Document:

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                                                                   Exhibit 10.31

                            COLONY RIH HOLDINGS, INC.
                        2001 OMNIBUS STOCK INCENTIVE PLAN

                      ALAN J. RIVIN STOCK OPTION AGREEMENT

                  THIS STOCK OPTION AGREEMENT (this "Agreement"), dated as of
the first day of October, 2001 (the "Effective Date"), by and between COLONY RIH
HOLDINGS, INC., a Delaware corporation (the "Company"), and ALAN J. RIVIN (the
"Optionee") in his capacity as the Senior Vice President - Hotel Operations of
the Resorts International Hotel, Inc., a New Jersey corporation and a Subsidiary
of the Company ("Resorts").

                  Pursuant to the Colony RIH Holdings, Inc. 2001 Omnibus Stock
Incentive Plan (the "Plan"), the Board of Directors of the Company (the
"Board"), as the Administrator of the Plan, has determined that the Optionee is
to be granted an option (the "Option") to purchase shares of the Company's Class
A Common Stock, par value $.01 per share (the "Class A Common Stock"), and
shares of the Company's Class B Common Stock, par value $.01 per share (the
"Class B Common Stock" and, together with the Class A Common Stock, the "Common
Stock"), each on the terms and conditions set forth herein, and hereby grants
such Option. Such grants shall be deemed to satisfy in full the obligations
under Paragraph 4(b) of that certain Employment Agreement between the Optionee
and Resorts, as hereinafter amended (the "Employment Agreement"). Such grants
shall also be conditioned on the Optionee agreeing to be bound by the
Stockholders Agreement (as defined below) with respect to the Common Stock, and
shall evidence such agreement by executing a joinder agreement substantially in
the form of Exhibit A attached hereto.

         All capitalized terms not defined herein shall have their respective
meanings set forth in the Plan.

         1. Terms of Option Grant. (a) The Option entitles the Optionee to
purchase 77 shares of the Company's Class A Common Stock at a price equal to
$0.0475 per share (the "Class A Option Exercise Price"), which the parties
acknowledge is not less than the fair market value of one share of the Class A
Common Stock as of the Effective Date. The Option also entitles the Optionee to
purchase 1,556 shares of the Company's Class B Common Stock at a price equal to
$100.00 per share (the "Class B Option Exercise Price" and, collectively with
the Class A Option Exercise Price, the "Option Exercise Price"), which the
parties acknowledge is not less than the fair market value of one share of the
Class B Common Stock as of the Effective Date. The shares of Class A Common
Stock and Class B Common Stock subject to the Option are referred to herein as
the "Option Shares." It is intended that the Option shall not constitute an
"incentive stock option" within the meaning of Section 422 of the Code.

         (b) The term of the Option (the "Option Term") shall commence on the
Effective Date (the "Date of Grant") and, unless the Option is previously
terminated pursuant to this Agreement, shall terminate upon the expiration of
ten (10) years from the Date of Grant.

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Upon expiration of the Option Term, all rights of the Optionee hereunder shall
terminate.

         (c) Except as otherwise provided in Section 5 hereof, the Option shall
vest and become exercisable if the conditions set forth below are satisfied as
of the end of the applicable vesting period:

                  (i) For the Company's fiscal year ended December 31, 2001, 20%
         of the Option Shares shall vest and become exercisable provided the
         Company achieves the applicable operating performance targets as
         established by the Board for such fiscal year.

                  (ii) For the Company's fiscal year ended December 31, 2002,
         20% of the Option Shares shall vest and become exercisable provided the
         Company achieves the applicable operating performance targets as
         established by the Board for such fiscal year.

                  (iii) For the Company's fiscal year ended December 31, 2003,
         20% of the Option Shares shall vest and become exercisable provided the
         Company achieves the applicable operating performance targets as
         established by the Board for such fiscal year.

                  (iv) For the Company's fiscal year ended December 31, 2004,
         20% of the Option Shares shall vest and become exercisable provided the
         Company achieves the applicable operating performance targets as
         established by the Board for such fiscal year.

                  (v) For the Company's fiscal year ended December 31, 2005, 20%
         of the Option Shares shall vest and become exercisable provided the
         Company achieves the applicable operating performance targets as
         established by the Board for such fiscal year.

                  (vi) Notwithstanding the foregoing clauses (i) through (v) of
         this Section 1(c), in the event that the Company fails to meet the
         applicable performance target described above for any fiscal year (a
         "Shortfall Year"), but it achieves more than 100% of the applicable
         performance target for the fiscal year immediately following the
         Shortfall Year and the excess is at least the amount of the shortfall
         in the Shortfall Year (that is, the difference between the Shortfall
         Year's performance target and the performance actually generated by the
         Company in such Shortfall Year), then the Option Shares that would have
         vested in the Shortfall Year if the performance target had been
         satisfied shall vest retroactively as if the performance target in the
         Shortfall Year had been satisfied. Until such time as the Option Shares
         described herein are retroactively vested, they shall be considered as
         forfeited for all purposes of the Plan and this Agreement.

         (d) Except as otherwise provided herein, the right of the Optionee to
purchase Option Shares with respect to which the Option has become exercisable
may be exercised in whole or in part at any time or from time to time prior to
expiration of the Option Term, provided, that any exercise of the Option shall
be deemed to relate in tandem to both the Class A Common Stock and the Class B
Common Stock subject to the Option, such that the ratio of (i) the number of
shares of Class A Common Stock issuable upon such exercise to (ii) the total
number of shares of Class A Common Stock outstanding on the date hereof shall be
the same as the ratio of (iii) the number of shares of Class B Common Stock
issuable upon such exercise to (iv) the total number of shares of Class B Common
Stock outstanding on the date hereof.

