized below. This summary does not address
issues related to the tax circumstances of any particular employee. The
summary is based on United States Federal income tax laws in effect on the
date hereof and is, therefore, subject to possible future changes in law. This
discussion does not address state, local or foreign tax consequences.
Employees should consult their own tax advisors about the Federal income tax
consequences of the Plan, including the consequences applicable to their
particular situation and the state or local tax consequences of the Plan.

<PAGE>

                                                                            10

Rights. If ADSs or registered shares are issued or cash is delivered to the
original holder of a right which is granted and exercised in accordance with
the Plan, then:

     o    no income will be recognized by the holder at the time of grant of
          the right;

     o    upon exercise of the right the holder will recognize taxable
          ordinary income in an amount equal to the fair market value of the
          ADSs or registered shares acquired or, where applicable, the amount
          of cash received;

     o    the recipient's holding period for the registered shares or ADSs
          acquired upon the exercise of the right will begin at the time
          taxable income is recognized, and the tax basis in the acquired
          registered shares or ADSs will be the amount of ordinary income so
          recognized;

     o    the Company will be entitled to a deduction at the same time and in
          the same amount as the holder has income under the previous clause;
          and

     o    upon a sale of the ADSs or registered shares so acquired, the holder
          will have short-term or long- term capital gain or loss, as the case
          may be, in an amount equal to the difference between the amount
          realized on such sale and the tax basis of the ADSs or registered
          shares sold.

If the exercisability of a right is accelerated as a result of a change in
control, all or a portion of the value of the right at that time may be a
parachute payment for purposes of determining whether a 20% excise tax is
payable by the employee as a result of the receipt of an excess parachute
payment pursuant to Section 4999 of the Code.

IV.  IMPORTANT LEGAL INFORMATION; INCORPORATION OF CERTAIN DOCUMENTS BY
     REFERENCE

A copy of the Parent's Annual Report for the year ended December 31, 2000,
will be delivered together with this Prospectus. In addition, each person
holding shares or rights will be provided with copies of subsequent Annual
Reports and other communications distributed to shareholders of the Parent
generally. The Parent's Annual Report on Form F-20 for the year ended December
31, 2000 and all other reports filed by the Parent with the SEC since December
31, 2000, pursuant to Section 13(a) or 15(d) of the Securities

<PAGE>

                                                                            11

Exchange Act of 1934, as amended (the "Exchange Act"), are incorporated by
reference in this Prospectus. A description of the Parent's shares contained
in the Parent Registration Statement on Form 20-F, filed with the SEC on July
24, 2000, pursuant to Section 12 of the Exchange Act is also incorporated by
reference in this Prospectus. All reports and other documents filed by the
Parent pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
after the date of this Prospectus and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Prospectus from the date of the filing of
those reports and documents.

V. ADDITIONAL INFORMATION

The Parent (or the Company on behalf of the Parent) will provide without
charge to each person to whom a copy of this Prospectus has been delivered,
upon request, a copy of any of the documents that have been incorporated by
reference in this Prospectus other than exhibits to such documents. Written or
telephonic requests for such copies, or for any other information regarding
the Plans, should be directed to:

          Kevin Graveline
          Ciba  Specialty  Chemicals  Corporation
          560 White Plains Road
          Tarrytown, New York 10591-9005
          914-785-4089.

This Prospectus may be updated from time to time by furnishing employees
who hold awards with supplements, appendices or replacement pages to this
Prospectus. This Prospectus, together with any such future supplements,
appendices or replacement pages, will be furnished by the Parent (or the
Company on behalf of the Parent) to employees who hold awards. Additional
copies may be obtained by such employees upon oral or written request to Kevin
Graveline, listed above.Exhibit 4.3

                                   PROSPECTUS

                      Ciba Specialty Chemicals Corporation
                             1999 Stock Option Plan

                      Ciba Specialty Chemicals Corporation
                                 1998 Stock Plan

                      1,439,684 AMERICAN DEPOSITORY SHARES
                EACH REPRESENTING ONE-HALF OF ONE ORDINARY SHARE,
                               AND ORDINARY SHARES
                      PAR VALUE 10 SWISS FRANCS PER SHARE,
                    OF CIBA SPECIALTY CHEMICALS HOLDING INC.

-------------------------------------------------------------------------------

This document constitutes part of a prospectus covering securities that have
been registered under the Securities Act of 1933, as amended.

-------------------------------------------------------------------------------

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.

-------------------------------------------------------------------------------

                         The date of this prospectus is

                                February 22, 2001

<PAGE>

                                                                             i

                                TABLE OF CONTENTS

I.   PURPOSE OF THE PLAN......................................................1

II.  DESCRIPTION OF THE 1999 STOCK PLAN.......................................1
     Adoption of the 1999 Stock Plan..........................................1
     Stock Subject to the 1999 Stock Plan.....................................2
     Administration...........................................................2
     Eligibility..............................................................3
     Grant of Options.........................................................3
     Options..................................................................4
     Term of Options..........................................................4
     Exercise of Options......................................................4
     Restricted Shares........................................................6
     Nontransferability of Awards and Designation of
           Beneficiary........................................................6
     Termination of Employment................................................7
     Acceleration of Awards...................................................9
     Effect of Certain Changes................................................9
     Restrictions on Awards...................................................9
     Written Grant...........................................................10
     Termination and Amendment...............................................10
     Gross-Up for Parachute Payments or Other Tax
          Liability Triggered by Acceleration of Awards......................10
     Tax Withholding.........................................................11
     Payments to Minors and Incompetents.....................................12
     Applicable Laws; Severability...........................................12

