Document:

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                                                                   Exhibit 10.42

                              EMPLOYMENT AGREEMENT

            THIS AGREEMENT entered into as of December 3, 2001, by and between
ICN Pharmaceuticals, Inc. (the "Company"), a Delaware corporation, and Alan
Charles (the "Executive"), and individual resident of Los Angeles County,
California (hereinafter the Company and the Executive collectively referred to
as "the parties").

                                    RECITALS

            WHEREAS, the Executive is being employed by the Company as its
Executive Vice President for Corporate Relations and is experienced in all
phases of the business of the Company, and the Company desires to retain the
services of the Executive 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 interests 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.

                                    AGREEMENT

            NOW, THEREFORE, for consideration, the value, sufficiency, and
receipt of which is hereby acknowledged, the parties agree as follows.

      1. Term. The initial term of employment under this Agreement will be for
the period commencing on the date hereof, and ending December 1, 2004 ("Initial
Term"); provided, however, that the term of this Agreement will be automatically
extended for one (1) year on December 1, 2004, and on each December 1 thereafter
unless either the Company or the Executive has given written notice to the other
at least ninety (90) days prior thereto that the term of this Agreement will not
be so extended; and provided, further, that notwithstanding any such notice by
the Company not to extend given, the term of this Agreement will not expire
prior to the expiration of the third anniversary of a Change in Control (as
hereinafter defined).

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Notwithstanding the foregoing, in no event will the term of this Agreement
extend beyond the first day of the month following the month in which the
Executive attains age 68.

    2.   Employment.

                  (a) The Executive will be employed as the Executive Vice
         President, Corporate Relations of the Company or such other senior
         executive capacity as may be mutually agreed to in writing by the
         parties. The Executive will perform the duties, undertake the
         responsibilities and exercise the authority customarily performed,
         undertaken and exercised by persons situated in a similar executive
         capacity. He will 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
         (1) serve on corporate, civil or charitable boards of committees, (2)
         manage personal investments and (3) 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
$400,000 per annum or such larger amount as the Board may from time to time
determine (hereinafter referred to as the "Base Salary"). The Base Salary will
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, will be reviewed at least annually by the Board and may be further
increased (but not decreased) in such amounts as the Board in its discretion may
decide.

      4. Employee Benefits. The Executive will 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 will be on the same basis
and terms as are applicable to employees of the Company generally.

      5. Executive Benefits. The Executive will 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 supplement 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 will 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

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effect on the date hereof. No additional compensation provided under any of such
plans will 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 will 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 will 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 will be provided with
         an appropriate office in Costa Mesa, California, or such other place as
         may be mutually agreed 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.

                  (d) Stock Options. Upon approval of the Compensation Committee
         of the Board, and conditional on commencement of employment, the
         Executive will receive stock options to purchase 200,000 shares of the
         Company's Common Stock, subject to the terms and conditions set forth
         in a stock option agreement between Company and the Executive.

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

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

                  (b) in addition to the aforesaid paid vacations, the Executive
         will be entitled, without loss of pay, to absent himself voluntarily
         from the performance of his employment for such additional periods of
         time and for such valid and legitimate reasons as the Board in its
         discretion may determine (further, the Board will 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); and

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                  (c) the Executive will 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. The Executive's employment hereunder may be terminated
under the following circumstances.

                  (a) 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 days. The Executive will
         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 is unable to work 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 will 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.

                  (b) 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 (1) 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, or (2) willfully engaged
         in conduct which is demonstrably and materially injurious to the
         Company, monetarily or otherwise; provided, however that no termination
         of the Executive's employment will be for Cause as set forth in clause
         (2) above until (i) there will have been delivered to the Executive a
         copy of a written notice setting forth that the Executive engaged in
         the conduct set forth in clause (2) and specifying the particulars
         thereof in detail and (ii) the Executive will 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 will 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 will constitute cause
         for purposes of this Agreement.

                  (c) (1) Good Reason. The Executive may terminate his
         employment for "Good Reason." For purposes of this Agreement, Good
         Reason

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       will mean the occurrence after a Change in Control (as hereinafter
       defined in this Section 8(e)) of any of the following 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 Executive's reasonable judgment, does not
                  represent a promotion from his status, title, position or
                  responsibilities as in effect immediately prior thereto; 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; 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 or the Subsidiary 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, 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 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;

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

                        (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.

                  (2) Any event or condition described in Sections 8(c)(i)
            through (viii) which occurs prior to a Change in Control, but which
            (i) was at the request of a third party who has taken steps
            reasonably calculated to effect a Change in Control or (ii)
            otherwise arose in connection with a Change in Control, will
            constitute Good Reason for purposes of this Agreement
            notwithstanding that it occurred prior to a Change in Control.

                  (3) The Executive's right to terminate his employment pursuant
            to this Section 8(c) will not be affected by his incapacity due to
            physical or mental illness.

            (d) 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 will be referred to as a
      "Limited Period Termination."

            (e) For purposes of this Agreement, a "Change in Control" will mean
      any one or more of the following events:

                  (1) the acquisition (other than from the Company) by any
            person (as such term is defined in Section 13(c) or 14(d) of the
            Securities Exchange Act of 1934, as amended (the "1934 Act")) of
            beneficial ownership (within the meaning of Rule 13d-3 promulgated
            under the 1934 Act) of twenty percent (20%) or more of the combined
            voting power of the Company's then outstanding voting securities;

                  (2) the individuals who, as of May 1, 2001, are members of the
            Board (the "Incumbent Board"), cease for any reason to constitute at
            least two-thirds (2/3) of the Board, unless the election, or
            nomination for election by the Company's stockholders, of any new
            director was approved by a vote of at least two-thirds (2/3) of the
            Incumbent Board, and such new director will, for purposes of this
            Agreement, be considered as a member of the Incumbent Board; and
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                  (3) approval by stockholders of the Company of (i) a merger or
            consolidation involving the Company if the stockholders of the
            Company, immediately before such merger or consolidation, do not, as
            a result of such merger or consolidation, own, directly or
            indirectly, more than eighty percent (80%) of the combined voting
            power of the then outstanding voting securities of the corporation
            or other entity resulting from such merger or consolidation in
            substantially the same proportion as their ownership of the combined
            voting power of the voting securities of the Company outstanding
            immediately before such merger or consolidation or (ii) a complete
            liquidation or dissolution of the Company or an agreement for the
            sale or other disposition of all or substantially all of the assets
            of the Company.

