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                                                                 EXHIBIT 10.13A

            THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT ("First Amendment") is
made this first day of October, 2001 (the "Effective Date"), by and between
Sheffield Pharmaceuticals, Inc. (the "Corporation") and Loren G. Peterson (the
"Executive").

            WHEREAS, the Compensation Committee of the Board of Directors has
determined that a possibility of a Change in Control of the Corporation exists
and appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of certain management to their assigned duties.

            NOW, THEREFORE, in consideration of the covenants and agreements
contained herein, intending to be legally bound, the Corporation and Executive
hereby agree, effective as of the Effective Date, as follows:

22.  Paragraph 3 of the Employment Agreement by and between the Corporation and
     Executive dated April 25, 1997 (the "Employment Agreement") is hereby
     amended by deleting the fourth sentence in its entirety and adding to the
     third sentence the following:

            "; provided that, no such notice by the Corporation shall be
            effective and the term of this Agreement shall be extended for an
            additional year if a Potential Change in Control shall have occurred
            or occurs at any time prior to the date of such notice or within the
            twelve month period beginning on the date of such notice. Further,
            if a Change in Control shall have occurred at any time during the
            term of this Agreement, then notwithstanding any provision hereof to
            the contrary, the term shall continue in effect for: (i) the
            remainder of the month in which the Change in Control occurred, and
            (ii) a term of twenty-four months beyond the month in which such
            Change in Control occurred; provided that, if any obligations of the
            Corporation hereunder shall not have been fully and finally
            discharged at the end of such twenty-four month period, the term
            shall continue until such obligations shall have been finally
            discharged in full. The period commencing on the earlier of a
            Potential Change in Control (if applicable) or Change in Control and
            ending with the conclusion of such twenty-four month period shall be
            referred to hereinafter as the "Protection Period."

23.  Paragraph 12(c) of the Employment Agreement is hereby deleted in its
     entirety.

24.  Paragraph 14 of the Employment Agreement is hereby amended by deleting
     Paragraph 14 in its entirety and replacing it with the following:

                        "14. Termination for Cause. The Corporation may at any
time upon written notice to Executive terminate Executive's employment for
Cause. For purposes of this Agreement, the following shall constitute Cause: (a)
the Executive's gross misconduct which is materially and demonstrably injurious
to the Corporation; (b) the Executive's willful and continued failure to perform
substantially his duties with the Corporation (other than a failure resulting
from the Executive's incapacity due to bodily injury or physical or mental
illness) after a demand for substantial performance is delivered to the
Executive by the Board which specifically identifies the manner in which the
Board believes that the Executive has not substantially performed his duties and
provides for a reasonable period of time within which the Executive may take
corrective measures; or (c) the Executive's conviction (including a plea of nolo
contendere) of willfully engaging in illegal conduct constituting a felony or a
gross misdemeanor involving an intentional act of fraud, misrepresentation,
theft, embezzlement or dishonesty under federal or state law (or comparable
illegal conduct under the laws of any foreign jurisdiction) which is materially
and demonstrably injurious to the Corporation or which impairs the Executive's
ability to perform substantially his duties with the Corporation. An act or
failure to act will be considered "gross" or "willful" for this purpose only if
done, or omitted to be done, by the Executive in bad faith and without
reasonable belief that it was in, or not opposed to, the best interests of the
Corporation. Any act, or failure to act, based upon authority given pursuant to
a resolution duly adopted by the Board or governing body of the Corporation (or
a committee thereof) or based upon the advice of counsel for the Corporation
will be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Corporation.
Executive's attention to matters not directly related to the business of the
Corporation will not provide a basis for termination for Cause so long as the
Board did not expressly disapprove in writing of his engagement in such
activities either before or within a reasonable period of time after the Board
knew or could reasonably have known that the Executive engaged in those
activities. Notwithstanding the

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foregoing, the Executive may not be terminated for Cause unless and until there
has been delivered to Executive a copy of a resolution duly adopted by the
affirmative vote of not less than two-thirds of the entire membership of the
Board (excluding such Executive) at a meeting of the Board called and held for
such purpose (after reasonable notice to such Executive and an opportunity for
such Executive, together with his counsel, to be heard before the Board),
finding that in the good faith opinion of the Board such Executive engaged in
the conduct set forth in paragraphs (a), (b) or (c) above and specifying the
particulars thereof in detail."

25.  Paragraph 21 of the Employment Agreement is hereby amended by adding to the
     end of the first sentence the following:

            "and the Corporation hereby irrevocably consents to the jurisdiction
            of the federal and state courts sitting in the State of Missouri for
            purposes of enforcing this Agreement."

26.  Paragraph 26 of the Employment Agreement is hereby amended by deleting
     Paragraph 26 in its entirety and replacing it with the following:

                        "26. Disputes. (a) If the Executive so elects, any
dispute, controversy or claim arising under or in connection with this Agreement
will be settled exclusively by binding arbitration in St. Louis, Missouri in
accordance with the Employee Benefit Plan Claims Arbitration Rules of the
American Arbitration Association, incorporated by referenced herein. Judgment
may be entered on the arbitrator's award in any court having jurisdiction;
provided that, the Executive may seek specific performance of his right to
receive benefits until the Termination Date during the pendency of any dispute
or controversy arising under or in connection with this Agreement.

                        (b) If the Executive does not elect arbitration to
resolve a dispute, claim or controversy, he may pursue all other available legal
remedies.

                        (c) Any review by an arbitrator or a court of competent
jurisdiction of a decision made by the Board at any time after a Change in
Control shall be de novo, and any such Board determination shall not be entitled
to deference.

                        (d) The Corporation will not assert in any dispute or
controversy with the Executive arising under or in connection with this
Agreement the Executive's failure to exhaust administrative remedies.

                        (e) In the event of any dispute, claim or controversy
arising out of or in connection with this Agreement, if the Executive prevails
on any of the material issues involved in any such dispute, claim or
controversy, the Corporation shall pay to the Executive immediately upon demand
all reasonable expenses (including without limitation attorneys' fees) incurred
by the Executive in connection therewith.

                        (f) If the Corporation refuses or otherwise fails to
make a payment when due under this Agreement and it is ultimately determined
that the Executive is entitled to such payment, such payment shall be increased
to reflect an interest factor, compounded annually, equal to the prime rate in
effect as of the date the payment was first due plus five points. For this
purpose, the prime rate shall be based on the rate identified by Chase Manhattan
Bank as its prime rate in New York City."

27. The Employment Agreement is further amended by adding the following as new
Paragraphs 27 through 32:

                        "27. Definitions. For purposes of this Agreement, the
capitalized terms set forth herein and not otherwise defined shall have the
meanings set forth in Appendix A attached hereto which shall have the same force
and effect as if included as a Paragraph in this Amendment and shall apply when
interpreting the terms of this Agreement.

                        28. Termination Employment in Connection with a Change
in Control.

                            (a) Eligibility. If the Executive's employment is
terminated during the Protection Period either: (i) by the Corporation without
Cause, or (ii) by the Executive for Good Reason, the Corporation will provide

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the Executive with the payments and benefits set forth in Paragraph 29 below
(collectively, the "Enhanced Severance Benefits"), accelerated vesting and
exercisability of stock based compensation under Paragraph 30 and a Gross-Up
Payment for "Excise Tax" (as defined in Paragraph 31) under Paragraph 31. If the
Executive terminates employment with the Corporation under any other
circumstances, he shall not be entitled to Enhanced Severance Benefits under
Paragraph 29, but may be entitled to (c) benefits under Paragraph 12 hereunder,
and (d) accelerated vesting and exercisability of stock based compensation under
Paragraph 30 and a Gross-Up Payment for Excise Tax under Paragraph 31 by
remaining employed with the Corporation as of a Change in Control. In no event
shall Executive be entitled to Enhanced Severance Benefits under Paragraph 29
and to benefits under Paragraph 12.

                            (b) Process for Termination of Employment. During
the Protection Period, any termination of the Executive's employment by the
Executive for Good Reason or by the Corporation for Cause shall be communicated
by written Notice of Termination from the party terminating employment hereunder
to the other party hereto in accordance with Paragraph 18. A "Notice of
Termination" shall mean, for purposes of this Agreement, a written notice given
in good faith and with a reasonable belief that Good Reason or Cause, as the
case may be, has occurred, which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated. Any Notice of
Termination must specify a Termination Date and any Notice of Termination for
Cause shall include a copy of the relevant resolution of the Board action taken
in accordance with the terms of this Agreement to terminate the Executive's
employment for Cause.

