Exhibit 10.1



                            INCENTIVE BONUS AGREEMENT
                            -------------------------


      THIS INCENTIVE  BONUS AGREEMENT (the  "Agreement"),  made this      day of
[      ], 2003  (the   "Effective   Date")  is   entered   into  by   CollaGenex
Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and [           ]
(the "Executive").

      WHEREAS,  the Company  wishes to provide  the  Executive  with  additional
incentive  during the term of this  agreement,  in order to fully develop growth
opportunities available to the Company; and

      WHEREAS,  the Executive  desires to remain with the Company and to advance
the Company's position in the marketplace;

      NOW,  THEREFORE,  in  consideration  of the mutual  covenants and promises
contained  herein,  the  parties  agree as  follows:

      1.  TERM.  The term of this  Agreement  shall be from the  Effective  Date
through the first anniversary  thereof (the "Term").  Thereafter (so long as all
payments required hereunder,  if any, have been made), this Agreement will be of
no force or effect.

      2. TITLE;  CAPACITY. The Executive shall continue to serve in the position
of Senior Vice President,  Sales and Marketing or such other position reasonably
commensurate therewith during the term hereof and shall devote substantially all
of his working time, energy and skill to the business of the Company in order to
perform his duties faithfully and diligently.

      3. INCENTIVE BONUS. In addition to any other compensation and benefits the
Executive is eligible for as a result of his  employment  with the Company,  the
Company agrees to provide the Executive with an incentive  bonus (the "Incentive
Bonus") on the following terms:


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      (a) The Incentive Bonus shall be equal to twelve months of the Executive's
base salary on the Effective Date (a sum of $238,680.00).

      (b) The Incentive Bonus shall be payable if, and only if:

            (i)  The  Executive  remains  actively  employed  with  the  Company
      throughout  the duration of the Term of this Agreement and continues to be
      employed on the first anniversary of the Effective Date; or

            (ii) The  Company  terminates  the  Executive's  employment  without
      "Cause" (as defined in subsection  (e)) prior to the first  anniversary of
      the Effective Date.

      (c) No Incentive  Bonus (nor any portion  thereof) shall be payable if the
Employee  leaves  employment with the Company during the Term for a reason other
than a termination by the Company without Cause.

      (d) The Incentive  Bonus, if earned,  shall be payable in a lump sum on or
before the thirtieth (30th) day following the expiration of the Term.

      (e) "Cause",  as used  herein,  shall be  determined  in good faith by the
Board after a finding of one of the following:

            (i) Failure of the Employee to perform his  assigned  duties for the
      Company or to follow Company policies and procedures;

            (ii) The Employee's  commission of dishonesty,  gross  negligence or
      misconduct,  in connection  with the  Employee's  responsibilities  in his
      position with the Company;

                                     - 2 -

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            (iii) The Employee's  commission of any act or conduct that subjects
      the Company to public  disrespect or ridicule or injures the reputation of
      the Company;

            (iv) Breach of the Employee's non-compete  obligations,  or his duty
      of confidentiality or duty of loyalty to the Company; or

            (v) The conviction of the Employee of, or the entry of a pleading of
      guilty or nolo  contendere by the Employee to, any crime  involving  moral
      turpitude or any felony;

      4. AMENDMENT.  This Agreement may be amended or modified only by a written
instrument executed by both a properly authorized  executive officer or director
of the Company and the Executive.

      5.  GOVERNING LAW AND  JURISDICTION.  This  Agreement  shall be construed,
interpreted  and enforced in  accordance  with the laws of the  Commonwealth  of
Pennsylvania.  The parties agree that any disputes  arising under this Agreement
or otherwise  related to the employment of the Executive by the Company shall be
brought  exclusively in the state and federal courts located in the Commonwealth
of Pennsylvania and the parties hereby waive the defense of lack of personal

      6.   COUNTERPARTS.   This  Agreement  may  be  executed  in  one  or  more
counterparts,  each of which shall be deemed an original  and all of which shall
constitute one in the same Agreement.

                                     - 3 -

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      IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as of
the day and year set forth above.


COLLAGENEX PHARMACEUTICALS, INC.             EXECUTIVE



By:
   --------------------------------          --------------------------
    Name: Brian Gallagher
    Title:  Chief Executive Officer

Dated:                                       Dated:
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