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         (e) The Option may be exercised by means of written notice of exercise
to the Company specifying the number of Option Shares to be purchased,
accompanied by payment in full of the aggregate Option Exercise Price and any
applicable withholding amounts (i) in cash or by check, (ii) at any time
following the closing of the Company's Initial Public Offering (as defined in
Section 2 below) by means of a broker cashless exercise procedure, on terms
reasonably acceptable to the Company, providing proceeds sufficient to pay the
exercise price and any applicable withholding amounts or (iii) by any other
means of exercise authorized from time to time in the Plan and/or by the Board.

         2. Certain Definitions. For purposes of this Agreement:

         (a) "Initial Public Offering" shall mean the closing of a public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), covering shares of the Company's
Common Stock, which shares are approved for listing or quotation on the New York
Stock Exchange, American Stock Exchange or Nasdaq National Market.

         (b) "Change in Control" shall mean the occurrence of one or more of the
following events:

                  (i) the sale, lease, transfer, conveyance or other
         disposition, in one or a series of related transactions, of all or
         substantially all of the assets of the Company and its Subsidiaries,
         taken as a whole;

                  (ii) the adoption by the Company's stockholders of a plan of
         liquidation or dissolution of the Company;

                  (iii) prior to the time the Company or any Parent Corporation
         completes an Initial Public Offering, the Company becomes aware (by way
         of a report or any other filing pursuant to Section 13(d) of the
         Exchange Act, proxy vote, written notice or otherwise) of the
         acquisition by any "Person" or related group (within the meaning of
         Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any
         successor provision to either of the foregoing, including any "group"
         acting for the purpose of acquiring, holding or disposing of securities
         within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other
         than a group consisting of the Principals and their Related Parties, in
         a single transaction or in a related series of transactions, by way of
         merger, consolidation or other business combination or purchase of
         direct or indirect beneficial ownership (within the meaning of Rule
         13d-3 under the Exchange Act, or any successor provision) of 50% or
         more of the total voting power entitled to vote in the election of the
         Board or such other Person surviving the transaction;

                  (iv) subsequent to the time the Company or any Parent
         Corporation completes an Initial Public Offering, the Principals and
         their Related Parties shall directly or indirectly beneficially own
         shares of capital stock representing less than 25% of the total voting
         power entitled to vote in the election of the Board and either (A) any
         other Person directly or indirectly beneficially owns shares of capital
         stock representing voting power in excess of the voting power
         represented by shares of capital stock owned by the

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         Principals and their Related Parties or (B) individuals who were the
         voting members of the Board at the beginning of any two-year period
         commencing subsequent to the Initial Public Offering (together with any
         new voting directors whose election or appointment by the Board or
         whose nomination for election by the shareholders of the Company was
         approved by a vote of a majority of the directors then still in office
         who were either directors at the beginning of such period or whose
         election or nomination for election was previously so approved) cease
         for any reason to constitute a majority of the Board then in office.

         (c) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

         (d) "Principals" shall mean Colony Investors IV, L.P., Colony RIH
Voteco, LLC and any of their respective affiliates and any of the Company's
officers and directors.

         (e) "Related Party," with respect to any Principal, shall mean (A) any
controlling stockholder, 80% (or more) owned Subsidiary, or spouse or immediate
family member (in the case of an individual) of such Principal or (B) any trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 80% or more controlling
interest of which consist of such Principal and/or such other Persons referred
to in the immediately preceding clause (A).

         (f) "Stockholders Agreement" shall mean that certain Stockholders
Agreement, dated as of April 25, 2001, among the Company, Colony RIH Voteco,
LLC, a Delaware limited liability company, Colony Investors IV, L.P., a Delaware
limited partnership, and certain additional security holders of the Company.

         3. Adjustments. In the event of any merger, reorganization,
consolidation, recapitalization, a sale of substantially all of the assets of
the Company or other change in corporate structure by reason of any stock
dividend, stock split, reverse stock split or other change affecting the Common
Stock (including any change in circumstances which results in or would result in
any substantial dilution or enlargement of the rights granted to, or available
for, Participants in the Plan), an equitable substitution or proportionate
adjustment shall be made in the kind, number and option price of shares of
Common Stock subject to the Option, in each case as may be determined by the
Administrator, in good faith. Such other substitutions or adjustments shall be
made as may be determined by the Administrator, in its sole discretion. Anything
herein to the contrary notwithstanding, in connection with any event described
in this paragraph, the Administrator may provide, in its good faith discretion,
for the cancellation of any outstanding awards without the consent of
Participants and payment of an equitable amount in cash or securities therefor.

         4. Nontransferability of Option and Option Shares; Option Shares
Subject to Stockholders Agreement. (a) The Option and this Agreement shall not
be transferable and, during the lifetime of the Optionee, the Option may be
exercised only by the Optionee; provided, however, that the Optionee shall be
permitted to transfer the Option and this Agreement to a trust controlled by the
Optionee during the Optionee's lifetime for estate planning purposes. Without

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limiting the generality of the foregoing, except as otherwise provided herein,
the Option may not be assigned, transferred, pledged or hypothecated in any way,
shall not be assignable by operation of law, and shall not be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of the Option contrary to the
provisions hereof, and the levy of any execution, attachment or similar process
upon the Option shall be null and void and without effect.

         (b) Notwithstanding any provision herein to the contrary, the Optionee
and, upon exercise of the Option, the Option Shares, shall at all times and in
all respects be subject to the Stockholders Agreement, the provisions of which
shall be deemed to be incorporated into this Agreement.

