Document:

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                                                                   EXHIBIT 10.11

       **CERTAIN CONFIDENTIAL MATERIAL CONTAINED IN THIS DOCUMENT HAS BEEN
    OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
     PURSUANT TO 17 C.F.R. SUBSECTION 200.80(B)(4), 200.83 AND 230.406.**

               AMENDMENT TO EXCLUSIVE LICENSE AND SUPPLY AGREEMENT
                                     BETWEEN
                            ICN PHARMACEUTICALS, INC.
                                       AND
                              SCHERING-PLOUGH LTD.
                               DATED JULY 28, 1995

         This Amendment, effective as of the last date below (the "Effective
Date"), to the Exclusive License and Supply Agreement between ICN
Pharmaceuticals, Inc. ("ICN") and Schering-Plough Ltd. ("Schering") dated July
28, 1995 (the "Agreement") is entered into by and between the parties hereto
with reference to the facts below. Terms with initial capitals which are not
specifically defined in this Amendment shall have the defined meaning set forth
in the Agreement.

         WHEREAS, Section 7.1 of the Agreement grants the right to ICN,
following receipt of Regulatory Approval in the EU, to distribute, market, use,
make, have made and sell the Product for the treatment of chronic hepatitis C,
at ICN's expense, in the EU; and

         WHEREAS, the Parties wish to amend the Agreement to increase certain
royalty payments to ICN in exchange for ICN relinquishing its rights and
granting to Schering exclusive rights to develop, distribute, market, use, make,
have made and sell the Product alone or as part of a combination therapy for the
treatment of chronic hepatitis C in the EU; and

         WHEREAS, the Parties also wish to modify certain other provisions of
the Agreement in order to achieve consistency with the objective of this
amendment granting Schering exclusive rights to the Product in the Territory;
and

         WHEREAS, pursuant to Section 3.2(e) of the Agreement, ICN is required
to reimburse Schering for [REDACTED], up to a maximum amount of [REDACTED], of
the reasonable costs and expenses incurred by Schering in pursuing Regulatory
Approval in the EU and whereas ICN has to date made no such reimbursement; and
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         WHEREAS, ICN has incurred certain costs in anticipation of co-promoting
the Product in the EU and Schering has agreed to reimburse ICN for such amounts
expended by ICN; and

         WHEREAS, the Parties wish to resolve certain additional matters between
them and provide for additional value to ICN of [REDACTED].

         NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and obligations below, the Parties agree as follows:

          1. ICN acknowledges that in exchange for the receipt of additional
value to ICN of [REDACTED] the matters set forth below are resolved between the
parties. From the [REDACTED] in additional value to ICN, Schering shall deduct
[REDACTED] and Schering acknowledges that ICN shall not be required to reimburse
Schering for [REDACTED], up to a maximum amount of [REDACTED], of the reasonable
costs and expenses incurred by Schering in pursuing Regulatory Approval in the
EU, as provided in Section 3.2(e) of the Agreement, and such debt of ICN is
forgiven by Schering.

          2. Within [REDACTED] business days after the Effective Date, Schering
shall pay to ICN the balance of [REDACTED], by wire transfer of immediately
available funds to an account designated by ICN.

          3. ICN acknowledges and agrees that payment by Schering shall be in
full and complete satisfaction of any and all rights and/or claims that ICN has
or may have relating to:

          (a)      royalties due ICN under the Agreement, as amended by this
                   Amendment Agreement, for any and all [REDACTED] (but not
                   [REDACTED] sales), including, as described in Section
                   [REDACTED] of the Agreement, which programs are in existence
                   at the Effective Date and continue past the Effective Date;
                   and

          (b)      [REDACTED]; and

          (c)      reimbursement for the amounts that ICN has expended in
                   anticipation of co-promoting the Product in the EU. In
                   addition, ICN transfers to Schering ownership of certain
                   pre-marketing activities in exchange for the consideration
                   provided to ICN under this Agreement.

                                      -2-
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          4. The Parties agree that clinical trials where patients are
administered [REDACTED] (those with protocols and case report forms) were not
and are not subject to any royalty obligations under the Agreement. Clinical
trials utilizing ribavirin monotherapy up to [REDACTED] of Schering's Net Sales
of ribavirin on a country-by-country basis (measured in units for this purpose)
are not subject to any royalty obligations under the Agreement. However,
clinical trials utilizing ribavirin monotherapy in excess of [REDACTED] of
Schering's Net Sales of ribavirin on a country-by-country basis (measured in
units for this purpose) shall be subject to royalty obligations under the
Agreement. Examples of clinical trials, include but are not limited to,
[REDACTED].

                  Notwithstanding anything set forth in this Section 4, during
the first [REDACTED] period following Regulatory Approval of the Product in any
country of the Territory on a country-by-country basis, except for specific
investigator initiated studies to which the Parties mutually agree, no
investigator initiated studies shall be subject to the minimum royalty payment
to ICN, as such minimum royalty is set forth in Section 6.2. If after the
[REDACTED] period set forth above, except for specific investigator initiated
studies to which the Parties mutually agree, there are investigator initiated
studies continuing in the relevant country, then ICN shall be entitled and
Schering shall pay to ICN, [REDACTED] of the minimum royalty on such use of
ribavirin. Beginning one year after such [REDACTED] period (i.e., [REDACTED]
after Regulatory Approval of the Product in the relevant country), except for
specific investigator initiated studies to which the Parties mutually agree, if
the investigator initiated studies are still continuing in the relevant country,
then ICN shall be entitled and Schering shall pay to ICN, [REDACTED] of the
minimum royalty on such use of ribavirin.

          5. ICN further acknowledges and agrees that all minimum royalties due
ICN through the Effective Date shall be satisfied upon payment to ICN of the
amounts set forth in this agreement. In addition, the audit of Schering's books
and records as requested by ICN by notice dated June 9, 1998, shall cease and
ICN hereby waives and relinquishes its right under the Agreement to examine the
books and records of Schering for minimum royalty purposes from the period of
the inception of the Agreement through the Effective Date.