                            (c) Compensation and Benefits before Termination
Date. During the period beginning on the date the Executive or the Corporation,
as the case may be, receives Notice of Termination and ending on the Termination
Date, the Corporation will continue to pay the Executive his Base Pay and cause
his continued participation in all Benefit Plans in accordance with the terms of
such Benefit Plans.

                            (d) Rights Under Other Plans, Policies, Practices
and Agreements. Other than to the extent expressly provided herein, this
Agreement does not supersede any other plans, policies, and/or practices of the
Corporation. To the extent that any provision of any Benefit Plan limits,
qualifies or is inconsistent with any of the benefits provided under this
Agreement, then, for purposes of this Agreement, while such other Benefit Plans
remains in force, the provisions of this Agreement will control and such
provision of such other Benefit Plan will be deemed to have been superseded and
to be of no force or effect, as if such other agreement had been formally
amended to the extent necessary to accomplish such purpose. Nothing in this
Agreement prevents or limits the Executive's continuing or future participation
in any Benefit Plan provided by the Corporation and nothing in this Agreement
limits or otherwise affects the rights the Executive may have under any Benefit
Plans with the Corporation. Amounts that are vested benefits or which the
Executive is otherwise entitled to receive under any Benefit Plan with the
Corporation at or subsequent to the Termination Date will be payable in
accordance with such Benefit Plan.

         29. Enhanced Severance Benefits.

             (a) Cash Payment. The Executive will be entitled to a cash payment
equal to two (2) times Base Pay (disregarding any change in Base Pay that
constitutes Good Reason). The benefit provided under this Paragraph 29(a) will
be distributed in a single lump sum within ten business days after the
Termination Date or, if later, within ten business days following the effective
date of the Change in Control.

             (b) Continuation of Certain Welfare Benefits.

                 (i) During the period described in Paragraph 29(b)(ii) below,
the Corporation will maintain, or continue to reimburse or pay on behalf of the
Executive, as the case may be, medical, dental and life insurance plans which by
their terms cover the Executive and his family members and dependents under the
same terms and at the same cost to the Executive and his family members and
dependents as similarly situated executives who continue to be employed by the
Corporation (without regard to any reduction in such benefits that constitutes
Good Reason). The continuation period under applicable federal and state
continuation laws will begin to run from the date on which coverage under this
Paragraph ends.

                 (ii) For purposes of Paragraph 29(b)(i) above, the continuation
period with respect to any particular plan is the period beginning on the
Termination Date and ending on the earlier of: (x) the last day

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of the twelfth month that begins after the Termination Date, (y) the date after
Termination Date on which the Executive first becomes eligible to participate in
the plan of another employer providing comparable benefits to the Executive and
his eligible family members and dependents which plan does not contain any
exclusion or limitation with respect to any pre-existing condition of the
Executive or any eligible family member or dependent who would otherwise be
covered under the Corporation's plan but for this clause (y), or (z) the date of
the Executive's death.

                 (iii) To the extent the Executive incurs a liability for Taxes
in connection with a benefit provided pursuant to Paragraph 29(b) which he would
not have incurred had he been an active employee of the Corporation
participating in one of the Corporation's Benefit Plans, the Corporation shall
make a Gross-Up Payment for any such Taxes to the Executive. For purposes of
applying the foregoing, the Executive's tax rate will be deemed to be the
highest statutory marginal state and federal tax rate (on a combined basis) then
in effect. The payment pursuant to this subparagraph will be made within ten
days after the Executive's remittal of a written request therefor, accompanied
by a statement indicating the basis for and amount of the liability.

             (c) Extended Exercise Period for Stock Options. Any stock options
issued by the Corporation and held by the Executive shall remain exercisable
until thirty-six months following the Termination Date, but in no event beyond
the stock option's maximum exercise period (without regard to any provisions
that shortens the exercise period in connection with termination of employment
or otherwise).

         30. Accelerated Vesting and Exercisability. If a Change in Control
occurs while the Executive is employed by the Corporation or after the Executive
has terminated employment with the Corporation under circumstances entitling him
to Enhanced Severance Benefits, (a) all stock options previously granted to the
Executive by the Corporation shall become fully vested and exercisable as of the
date of the Change in Control, whether or not otherwise exercisable and vested
as of that date, and (b) shares of restricted Corporation stock previously
awarded to the Executive shall become fully vested.

         31. Excise Tax Equalization. The Corporation will cause its independent
auditors promptly to review, at the Corporation's sole expense, the
applicability of Paragraph 4999 of the Code to any payment or distribution of
any type by the Corporation or its Affiliates to or for the benefit of the
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement, any Benefit Plan or otherwise (the "Total
Payments"). The Corporation shall engage the auditor so that its review is
completed no later than the Change in Control. If the auditor determines that
the Total Payments result in an excise tax imposed by Paragraph 4999 of the Code
or any comparable state or local law, or any interest or penalties with respect
to such excise tax (such excise tax, together with any such interest and
penalties, are collectively referred to as the "Excise Tax") and if the
Executive is entitled to Enhanced Severance Benefits or accelerated vesting or
exercisability of equity compensation under Paragraph 30, or both, the
Corporation shall make a Gross-Up Payment for any Excise Taxes to the Executive
within ten business days after the Termination Date, but in no event later than
the due date for the payments of any excise tax. For purposes of the foregoing
determination, the Executive's tax rate will be deemed to be the highest
statutory marginal state and federal tax rate (on a combined basis) then in
effect. If any tax authority determines that a greater Excise Tax should be
imposed upon the Total Payments than is determined by the Corporation's
independent auditors pursuant to this Paragraph 31, the Executive is entitled to
receive from the Corporation the full Gross-Up Payment calculated on the basis
of the amount of Excise Tax determined to be payable by such tax authority
within ten business days after he notifies the Corporation of such
determination.

         32. Miscellaneous.

             (a) Successors and Assigns.

                 (i) The Corporation will require any Successor to expressly
assume and agree to perform the obligations of this Agreement in the same manner
and to the same extent that the Corporation would be required to perform if no
such succession had taken place except as specifically required to the contrary
hereunder. Failure of the Corporation to obtain such assumption and agreement at
least three business days prior to the time a Person becomes a Successor (or
where the Corporation does not have at least three business days' advance notice
that a Person may become a Successor, within one business day after having
notice that such Person may become or has become a Successor) will constitute
Good Reason for termination of the Executive's employment. The date on which any
such succession becomes effective will be deemed the Termination Date and Notice
of Termination will be deemed to have been timely given by the Executive. A
Successor has no rights, authority or power with respect to this Agreement prior
to a Change in Control.

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                 (ii) This Agreement is for the benefit of, and is enforceable
by, the Executive, his personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees; provided
that, the Executive may not otherwise assign any of his rights or delegate any
of his obligations under this Agreement. If the Executive dies after becoming
entitled to, but before receiving, any amounts payable under this Agreement, all
such amounts, unless otherwise specifically provided to the contrary in this
Agreement, will be paid in accordance with the terms of this Agreement to the
Executive's devisee, legatee or other designee or, if there be no such designee,
to the Executive's estate.

             (b) No Mitigation or Set-Off. The Executive will not be required to
mitigate the amount of any benefits the Corporation becomes obligated to provide
in connection with this Agreement by seeking other employment or otherwise. The
Corporation has no right to set-off benefits owed under this Agreement against
amounts owed or claimed to be owed by the Executive to the Corporation under
this Agreement or otherwise.

             (c) Taxes. All benefits to be provided to the Executive in
connection with the this Agreement will be subject to required withholding of
federal, state and local income, excise and employment-related taxes.

             (d) Survival. The respective obligations of, and benefits afforded
to, the Corporation and the Executive which, by their express terms or clear
meaning, survive termination of the Executive's employment with the Corporation
or termination of this Agreement, as the case may be, will remain in full force
and effect according to their terms notwithstanding the termination of the
Executive's employment with the Corporation or termination of this Agreement, as
the case may be.

             (e) Benefits as Eligible Compensation under Other Benefit Plans.
Unless otherwise expressly provided therein, benefits paid or payable under this
Agreement will not be deemed to be salary or compensation for purposes of
determining the benefits to which the Executive may be entitled under any other
Benefit Plan sponsored, maintained or contributed to by the Corporation."

28.  Except as amended as set forth in this First Amendment, the Employment
     Agreement shall remain in full force and effect in accordance with its
     terms.

            IN WITNESS WHEREOF, this First Amendment has been executed by the
Corporation, by its duly authorized representative, and by Executive, as of the
Effective Date.

