1992 Stock Option Plan - Bio-Technology General Corp.


                          BIO-TECHNOLOGY GENERAL CORP.
                             1992 STOCK OPTION PLAN

     1. Purpose. The purpose of the Bio-Technology General Corp. 1992 Stock
Option Plan (the 'Plan') is to enable Bio-Technology General Corp. (the
'Company') and its stockholders to secure the benefits of common stock ownership
by key personnel of the Company and its subsidiaries. The Board of Directors of
the Company (the 'Board') believes that the granting of options under the Plan
will foster the Company's ability to attract, retain and motivate those
individuals who will be largely responsible for the continued profitability and
long-term future growth of the Company.

     2. Stock Subject to the Plan. The Company may issue and sell a total of
12,000,000 shares of its common stock, $.01 par value (the 'Common Stock'),
pursuant to the Plan. Such shares may be either authorized and unissued or held
by the Company in its treasury. New options may be granted under the Plan with
respect to shares of Common Stock which are covered by the unexercised portion
of an option which has terminated or expired by its terms, by cancellation or
otherwise.

     3. Administration. The Plan will be administered by a committee (the
'Committee') consisting of at least two directors appointed by and serving at
the pleasure of the Board. To the extent required by the applicable provisions
of Rule 16(b)-3 under the Securities Exchange Act of 1934, as amended (the
'Exchange Act'), no member of the Committee shall have received an option under
the Plan or any other plan within one year before his or her appointment or such
other period as may be prescribed by said Rule. Subject to the provisions of the
Plan, the Committee, acting in its sole and absolute discretion, will have full
power and authority to grant options under the Plan, to interpret the provisions
of the Plan, to fix and interpret the provisions of option agreements made under
the Plan, to supervise the administration of the Plan, and to take such other
action as may be necessary or desirable in order to carry out the provisions of
the Plan. A majority of the members of the Committee will constitute a quorum.
The Committee may act by the vote of a majority of its members present at a
meeting at which there is a quorum or by unanimous written consent. The decision
of the Committee as to any disputed question, including questions of
construction, interpretation and administration, will be final and conclusive on
all persons. The Committee will keep a record of its proceedings and acts and
will keep or cause to be kept such books and records as may be necessary in
connection with the proper administration of the Plan.

     4. Eligibility. Options may be granted under the Plan to present or future
key employees of the Company or a subsidiary of the Company (a 'Subsidiary')
within the meaning of Section 424(f) of the Internal Revenue Code of 1986 (the
'Code'), and to consultants to the Company or a Subsidiary who are not
employees. Options may not be granted to directors of the Company or a
Subsidiary who are not also employees of or consultants to the Company and/or a
Subsidiary. Subject to the provisions of the Plan, the Committee may from time
to time select the persons to whom options will be granted, and will fix the
number of shares covered by each such option and establish the terms and
conditions thereof, including, without







limitation, the exercise price, restrictions on exercisability of the option or
on the disposition of the shares of Common Stock issued upon exercise of the
option, and whether or not the option is to be treated as an incentive stock
option within the meaning of Section 422 of the Code (an 'Incentive Stock
Option').

     5. Terms and Conditions of Options. Each option granted under the Plan will
be evidenced by a written agreement in a form approved by the Committee. Each
such option will be subject to the terms and conditions set forth in this
paragraph and such additional terms and conditions not inconsistent with the
Plan (and, in the case of an Incentive Stock Option, not inconsistent with the
provisions of the Code applicable thereto) as the Committee deems appropriate.

     (a) Option Exercise Price. In the case of an option which is not treated as
an Incentive Stock Option, the exercise price per share may not be less than the
par value of a share of Common Stock on the date the option is granted; and, in
the case of an Incentive Stock Option, the exercise price per share may not be
less than 100% of the fair market value of a share of Common Stock on the date
the option is granted (110% in the case of an optionee who, at the time the
option is granted, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or a Subsidiary (a 'ten
percent shareholder')). For purposes hereof, the fair market value of a share of
Common Stock on any date will be equal to the closing sale price per share as
published by a national securities exchange on which shares of the Common Stock
are traded on such date or, if there is no sale of Common Stock on such date,
the average of the bid and asked prices on such exchange at the closing of
trading on such date or, if shares of the Common Stock are not listed on a
national securities exchange on such date, the closing price or, if none, the
average of the bid and asked prices in the over the counter market at the close
of trading on such date, or if the Common Stock is not traded on a national
securities exchange or the over the counter market, the fair market value of a
share of the Common Stock on such date as determined in good faith by the
Committee.