            Notwithstanding the foregoing, a Change in Control will not be
            deemed to occur pursuant to Section 8(e)(1) solely because twenty
            percent (20%) or more of the combined voting power of the Company's
            then outstanding securities is acquired by (i) a trustee or other
            fiduciary holding securities under one or more employee benefit
            plans maintained by the Company or any of its subsidiaries or (ii)
            any corporation which, immediately prior to such acquisition, is
            owned directly or indirectly by the stockholders of the Company in
            the same proportion as their ownership of stock in the Company
            immediately prior to such acquisition.

            (f) Notice of Termination. Any purported termination by the Company
      or by the Executive will be communicated by written Notice of Termination
      to the other. For purposes of this Agreement, a "Notice of Termination"
      will mean a notice which indicates the specific termination provision in
      this Agreement relied upon and will 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 will be
      effective without such Notice of Termination.

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

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

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

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

            (a) If the Executive's employment is terminated by the Company for
      Cause or Disability, after the Initial Term by the Executive (other than
      for Good Reason or a Limited Period Termination), or by reason of the
      Executive's death, the Company will 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 will pay to the Executive
      or his beneficiaries an amount equal to the 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 will be determined in accordance with the Company's employee
      benefit plans and other applicable programs and practices then in effect.
      Notwithstanding any other provision in this Agreement to the contrary, if
      the Executive's employment is terminated by the Executive during the
      Initial Term (other than for Good Reason or a Limited Period Termination),
      the Executive will be paid (x) Accrued Compensation, (y) a Pro Rata Bonus,
      and (z) his then effective Base Salary until expiration of the Initial
      Term in accordance with the Company's payroll practices then applicable to
      similar executives on full time employment status.

            (b) If the Executive's employment is 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 will be entitled to all benefits provided below in each of
      Subsections (i) - (v):

                  (i)   The Company will pay the Executive all Accrued
            Compensation and a Pro Rata Bonus.

                  (ii) The Company will 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

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            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 under this
            Subsection (ii) will be multiplied by a fraction (which in no event
            will be greater than one (1), the denominator of which will be the
            number of months (for this purpose any partial month will be
            considered as a whole month) remaining until the Executive's 67th
            birthday and the denominator of which will be thirty-six (36). The
            term "Bonus Amount" will mean (x) the greatest amount of any cash
            bonus or 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
            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 68th birthday, the Company will 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) will 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 will 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

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            and costs to him, than the coverage required to be provided
            hereunder. This Subsection (iii) will 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 employment,
            including without limitation, retiree medical and life insurance
            benefits.

                  (iv) The Company will 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 67th birthday (if earlier)), (y) his annual compensation during
            such period been equal to his Base Salary (at the rate used for
            purposes of Section 9(b)(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" will 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 will in any event
            take into account; the value of any subsidized early retirement
            benefit).

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

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

            (d) The Executive will 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 will be offset or reduced by the amount of
      any compensation or benefits provided to the Executive in any subsequent
      employment, except as described in Section 9(b)(iii).

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      10. Unauthorized Disclosure. The Executive will not make any Unauthorized
Disclosure. For purposes of this Agreement, "Unauthorized Disclosure" will 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 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 will 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 will be binding upon and will inure to the
      benefit of the Company, its successors and assigns, and the Company will
      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 will include such
      successors and assigns. The term "successors and assigns" as used herein
      will 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 will
      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 will inure to the benefit of and be
      enforceable by the Executive's legal personal representative.

      12. Fees and Expenses. The Company will 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(b) of this Agreement, and (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) will be in writing and will 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 will be directed to the
attention of the Board with a copy to the Secretary of the Company. All notices
and communications will be

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deemed to have been received on the date of delivery thereof or on the third
(3rd)) business day after the mailing thereof, except that notice of change of
address will be effective only upon receipt.

      14. Non-exclusivity of Rights. Nothing in this Agreement will prevent or
limit the Executive's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company or any of its
subsidiaries and for which the Executive may qualify, and nothing in this
Agreement will 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 will 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 will 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 amended,
modified, or changed unless such amendment, modification or change is agreed to
in writing by the Executive and the Company. Either party may waive any breach
or non-compliance provision or condition in favor of the waiving party under
this Agreement in a writing signed by the party to be charged. 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 will 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 will 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 will be deemed
severable and the invalidity or unenforceability of any provision will 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 negotiations, agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.

                                      * * *
                            [signature page follows]

                                       12
<PAGE>

            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.

                                    ICN PHARMACEUTICALS, INC.

                                    By:________________________________

                                    Title:______________________________

ATTEST:

___________________________
Secretary

                                    THE "EXECUTIVE"

                                    By:________________________________
                                          Alan Charles

                                       13<PAGE>
                                                                   EXHIBIT 10.78

                        FIDELITY NATIONAL FINANCIAL, INC.

                              AMENDED AND RESTATED

                            2001 STOCK INCENTIVE PLAN

                   AS AMENDED AND RESTATED AS OF JULY 24, 2001

        This AMENDED AND RESTATED 2001 STOCK INCENTIVE PLAN (the "Amended and
Restated Plan") is hereby established by FIDELITY NATIONAL FINANCIAL, INC., a
Delaware corporation (the "Company"), and amends and restates the Company's 2001
Stock Incentive Plan, effective as of the 24th day of July, 2001 (the "Effective
Date").

                                   ARTICLE 1.