EXECUTIVE                                       CORPORATION

/s/ Loren G. Peterson                           /s/ Thomas M. Fitzgerald
------------------------------                  -----------------------------
                                                By: Thomas M. Fitzgerald
                                                Title: Chairman

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                                   APPENDIX A

                                   DEFINITIONS

Whenever the following capitalized terms are used in the Agreement, they shall
have the meaning specified below.

Affiliate

            "Affiliate" shall mean: (a) any corporation at least a majority of
whose outstanding securities ordinarily having the right to vote at elections of
directors is owned directly or indirectly by the Corporation; or (b) any other
form of business entity in which the Corporation, by virtue of a direct or
indirect ownership interest, has the right to elect a majority of the members of
such entity's governing body.

Base Pay

            "Base Pay" shall mean the Executive's base salary at the highest
annual rate in effect immediately prior to the Change in Control or at the time
Notice of Termination is given, whichever is greater, disregarding any decrease
which constitutes Good Reason for the Executive's termination of employment.
Base Pay includes only regular cash salary and wages and is determined before
any reduction for deferrals pursuant to any nonqualified deferred compensation
plan or arrangement, qualified cash or deferred arrangement or cafeteria plan.

Beneficial Owner

            "Beneficial Owner" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

Benefit Plan

            "Benefit Plan" is (a) employee benefit plan as defined in Paragraph
3(3) of ERISA, (b) a cafeteria plan described in Paragraph 125 of the Code, (c)
a plan, policy or practice providing for paid vacation, other paid time off or
short- or long-term profit sharing, bonus or incentive payments, or (d) stock
option, stock purchase, restricted stock, phantom stock, stock appreciation
right or other equity-based compensation plan that is sponsored, maintained or
contributed to by the Corporation or its Affiliates for the benefit of employees
(and/or their families and dependents) generally or the Executive (and/or the
Executive's family and dependents) in particular.

Board

            "Board" is the board of directors of the Corporation duly qualified
and acting at the time in question. On and after the date of a Change in
Control, any duty of the Board in connection with this Agreement is
non-delegable and any attempt by the Board to delegate any such duty is
ineffective.

Change in Control

            A "Change in Control" shall mean the first of the following events
to occur:

            (a) Any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Corporation representing at least thirty
percent or, in the case of Elan Corporation and its Affiliates in the aggregate
(collectively, the "Elan Group"), at least fifty percent, of the combined voting
power of the Corporation's then outstanding securities;

            (b) During any twenty-four month consecutive period beginning on or
after October 1, 2001, individuals who at the beginning of such period
constituted a majority of the Board of Directors cease for any reason during any
day during any such period to constitute a majority thereof; provided, however,
that any director who is not in office at the beginning of such twenty-four
month period, but whose election by the Board or whose nomination for election
by the Company's shareholders was to fill a vacancy caused by death or
retirement and was

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approved by a vote of at least two-thirds 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 shall be deemed
to have been in office at the beginning of such period for purposes of this
definition;

            (c) the stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other Corporation or agreement of
exchange involving the Corporation ("Merger"), other than (1) a Merger which
would result in the voting securities of the Corporation outstanding as of
October 1, 2001 continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than fifty
percent of the combined voting power of the voting securities of the Corporation
or such surviving entity outstanding immediately after the Merger, or (2) a
Merger effected to implement a recapitalization of the Corporation (or similar
transaction) in which no Person acquires thirty percent or more, or in the case
of Elan Group in the aggregate, fifty percent or more, of the combined voting
power of the Corporation's then outstanding securities; or

            (d) the stockholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) or
disposition by the Corporation of all or substantially all of the Corporation's
assets.

Code

            "Code" shall mean the Internal Revenue Code of 1986, as amended. Any
reference to a specific provision of the Code includes a reference to such
provision as it may be amended from time to time and to any successor provision.

Effective Date

            "Effective Date" shall mean the Effective Date of the First
Amendment.

ERISA

            "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended. Any reference to a specific provision of ERISA includes a
reference to such provision as it may be amended from time to time and to any
successor provision.

Exchange Act

            The "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended. Any reference to a specific provision of the Exchange Act or to any
rule or regulation thereunder includes a reference to such provision as it may
be amended from time to time and to any successor provision.

Good Reason

            "Good Reason" shall mean the occurrence of one or more of the
following events (regardless of whether any other reason, other than Cause, for
such termination exists or has occurred, including without limitation other
employment):

            (a) failure to elect or reelect or otherwise maintain the Executive
in the offices or positions that the Executive held immediately prior to the
Change in Control;

            (b) a change in the nature or scope of the authorities, powers,
functions, duties or responsibilities attached to the position with the
Corporation that the Executive held immediately prior to the Change in Control,
as reasonably determined by the Executive;

            (c) a reduction by the Corporation in the Executive's Base Pay or an
adverse change in the form or timing of the payment thereof, as in effect
immediately prior to the Potential Change in Control or as thereafter increased;

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            (d) the failure by the Corporation to cover the Executive under
Benefit Plans that, in the aggregate, provide substantially similar benefits to
the Executive and/or his family and dependents at a substantially similar total
cost to the Executive (e.g., premiums, deductibles, co-pays, out of pocket
maximums, required contributions, Taxes and the like) relative to the highest
benefits and lowest total costs under the Benefit Plans in which the Executive
(and/or his family or dependents) is participating at any time during the period
between the Potential Change in Control and the Change in Control;

            (e) the Corporation's requiring the Executive to be based more than
fifty miles from where his office is located immediately prior to the Change in
Control, except for required travel on the Corporation's business, and then only
to the extent substantially consistent with the business travel obligations
which the Executive undertook on behalf of the Corporation during the ninety day
period ending on the date of the Potential Change in Control (without regard to
travel related to or in anticipation of the Change in Control);

            (f) the failure of the Corporation to obtain from any Successor the
assent to this Agreement as required under Paragraph 32(a)(i);

            (g) any purported termination by the Corporation of the Executive's
employment which is not properly effected pursuant to a Notice of Termination
and pursuant to any other requirements of this Agreement and, for purposes of
this Agreement, no such purported termination will be effective; or

            (h) any refusal by the Corporation to continue to allow the
Executive to attend to matters or engage in activities not directly related to
the business of the Corporation which, at any time prior to the Potential Change
in Control, the Executive was not expressly prohibited by the Corporation from
attending to or engaging in.

The Executive's continued employment does not constitute consent to, or waiver
of any rights arising in connection with, any circumstance constituting Good
Reason. Notwithstanding the foregoing, the occurrence of an event that would
otherwise constitute Good Reason hereunder shall cease to be an event
constituting Good Reason if the Executive does not provide a Notice of
Termination to the Corporation within one hundred eighty days of the date that
the Executive first becomes aware of the occurrence of such event. Termination
by the Executive of his employment for Good Reason as defined hereunder will
constitute Good Reason for all purposes of this Agreement, even if the Executive
may also thereby be deemed to have "retired" under any applicable retirement
programs of the Corporation.

Gross-Up Payment

            "Gross-Up Payment" shall mean an amount payable to the Executive
such that, after the payment of all Taxes attributable to any item of
compensation subject to gross-up under this Agreement by the Corporation, there
remains a balance sufficient to pay the Taxes being reimbursed.

Person

            A "Person" shall mean any individual, corporation, partnership,
group, association or other "person," as such term is used in Paragraph 14(d) of
the Exchange Act, other than the Corporation, any Affiliate or any benefit plan
sponsored by the Corporation or an Affiliate.

Potential Change in Control

            A "Potential Change in Control" shall be the first of the following
events to occur:

            (a) the Corporation enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control;

            (b) any Person (including the Corporation) publicly announces an
intention to take or to consider taking actions which, if consummated, would
constitute a Change in Control; or

            (c) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Corporation representing fifteen percent or
more of the combined voting power of the Corporation's then outstanding

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securities, increases its beneficial ownership of such securities by one
percentage point or more over the percentage so owned by such Person on the
Effective Date, other than an increase in ownership percentage due to the
payment of dividends by the issuance of additional securities of the
Corporation; or

            (d) the Board adopts a resolution to the effect that, for purposes
of this Agreement, a Potential Change in Control has occurred.

The Board shall not be precluded from adopting a resolution to the effect that,
for purposes of this Agreement, it is the good faith opinion of the Board that a
Potential Change in Control has been abandoned and that a Potential Change in
Control no longer exists.

An event shall not be a Potential Change in Control for purposes of this
Agreement if a Change in Control does not occur within twelve months of such
event.

Successor

            A "Successor" shall mean any Person that succeeds to, or has the
practical ability to control (either immediately or solely with the passage of
time), the Corporation's business directly, by merger, consolidation or other
form of business combination, or indirectly, by purchase of the Corporation's
outstanding securities ordinarily having the right to vote at the election of
directors, all or substantially all of its assets or otherwise.