III. DESCRIPTION OF THE 1998 STOCK PLAN......................................12
     General.................................................................12
     Stock Subject to the 1998 Stock Plan....................................12
     Administration..........................................................12
     Eligibility.............................................................13
     Grant of Options and Stock Appreciation Rights..........................13
     Options.................................................................13
     SARs....................................................................13
     Exchange of Awards......................................................14
     Term of Awards..........................................................14
     Exercise of Awards......................................................14
     Nontransferability of Awards and Designation of
          Beneficiary........................................................15
     Termination of Employment...............................................15
     Acceleration of an Award................................................15
     Effect of Certain Changes...............................................15
     Restrictions on Awards and Optioned Shares..............................15
     Written grant...........................................................15
     Termination and Amendment...............................................16
     Tax Withholding.........................................................16
     Gross-Up for Parachute Payments or Other Tax
          Liability Triggered by Acceleration of Awards......................16

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                                                                            ii

     Payments to Minors and Incompetents.....................................16
     Applicable Laws; Severability...........................................16

IV.  FEDERAL INCOME TAX CONSEQUENCES.........................................16
     Options.................................................................17
     Restricted Shares.......................................................18
     SARs....................................................................19

V.   IMPORTANT LEGAL INFORMATION; INCORPORATION OF CERTAIN
     DOCUMENTS BY REFERENCE..................................................20

VI.  ADDITIONAL INFORMATION..................................................20

<PAGE>

I. PURPOSE OF THE PLANS

This prospectus (the "Prospectus") summarizes and explains the receipt of
awards under:

     o    the Ciba Specialty Chemicals Corporation 1999 Stock Option Plan,
          effective April 9, 1999, as amended January 17, 2001 (the "1999
          Stock Plan"); and

     o    the Ciba Specialty Chemicals Corporation 1998 Stock Plan, as amended
          January 17, 2001 (the "1998 Stock Plan")(collectively referred to
          as the "Plans").

The general purpose of granting awards under the Plans is to promote the
interests of Ciba Specialty Chemicals Corporation (the "Company"), Ciba
Specialty Chemicals Canada Inc. ("Ciba Canada") and their affiliates by
providing to their key employees additional opportunities and incentives to
enlarge their proprietary interest in Ciba Specialty Chemicals Holding Inc.
(the "Parent"), and to continue and increase their efforts with respect to,
and to remain in the employ of, the Company, Ciba Canada and their respective
affiliates.

The Plans are not subject to any provisions of the Employee Retirement Income
Security Act of 1974, as amended, and are not qualified under Section 401(a)
of the Internal Revenue Code of 1986, as amended (the "Code"). This Prospectus
is intended to give an explanation of the Plans; however, the Plans are set up
and operated under the terms of the Plan documents and awards are generally
evidenced by a written grant document. If there is any conflict between the
provisions of this Prospectus and the Plan documents, the terms of the Plan
documents will control.

II. DESCRIPTION OF THE 1999 STOCK PLAN

Adoption of the 1999 Stock Plan. The Company adopted the 1999 Stock Plan
providing for the granting of non-qualified stock options ("options") to key
employees of the Company, Ciba Canada and their affiliates. Effective January
17, 2001, the 1999 Stock Plan was amended and restated to provide that shares
of restricted stock ("restricted shares") may be granted under the 1999 Stock
Plan, and awards may be settled, in the form of registered shares of the
Parent with a nominal value of 10 Swiss francs ("shares") or of American
Depositary Shares ("ADSs"), each representing one-half of a share.

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                                                                             2

Stock Subject to the 1999 Stock Plan. Shares are subject to awards under the
1999 Stock Plan in such amounts as the Parent allocates to the 1999 Stock Plan
from time to time. Although awards will be granted in terms of shares, on and
after January 17, 2001, the settlement of any award may be in the form of ADSs
or shares, as the Company may elect. Such shares and ADSs will be issued and
outstanding shares or ADSs acquired by the Company from the Parent or
purchased on the open market. If any option granted under the 1999 Stock Plan
expires, terminates or is canceled for any reason without having been
exercised in full or any restricted shares or ADSs are forfeited under the
terms of the 1999 Stock Plan, such shares or ADSs subject thereto will again
be available for purposes of the 1999 Stock Plan.

Administration. The 1999 Stock Plan will be administered by the Chief
Executive Officer of the Company (the "CEO"). Subject to the express
provisions of the 1999 Stock Plan, the CEO will have plenary authority, in his
or her discretion, to determine the terms of all awards granted under the 1999
Stock Plan (which need not be identical) including, without limitation,

     o    the purchase price of the shares covered by each award,

     o    the individuals to whom and the time or times at which awards will be
          granted,

     o    the number of shares to be subject to each award,

     o    when an option can be exercised and whether in whole or in
          installments,

     o    when the restrictions on restricted shares lapse and

     o    to require participants to execute any forms or agreements (including,
          without limitation, with third-party service providers) necessary or
          desirable to implement the 1999 Stock Plan.

