EXHIBIT 10.4
                                                                    ------------

                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT is entered into as of the 1st day of January 2002
(the "Effective Date") by and between Bentley Pharmaceuticals. Inc., a Delaware
corporation (the "Employer"), and Robert J. Gyurik (the "Employee").

                                    RECITALS

     The Employer desires to employ the Employee, and the Employee desires to be
employed by the Employer, all upon the terms and provisions and subject to the
conditions set forth in this Agreement.

                                   WITNESSETH

     NOW THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree to be legally bound as follows:

1. EMPLOYMENT. The Employer hereby employs the Employee, and the Employee hereby
accepts such employment, as Vice President of Pharmaceutical Development of the
Employer upon the terms and subject to the conditions set forth in this
Agreement. The Employee shall perform such functions as are consistent with
these positions under the supervision of the Chief Executive Officer or the
Board of Directors of the Employer. The Employee shall, without any compensation
in addition to that which is specifically provided in this Agreement, serve in
such further offices or positions with Employer or any subsidiary or affiliate
of Employer (collectively, the "Employer Group") as shall from time to time be
reasonably requested by the Chief Executive Officer or the Board of Directors of
Employer.

2. TERM. Subject to the termination provisions hereinafter contained, the term
of employment under this Agreement shall be for an initial term commencing on
the Effective Date and terminating on December 31, 2003. This Agreement shall
thereafter be automatically renewed for successive one (1) year terms, unless
the Employee's employment with the Company has been terminated, as hereinafter
provided, or unless either party shall have given the other party notice of
termination of this Agreement as of its then applicable date of expiration of
the Term at least one year before the then applicable date of expiration. The
term of employment hereunder, and any extension thereof pursuant to this
paragraph, are referred to as the "Term".

3. COMPENSATION, REIMBURSEMENT, ETC.

   A.   Base Salary. Commencing on the Effective Date, the Employer shall pay to
        the Employee as compensation for all services rendered by the Employee
        an annual base salary of $210,000, payable in accordance with the
        Employer's regular payroll practices, plus annual bonuses as determined
        by the Compensation Committee of the Board of Directors (the
        "Compensation Committee"), subject to Sections 3(d) and 3(e). If an
        increase in base salary is determined for a calendar year after January
        1 and before April 30 of that year, the increase shall be

<PAGE>

        retroactive to the beginning of that year. Annual reviews of the
        Employee will be on a calendar year basis.

   B.   Expense Reimbursement. The Employer shall reimburse the Employee on a
        semi-monthly basis for all reasonable expenses incurred by the Employee
        in the performance of his duties under this Agreement; provided however,
        that the Employee shall have previously furnished to the Employer an
        itemized account, satisfactory to the Employer, in substantiation of
        such expenditures.

   C.   Benefits. The Employee shall be entitled to health and other benefits on
        the same terms and conditions as the Employer has made available to
        other senior executives of Employer, including participation in the
        Employer's health plans. The Employer shall obtain a term life insurance
        and disability policy for the Employee with a value equal to at least
        two year's base salary payable to the estate or beneficiaries of the
        Employee upon the Employee's death or to the Employee in the event of
        disability as provided in Section 7(b) hereof.

   D.   Bonuses. The Employee shall be eligible for a bonus each year of the
        Term of up to 50% of annual salary, payable in cash and/or common stock,
        as determined by the Compensation Committee. Such annual bonus will be
        awarded as soon as practicable after March 15th of the following year.

   E.   Annual Review. The Employee shall be reviewed by the CEO who will give
        recommendations to the Compensation Committee on an annual (calendar
        year) basis.

   F.   Stock Option Plan. The Employee will be eligible for periodic stock
        option grants (the "Plan Options") under the Employer's 2001 Stock
        Option Plan or another plan as determined by the Compensation Committee
        (collectively, the "Plan").

4. DUTIES. The Employee is engaged as a Vice President of Pharmaceutical
Development of the Employer. In addition, the Employee shall have such other
duties and hold such offices as may from time to time be reasonably assigned to
him by the Chief Executive Officer or the Board of Directors of the Employer.

