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EXHIBIT 10.1
 AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
 THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT
 RECITALS
  WITNESSETH
 NOW THEREFORE
 1. Employment
 2. 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 a base salary of
$56,059.92 per month (the Monthly Base Salary), payable in accordance with the
Employers regular payroll practices, plus annual bonuses on a calendar year basis 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 Monthly Base Salary
is determined for a calendar year after January 1 and before May 31 of that year, the
increase shall be retroactive to the
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b.
    
    beginning of that year. Annual review of the Employees Monthly Base Salary will be on a calendar year basis, and the results of such review will be provided to the Employee no later than May of the following year.
 c.
    
    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.
 d.
    
    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 without limitation participation in the Employers health plans
and a supplemental executive health insurance policy issued by Boston Mutual or a
comparable carrier. The Employer agrees to maintain (i) life insurance and disability
coverage on the Employee in an amount equivalent to 24 times the Monthly Base Salary,
which insurance will be payable to the Employees estate or beneficiaries (as the
Employee may designate) upon the Employees death or to the Employee in the event of
disability as provided in Section 7(b) hereof, as well as (ii) an additional term life
insurance policy in the amount of $1,000,000.
 e.
    
    Bonuses.The Employee shall be eligible for a bonus each year of the Term,
payable in cash, common stock and/or other equity awards as determined by the
Compensation Committee. Such annual bonus will be awarded for each year as soon as
practicable after March 15, but not later than June 30, of the following year.
 f.
    
    Annual Review.The Employee shall be reviewed by the Compensation Committee on
an annual (calendar year) basis.
 g.
    
    Equity Awards.The Employee will be eligible for periodic equity awards
(Equity Awards) under the Employers 2005 Equity and Incentive Plan or another plan
as determined by the Compensation Committee of the Board of Directors (collectively,
the Plan), which shall include annual Equity Awards having a value of not less than
50,000 stock options under the Plan, the value of which shall be determined based upon
the fair value of such Equity Awards as of the date of grant, as determined by the
Compensation Committee.
 4. Duties
 5. Extent of Services
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6. Vacation
 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 Equity Awards shall be
exercisable for a period of twelve (12) months from death, in accordance with 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 shall have no additional financial obligation under
this Agreement to the Employee or his estate beyond the term-life insurance benefit
described in Section 3(c) 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 Equity Awards
shall vest, and be exercisable for a period of time, in accordance with their
respective terms and the terms of 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
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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 Medical Society 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 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 written 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 (a) twelve months of the Employees
Monthly Base Salary plus (b) the higher of the bonus target for the current
year or the bonus paid for the prior year, which amount shall be due and
payable in a lump sum within not more than ten (10) days after such termination
or such later date as the Employee delivers the release contemplated by Section
18.Additionally,the vesting of Equity Awards shall be accelerated on a pro
rata basis determined by the number of completed months of service during the
then current annual vesting period, the vested portions of such Equity Awards
shall be exercisable for the period of time indicated in the terms of the
Equity Award, and all other vesting of Equity Awards shall cease unless
otherwise determined by the Compensation Committee.
 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 mean:
(a) any breach by Employee of any of Employees fiduciary duties to Employer or
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material obligations under this Agreement (other than as a result of incapacity
due to physical or mental illness), in each case if such breach is not cured
within ten (10) days after written notice thereof to Employee by Employer, (b)
conviction of a felony or a crime involving moral turpitude or other commission
of any act or omission of Employee involving, fraud, embezzlement, theft,
substance abuse or sexual misconduct with respect to the Employer or any of its
subsidiaries or any of their employees, vendors, suppliers or customers, (c)
Employees substantial neglect of duties or failure to follow an explicit,
lawful directive of the Board of Directors of Employer, provided that such act
of neglect or failure is not cured within ten (10) days after written notice
thereof to Employee by Employer, (d) the Employees willful, knowing or
deliberate misappropriation of funds or assets of Employer or one of its
subsidiaries for personal use, or (e) the Employees willful, knowing or
deliberate misconduct in the performance of Employees duties.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 in
accordance with law, but in any event within not more than ten (10) days after
such termination. 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 Equity Awards shall cease vesting in accordance with the terms
thereof and the Plan.
 c.
    
    Whenever the Employees employment is terminated under this Agreement, the
Employee shall immediately resign, in a signed writing in such form as the Employer may
reasonably request, from all offices and any other positions he shall hold with the
Employer or any parent corporation and any subsidiaries or divisions of the Employer or
any such parent corporation. If Employee fails to deliver any such resignation
immediately, Employee may be removed from any such office or position without further
cause.
 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;
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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 Employer 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 Employer 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 Employers then
outstanding securities;orv.
    
    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 Employer 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 Employer 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 Employer 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.
    
    A material diminution of the Employees authority, duties, or
responsibilities,ii.
    
    a material breach of Employers obligations pursuant to this
Agreement;iii.
    
    the Employer requires Employee to move Employees primary place
of employment to a location more than 30 miles from Employers primary
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place of
business before the Change in Control (other than temporary relocation or
business travel in the ordinary course); oriv.
    
    a material diminution in the Employees Monthly Base Salary
without the prior written consent of the Employee;
 provided that in the case of clause i. through iv. such event or condition continues
uncured for 30 days after Employee gives Employer notice of such event or condition
within 90 days of its initial existence.An election by the Employee to terminate his employment following a Change in
Control for any of the reasons set forth above 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 in 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 twelve (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 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 of
termination of employment, in cash, severance pay in an amount equal to (a)
twenty-four (24) times his Monthly Base Salary plus (b) two (2) times the
average of his bonuses (if any) paid to him for the two prior calendar years;ii.
    
    all stock options and other Equity Awards under the Plan 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 terms of the option or other Equity Award;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 Employers plans; provided,
however, that benefits will be subject to mitigation to the extent of
comparable benefits at a new job; and
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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
Employer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 Equity Awards in
accordance with the terms thereof and 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
in Control had not occurred.
 e.
    
    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
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11. Confidentiality.
 12. Non-Competition.
 13. Conflict of Interest and Other Policies.
 14. Specific Performance.
 15. Compliance with Other Agreements.
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16. Waiver of Breach.
 17. D&O Insurance; Indemnification.
 18. Release.
 19. Binding Effect, Assignment.
 20. Modification, Amendment, Etc.
 21. Notice.
 22. Severability.
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23. Entire Agreement.
 24. Headings.
 25. Governing Law; Forum.
 26. Counterparts.
  Employer:
    
    
    
    Employee:BENTLEY PHARMACEUTICALS, INC.By: /s/ Richard P. Lindsay
    
    
    
    /s/ James R. MurphyName: Richard P. Lindsay
    
    
    
    James R. Murphy, individuallyTitle: VP, CFO, Secretary & Treasurer
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