         5. Forfeiture and Vesting Acceleration of Options. (a) If the
Optionee's services with Resorts are terminated by Resorts without Cause (as
defined in the Employment Agreement), the Option shall immediately vest and
become exercisable as to that number of Option Shares that would have vested
pursuant to Section 1(c) had the Optionee's services continued without
interruption under the Employment Agreement until December 31 following such
termination date notwithstanding any performance targets established with
respect to the Option Shares. Anything herein to the contrary notwithstanding,
the termination of the Optionee's services without Cause shall not result in the
vesting of any Option Shares that were forfeited at any time prior to such
termination date by reason of the Company's failing to satisfy any performance
targets relating to such Option Shares. Following the Optionee's termination
date, the unexercised portion of the Option, to the extent vested, shall remain
exercisable for ninety (90) days after the Optionee's termination date, at which
time all Option Shares, to the extent not exercised prior to the end of such
period, shall lapse and be canceled.

         (b) If the Optionee's services with Resorts shall terminate by reason
of his death or disability, the Option shall immediately vest and become
exercisable as to that number of Option Shares that would have vested pursuant
to Section 1(c) had the Optionee's services continued without interruption under
the Employment Agreement until December 31 following the Optionee's death or the
forty-fifth (45th) day after receipt of notice of termination for disability, as
applicable, notwithstanding any performance targets established with respect to
the Option Shares. Anything herein to the contrary notwithstanding, the
termination of the Optionee's services due to death or disability shall not
result in the vesting of any Option Shares that were forfeited at any time prior
to such termination by reason of the Company's failing to satisfy any
performance targets relating to such Option Shares. Following the Optionee's
termination date, the unexercised portion of the Option, to the extent vested,
shall remain exercisable for ninety (90) days after the Optionee's death or the
forty-fifth (45th) day after receipt of notice of termination for disability, as
applicable, at which time all Option Shares, to the extent not exercised prior
to the end of such period, shall lapse and be canceled.

         (c) If the Optionee's services with Resorts are terminated by the
Optionee, the unexercised portion of the Option, to the extent vested, shall
remain exercisable for ninety (90) days after such termination, at which time
all Option Shares, to the extent not exercised prior to the end of such period,
shall lapse and be canceled.

         (d) If the Optionee's services with Resorts are terminated by Resorts

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for Cause (as defined in the Employment Agreement), the unexercised portion of
the Option, whether exercisable or not, shall lapse and be immediately canceled
as of the date of such termination.

         (e) Upon the occurrence of a Change in Control (as defined in Section
2) at any time prior to the termination of the Optionee's services with Resorts,
for any or no reason, the Option shall immediately vest and become exercisable
as to 100% of the Option Shares (notwithstanding any performance targets
established with respect to such Option Shares) and all provisions of this
Agreement relating to the forfeiture of the Option in the event of the
Optionee's termination of service with Resorts shall expire. Anything herein to
the contrary notwithstanding, the occurrence of a Change in Control shall not
result in the vesting of any Option Shares that were forfeited at any time prior
to such Change in Control by reason of the Company's failing to satisfy any
performance targets relating to such Option Shares.

         6. Call Rights. In the event of (i) the termination of the Optionee's
employment with Resorts at any time, under any circumstances and for any or no
reason, (ii) a Change in Control or (iii) any transfer of any Option Shares by
the Optionee under any circumstances (other than to a trust controlled by the
Optionee for estate planning purposes, the trustee of which agrees in writing to
be subject in all events and for all purposes to the Company's Call as set forth
herein), including pursuant to any arrangement, proceeding, decree, judgment,
order or application of law relating to the division of property for domestic
relations purposes (each a "Call Event"), for a period commencing on the date of
such event and expiring upon the Company's Initial Public Offering (the "Call
Exercise Period"), the Company shall have the right to purchase from the
Optionee, in accordance with the terms hereof and of Section 2.4(e) of the
Stockholders Agreement (the "Call") (y) any or all of such portion of the Option
as shall relate to vested and exercisable Option Shares as of the date written
notice is given (the "Call Exercise Date"), and/or (z) any or all Option Shares
owned by the Optionee as of the end of business on the Call Exercise Date.

         (a) The following terms and conditions shall apply to the exercise of
the Call:

                  (i) If exercising its rights under (y) above, the Company
         shall pay the Optionee an amount in cash equal to the product of (A)
         the excess, if any, of the Fair Market Value (as defined, for purposes
         of this Section 6, in the Stockholders Agreement with respect to
         Employee Stockholders other than the Qualified Stockholders) of a share
         of Class A Common Stock or Class B Common Stock, as applicable, as of
         the first applicable Call Event (the "Call Price") over the Class A
         Option Exercise Price or Class B Option Exercise Price, as applicable,
         and (B) the number of shares of Class A Common Stock or Class B Common
         Stock, as applicable, that the portion of the Option being purchased by
         the Company pursuant to the Call would otherwise entitle the Optionee
         to purchase.

                  (ii) If exercising its rights under (z) above, the Company
         shall pay the Optionee an amount equal to the product of (A) the Call
         Price and (B) the number of Option Shares being purchased pursuant
         thereto.

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         (b) The Company may elect to exercise the Call, at its discretion, at
any time prior to the end of the Call Exercise Period in accordance with the
procedures set forth in Section 2.4 of the Stockholders Agreement with respect
to "Offered Securities;" provided, however, that if the Company does not
exercise the Call within fifteen (15) days after the occurrence of the first
Call Event, the Call Price for the Option Shares being repurchased, as
determined above, shall be increased by 10% interest (6% interest if the Call
Event occurs in connection with the Optionee's termination of employment by the
Company for Cause (as defined in the Employment Agreement) or the Optionee's
resignation from employment with the Company), compounded annually on the basis
of the actual number of days elapsed over a year of 365 days, from the date of
such Call Event until the date of the Company's payment.