5. EXTENT OF SERVICES. During the Term, the Employee shall devote his full time,
energy and attention to the benefit and business of the Employer and its
affiliates and shall not be employed by another entity, either directly or as a
consultant to or in any other capacity, except as approved in advance by the
Employer's Board of Directors; provided, however, that no such approval shall be
required to serve as a director, officer or trustee of any trade association or
of any civic or charitable organization so long as such service does not
significantly interfere with the Employee's performance of his duties at the
Company.

6. VACATION AND DAYS OFF. The Employee may take a maximum of four weeks of
vacation each calendar year, at times to be determined in a manner most
convenient to the business of the Employer, as approved by the Chief Executive
Officer. A maximum of one week unused vacation may be carried over from one
calendar year to the next.


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7. TERMINATION FOLLOWING DEATH OR INCAPACITY.

   A.   Death. All rights of the Employee under this Agreement shall terminate
        upon death (other than rights accrued prior thereto). All Plan Options
        shall vest in accordance with the Plan and shall be exercisable for a
        period of time as set forth in the Plan. The Employer shall pay to the
        estate of the Employee any unpaid salary and other benefits due as well
        as reimbursable expenses accrued and owing to the Employee at the time
        of his death. The Employer agrees to maintain life insurance on the
        Employee equivalent to two year's salary and will be payable to the
        Employee's estate or beneficiaries upon his death. The Employer shall
        have no additional financial obligation under this Agreement to the
        Employee or his estate beyond the term-life insurance benefit and as
        discussed above.

   B.   Disability.

        i.     During any period of disability, illness or incapacity during the
               Term which renders the Employee at least temporarily unable to
               perform the services required under this Agreement, the Employee
               shall receive his salary payable under Section 3 of this
               Agreement, less any benefits received by him under any insurance
               carried by or provided by the Employer; provided however, all
               rights of the Employee under this Agreement (other than rights
               already accrued) shall terminate as provided below upon the
               Employee's permanent disability (as defined below).

        ii.    The term "permanent disability" as used in this Agreement shall
               mean the inability of the Employee, as determined by the Board of
               Directors of the Employer, by reason of physical or mental
               disability to perform the duties required of him under this
               Agreement after a period of: (a) 120 consecutive days of such
               disability; or (b) disability for at least six months during any
               twelve month period. Upon such determination, the Board of
               Directors may terminate the Employee's employment under this
               Agreement upon ten (10) days prior written notice. In the event
               of permanent disability all Plan Options shall vest in accordance
               with the terms of the Plan and shall be exercisable for a period
               of time as set forth in the Plan.

        iii.   If any determination of the Board of Directors with respect to
               permanent disability is disputed by the Employee, the parties
               hereto agree to abide by the decision of a panel of three
               physicians. The Employee and Employer shall each appoint one
               member, and the third member of the panel shall be appointed by
               the other two physicians. If the physicians appointed by the
               parties have not agreed upon the third physician within fifteen
               (15) days, either party may petition the New Hampshire State
               Medical Association to appoint a third physician. The Employee
               agrees to make himself available for and to submit to reasonable
               examinations by such physicians as may be directed by the
               Employer. Failure to submit to any such exam shall constitute a
               material breach of this Agreement. In the event such a


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<PAGE>

               panel is convened, the party whose position is not sustained will
               bear all the associated costs.

8. OTHER TERMINATIONS.

A.       Without Cause.

        i.     Either the Employee or the Employer may terminate the Employee's
               employment hereunder at any time upon written notice.

        ii.    If the Employee gives notice pursuant to paragraph (i) above, the
               Employer shall have the right to either (a) relieve the Employee,
               in whole or in part, of his duties under this Agreement or (b) to
               accelerate the date of termination of employment to coincide with
               the date on which the written notice is received.

        iii.   Notwithstanding any provisions hereof to the contrary, the
               Employer may terminate Employee's employment hereunder without
               cause at any time. If the Employer terminates the Employee's
               Employment pursuant to the provisions of this section 8(a), it
               shall pay to the Employee as a severance benefit, in cash, an
               amount equal to the Employee's Annual Base Salary plus bonus (the
               higher of the bonus target for the current year or the bonus paid
               in the prior year). Additionally, the vesting of Plan Options
               shall be accelerated on a pro rata basis determined by the number
               of completed months of service during the then current annual
               vesting period, and all other vesting of Plan Options shall
               cease.

