Document:

EXHIBIT 10.4

                              EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT is entered into as of the 9th day of March 1999 (the
"Effective Date") by and between Bentley Pharmaceuticals. Inc., a Florida
corporation, (the "Employer") and Robert J. Gyurik (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 Vice President, Pharmaceutical Research 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
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.

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, 2000. 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 March 9, 1999, the Employer shall pay to the Employee
as compensation for all services rendered by the Employee an annual base salary
of $120,000 plus annual bonuses as determined by the Compensation Committee of
the Board of Directors, subject to Sections 3(d) and 3(e). Annual reviews of the
Employee will be on a calendar year basis.

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(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, i.e.
participation in the Employer's Health Plan. The Employer shall obtain a term
life insurance and disability policy for the Employee with a value equal to at
least one 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(a) hereof.

(d) BONUSES. The Employee shall be eligible for bonuses of up to 50% of annual
salary each year, payable in cash and/or common stock as determined by the Board
of Director's Compensation Committee. Such compensation will be awarded as soon
as practicable after March 15th of each year. The specific amount of bonus will
be determined based upon (i). attainment of research collaborations and the
value of those collaborations (to be mutually agreed upon with the Compensation
Committee). (ii) In the event of an 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 eligible for a cash
bonus award. Upon a Change in Control (as defined below), the Employee will be
entitled to the maximum cash bonus award.

(e) ANNUAL REVIEW. The Employee shall be reviewed by the CEO and CSO who will
give recommendations to the compensation committee of the Board of Directors of
the Employer on an annual (calendar year) basis. The Employee will be eligible
to receive a minimum of 5% increase in base salary and issuance of stock options
as determined by the Board's Compensation Committee.

(f)   STOCK OPTION PLAN. The Employee will be eligible for periodic stock option
      grants under the 1991 Stock Option Plan (the "Plan") or another plan as
      determined by the Board of Director's Compensation Committee.

(g)   SIGN-ON BONUS. The Employee shall be granted such number of shares of the
      Employer's common stock that are equivalent to the loss realized by the
      Employee as a result of non-vesting of stock options on March 8,1999 by
      using a formula of MCHM common stock price on March 8th less the
      Employee's option strike price multiplied by the number of options not
      vested on that date.

4. DUTIES. The Employee is engaged as the Vice President, Pharmaceutical
Research 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 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

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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 in advance
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 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. 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 one year's 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 will 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

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     exercisable  for a period of five years or the period of time  indicated in
     the option contract,  whichever is greater.  (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.

     (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 the Employee's Annual 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.

(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 employee, 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

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<PAGE>

     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 at 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.

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 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 Section 3(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 compensation or
     duties as constituted immediately prior to the Change in Control,

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     (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.

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. 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 2.9
     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 of Directors approves a transaction which
     results in a Change of Control, the amount paid to the Employee shall be
     calculated using a multiplier of 2.0 rather than 2.9.
     (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

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     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 Non-Plan Options 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.

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 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

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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.

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

Through the Term of this Agreement and for a period of one year thereafter, 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. Through the Term of this Agreement and for a period of one year
thereafter, 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

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(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, and 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, and 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, or 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.

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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:

Employer:     Bentley Pharmaceuticals, Inc   Employee:    Robert J. Gyurik
              65 Lafayette Road                           12 Ashbrook Rd.
              Third Floor                                 Exeter, NH 03833
              North Hampton, NH 03862

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

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<PAGE>

Agreement to be 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.                       Robert J. Gyurik

By:  /s/ James R. Murphy                            By:  /s/ Robert J. Gyurik
     -------------------                                ---------------------

Compensation Committee                              Chairman, and CEO
Bentley Pharmaceuticals, Inc.
Board of Directors                                  By:  /s/ James R. Murphy
                                                        ---------------------
                                                                              11<PAGE>

                                                                    Exhibit 10.1

                                VARIAGENICS, INC.

                       AMENDED 1997 EMPLOYEE, DIRECTOR AND
                          CONSULTANT STOCK OPTION PLAN

1.    DEFINITIONS.

      Unless otherwise specified or unless the context otherwise requires, the
      following terms, as used in this Variagenics , Inc. 1997 Employee,
      Director and Consultant Stock Option Plan, have the following meanings:

            Administrator means the Board of Directors, unless it has delegated
            power to act on its behalf to a committee. (See Paragraph 4)

            Affiliate means a corporation which, for purposes of Section 424 of
            the Code, is a parent or subsidiary of the Company, direct or
            indirect.

            Board of Directors means the Board of Directors of the Company.

            Code means the United States Internal Revenue Code of 1986, as
            amended.