In the case of any awards to be granted to the CEO, the grant of such awards
will be approved by the Chief Executive Officer or the Director, Corporate
Human Resources, of the Parent. In making such determinations, the CEO (or in
the case of awards granted to the CEO, the Chief Executive Officer or
Director, Corporate Human Resources, of the Parent) may take into account the
nature of the services rendered by employees, their present and potential

<PAGE>

                                                                             3

contributions to the Company's, Ciba Canada's or an affiliate's success, any
applicable legal restrictions on the issuance of shares and such other factors
as the determining person in his or her discretion deems relevant. Subject to
the express provisions of the 1999 Stock Plan, the CEO (or his or her
delegate) will have plenary authority to interpret the 1999 Stock Plan, to
prescribe, amend and rescind the rules and regulations relating to it and to
make all other determinations deemed necessary or advisable for the
administration of the 1999 Stock Plan (except that determinations relating
primarily to the grant of awards to the CEO will be made by the Chief
Executive Officer or the Director, Corporate Human Resources, of the Parent).
The determination of the CEO (or, in the case of awards granted to the CEO,
the Chief Executive Officer or Director, Corporate Human Resources, of the
Parent) as to the terms of any award will be conclusive. In the event any
dispute arises with respect to the interpretation of the 1999 Stock Plan or a
determination as to the benefits to which an employee is entitled under his or
her award, such dispute will be resolved by the Executive Compensation
Committee. The results of any decision by the Executive Compensation Committee
will be conclusive and will not be subject to any judicial interference or
review on any ground whatsoever.

The Executive Compensation Committee will be appointed by the Board of
Directors of the Company (the "Board"). Such committee will act by a majority
vote of its members. In the event the Company does not have an Executive
Compensation Committee, the Board may take any action to be taken by the
Executive Compensation Committee pursuant to the terms of the 1999 Stock Plan
with the same effect as if the Executive Compensation Committee had taken such
action.

Eligibility. Awards may be granted only to salaried employees (which includes
officers) of the Company, Ciba Canada or their affiliates. A director of the
Company, Ciba Canada or an affiliate who is not also an employee of the
Company, Ciba Canada or an affiliate will not be eligible to receive any
awards under the 1999 Stock Plan. Awards may be granted to employees who hold
or have held awards under other employee benefit plans of the Company, Ciba
Canada or any affiliate.

Grant of Options. The CEO will determine the number of shares to be offered
from time to time by the grant of options. More than one option may be granted
to the same employee. Options will be nonqualified options. The grant of an
option to an employee will not be deemed either to entitle the employee to, or
to disqualify the employee from,

<PAGE>

                                                                             4

participation in any other grant of options under the 1999 Stock Plan.

Options. The grant of an option will entitle the holder to exercise an option
for shares during a specified term at a specified price set at the time of
grant in either Swiss francs or United States dollars. The option will be
subject to such conditions as the CEO or other administrator may determine.
The purchase price of the shares under each option will be equivalent to 100%
of the "Market Value" of the shares on the date of grant of such option as
determined under the Long Term Incentive Plan of Ciba Specialty Chemicals
Holding Inc. for the year in which such option was granted (the "Parent's
Plan") or as determined in good faith by the Board in a manner that is
consistent with the determination by the Parent of the Market Value of a share
under the Parent's Plan. Any purchase price expressed in Swiss francs will be
converted to United States dollars by dividing such purchase price by the
exchange rate determined by the CEO to be in effect on the date of exercise.

Term of Options. The term of each option will be for such period as the CEO
determines, but not more than 10 years from the date of granting thereof.

Exercise of Options. Unless otherwise provided in the granting document,
options will become vested and exercisable with respect to the following
aggregate number of shares covered by an option on and after each of the
following dates during the term of the option:

        Date                                Number of Shares
        ----                                ----------------

        1st anniversary of the              33-1/3% of original grant
        date of grant

        2nd anniversary of the              66-2/3% of original grant
        date of grant

        3rd anniversary of the              100% of original grant
        date of grant

In no case may an option be exercised at any time for less than 33 shares (or
the remaining shares covered by the option if less than 33). The CEO (or in
the case of an option held by the CEO, the Chief Executive Officer or
Director, Corporate Human Resources, of the Parent) may without the consent of
the option holder from time to time impose additional restrictions upon the
exercise of an option (including an already outstanding option) as he or she
concludes in his or her discretion is necessary to ensure compliance with any
applicable law, regulation or

<PAGE>

                                                                             5

rule. Payment for the exercise of an option must be made in:

     o    cash,

     o    in whole shares or ADSs already owned by the holder of the option,

     o    partly in cash and partly in shares or ADSs or,

     o    with the consent of the Company, through a cashless exercise program
          (effected, at the election of the Company, either through a broker or
          through the Company).

If shares or ADSs are to be used to satisfy the exercise price, such shares or
ADSs must have been acquired by the holder of the option at least six months
prior to the exercise date or acquired in an open market transaction. An
option may be exercised by written notice to the Company. Such notice must
state:

     o    that the holder of the option elects to exercise the option,

     o    the number of shares in respect of which it is being exercised and
          the manner of payment for such shares,

     o    the manner in which tax withholding requirements are satisfied, and,

     o    unless the exercise is to be accomplished through a cashless
          exercise program, must be accompanied by payment of the full
          purchase price of such shares plus any additional amounts required
          for tax withholding.

Cash payments must be made by cash or check payable to the order of the
Company. Share and ADS payments (valued at Market Value on the date of
exercise) must be made by delivery of (i) stock certificates in negotiable
form or (ii) a completed attestation form prescribed by the Company setting
forth the whole shares or ADSs owned by the holder which the holder wishes to
utilize to satisfy the exercise price. Upon exercise of an option, the option
will be settled in ADSs.

Other than as specified in the 1999 Stock Plan, no option may be exercised at
any time unless the holder thereof is then an employee of the Company, Ciba
Canada or an

<PAGE>

                                                                             6

affiliate. The holder of an option will have none of the rights of a
shareholder with respect to the shares or ADSs subject to the option until
such shares are transferred to the holder upon the exercise of the option.

Restricted Shares. Unless the applicable granting document provides otherwise,
restricted shares will become vested and nonforfeitable on the third
anniversary of the date of grant ("restricted period") provided that the
holder either remains employed by the Company, Ciba Canada or an affiliate on
such date or retires on or after age 60. The shares will not be delivered to a
participant prior to the third anniversary of the date of grant. In the event
of the holder's death during the restricted period, the restrictions on the
restricted shares will lapse and shares in the form of ADSs will be issued as
soon as practicable following the death of the holder. The Board will
determine the price, if any, to be paid by the holder for the restricted
shares.

