PHARMACEUTICAL RESOURCES, INC.
1997 DIRECTORS STOCK OPTION PLAN
Effective October 28, 1997
As used herein, the following terms have the meanings hereinafter set forth unless the context clearly indicates to
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Company" shall mean Pharmaceutical Resources, Inc.
(c) "Date of Grant" shall mean, with respect to any Eligible Director: (a) the Effective Date with respect to those
Options granted on the Effective Date,
(b) the date such Eligible Director is initially elected to the Board of Directors if such Eligible Director was first
elected after the Effective Date, and (c) for each respective fiscal year of the Company thereafter, the date on
which the shareholders of the Company shall elect directors at an annual meeting of shareholders or any
(d) "Effective Date" shall mean October 28, 1997, the date of adoption by the Board.
(e) "Eligible Director" shall mean any Director of the Company who is not an employee of the Company or its
(f) "Fair Market Value" on any day shall mean (a) if the principal market for the Stock is The New York Stock
Exchange, any other national securities exchange or The NASDAQ Stock Market, the closing sales price regular
way of the Stock on such day as reported by such exchange or market, or on a consolidated tape reflecting
transactions on such exchange or market, or (b) if the principal market for the Stock is not a national securities
exchange and if there are no closing prices reported on The NASDAQ Stock Market, the mean between the
closing bid and the closing asked prices for the Stock on such day as quoted on such market, or (c) if there are
no such prices quoted on The NASDAQ Stock Market, the price furnished by any New York Stock Exchange
member selected by the Company from time to time for such purpose; provided that if clauses (a), (b) and (c) of
this paragraph are all inapplicable, or if no