Taxes

            "Taxes" shall mean the incremental federal, state and local income,
excise and other taxes (including Excise Taxes), penalties and interest payable
by the Executive with respect to any applicable item of income.

Termination Date

            "Termination Date" shall mean: (1) in the case of an employment
termination by the Corporation for Cause or by the Executive for Good Reason,
the date specified as the Executive's last day of employment in the Notice of
Termination, which shall not be less than ten business days after the date such
Notice of Termination is deemed given in accordance with Paragraph 18, or (2) in
any other case, the last day worked by the Executive as reflected on the
Corporation's payroll records. Notwithstanding the foregoing, if the Corporation
terminates the Executive's employment for Cause and the Executive has not
previously expressly agreed in writing to the termination, then within the
thirty day period after the Executive's receipt of the Notice of Termination,
the Executive may notify the Corporation that a dispute exists concerning the
termination, in which event the Termination Date will be the date set either by
mutual written agreement of the parties or by the arbitrators or a court under
the dispute resolution provisions in Paragraph 26. During the pendency of any
such dispute, the Executive will continue to make himself available to provide
services to the Corporation and the Corporation will continue to pay the
Executive his full compensation and benefits in effect immediately prior to the
date on which the Notice of Termination is given (without regard to any changes
to such compensation or benefits which constitute Good Reason) and until the
dispute is resolved in accordance with Paragraph 26. The Executive will be
entitled to retain the full amount of any such compensation and benefits without
regard to the resolution of the dispute unless the arbitrators or judge
decide(s) that the Executive's claim of a dispute was frivolous or advanced by
the Executive in bad faith.

                                       9<PAGE>
                                                                   EXHIBIT 10.37

                                                  February 18, 2002

Mr. Carl F. Siekmann
15915 Wetherburn Road
Chesterfield, Missouri  63017

Dear Carl:

            This letter follows up on the discussions we have had recently
concerning the mutually agreeable separation of your employment for reasons
other than cause with Sheffield Pharmaceuticals, Inc. (the "Company"). To assist
you in your transition, the Company is offering to you certain severance and
other benefits in exchange for the general release of claims and other terms set
forth below. The specific terms of the Company's proposed agreement (the
"Agreement") are as follows:

            1. TERMINATION OF EMPLOYMENT. The effective date of your termination
shall be February 15, 2002 (the "Termination Date"). The Company will pay you
all wages earned and any accrued and unused vacation time in accordance with
Company policy through your Termination Date. For the period from the date of
this letter through your Termination Date, you will continue to perform your
duties and responsibilities in your current position; provided however that the
Company may at any time and in its sole discretion request that you vacate the
Company's premises and cease performing any duties for the Company. In such
event, the Company shall remain obligated to pay to you all wages due to you
through your Termination Date.

            2. SEVERANCE PAY. The Company will continue to pay your base salary,
as in effect on your Termination Date, for a period of nine months following
your Termination Date, subject to appropriate tax withholdings and authorized
deductions, in accordance with the Company's regular payroll practices and
regular pay schedule.

            3. BENEFIT CONTINUATION.

               (a) Death and Disability Insurance. The Company will continue to
pay the full premium cost of Company-sponsored death and/or disability insurance
coverage for you in effect as of your Termination Date, if any, for a period of
nine months following your Termination Date. Your rights and obligations under
such insurance plans shall be governed by the specific terms of the plans. In
the event you obtain comparable death and/or disability insurance coverage
through other employment prior to the expiration of the nine month period of
continuation coverage described herein, the Company's obligation to continue to
provide such coverage shall cease as of the effective date of such comparable
coverage. For purposes of this agreement, comparable coverage shall be deemed to
include, at a minimum, coverage at the same benefit level at no cost to you.
Should you obtain such comparable coverage, you agree to promptly notify the
Company's Chief Executive Officer in writing at the Company's headquarters.

               (b) Health and Dental Insurance. Upon the termination of your
employment, you and your dependents may be eligible to continue your health
and/or dental insurance coverage under Company-sponsored plans, if any, pursuant
to the federal law known as COBRA. In the event you elect COBRA continuation
coverage, the Company will pay the full premium cost and any administrative fee
for such continuation coverage for a period of nine months following your
Termination Date. After that time, you will become responsible for the full
premium cost and any administrative fee for such continuation coverage. You
understand and acknowledge that it is solely your responsibility to elect COBRA
continuation coverage if you desire such coverage. Your rights and obligations
under such insurance plans shall be governed by the specific terms of the plans
and COBRA. Information concerning COBRA rights, coverage and election will be
sent to you under separate cover. In the event you and/or your dependent(s)
become ineligible for COBRA continuation coverage during the nine month period
of premium payments described herein, the Company shall reimburse you for the
premium cost of health and/or dental insurance

                                       1
<PAGE>

coverage at the same monthly rate the Company would have paid for COBRA
continuation coverage had you and/or your dependents remained eligible for such
coverage. In the event you obtain comparable health and/or dental insurance
coverage through other employment prior to the expiration of the nine month
period of premium payments described herein, the Company's obligation to
continue to provide such premium payments shall cease as of the effective date
of such comparable coverage. For purposes of this agreement, comparable coverage
shall be deemed to include, at a minimum, coverage at the same benefit level at
no cost to you. Should you obtain such comparable coverage, you agree to
promptly notify the Company's Chief Executive Officer in writing at the
Company's headquarters.

               (c) Other Benefits. Except as specifically set forth in this
Agreement, your right to, and participation in, all employee benefit plans of
the Company shall terminate as of your Termination Date in accordance with the
specific terms of each plan; provided however, and notwithstanding anything to
the contrary herein, in no event shall you have any right to any benefits upon a
change in control, except with respect to the specific benefits set forth in
this Agreement.

            4. STOCK OPTIONS. Except as provided in this paragraph 4, your
interest in and rights in your Vested Stock Options (as defined and set forth in
Exhibit A) shall be governed by and be subject to all conditions, terms and
restrictions contained in the Company's 1993 Stock Option Plan, as amended from
time to time ("the Plan"), and the option letter agreements dated April 25, 1997
(denoted as Exhibits A-1, A-2 and B to your Employment Agreement dated April 25,
1997, a copy of which is attached hereto as Exhibit B (the "Employment
Agreement")), the option letter agreement dated August 28, 1998 (a copy of which
is attached hereto as Exhibit C) and the option letter agreement dated March 1,
2000 (a copy of which is attached hereto as Exhibit D). Your rights with respect
to your Stock Options shall be fixed as of your Termination Date and pursuant to
this Agreement. With respect to the option letter agreements dated April 25,
1997 and denoted as Exhibits A-1 and A-2 to your Employment Agreement, all
250,000 options shall be deemed vested as of your Termination Date and you shall
be entitled to exercise those options on or before February 15, 2003. With
respect to the option letter agreement dated April 25, 1997 and denoted as
Exhibit B to your Employment Agreement, 60,000 options shall be deemed vested as
of your Termination Date and you shall be entitled to exercise those 60,000
options on or before February 15, 2003, and the 90,000 options that would have
been unvested as of your Termination Date shall be accelerated and deemed to
have become fully vested as of your Termination Date and you shall be entitled
to exercise those 90,000 options on or before February 15, 2005. With respect to
the option letter agreement dated August 28, 1998, you shall be entitled to
exercise, at your election, some or all of the 105,000 options that are vested
as of your Termination Date on a cashless basis (defined below) on the later of
either: (a) your Termination Date; or (b) within five (5) business days
following the expiration of the Revocation Period defined in paragraph 11. For
purposes of this Agreement, the term "Cashless Basis" shall mean that in lieu of
exercising some or all of your 105,000 vested stock options for cash, you shall
be entitled to receive up to a total number of shares of common stock of the
Company computed using the following formulas:

            X  =        35,000 (A - $1.2375) ; and
                        --------------------
                                    A

            X  =        35,000 (A - $2.125) ; and
                        -------------------
                                    A

            X  =        35,000 (A - $3.125)
                        -------------------
                                    A

where X equals the number of shares of common stock to be issued to you and A
equals the fair market value of one share of common stock on the date of
exercise. In addition, you may elect to have the Company withhold from the total
number of shares due under the above formulas a number of shares having a fair
market value equal to the minimum amount necessary to satisfy the Company's
aggregate federal, state, local and foreign tax withholding and FICA and FUTA
obligations due as a result of a Cashless Basis exercise. With respect to the
option letter agreement dated March 1, 2000, you shall be entitled to exercise
the 60,000 options that are vested as of your Termination Date on or before
February 15, 2005. You acknowledge and agree that you shall forfeit any right to
those 30,000 unvested stock options under the option letter agreement dated
March 1, 2000, as shown in Exhibit A hereto. You acknowledge and agree that
there has been no change of control at any time up to and including your
Termination Date and that you shall have no rights to accelerated vesting or
otherwise upon any change of control occurring after

                                       2
<PAGE>
your Termination Date. The Company agrees to take any action necessary to
effectuate the terms of this paragraph 4.