                              PURPOSES OF THE PLAN

        1.1 PURPOSES. The purposes of the Amended and Restated Plan are (a) to
enhance the Company's ability to attract and retain the services of qualified
employees, officers and directors (including non-employee officers and
directors), and consultants and other service providers upon whose judgment,
initiative and efforts the successful conduct and development of the Company's
business largely depends, and (b) to provide additional incentives to such
persons or entities to devote their utmost effort and skill to the advancement
and betterment of the Company, by providing them an opportunity to participate
in the ownership of the Company and thereby have an interest in the success and
increased value of the Company.

                                   ARTICLE 2.

                                   DEFINITIONS

     For purposes of this Amended and Restated Plan, the following terms shall
have the meanings indicated:

        2.1 ADMINISTRATOR. "Administrator" means the Board or, if the Board
delegates responsibility for any matter to the Committee, the term Administrator
shall mean the Committee.

        2.2 AFFILIATED COMPANY. "Affiliated Company" means any subsidiary of the
Company, any business venture which the Company has a significant interest, as
determined at the discretion of the Administrator. However, for purposes of
eligibility to receive Incentive Options, "Affiliated Company" means any "parent
corporation" or "subsidiary corporation" of the Company, whether now existing or
hereafter created or acquired, as those terms are defined in Sections 424(e) and
424(f) of the Code, respectively.

        2.3 AWARD. "Award" means any award made pursuant to Articles 5, 6, and
6A of this Amended and Restated Plan including Options, Restricted Stock, and
Deferred Shares.

        2.4 BOARD. "Board" means the Board of Directors of the Company.

<PAGE>

        2.5 CHANGE IN CONTROL. "Change in Control" shall mean (i) the
acquisition, directly or indirectly, by any person or group (within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) of the
beneficial ownership of securities of the Company possessing more than fifty
percent (50%) of the total combined voting power of all outstanding securities
of the Company; (ii) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction in which the holders of the
outstanding voting securities of the Company immediately prior to such merger or
consolidation hold, in the aggregate, securities possessing more than fifty
percent (50%) of the total combined voting power of all outstanding voting
securities of the surviving entity immediately after such merger or
consolidation; (iii) a reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of the
total combined voting power of all outstanding voting securities of the Company
are transferred to or acquired by a person or persons different from the persons
holding those securities immediately prior to such merger; (iv) the sale,
transfer or other disposition (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Company; or (v)
the approval by the shareholders of a plan or proposal for the liquidation or
dissolution of the Company.

        2.6 CODE. "Code" means the Internal Revenue Code of 1986, as amended
from time to time.

        2.7 COMMITTEE. "Committee" means a committee of two or more "outside"
(within the meaning of Code Section 162(m)) members of the Board appointed to
administer the Amended and Restated Plan, as set forth in Section 7.1 hereof.

        2.8 COMMON STOCK. "Common Stock" means the Common Stock, $.0001 par
value of the Company, subject to adjustment pursuant to Section 4.2 hereof.

        2.9 CONTINUOUS SERVICE. "Continuous Service" means uninterrupted service
as an Officer, employee of the Company or of an Affiliated Company, member of
the Board (whether or not employed by the Company or an Affiliated Company), or
Service Provider. Continuous Service shall not be considered interrupted (unless
an Award otherwise specifies) in the case of: (i) any approved or
legally-mandated leave of absence, provided that such leave is for a period of
not more than 90 days, unless reemployment upon the expiration of such leave is
guaranteed by contract or statute, or unless provided otherwise pursuant to
Company policy; (ii) changes in status with the Company (including changes to
advisory or emeritus status); or (iii) in the case of transfers between
locations of the Company or between the Company, any Affiliated Company, or
their respective successors.

        2.10 DEFERRED SHARE. "Deferred Share" means a share of the Common Stock
credited under Section 6A.2 of this Amended and Restated Plan.

        2.11 DISABILITY. "Disability" means permanent and total disability as
defined in Section 22(e)(3) of the Code. The Administrator's determination of a
Disability or the absence thereof shall be conclusive and binding on all
interested parties.

        2.12 EFFECTIVE DATE. "Effective Date" means the date on which the
Amended and Restated Plan is adopted by the Board, as set forth on the first
page hereof.

                                       2
<PAGE>

        2.13 EXERCISE PRICE. "Exercise Price" means the purchase price per share
of Common Stock payable upon exercise of an Option.

        2.14 FAIR MARKET VALUE. "Fair Market Value" on any given date means the
value of one share of Common Stock, determined as follows:

               (a) If the Common Stock is then listed or admitted to trading on
        a national stock exchange or a NASDAQ market system which reports
        closing sale prices, the Fair Market Value shall be the closing sale
        price on the date of valuation on the principal stock exchange or NASDAQ
        market system on which the Common Stock is then listed or admitted to
        trading, or, if no closing sale price is quoted on such day, then the
        Fair Market Value shall be the closing sale price of the Common Stock on
        such exchange or NASDAQ market system on the next preceding day for
        which a closing sale price is reported.

               (b) If the Common Stock is not then listed or admitted to trading
        on a national stock exchange or NASDAQ market system which reports
        closing sale prices, the Fair Market Value shall be the average of the
        closing bid and asked prices of the Common Stock in the over-the-counter
        market on the date of valuation.

               (c) If neither (a) nor (b) is applicable as of the date of
        valuation, then the Fair Market Value shall be determined by the
        Administrator in good faith using any reasonable method of evaluation,
        which determination shall be conclusive and binding on all interested
        parties.

        2.15 INCENTIVE OPTION. "Incentive Option" means any Option designated
and qualified as an "incentive stock option" as defined in Section 422 of the
Code.

        2.16 INCENTIVE OPTION AGREEMENT. "Incentive Option Agreement" means an
Option Agreement with respect to an Incentive Option.

        2.17 NASD DEALER. "NASD Dealer" means a broker-dealer that is a member
of the National Association of Securities Dealers, Inc.