Shares or ADSs will be issued at the end of the restricted period provided
that the terms and conditions applicable to the vesting of the restricted
shares are satisfied. During the restricted period but not after a participant
has forfeited the participant's interest in the restricted shares, the holder
will be entitled:

     o    to receive any cash dividends and any other distributions declared
          with respect to the restricted shares,

     o    to participate in shareholders' meetings and

     o    to exercise full voting rights with respect to the participant's
          restricted shares.

Nontransferability of Awards and Designation of Beneficiary. No award granted
under the 1999 Stock Plan will be transferable other than by will or the laws
of descent and distribution. An option may be exercised, during the lifetime
of the holder thereof, only by such holder or, in the event of incapacity, by
his or her guardian or legal representative.

A holder of an option may designate, in a written election filed with the
Company, a beneficiary or beneficiaries (which may be an entity other than a
natural person) to exercise all outstanding options under the 1999 Stock Plan
after the holder's death to the extent such options may be exercised after the
holder's death. Any such designation

<PAGE>

                                                                             7

may be revoked, and a new election may be made, at any time and from time to
time, by the holder without the consent of any beneficiary. The designation of
a beneficiary by an option holder will not constitute a transfer.

Termination of Employment. If the holder's employment terminates so that he is
no longer employed by Ciba, Ciba Canada or an affiliate prior to the complete
exercise of an option, then such option will thereafter be exercisable to the
following extent:

     o    no option may be exercised after the scheduled expiration date of
          such option;

     o    if the holder's employment terminates by reason of death, the option
          will become immediately vested and will remain exercisable for a
          period of one year following the holder's date of death;

     o    if the holder's employment terminates by reason of disability (as
          defined under the Long-Term Disability Plan for Salaried Employees
          of Ciba Specialty Chemicals Corporation) or retirement on or after
          attainment of age 60 (as defined under the Pension Equity Plan for
          Salaried Employees of Ciba Specialty Chemicals Corporation), the
          option will continue to vest in accordance with the vesting schedule
          applicable to the option and will remain exercisable for a period of
          five years following such termination of employment;

     o    if the holder's employment terminates by reason of early retirement
          before age 60, the option (to the extent exercisable immediately
          prior to such retirement) will remain exercisable for a period of
          five years following such retirement;

     o    if the holder's employment with the Company is terminated by the
          Company (or his or her resignation is requested or approved by the
          Company) for any reason other than cause or is voluntarily
          terminated by the holder for any other reason, the option (to the
          extent exercisable immediately prior to such termination) will
          remain exercisable for a period of three months following such
          termination.

If any holder whose employment has terminated for a reason other than death
dies within the period during which his or her option is exercisable but prior
to the complete exercise of the option, such option may be exercised by the

<PAGE>

                                                                             8

designated beneficiary at any time within the lesser of one year after such
date of death or the remainder of the period in which the holder could have
exercised the option had he or she not died but in no event beyond the
original term of the option.

The CEO may grant options with different terms than those described above, and
may accelerate the vesting of an option or extend the period during which an
option may be exercised at any time prior to exercise of the option.

If the holder's employment with the Company, Ciba Canada or an affiliate is
terminated by the Company, Ciba Canada or such affiliate for cause, then all
options held by such holder will terminate immediately and such holder's
rights to restricted shares, unpaid dividends and retained distributions will
be forfeited immediately. Cause will have the meaning established by the Board
or, in the absence thereof, will include but not be limited to,
insubordination, dishonesty, incompetence, moral turpitude, other misconduct
of any kind and the refusal to substantially perform his or her duties and
responsibilities for any reason other than illness or incapacity.

Awards made under the 1999 Stock Plan will not be affected by any change of
employment so long as the holder continues to be an employee of the Company,
Ciba Canada or an affiliate.

Notwithstanding anything contained in the 1999 Stock Plan to the contrary, in
the case of a holder of an outstanding option who was employed by the
Performance Polymers Division of the Company immediately prior to the sale of
such division, his employment with the Company will not be considered
terminated until his employment with Avanti USA, Inc. (or any successor) (the
"Buyer") terminates. Thus, until such termination, his outstanding options
will continue to vest and the period during which such options will be
exercisable will be determined as if such continued employment with the Buyer
were employment with the Company. A holder's eligibility for "retirement" will
be based on the holder's combined service with the Company and the Buyer and
the requirements for retirement under the Pension Plan for Salaried Employees
of Ciba Specialty Chemicals Corporation ("Pension Plan") as in effect on the
closing date of the sale of the Performance Polymers Division. Notwithstanding
the foregoing, nothing in the 1999 Stock Plan will entitle any holder to
additional service credit for service with the Buyer under the Pension Plan or
any other plan of the Company.

<PAGE>

                                                                             9

Acceleration of Awards. In the event of any Change in Control, then,
notwithstanding any contrary vesting period in the 1999 Stock Plan, and unless
the applicable granting document provides otherwise:

     o    each outstanding option granted under the 1999 Stock Plan will
          become immediately vested and each participant will have the right
          to exercise the options at any time but not later than the normal
          expiration date of the options and

     o    the restricted period will be deemed to have expired with respect to
          all restricted shares, and any shares (in the form of ADSs), any
          related retained distributions and unpaid dividends will be
          distributed to the holder as soon as practicable.

Any conversion into United States dollars or other local currency will be
based on the currency exchange rate determined by the CEO to be in effect on
the date of the Change in Control. A Change in Control will be deemed to occur
if there has been a Change in Control under the Parent's Plan.