            5. STOCK PROXY. You agree that at the time you execute this
Agreement, you will execute a proxy for all of your shares of Company common
stock in favor of the President of the Company, Loren G. Peterson, or his
designee, which proxy shall be in the form attached hereto as Exhibit E. The
proxy shall be granted for a term of one year and shall not be limited in scope
of authority.

            6. RETURN OF COMPANY PROPERTY. You agree to return to the Company:
(a) all originals and copies of all proprietary and/or confidential information
and trade secrets of the Company; (b) all originals and copies of customer
files; (c) all identification cards, keys, or other means of access to the
Company; and (d) any other property of the Company in your possession, custody
or control. All Company property must be returned no later than your Termination
Date.

            7. NONDISPARAGEMENT. You agree that you will not make disparaging or
adverse remarks about, or refer negatively to your association with the Company,
its parents, subsidiaries, affiliates, officers, directors, trustees, employees
or any other Released Party defined in paragraph 10. The Company agrees that its
Board of Directors and executive officers shall not make disparaging or adverse
remarks about you, or refer negatively to your association with the Company.

            8. NON-FILING OF COMPLAINT OR CHARGES. You represent that you have
not filed or asserted any cause of action, claim, charge or other action or
proceeding against the Company.

            9. COOPERATION. You agree that you will cooperate and assist the
Company in the future in the event that the Company is presented with legal
issues as to which you have relevant information and knowledge. To the extent
such cooperation is required, the Company agrees: (a) to reimburse you for
reasonable out-of-pocket expenses actually incurred in connection with providing
such cooperation so long as such expenses are approved in advance; and (b) to
compensate you for your time at a reasonable rate.

            10. GENERAL RELEASE. As a material inducement to the Company to
enter into this Agreement, and in consideration of the good and valuable
consideration contained herein, the receipt and sufficiency of which is hereby
acknowledged, you, on behalf of yourself, your heirs, administrators,
representatives, executors, successors, and assigns, hereby irrevocably and
unconditionally release, acquit, and forever discharge Sheffield
Pharmaceuticals, Inc. and its predecessors (including without limitation
Sheffield Medical Technologies Inc.), parents, subsidiaries, affiliates,
divisions, successors and assigns, and all of their current and former agents,
officers, directors, employees, members, trustees, fiduciaries, representatives
and attorneys (the "Released Parties") from any and all charges, complaints,
claims, liabilities, obligations, promises, agreements, damages, causes of
action, suits, demands, losses, debts, and expenses of any nature whatsoever,
known or unknown ("Claims") which you have, had or claim to have against any
Released Party up to and including the date you sign this Agreement. This
General Release of Claims shall include, without limitation, Claims relating to
your employment and separation from employment with the Company, Claims of
discrimination under the common law or any federal or state statute (including,
without limitation, the Civil Rights Act of 1964, the Americans with
Disabilities Act and the Age Discrimination in Employment Act, all as amended),
Claims for wrongful discharge, Claims for the payment of any salary, wages,
vacation time, bonuses or commissions, Claims for severance or other benefits
(other than as specifically set forth in paragraphs 2, 3 and 4 herein), Claims
of detrimental reliance, and all other statutory, common law or other Claims of
any nature whatsoever. This General Release of Claims does not apply to any
Claims concerning a breach of this Agreement, including the option letter
agreements referred to in Paragraph 4 as amended by this Agreement, or any
claims arising after the date you sign this Agreement. With respect to the
Claims you are waiving herein, you acknowledge that you are waiving your right
to receive money or any other relief in any action instituted by you or on your
behalf by any other person, entity or government agency.

            11. NOTICE AND RIGHT TO CONSIDER. You are advised to consult with an
attorney before executing this Agreement. You acknowledge that you have
consulted with an attorney of your choosing, Charles Elbert, Esquire, in
connection with your review of this Agreement. In any event, you should
thoroughly review and understand the effect of this Agreement and its General
Release before taking action upon them. You may have up to forty-five (45) days
from January 14, 2002 (the date you first received the Company's written offer
concerning the separation of your employment) to complete your review and sign
the Agreement. You acknowledge that if you sign this

                                       3
<PAGE>
Agreement prior to the expiration of the forty-five (45) day period that you did
so voluntarily. You will also have seven (7) days following your execution of
this Agreement to revoke it (the "Revocation Period"). If you wish to revoke the
Agreement, you must do so in writing, addressed to the Company's Chief Executive
Officer at the Company's headquarters, and such revocation must be received by
the Company prior to the expiration of the Revocation Period.

            If you sign this Agreement prior to your Termination Date, then you
agree to execute the General Release attached hereto as Exhibit F on your
Termination Date. Should you fail to do so, then this Agreement shall
immediately become null and void.

            12. AGE AND JOB TITLE INFORMATION. Attached to this letter as
Exhibit G is a description of (i) any class, unit or group of individuals being
offered the benefits that the Company has offered to you, and any applicable
time limits regarding such offer; (ii) the job titles and ages of all
individuals eligible or selected for such offer, and (iii) the ages of all
individuals in the same job classification or organizational unit who are not
eligible or selected for the offer. By signing this Agreement you acknowledge
that you have received Exhibit G and understand its contents.

            13. MISCELLANEOUS. This Agreement constitutes the full understanding
and entire Agreement between you and the Company and supersedes and terminates
any other agreements, communications and understandings of any kind, whether
oral or written, formal or informal, including, without limitation, any
agreement concerning benefits upon a change in control. Except for paragraphs 9,
10 and 11 (excluding any reference in paragraph 11 to paragraph 8) and the
Exhibits to the Employment Agreement which have been referenced in this
Agreement, the Employment Agreement by and between the parties is hereby
superseded by this Agreement and shall be deemed null and void and of no further
force or effect. You represent and acknowledge that in signing this Agreement,
you have not relied upon any promise, inducement, representation or statement,
whether oral or written, not set forth in this Agreement. This Agreement may be
amended or modified only by a written instrument signed by the parties.

            The Company acknowledges that you are entitled to, and will continue
to be entitled to, the same rights of indemnification as current officers and
directors of the Company, to the fullest extent provided for under Delaware law
and as more particularly set forth in the Company's By-Laws.

            The parties agree that the failure of a party at any time to require
performance of any provision of this Agreement shall not affect, diminish,
obviate or void in any way the Party's full right or ability to require
performance of the same or any other provisions of this Agreement at any time
thereafter.

            This Agreement shall inure to the benefit of and shall be binding
upon you, your heirs, administrators, representatives, executors, successors and
assigns and upon the successors and assigns of the Company.

            This Agreement shall be construed in accordance with and governed by
the laws of the State of Missouri, without respect to its conflict of laws
provisions.

            Should any portion, term or provision of this Agreement be declared
or determined by any court to be illegal, invalid or unenforceable, the validity
or the remaining portions, terms and provisions shall not be affected thereby,
and the illegal, invalid or unenforceable portion, term or provision shall be
deemed not to be part of this Agreement.

            The headings of the paragraphs of this Agreement are for convenience
only and are not binding on any interpretation of this Agreement.

            In the event of any conflict between this Agreement and the stock
option letter agreements referred to in paragraph 4, the provisions of this
Agreement shall control.

                                      * * *

            If you wish to accept this Agreement, please sign and date the
Agreement below and return it to me within the time period specified in
paragraph 11.

            We wish you every success for the future.

                                       4
<PAGE>

                                        Sincerely,

                                        /s/ Loren G. Peterson
                                        -------------------------------------
                                        Loren G. Peterson
                                        President and Chief Executive Officer

BY SIGNING THIS AGREEMENT, I STATE THAT I HAVE READ IT, I UNDERSTAND IT, I AGREE
WITH EVERYTHING IN IT AND I HAVE SIGNED IT KNOWINGLY AND VOLUNTARILY.