        2.18 NONQUALIFIED OPTION. "Nonqualified Option" means any Option that is
not an Incentive Option. To the extent that any Option designated as an
Incentive Option fails in whole or in part to qualify as an Incentive Option,
including, without limitation, for failure to meet the limitations applicable to
a 10% Shareholder or because it exceeds the annual limit provided for in Section
5.6 below, it shall to that extent constitute a Nonqualified Option.

        2.19 NONQUALIFIED OPTION AGREEMENT. "Nonqualified Option Agreement"
means an Option Agreement with respect to a Nonqualified Option.

        2.20 OFFEREE. "Offeree" means a Participant to whom a Right to Purchase
has been offered or who has acquired Restricted Stock under the Amended and
Restated Plan.

                                       3
<PAGE>

        2.21 OPTION. "Option" means any option to purchase Common Stock granted
pursuant to the Amended and Restated Plan.

        2.22 OPTION AGREEMENT. "Option Agreement" means the written agreement
entered into between the Company and the Optionee with respect to an Option
granted under the Amended and Restated Plan.

        2.23 OPTIONEE. "Optionee" means a Participant who holds an Option.

        2.24 PARTICIPANT. "Participant" means an individual or entity who holds
an Option, a Right to Purchase, Restricted Stock, or rights to Deferred Shares
under the Amended and Restated Plan.

        2.25 PURCHASE PRICE. "Purchase Price" means the purchase price per share
of Restricted Stock payable upon acceptance of a Right to Purchase.

        2.26 RESTRICTED STOCK. "Restricted Stock" means shares of Common Stock
issued pursuant to Article 6 hereof, subject to any restrictions and conditions
as are established pursuant to such Article 6.

        2.27 RIGHT TO PURCHASE. "Right to Purchase" means a right to purchase
Restricted Stock granted to an Offeree pursuant to Article 6 hereof.

        2.28 SERVICE PROVIDER. "Service Provider" means a consultant or other
person or entity who provides services to the Company or an Affiliated Company
and who the Administrator authorizes to become a Participant in the Amended and
Restated Plan.

        2.29 STOCK PURCHASE AGREEMENT. "Stock Purchase Agreement" means the
written agreement entered into between the Company and the Offeree with respect
to a Right to Purchase or a right to accrue Deferred Shares offered under the
Amended and Restated Plan.

        2.30 10% SHAREHOLDER. "10% Shareholder" means a person who, as of a
relevant date, owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or of an
Affiliated Company.

                                   ARTICLE 3.

                                   ELIGIBILITY

        3.1 INCENTIVE OPTIONS. Officers and other employees of the Company or of
an Affiliated Company (including members of the Board if they are employees of
the Company or of an Affiliated Company) are eligible to receive Incentive
Options under the Amended and Restated Plan.

        3.2 NONQUALIFIED OPTIONS, RIGHTS TO PURCHASE, RESTRICTED STOCK, AND
DEFERRED SHARES. Officers and other employees of the Company or of an Affiliated
Company, members of the Board or of the board of directors of any Affiliated
Company (whether or not employed by

                                       4
<PAGE>

the Company or an Affiliated Company), Service Providers, customers and
suppliers of the Company or of an Affiliated Company are eligible to receive
Nonqualified Options, Rights to Purchase, Restricted Stock, or Deferred Shares
under the Amended and Restated Plan.

        3.3 LIMITATION ON SHARES. In no event shall any Participant be granted
Options or Rights to Purchase pursuant to which the aggregate number of shares
of Common Stock that may be acquired thereunder exceeds the total number of
shares then available for grants under Section 4.1 hereof. In no event shall the
aggregate number of shares of Common Stock subject to Incentive Options exceed
2,000,000.

                                   ARTICLE 4.

                                   PLAN SHARES

        4.1 SHARES SUBJECT TO THE AMENDED AND RESTATED PLAN. A total of
2,000,000 shares of Common Stock, plus, on the date of each annual meeting of
the stockholders an additional 200,000 shares of Common Stock, may be issued
under the Amended and Restated Plan subject to adjustment as to the number and
kind of shares pursuant to Section 4.2 hereof. For purposes of this limitation,
in the event that (a) all or any portion of any Option or Right to Purchase
granted or offered under the Amended and Restated Plan can no longer under any
circumstances be exercised, or (b) any shares of Common Stock are reacquired by
the Company pursuant to an Incentive Option Agreement, Nonqualified Option
Agreement or Stock Purchase Agreement or (c) any shares of Restricted Stock or
Deferred Shares are forfeited for any reason, the shares of Common Stock
allocable to the unexercised portion of such Option or such Right to Purchase,
or the shares so reacquired of forfeited, shall again be available for grant or
issuance under the Amended and Restated Plan.

        4.2 CHANGES IN CAPITAL STRUCTURE. In the event that the outstanding
shares of Common Stock are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of the
Company by reason of a recapitalization, stock split, combination of shares,
reclassification, stock dividend, or other change in the capital structure of
the Company, then appropriate adjustments shall be made by the Administrator to
the aggregate number and kind of shares subject to this Amended and Restated
Plan, and the number and kind of shares and the price per share subject to
outstanding Option Agreements, Rights to Purchase and Stock Purchase Agreements,
Restricted Stock, or Deferred Share Awards in order to preserve, as nearly as
practical, but not to increase, the benefits to Participants.

                                   ARTICLE 5.

                                     OPTIONS

        5.1 OPTION AGREEMENT. Each Option granted pursuant to this Amended and
Restated Plan shall be evidenced by an Option Agreement which shall specify the
number of shares subject thereto, the Exercise Price per share, and whether the
Option is an Incentive Option or Nonqualified Option. As soon as is practical
following the grant of an Option, an Option Agreement shall be duly executed and
delivered by or on behalf of the Company to the Optionee to whom such Option was
granted. Each Option Agreement shall be in such form and contain such additional
terms and conditions, not inconsistent with the provisions of this Amended and

                                       5
<PAGE>

Restated Plan, as the Administrator shall, from time to time, deem desirable,
including, without limitation, the imposition of any rights of first refusal and
resale obligations upon any shares of Common Stock acquired pursuant to an
Option Agreement. Each Option Agreement may be different from each other Option
Agreement.