B.       For Cause.

        i.     The Employer may terminate the Employee's employment hereunder
               without notice (a) upon the Employee's breach of any material
               provision of this Agreement, or (b) for other "good cause" (as
               defined below).

        ii.    The term "good cause" as used in this Agreement shall include,
               but shall not be limited to: (a) conduct which breaches the
               Employee's fiduciary duties to the Employer; (b) a significant
               performance shortcoming, which has been brought to the Employee's
               attention in writing by his supervisor, where the supervisor has
               provided the Employee with written performance improvement
               objectives and a timeline of at least three months to achieve
               these objectives and the Employee fails to remedy the shortcoming
               within such period (or such extended period as the supervisor may
               determine based on the employee's progress towards achievement of
               the improvement plan); (c) conviction of any crime involving
               moral turpitude; and (d) substantial dependence, as determined by
               the Board of Directors of the Employer, on any addictive
               substance, including but not limited to alcohol, amphetamines,
               barbiturates, methadone, cannabis, cocaine, PCP, THC, LSD, or any
               other narcotic drug; provided, however, that after a Change in
               Control (as defined below) "good cause" termination shall not


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<PAGE>

               include termination for the cause set forth in the preceding
               clause (b). Should the Employee dispute such a determination, the
               parties hereto agree to abide by the decision of a panel of three
               physicians as described in section 7(b)(iii).

        iii.   If the Employee's employment is terminated pursuant to Section
               8(b), the Employer shall pay to the Employee any unpaid salary
               and other benefits and reimbursable expenses accrued and owing to
               the Employee. Such payment shall be in full and complete
               discharge of any and all liabilities or obligations of the
               Employer to the employee hereunder. The Employee shall be
               entitled to no further benefits under this Agreement other than
               extension of health benefits as required by law, at the
               Employee's expense. All Plan Options shall cease vesting in
               accordance with the terms thereof and the Plan.

9. TERMINATION OF EMPLOYMENT UPON CHANGE IN CONTROL.

   A.   For purposes hereof, a "Change in Control" shall be deemed to have
        occurred if:

        i.     there has occurred a "change in control" as such term is used in
               Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
               Securities Exchange Act of 1934, as in effect as of the date
               hereof (hereinafter referred to as the "1934 Act");

        ii.    if there has occurred a change in "control" as the term "control"
               is defined in Rule 12b-2 promulgated under the 1934 Act;

        iii.   when any person (as such term is defined in Section 3(a)(9) and
               13(d)(3) of the 1934 Act, a "Person"), during the Term, becomes a
               beneficial owner, directly or indirectly, of securities of the
               Employer representing 20% or more of the Employer's then
               outstanding securities having the right to vote on the election
               of directors if such person did not have 20% or more of the
               Employer's then outstanding securities at the commencement of the
               Term; or if a Person having more than 20% of the Employer's then
               outstanding securities increases his or its holdings by more than
               15% of the Employer's then outstanding securities during the
               Term;

        iv.    if the stockholders of the Employer approve a plan of complete
               liquidation or dissolution of the Employer, or a merger or
               consolidation (a) in which the voting securities of the Company
               outstanding immediately prior thereto do not represent (either by
               remaining outstanding or by being converted into voting
               securities of the surviving entity) at least 50.1% of the
               combined voting securities of the Company or such surviving
               entity outstanding immediately after such merger or consolidation
               or (b) in which no Person acquires 30% or more of the combined
               voting power of the Company's then outstanding securities; or


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<PAGE>

        v.     if during any period of twenty-four (24) consecutive months (not
               including any period prior to the date of this Agreement),
               individuals who at the beginning of such period constitute the
               Board and any new director (other than a director designated by a
               person who has entered into an agreement with the Company to
               effect a transaction described in paragraphs i, ii or iii of this
               section 9(a)) whose election by the Board or nomination for
               election by the stockholders of the Company was approved by a
               vote of at least two-thirds (2/3) of the directors then still in
               office who either were directors at the beginning of such period
               or whose election or nomination for election was previously so
               approved by the stockholders, cease for any reason to constitute
               a majority thereof; provided, however, in no event shall any mere
               action (other than sales or purchases of the Employer's
               outstanding securities) by Michael McGovern and the Company be
               deemed to be a Change in Control.

