EXHIBIT 10.1


                              EMPLOYMENT AGREEMENT


THIS  EMPLOYMENT  AGREEMENT  is entered into as of the 1st day of July 1998 (the
"Effective  Date")  by and  between  Bentley  Pharmaceuticals  Inc.,  a  Florida
corporation,  (the "Employer") and James R. Murphy (the "Employee"), as the same
may be  modified,  supplemented,  amended or  restated  from time to time in the
manner provided herein.

                                    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 the  President,  Chairman  of the  Board and Chief
Executive  Officer of the Employer upon the terms and subject to the  conditions
set forth in this  Agreement.  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  of Employer or
(collectively,  the  "Employer  Group") as shall from time to time be reasonably
requested by the Board of Directors of Employer. Each office and position within
the Employer  Group in which  Employee may serve or to which he may be appointed
shall be consistent in title and duties with  Employee's  positions as Chairman,
President and Chief Executive Officer of the Employer.

2. Term. Subject to the termination provisions  hereinafter contained,  the term
of  employment  under this  Agreement  shall be for an initial term of three and
one-half years, commencing on the Effective Date and terminating on December 31,
2001. This Agreement and the Employee's employment hereunder shall thereafter be
automatically  renewed for successive one (1) year terms,  unless  terminated as
hereinafter  provided.  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.  Effective July 1, 1998, the Employer shall pay to the Employee
as  compensation  for all  services  rendered  by the  Employee a base salary of
$275,000 plus annual bonuses as determined by the Compensation  Committee of the
Board of Directors, 


<PAGE>

subject to Sections 3(d) and 3(e).  Beginning  Jan. 1, 1999 the base salary will
be adjusted to $290,000.  Annual  reviews of the Employee  will be on a calendar
year basis thereafter.

(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 the Employee
during his initial employment contract dated 12 June 1995, i.e. participation in
the  Employer's  Health Plan  supplemented  by an  executive  policy from Boston
Mutual or a comparable carrier.  The Employer shall obtain a term life insurance
and  disability  policy for the Employee  with a value equal to at least one and
one half  year's  base  salary  payable to the estate 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 on or prior to December
31, 1998,  payable in common stock of the Employer in an amount to be determined
by the Compensation Committee.  Thereafter during the Term starting Jan 1, 1999,
the  Employee  shall be eligible  for bonuses up to 50% of annual  salary or any
other amount  determined by the Compensation  Committee,  payable in cash and/or
common stock in accordance  with this Section 3(d) (i),  (ii),  and (iii).  Such
compensation  will be awarded as soon as  practicable  after March  15th.  It is
hereby  understood  between the  Employer  and the  Employee  that upon (i). the
attainment of the Employer's posting of it's second  consecutive  quarter of net
profit,  or closing a year with a net profit,  or  announcement of a merger into
another  company,  or the sale or  transfer of all or  substantially  all of the
pharmaceutical  assets of the Company,  the Employee  will be entitled to a cash
bonus  award 50% of annual  base  salary,  OR (ii) upon a Change in Control  (as
defined  below),  the  Employee  will be  entitled  to a cash bonus award 50% of
annual salary. OTHERWISE, (iii). Bonuses (payable in cash and/or common stock of
the Company) will be determined  based upon, but not limited to,  improvement in
the financial  position of the Company  without regard to budgeted  research and
development  expenditures.  Other considerations will be given to the attainment
of  strategic   alliances,   acquisition   of  new  products,   acquisition   of
technologies,  purchase of developmental products for future  commercialization,
attainment of patents, product registrations submitted and/or approved,  raising
of  capital,  as well as specific  personal  and  corporate  goals which will be
submitted to the  Compensation  Committee by the Employee  within 30 days of the
organizational  meeting which the Compensation Committee will review, approve or
modify  and  return  said  goals  document  ("Document")  to  the  Employee  for
submission  to  the  Board  of  Directors  for   ratification.   Each  year  the
Compensation  Committee will give  consideration  and weight to each agreed upon
objective.  The  Employee  will  be  evaluated  by the  Compensation  Committee,
beginning in the fall of each year, based upon the 

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<PAGE>

mutually agreed Document. Any alteration in the Employee's compensation would be
effective at the beginning of the calendar year.

(e) Annual  Review.  The Employee shall be reviewed by the Board of Directors of
the  Employer  on an annual  (calendar  year) basis and be eligible to receive a
minimum of 7% increase in base salary and  issuance of a minimum of 50,000 stock
options or a greater amount as determined by the Board's Compensation Committee.

(f) Stock Option  Plan.  Beginning  in April 1999,  the  Employee  will again be
eligible for periodic  stock option grants under the 1991 Stock Option Plan (the
"Plan")  or  Non-Plan  Options  (defined  below) as  determined  by the Board of
Director's Compensation Committee.