Effect of Certain Changes. If there is any change in the number of outstanding
shares by reason of any stock dividend, stock split, recapitalization,
combination, exchange of shares, merger, consolidation, liquidation, split-up,
spin-off or other similar change in capitalization, any distribution to common
shareholders, including a rights offering, other than cash dividends, or any
like change, then the number of shares available for awards, the number of
such shares covered by outstanding awards, and the price per share of such
awards will be proportionately adjusted by the CEO in a manner that is
consistent with similar adjustments made by the Parent with respect to
participants under the Parent's Plan to reflect such change or distribution.

In the event of a change in the shares of the Parent as presently constituted,
the shares resulting from any such change will be deemed to be shares within
the meaning of the 1999 Stock Plan.

Restrictions on Awards. No awards will be granted under the 1999 Stock Plan,
and no shares in the form of ADSs will be issued and delivered upon the
exercise of awards granted under the 1999 Stock Plan, unless and until any
applicable Federal or state registration, listing and qualification
requirements and any other requirements of law or of any

<PAGE>

                                                                            10

regulatory agencies having jurisdiction shall have been fully complied with
(or exceptions from the foregoing are available).

The CEO may impose such other terms, conditions, and restrictions upon any
award, including any award theretofore granted, that the CEO concludes, in his
or her discretion, are necessary or desirable to ensure compliance with any
applicable law, regulation or rule.

No shares or ADSs will be issued to any Canadian citizen employed by Ciba
Canada unless all provincial and national securities requirements of Canada
are satisfied.

Written Grant. Each award will be evidenced by a written document which may
contain such terms as the CEO from time to time will approve provided that
such terms are not inconsistent with the provisions of the 1999 Stock Plan.
Unless such document specifies otherwise, the effective date of the granting
of an award will be the date on which the CEO approves such grant. Each
grantee of an award will be notified promptly of such grant and such written
document will be promptly executed and delivered by the Company to the
grantee.

Termination and Amendment. Unless the 1999 Stock Plan is extended by action of
the Board, the 1999 Stock Plan will terminate on, and no award may be granted
after, April 8, 2009, although the provisions of the 1999 Stock Plan will
remain in effect for outstanding grants until such grants expire, are
exercised or terminate in accordance with the terms of the 1999 Stock Plan.
The 1999 Stock Plan may be terminated, modified or amended at any time by the
Parent or the Board. No termination, modification or amendment of the 1999
Stock Plan may, without the consent of the employee to whom any award shall
theretofore have been granted, adversely affect the rights of such employee
under such award.

Gross-Up for Parachute Payments or Other Tax Liability Triggered by
Acceleration of Awards. Any additional taxes (including payroll taxes) which
may be imposed on a participant as a result of any acceleration (including any
acceleration of vesting or of the expiration of a restricted period) will be
borne by the Company. In this context, "additional" includes such taxes and
similar duties which may be imposed in excess of those which would have been
borne by a participant under the ordinary vesting and restriction period of
the 1999 Stock Plan. In the event that it is determined that any payment or
distribution made under the 1999 Stock Plan would be subject to the excise tax

<PAGE>

                                                                            11

imposed by Section 4999 of the Code, or that any interest or penalties are
incurred by a participant with respect to such excise tax, then the
participant will be entitled to receive an additional gross-up payment in an
amount such that, after payment by the participant of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income and employment taxes (and any interest and penalties
imposed with respect to such taxes) and excise tax imposed upon the gross-up
payment, the participant retains an amount of gross-up payment equal to the
excise tax imposed on the payments. The determination of the amount of any
gross-up payment will be determined by a nationally recognized accounting
firm, mutually acceptable to the Company and the participant and all costs
will be paid by the Company.

Tax Withholding. In connection with the transfer of ADSs as a result of the
exercise or vesting of an award, the Company will have the right to require
the holder to pay an amount in cash or to retain or sell without notice, or to
demand surrender of, shares or ADSs in value sufficient to cover any tax,
including any Federal, state or local income taxes, FICA, Medicare or any
other taxes required by any governmental entity of any jurisdiction to be
withheld or otherwise deducted and paid with respect to such transfer
("withholding tax"), and to make payment (or to reimburse itself for payment
made) to the appropriate taxing authority of an amount in cash equal to the
amount of such withholding tax, remitting any balance to the holder. The value
of shares or ADSs so retained or surrendered will be equal to the Market Value
on the date that the amount of the withholding tax is to be determined, and
the value of shares or ADSs so sold will be the actual net sale price per
share (after deduction of commissions) received by the Company.

Notwithstanding the foregoing, the holder will be entitled to satisfy the
obligation to pay any withholding tax, in whole or in part, by providing the
Company with funds sufficient to enable the Company to pay such withholding
tax or by requesting the Company to retain or to accept upon delivery thereof
shares or ADSs sufficient in value (determined in accordance with the last
sentence of the preceding paragraph) to cover the amount of such withholding
tax. Each election by a holder to have ADSs retained or to deliver shares or
ADSs for this purpose will be subject to the following restrictions: (i) the
election must be in writing and made on or prior to the date the withholding
tax is determined and (ii) the election will be subject to the approval of the
Company.

<PAGE>

                                                                            12

Payments to Minors and Incompetents. If a person entitled to receive any
payments or distributions under the 1999 Stock Plan is a minor or is deemed by
the CEO or is adjudged to be legally incapable of giving valid receipt and
discharge for such payments or distributions, the CEO may direct payments to
the legal representative of such person, or, if none, to a person designated
by the CEO for the benefit of such person, or the CEO may direct application
of the payment for the benefit of such person in such manner as the CEO
considers advisable. Such payment will, to the extent made, be deemed a
complete discharge of any liability for such payment under the 1999 Stock
Plan.