   B.   The Employee may terminate his employment at any time within 12 months
        after a Change in Control and any of the following events has occurred:

        i.     an assignment to the Employee of any duties inconsistent with the
               status of the Employee's office and/or position with the Employer
               as constituted immediately prior to the Change in Control or a
               significant adverse change in the nature or scope of the
               Employee's authority, power, compensation, functions or duties as
               constituted immediately prior to the Change in Control,

        ii.    a failure by the Employer, after having received written notice
               from the Employee specifying a material breach of its obligations
               pursuant to this Agreement, to cure such breach within 30 days
               after receipt of such notice; or

        iii.   the Company requires Employee to move Employee's primary place of
               employment to a location more than 30 miles from the Company's
               primary place of business before the Change in Control (other
               than temporary relocation or business travel in the ordinary
               course).

     An election by the Employee to terminate his employment following a Change
in Control shall not be deemed a voluntary termination of employment by the
Employee for the purpose of interpreting the provisions of this Agreement or any
of the Employer's employee benefit plans and arrangements. The Employee's
continued employment with the Employer for any period of time during the Term of
this Agreement after a Change of Control shall not be considered a waiver of any
right he may have to terminate his employment to the extent permitted under this
Section 9(b).

     If the Employer terminates the Employee without cause pursuant to Section
8(a) hereof within 12 months after a Change in Control has occurred, such
termination shall be deemed an election by the Employee to terminate his
employment pursuant to this Section 9(b) and Employee shall have the right to
the compensation set forth in Section 9(c) instead of the


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<PAGE>

compensation set forth in Section 8(a). In addition, in the event of such
termination, the Employee shall continue to have the obligations provided for in
Sections 11 and 12 hereof.

   C.   If the Employee's employment with the Employer is terminated under
        Section 9(b) hereof,

        i.     the Employee shall be paid in a lump sum, within 30 days after
               termination of employment, in cash, severance pay in an amount
               equal to 2 times his Base Salary and 2 times the average of his
               bonuses (if any) of the two prior years;

        ii.    all stock options held by the Employee immediately prior to the
               effective date of the Change in Control shall immediately vest
               and become fully exercisable for the period of time indicated in
               the option contract;

        iii.   health benefits as provided in Section 3(c) shall continue for up
               to two years from the date of termination, including
               reimbursement of COBRA payments to the extent no longer covered
               under the Company's plans; provided, however, that benefits will
               be subject to mitigation to the extent of comparable benefits at
               a new job; and

        iv.    life insurance benefits may be continued for up to two years from
               the date of termination at the option of the Employee and at the
               Employee's expense.

     The lump sum severance payment described in clause (i) of this Section 9(c)
is hereinafter referred to as the "Termination Compensation." The amount of the
Termination Compensation shall be determined, at the expense of the Employer, by
its regular outside certified public accountants. Upon payment of the
Termination Compensation and any other accrued compensation, this Agreement
shall terminate (except for the Employee's obligations pursuant to Sections 10,
11, 12, 13 and 14 hereof and the continuing obligations to provide the benefits
set forth in clauses (ii) - (iv) of this Section 9(c) in accordance with the
terms thereof) and be of no further force or effect.

   D.   After a Change in Control has occurred, the Employer shall honor the
        Employee's exercise of the Employee's outstanding stock options and any
        other stock related rights, in accordance with this Employment
        Agreement. After a Change in Control has occurred and the Employee's
        employment is terminated as a result thereof, the Employee (or his
        designated beneficiary or personal representative(s) shall also receive,
        except to the extent already paid pursuant to Section 9(c)(i) hereof or
        otherwise, the sums the Employee would otherwise have received (whether
        under this Agreement, by law or otherwise) by reason of termination of
        employment as if a Change of Control had not occurred.