         (c) Notwithstanding any other provision hereof, the Company may assign,
without the consent of the Optionee, its rights under this Section 6.

         (d) Unless the Company shall have given prior notice of its intent to
exercise the Call, the Call shall terminate upon the closing of the Company's
Initial Public Offering.

         7. Investment Representation. The Optionee hereby represents and
warrants to the Company that the Optionee, by reason of the Optionee's business
or financial experience (or the business or financial experience of the
Optionee's professional advisors who are unaffiliated with and who are not
compensated by the Company or any affiliate or selling agent of the Company,
directly or indirectly), has the capacity to protect the Optionee's own
interests in connection with the transactions contemplated under this Agreement.

         8. Notices. All notices and other communications under this Agreement
shall be in writing and shall be given by first class mail, certified or
registered with return receipt requested, or by a nationally recognized
overnight delivery service to the respective parties named below:

         If to Company:       Colony RIH Holdings, Inc.
                              660 Madison Avenue
                              New York, New York
                              Attention:  President
                              Facsimile:  212-593-5433

         With a copy to:      Colony Capital, LLC
                              1999 Avenue of the Stars, Suite 1200
                              Los Angeles, California 90067
                              Attention:  Jonathan Grunzweig
                              Facsimile:  310-843-3663

         If to the Optionee:  Alan J. Rivin
                              207 Alexander Drive
                              Linwood, New Jersey 08221

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Either party hereto may change such party's address for notices by notice duly
given pursuant hereto.

         9. Securities Laws Requirements. The Option shall not be exercisable to
any extent, and the Company shall not be obligated to transfer any Option Shares
to the Optionee upon exercise of the Option, if such exercise, in the opinion of
counsel for the Company, would violate the Securities Act (or any other federal
or state statutes having similar requirements as may be in effect at that time).
Further, the Company may require as a condition of transfer of any Option Shares
pursuant to any exercise of the Option that the Optionee furnish a written
representation that he is purchasing or acquiring the Option Shares for
investment and not with a view to resale or distribution to the public. The
Optionee hereby represents and warrants that he understands that the Option
Shares are "restricted securities," as defined in Rule 144 under the Securities
Act, and that any resale of the Option Shares must be in compliance with the
registration requirements of the Securities Act or an exemption therefrom. Each
certificate representing Option Shares shall bear the legend set forth below:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED,
         SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE DISPOSED OF (A "TRANSFER")
         EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF THAT CERTAIN STOCK OPTION
         AGREEMENT, DATED AS OF OCTOBER 1, 2001, BETWEEN COLONY RIH HOLDINGS,
         INC., A DELAWARE CORPORATION (THE "COMPANY"), AND ONE OF ITS EXECUTIVES
         AND THAT CERTAIN STOCKHOLDERS AGREEMENT, DATED AS OF APRIL 25, 2001, BY
         AND AMONG THE COMPANY AND CERTAIN OF ITS STOCKHOLDERS. ANY TRANSFEREE
         OF THESE SECURITIES SHALL TAKE SUBJECT TO THE TERMS OF SUCH AGREEMENTS,
         COPIES OF WHICH ARE ON FILE WITH THE COMPANY.

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE SECURITIES
         LAWS, AND NO TRANSFER OF THESE SECURITIES MAY BE MADE EXCEPT (A)
         PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR (B)
         PURSUANT TO AN EXEMPTION THEREFROM WITH RESPECT TO WHICH THE COMPANY
         MAY, UPON REQUEST, REQUIRE A SATISFACTORY OPINION OF COUNSEL FOR THE
         HOLDER THAT SUCH TRANSFER IS EXEMPT FROM THE REQUIREMENTS OF THE ACT.

Further, if the Company determines that the listing or qualification of the
Option Shares under any securities or other applicable law is necessary in order
to avoid a violation of any securities laws, the Option shall not be
exercisable, in whole or in part, unless and until such listing or
qualification, or a consent or approval with respect thereto, shall have been
effected or obtained free of any conditions not acceptable to the Company,
provided, that the Company shall pursue such listing or qualification diligently
and in good faith.

         10. No Obligation to Register Shares. Except as provided in the
Stockholders Agreement, the Company shall be under no obligation to register the
Option Shares.

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         11. Protections Against Violations of Agreement. No purported sale,
assignment, mortgage, hypothecation, transfer, pledge, encumbrance, gift,
transfer in trust (voting or other) or other disposition of, or creation of a
security interest in or lien on, any of the Option Shares by any holder thereof
in violation of the provisions of this Agreement, the Stockholders Agreement,
the Employment Agreement or the Certificate of Incorporation or the Bylaws of
the Company, will be valid, and the Company will not transfer any of said Option
Shares on its books nor will any of the Option Shares be entitled to vote, nor
will any dividends be paid thereon, unless and until there has been full
compliance with such provisions to the satisfaction of the Company. The
foregoing restrictions are in addition to and not in lieu of any other remedies,
legal or equitable, available to enforce such provisions.

         12. Withholding Requirements. The Optionee shall, no later than the
date as of which the value of any award hereunder becomes includable in his
gross income (after taking into account the provisions of Section 3 hereof), pay
to the Company, or make arrangements satisfactory to the Company regarding
payment of, any federal, state, or local taxes or other amounts of any kind
required by law to be withheld with respect thereto. The obligations of the
Company hereunder shall be conditional on the making of such payments or
arrangements, and the Company shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
Optionee.

         13. Failure to Enforce Not a Waiver. The failure to enforce at any time
any provision of this Agreement shall in no way be construed to be a waiver of
such provision or of any other provision hereof.