Applicable Laws; Severability. The 1999 Stock Plan is to be construed,
administered and governed in all respects under and by the laws of the United
States and, to the extent applicable, under and by the laws of the State of
New York. If any provision of the 1999 Stock Plan is held by a court or
governmental agency of competent jurisdiction to be invalid or unenforceable,
the remaining provisions of the 1999 Stock Plan will continue to be fully
effective.

III. DESCRIPTION OF THE 1998 STOCK PLAN

General. The 1998 Stock Plan provides for the granting of nonqualified stock
options and stock appreciation rights ("SARs"). Effective January 17, 2001,
the 1998 Stock Plan was amended and restated to provide that awards will be
settled in the form of ADSs.

Stock Subject to the 1998 Stock Plan. The terms of the 1998 Stock Plan
covering the stock subject to such plan are substantially similar to the 1999
Stock Plan.

Administration. The 1998 Stock Plan will be administered by the CEO. Subject
to the express provisions of the 1998 Stock Plan, the CEO will have plenary
authority, in his or her discretion, to determine the terms of all awards
granted under the 1998 Stock Plan (which need not be identical) including,
without limitation,

     o    whether an award will be an option or an SAR,

     o    the purchase price of the shares covered by each option,

     o    the base appreciation value of the shares covered by each SAR ("Base
          Appreciation Value"),

<PAGE>

                                                                            13

     o    the individuals to whom and the time or times at which awards will
          be granted,

     o    the number of shares to be subject to each award,

     o    when an award can be exercised and whether in whole or in
          installments.

In all other manners, the terms of the 1998 Stock Plan relating to the
administration of such plan are substantially similar to the 1999 Stock Plan.

Eligibility. The terms of the 1998 Stock Plan relating to the eligibility
requirements of such plan are substantially similar to the 1999 Stock Plan.

Grant of Options and Stock Appreciation Rights. The CEO will determine the
number of shares to be offered from time to time by the grant of awards (it
being understood that more than one award may be granted to the same
employee). Awards under the 1998 Stock Plan will be either options or SARs.
The grant of an award to an employee will not be deemed either to entitle the
employee to, or to disqualify the employee from, participation in any other
grant of awards under the 1998 Stock Plan.

Options. The grant of an option will entitle the holder to purchase shares in
the form of ADSs during a specified term at a specified price set at the time
of grant in either Swiss francs or United States dollars. The option will be
subject to such conditions as the CEO or other administrator determines. The
purchase price of the shares under each option will be equivalent to 100% of
the "Market Value" of the shares on the date of grant of such option as
determined under the Parent's Plan or as determined in good faith by the Board
in a manner that is consistent with the determination by the Parent of the
Market Value of a share under the Parent's Plan. Any purchase price expressed
in Swiss francs will be converted to United States dollars by dividing such
purchase price by the exchange rate determined by the CEO to be in effect on
the date of exercise of the option or SAR. Any conversion into United States
dollars or other local currency pursuant to the 1998 Stock Plan will be based
on the exchange rate determined by the CEO to be in effect on the specified
date.

SARs. A SAR entitles the holder to receive whole shares in the form of ADSs
with an aggregate Market Value equal to the excess of the aggregate Market
Value of the shares subject to the SAR at the time of exercise over the
aggregate Base Appreciation Value of such shares, with cash in lieu of

<PAGE>

                                                                            14

fractional shares. The Base Appreciation Value will be equivalent to 100% of
the Market Value of the shares subject to the SAR on the date of grant.

Exchange of Awards. The Company may, in its discretion, redeem any outstanding
SAR without the consent of the holder of such SAR by issuing in its place an
option to purchase the same number of shares as are subject to the SAR at a
per share purchase price equivalent to 100% of the Base Appreciation Value of
the shares subject to the SAR and otherwise having terms comparable to the
redeemed award, so long as the issuance of such option and the sale of shares
pursuant to exercise of such option would be in compliance with the Securities
Act of 1933, as amended (the "Act"), and any applicable "blue sky" laws. The
CEO (or in the case of awards held by the CEO, the Chief Executive Officer or
Director, Corporate Human Resources, of the Parent) will determine whether to
so redeem any SARs. The Company will redeem any option without the consent of
the holder of such option if the sale of shares pursuant to such option would
not be in compliance with the Act or any applicable "blue sky" laws, by
issuing in its place a SAR with respect to the number of shares covered by
such option entitling the holder to receive whole shares in the form of ADSs
with an aggregate Market Value equal to the excess of the aggregate Market
Value of the shares subject to the SAR at the time of exercise over the
aggregate option purchase price of such shares, with cash in lieu of
fractional shares and otherwise having terms comparable to the redeemed award.
Upon any such redemption, the SAR or option redeemed will be null and void.

Term of Awards. The term of each award will be for such period as the CEO will
determine, but not more than 10 years from the date of granting thereof.

Exercise of Awards. The terms of the 1998 Stock Plan relating to the exercise
of options under such plan are substantially similar to the 1999 Stock Plan.

Upon the exercise of a SAR, subject to satisfaction of the tax withholding
requirements, the holder will be entitled to receive whole shares in the form
of shares or ADSs with an aggregate Market Value equal to the excess of the
aggregate Market Value of the shares subject to the SAR (to the extent being
exercised) over the aggregate Base Appreciation Value attributable to such
shares, with cash in lieu of any fractional shares. The number of shares
remaining covered by the related award will be reduced to the extent of the
number of shares with respect to which the SAR is exercised (and will no
longer be available for purposes of determining

<PAGE>

                                                                            15

the number of shares in respect of which other awards may be granted). Upon
the exercise or termination of a SAR, the potential conversion into options
with respect thereto will be canceled to the extent of the number of shares
with respect to which the SAR was so exercised or terminated.