4.  Duties.  The  Employee is engaged as the  Chairman of the Board,  President,
Chief  Executive  Officer  of  Bentley  Pharmaceuticals,  Inc.  and in  addition
President  (Consejero  Delegado)  of  Laboratorios  Belmac,  S.A.,  President of
Laboratorios Davur in Spain, President of Laboratorios Belmac-Davur in Chile and
President of Pharma de Espana,  Inc. 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 Board of Directors of the Employer.

5. Extent of Services.  During the Term of employment under this Agreement,  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 a consultant to or as a director of a non-competitive  company
or a company that could be of strategic  interest to the Employer  approved,  by
the Employer's Board of Directors.

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.  A  maximum  of one week  unused
vacation may be carried over from one calendar  year to the next or will be paid
to the Employee.

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 (as defined below)
shall vest in accordance  with the Plan and shall be exercisable for a period of
time as set forth in the Plan.  All  Non-Plan  Options (as defined  below) shall
immediately vest and transfer to the Employee's  estate and be exercisable for a
period of 5 years  from the date of his death or the period of time as set forth
in the Non-Plan Option Contract,  whichever is greater. However, at the election
of the Employee's estate, all Plan Options may be terminated and may be replaced
with Non-Plan Options (the "Replacement Options"). The Replacement Options shall
have the same  terms as set forth in the Plan,  except  that terms  relating  to
Non-Plan  Options (as defined below),  which are set forth in this Agreement 


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<PAGE>

and which vary the terms of the Plan shall govern. 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 prior to his death. The
Employer agrees to maintain life insurance on the Employee equivalent to one and
one half year's base  salary and will be payable to the  Employee's  estate 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
as discussed above.

(b) Disability.
         (i) During any period of disability,  illness or incapacity  during the
term of this Agreement which renders the Employee at least temporarily unable to
perform the services  required under this Agreement,  the Employee shall receive
throughout  which time,  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 (as defined below)
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.  All  Non-Plan  Options  (as  defined
below) shall immediately vest and will be exercisable for a period of five years
or the period of time indicated in the option contract, whichever is greater. At
the election of the Employee,  Plan Options (as defined below) may be terminated
and may be replaced by Replacement Options.
     (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.  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 panel is convened, the
party whose position is not sustained will bear all the associated costs.

8.       Other Terminations.

(a)      Without Cause.


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<PAGE>


     (i) Either the Employee or the Employer may terminate  this  Agreement upon
written  notice,  sixty  (60) days prior to the end of the  initial  term or any
one-year extension of this Agreement.
     (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  (without reduction in compensation) or
(b) to accelerate the date of termination to coincide with the date on which the
written notice is received  (without  reduction in  compensation  for the notice
period).
     (iii) Not withstanding any provisions hereof to the contrary,  the Employer
may  terminate  this  Agreement  without  cause  at any  time.  If the  Employer
terminates  this  Agreement  pursuant to the  provisions of this  paragraph 8(a)
(iii), it shall pay to the Employee as a severance  benefit,  in cash, an amount
equal to two (2) times the Employee's  Base Salary plus bonus,  all Plan Options
(defined below) 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 and all  Non-Plan
Options  (defined  below)  shall  immediately  vest  and be  exercisable  by the
Employee  for a period  of five  years or the  period of time  indicated  in the
Non-Plan Option contract whichever is greater.  At the election of the Employee,
all Plan  Options (as defined  below) may be  terminated  and may be replaced by
Replacement Options.

(b)      For Cause.

     (i) The Employer may terminate this  Agreement  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 disloyal to the employer; (b) conviction of
any  crime  involving  moral  turpitude;  and  (c)  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 narcotic  drug.  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).

(c.) Payment on Termination. If this Agreement 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  except as provided in
Section 9 hereof.  The Employee  shall be entitled to no further  benefits under
this Agreement other than extension of health benefits as the Employee's expense
and Plan Options  (defined below) 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 and
all Non-Plan Options  (defined below) awarded to the Employee shall  immediately
vest and be exercisable  for a period of 5 years or the period of time indicated
in the option contract, whichever is greater.


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<PAGE>


8.       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 the date  hereof  (hereinafter  referred to as the
"Act");
     (ii) if there has  occurred a Change in Control  as the term  "Control"  is
defined in Rule 12b-2 promulgated under the Act;
     (iii) when any  "person"  (such term is defined in Section3  (a) (9) and 13
(d) (3) of the Act),  during the Term of this  Agreement,  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;
     (iv)  if the  stockholders  of the  Employer  approve  a plan  of  complete
liquidation or dissolution of the Employer or a merger or consolidation in which
the Employer is not the surviving corporation;
     (v) if there has occurred a change in ownership of effective control of the
Employer (within the meaning of Section 280G (b) (2) (A) of the Internal Revenue
Code of 1986, as amended (the "Code"); or
     (vi) when the  individuals who are members of the Board of Directors of the
Employer on the date hereof shall cease to constitute at least a majority of the
Board of Directors of the  Employer,  provided,  however,  that any new director
whose election to the Board of Directors or nomination for election to the Board
of Directors  then still in office,  shall not be deemed to have replaced his or
her predecessor.