         14. Governing Law. This Agreement shall be governed by and construed
according to the laws of the State of New York without regard to its principles
of conflict of laws.

         15. Incorporation of Plan. The Plan is hereby incorporated by reference
and made a part hereof, and the Option award and this Agreement shall be subject
to all terms and conditions of the Plan; provided, however, that in the event of
a conflict between the terms of this Agreement and the Plan, the terms of this
Agreement shall govern.

         16. Amendments. This Agreement may be amended or modified at any time
only by an instrument in writing signed by each of the parties hereto.

         17. Rights as a Stockholder. Neither the Optionee nor any of the
Optionee's successors in interest shall have any rights as a stockholder of the
Company with respect to any shares of Common Stock subject to the Option until
the date of issuance of a stock certificate for such shares of Common Stock.

         18. Agreement Not a Contract of Service. Neither the Plan, the granting
of the Option, this Agreement nor any other action taken pursuant to the Plan
shall constitute or be evidence of any agreement or understanding, express or
implied, that the Optionee has a right to continue in the service of the Company
or any Subsidiary or affiliate of the Company for any period of time or at any
specific rate of compensation.

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         19. Authority of the Administrator. The Administrator shall have full
authority to interpret and construe the terms of the Plan and this Agreement,
and shall do so in good faith.

         20. Dispute Resolution. Any dispute arising under this Agreement shall
be resolved in accordance with the arbitration provisions of the Stockholders
Agreement as in effect as of the date hereof, or as the same may be amended from
time to time, and such arbitration provisions shall be deemed to be incorporated
herein by this reference.

         21. Market Stand-Off. In connection with any underwritten public
offering by the Company of its equity securities pursuant to an effective
registration statement filed under the Securities Act for such period as the
Company or its underwriters may request (such period not to exceed 180 days
following the date of the applicable offering), the Optionee shall not, directly
or indirectly, sell, make any short sale of, loan, hypothecate, pledge, offer,
grant or sell any option or other contract for the purchase of, purchase any
option or other contract for the sale of, or otherwise dispose of or transfer,
or agree to engage in any of the foregoing transactions with respect to, any
Option Shares acquired under this Agreement without the prior written consent of
the Company or its underwriters, provided, that the Optionee shall not be
required to be subject to "lock-up" restrictions that are more restrictive than
such restrictions to which any other Employee Stockholder (as defined in the
Stockholders Agreement) is subject, or that would prevent the Optionee from
effectuating a sale pursuant to Section 2.5 of the Stockholders Agreement.

         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.

                                    COLONY RIH HOLDINGS, INC.

                                    By:  /s/ Nicholas L. Ribis
                                         ---------------------------------
                                         Name:  Nicholas L. Ribis
                                         Title:

                                    The undersigned hereby accepts
                                    and agrees to all the terms and
                                    provisions of the foregoing
                                    Agreement and to all the terms
                                    and provisions of the Plan, the
                                    Employment Agreement and the
                                    Stockholders Agreement herein
                                    incorporated by reference.

                                    /s/ Alan J. Rivin
                                    --------------------------------------
                                    Alan J. Rivin

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                                                                    EXHIBIT A

                         STOCKHOLDERS AGREEMENT JOINDER

                  As of the date set forth below, the undersigned, ___________,
is being issued options to acquire ________ shares of Class A Common Stock, at a
price equal to $0.0475 per share, and ________ shares of Class B Common Stock,
at a price equal to $100.00 per share (the "Shares"), of Colony RIH Holdings,
Inc. (the "Company"). By execution of this Stockholders Agreement Joinder, the
undersigned shall be deemed to be a party to that certain Stockholders
Agreement, dated as of April 25, 2001, by and between the Company and the
Stockholders identified therein (the "Stockholders Agreement"). Pursuant to
Section 4.8 (but subject to Sections 2.2 and 2.3) of the Stockholders Agreement,
the undersigned shall have all rights, and shall observe all the obligations,
applicable to a "Stockholder" as set forth in the Stockholders Agreement. In
order to give effect to this transaction, please add the undersigned to the list
of "Stockholders" as set forth in Schedule A to the Stockholders Agreement.

Signature:
           ------------------------------
Address:

Date:<PAGE>

                                   EXHIBIT 4.1

 .........................
FINAL VERSION
 .........................

                                AXCAN PHARMA INC.

                                STOCK OPTION PLAN

                                       AND

                                 OFFERING NOTICE

                  AS AMENDED AND RESTATED ON DECEMBER 19, 2000

1.       PURPOSE OF THE PLAN

1.1 The purpose of this stock option plan (the "Plan") is to provide directors,
senior executives and full-time employees of Axcan Pharma Inc. ("Axcan") and its
subsidiaries (Axcan and its subsidiaries, present and future, being hereinafter
referred to collectively as the "Corporations") with a proprietary interest
through the granting of options to purchase shares of Axcan, subject to certain
conditions as hereinafter set forth, for the following purposes:

1.1.1       to increase the interest in the Corporations' welfare of those
            directors, senior executives and employees who share primary
            responsibility for the management, growth and protection of the
            business of the Corporations;

1.1.2       to furnish an incentive to such directors, senior executives and
            employees to continue their services for the Corporations; and

1.1.3       to provide a means through which each of the Corporations may
            attract able persons to enter its employment.