            Committee means the Committee to which the Board of Directors has
            delegated power to act under or pursuant to the provisions of the
            Plan.

            Common Stock means shares of the Company's common stock, $0.01 par
            value.

            Company means Variagenics, Inc., a Delaware corporation.

            Disability or Disabled means permanent and total disability as
            defined in Section 22(e)(3) of the Code.

            Fair Market Value of a Share of Common Stock means:

            (1) If the Common Stock is listed on a national securities exchange
            or traded in the over-the-counter market and sales prices are
            regularly reported for the Common Stock, either (a) the average of
            the closing or
<PAGE>

            last prices of the Common Stock on the Composite Tape or other
            comparable reporting system for the ten (10) consecutive trading
            days immediately preceding the applicable date or (b) the closing or
            last price of the Common Stock on the Composite Tape or other
            comparable reporting system for the trading day immediately
            preceding the applicable date, as the Administrator shall determine.

            (2) If the Common Stock is not traded on a national securities
            exchange but is traded on the over-the-counter market, if sales
            prices are not regularly reported for the Common Stock for the
            trading days or day referred to in clause (1), and if bid and asked
            prices for the Common Stock are regularly reported, either (a) the
            average of the mean between the bid and the asked price for the
            Common Stock at the close of trading in the over-the-counter market
            for the ten (10) trading days on which Common Stock was traded
            immediately preceding the applicable date or (b) the mean between
            the bid and the asked price for the Common Stock at the close of
            trading in the over-the-counter market for the trading day on which
            Common Stock was traded immediately preceding the applicable date,
            as the Administrator shall determine; and

            (3) If the Common Stock is neither listed on a national securities
            exchange nor traded in the over-the-counter market, such value as
            the Administrator, in good faith, shall determine.

            ISO means an option meant to qualify as an incentive stock option
            under Code Section 422.

            Key Employee means an employee of the Company or of an Affiliate
            (including, without limitation, an employee who is also serving as
            an officer or director of the Company or of an Affiliate),
            designated by the Administrator to be eligible to be granted one or
            more Options under the Plan.

            Non-Qualified Option means an option which is not intended to
            qualify as an ISO.

            Option means an ISO or Non-Qualified Option granted under the Plan.

            Option Agreement means an agreement between the Company and a
            Participant delivered pursuant to the Plan.

                                     - 2 -
<PAGE>

            Participant means a Key Employee, director or consultant to whom one
            or more Options are granted under the Plan. As used herein,
            "Participant" shall include "Participant's Survivors" where the
            context requires.

            Participant's Survivors means a deceased Participant's legal
            representatives and/or any person or persons who acquired the
            Participant's rights to an Option by will or by the laws of descent
            and distribution.

            Plan means this Variagenics, Inc. Amended 1997 Employee, Director
            and Consultant Stock Option Plan.

            Shares means shares of the Common Stock as to which Options have
            been or may be granted under the Plan or any shares of capital stock
            into which the Shares are changed or for which they are exchanged
            within the provisions of Paragraph 3 of the Plan. The Shares issued
            upon exercise of Options granted under the Plan may be authorized
            and unissued shares or shares held by the Company in its treasury,
            or both.

2.    PURPOSES OF THE PLAN.

      The Plan is intended to encourage ownership of Shares by Key Employees,
directors and certain consultants to the Company in order to attract such
people, to induce them to work for the benefit of the Company or of an Affiliate
and to provide additional incentive for them to promote the success of the
Company or of an Affiliate. The Plan provides for the granting of ISOs and
Non-Qualified Options.

3.    SHARES SUBJECT TO THE PLAN.

      The number of Shares subject to this Plan as to which Options may be
granted from time to time shall be 600,000, or the equivalent of such number of
Shares after the Administrator, in its sole discretion, has interpreted the
effect of any stock split, stock dividend, combination, recapitalization or
similar transaction in accordance with Paragraph 16 of the Plan.

      If an Option ceases to be "outstanding", in whole or in part, the Shares
which were subject to such Option shall be available for the granting of other
Options under the Plan. Any Option shall be treated as "outstanding" until such
Option is exercised in full, or terminates or expires under the provisions of
the Plan, or by agreement of the parties to the pertinent

                                     - 3 -
<PAGE>

Option Agreement.