(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  authorities,  powers,  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.
     (iii) the  Employee  determines  that the work  environment  is  hostile or
uncomfortable.

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).

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<PAGE>

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. In addition,  in the event of such termination,  the Employee
shall continue to have the obligation 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 2.99
times his Base Salary plus  bonuses,  or that amount of salary and bonuses  that
would have been due to the Employee  through the  expiration of the Term of this
Agreement,  whichever  is the greater;  Notwithstanding  the  foregoing,  if the
majority  of the Board  approves  a  transaction  which  results  in a Change in
Control, (a) the Employee may not terminate his employment pursuant to Section 9
(b) (iii) hereof and the amount paid to the Employee  shall be calculated  using
the multiplier 2.0 rather than 2.99 as set forth in Section 9 (c).
     (ii) the  Employee  shall be issued a number of stock  options to  purchase
shares of common stock (the "Common  Stock") of the Employer equal to the number
of stock options (vested or non-vested) held by the Employee  immediately  prior
to the effective date of any Change in Control;  to the extent that a sufficient
number of  shares of Common  Stock  are  available  under the Plan,  options  to
purchase such shares shall be issued under the Plan ("the Plan Options"), and to
the extent that there are an insufficient  number of shares  available under the
Plan,  such number of options to purchase  shares shall be issued outside of the
Plan (the "Non-Plan  Options");  the exercise price of the shares underlying the
Plan Options shall equal the fair market value of the Employer's Common Stock on
the date of the  Employee's  termination  and the  exercise  price of the shares
underlying  the  Non-Plan  Options  shall  equal  the  closing  bid price of the
Employer's Common Stock on the Effective Date of this Agreement; and
     (iii) all  stock  options  held by the  Employee  immediately  prior to the
effective date of the Change in Control and those Plan Options granted  pursuant
to Section 9 (c) (ii) shall  immediately vest and become fully exercisable for a
period of time  indicated  in the  option  contract,  and all  Non-Plan  Options
granted  pursuant to Section 9 (c)(ii) shall  immediately  vest and become fully
exercisable  for a period  of 5 years or the  period  of time  indicated  in the
option contract,  whichever is greater;  however, at the option of the Employee,
if the Employee is to receive options pursuant to this section, all Plan Options
may be terminated and may be replaced with Replacement and
     (iv)  benefits,  as provided in Section 3 (c), shall continue until the end
of the Term as if the Employee continued to remain in employment through the end
of the  Term of this  Agreement  or for a  period  of five  years  whichever  is
greater.

The lump sum  severance  payment  described  in this  Section 9 (c)  (i)-(iv) 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 accountant organization Upon payment of the
Termination  Compensation  and any other accrued  compensation,  this  Agreement
shall terminate (except for the 


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<PAGE>

Employee's  obligations pursuant to Sections 10, 11, 12,13 and 14 hereof) 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 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.

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 form any  disclosure  made by the  Employee
pursuant to this paragraph,  whether or not patentable,  shall be and remain the
sole property of the Employer.

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<PAGE>


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
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.  This covenant
shall  continue for the Term hereof and for a one year period  subsequent to the
termination  of this  Agreement.  Through the Term of this  Agreement  and for a
period of one year thereafter, if the Employee is terminated for good cause, 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,  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.

13. Conflict of Interest
(a) 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. (b)
Essential  Element.  It is understood by and between the parties hereto that the
foregoing  restrictive  covenants set forth in Sections 10, 11, 12, 13(a) 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(a)  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 

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<PAGE>

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.

19. Successors and Assigns; Assignment.  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 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 or the Employee other
than stated in section 7 of this  Agreement),  and the  Employee  covenants  and
agrees that he shall not make any such assignments.

20. 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.

21.  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  parties  at  the  following
addresses:


                                       10

<PAGE>


Employer:   Bentley Pharmaceuticals, Inc      Employee:  James R. Murphy
            Two Urban Centre, Suite 400                  4 John Stark Lane
            4890 W, Kennedy Blvd.                        Hampton, NH
            Tampa, FL 33609                              03842

22. Severability.  It is agreed by the Employer and Employee that if any portion
of the  covenants  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  unreasonable , arbitrary or against  public policy,  then a lesser
time  period  or  geographical   are  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.

23. Entire Agreement.  This Agreement  contains the entire agreement between the
Employer and the employee and superseded all prior agreement and understandings,
oral or written,  with  respect to the subject  matter  hereof.  It is expressly
agreed that the terms of this Employment Agreement govern any prior stock option
grants to the Employee.

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

25.  Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the State of Florida.

26.  Counterparts.  This Agreement may be executed in two counterparts 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.

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

Employer:                                 Employee:
Bentley Pharmaceuticals, Inc.             /s/ James R. Murphy       
By:  ________________________             -------------------------
                                           James R. Murphy   
Compensation Committee
Bentley Pharmaceuticals, Inc.
Board of Directors