          6. The Parties further agree that royalties in the EU shall be
calculated as Net Sales of ribavirin multiplied by the applicable royalty rate
set forth in subsection 6.2(a), provided, however, that from such calculation,
Schering shall deduct its [REDACTED]. When ribavirin is sold in a [REDACTED],
ribavirin net sales are calculated by determining [REDACTED].

                                      -3-
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                  With regard to discounts, rebates and charge back payments
(collectively, "Discount"), when applied to [REDACTED], the Discount applied to
the [REDACTED] shall be the average discount applied to [REDACTED] in the
country, on a country-by-country basis. The remainder of the Discount will be
applied to the [REDACTED]. Following [REDACTED] of sales of the [REDACTED]
in a Major Market, and thereafter on an annual basis, in the event ICN
reasonably believes that there has been an inequitable apportionment of the
Discount relating to [REDACTED], then ICN may request a meeting with Schering to
resolve in good faith the issue of the equitable apportionment of the Discount
of the [REDACTED].

          7. ICM further acknowledges and agrees that Schering has paid in full
and completely satisfied its obligations with regard to the Portugal "Virazide
Transfer" and ICN acknowledges that such amounts were correctly deducted from
applicable royalties due ICN.

          8. Sections of the Agreement relating to or implementing ICN's right
to distribute, market and sell the Product in the EU shall be deleted in order
to give effect to the intent of the Parties to amend the Agreement to grant
Schering exclusive rights to the Product in the Territory with no retained
marketing rights by ICN in the EU, except as provided in Section 12.6 ("Effects
of Termination by ICN"). Such amendments to the Agreement are as follows:

-    Section 2.4 ("Prices") shall be amended to delete the second sentence in
     its entirety. The remainder of Section 2.4 shall remain the same.

-    Sections 3.1 (d) ("Research and Development Activities") shall be amended
     to delete the first two sentences and the Section shall read in its
     entirety as follows:

                  "(d) ICN will use it reasonable efforts to apply the
         publication procedures set forth in Exhibit F to any studies that
         commenced prior to and are planned as of the Effective Date."

-    Section 3.2(b) ("Product Registrations"). The first sentence shall be
     amended to delete the first five words ("Except as to the EU") in their
     entirety. The remainder of Section 3.2(b) shall remain the same.

                                      -4-
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     Section 3.2(c) ("Product Registrations"). This Section 3.2(c) shall be
     deleted in its entirety. Section 3.2(d) shall be renumbered as Section
     3.2(c) but shall otherwise remain the same.

-    Section 3.2(e) ("Product Registrations"). This Section 3.2(e) shall be
     deleted in its entirety.

-    Section 3.3(a) ("Pricing and Reimbursement Approvals"). The second sentence
     ("In the EU, ICN shall be responsible for ICN's pricing and reimbursement
     approvals and structure.") shall be deleted in its entirety. The remainder
     of Section 3.3(a) shall remain the same.

-    Section 3.3(b) ("Pricing and Reimbursement Approvals"). The first sentence
     shall be amended to delete the first five words in their entirety and the
     last sentence of Section 3.3(b) shall be deleted in its entirety. Amended
     Section 3.3(b) shall thereupon read in its entirety as follows:

         "(b) Each pricing and reimbursement approval shall be placed in
     Schering's name or the name of a designated Schering Affiliate unless local
     law requires, or ICN and Schering otherwise agree, that such approval be in
     the name of ICN or a designated ICN Affiliate."

-    Section 4.1 ("Diligence in Marketing the Product"). The last sentence shall
     be deleted in its entirety. The remainder of Section 4.1 shall remain the
     same.

-    Section 4.3(a) ("Trademark Registrations and Infringements"). The last
     sentence shall be deleted in its entirety. The remainder of Section 4.3(a)
     shall remain the same.

-    Section 4.3(e) ("Trademark Registrations and Infringements"). The
     parenthetical on lines two through four of the Section ("(including without
     limitation, the rights to manufacture the Product and to distribute, market
     and sell the Product in the EU under the ICN Trademark)") shall be deleted
     in its entirety. The remainder of Section 4.3(e) shall remain the same.

-    Section 5.3(b) ("Product Sampling"). This subsection shall be deleted in
     its entirety. Section 5.3(c) shall be renumbered 5.3(b).

                                      -5-
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-    Current Section 5.3(c) ("Product Sampling"). The last sentence of the
     section shall be deleted in its entirety. This section has been renumbered
     5.3(b) and the remaining sentence of new Section 5.3(b) shall remain the
     same.

-    Section 12.5(b)(ii) ("Effects of Termination by Schering"). This subsection
     shall be amended to delete the phrase "outside of the EU" from the eighth
     line of the subsection and subsection 12.5(b)(ii) shall thereupon read in
     its entirety as follows:

         "(ii) Schering shall grant ICN reference to any Regulatory Approvals
 and pricing or reimbursement approvals relating to the Product in the
 Territory;"

-    Section 12.5(d)(i) ("Effects of Termination by Schering"). This subsection
     shall be amended to delete the phrase "including in the EU" from the fifth
     line of the subsection and subsection 12.5(d)(i) shall thereupon read in
     its entirety as follows:

         "(i) Schering shall retain a worldwide, perpetual, fully-paid up,
exclusive license (exclusive even as to ICN) in and to the Know-How to enable
Schering to develop, make, have made, use, sell and distribute Product in the
Territory;"

         9. Section 6.2 of the Agreement shall be amended to read in its
entirety as follows:

                  "6.2 Royalty Payment. In partial consideration of the grant of
rights to Schering by ICN under this Agreement, Schering shall pay ICN a royalty
in the following amounts:

                  (a) with respect to sales of Product, alone or as part of a
combination therapy, in the EU, the following royalty, [REDACTED], but in no
event less than [REDACTED] of Net Sales:

                     (i) [REDACTED];

                     (ii) [REDACTED]; and

                    (iii) [REDACTED];