4.    ADMINISTRATION OF THE PLAN.

      The Administrator of the Plan will be the Board of Directors, except to
the extent the Board of Directors delegates its authority to a Committee of the
Board of Directors. Following the date on which the Common Stock is registered
under the Securities and Exchange Act of 1934, as amended (the "1934 Act"), the
Plan is intended to comply in all respects with Rule 16b-3 or its successors,
promulgated pursuant to Section 16 of the 1934 Act with respect to Participants
who are subject to Section 16 of the 1934 Act, and any provision in this Plan
with respect to such persons contrary to Rule 16b-3 shall be deemed null and
void to the extent permissible by law and deemed appropriate by the
Administrator. Subject to the provisions of the Plan, the Administrator is
authorized to:

      a.    Interpret the provisions of the Plan or of any Option or Option
            Agreement and to make all rules and determinations which it deems
            necessary or advisable for the administration of the Plan;

      b.    Determine which employees of the Company or of an Affiliate shall be
            designated as Key Employees and which of the Key Employees,
            directors and consultants shall be granted Options;

      c.    Determine the number of Shares for which an Option or Options shall
            be granted; and

      d.    Specify the terms and conditions upon which an Option or Options may
            be granted;

provided, however, that all such interpretations, rules, determinations, terms
and conditions shall be made and prescribed in the context of preserving the tax
status under Code Section 422 of those Options which are designated as ISOs.
Subject to the foregoing, the interpretation and construction by the
Administrator of any provisions of the Plan or of any Option granted under it
shall be final, unless otherwise determined by the Board of Directors, if the
Administrator is other than the Board of Directors.

5.    ELIGIBILITY FOR PARTICIPATION.

      The Administrator will, in its sole discretion, name the Participants in
the Plan, provided, however, that each

                                     - 4 -
<PAGE>

Participant must be a Key Employee, director or consultant of the Company or of
an Affiliate at the time an Option is granted. Notwithstanding any of the
foregoing provisions, the Administrator may authorize the grant of an Option to
a person not then an employee, director or consultant of the Company or of an
Affiliate. The actual grant of such Option, however, shall be conditioned upon
such person becoming eligible to become a Participant at or prior to the time of
the execution of the Option Agreement evidencing such Option. ISOs may be
granted only to Key Employees. Non-Qualified Options may be granted to any Key
Employee, director or consultant of the Company or an Affiliate. The granting of
any Option to any individual shall neither entitle that individual to, nor
disqualify him or her from, participation in any other grant of Options.

6.    TERMS AND CONDITIONS OF OPTIONS.

      Each Option shall be set forth in writing in an Option Agreement, duly
executed by the Company and, to the extent required by law or requested by the
Company, by the Participant. The Administrator may provide that Options be
granted subject to such conditions as the Administrator may deem appropriate
including, without limitation, subsequent approval by the shareholders of the
Company of this Plan or any amendments thereto. The Option Agreements shall be
subject to at least the following terms and conditions:

      A.    Non-Qualified Options: Each Option intended to be a Non-Qualified
            Option shall be subject to the terms and conditions which the
            Administrator determines to be appropriate and in the best interest
            of the Company, subject to the following minimum standards for any
            such Non-Qualified Option:

            a.    Option Price: The option price (per share) of the Shares
                  covered by each Option shall be determined by the
                  Administrator but shall not be less than the par value per
                  share of Common Stock.

            b.    Each Option Agreement shall state the number of Shares to
                  which it pertains;

            c.    Each Option Agreement shall state the date or dates on which
                  it first is exercisable and the date after which it may no
                  longer be exercised, and may provide that the Option rights
                  accrue or become exercisable in installments over a period of
                  months or years, or upon the occurrence of certain conditions
                  or the attainment of stated

                                     - 5 -
<PAGE>

                  goals or events; and

            d.    Exercise of any Option may be conditioned upon the
                  Participant's execution of a Share purchase agreement in form
                  satisfactory to the Administrator providing for certain
                  protections for the Company and its other shareholders
                  including requirements that:

                  i.    The Participant's or the Participant's Survivors' right
                        to sell or transfer the Shares may be restricted; and

                  ii.   The Participant or the Participant's Survivors may be
                        required to execute letters of investment intent and
                        must also acknowledge that the Shares will bear legends
                        noting any applicable restrictions.

      B.    ISOs: Each Option intended to be an ISO shall be issued only to a
            Key Employee and be subject to at least the following terms and
            conditions, with such additional restrictions or changes as the
            Administrator determines are appropriate but not in conflict with
            Code Section 422 and relevant regulations and rulings of the
            Internal Revenue Service:

            a.    Minimum standards: The ISO shall meet the minimum standards
                  required of Non-Qualified Options, as described above, except
                  clause (a) thereunder.

            b.    Option Price: Immediately before the Option is granted, if the
                  Participant owns, directly or by reason of the applicable
                  attribution rules in Code Section 424(d):

                  i.    Ten percent (10%) or less of the total combined voting
                        power of all classes of share capital of the Company or
                        an Affiliate, the Option price per share of the Shares
                        covered by each Option shall not be less than one
                        hundred percent (100%) of the Fair Market Value per
                        share of the Shares on the date of the grant of the
                        Option.