/s/ Carl F. Siekmann
--------------------
Carl F. Siekmann

Date:  2/18/02
       -------

                                       5
<PAGE>

                                    EXHIBIT A

                      STOCK OPTIONS AS OF TERMINATION DATE

<Table>
<Caption>
                                                                                       Exercise Period for
Grant Date    Total Shares  Vested Stock Options  Unvested Shares  Exercise Price      Vested Stock Options
----------    ------------  --------------------  ---------------  --------------      -------------------
<S>           <C>           <C>                   <C>              <C>                 <C>
4/25/97       100,000       100,000               0                $2.75               To and including 2/15/03
(A-1 grant)
4/25/97       150,000       150,000               0                $2.75               To and including 2/15/03
(A-2 grant)
4/25/97       150,000       150,000               0                $2.75               60,000 to and including
(B grant)                                                                              2/15/03
                                                                                       ***
                                                                                       90,000 to and including
                                                                                       2/15/05
8/28/98       105,000       35,000 at $1.2375     0                35,000 at $1.2375   see n. 1
                            35,000 at $2.125                       35,000 at $2.125
                            35,000 at $3.125                       35,000 at $3.125
3/01/00       90,000        30,000 at $4.75       30,000 at        30,000 at $4.75     To and including 2/15/05
                            30,000 at $5.3125     at $6.3125       30,000 at $5.3125
                                                                   30,000 at $6.3125
</Table>

n. 1:  Either (at your election):

            (1) 35,000 at $1.2375; 35,000 at $2.125; 35,000 at $3.125; all
within 90 days from your Termination Date; or

            (2) Some or all of the 105,000 options on a Cashless Basis, defined
in paragraph 4 of the Agreement, on the later of either: (a) your Termination
Date; or (b) within five (5) business days following the expiration of the
Revocation Period, defined in paragraph 12 of the Agreement.

                                       6
<PAGE>

                                    EXHIBIT B

            EMPLOYMENT AGREEMENT (INCLUDING EXHIBITS A-1, A-2 AND B)

                              EMPLOYMENT AGREEMENT

            AGREEMENT made as of the 25th day of April, 1997, by and between
Sheffield Medical Technologies Inc., a Delaware corporation with its principal
offices at 30 Rockefeller Plaza, Suite 4515, New York, New York 10112 (the
"Corporation"), and Carl F. Siekmann residing at 15915 Wetherburn Road,
Chesterfield, Missouri 63017 ("Executive").

                                   WITNESSETH

            WHEREAS, the Corporation desires to employ and retain Executive as
its Executive Vice President - Corporate Development, upon the terms and subject
to the conditions of this Agreement; and

            NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto agree as follows:

            1. Employment of Executive. The Corporation hereby employs Executive
as its Executive Vice President - Corporate Development, to perform the duties
and responsibilities traditionally incident to such office, subject at all times
to the control and direction of the Board of Directors of the Corporation.

            2. Acceptance of Employment; Offices; Time and Attention, Etc. (a)
Executive hereby accepts such employment and agrees that throughout the period
of his employment hereunder, except as hereinafter provided, he will devote his
full business and professional time in utilizing his business and professional
expertise, with proper attention, knowledge and skills faithfully, diligently
and to the best of his ability in furtherance of the business of the Corporation
and its subsidiaries and will perform the duties assigned to him pursuant to
Paragraph 1 hereof. As Executive Vice President - Corporate Development,
Executive shall also perform such specific duties and shall exercise such
specific authority related to the management of the day-to-day operations of the
Corporation and its subsidiaries as may be reasonably assigned to Executive from
time to time by the Board of Directors of the Corporation.

            (b) Executive shall at all times be subject to, observe and carry
out such rules, regulations, policies, directions and restrictions as the Board
of Directors of the Corporation shall from time to time establish. During the
period of his employment hereunder, Executive shall not, directly or indirectly,
accept employment or compensation from, or perform services of any nature for,
any business enterprise other than the Corporation and its subsidiaries.
Notwithstanding the foregoing in this Paragraph 2, Executive shall not be
precluded from engaging in recreational, eleemosynary, educational and other
activities which do not materially interfere with his duties hereunder during
vacations, holidays and other periods outside of business hours.

            (c) It is anticipated that the Corporation's principal executive
office (now located in New York City) shall be relocated to St. Louis, Missouri
but that Executive may be required to spend substantial amounts of time at
locations in and outside of St. Louis, Missouri relating to the business of the
Corporation and its subsidiaries. It is understood that Executive shall continue
to reside in the vicinity of St. Louis, Missouri and that the Corporation shall
maintain an office in St. Louis, Missouri, which is where Executive shall
maintain his principal office until the Corporation relocates from New York City
to St. Louis, Missouri. The Corporation agrees to reimburse Executive for his
reasonable expenses, including hotel and travel costs, associated with the
Corporation's business. In addition, until completion of such relocation, it is
understood that Executive shall visit the Corporation's executive office in New
York City on a regular basis for meetings and to conduct Corporation business
that is more appropriately conducted from such executive office.

            3. Term. Except as otherwise provided herein, the term of
Executive's employment hereunder shall commence on the date of the consummation
of the merger of Camelot Pharmacal, L.L.C., a Missouri limited liability
company, with and into a subsidiary of the Company (the "Merger") and shall
continue to and including April 25, 2002. Notwithstanding anything to the
contrary contained in the Agreement, this Agreement shall terminate and have no
force and effect in the event that the Merger is not consummated on or before
June 6, 1997. Unless terminated earlier in accordance with the terms hereof,
this Agreement shall automatically be extended for one or more additional
consecutive one year terms unless either party notifies the other party in
writing at least six months before the end of the then current term (including
the initial term) of its or his desire to terminate this Agreement. The last day
of the term of this Agreement pursuant to this Paragraph 3 (including any early
termination pursuant to the terms hereof) is referred to herein as the
"Termination Date".

            4. Compensation. (a) As compensation for his services hereunder, the
Corporation shall pay to Executive (i) a base annual salary at the rate of
$160,000, payable in equal installments in accordance with the normal payroll
practices of the Corporation but in no event less frequently than semi-monthly,
and (ii) such incentive compensation and bonuses, if any, as the Board of
Directors of the Corporation in its absolute discretion may determine to award
Executive (it being understood that this Agreement shall in no event be
construed to require the payment to Executive of any incentive compensation or
bonuses), it being understood that Executive shall be entitled to receive such
incentive compensation and bonuses determined on a basis comparable to the
incentive compensation and/or bonuses awarded to other executive officers of the
Corporation. All compensation paid to Executive shall be subject to withholding
and other employment taxes imposed by applicable law.

                                       7
<PAGE>
            (b) During the period of Executive's employment hereunder, Executive
shall not be entitled to any additional compensation for rendering employment
services to subsidiaries of the Corporation or for serving in any office of the
Corporation or any of its subsidiaries to which he is elected or appointed.

            (c) In the event that Executive is elected to the Corporation's
Board of Directors, Executive will receive compensation and benefits as a
director of the Corporation consistent with the compensation and benefits
received by the Corporation's other directors who are also employees of the
Corporation.

            5. Stock Options. (a) As additional compensation for his services
hereunder, the Corporation shall grant to Executive an option under the
Corporation's 1993 Stock Option Plan (the "Plan") to acquire a total of 400,000
shares of the Corporation's common stock at an exercise price per share equal to
the closing sale price of the Corporation's common stock as reported by the
American Stock Exchange on the date hereof, with the terms of such option to be
evidenced by (i) one option letter agreement in the form annexed as Exhibit "A"
hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common
Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2"
hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common
Stock and (iii) one option letter agreement in the form annexed as Exhibit "B"
hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock
(such option letters being referred to collectively herein as the "Plan Option
Letters").

            (b) The Company represents and warrants that there are sufficient
shares of Common Stock currently available under the Company's 1993 Stock Option
Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive
upon exercise of Option Letter A-1.

            (c) In the event that the Company's stockholders fail at the next
annual meeting of stockholders of the Corporation to approve both (i) an
amendment increasing the number of shares available for the issuance of options
under the Plan to an amount at least sufficient to cover all the shares of
Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and
(ii) appropriate amendments to the Plan specifically confirming the right of the
Corporation's Board of Directors, in the issuance of stock options under the
Plan, to determine provisions regarding terms of the exercise of such stock
options (including without limitation, the period of exercisability of stock
options under the Plan upon termination of employment for cause or without
cause) and provisions regarding forfeiture of stock options under the Plan upon
termination of employment, the Company agrees, upon receipt of a written demand
from Executive, to promptly amend the Plan Option Letters to provide for three
non-qualified options outside the Plan having substantially the same terms and
provisions of the Plan Stock Options.