1.2         For the purposes of the Plan,

1.2.1       a "Subsidiary of Axcan" shall be any corporation (other than Axcan)
            in an unbroken chain of corporations beginning with Axcan if, at the
            time of the granting of the option hereunder, each of the
            corporations other than the last corporation in the unbroken chain
            owns shares to which are attached more than fifty percent (50%) of
            the aggregate voting rights attached to all classes of shares in one
            of the other corporations in such chain;

1.2.2       the term "Outside Director" means a director of any of the
            Corporation who is not an employee of any of the Corporation and a
            director who has ceased to be an employee of any of the Corporation
            as at and from the date of such termination; and

1.2.3       the term "Other Plans" means any stock option, stock option plan,
            stock purchase plan or any other compensation or incentive mechanism
            involving the issuance or potential issuance of shares to one or
<PAGE>

            more directors, senior executives or full-time employees, including
            a share purchase from treasury which is financially assisted by any
            of the Corporation by way of a loan, guaranty or otherwise and
            including without limitation Axcan's Share Purchase Plan adopted on
            December 15, 1995 and Axcan's Stock Participation Plan adopted on
            December 15, 1995.

2.       ADMINISTRATION OF THE PLAN

2.1 The Plan shall be administered by the Board of Directors of Axcan (the
"Board"). The Board may delegate the general administration of the Plan to any
committee of the Board, in which case, unless the context otherwise requires,
all references herein to the Board shall be deemed to be references to such
committee.

2.2 The Board may, from time to time, as it may deem expedient, adopt, amend and
rescind rules and regulations for carrying out the provisions and purposes of
the Plan. The interpretation, construction and application of the Plan and any
provisions thereof made by the Board, shall be final and binding on all holders
of options granted under the Plan and all persons eligible under the provisions
of the Plan to participate therein. No member of the Board shall be liable for
any action taken or for any determination made in good faith in the
administration, interpretation, construction or application of the Plan.

3.       GRANTING OF OPTIONS

3.1 The Board may, from time to time, designate directors, senior executives and
full-time employees of the Corporations to whom options to purchase common
shares in the share capital of Axcan (the "Common Shares") may be granted and
the number of Common Shares to be optioned to each, provided that:

3.1.1       the total number of Common Shares to be optioned to any one
            individual under the Plan, when combined with the number of Common
            Shares issued or issuable to such individual under any of the Other
            Plans, shall not exceed five percent (5%) of the total issued and
            outstanding Common Shares as of the date of grant of the option;

3.1.2       the total number of Common Shares to be optioned under the Plan
            shall not exceed the number provided in subsection 4.1 hereof;

3.1.3       the total number of Common Shares reserved for issuance to Insiders
            (as defined in the Securities Act (Quebec)) and their Associates (as
            defined in the Securities Act (Quebec)) under the Plan or any of the
            Other Plans shall not exceed ten percent (10%) of the Common Shares
            outstanding on the date of reservation of such Common Shares;

3.1.4       the total number of Common Shares issued to all Insiders and their
            Associates under the Plan or Other Plans within a one-year period,
            shall not exceed ten percent (10%) of the Common Shares outstanding
            on the date of issuance of such Common Shares; and

3.1.5       the total number of Common Shares issued to any one Insider and his
            Associates under the Plan or Other Plans within a one-year period
            shall not exceed five percent (5%) of the Common Shares outstanding
            on the date of issuance of such Common Shares.

For the purposes of paragraphs 3.1.3, 3.1.4 and 3.1.5: (i) an entitlement
granted prior to the optionee becoming an Insider or Associate of an Insider

                                       2
<PAGE>

shall be excluded in determining the number of shares issuable to Insiders and
their Associates and (ii) no person shall be considered an Insider solely by
virtue of being a director or senior executive of a Subsidiary of Axcan.

3.2 Options may only be granted by Axcan pursuant to decisions of the Board. No
option shall be granted to any person who is not a director, senior executive or
full-time employee of any of the Corporation. For United States federal income
tax purposes, options granted pursuant to the Plan may be either Incentive Stock
Options ("Incentive Stock Options") meeting the requirements of Section 422 of
the United States Internal Revenue Code of 1986, as amended (the "U.S. Tax
Code"), or non-statutory options which are not intended to meet the requirements
of U.S. Tax Code Section 422.

3.3 The granting of options hereunder and the obligation of Axcan to deliver its
Common Shares pursuant hereto shall be subject to Axcan obtaining the approval
of any competent authority which may be required in connection with the granting
of options hereunder or the authorization, issuance or sale of the optioned
shares, and, if required, Axcan having effectively listed the optioned shares on
any stock exchange on which Common Shares may then be listed. Axcan shall use
its best efforts to obtain all approvals necessary to give effect to this Plan.

4.       SHARES SUBJECT TO THE PLAN

4.1 The maximum number of Common Shares which may be optioned under the Plan,
subject to the provisions of Section 8 hereof, shall be 2,590,000 Common Shares.

4.2 The Common Shares in respect of which options are not exercised before their
expiry shall be available for subsequent options to be granted pursuant to the
provisions hereof.

5.       OPTION PRICE

5.1 The option price per share for Common Shares which are the subject of any
option shall be fixed by the Board when such option is granted. Except as set
forth in Section 11, the option price for said shares shall be the reported
closing price for Common Shares on any stock exchange on which Common Shares may
then be listed on the last trading day before the day on which the option is
granted, provided that:

5.1.1       if no sale is reported on any such stock exchange on that day, the
            reported closing price shall be deemed to be the mean of the highest
            bid and asked quotations, if any, for such shares on any stock
            exchange selected by the Board on which the Common Shares are listed
            on that date;

5.1.2       if the Common Shares are listed on more than one stock exchange and
            the closing price for such last trading day is not the same on all
            such exchanges, the option price shall be the reported closing price
            on the exchange having recorded the highest volume of Common Shares
            traded for such day; and

5.1.3       prices and quotations expressed in Canadian or U.S. currency shall
            be converted in the other currency based on the exchange rate
            prevailing for the relevant trading day as published in the Wall
            Street Journal (or failing its publication, in any national
            financial newspaper published in Canada or the United States as may
            be selected by the Board).