                  ii.   More than ten percent (10%) of the total combined voting
                        power of all classes of share capital of the Company or
                        an Affiliate, the Option price per share of the Shares
                        covered by each Option shall not be less than one

                                     - 6 -
<PAGE>

                        hundred ten percent (110%) of the said Fair Market Value
                        on the date of grant.

            c.    Term of Option: For Participants who own

                  i.    Ten percent (10%) or less of the total combined voting
                        power of all classes of share capital of the Company or
                        an Affiliate, each Option shall terminate not more than
                        ten (10) years from the date of the grant or at such
                        earlier time as the Option Agreement may provide.

                  ii.   More than ten percent (10%) of the total combined voting
                        power of all classes of share capital of the Company or
                        an Affiliate, each Option shall terminate not more than
                        five (5) years from the date of the grant or at such
                        earlier time as the Option Agreement may provide.

            d.    Limitation on Yearly Exercise: The Option Agreements shall
                  restrict the amount of Options which may be exercisable in any
                  calendar year (under this or any other ISO plan of the Company
                  or an Affiliate) so that the aggregate Fair Market Value
                  (determined at the time each ISO is granted) of the stock with
                  respect to which ISOs are exercisable for the first time by
                  the Participant in any calendar year does not exceed one
                  hundred thousand dollars ($100,000), provided that this
                  subparagraph (e) shall have no force or effect if its
                  inclusion in the Plan is not necessary for Options issued as
                  ISOs to qualify as ISOs pursuant to Section 422(d) of the
                  Code.

            e.    Limitation on Grant of ISOs: No ISOs shall be granted after
                  the date which is the earlier of ten (10) years from the date
                  of the adoption of the Plan by the Company and the date of the
                  approval of the Plan by the shareholders of the Company.

                                     - 7 -
<PAGE>

7.    EXERCISE OF OPTION AND ISSUE OF SHARES.

      An Option (or any part or installment thereof) shall be exercised by
giving written notice to the Company at its principal office address, together
with provision for payment of the full purchase price in accordance with this
paragraph for the Shares as to which such Option is being exercised, and upon
compliance with any other condition(s) set forth in the Option Agreement. Such
written notice shall be signed by the person exercising the Option, shall state
the number of Shares with respect to which the Option is being exercised and
shall contain any representation required by the Plan or the Option Agreement.
Payment of the purchase price for the Shares as to which such Option is being
exercised shall be made (a) in United States dollars in cash or by check, or (b)
at the discretion of the Administrator, through delivery of shares of Common
Stock having a fair market value equal as of the date of the exercise to the
cash exercise price of the Option, determined in good faith by the
Administrator, or (c) at the discretion of the Administrator, by delivery of the
grantee's personal recourse note bearing interest payable not less than annually
at no less than 100% of the applicable Federal rate, as defined in Section
1274(d) of the Code, or (d) at the discretion of the Administrator, in
accordance with a cashless exercise program established with a securities
brokerage firm, and approved by the Administrator or (e) at the discretion of
the Administrator, by any combination of (a), (b), (c) and (d) above.
Notwithstanding the foregoing, the Administrator shall accept only such payment
on exercise of an ISO as is permitted by Section 422 of the Code.

      The Company shall then reasonably promptly deliver the Shares as to which
such Option was exercised to the Participant (or to the Participant's Survivors,
as the case may be). In determining what constitutes "reasonably promptly," it
is expressly understood that the delivery of the Shares may be delayed by the
Company in order to comply with any law or regulation which requires the Company
to take any action with respect to the Shares prior to their issuance. The
Shares shall, upon delivery, be evidenced by an appropriate certificate or
certificates for fully paid, non-assessable Shares.

      The Administrator shall have the right to accelerate the date of exercise
of any installment of any Option; provided that the Administrator shall not
accelerate the exercise date of any installment of any Option granted to any Key
Employee as an ISO (and not previously converted into a Non-Qualified Option
pursuant to Paragraph 19) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the

                                     - 8 -
<PAGE>

Code, as described in paragraph 6(e).

      The Administrator may, in its discretion, amend any term or condition of
an outstanding Option provided (i) such term or condition as amended is
permitted by the Plan, (ii) any such amendment shall be made only with the
consent of the Participant to whom the Option was granted, or in the event of
the death of the Participant, the Participant's Survivors, if the amendment is
adverse to the Participant, (iii) any such amendment of any ISO shall be made
only after the Administrator, after consulting the counsel for the Company,
determines whether such amendment would constitute a "modification" of any
Option which is an ISO (as that term is defined in Section 424(h) of the Code)
or would cause any adverse tax consequences for the holders of such ISO, and
(iv) with respect to any Option held by any Participant who is subject to the
provisions of Section 16(a) of the 1934 Act, any such amendment shall be made
only after the Administrator, after consulting with counsel for the Company,
determines whether such amendment would constitute the grant of a new Option.