     (b) Option Period. The period during which an option may be exercised will
be fixed by the Committee and will not exceed 10 years from the date the option
is granted (5 years in the case of an Incentive Stock Option granted to a 'ten
percent shareholder').

     (c) Exercise of Options. No option will become exercisable unless the
person to whom the option was granted remains in the continuous employ or
service of the Company or a Subsidiary for at least one year (or for such other
period as the Committee may designate) from the date the option is granted.
Subject to earlier termination of the option as provided herein, unless the
Committee determines otherwise, options will be exercisable from and after the
date of grant. Vesting or other restrictions on the exercisability of an option
will be set forth in the related option agreement. All or part of the
exercisable portion of an option may be exercised at any time during the option
period. An option may be exercised by transmitting to the Company (1) a written
notice specifying the number of shares to be purchased, and (2) payment of the
exercise price, together with the amount, if any, deemed necessary by the
Committee to enable the Company to satisfy its income tax withholding
obligations with 





respect to such exercise (unless other arrangements acceptable to the Company
are made with respect to the satisfaction of such withholding obligations).

     (d) Payment of Exercise Price. The purchase price of shares of Common Stock
acquired pursuant to the exercise of an option granted under the Plan may be
paid in cash and/or such other form of payment as may be permitted under the
option agreement, including, without limitation, previously-owned shares of
Common Stock and installment payments under the optionee's promissory note.

     (e) Rights as a Stockholder. No shares of Common Stock will be issued in
respect of the exercise of an option granted under the Plan until full payment
therefor has been made (and/or provided for where all or a portion of the
purchase price is being paid in installments), and the applicable income tax
withholding obligation has been satisfied or provided for. The holder of an
option will have no rights as a stockholder with respect to any shares covered
by an option until the date a stock certificate for such shares is issued to him
or her. Except as otherwise provided herein, no adjustments shall be made for
dividends or distributions of other rights for which the record date is prior to
the date such stock certificate is issued.

     (f) Nontransferability of Options. No option granted under the Plan may be
assigned or transferred except by will or by the applicable laws of descent and
distribution; and each such option may be exercised during the optionee's
lifetime only by the optionee.

     (g) Termination of Employment or Other Service. If an optionee ceases to be
employed by or to perform services for the Company and any Subsidiary for any
reason other than death or disability (defined below), then, unless extended by
the Committee acting in its sole discretion, each outstanding option granted to
him or her under the Plan will terminate on the date three months after the date
of such termination of employment or service, or, if earlier, the date specified
in the option agreement. If an optionee's employment or service is terminated by
reason of the optionee's death or disability (or if the optionee's employment or
service is terminated by reason of his or her disability and the optionee dies
within one year after such termination of employment or service), then, unless
extended by the Committee acting in its sole discretion, each outstanding option
granted to the optionee under the Plan will terminate on the date one year after
the date of such termination of employment or service (or one year after the
later death of a disabled optionee) or, if earlier, the date specified in the
option agreement. For purposes hereof, the term 'disability' means the inability
of an optionee to perform the customary duties of his or her employment or other
service for the Company or a Subsidiary by reason of a physical or mental
incapacity which is expected to result in death or be of indefinite duration.

     (h) Incentive Stock Options. In the case of an Incentive Stock Option
granted under the Plan, at the time the option is granted, the aggregate fair
market value (determined at the time of grant) of the shares of Common Stock
with respect to which Incentive Stock Options are exercisable for the first time
by the optionee during any calendar year may not exceed $100,000.



     (i) Other Provisions. The Committee may impose such other conditions with
respect to the exercise of options, including, without limitation, any
conditions relating to the application of federal or state securities laws, as
it may deem necessary or advisable.

     (j) Maximum Option Grant. The maximum option grant which may be made to an
employee of the Company in any calendar year shall not cover more than 250,000
shares.

     6. Capital Changes, Reorganization, Sale.

     (a) Adjustments Upon Changes in Capitalization. The aggregate number and
class of shares for which options may be granted under the Plan, the maximum
number of shares for which options may be granted to any employee in any
calendar year, the number and class of shares covered by each outstanding option
and the exercise price per share shall all be adjusted proportionately for any
increase or decrease in the number of issued shares of Common Stock resulting
from a split-up or consolidation of shares or any like capital adjustment, or
the payment of any stock dividend.

     (b) Acceleration of Vesting Upon Change of Control. If there is a change of
control of the Company (as defined in subparagraph (f) below), then all
outstanding options shall become fully exercisable whether or not the vesting
conditions, if any, set forth in the related option agreements have been
satisfied, and each optionee shall have the right to exercise his or her options
prior to such change of control and for as long thereafter as the option shall
remain in effect in accordance with its terms and the provisions hereof.