            (d) In the event that (i) the Corporation is required to amend the
Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by
the Corporation is terminated (x) by the Corporation for any reason other than
for Cause, (y) by Executive as a result of an Employer Breach or (z) by the
Corporation by reason of the Executive's disability or death prior to the
expiration of the options evidenced by the Plan Option Letters and Executive is
required after such event to pay any U.S. federal or state income and
withholding tax (collectively, "Income Taxes") on any income recognized by
Executive arising upon any exercise of options evidenced by the Plan Option
Letters, the Corporation agrees to reimburse Executive the difference between
(A) the amount of Income Taxes Executive would have been required to pay had the
income recognized on such exercise been treated as a long term capital gain and
(B) the amount of Income Taxes payable by Executive in respect of such exercise
(the amount of such difference being referred to as the "Tax Difference" in
respect of such exercise). In computing the Tax Difference, the amount of taxes
payable by Executive shall be determined by assuming that the income recognized
as a result of such exercise is taxed at the highest marginal federal and state
income tax rates applicable to ordinary income. In addition, the Corporation
shall pay Executive an amount equal to the Tax Difference arising in respect of
such exercise multiplied by a fraction, the numerator of which is 1 and the
denominator of which is equal to 1 minus (i) the highest marginal federal income
tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate
applicable to Executive, in each case in respect of ordinary income, in effect
at the time of such exercise. Such amount shall be paid by the Corporation
within ninety (90) days after any such exercise. Notwithstanding anything to the
contrary in this Agreement or the Plan Option Letters, the Corporation shall
have no obligation to pay Executive any amount in excess of $250,000 in the
aggregate in respect of its obligations under this subparagraph.

            6. Additional Benefits; Vacation. (a) In addition to such base
salary, Executive shall receive and be entitled to participate, to the extent he
is eligible under the terms and conditions thereof, in any profit sharing,
pension, retirement, hospitalization, disability, medical service, insurance or
other employee benefit plan generally available to the executive officers of the
Corporation that may be in effect from time to time during the period of
Executive's employment hereunder. The Corporation agrees to cover Executive
under any directors' and officers' liability policy maintained by the
Corporation.

            (b) Executive shall be entitled to four (4) weeks' paid vacation in
respect of each 12-month period during the term of his employment hereunder,
such vacation to be taken at times mutually agreeable to Executive and the Board
of Directors of the Corporation.

            (c) Executive shall be entitled to recognize as holidays all days
recognized as such by the Corporation.

            7. Reimbursement of Expenses. The Corporation shall reimburse
Executive in accordance with applicable policies of the Corporation for all
expenses reasonably incurred by him in connection with the performance of his
duties hereunder and the business of the Corporation, upon the submission to the
Corporation of appropriate receipts or vouchers.

            8. Restrictive Covenant. (a) In consideration of the Corporation's
entering into this Agreement, Executive agrees that during the period of his
employment hereunder and, in the event of termination of this Agreement (i) by
the Corporation upon Executive becoming Disabled (as that term is defined in
Paragraph 13 hereof), (ii) by the Corporation for Cause (as that term, is
defined in Paragraph 14 hereof) or (iii) by Executive otherwise than for

                                       8
<PAGE>

Employer Breach (as that term is defined in Paragraph 15 hereof), for a further
period of six months thereafter, he will not (x) directly or indirectly own,
manage, operate, join, control, participate in, invest in, whether as an
officer, director, employee, partner, investor or otherwise, any business entity
that is engaged in a directly competitive business (as hereinafter defined) to
that of the Corporation or any of its subsidiaries within the United States of
America, (y) for himself or on behalf of any other person, partnership,
corporation or entity, call on any customer of the Corporation or any of its
subsidiaries for the purpose of soliciting away, diverting or taking away any
customer from the Corporation or its subsidiaries, or (z) solicit any person
then engaged as an employee, representative, agent, independent contractor or
otherwise by the Corporation or any of its subsidiaries, to terminate his or her
relationship with the Corporation or any of its subsidiaries. For purposes of
this Agreement, the term "directly competitive business" shall mean any business
that is then involved in the research, development, manufacturing or
commercialization in any way of any product, compound, device or method that
acts or functions by, through or on the same active, binding or receptor site,
mechanism of action, signaling pathway or channel as any product, compound,
device or method that is or becomes a part of the Corporation's business or the
business of any of its subsidiaries during Executive's employment by the
Corporation or any of its subsidiaries. Nothing contained in this Agreement
shall be deemed to prohibit Executive from investing his funds in securities of
an issuer if the securities of such issuer are listed for trading on a national
securities exchange or are traded in the over-the-counter market and Executive's
holdings therein represent less than 10% of the total number of shares or
principal amount of the securities of such issuer outstanding.

            (b) Executive acknowledges that the provisions of this Paragraph 8
are reasonable and necessary for the protection of the Corporation, and that
each provision, and the period or periods of time, geographic areas and types
and scope of restrictions on the activities specified herein are, and are
intended to be, divisible. In the event that any provision of this Paragraph 8,
including any sentence, clause or part hereof, shall be deemed contrary to law
or invalid or unenforceable in any respect by a court of competent jurisdiction,
the remaining provisions shall not be affected, but shall, subject to the
discretion of such court, remain in full force and effect.

            9.  Confidential Information.

            (a) Executive shall hold in a fiduciary capacity for the benefit of
the Corporation and its subsidiaries all confidential information, knowledge and
data relating to or concerned with its operations, sales, business and affairs,
and he shall not, at any time during his employment hereunder and for two years
thereafter, use, disclose or divulge any such information, knowledge or data to
any person, firm or corporation other than to the Corporation and its
subsidiaries or their respective designees or except as may otherwise be
reasonably required or desirable in connection with the business and affairs of
the Corporation and its subsidiaries.

            (b) Notwithstanding anything to the contrary contained herein,
Executive's obligations under Paragraph 9(a) hereof shall not apply to any
information which:

            (i) becomes rightfully known to Executive subsequent or prior to his
            employment by the Corporation;

            (ii) is or becomes available to the public other than as a result of
            wrongful disclosure by Executive;

            (iii) becomes available to Executive subsequent to his employment by
            the Corporation on a nonconfidential basis from a source other than
            the Corporation or its agents which source has a right to disclose
            such information; or

            (iv) results from research and development and/or commercial
            operations at any time by or on behalf of any person, company or
            other entity with which or with whom Executive shall become
            associated (in a manner consistent with the terms of this Agreement)
            subsequent to his employment by the Corporation or its agents
            totally independent from any disclosure from the Corporation or its
            agents.

            (c) Notwithstanding anything to the contrary contained herein, in
the event that Executive becomes legally compelled to disclose any confidential
information, Executive will provide the Corporation with prompt notice so that
the Corporation may seek a protective order or other appropriate remedy. In the
event that such protective order or other remedy is not obtained, Executive
shall furnish only such confidential information which is legally required to be
disclosed.

            10. Intellectual Property. Any idea, invention, design, written
material, manual, system, procedure, improvement, development or discovery
conceived, developed, created or made by Executive alone or with others, during
the period of his employment hereunder and applicable to the business of the
Corporation or any of its subsidiaries, whether or not patentable or
registrable, shall become the sole and exclusive property of the Corporation or
such subsidiary. Executive shall disclose the same promptly and completely to
the Corporation and shall, during the period of his employment hereunder and at
any time and from time to time hereafter at no cost to Executive (i) execute all
documents reasonably requested by the Corporation for vesting in the Corporation
or any of its subsidiaries the entire right, title and interest in and to the
same, (ii) execute all documents reasonably requested by the Corporation for
filing and prosecuting such applications for patents, trademarks, service marks
and/or copyrights as the Corporation, in its sole discretion, may desire to
prosecute, and (iii) give the Corporation all assistance it reasonably requires,
including the giving of testimony in any suit, action or proceeding, in order to
obtain, maintain and protect the Corporation's right therein and thereto.

            11. Equitable Relief. The parties hereto acknowledge that
Executive's services are unique and that, in the event of a breach or a
threatened breach by Executive of any of his obligations under Paragraphs 8, 9
or 10 this Agreement, the Corporation shall not have an adequate remedy at law.
Accordingly, in the event of any such breach or threatened breach by Executive,
the Corporation shall be entitled to such equitable and injunctive relief as may
be available to restrain Executive and any business, firm, partnership,
individual, corporation or entity participating in

                                       9
<PAGE>
such breach or threatened breach from the violation of the provisions of
Paragraph 8, 9 or 10 hereof. Nothing herein shall be construed as prohibiting
the Corporation from pursuing any other remedies available at law or in equity
for such breach or threatened breach, including the recovery of damages and the
immediate termination of the employment of Executive hereunder, if and to the
extent permitted hereunder.