Other than as specified in the 1998 Stock Plan, no award may be exercised at
any time unless the holder thereof is then an employee of the Company, Ciba
Canada or an affiliate. The holder of an award will have none of the rights of
a shareholder with respect to the shares subject to the award until such
shares or ADSs are transferred to the holder upon the exercise of the award.

Nontransferability of Awards and Designation of Beneficiary. The terms of the
1998 Stock Plan relating to the Nontransferability of awards granted under
such plan are substantially similar to the 1999 Stock Plan.

Termination of Employment. The terms of the 1998 Stock Plan relating to the
termination of an award holder's employment are substantially similar to the
1999 Stock Plan.

Acceleration of an Award. The terms of the 1998 Stock Plan relating to the
acceleration of awards granted under such plan are substantially similar to
the 1999 Stock Plan.

Effect of Certain Changes. The terms of the 1998 Stock Plan relating to the
effect of certain corporate changes are substantially similar to the 1999
Stock Plan.

Restrictions on Awards and Optioned Shares. The terms of the 1998 Stock Plan
relating to restrictions on awards and optioned shares are substantially
similar to the 1999 Stock Plan.

Written grant. Each award granted under the 1998 Stock Plan will be evidenced
by an agreement which may contain such terms as the CEO from time to time
shall approve provided that such terms are not inconsistent with the
provisions of the 1998 Stock Plan. Unless the agreement specifies otherwise,
the effective date of the granting of an award will be the date on which the
CEO approves such grant. Each grantee of an award will be notified promptly of
such grant and a written agreement will be promptly executed and delivered by
the Company and the grantee, provided that such grant of awards will terminate
if such written agreement is not signed by such grantee (or his or her
attorney) and delivered to the Company within 60 days after the effective date
of such grant.

<PAGE>

                                                                            16

Termination and Amendment. Unless the 1998 Stock Plan is extended by action of
the Board, the 1998 Stock Plan will terminate on, and no award will be granted
after, December 31, 2007, although the provisions of the 1998 Stock Plan will
remain in effect for outstanding grants until such grants expire, are
exercised or terminate in accordance with the terms of the 1998 Stock Plan.
The 1998 Stock Plan may be terminated, modified or amended at any time by the
Parent or the Board. No termination, modification or amendment of the 1998
Stock Plan may, without the consent of the employee to whom any award shall
theretofore have been granted, adversely affect the rights of such employee
under such award.

Tax Withholding. The terms of the 1998 Stock Plan relating to tax withholding
are substantially similar to the 1999 Stock Plan.

Gross-Up for Parachute Payments or Other Tax Liability Triggered by
Acceleration of Awards. The terms of the 1998 Stock Plan relating to gross-up
for parachute payments and other tax liability triggered by the acceleration
of awards are substantially similar to the 1999 Stock Plan.

Payments to Minors and Incompetents. The terms of the 1998 Stock Plan relating
to payments to minors and incompetents are substantially similar to the 1999
Stock Plan.

Applicable Laws; Severability. The terms of the 1998 Stock Plan applicable
laws and severability are substantially similar to the 1999 Stock Plan.

IV. FEDERAL INCOME TAX CONSEQUENCES

The material Federal income tax consequences of participation in the 1999
Stock Plan and the 1998 Stock Plan by United States employees are summarized
below. This summary does not address issues related to the tax circumstances
of any particular employee. The summary is based on United States Federal
income tax laws in effect on the date hereof and is, therefore, subject to
possible future changes in law. This discussion does not address state, local
or foreign tax consequences. Employees should consult their own tax advisors
about the Federal income tax consequences of the 1999 Stock Plan and the 1998
Stock Plan, including the consequences applicable to their particular
situation and the state or local tax consequences of the Plans.

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                                                                            17

Options. If ADSs or shares are issued to the original holder of an option
which is granted and exercised in accordance with the 1999 Stock Plan or the
1998 Stock Plan, then:

     o    no income will be recognized by the holder at the time of grant of
          the option;

     o    upon exercise of the option the holder will recognize taxable
          ordinary income in an amount equal to the excess of the fair market
          value, at the time of exercise, of the ADSs or shares acquired over
          the option price;

     o    subject to the limitation described below, the Company will be
          entitled to a deduction at the same time and in the same amount as
          the holder has income under the previous clause; and

     o    upon a sale of the ADSs or shares so acquired, the holder will have
          short-term or long-term capital gain or loss, as the case may be, in
          an amount equal to the difference between the amount realized on
          such sale and the tax basis of the ADSs or shares sold.

If payment of the option price is made entirely in cash, the tax basis of the
ADSs or shares will be equal to their fair market value on the date of
exercise, but not less than the option price, and their holding period will
begin on the day after the tax basis of the ADSs or shares is so determined.

If the optionee uses previously owned shares or ADSs to exercise an option in
whole or in part, the transaction will not be considered to be a taxable
disposition of the previ ously owned shares or ADSs. The holder's tax basis
and holding period of the previously owned shares or ADSs will be carried over
to the equivalent number of ADSs or shares received on exercise. The tax basis
of the additional ADSs or shares received upon exercise will be the fair
market value of the ADSs or shares on the date of exercise, but not less than
the amount of cash used in payment, and the holding period for such additional
ADSs or shares will begin on the day after the tax basis of the ADSs or shares
is so determined.