                                     - 9 -
<PAGE>

8.    RIGHTS AS A SHAREHOLDER.

      No Participant to whom an Option has been granted shall have rights as a
shareholder with respect to any Shares covered by such Option, except after due
exercise of the Option and tender of the full purchase price for the Shares
being purchased pursuant to such exercise and registration of the Shares in the
Company's share register in the name of the Participant.

9.    ASSIGNABILITY AND TRANSFERABILITY OF OPTIONS.

      By its terms, an Option granted to a Participant shall not be transferable
by the Participant other than by will or by the laws of descent and distribution
or pursuant to a qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act or the rules thereunder,
provided, however, that the designation of a beneficiary of an Option by a
Participant shall not be deemed a transfer prohibited by this Paragraph. Except
as provided in the preceding sentence, an Option shall be exercisable, during
the Participant's lifetime, only by such Participant (or by his or her legal
representative) and shall not be assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted transfer, assignment,
pledge, hypothecation or other disposition of any Option or of any rights
granted thereunder contrary to the provisions of this Plan, or the levy of any
attachment or similar process upon an Option, shall be null and void.

10.   EFFECT OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE".

      Except as otherwise provided in the pertinent Option Agreement, in the
event of a termination of service (whether as an employee, director or
consultant) with the Company or an Affiliate before the Participant has
exercised all Options, the following rules apply:

      a.    A Participant who ceases to be an employee, director or consultant
            of the Company or of an Affiliate (for any reason other than
            termination "for cause", Disability, or death for which events there
            are special rules in Paragraphs 11, 12, and 13, respectively), may
            exercise any Option granted to him or her to the extent that the
            Option is exercisable on the date of such termination of service,
            but only within such term as the Administrator has designated in the
            pertinent Option

                                     - 10 -
<PAGE>

            Agreement.

      b.    In no event may an Option Agreement provide, if the Option is
            intended to be an ISO, that the time for exercise be later than
            three (3) months after the Participant's termination of employment.

      c.    The provisions of this Paragraph, and not the provisions of
            Paragraph 12 or 13, shall apply to a Participant who subsequently
            becomes disabled or dies after the termination of employment,
            director status or consultancy, provided, however, in the case of a
            Participant's death within three (3) months after the termination of
            employment, director status or consulting, the Participant's
            Survivors may exercise the Option within one (1) year after the date
            of the Participant's death, but in no event after the date of
            expiration of the term of the Option.

      d.    Notwithstanding anything herein to the contrary, if subsequent to a
            Participant's termination of employment, termination of director
            status or termination of consultancy, but prior to the exercise of
            an Option, the Board of Directors determines that, either prior or
            subsequent to the Participant's termination, the Participant engaged
            in conduct which would constitute "cause", then such Participant
            shall forthwith cease to have any right to exercise any Option.

      e.    A Participant to whom an Option has been granted under the Plan who
            is absent from work with the Company or with an Affiliate because of
            temporary disability (any disability other than a permanent and
            total Disability as defined in Paragraph 1 hereof), or who is on
            leave of absence for any purpose, shall not, during the period of
            any such absence, be deemed, by virtue of such absence alone, to
            have terminated such Participant's employment, director status or
            consultancy with the Company or with an Affiliate, except as the
            Administrator may otherwise expressly provide.

      f.    Options granted under the Plan shall not be affected by any change
            of employment or other service within or among the Company and any
            Affiliates, so long as the Participant continues to be an employee,
            director or consultant of the Company or any Affiliate, provided,
            however, if a Participant's employment by either the Company or an
            Affiliate should cease (other than to

                                     - 11 -
<PAGE>

            become an employee of an Affiliate or the Company), such termination
            shall affect the Participant's rights under any Option granted to
            such Participant in accordance with the terms of the Plan and the
            pertinent Option Agreement.