                                       3
<PAGE>

6.       CONDITIONS GOVERNING OPTIONS

6.1 Options shall be evidenced by a stock option agreement or other written
instrument in such form not inconsistent with the Plan as the Board may from
time to time determine, provided that the substance of the following be included
or referenced therein:

6.1.1       Employment - The granting of an option to a director, senior
            executive or full-time employee shall not impose upon any of the
            Corporation any obligation to retain the optionee in its employ or
            to preserve the office of the optionee.

6.1.2       Option Term - The period during which an option is exercisable shall
            not, subject to the provisions of the Plan, exceed ten (10) years
            from the date the option is granted.

6.1.3       Exercise of Options - Prior to its expiration or earlier termination
            in accordance with the Plan, each option shall be exercisable as to
            the whole or any portion thereof at the time or times stipulated.
            The Board may, at the time of granting a particular option, impose
            such conditions as it shall determine in its sole discretion
            regarding the time or times at which the option may be exercised in
            whole or in part.

6.1.4       Non-assignability of Options - Each option granted hereunder is
            personal to the optionee and shall not be assignable or transferable
            by the optionee, whether voluntarily or by operation of law, except
            by will or by the laws of succession of the domicile of the deceased
            optionee. No option granted hereunder shall be pledged,
            hypothecated, charged, transferred, assigned or otherwise encumbered
            or disposed of on pain of nullity, and, subject to the foregoing
            exception in the case of death, each option granted hereunder may be
            exercised only by the optionee.

6.1.5    Effect of Termination of Office or Employment or of Death

            6.1.5.1       Upon an optionee's full-time employment with the
                          Corporations being terminated for cause or upon an
                          optionee ceasing to be a director or senior executive
                          of any of the Corporation by reason of his being
                          removed or becoming disqualified from being a director
                          or senior executive by law, any option or the
                          unexercised portion thereof granted to him shall
                          terminate forthwith.

            6.1.5.2       Upon an optionee's full-time employment with the
                          Corporations being terminated (except in the case of
                          transfer from one corporation to another corporation
                          contemplated herein) otherwise than by reason of death
                          or termination for cause, or upon an optionee ceasing
                          to be a director (other than an Outside Director) or
                          senior executive of any of the Corporation other than
                          by reason of death, removal or disqualification by
                          law, any option or unexercised portion thereof granted
                          to such optionee may be exercised by him only for that
                          number of Common Shares which he was entitled to
                          acquire under the option pursuant to paragraph 6.1.3
                          hereinabove at the time of such termination or
                          cessation. Such option shall only be exercisable
                          within ninety (90) days after such termination or
                          cessation or prior to the expiration of the term of
                          the option, whichever occurs earlier. Any option or
                          unexercised portion thereof granted to an optionee who
                          is an Outside Director, and who ceases to hold his
                          office for reason other than death, removal or
                          disqualification by law, may be exercised within the
                          time period and in accordance with the other terms and
                          conditions provided for any such option.

                                       4
<PAGE>

            6.1.5.3       If an optionee dies while employed by any of the
                          Corporation or while serving as a director or senior
                          executive of any of the Corporation, any option or
                          unexercised portion thereof granted to such optionee
                          may be exercised by a legatee or legatees of such
                          optionee under the optionee's last will or by his
                          personal representatives for that number of Common
                          Shares which he was entitled to acquire under the
                          option pursuant to paragraph 6.1.3 hereinabove at the
                          time of his demise. Such option shall only be
                          exercisable within twelve (12) months after the
                          optionee's death or prior to the expiration of the
                          term of the option, whichever occurs earlier.

            6.1.5.4       The Board may, subject to the prior approval of The
                          Toronto Stock Exchange, or other relevant regulatory
                          authorities, at any time and at its discretion, waive
                          any of the termination provisions contained in
                          subparagraphs 6.1.5.1, 6.1.5.2 and 6.1.5.3 hereof in
                          respect of any particular optionee.

6.1.6       Rights as a Stockholder - The optionee (or his personal
            representatives or legatees) shall have no rights whatsoever as a
            shareholder in respect of any shares covered by his option until the
            date of issuance of a share certificate to him (or his personal
            representatives or legatees) for such shares. Without in any way
            limiting the generality of the foregoing, no adjustment shall be
            made for dividends or other rights for which the record date is
            prior to the date such share certificate is issued.

6.1.7       Method of Exercise - Subject to the provisions of the Plan, an
            option granted under the Plan shall be exercisable (from time to
            time as provided in paragraph 6.1.3 hereinabove) by the optionee's
            (or his personal representatives' or legatees') giving of notice in
            writing to Axcan at its registered office, addressed to its
            Vice-President, Finance, which notice shall specify the number of
            Common Shares in respect of which the option is being exercised and
            shall be accompanied by full payment, by cash or certified cheque,
            of the purchase price for the number of shares specified. On the
            date of issue of the certificate representing the shares purchased
            under the option, which shall not be later than the tenth (10th)
            business day following the date of receipt by the Vice-President,
            Finance of Axcan of the written notice herein referred to, the
            optionee shall be considered as the registered holder of such number
            of shares as the optionee (or his personal representatives or
            legatees) shall have then paid for and as are specified in such
            notice and Axcan shall cause the transfer agent and registrar of
            Axcan to deliver to the optionee (or his personal representatives or
            legatees), according to the latter's written instructions, if any, a
            certificate in the name of the optionee representing such shares. If
            required by the Board by notification to the optionee at the time of
            granting of the option, it shall be a condition of such exercise
            that the optionee shall represent that he is purchasing the Common
            Shares in respect of which the option is being exercised for
            investment only and not with a view of resale or distribution.