If the exercisability of an option is accelerated as a result of a change in
control, all or a portion of the value of the option at that time may be a
parachute payment for purposes of determining whether a 20% excise tax is
payable

<PAGE>

                                                                            18

by the employee as a result of the receipt of an excess parachute payment
pursuant to Section 4999 of the Code.

Restricted Shares. Except as provided below, the fair market value of the
restricted shares awarded under the 1999 Stock Plan will be taxable to the
holder of the award as ordinary income at the time such shares are considered
transferred to the holder.

If restricted shares, whether or not in the form of ADSs, are transferred to an
employee under the 1999 Stock Plan, then

     o    except as described in the following clause, when such shares or
          ADSs cease to be subject to restrictions under the 1999 Stock Plan
          or the holder first becomes eligible to retire and is age 60 or
          older, the holder will recognize taxable ordinary compensation
          income equal to the fair market value of the shares, whether or not
          in the form of ADSs, at that time; and

     o    within 30 days after the date the restricted shares, whether or not
          in the form of ADSs, are initially considered to be transferred to
          an employee and regardless of the existence of such restrictions,
          the employee may elect under Section 83(b) of the Code to recognize
          taxable ordinary compensation income at the time of transfer in an
          amount equal to the fair market value of the shares, whether or not
          in the form of ADSs, at such time, in which case (a) if the shares
          or ADSs are subsequently forfeited or acquired by the employer, no
          deduction of such amount will be allowed and (b) no additional
          income will be recognized solely by virtue of the lapse of
          restrictions on the shares.

For purposes of calculating capital gains treatment, the recipient's holding
period for the restricted shares, whether or not in the form of ADSs, will
begin at the time taxable income is recognized under these rules, and the tax
basis in the restricted shares, whether or not in the form of ADSs, will be
the amount of ordinary income so recognized.

Dividends on restricted shares, whether or not in the form of ADSs, received
prior to the date the holder recognizes income on the value of those shares
will be treated as ordinary compensation income rather than as dividends.

<PAGE>

                                                                            19

Dividends on restricted shares, whether or not in the form of ADSs, received
after the date the holder recognizes income on the value of those shares will
be treated as dividends for tax purposes.

The Company will obtain a tax deduction at the same time as compensation income
is recognized by its employees.

If the lapse of the restrictions on the restricted shares is accelerated as a
result of a change in control, all or a portion of the value of the restricted
shares at that time may be a parachute payment for purposes of determining
whether a 20% excise tax is payable by the employee as a result of the receipt
of an excess parachute payment pursuant to Section 4999 of the Code.

SARs. If ADSs or shares are issued or cash is delivered to the original holder
of a SAR which is granted and exercised in accordance with the 1998 Stock Plan,
then:

     o    no income will be recognized by the holder at the time of grant of
          the SAR;

     o    upon exercise of the SAR the holder will recognize taxable ordinary
          income in an amount equal to the fair market value of the ADSs or
          shares acquired or, where applicable, the amount of cash received;

     o    the recipient's holding period for the shares acquired upon the
          exercise of the SAR, whether or not in the form of ADSs, will begin
          at the time taxable income is recognized, and the tax basis in the
          acquired shares, whether or not in the form of ADSs, will be the
          amount of ordinary income so recognized;

     o    the Company will be entitled to a deduction at the same time and in
          the same amount as the holder has income under the previous clause;
          and

     o    upon a sale of the ADSs or shares so acquired, the holder will have
          short-term or long-term capital gain or loss, as the case may be, in
          an amount equal to the difference between the amount realized on such
          sale and the tax basis of the ADSs or shares sold.

If the exercisability of a SAR is accelerated as a result of a change in
control, all or a portion of the value of the SAR at that time may be a
parachute payment for purposes of determining whether a 20% excise tax is
payable by the

<PAGE>

                                                                            20

employee as a result of the receipt of an excess parachute payment pursuant to
Section 4999 of the Code.

V. IMPORTANT LEGAL INFORMATION; INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

A copy of the Parent's Annual Report for the year ended December 31, 2000,
will be delivered together with this Prospectus. In addition, each person
holding stock options or restricted shares will be provided with copies of
subsequent Annual Reports and other communications distributed to shareholders
of the Parent generally. The Parent's Annual Report on the Form 20-F for the
year ended December 31, 2000 and all other reports filed by the Parent with
the SEC since December 31, 2000 pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated by reference in this Prospectus. A description of the Parent's
Shares contained in the Parent's Registration Statement on Form 20-F, filed
with the SEC on July 24, 2000, pursuant to Section 12 of the Exchange Act is
also incorporated by reference in this Prospectus. All reports and other
documents filed by the Parent pursuant to Sections 13(a), 13(c), 14 and 15(d)
of the Exchange Act after the date of this Prospectus and prior to the filing
of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Prospectus
from the date of the filing of those reports and documents.

VI. ADDITIONAL INFORMATION

The Parent will provide without charge to each person to whom a copy of this
Prospectus has been delivered, upon request, a copy of any of the documents
that have been incorporated by reference in this Prospectus other than
exhibits to such documents. Written or telephonic requests for such copies, or
for any other information regarding the Plans, should be directed to:

           Kevin Graveline
           Ciba  Specialty  Chemicals  Corporation
           560 White Plains Road
           Tarrytown, New York 10591-9005
           914-785-4089.

This Prospectus may be updated from time to time by furnishing employees who
hold awards with supplements,

<PAGE>

                                                                            21

appendices or replacement pages to this Prospectus. This Prospectus, together
with any such future supplements, appendices or replacement pages, will be
furnished by the Parent (or the Company on behalf of the Parent) to employees
who hold awards. Additional copies may be obtained by such employees upon oral
or written request to Kevin Graveline, listed above.

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