11.   EFFECT OF TERMINATION OF SERVICE "FOR CAUSE".

      Except as otherwise provided in the pertinent Option Agreement, the
following rules apply if the Participant's service (whether as an employee,
director or consultant) with the Company or an Affiliate is terminated "for
cause" prior to the time that all of his or her outstanding Options have been
exercised:

      a.    All outstanding and unexercised Options as of the date the
            Participant is notified his or her service is terminated "for cause"
            will immediately be forfeited, unless the Option Agreement provides
            otherwise.

      b.    For purposes of this Paragraph, "cause" shall include (and is not
            limited to) dishonesty with respect to the employer,
            insubordination, substantial malfeasance or non-feasance of duty,
            unauthorized disclosure of confidential information, and conduct
            substantially prejudicial to the business of the Company or any
            Affiliate. The determination of the Administrator as to the
            existence of cause will be conclusive on the Participant and the
            Company.

      c.    "Cause" is not limited to events which have occurred prior to a
            Participant's termination of service, nor is it necessary that the
            Administrator's finding of "cause" occur prior to termination. If
            the Administrator determines, subsequent to a Participant's
            termination of service but prior to the exercise of an Option, that
            either prior or subsequent to the Participant's termination the
            Participant engaged in conduct which would constitute "cause", then
            the right to exercise any Option is forfeited.

      d.    Any definition in an agreement between the Participant and the
            Company or an Affiliate, which contains a conflicting definition of
            "cause" for termination and which is in effect at the time of such
            termination, shall supersede the definition in this Plan with
            respect to such Participant.

                                     - 12 -
<PAGE>

12.   EFFECT OF TERMINATION OF SERVICE FOR DISABILITY.

      Except as otherwise provided in the pertinent Option Agreement, a
Participant who ceases to be an employee, director or consultant of the Company
or of an Affiliate by reason of Disability may exercise any Option granted to
such Participant:

      a.    To the extent exercisable but not exercised on the date of
            Disability; and

      b.    In the event rights to exercise the Option accrue periodically, to
            the extent of a pro rata portion of any additional rights as would
            have accrued had the Participant not become Disabled prior to the
            end of the accrual period which next ends following the date of
            Disability. The proration shall be based upon the number of days of
            such accrual period prior to the date of Disability.

      A Disabled Participant may exercise such rights only within a period of
not more than one (1) year after the date that the Participant became Disabled,
notwithstanding that the Participant might have been able to exercise the Option
as to some or all of the Shares on a later date if he or she had not become
disabled and had continued to be an employee, director or consultant or, if
earlier, within the originally prescribed term of the Option.

      The Administrator shall make the determination both of whether Disability
has occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such determination).
If requested, the Participant shall be examined by a physician selected or
approved by the Administrator, the cost of which examination shall be paid for
by the Company.

13.   EFFECT OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.

      Except as otherwise provided in the pertinent Option Agreement, in the
event of the death of a Participant to whom an Option has been granted while the
Participant is an employee, director or consultant of the Company or of an
Affiliate, such Option may be exercised by the Participant's Survivors:

      a.    To the extent exercisable but not exercised on the date of death;
            and

                                     - 13 -
<PAGE>

      b.    In the event rights to exercise the Option accrue periodically, to
            the extent of a pro rata portion of any additional rights which
            would have accrued had the Participant not died prior to the end of
            the accrual period which next ends following the date of death. The
            proration shall be based upon the number of days of such accrual
            period prior to the Participant's death.

      If the Participant's Survivors wish to exercise the Option, they must take
all necessary steps to exercise the Option within one (1) year after the date of
death of such Participant, notwithstanding that the decedent might have been
able to exercise the Option as to some or all of the Shares on a later date if
he or she had not died and had continued to be an employee, director or
consultant or, if earlier, within the originally prescribed term of the Option.

14.   PURCHASE FOR INVESTMENT.

      Unless the offering and sale of the Shares to be issued upon the
particular exercise of an Option shall have been effectively registered under
the Securities Act of 1933, as now in force or hereafter amended (the "1933
Act"), the Company shall be under no obligation to issue the Shares covered by
such exercise unless and until the following conditions have been fulfilled:

      a.    The person(s) who exercise such Option shall warrant to the Company,
            prior to the receipt of such Shares, that such person(s) are
            acquiring such Shares for their own respective accounts, for
            investment, and not with a view to, or for sale in connection with,
            the distribution of any such Shares, in which event the person(s)
            acquiring such Shares shall be bound by the provisions of the
            following legend which shall be endorsed upon the certificate(s)
            evidencing their Shares issued pursuant to such exercise or such
            grant:

                  "The shares represented by this certificate have been taken
                  for investment and they may not be sold or otherwise
                  transferred by any person, including a pledgee, unless (1)
                  either (a) a Registration Statement with respect to such
                  shares shall be effective under the Securities Act of 1933, as
                  amended, or (b) the Company shall have received an opinion of
                  counsel satisfactory to it that an exemption from registration
                  under such Act is then available, and (2) there shall have
                  been compliance with all applicable state securities laws.

                                     - 14 -
<PAGE>

      b.    The Company shall have received an opinion of its counsel that the
            Shares may be issued upon such particular exercise in compliance
            with the 1933 Act without registration thereunder.