        5.2 EXERCISE PRICE. The Exercise Price per share of Common Stock covered
by each Option shall be determined by the Administrator, subject to the
following:

               (a) the Exercise Price of an Option shall not be less than 100%
        of Fair Market Value on the date the Option is granted, and (b) if the
        person to whom an Incentive Option is granted is a 10% Shareholder on
        the date of grant, the Exercise Price shall not be less than 110% of
        Fair Market Value on the date the Incentive Option is granted.

               (b) the Exercise Price, for each Nonqualified Option granted
        pursuant to any program by which the Administrator or the Board allows a
        select Participant to receive Nonqualified Options in lieu of a bonus
        otherwise payable in cash, shall be reduced below Fair Market Value at
        the election of the Participant and in such dollar increment per
        Nonqualified Option as the Administrator determines in its discretion;
        provided that the aggregate Exercise Price reduction for the
        Nonqualified Options issued to such Participant shall equal the bonus
        that the Company would otherwise have paid in cash but for the
        Participant's election to defer compensation.

        5.3 PAYMENT OF EXERCISE PRICE. Payment of the Exercise Price shall be
made upon exercise of an Option and may be made, in the discretion of the
Administrator, subject to any legal restrictions, by: (a) cash; (b) certified or
official bank check, wire transfer, or the equivalent thereof acceptable to the
Company; (c) the surrender of shares of Common Stock owned by the Optionee that
have been held by the Optionee for at least six (6) months, which surrendered
shares shall be valued at Fair Market Value as of the date of such exercise; (d)
the Optionee's promissory note in a form and on terms acceptable to the
Administrator; (e) the cancellation of indebtedness of the Company to the
Optionee; (f) the waiver of compensation due or accrued to the Optionee for
services rendered; (g) provided that a public market for the Common Stock
exists, a "same day sale" commitment from the Optionee and an NASD Dealer
whereby the Optionee irrevocably elects to exercise the Option and to sell a
portion of the shares so purchased to pay for the Exercise Price and whereby the
NASD Dealer irrevocably commits upon receipt of such shares to forward the
Exercise Price directly to the Company; (h) provided that a public market for
the Common Stock exists, a "margin" commitment from the Optionee and an NASD
Dealer whereby the Optionee irrevocably elects to exercise the Option and to
pledge the shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the Exercise Price,
and whereby the NASD Dealer irrevocably commits upon receipt of such shares to
forward the Exercise Price directly to the Company; or (i) any combination of
the foregoing methods of payment or any other consideration or method of payment
as shall be permitted by applicable corporate law. In addition, where the
Committee provides written approval after investigating the associated financial
accounting consequences, the Committee may provide in an Option Agreement for
the payment of the Exercise Price on a cashless basis, by stating in the
exercise notice the number of shares of Common Stock the Optionee elects to
purchase pursuant to such exercise (in which case the Optionee shall receive a

                                       6
<PAGE>

number of shares of Common Stock equal to the number the Optionee would have
received upon such exercise for cash less such number of shares of Common Stock
as shall then have a Fair Market Value in the aggregate equal to the Exercise
Price due in respect of such exercise). The Committee may, in its discretion and
for any reason, refuse to accept a particular form of consideration (other than
cash or a certified or official bank check) at the time of any Option exercise.

        5.4 TERM AND TERMINATION OF OPTIONS. The term and provisions for
termination of each Option shall be as fixed by the Administrator, but no
Incentive Option may be exercisable more than ten (10) years after the date it
is granted. An Incentive Option granted to a person who is a 10% Shareholder on
the date of grant shall not be exercisable more than five (5) years after the
date it is granted.

        5.5 VESTING AND EXERCISE OF OPTIONS. Each Option shall vest and become
exercisable in one or more installments at such time or times and subject to
such conditions, including without limitation the achievement of specified
performance goals or objectives, as shall be determined by the Administrator.

        5.6 ANNUAL LIMIT ON INCENTIVE OPTIONS. To the extent required for
"incentive stock option" treatment under Section 422 of the Code, the aggregate
Fair Market Value (determined as of the time of grant) of the Common Stock shall
not, with respect to which Incentive Options granted under this Amended and
Restated Plan and any other plan of the Company or any Affiliated Company become
exercisable for the first time by an Optionee during any calendar year, exceed
$100,000.

        5.7 NONTRANSFERABILITY OF OPTIONS. Except as otherwise provided by the
Administrator, no Incentive Option shall be assignable or transferable except by
will or the laws of descent and distribution, and during the life of the
Optionee shall be exercisable only by such optionee. Any other Award pursuant to
the Amended and Restated Plan shall be transferable only by will, the laws of
descent and distribution, or to an immediate family member of the optionee or a
trust for an immediate family member; provided that any transferee of such an
Award shall be subject to the terms of the original Award.

        5.8 RIGHTS AS SHAREHOLDER. An Optionee or permitted transferee of an
Option shall have no rights or privileges as a shareholder with respect to any
shares covered by an Option until such Option has been duly exercised and
certificates representing shares purchased upon such exercise have been issued
to such person.

                                   ARTICLE 6.

                               RIGHTS TO PURCHASE

        6.1 NATURE OF RIGHT TO PURCHASE. A Right to Purchase granted to an
Offeree entitles the Offeree to purchase shares of Common Stock subject to such
terms, restrictions and conditions as the Administrator may determine at the
time of grant ("Restricted Stock") provided, however, in no event shall the
Purchase Price for a Right to Purchase be less than 100% of Fair Market Value on
the date the Right to Purchase is granted. Such conditions may include, but are

                                       7
<PAGE>

not limited to, continued employment or the achievement of specified performance
goals or objectives.