7.       USE OF PROCEEDS

7.1 The proceeds received by Axcan upon the exercise of options by optionees
shall be used to increase the working capital of Axcan and for general corporate
purposes.

                                       5
<PAGE>

8.       ADJUSTMENT TO SHARES SUBJECT TO THE OPTION

8.1 In the event that the outstanding Common Shares of Axcan are hereafter
changed into or exchanged for a different number or kind of shares or other
securities of Axcan or of another corporation, or in the event that there is a
reorganization, amalgamation, consolidation, reclassification, dividend payable
in capital stock or other change in the capital stock of Axcan, subject to
regulatory approval, the Board shall make such adjustments as it deems
appropriate in the number and kind of shares for the purchase of which options
may be granted under the Plan and such adjustments shall be final and binding.

9.       AMENDMENT OR DISCONTINUANCE OF THE PLAN

9.1 The Board may amend, subject to the prior approval of The Toronto Stock
Exchange or other relevant regulatory authorities, or discontinue the Plan or
the terms of any options granted under the Plan at any time, provided, however,
that no such amendment may detrimentally alter any option previously granted to
an optionee under the Plan without the consent of the optionee, except to the
extent required by law.

9.2 Notwithstanding anything contained to the contrary in this Plan or in any
resolution of the Board in implementation thereof:

9.2.1       in the event Axcan proposes to amalgamate, merge or consolidate with
            any other corporation (other than with a wholly-owned Subsidiary of
            Axcan) or to liquidate, dissolve or wind-up, or in the event an
            offer to purchase the Common Shares or any part thereof shall be
            made to all holders of Common Shares, Axcan shall have the right,
            upon written notice thereof to each optionee holding options under
            this Plan, to permit the exercise of all such options within the
            thirty (30) day period next following the date of such notice and to
            determine that upon the expiration of such thirty (30) day period,
            all rights of optionees to such options or to exercise same (to the
            extent not theretofore exercised) shall ipso facto terminate and
            cease to have any further force or effect whatsoever;

9.2.2       the Board may, by resolution, advance the date on which any option
            may be exercised, in the manner to be set forth in such resolution.
            The Board shall not, in the event of any such advancement, be under
            any obligation to advance the date upon which any option may be
            exercised by any other optionee; and

9.2.3       the Board may, by resolution, but subject to applicable regulatory
            provisions, decide that any of the provisions hereof concerning the
            effect of termination of the optionee's full-time employment or
            cessation of the optionee's office as senior executive or director
            shall not apply for any reason acceptable to the Board.

10.      OTHER MATERIAL INFORMATION

10.1 Reference is made to the most recently available proxy material, annual
information form, press releases, material change reports and annual financial
statements of Axcan as regards certain facts relating to Axcan which may be
material.

11.      INCENTIVE STOCK OPTIONS

11.1 Options granted under the Plan which are intended to be Incentive Stock
Options may only be granted before the 10th anniversary of the Plan's effective

                                       6
<PAGE>

date (such anniversary being December 15, 2005) and only to persons who are
employees of the Corporations on the date of grant and shall be subject to the
following additional terms and conditions:

11.1.1      Dollar Limitation - To the extent that the aggregate fair market
            value of Common Shares for which Incentive Stock Options are
            exercisable for the first time by an employee during any calendar
            year (under all plans of the Corporations, with fair market value
            being determined as of each Incentive Stock Option's date of grant)
            exceeds U.S. $100,000, options designated as Incentive Stock Options
            shall be treated as non-qualified stock options for United States
            tax purposes, with later granted options being treated as
            non-qualified stock options first; and

11.1.2      10% Stockholder - If any employee to whom an Incentive Stock Option
            is to be granted under the Plan is at the time of the grant of such
            Incentive Stock Option the owner of stock possessing more than 10%
            of the total combined voting power of all classes of stock of the
            Corporations, then the following special provisions shall be
            applicable to the Incentive Stock Option granted to such individual:
            (i) the purchase price per share of the Common Share subject to such
            Incentive Stock Option shall not be less than 110% of the fair
            market value of one share of Common Share at the time of grant; and
            (ii) the option exercise period shall not exceed five years from the
            date of grant.

Except as modified by the preceding provisions of this Section 11, all the
provisions of the Plan shall be applicable to Incentive Stock Options granted
hereunder.

12.      EFFECTIVE DATE OF PLAN

12.1 This Plan was (i) originally adopted by the Board on December 15, 1995,
(ii) amended by the Board on December 23, 1999 and ratified by the Shareholders
of Axcan on February 22, 2000 and (iii) re-amended as of December 19, 2000
subject to ratification by the Shareholders at the next Shareholders Meeting of
Axcan. Should changes be required in this Plan by any securities commission or
other governmental body of any province of Canada to which this Plan has been
submitted or by The Toronto Stock Exchange or any other exchange on which the
Common Shares may from time to time be listed, such changes shall be made in
this Plan as are necessary to conform with such requests and if such changes are
approved by the Board, this Plan, as amended, shall remain in full force and
effect in its amended form as of and from December 15, 1995. Axcan may, in its
discretion, qualify this Plan in additional jurisdictions outside of Canada.
However, unless and until Axcan decides to so qualify this Plan, employees
residing in such other jurisdictions are not eligible to participate in this
Plan.

                                             By Order of the Board of Directors

                                             December 19, 2000.

                                       7

<PAGE>

SECRETARY CERTIFICATION

The undersigned certifies that the Stock Option Plan restated and amended is a
true copy of the Plan as adopted and restated on December 19, 2000, and has not
been reamended or revoked.

February 22, 2001

/s/ Francois Painchaud
-----------------------------
Francois Painchaud
Secretary

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