      The Company may delay issuance of the Shares until completion of any
action or obtaining of any consent which the Company deems necessary under any
applicable law (including, without limitation, state securities or "blue sky"
laws).

15.   DISSOLUTION OR LIQUIDATION OF THE COMPANY.

      Upon the dissolution or liquidation of the Company, all Options granted
under this Plan which as of such date shall not have been exercised will
terminate and become null and void; provided, however, that if the rights of a
Participant or a Participant's Survivors have not otherwise terminated and
expired, the Participant or the Participant's Survivors will have the right
immediately prior to such dissolution or liquidation to exercise any Option to
the extent that the Option is exercisable as of the date immediately prior to
such dissolution or liquidation.

16.   ADJUSTMENTS.

      Upon the occurrence of any of the following events, a Participant's rights
with respect to any Option granted to him or her hereunder which have not
previously been exercised in full shall be adjusted as hereinafter provided,
unless otherwise specifically provided in the written agreement between the
Participant and the Company relating to such Option:

      A. Stock Dividends and Stock Splits. If the shares of Common Stock shall
be subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of such Option shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.

      B. Consolidations or Mergers. If the Company is to be consolidated with or
acquired by another entity in a merger, sale of all or substantially all of the
Company's assets or otherwise (an "Acquisition"), the Administrator or the board
of directors of any entity assuming the obligations of the Company hereunder

                                     - 15 -
<PAGE>

(the "Successor Board"), shall, as to outstanding Options, either (i) make
appropriate provision for the continuation of such Options by substituting on an
equitable basis for the Shares then subject to such Options either the
consideration payable with respect to the outstanding shares of Common Stock in
connection with the Acquisition or securities of any successor or acquiring
entity; or (ii) upon written notice to the Participants, provide that all
Options must be exercised (either to the extent then exercisable or, at the
discretion of the Administrator, all Options being made fully exercisable for
purposes of this subsection), within a specified number of days of the date of
such notice, at the end of which period the Options shall terminate; or (iii)
terminate all Options in exchange for a cash payment equal to the excess of the
Fair Market Value of the shares subject to such Options (either to the extent
then exercisable or, at the discretion of the Administrator, all Options being
made fully exercisable for purposes of this subsection) over the exercise price
thereof.

      C. Recapitalization or Reorganization. In the event of a recapitalization
or reorganization of the Company (other than a transaction described in
subparagraph B above) pursuant to which securities of the Company or of another
corporation are issued with respect to the outstanding shares of Common Stock, a
Participant upon exercising an Option shall be entitled to receive for the
purchase price paid upon such exercise the securities he or she would have
received if he or she had exercised such Option prior to such recapitalization
or reorganization.

      D. Modification of ISOs. Notwithstanding the foregoing, any adjustments
made pursuant to subparagraph A, B or C with respect to ISOs shall be made only
after the Administrator, after consulting with counsel for the Company,
determines whether such adjustments would constitute a "modification" of such
ISOs (as that term is defined in Section 424(h) of the Code) or would cause any
adverse tax consequences for the holders of such ISOs. If the Administrator
determines that such adjustments made with respect to ISOs would constitute a
modification of such ISOs, it may refrain from making such adjustments, unless
the holder of an ISO specifically requests in writing that such adjustment be
made and such writing indicates that the holder has full knowledge of the
consequences of such "modification" on his or her income tax treatment with
respect to the ISO.

                                     - 16 -
<PAGE>

17.   ISSUANCES OF SECURITIES.

      Except as expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares subject to Options. Except as
expressly provided herein, no adjustments shall be made for dividends paid in
cash or in property (including without limitation, securities) of the Company.

18.   FRACTIONAL SHARES.

      No fractional share shall be issued under the Plan and the person
exercising such right shall receive from the Company cash in lieu of such
fractional share equal to the Fair Market Value thereof.

19.   CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS: TERMINATION OF ISOs.

      The Administrator, at the written request of any Participant, may in its
discretion take such actions as may be necessary to convert such Participant's
ISOs (or any portions thereof) that have not been exercised on the date of
conversion into Non-Qualified Options at any time prior to the expiration of
such ISOs, regardless of whether the Participant is an employee of the Company
or an Affiliate at the time of such conversion. Such actions may include, but
not be limited to, extending the exercise period or reducing the exercise price
of the appropriate installments of such Options. At the time of such conversion,
the Administrator (with the consent of the Participant) may impose such
conditions on the exercise of the resulting Non-Qualified Options as the
Administrator in its discretion may determine, provided that such conditions
shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to
give any Participant the right to have such Participant's ISO's converted into
Non-Qualified Options, and no such conversion shall occur until and unless the
Administrator takes appropriate action. The Administrator, with the consent of
the Participant, may also terminate any portion of any ISO that has not been
exercised at the time of such termination.

