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Exhibit 10.1
 
SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

This Amendment to Employment Agreement (this “Amendment”) is made and entered
into this __ day of June, 2009 by and between Jason Ash (the “Employee”) and
PacificHealth Laboratories, Inc., a Delaware corporation (the “Company”).

W I T N E S S E T H

WHEREAS, the Employee and the Company are parties to that certain Employment
Agreement dated as of January 3, 2008, as amended on August 5, 2008 effective
August 1, 2008 (together, the ‘Employment Agreement”); and

WHEREAS, the Employee and the Company desire to amend the Employment Agreement
to extend the initial term of the Employment Agreement and to make certain other
changes to the terms and conditions of the Employment Agreement.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the undersigned agree as follows:

1.           Capitalized terms used but not defined herein shall have the
meanings set forth in the Employment Agreement.

2.           The first sentence of Section 2 of the Employment Agreement is
hereby restated to provide as follows:

The term of this Agreement, and the term of employment of Employee hereunder,
shall commence on the Effective Date, and shall end December 31, 2012 (the
“Scheduled Termination Date”), provided:

3.           Section 3(a) of the Employment Agreement is amended to delete the
requirement for annual increases at least equal to the change in the consumer
price index, so that it shall provide in its entirety as follows:
 
a.           During the term of this Agreement, beginning as of the Effective
Date, Employee shall receive a base salary paid in equal, semi-monthly
installments commencing with the first pay period immediately following the
Effective Date, in the amount of $295,000 per annum. Annual base salary shall be
adjusted with a market increase consistent with the position, Company
performance, and responsibilities of Employee.

4.           In addition to the Options specified in subparagraph i) of
paragraph 3c of the Employment Agreement, Employee shall receive options
exercisable for 200,000 shares of the Company’s Common Stock (“New
Options”).  The New Options shall have an exercise price equal to the closing
price for the Company’s Common Stock on June 23, 2009 of $0.28 per share, shall
have a 5-year life, and shall vest as to 50,000 shares on June 23, 2010; 50,000
shares on June 23, 2011; 50,000 shares on June 23, 2012; and the remaining
50,000 shares on June 23, 2013.  The New Options shall be subject to the
provisions of subparagraphs ii) through vi) of paragraph 3c.

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5.           Employee acknowledges that the relocation/travel/car stipend
provided in Section 4 of the Employment Agreement is not applicable after
December 31, 2009.  The Company agrees, however, to pay an additional one-time
lump sum stipend in the amount of $50,000 in the event all of the following
occur:

(i)           Employee terminates his employment under the Employment Agreement
for Good reason, or the Company terminates his employment under the Employment
Agreement without cause;

(ii)           As a result of such termination, Employee’s H1B visa is
terminated within 30 days of termination from the Company and he is required to
leave the United States upon 30 days (or less) notice; and

(iii)           Employee in fact does leave the United States for the above
reasons without having obtained a new visa.

6.           Except as modified by this Amendment, and previous amendments, all
terms, provisions and conditions of the Employment Agreement shall remain
unchanged and in full force and effect.

7.           This Amendment may be executed in counterparts and by facsimile,
each of which shall constitute an original and all of which shall constitute one
and the same Amendment.

IN WITNESS WHEREOF, this Amendment has been executed by the Company, by its duly
authorized representative, and by the Employee, as of the date first above
written.

PACIFICHEALTH LABORATORIES, INC.    EMPLOYEE                       By:
 
 
      Stephen Kuchen   Jason Ash    
Chief Financial Officer
     

 
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