        6.2 ACCEPTANCE OF RIGHT TO PURCHASE. An Offeree shall have no rights
with respect to the Restricted Stock subject to a Right to Purchase unless the
Offeree shall have accepted the Right to Purchase within ten (10) days (or such
longer or shorter period as the Administrator may specify) following the grant
of the Right to Purchase by making payment of the full Purchase Price to the
Company in the manner set forth in Section 6.3 hereof and by executing and
delivering to the Company a Stock Purchase Agreement. Each Stock Purchase
Agreement shall be in such form, and shall set forth the Purchase Price and such
other terms, conditions and restrictions of the Restricted Stock, not
inconsistent with the provisions of this Amended and Restated Plan, as the
Administrator shall, from time to time, deem desirable. Each Stock Purchase
Agreement may be different from each other Stock Purchase Agreement.

        6.3 PAYMENT OF PURCHASE PRICE. Subject to any legal restrictions,
payment of the Purchase Price upon acceptance of a Right to Purchase Restricted
Stock may be made, in the discretion of the Administrator, by: (a) cash; (b)
certified or official bank check, wire transfer, or the equivalent thereof
acceptable to the Company; (c) the surrender of shares of Common Stock owned by
the Offeree that have been held by the Offeree for at least six (6) months,
which surrendered shares shall be valued at Fair Market Value as of the date of
such exercise; (d) the Offeree's promissory note in a form and on terms
acceptable to the Administrator; (e) the cancellation of indebtedness of the
Company to the Offeree; (f) the waiver of compensation due or accrued to the
Offeree for services rendered; or (g) any combination of the foregoing methods
of payment or any other consideration or method of payment as shall be permitted
by applicable corporate law.

        6.4 RIGHTS AS A SHAREHOLDER. Upon complying with the provisions of
Section 6.2 hereof, an Offeree shall have the rights of a shareholder with
respect to the Restricted Stock purchased pursuant to the Right to Purchase,
including voting and dividend rights, subject to the terms, restrictions and
conditions as are set forth in the Stock Purchase Agreement. Unless the
Administrator shall determine otherwise, certificates evidencing shares of
Restricted Stock shall remain in the possession of the Company until such shares
have vested in accordance with the terms of the Stock Purchase Agreement.

        6.5 RESTRICTIONS. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided in the Stock Purchase Agreement. In the event of
termination of a Participant's employment, service as a director of the Company
or Service Provider status for any reason whatsoever (including death or
disability), the Stock Purchase Agreement may provide, in the discretion of the
Administrator, that the Company shall have the right, exercisable at the
discretion of the Administrator, to repurchase (i) at the original Purchase
Price, any shares of Restricted Stock which have not vested as of the date of
termination, and (ii) at Fair Market Value, any shares of Restricted Stock which
have vested as of such date, on such terms as may be provided in the Stock
Purchase Agreement.

        6.6 VESTING OF RESTRICTED STOCK. The Stock Purchase Agreement shall
specify the date or dates, the performance goals or objectives which must be
achieved, and any other conditions on which the Restricted Stock may vest.

                                       8
<PAGE>

        6.7 DIVIDENDS. If payment for shares of Restricted Stock is made by
promissory note, any cash dividends paid with respect to the Restricted Stock
may be applied, in the discretion of the Administrator, to repayment of such
note.

        6.8 NONASSIGNABILITY OF RIGHTS. No Right to Purchase shall be assignable
or transferable except by will or the laws of descent and distribution or as
otherwise provided by the Administrator.

        6.9 DEFERRAL ELECTIONS. The Participant may elect in accordance with
Article 6A.1 hereto, with the Committee's consent, to exchange Restricted Stock
for an equivalent Deferred Share Award under Article 6A hereto (or a deferred
compensation provision under another Company plan).

                                   ARTICLE 6A

                                 DEFERRED SHARES

        6A.1 DEFERRAL ELECTIONS. The Committee may permit employees of the
Company or of an Affiliated Company, members of the Board (whether or not
employed by the Company or an Affiliated Company), and Service Providers to
irrevocably elect to receive the credits described in Section 6A.2 below in lieu
of fees, salary, or other income from the Company that the Participant earns
after the election; provided that employees of the Company will only be
permitted to make deferral elections if the Committee determines they are
members of a select group of management or highly compensated employees (within
the meaning of the Employee Retirement Income Security Act of 1974). Any
election pursuant to this Section 6A.1 shall be made before the Participant
becomes legally entitled to the fees, salary, or other income being deferred;
provided that (a) a deferral election with respect to Restricted Stock of
previously Deferred Shares must be made more than 12 months before a
Participant's Restricted Stock vests or Deferred Shares are scheduled to be
distributed to a Participant pursuant to this Article 6A; and provided further
that (b) the Committee will honor an election made within 12 months of a
scheduled vesting date (or distribution date for Deferred Shares) if the
Participant consents in the election to irrevocably forfeit 5% of the Restricted
Stock or Deferred Shares to which the Participant would otherwise be entitled.

        6A.2 DEFERRED SHARE CREDITS AND EARNINGS. The Committee shall establish
an internal Amended and Restated Plan account for each Participant who makes an
election under Section 6A.1 hereto. At the end of each calendar year thereafter
(or such more frequent periods as the Committee may direct or approve), the
Committee shall credit the Participant's account with a number of Deferred
Shares having a Fair Market Value on that date equal to the compensation
deferred during the year, and any cash dividends paid during the year on
Deferred Shares previously credited to the Participant's account. The Committee
shall hold each Participant's Deferred Shares until distribution is required
pursuant to Section 6A.4 hereto.

        6A.3 RIGHTS TO DEFERRED SHARES. Except as provided in Section 6.9
hereto, a Participant shall at all times be 100% vested in his or her right to
any Deferred Shares and any associated cash earnings. A Participant's right to
Deferred Shares shall at all times constitute an unsecured promise of the
Company to pay benefits as they come due.