   E.   Notwithstanding anything in this Agreement to the contrary, the Employee
        shall have the right, prior to the receipt by him of any amounts due
        hereunder, to treat some or all of such amounts as a loan from the
        Employer which the Employee shall repay to the Employer, within 90 days
        from the date of receipt, with interest


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        at the rate provided in Section 7872 of the Code. The repayment of the
        loan balance will be with the deferred severance which will then be
        supplied by the Employer. Notice of any such waiver or treatment of
        amounts received as a loan shall be given by the Employee to the
        Employer in writing and shall be binding upon the Employer.

   F.   The Employee shall not be required to mitigate the payment of the
        Termination Compensation or other benefits or payments by seeking other
        employment. To the extent that the Employee shall, after the Term of
        this Agreement, receive compensation from any other employment, the
        payment of Termination Compensation or other benefits or payments shall
        not be adjusted (except as set forth in Section 9(c)(iii)).

10. DISCLOSURE, PROPRIETARY RIGHTS. The Employee agrees that during the Term of
his employment by the Employer, he will disclose only to the Employer all ideas,
methods, plans, formulas, processes, trade secrets, developments, or
improvements known by him which relate directly or indirectly to the business of
the Employer, including any lines of business, acquired by the Employee during
his employment by the Employer; provided, that nothing in this Section 10 shall
be construed as requiring any such communication where the idea, plan, method or
development is lawfully protected from disclosure, including but not limited to
trade secrets of third parties. For purposes of the Agreement, the term "the
business of the Employer" shall include, without limitation, the following: the
design, development, obtaining regulatory approval, production, manufacturing,
marketing, and licensing of prescription and non-prescription drugs, medical
devices, and methods for the diagnosis, evaluation, treatment or correction of
any disease, injury, illness or other medical or health condition and such other
lines of business as the Employer shall engage in during the Term hereof. The
parties further agree that any inventions, formulas, trade secrets, ideas, or
secret processes which shall arise from any disclosure made by the Employee
pursuant to this paragraph, whether or not patentable, shall be and remain the
sole property of the Employer.

11. CONFIDENTIALITY. The Employee agrees to keep in strict secrecy and
confidence any and all information the Employee assimilates or to which he has
access during his employment by the Employer and which has not been publicly
disclosed and is not a matter of common knowledge in the fields of work of the
Employer. The Employee agrees that both during and after the Term of his
employment by the Employer, he will not, without prior written consent of the
Employer, disclose any such confidential information to any third person,
partnership, joint venture, company, corporation, or other organization.

12. NON-COMPETITION. If the Employee is terminated for good cause the Employee
covenants that he will not engage, directly or indirectly, alone or in
conjunction with others, as an agent, employee, investor, director, shareholder
or partner in any business which provides products, information and/or services
to the public which are competitive with those provided by the Employer Group;
provided, however, that the ownership by the Employee of 5% or less of the
issued and outstanding shares of any class of securities which is traded on a
national securities exchange or, in the over the counter market shall not
constitute a breach of the provisions of this section. The Employee will not on
his own behalf or on behalf of any other business enterprise, directly or
indirectly, solicit or induce any creditor, customer, client,


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supplier, officer, employee or agent of the Employer Group to sever his/her or
its relationship with or leave the employ of the Employer Group. The covenants
in this Section 12 shall continue in full force and effect throughout the Term
hereof and for a one year period subsequent to the termination hereof.

13. CONFLICT OF INTEREST. The employee shall devote his full time, energy and
attention to the benefit and business of the employer and its affiliates and
shall not be employed by another entity, except as permitted in Section 5. It is
understood by and between the parties hereto that the foregoing restrictive
covenants set forth in Sections 10, 11, 12, 13 and 14 are essential elements of
this Agreement, and that but for the agreement of the Employee to comply with
such covenants, the Employer would not have entered into this Agreement.
Notwithstanding anything to the contrary in this Agreement, the terms and
provisions of Sections 11, 12, 13 and 14 of this Agreement, together with any
definitions used in such terms and provisions, shall survive the termination or
expiration of this Agreement. The existence of any claim or cause of action of
the Employee against the Employer, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Employer of
such covenants.