                                      -6-
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                  (b) With respect to sales of Product, alone or as part of a
combination therapy, in the Territory other than the EU:

                     (i) [REDACTED];

                     (ii) [REDACTED]; and

                     (iii) [REDACTED];

provided, however, that in no event shall the royalty on sales of the Product,
alone or as part of a combination therapy, in any country in the Territory be
less that [REDACTED] per capsule sold based on a [REDACTED], [REDACTED] per
capsule sold based on a [REDACTED], and [REDACTED] per capsule sold based on a
[REDACTED], such amounts to be proportionately adjusted based on a scale of
[REDACTED] for other capsule sizes less than [REDACTED] and based on a scale of
[REDACTED] for other capsule sizes in excess of [REDACTED]. In the event oral
ribavirin from any third party becomes commercially available in any country in
the Territory, then Schering shall not be obligated to pay the minimum royalty
provided for in this Section 6.2 for that country, provided, however, that
notwithstanding the foregoing, (A) Schering shall be obligated to pay the
minimum royalty provided for in this Section 6.2 with respect to sales of the
Product in any of [REDACTED] for a maximum of [REDACTED] from first introduction
of oral ribavirin, at a [REDACTED], into any of [REDACTED]; (B) Schering shall
be obligated to pay the minimum royalty provided for in this Section 6.2 with
respect to sales of the Product in the [REDACTED] for a maximum of [REDACTED]
years from first introduction of oral ribavirin, at a [REDACTED], in the
[REDACTED] and (C) Schering shall be obligated to pay the minimum royalty
provided for in this Section 6.2 with respect to sales of the Product in
[REDACTED] for a maximum of [REDACTED] from first introduction of oral
ribavirin, at a [REDACTED], in [REDACTED]. The phrase [REDACTED] as used in this
Section 6.2 shall [REDACTED].

                                      -7-
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[REDACTED] For purposes of this Section 6.2, the current actual net selling
price shall be determined on a country-by-country basis, for each calendar
quarter, by dividing the Net Sales of capsules of a particular capsule strength
by the total number of capsules of the same strength that were sold and sampled
in such country during such period. Each Party shall have the right to audit the
books and records of the other Party for the purpose of verifying the current
actual net selling price, in accordance with the procedures set forth in Section
6.10."

          10. The last sentence of Section 6.12 shall be amended to read in its
entirety as follows:

          "Notwithstanding the foregoing, (i) in no event shall ICN be liable
for any deficiency, fine, assessment or penalty resulting from Schering's
failure to withhold the proper amount in accordance with the written
instructions of ICN to Schering given in accordance with Section 15.7 hereof,
and (ii) in no event shall ICN be liable for any deficiency, fine, assessment or
penalty resulting from Schering's failure to withhold the proper amount as a
result of Schering's negligence in calculating or paying such withholding tax.
In the event ICN is required to pay any such deficiency, or any fine, assessment
or penalty for any such deficiency, Schering shall promptly reimburse ICN for
such payments". The remainder of Section 6.12 shall remain the same.

          11. Section 7.1 of the Agreement entitled "ICN's Marketing Rights"
shall be deleted in its entirety except that the last sentence shall remain and
have the following added at the end of the existing sentence "or is known to
have sold the Product outside of Egypt." Section 7.1 shall be re-titled "ICN's
Marketing Rights in Egypt." and shall read in its entirety as follows:

         7.1 ICN's Marketing Rights in Egypt. In recognition of ICN's current
sales of the Product for the treatment of chronic hepatitis C pursuant to a
Regulatory Approval in

                                      -8-
<PAGE>   9
Egypt, ICN shall have the right under its existing contractual obligations (on a
semi-exclusive basis with Schering) at any time to distribute, market, use and
sell the Product for the treatment of chronic hepatitis C, at ICN's expense in
Egypt; provided, however, that ICN shall not sell the Product to any entity in
Egypt that could reasonably be expected to resell the Product outside Egypt or
is known to have sold the Product outside of Egypt."

         12. In order for Schering to derive the full benefits of the Agreement
with ICN, it is important that Schering be allowed to fully exploit the
exclusive rights granted to it under the Agreement. Without restricting ICN from
being able to fully exploit its rights to further develop ribavirin in
accordance with the terms of the Agreement for use in therapeutic areas other
than hepatitis C, ICN agrees not to enter into any agreements, understandings or
arrangements of any kind with any third or affiliated parties that directly or
indirectly interferes with the exclusive rights of Schering to make, have made,
develop, use, sell and distribute the Product in the Territory for the treatment
of hepatitis C. In addition, ICN agrees not to provide Product, Know-How, data
or any other such information or in any way facilitate the provision of Product,
Know-How, data or other such information with or without compensation for any
purpose that would allow, or might allow, a third or affiliated party to obtain
a health registration for the Product or enable the third or affiliated party to
compete against Schering by using the Product, alone or [REDACTED], for the
treatment of hepatitis C. In the event, Schering is able to provide ICN with
information reasonably demonstrating that a third or affiliated party is using
Product, Know-How, data or any other such information provided or facilitated by
ICN to attempt to obtain a health registration for the Product or enabling it to
compete against Schering by using the Product, ICN will immediately discontinue
providing or facilitating the provision of such Product, Know-How, data or other
such information to the third or affiliated party and take all reasonable steps
to recover or withdraw permission to use such Product, Know-How, date or other
such information.

          13. Without limiting the foregoing, ICN further acknowledges that it
is hereby releasing and forever discharging Schering, and any affiliated
entities, and their officers, directors, shareholders, employees and
representatives, of and from any and all actions, claims, liabilities and
demands now existing or which may hereafter arise including all claims for
damages, costs and fees, including attorneys' fees, of any description
whatsoever, arising out of or relating to any claim for (a) royalties due ICN
under the Agreement, as amended by this Amendment Agreement, for any and all

                                      -9-
<PAGE>   10
[REDACTED] (but not [REDACTED]) including, as described in
Section 6.2(b) of the Agreement, both prior to and until Regulatory Approval of
the Product in each country where such [REDACTED] have been or
are [REDACTED], (b) royalties due ICN for any and all [REDACTED] and
any [REDACTED] of Product through the Effective Date, (c) the calculation of
Schering's [REDACTED] through the Effective Date, (d) any alleged breach of
Section 3.2(c) of the Agreement through the Effective Date, or (e) reimbursement
of any funds expended by ICN in anticipation of co-promotion of Product in the
EU, (f) any of the matters that are the subject of this Agreement.