                                       9
<PAGE>

        6A.4 DISTRIBUTION OF DEFERRED SHARES AND EARNINGS. The Committee shall
distribute a Participant's Deferred Shares in five substantially equal annual
installments in real Shares commencing as of the first day of the calendar year
beginning after the Participant's Continuous Service terminates, provided that
the Committee will honor a Participant's election of a different time and manner
of distribution if the election is made on a form approved by the Committee
pursuant hereto. Fractional shares shall not be distributed, and instead shall
be paid out in cash.

        6A.5 HARDSHIP WITHDRAWALS. A Participant may apply to the Committee for
an immediate distribution of all or a portion of his or her Deferred Shares on
account of hardship. The hardship must result from a sudden and unexpected
illness or accident of the Participant or dependent, casualty loss of property,
or other similar conditions beyond the control of the Participant. School
expenses or residence purchases, for example, will not be considered hardships.
Distributions will not be made to the extent a hardship could be relieved
through insurance or by liquidation of the Participant's nonessential assets.
The amount of any distribution hereunder shall be limited to the amount
necessary to relieve the Participant's financial hardship. The determination of
whether a Participant has a qualifying hardship and the amount to be
distributed, if any, shall be made by the Committee in its discretion. The
Committee may require evidence of the purpose and amount of the need, and may
establish such application or other procedures as it deems appropriate.

                                   ARTICLE 7.

                           ADMINISTRATION OF THE PLAN

        7.1 ADMINISTRATOR. Authority to control and manage the operation and
administration of the Amended and Restated Plan shall be vested in the Board,
which may delegate such responsibilities in whole or in part to a committee
consisting of two (2) or more "outside" (within the meaning of Code Section
162(m)) members of the Board (the "Committee"). Members of the Committee may be
appointed from time to time by, and shall serve at the pleasure of, the Board.
As used herein, the term "Administrator" means the Board or, with respect to any
matter as to which responsibility has been delegated to the Committee, the term
Administrator shall mean the Committee.

        7.2 POWERS OF THE ADMINISTRATOR. In addition to any other powers or
authority conferred upon the Administrator elsewhere in the Amended and Restated
Plan or by law, the Administrator shall have full power and authority: (a) to
determine the persons to whom, and the time or times at which, Incentive Options
or Nonqualified Options shall be granted and Rights to Purchase and the
opportunity to accrue Deferred Shares shall be offered, the number of shares to
be represented by each Option and Right to Purchase and the consideration to be
received by the Company upon the exercise thereof; (b) to interpret the Amended
and Restated Plan; (c) to create, amend or rescind rules and regulations
relating to the Amended and Restated Plan; (d) to determine the terms,
conditions and restrictions contained in, and the form of, Option Agreements and
Stock Purchase Agreements; (e) to determine the identity or capacity of any
persons who may be entitled to exercise a Participant's rights under any Option
or Right to Purchase under the Amended and Restated Plan; (f) to correct any
defect or supply any omission or reconcile any inconsistency in the Amended and
Restated Plan or in any Option Agreement or Stock Purchase Agreement; (g) to
accelerate the vesting of any Option or release or waive any repurchase rights
of the Company with respect to

                                       10
<PAGE>

Restricted Stock; (h) to extend the exercise date of any Option or acceptance
date of any Right to Purchase; (i) to provide for rights of first refusal and/or
repurchase rights; (j) to amend outstanding Option Agreements and Stock Purchase
Agreements to provide for, among other things, any change or modification which
the Administrator could have provided for upon the grant of an Option or Right
to Purchase or in furtherance of the powers provided for herein; and (k) to make
all other determinations necessary or advisable for the administration of the
Amended and Restated Plan, but only to the extent not contrary to the express
provisions of the Amended and Restated Plan. Except for those eligible employees
of the Company or an Affiliated Company who qualified to participate in the
Company's Chairman's Roundtable Program and, prior to the 2001 Annual
Shareholders' Meeting, made an election to defer a part of their entire 2001
bonus pursuant to the terms and conditions contained within the Chairman's
Roundtable Deferral of 2001 Annual Bonus Memo distributed to said employees in
the first quarter of 2001 (see "Attachment 1"), the Administrator may not in any
event (i) modify any Option to reduce the exercise price of such Option below
100% of Fair Market Value on the date the Option was granted; or (ii) modify any
Right to Purchase to reduce the Purchase Price of such Right to Purchase below
100 % of Fair Market Value on the date the Right to Purchase was granted; or
(iii) modify or otherwise credit a Participant's account with Deferred Shares in
addition to the number of Deferred Shares initially credited to such account
based on the Fair Market Value on the date of such initial credit and the
compensation amount deferred by such Participant. Any action, decision,
interpretation or determination made in good faith by the Administrator in the
exercise of its authority conferred upon it under the Amended and Restated Plan
shall be final and binding on the Company and all Participants.

        7.3 LIMITATION ON LIABILITY. No employee of the Company or member of the
Board or Committee shall be subject to any liability with respect to duties
under the Amended and Restated Plan unless the person acts fraudulently or in
bad faith. To the extent permitted by law, the Company shall indemnify each
member of the Board or Committee, and any employee of the Company with duties
under the Amended and Restated Plan, who was or is a party, or is threatened to
be made a party, to any threatened, pending or completed proceeding, whether
civil, criminal, administrative or investigative, by reason of such person's
conduct in the performance of duties under the Amended and Restated Plan.

                                   ARTICLE 8.