     (c) Conversion of Options on Stock for Stock Exchange. If the shareholders
of the Company receive capital stock of another corporation ('Exchange Stock')
in exchange for their shares of Common Stock in any transaction involving a
merger (other than a merger of the Company in which the holders of Common Stock
immediately prior to the merger have the same proportionate ownership of Common
Stock in the surviving corporation immediately after the merger), consolidation,
acquisition of property or stock, separation or reorganization (other than a
mere reincorporation or the creation of a holding company), all options granted
hereunder shall be converted into options to purchase shares of Exchange Stock
unless the Company and the corporation issuing the Exchange Stock, in their sole
discretion, determine that any or all such options granted hereunder shall not
be converted into options to purchase shares of Exchange Stock but instead shall
terminate, subject to the provisions of subparagraph (b) above and the
optionees' prior exercise rights thereunder. The amount and price of converted
options shall be determined by adjusting the amount and price of the options
granted hereunder in the same proportion as used for determining the number of
shares of Exchange Stock the holders of the Common Stock receive in such merger,
consolidation, acquisition of property or stock, separation or reorganization.
In accordance with subparagraph (b) above, the converted options shall be fully
vested whether or not the vesting requirements set forth in the option agreement
have been satisfied.

     (d) Fractional Shares. In the event of any adjustment in the number of
shares covered by any option pursuant to the provisions hereof, any fractional
shares resulting from such





adjustment will be disregarded and each such option will cover only the number
of full shares resulting from the adjustment.

     (e) Determination of Board to be Final. All adjustments under this
paragraph 6 shall be made by the Board, and its determination as to what
adjustments shall be made, and the extent thereof, shall be final, binding and
conclusive. Unless an optionee agrees otherwise, any change or adjustment to an
Incentive Stock Option shall be made in such a manner so as not to constitute a
'modification' as defined in Section 424(h) of the Code and so as not to cause
the optionee's Incentive Stock Option issued hereunder to fail to continue to
qualify as an Incentive Stock Option.

     (f) Change of Control Defined. For purposes hereof, a change in control of
the Company is deemed to occur if (1) there occurs (A) any consolidation or
merger in which the Company is not the continuing or surviving entity or
pursuant to which shares of the Common Stock would be converted into cash,
securities or other property, other than a merger of the Company in which the
holders of the Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation immediately
after the merger, or (B) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all the
Company's assets; (2) the Company's stockholders approve any plan or proposal
for the liquidation or dissolution of the Company; (3) any person (as such term
is used in Sections 13(d) and 14(d)(2) of the Exchange Act) shall become the
beneficial owner (within the meaning of Rule 13d-3 under said Act) of 40% or
more of the Common Stock other than pursuant to a plan or arrangement entered
into by such person and the Company; or (4) during any period of two consecutive
years, individuals who at the beginning of such period constitute the entire
Board of Directors shall cease for any reason to constitute a majority of the
Board unless the election or nomination for election by the Company's
stockholders of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of the
period.

     7. Amendment and Termination of the Plan. The Board may amend or terminate
the Plan. Except as otherwise provided in the Plan with respect to equity
changes, any amendment which would increase the aggregate number of shares of
Common Stock as to which options may be granted under the Plan, materially
increase the benefits under the Plan, or modify the class of persons eligible to
receive options under the Plan shall be subject to the approval of the holders
of a majority of the Common Stock issued and outstanding. No amendment or
termination may affect adversely any outstanding option without the written
consent of the optionee.

     8. No Rights Conferred. Nothing contained herein will be deemed to give any
individual any right to receive an option under the Plan or to be retained in
the employ or service of the Company or any Subsidiary.

     9. Governing Law. The Plan and each option agreement shall be governed by
the laws of the State of Delaware.




     10. Decisions and Determinations of Committee to be Final. Except to the
extent rights or powers under this Plan are reserved specifically to the
discretion of the Board, the Committee shall have full power and authority to
interpret the Plan and any option agreement made under the Plan and to determine
all issues which arise thereunder or in connection therewith, and the decision
of the Board or the Committee, as the case may be, shall be binding and
conclusive on all interested persons.

     11. Term of the Plan. The Plan shall be effective as of February 28, 1992,
the date on which it was adopted by the Board, subject to the approval of the
stockholders of the Company, which approval was granted on June 1, 1992. The
Plan will terminate on February 27, 2002, the date ten years after the date of
adoption by the Board, unless sooner terminated by the Board. The rights of
optionees under options outstanding at the time of the termination of the Plan
shall not be affected solely by reason of the termination and shall continue in
accordance with the terms of the option (as then in effect or thereafter
amended).