          14. In addition and in further consideration of the foregoing, ICN
hereby expressly waives any and all rights and benefits conferred upon it by the
provisions of Section 1542 of the Civil Code of the State of California, which
reads as follows:

          "A general release does not extend to claims which the creditor does
          not know or suspect to exist in his favor at the time of executing the
          release, which if known by him must have materially affected his
          settlement with the debtor."

          15. It is understood that neither the execution of this Agreement nor
any other action taken by Schering in connection with this Agreement constitutes
an admission by Schering or any affiliated entity of any violation of any law,
duty or obligation, and this Agreement is entered into without admission of
liability of any kind and is made in discharge, compromise, settlement and
satisfaction of all actions, claims and demands of any kind whatsoever by ICN
against Schering and any affiliated entities.

          16. The terms, conditions and existence of this Agreement shall be
treated by the Parties on a confidential basis, subject to Section 9.2 of the
Agreement ("No Publicity") and subject further to appropriate disclosure to
employees and shareholders of Schering-Plough Corporation (the corporate parent
of Schering) and its affiliates and/or ICN, or as otherwise required by law.
Each of Schering and ICN agrees to coordinate both the timing and content of any
public announcements relating to this Amendment Agreement and any such public
announcements shall be subject to the review and approval of the Parties prior
to public disclosure.

          17. This Agreement shall bind the Parties and their successors or
assigns.

          18. The Parties agree that the laws of the state of New Jersey,
exclusive of its conflicts of laws rules, shall be controlling with respect to
the validity, performance and interpretations of the terms of this Agreement.

                                      -10-
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          19. This Amendment to the Agreement is incorporated therein and
expressly made a part thereof.

          20. This Amendment to the extent set forth herein, amends, modifies
and supplements the Agreement. This Agreement contains the entire agreement
between the Parties hereto, and the terms of this Agreement are contractual and
not a mere recital. Except as expressly. modified herein, all of the terms and
provisions of the Agreement remain in full force and effect and cannot be
amended, modified or changed in any way whatsoever except by a written
instrument duly executed by the Parties hereto.

          IN WITNESS WHEREOF, the Parties have executed this Amendment effective
as of the last date below.

SCHERING-PLOUGH LTD.                           ICN PHARMACEUTICALS, INC.

By:        /s/ David Poorvin                  By:      /s/ David C. Watt
     ----------------------------------             ---------------------------
           David Poorvin                               David C. Watt

Title:   Prokurist                            Title:   Executive Vice President
                                                       General Counsel &
                                                       Corporate Secretary

Date:         16 July 1988                    Date:
      ---------------------------------            ----------------------------

                                      -11-<PAGE>   1

                                                                   Exhibit 10.12

                              EMPLOYMENT AGREEMENT

                  THIS AGREEMENT entered into as of the ___ day of _______,
2001, by and between Ribapharm Inc. (the "Company") and Johnson Yiu-Nam Lau, an
individual (the "Executive").

                  WHEREAS, the Company desires to retain the services of the
Executive as Chief Executive Officer and Chief Scientific Officer of the Company
on the terms set forth herein;

                  WHEREAS, the Board of Directors of the Company (the "Board")
recognizes that the threat of an unsolicited takeover of the Company may occur
which can result in significant distractions of its management personnel because
of the uncertainties inherent in such a situation;

                  WHEREAS, the Board of the Company has determined that it is
essential and in the best interest of the Company and its stockholders to retain
the services of its key management personnel in the event of a threat of a
change in control of the Company and to ensure their continued dedication and
efforts in such event without undue concern for their personal financial and
employment security; and

                  WHEREAS, in order to induce the Executive to remain in the
employ of the Company, particularly in the event of a threat of a change in
control of the Company, the Company desires by this writing to set forth the
continued employment relationship of the Executive with the Company, and the
Executive is willing to continue such employment relationship on the terms and
conditions set forth herein.

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

         1. Term. The initial term of employment under this Agreement shall be
for the period commencing on the date hereof, and ending ________ __, ____;
provided, however, that the term of this Agreement shall be automatically
extended for one (1) year on ________ __, ____, and on each _________ __
thereafter unless either the Company or the Executive shall have given written
notice to the other at least ninety (90) days prior thereto that the term of
this Agreement shall not be so extended; and provided, further, that
notwithstanding any such notice by the Company given after a Change in Control
not to extend, the term of this Agreement shall not expire prior to the
expiration of the third anniversary of a Change in Control (as hereinafter
defined). Notwithstanding the foregoing, in no event shall the term of this
Agreement extend beyond the first day of the month following the month in which
the Executive attains age 65.
<PAGE>   2
         2. Employment.

                                    (a) The Executive shall be employed as the
                  Chief Executive Officer and Chief Scientific Officer of the
                  Company or such other senior executive capacity as may be
                  mutually agreed to in writing by the parties. The Executive
                  shall perform the duties, undertake the responsibilities and
                  exercise the authority customarily performed, undertaken and
                  exercised by persons situated in a similar executive capacity.
                  He shall also promote, by entertainment or otherwise, the
                  business of the Company.

                                    (b) Excluding periods of vacation and sick
                  leave to which the Executive is entitled, the Executive agrees
                  to devote reasonable attention and time during usual business
                  hours to the business and affairs of the Company to the extent
                  necessary to discharge the responsibilities assigned to the
                  Executive hereunder. The Executive may (i) serve on corporate,
                  civil or charitable boards of committees, (ii) manage personal
                  investments and (iii) deliver lectures and teach at education
                  institutions, so long as such activities do not significantly
                  interfere with the performance of the Executive's
                  responsibilities hereunder.