                                CHANGE IN CONTROL

        8.1 CHANGE IN CONTROL. In order to preserve a Participant's rights in
the event of a Change in Control of the Company, (i) the time period relating to
the exercise or realization of all outstanding Options, Rights to Purchase and
Restricted Stock shall automatically accelerate immediately prior to the
consummation of such Change in Control, and (ii) with respect to Options, Rights
to Purchase, or Deferred Shares the Administrator in its discretion may, at any
time an Option, Right to Purchase, or Deferred Share Award is granted, or at any
time thereafter, take one or more of the following actions: (A) provide for the
purchase or exchange of each Option or Right to Purchase for an amount of cash
or other property having a value equal to the difference, or spread, between (x)
the value of the cash or other property that the Participant would have received
pursuant to such Change in Control transaction in exchange for the shares
issuable upon exercise of the Option or Right to Purchase had the Option or
Right to Purchase been exercised immediately prior to such Change in Control
transaction and (y) the Exercise Price of such Option or the Purchase Price
under such Right to Purchase, (B) adjust the terms of

                                       11
<PAGE>

the Options, Rights to Purchase, or Deferred Shares in a manner determined by
the Administrator to reflect the Change in Control, (C) cause the Options,
Rights to Purchase, or Deferred Shares to be assumed, or new rights substituted
therefor, by another entity, through the continuance of the Amended and Restated
Plan and the assumption of outstanding Options, Rights to Purchase, or Deferred
Shares, or the substitution for such Options, Rights to Purchase, and Deferred
Shares of new options, new rights to purchase or new deferred shares of
comparable value covering shares of a successor corporation, with appropriate
adjustments as to the number and kind of shares and Exercise Prices, in which
event the Amended and Restated Plan and such Options, Rights to Purchase, or
Deferred Shares, or the new options, rights to purchase and deferred shares
substituted therefor, shall continue in the manner and under the terms so
provided, or (D) make such other provision as the Administrator may consider
equitable. If the Administrator does not take any of the forgoing actions, all
Options, Rights to Purchase, or Deferred Shares shall terminate upon the
consummation of the Change in Control, unless the Common Stock remains listed or
admitted to trading on a national stock exchange or a NASDAQ market system. The
Administrator shall cause written notice of the proposed Change in Control
transaction to be given to all Participants not less than fifteen (15) days
prior to the anticipated effective date of the proposed transaction.

                                   ARTICLE 9.

                      AMENDMENT AND TERMINATION OF THE PLAN

        9.1 AMENDMENTS. The Board may from time to time alter, amend, suspend or
terminate the Amended and Restated Plan in such respects as the Board may deem
advisable, provided however, no such amendment shall be made without the
approval of the Company's stockholders to the extent such approval is required
by law or agreement or if such amendment would:

    (i)    materially increase the benefits accruing to the Participants;

    (ii)   increase the number of shares of Common Stock available for issuance
           under the Amended and Restated Plan;

    (iii)  materially modify the requirements for eligibility to participate in
           the Amended and Restated Plan;

    (iv)   permit the grant of any Award at an exercise price or purchase price
           below 100% of Fair Market Value on the date of grant; or

    (v)    allow for the modification of any outstanding Award to reduce the
           exercise price or the purchase price of such Award below 100% of Fair
           Market Value on the date of grant of such Award.

        Notwithstanding the foregoing, the Board may alter or amend the Amended
and Restated Plan to comply with the following: i) the elections made by
employees of the Company or an Affiliated Company prior to the 2001 Annual
Shareholders' Meeting to defer a part or their entire 2001 bonus pursuant to the
terms and conditions contained within the Chairman's Roundtable Deferral of 2001
Annual Bonus Memo; and ii) requirements under the Code relating to Incentive
Options or other types of options which give Optionees more favorable tax
treatment than that applicable to Options granted under this Amended and
Restated Plan as of the date of its adoption. Upon any such alteration or
amendment, any outstanding Option granted hereunder may, if the Administrator so
determines and if permitted by applicable law, be subject to the more favorable
tax treatment afforded to an Optionee pursuant to such terms and conditions.

                                       12
<PAGE>

        9.2 AMENDED AND RESTATED PLAN TERMINATION. Unless the Amended and
Restated Plan shall theretofore have been terminated, the Amended and Restated
Plan shall terminate on the tenth (10th) anniversary of the Effective Date and
no Options, Rights to Purchase, or Deferred Shares may be granted under the
Amended and Restated Plan thereafter, but Option Agreements, Stock Purchase
Agreements and Rights to Purchase then outstanding shall continue in effect in
accordance with their respective terms.

                                   ARTICLE 10.

                                 TAX WITHHOLDING

        10.1 WITHHOLDING. The Company shall have the power to withhold, or
require a Participant to remit to the Company, an amount sufficient to satisfy
any applicable Federal, state, and local tax withholding requirements with
respect to any Options exercised or Restricted Stock or Deferred Share issued
under the Amended and Restated Plan. To the extent permissible under applicable
tax, securities and other laws, the Administrator may, in its sole discretion
and upon such terms and conditions as it may deem appropriate, permit a
Participant to satisfy his or her obligation to pay any such tax, in whole or in
part, up to an amount determined on the basis of the highest marginal tax rate
applicable to such Participant, by (a) directing the Company to apply shares of
Common Stock to which the Participant is entitled as a result of the exercise of
an Option or as a result of the purchase of or lapse of restrictions on
Restricted Stock or (b) delivering to the Company shares of Common Stock owned
by the Participant. The shares of Common Stock so applied or delivered in
satisfaction of the Participant's tax withholding obligation shall be valued at
their Fair Market Value as of the date of measurement of the amount of income
subject to withholding.

                                   ARTICLE 11.

                                  MISCELLANEOUS

        11.1 BENEFITS NOT ALIENABLE. Other than as provided above, benefits
under the Amended and Restated Plan may not be assigned or alienated, whether
voluntarily or involuntarily. Any unauthorized attempt at assignment, transfer,
pledge or other disposition shall be without effect.

        11.2 NO ENLARGEMENT OF EMPLOYEE RIGHTS. This Amended and Restated Plan
is strictly a voluntary undertaking on the part of the Company and shall not be
deemed to constitute a contract between the Company and any Participant to be
consideration for, or an inducement to, or a condition of, the employment of any
Participant. Nothing contained in the Amended and Restated Plan shall be deemed
to give the right to any Participant to be retained as an employee of the
Company or any Affiliated Company or to limit the right of the Company or any
Affiliated Company to discharge any Participant at any time.

        11.3 APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of Common Stock pursuant to Option Agreements and Stock Purchase
Agreements, except as otherwise provided herein, will be used for general
corporate purposes.

                                       13

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