14. SPECIFIC PERFORMANCE. The Employee agrees that damages at law will be
insufficient remedy to the Employer if the employee violates the terms of
Sections 10, 11, 12 or 13 of this Agreement and that the Employer shall be
entitled, upon application to a court of competent jurisdiction, to obtain
injunctive relief to enforce the provisions of such Sections, which injunctive
or other equitable relief shall be in addition to any other rights or remedies
available to the Employer, and the Employee agrees that he will not raise and
hereby waives any objection or defense that there is an adequate remedy at law.

15. COMPLIANCE WITH OTHER AGREEMENTS. The Employee represents and warrants that
the execution of this Agreement by him and his performance of his obligation
hereunder will not conflict with, result in the breach of any provision of,
terminate, or constitute a default under any agreement to which the Employee is
or may be bound.

16. WAIVER OF BREACH. The waiver by the Employer of a breach of any of the
provisions of this Agreement by the Employee shall not be construed as a waiver
of any subsequent breach by the Employee.

17. D&O INSURANCE; INDEMNIFICATION. The Employer hereby agrees to maintain in
full force and effect for the duration of this Agreement, Director's and
Officer's Liability Insurance of at least $2,000,000 and to indemnify and hold
harmless to the full extent permitted by law, the Employee for acts performed by
him in carrying out his duties and responsibilities in accordance with this
Agreement.

18. BINDING EFFECT, ASSIGNMENT. The rights and obligations of the Employer under
this Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Employer. This Agreement is a personal employment
contract and the rights, obligations and interests of the Employee hereunder may
not be sold or assigned or hypothecated. Whenever in this Agreement reference is
made to any party, such reference shall be deemed to include the successors,
assigns, heirs, and legal representatives of such party, and without limiting
the generality of the foregoing, all representations, warranties, covenants and
other agreements made


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by or on behalf of the Employee in this Agreement shall inure to the benefit of
the successors and assigns of the Employer; provided, however, that nothing
herein shall be deemed to authorize or permit the Employee to assign any of his
rights or obligations under this Agreement to any other person (whether or not a
family member or other affiliate of the Employee, other than as specifically
provided in this Agreement), and the Employee covenants and agrees that he shall
not make any such assignments.

19. MODIFICATION, AMENDMENT, ETC. Each and every modification and amendment of
this Agreement shall be in writing and signed by all of the parties hereto, and
each and every waiver of, or consent to any departure from, any representation,
warranty, covenant or other term or provision of this Agreement shall be in
writing and signed by each affected party hereto.

20. NOTICE. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and if sent by certified or registered mail,
first class, return receipt requested, to the Employer, at its executive offices
as set forth in its filings with the Securities and Exchange Commission and, to
the Employee, at his address as set forth on the current employment records of
the Employer.

21. SEVERABILITY. It is agreed by the Employer and Employee that if any portion
of the provisions set forth in this Agreement are held to be unreasonable,
arbitrary or against public policy, then that portion of such covenants shall be
considered divisible both as to time and geographical area. The Employer and
Employee agree that if any court of competent jurisdiction determines the
specific time period or the specified geographical area applicable to this
Agreement to be unreasonable, arbitrary or against public policy, then a lesser
time period or geographical area which is determined to be reasonable,
non-arbitrary and not against public policy may be enforced against the
Employee. The Employer and Employee agree that the foregoing covenants are
appropriate and reasonable when considered in light of the nature and extent of
the business conducted by the Employer.

22. ENTIRE AGREEMENT. This Agreement contains the entire agreement between the
Employer and the Employee and supersedes all prior agreements and
understandings, oral or written, with respect to the subject matter hereof.

23. HEADINGS. The headings contained in this agreement are for reference
purposes only and shall not affect the meaning or interpretation of the
Agreement.

24. GOVERNING LAW. This Agreement shall be construed and enforced in accordance
with the laws of the State of New Hampshire.

25. COUNTERPARTS. This Agreement may be executed in two counterpart copies of
the entire document or of signature pages to the document, each of which may be
executed by one or more of the parties hereto, but all of which when taken
together, shall constitute a single agreement binding upon all of the parties
hereto.


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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written.

Employer:                                     Employee:

BENTLEY PHARMACEUTICALS, INC.


By: /S/JAMES R. MURPHY                        /S/ ROBERT J. GYURIK
    --------------------------------          --------------------------
     James R. Murphy                          Robert J. Gyurik
     Chairman and CEO


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