         3. Base Salary. The Company agrees to pay or cause to be paid to the
Executive during the term of this Agreement a base salary at the rate of
$___________ per annum or such larger amount as the Board may from time to time
determine (hereinafter referred to as the "Base Salary"). Such Base Salary shall
be payable in accordance with the Company's customary practices applicable to
its executives. Such rate of salary, or increased rate of salary, if any, as the
case may be, shall be reviewed at least annually by the respective Board and may
be further increased (but not decreased) in such amounts as the respective Board
in its discretion may decide.

         4. Employee Benefits. The Executive shall be entitled to participate in
all employee benefit plans, practices and programs maintained by the Company and
made available to employees generally including, without limitation all pension,
retirement, profit sharing, savings, medical, hospitalization, disability,
dental, life or travel accident insurance benefit plans. The Executive's
participation in such plans, practices and programs shall be on the same basis
and terms as are applicable to employees of the Company generally.

         5. Executive Benefits. The Executive shall be entitled to participate
in all executive benefit or incentive compensation plans now maintained or
hereafter established by the Company for the purpose of providing compensation
and/or benefits to executives of the Company including, but not limited to, the
Company's 401(k) and Deferred Compensation Plans and any supplemental
retirement, salary continuation, stock option, deferred compensation,
supplemental medical or life insurance or other bonus or incentive compensation
plans. Unless otherwise provided herein, the Executive's participation in such
plans shall be on the same basis and terms as other similarly situated
executives of the Company, but in no event on a basis less favorable in terms of
benefit levels or reward opportunities applicable to the Executive as in effect
on the date

                                       2
<PAGE>   3
hereof. No additional compensation provided under any of such plans shall be
deemed to modify or otherwise affect the terms of this Agreement or any of the
Executive's entitlements hereunder.

         6. Other Benefits.

                                    (a) Fringe Benefits and Perquisites. The
                  Executive shall be entitled to all fringe benefits and
                  perquisites (e.g. Company cars, club dues, physical
                  examinations, financial planning and tax preparation services)
                  generally made available by the Company to its executives.

                                    (b) Expenses. The Executive shall be
                  entitled to receive prompt reimbursement of all expenses
                  reasonably incurred by him in connection with the performance
                  of his duties hereunder or for promoting, pursuing or
                  otherwise furthering the business or interests of the Company.

                                    (c) Office and Facilities. The Executive
                  shall be provided with an appropriate office in Costa Mesa,
                  California, or such other place as may be mutually agreed upon
                  and with such secretarial and other support facilities as are
                  commensurate with the Executive's status with the Company and
                  adequate for the performance of his duties hereunder.

         7. Vacation and Sick Leave. At such reasonable times as the Board shall
in its discretion permit, the Executive shall be entitled, without loss of pay,
to absent himself voluntarily from the performance of his employment under this
Agreement, provided that:

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

                                    (b) The Board shall be entitled to grant to
                  the Executive a leave or leaves of absence with or without pay
                  at such time or times and upon such terms and conditions as
                  the Board in its discretion may determine.

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

         8. Termination. (a) The Executive's employment hereunder may be
terminated under the following circumstances.

                                    (1) Disability. The Company may terminate
                  the Executive's employment after having established the
                  Executive's Disability. For purposes of this Agreement,
                  "Disability" means a physical or mental infirmity which
                  impairs the Executive's ability to substantially perform his
                  duties under this Agreement which continues for a period of at
                  least one hundred eighty (180) consecutive

                                       3
<PAGE>   4
                  days. The Executive shall be entitled to the compensation and
                  benefits provided for under this Agreement for any period
                  during the term of this Agreement and prior to the
                  establishment of the Executive's Disability during which the
                  Executive's ability to substantially perform his duties under
                  this Agreement is impaired due to a physical or mental
                  infirmity. Notwithstanding anything contained in this
                  Agreement to the contrary, until the Termination Date
                  specified in a Notice of Termination (as each term is
                  hereinafter defined) relating to the Executive's Disability,
                  the Executive shall be entitled to return to his position with
                  the Company as set forth in this Agreement in which event no
                  Disability of the Executive will be deemed to have occurred.

                                    (2) Cause. The Company may terminate the
                  Executive's employment for "Cause". A termination for Cause is
                  a termination evidenced by a resolution adopted in good faith
                  by two-thirds (2/3) of the Board that the Executive (i)
                  willfully and continually failed to substantially perform his
                  duties with the Company (other than a failure resulting from
                  the Executive's incapacity due to physical or mental illness)
                  which failure continued for a period of at least thirty (30)
                  days after a written notice of demand for substantial
                  performance has been delivered to the Executive specifying the
                  manner in which the Executive has failed to substantially
                  perform, (ii) willfully engaged in conduct which is
                  demonstrably and materially injurious to the Company,
                  monetarily or otherwise, or (iii) has been indicted or
                  convicted of an act which is defined as a felony under federal
                  or state law or otherwise willfully engaged in other acts of
                  misfeasance in connection with the performance of his duties;
                  provided, however, that no termination of the Executive's
                  employment shall be for Cause as set forth in clause (ii) or
                  (iii) above until (x) there shall have been delivered to the
                  Executive a copy of a written notice setting forth that the
                  Executive was guilty of the conduct set forth in clause (ii)
                  and specifying the particulars thereof in detail, and (y) the
                  Executive shall have been provided an opportunity to be heard
                  by the Board (with the assistance of the Executive's counsel
                  if the Executive so desires). No act, nor failure to act, on
                  the Executive's part, shall be considered "willful" unless he
                  has acted or failed to act, with an absence of good faith and
                  without a reasonable belief that his action or failure to act
                  was in the best interest of the Company. Notwithstanding
                  anything contained in this Agreement to the contrary, no
                  failure to perform by the Executive after Notice of
                  Termination is given by the Executive shall constitute Cause
                  for purposes of this Agreement.