                                     - 17 -
<PAGE>

20.   WITHHOLDING.

      In the event that any federal, state, or local income taxes, employment
taxes, Federal Insurance Contributions Act ("F.I.C.A.") withholdings or other
amounts are required by applicable law or governmental regulation to be withheld
from the Option holder's salary, wages or other remuneration in connection with
the exercise of an Option or a Disqualifying Disposition (as defined in
Paragraph 21), the Option holder shall advance in cash to the Company, or to any
Affiliate of the Company which employs or employed the Option holder, the amount
of such withholdings unless a different withholding arrangement, including the
use of shares of the Company's Common Stock, is authorized by the Administrator
(and permitted by law), provided, however, that with respect to persons subject
to Section 16 of the 1934 Act, any such withholding arrangement shall be in
compliance with any applicable provisions of Rule 16b-3 promulgated under
Section 16 of the 1934 Act. For purposes hereof, the fair market value of the
shares withheld for purposes of payroll withholding shall be determined in the
manner provided in Paragraph 1 above, as of the most recent practicable date
prior to the date of exercise. If the fair market value of the shares withheld
is less than the amount of payroll withholdings required, the Option holder may
be required to advance the difference in cash to the Company or the Affiliate
employer. The Administrator in its discretion may condition the exercise of an
Option for less than the then Fair Market Value on the Participant's payment of
such additional withholding.

21.   NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.

      Each Key Employee who receives an ISO must agree to notify the Company in
writing immediately after the Key Employee makes a Disqualifying Disposition of
any shares acquired pursuant to the exercise of an ISO. A Disqualifying
Disposition is any disposition (including any sale) of such shares before the
later of (a) two years after the date the Key Employee was granted the ISO, or
(b) one year after the date the Key Employee acquired shares by exercising the
ISO. If the Key Employee has died before such stock is sold, these holding
period requirements do not apply and no Disqualifying Disposition can occur
thereafter.

22.   TERMINATION OF THE PLAN.

      The Plan will terminate on the date which is ten (10) years from the
earlier of the date of its adoption and the date of its

                                     - 18 -
<PAGE>

approval by the shareholders of the Company. The Plan may be terminated at an
earlier date by vote of the shareholders of the Company; provided, however, that
any such earlier termination will not affect any Options granted or Option
Agreements executed prior to the effective date of such termination.

23.   AMENDMENT OF THE PLAN AND AGREEMENTS.

      The Plan may be amended by the shareholders of the Company. The Plan may
also be amended by the Administrator, including, without limitation, to the
extent necessary to qualify any or all outstanding Options granted under the
Plan or Options to be granted under the Plan for favorable federal income tax
treatment (including deferral of taxation upon exercise) as may be afforded
incentive stock options under Section 422 of the Code, to the extent necessary
to ensure the qualification of the Plan under Rule 16b-3, at such time, if any,
as the Company has a class of stock registered pursuant to Section 12 of the
1934 Act, and to the extent necessary to qualify the shares issuable upon
exercise of any outstanding Options granted, or Options to be granted, under the
Plan for listing on any national securities exchange or quotation in any
national automated quotation system of securities dealers. Any amendment
approved by the Administrator which is of a scope that requires shareholder
approval in order to ensure favorable federal income tax treatment for any
incentive stock options or requires shareholder approval in order to ensure the
compliance of the Plan with Rule 16b-3 at such time, if any, as the Company has
a class of stock registered pursuant to Section 12 of the 1934 Act, shall be
subject to obtaining such shareholder approval. Any modification or amendment of
the Plan shall not, without the consent of a Participant, adversely affect his
or her rights under an Option previously granted to him or her. With the consent
of the Participant affected, the Administrator may amend outstanding Option
Agreements in a manner which may be adverse to the Participant but which is not
inconsistent with the Plan. In the discretion of the Administrator, outstanding
Option Agreements may be amended by the Administrator in a manner which is not
adverse to the Participant.

24.   EMPLOYMENT OR OTHER RELATIONSHIP.

      Nothing in this Plan or any Option Agreement shall be deemed to prevent
the Company or an Affiliate from terminating the employment, consultancy or
director status of a Participant, nor to prevent a Participant from terminating
his or her own employment, consultancy or director status or to give any
Participant a right to be retained in employment or other service

                                     - 19 -
<PAGE>

by the Company or any Affiliate for any period of time.

25.   GOVERNING LAW.

      This Plan shall be construed and enforced in accordance with the law of
the State of Delaware.

                                     - 20 -

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