                                    (3) Good Reason. The Executive may terminate
                  his employment for "Good Reason". For purposes of this
                  Agreement, Good Reason shall mean the occurrence after a
                  Change in Control (as hereinafter defined in this Section
                  8(b)) of any of the Events or conditions described in
                  Subsections (i) through (viii) hereof:

                                    (i) a change in the Executive's status,
                           title, position or responsibilities (including
                           reporting responsibilities) which, in the

                                       4
<PAGE>   5
                           Executive's reasonable judgment, does not represent a
                           promotion from his status, title, position or
                           responsibilities as in effect immediately prior to
                           the Change in Control; the assignment to the
                           Executive of any duties or responsibilities which, in
                           the Executive's reasonable judgment, are inconsistent
                           with such status, title, position or responsibilities
                           immediately prior to the Change in Control; or any
                           removal of the Executive from or failure to reappoint
                           or reelect him to any of such positions, except in
                           connection with the termination of his employment for
                           Disability, Cause, as a result of his death or by the
                           Executive other than for Good Reason;

                                    (ii) a reduction in the Executive's Base
                           Salary or a failure by the Company to increase the
                           Executive's Base Salary within any twelve (12) month
                           period by the average percentage increase during such
                           period of the base salaries of similarly situated
                           executives;

                                    (iii) the Company's requiring the Executive
                           to be based at any place outside a 30-mile radius
                           from Costa Mesa, California, except for reasonably
                           required travel on the Company's business which is
                           not materially greater than such travel requirements
                           prior to the Change in Control;

                                    (iv) the failure by the Company to (A)
                           continue in effect any material compensation or
                           benefit plan in which the Executive was participating
                           at the time of the Change in Control, including, but
                           not limited to, the Company's Deferred Compensation
                           Plan, 401(k) Plan, and any other comparable plans
                           established or maintained by the Company in
                           replacement thereof, or (B) provide the Executive
                           with compensation and benefits at least equal (in
                           terms of benefit levels and/or reward opportunities)
                           to those provided for under each other employee
                           benefit plan, program and practice as in effect
                           immediately prior to the Change in Control (or as in
                           effect following the Change in Control, if greater);

                                    (v) the insolvency or the filing (by any
                           party, including the Company) of a petition for
                           bankruptcy of the Company;

                                    (vi) any material breach by the Company of
                           any material provision of this Agreement;

                                       5
<PAGE>   6
                                    (vii) any purported termination of the
                           Executive's employment for Cause by the Company which
                           does not comply with the terms of Section 8 of this
                           Agreement; and

                                    (viii) the failure of the Company to obtain
                           an agreement, satisfactory to the Executive, from any
                           successor or assign of the Company to assume and
                           agree to perform this Agreement, as contemplated in
                           Section 11 hereof.

                                    Any event or condition described in this
                  Section 8(a)(3)(i) through (viii) which occurs prior to a
                  Change in Control but which (x) was at the request of a third
                  party who has taken steps reasonably calculated to effect a
                  Change in Control, or (y) otherwise arose in connection with a
                  Change in Control, shall constitute Good Reason for purposes
                  of this Agreement notwithstanding that it occurred prior to a
                  Change in Control. The Executive's right to terminate his
                  employment pursuant to this Section 8(a) shall not be affected
                  by his incapacity due to physical or mental illness. "Good
                  Reason" shall not include acts not taken in bad faith which
                  are cured by the Company in all respects not later than thirty
                  (30) days from the date of receipt by the Company of a Notice
                  of Termination from the Executive.

                  (b) Voluntary Termination. The Executive may voluntarily
         terminate his employment hereunder at any time. If the Executive
         voluntarily terminates his employment for any reason or without reason
         during the 60-day period which commences on the date which is six (6)
         months following the date of a Change in Control, it shall be referred
         to as a "Limited Period Termination."

                  (c) For purposes of this Agreement, a "Change in Control"
         shall mean any of the following:

                           (1) an acquisition (other than directly from the
Company) of any voting securities of the Company (the "Voting Securities") by
any "Person" (as the term person is used for purposes of Section 13(d) or 14(d)
of the Exchange Act) immediately after which such Person has "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of more than fifty percent (50%) of the then outstanding shares of common stock
(the "Shares") or the combined voting power of the Company's then outstanding
Voting Securities or more than fifty percent (50%) of the then outstanding
Shares or the combined voting power of the Voting Securities of any entity (a
"Parent") that owns more than fifty percent (50%) of the Company's then
outstanding Shares or the combined voting power of the Company's then
outstanding Voting Securities; provided, however, in determining whether a
Change in Control has occurred pursuant to this Section 8(e)(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 (i)
an employee benefit plan (or a trust forming a part thereof) maintained by (A)

                                       6
<PAGE>   7
the Company or a Parent or (B) any corporation or other Person of which a
majority of its voting power or its voting equity securities or equity interest
is owned, directly or indirectly, by the Company (for purposes of this
definition, a "Related Entity"), (ii) the Company, ICN Pharmaceuticals, Inc.
("ICN") or any Related Entity, or (iii) any Person in connection with a
"Non-Control Transaction" (as hereinafter defined);

                           (2) The consummation of:

                                    (i) a merger, consolidation or
reorganization with or into the Company or a Parent (a "Merger"), unless such
Merger is a "Non-Control Transaction." A "Non-Control Transaction" shall mean a
Merger where:

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

                                             (B) the individuals who, as of
_________, ____, are members of the Board of Directors of the Company or a
Parent, as the case may be (the "Incumbent Boards"), immediately prior to the
execution of the agreement providing for such Merger, constitute at least a
majority of the members of the board of directors of (x) the Surviving
Corporation, if there is no Controlling Corporation, or (y) if there are one or
more Controlling Corporations, the ultimate Controlling Corporation;

                                    (ii) a complete liquidation or dissolution
of the Company or a Parent; or

                                    (iii) the sale or other disposition of all
or substantially all of the assets of the Company or a Parent to any Person
(other than a transfer to a Related Entity, or in the case of the Company, to
ICN under conditions that would constitute a Non-Control Transaction, with the
disposition of assets being regarded as a Merger for this purpose, or the
distribution to the stockholders of the Company or ICN of the stock of a Related
Entity (including, without limitation, the Company) or any other assets); or

                           (3) the individuals who are members of the Incumbent
Board cease for any reason to constitute at least two-thirds (2/3) of the
members of the Board of Directors of the Company or a Parent, as the case may
be, [or, following a Merger which results in a Controlling Corporation, the
board of directors of the ultimate Controlling Corporation]; provided, however,
that if the election, or nomination for election by the Company's stockholders
in the case of a Company Merger or ICN's stockholders in the case of an ICN
Merger, of any new director was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of this Agreement, be
considered as a member of the Incumbent Board; provided

                                       7
<PAGE>   8
further, however, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as described in Rule 14a-11
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board (a
"Proxy Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest.

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

                  (d) Notice of Termination. Any purported termination by the
         Company or by the Executive shall be communicated by written Notice of
         Termination to the other. For purposes of this Agreement, a "Notice of
         Termination" shall mean a notice which indicates the specific
         termination provision in this Agreement relied upon and shall set forth
         in reasonable detail the facts and circumstances claimed to provide a
         basis for termination of the Executive's employment under the provision
         so indicated. For purposes of this Agreement, no such purported
         termination of employment shall be effective without such Notice of
         Termination.

                  (e) Termination Date, Etc. "Termination Date" shall mean in
         the case of the Executive's death, his date of death, or in all other
         cases, the date specified in the Notice of Termination subject to the
         following:

                                    (1) if the Executive's employment is
                  terminated by the Company for Cause or due to Disability, the
                  date specified in the Notice of Termination shall be at least
                  thirty (30) days from the date the Notice of Termination is
                  given to the Executive, provided that in the case of
                  Disability the Executive shall not have returned to the
                  full-time performance of his duties during such period of at
                  least thirty (30) days; and

                                    (2) if the Executive's employment is
                  terminated for Good Reason or is a Limited Period Termination,
                  the date specified in the Notice of Termination shall not be
                  more than sixty (60) days, and shall not be less than thirty
                  (30) days, from the date the Notice of Termination is given to
                  the Company.

                                       8
<PAGE>   9
         9. Compensation Upon Termination. Upon termination of the Executive's
employment during the term of this Agreement (including any extensions thereof),
the Executive shall be entitled to the following benefits:

                  (a) If the Executive's employment is terminated by the Company
         for Cause or Disability or by the Executive (other than for Good Reason
         or a Limited Period Termination), or by reason of the Executive's
         death, the Company shall pay the Executive all amounts earned or
         accrued hereunder through the Termination Date but not paid as of the
         Termination Date, including (i) Base Salary, (ii) reimbursement for any
         and all monies advanced or expenses incurred in connection with the
         Executive's employment for reasonable and necessary expenses incurred
         by the Executive on behalf of the Company for the period ending on the
         Termination Date, (iii) vacation pay, (iv) any bonuses or incentive
         compensation and (v) any previous compensation which the Executive has
         previously deferred (including any interest earned or credited thereon)
         (collectively, "Accrued Compensation"). In addition to the foregoing,
         if the Executive's employment is terminated by the Company for
         Disability or by reason of the Executive's death, the Company shall pay
         to the Executive or his beneficiaries an amount equal to the annual
         bonus or incentive award that the Executive would have been entitled to
         receive in respect of the fiscal year in which the Executive's
         Termination Date occurs had he continued in employment until the end of
         such fiscal year, calculated as if all performance targets and goals
         (if applicable) had been fully met by the Company and by the Executive,
         as applicable, for such year, multiplied by a fraction the numerator of
         which is the number of days in such fiscal year through the Termination
         Date and the denominator of which is 365 (a "Pro Rata Bonus").
         Executive's entitlement to any other compensation or benefits shall be
         determined in accordance with the Company's employee benefit plans and
         other applicable programs and practices then in effect.

                  (b) If the Executive's employment by the Company shall be
         terminated (1) by the Company other than for Cause, death or
         Disability, (2) by the Executive for Good Reason, or (3) by the
         Executive as a Limited Period Termination, then the Executive shall be
         entitled to the benefits provided below:

                           (i) the Company shall pay the Executive all Accrued
                  Compensation and a Pro Rata Bonus;

                           (ii) the Company shall pay the Executive as severance
                  pay and in lieu of any further salary for periods subsequent
                  to the Termination Date, in a single payment an amount in cash
                  equal to three (3) times the sum of (A) the Executive's Base
                  Salary at the highest rate in effect at any time within the
                  ninety (90) day period ending on the date the Notice of
                  Termination is given (or if the Executive's employment is
                  terminated after a Change in Control, the Executive's Base
                  Salary immediately prior to the Change in Control, if greater)
                  and (B) the "Bonus Amount" (as defined below). Notwithstanding
                  the foregoing, the amount to be paid

                                       9
<PAGE>   10
                  under this Subsection (ii) shall be multiplied by a fraction
                  (which in no event shall be greater than one (1)), the
                  numerator of which shall be the number of months (for this
                  purpose any partial month shall be considered as a whole
                  month) remaining until the Executive's 65th birthday and the
                  denominator of which shall be thirty-six (36). The term "Bonus
                  Amount" shall mean (x) the greatest amount of any annual cash
                  bonus or annual incentive compensation received by the
                  Executive during the three fiscal years immediately preceding
                  the Termination Date or (y) if no such bonus was received by
                  the Executive during any of such three years, then an amount
                  equal to the Executive's maximum annual bonus which could be
                  awarded for the fiscal year in which the Termination Date
                  occurs had he continued in employment until the end of such
                  fiscal year, assuming all performance targets and goals (if
                  applicable) had been fully met by the Company and by the
                  Executive, as applicable, for such year;

                           (iii) for a number of months equal to the lesser of
                  (A) thirty-six (36) or (B) the number of months remaining
                  until the Executive's 65th birthday, the Company shall at its
                  expense continue on behalf of the Executive and his dependents
                  and beneficiaries the life insurance, disability, medical,
                  dental and hospitalization benefits which were being provided
                  to the Executive at the time Notice of Termination is given
                  (or, if the Executive is terminated following a Change in
                  Control, the benefits provided to the Executive at the time of
                  the Change in Control, if greater). The benefits provided in
                  this Section 9(b)(iii) shall be no less favorable to the
                  Executive, in terms of amounts and deductibles and costs to
                  him, than the coverage provided the Executive under the plans
                  providing such benefits at the time Notice of Termination is
                  given (or, if the Executive is terminated following a Change
                  in Control, at the time of the Change in Control if more
                  favorable to the Executive). The Company's obligation
                  hereunder with respect to the foregoing benefits shall be
                  limited to the extent that the Executive obtains any such
                  benefits pursuant to a subsequent employer's benefit plans, in
                  which case the Company may reduce the coverage of any benefits
                  it is required to provide the Executive hereunder as long as
                  the aggregate coverage of the combined benefit plans is no
                  less favorable to the Executive, in terms of amounts and
                  deductibles and costs to him, than the coverage required to be
                  provided hereunder. This Subsection (iii) shall not be
                  interpreted so as to limit any benefits to which the Executive
                  or his dependents may be entitled under any of the Company's
                  employee benefit plans, programs or practices following the
                  Executive's termination of

                                       10
<PAGE>   11
                  employment, including without limitation, retiree medical and
                  life insurance benefits;

                                    (iv) the Company shall pay in a single
                  payment an amount in cash equal to the excess of (A) the
                  actuarial equivalent of the aggregate retirement benefit the
                  Executive would have been entitled to receive under the
                  Company's supplemental and excess retirement plans had (x) the
                  Executive remained employed by the Company for an additional
                  three (3) complete years of credited service (or until his
                  65th birthday, if earlier), (y) his annual compensation during
                  such period been equal to his Base Salary (at the rate used
                  for purposes of Subsection (ii)) and the Bonus Amount, and (z)
                  he been fully (100%) vested in his benefit under each such
                  retirement plan, over (B) the actuarial equivalent of the
                  aggregate retirement benefit the Executive is actually
                  entitled to receive under such retirement plans. For purposes
                  of this Subsection (iv), "actuarial equivalent" shall be
                  determined in accordance with the actuarial assumptions used
                  for the calculation of benefits under any retirement plan as
                  applied prior to the Termination Date in accordance with such
                  plan's past practices (but shall in any event take into
                  account the value of any subsidized early retirement benefit);
                  and

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

                  (c) The amounts provided for in Sections 9(a) and 9(b)(i),
         (ii) and (iv) shall be paid within five (5) days after the Executive's
         Termination Date.

                  (d) The Executive shall not be required to mitigate the amount
         of any payment provided for in this Agreement by seeking other
         employment or otherwise and no such payment shall be offset or reduced
         by the amount of any compensation or benefits provided to the Executive
         in any subsequent employment.

         10. Unauthorized Disclosure. The Executive shall not make any
Unauthorized Disclosure. For purposes of this Agreement, "Unauthorized
Disclosure" shall mean disclosure by the Executive without the consent of the
Board to any person, other than an employee of the Company or a person to whom
disclosure is reasonably necessary or appropriate in connection with the
performance by the Executive of his duties as an executive of the Company or as
may be legally required, of any confidential information obtained by the
Executive while in the employ

                                       11
<PAGE>   12
of the Company (including, but not limited to, any confidential information with
respect to any of the Company's customers or methods of distribution) the
disclosure of which he knows or has reason to believe will be materially
injurious to the Company; provided, however, that such term shall not include
the use or disclosure by the Executive, without consent, of any information
known generally to the public (other than as a result of disclosure by him in
violation of this Section 10) or any information not otherwise considered
confidential by a reasonable person engaged in the same business as that
conducted by the Company.

         11. Successors and Assigns.

                  (a) This Agreement shall be binding upon and shall inure to
         the benefit of the Company, its successors and assigns and the Company
         shall require any successor or assign to expressly assume and agree to
         perform this Agreement in the same manner and to the same extent that
         the Company would be required to perform it if no such succession or
         assignment had taken place. The term "the Company" as used herein shall
         include such successors and assigns. The term "successors and assigns"
         as used herein shall mean a corporation or other entity acquiring all
         or substantially all the assets and business of the Company (including
         this Agreement) whether by operation of law or otherwise.

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

         12. Fees and Expenses. The Company shall pay all legal fees and related
expenses (including the costs of experts, evidence and counsel) incurred by the
Executive as they become due as a result of (i) the Executive's termination of
employment (including all such fees and expenses, if any, incurred in contesting
or disputing any such termination of employment), (ii) the Executive's hearing
before the Board as contemplated in Section 8(a)(2) of this Agreement, or (iii)
the Executive's seeking to obtain or enforce any right or benefit provided by
this Agreement or by any other plan or arrangement maintained by the Company
under which the Executive is or may be entitled to receive benefits.

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

         14. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or

                                       12
<PAGE>   13
program provided by the Company or any of its subsidiaries and for which the
Executive may qualify, nor shall anything herein limit or reduce such rights as
the executive may have under any other agreements with the Company or any of its
subsidiaries. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company or any of
its subsidiaries shall be payable in accordance with such plan or program,
except as explicitly modified by this Agreement.

         15. Settlement of Claims. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Executive or others.

         16. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreement or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement.

         17. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of California without
giving effect to the conflict of law principles thereof.

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

         19. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.

                                       13
<PAGE>   14
                  IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer and the Executive has executed this
Agreement as of the day and year first above written.

                                     Ribapharm Inc.

ATTEST:                              By:
                                        ---------------------------------
                                        Title:

---------------------------
Secretary

                                     The Executive

                                     By:
                                        ---------------------------------
                                            Johnson Yiu-Nam Lau

                                       14

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