            12. Termination of Agreement; Termination of Employment; Severance;
Survival. (a) This Agreement and Executive's employment hereunder shall
terminate upon the first to occur of the following: (i) Executive becoming
Disabled (as that term is defined in Paragraph 13 hereof); (ii) Executive's
death; (iii) termination of Executive's employment by the Corporation for Cause
or pursuant to subparagraph (b) of this Paragraph 12; (iv) termination of
Executive's employment for Employer Breach and (v) the termination of this
Agreement at the end of the term of this Agreement on the Termination Date
pursuant to Paragraph 3.

            (b) Notwithstanding anything to the contrary contained in this
Agreement, in the event of the termination of the Executive's employment by the
Corporation for any reason (other than for Cause), Executive shall be paid a
severance payment equal to 75% of Executive's then current annual base salary
payable in nine equal monthly installments, with the first installment being
payable on the date falling two weeks after the date of such termination and
each additional installment being paid every month after such date until such
severance is paid in full. In the event of such termination of the Executive's
employment by the Corporation (other than for Cause), the Corporation shall have
no further obligation to the Executive under this Agreement other than the
Corporation's obligation (i) to make such severance payment to the Executive
(ii) to pay Executive's COBRA premium payments for hospitalization and medical
insurance coverage provided by the Corporation and to pay Executive's premiums
on any death and/or disability insurance being maintained by the Corporation for
Executive at the time of such termination, in each case until the payment in
full of such severance payments

            (c) Paragraph 5(c) of this Agreement shall survive the termination
of Executive's employment hereunder until the earlier to occur of Executive's
exercise of all of the stock options granted pursuant to paragraph 5 and the
expiration of all such stock options pursuant to the Stock Option Letters.
Paragraphs 7, 8, 9, 10, 11 and 26 of this Agreement shall survive the
termination of Executive's employment hereunder, except in the case of
termination pursuant to Paragraph 15.

            13. Disability. In the event that during the term of his employment
by the Corporation Executive shall become Disabled (as that term is hereinafter
defined) he shall continue to receive the full amount of the base salary to
which he was theretofore entitled for a period of six months after he shall be
deemed to have become Disabled (the "First Disability Payment Period"). If the
First Disability Payment Period shall end prior to the Termination Date,
Executive thereafter shall be entitled to receive salary at an annual rate equal
to 80% of his then current base salary for a further period ending on the
earlier of (i) six months thereafter or (ii) the Termination Date (the "Second
Disability Payment Period"). Upon the expiration of the Second Disability
Payment Period, Executive shall not be entitled to receive any further payments
on account of his base salary until he shall cease to be Disabled and shall have
resumed his duties hereunder and provided that the Corporation shall not have
theretofore terminated this Agreement as hereinafter provided. The Corporation
may terminate Executive's employment hereunder at any time after Executive is
Disabled, upon at least 10 days' prior written notice; provided, however, that
such termination shall not relieve the Corporation from its obligation to make
the payments to Executive described above in this Paragraph 13. For the purposes
of this Agreement, Executive shall be deemed to have become Disabled when (x) by
reason of physical or mental incapacity, Executive is not able to perform his
duties hereunder for a period of 90 consecutive days or for 120 days in any
consecutive 180-day period or (y) when Executive's physician or a physician
designated by the Corporation shall have determined that Executive shall not be
able, by reason of physical or mental incapacity, to perform a substantial
portion of his duties hereunder. In the event that Executive shall dispute any
determination of his disability pursuant to clauses (x) or (y) above, the matter
shall be resolved by the determination of three physicians qualified to practice
medicine in the United States of America, one to be selected by each of the
Corporation and Executive and the third to be selected by the designated
physicians. If Executive shall receive benefits under any disability policy
maintained by the Corporation, the Corporation shall be entitled to deduct the
amount equal to the benefits so received from base salary that it otherwise
would have been required to pay to Executive as provided above.

            14. Termination for Cause. The Corporation may at any time upon
written notice to Executive terminate Executive's employment for Cause. For
purposes of this Agreement, the following shall constitute Cause: (i) the
willful and repeated failure of Executive to perform any material duties
hereunder or gross negligence of Executive in the performance of such duties,
and if such failure or gross negligence is susceptible to cure by Executive, the
failure to effect such cure within twenty (20) days after written notice of such
failure or gross negligence is given to Executive; (ii) except as permitted
hereunder, unexplained, willful and regular absences of Executive from the
Corporation; (iii) excessive use of alcohol or illegal drugs, interfering with
the performance of Executives duties hereunder; (iv) indictment for a crime of
theft, embezzlement, fraud, misappropriation of funds, other acts of dishonesty
or the violation of any law or ethical rule relating to Executive's employment;
(v) indicted for any other felony or other crime involving moral turpitude by
Executive; or (vi) the breach by Executive of any of the provisions of
paragraphs 8, 9 or 10 and if such breach is susceptible of cure by Executive,
the failure to effect such cure within twenty (20) days after written notice of
such breach is given to Executive. For purposes of this Agreement, an action
shall be considered "willful" if it is done intentionally, purposely or
knowingly, distinguished from an act done carelessly, thoughtlessly or
inadvertently. In any such event, Executive shall be entitled to receive his
base salary to and including the date of termination.

            15. Termination for Employer Breach. Executive may upon written
notice to the Corporation terminate this Agreement (including paragraphs 8, 9,
10 and 11) in the event of the breach by the Corporation of any material
provision of this Agreement, and if such breach is susceptible of cure, the
failure to effect such cure within 20 days after written notice of such breach
is given to the Corporation (an "Employer Breach"). Executive's right to
terminate this Agreement under this Paragraph 15 shall be in addition to any
other remedies Executive may have

                                       10
<PAGE>
under law or equity. Paragraphs 2(d), 7 and 12(b) of this Agreement shall
survive the termination of this Agreement by Executive pursuant to this
Paragraph 15.

            16. Insurance Policies. The Corporation shall have the right from
time to time to purchase, increase, modify or terminate insurance policies on
the life of Executive for the benefit of the Corporation, in such amounts as the
Corporation shall determine in its sole discretion. In connection therewith,
Executive shall, at such time or times and at such place or places as the
Corporation may reasonably direct, submit himself to such physical examinations
and execute and deliver such documents as the Corporation may reasonably deem
necessary or desirable.

            17. Entire Agreement; Amendment. This Agreement constitutes the
entire agreement of the parties hereto, and any prior agreement between the
Corporation and Executive is hereby superseded and terminated effective
immediately and shall be without further force or effect. No amendment or
modification himself shall be valid or binding unless made in writing and signed
by the party against whom enforcement thereof is sought.

            18. Notices. Any notice required, permitted or desired to be given
pursuant to any of the provisions of this Agreement shall be delivered in person
or sent by responsible overnight delivery service or sent by certified mail,
return receipt requested, postage and fees prepaid, if to the Corporation, at
its address set forth above to the attention of the Corporation's Chief
Financial Officer and, if to Executive, at his address set forth above. Either
of the parties hereto may at any time and from time to time change the address
to which notice shall be sent hereunder by notice to the other party given under
this Paragraph 18. Notices shall be deemed effective upon receipt.

            19. No Assignment; Binding Effect. Neither this Agreement, nor the
right to receive any payments hereunder, may be assigned by either party without
the other party's prior written consent. This Agreement shall be binding upon
Executive, his heirs, executors and administrators and upon the Corporation, its
successors and assigns.

            20. Waivers. No course of dealing nor any delay on the part of
either party in exercising any rights hereunder shall operate as a waiver of any
such rights. No waiver of any default or breach of this Agreement shall be
deemed a continuing waiver or a waiver of any other breach or default.

            21. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, except that body of law
relating to choice of laws.

            22. Invalidity. If any clause, paragraph, section or part of this
Agreement shall be held or declared to be void, invalid or illegal, for any
reason, by any court of competent jurisdiction, such provision shall be
ineffective but shall not in any way invalidate or affect any other clause,
paragraph, section or part of this Agreement.

            23. Further Assurances. Each of the parties shall execute such
documents and take such other actions as may be reasonably requested by the
other party to carry out the provisions and purposes of this Agreement in
accordance with its terms.

            24. Headings. The headings contained in this Agreement have been
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

            25. Publicity. The Corporation and Executive agree that they will
not make any press releases or other announcements prior to or at the time of
execution of this Agreement with respect to the terms contemplated hereby,
except as required by applicable law, without the prior approval of the other
party, which approval will not be unreasonably withheld.

            26. Arbitration. Any disputes arising under this Agreement shall be
submitted to and determined by arbitration in New York City, New York; provided,
however, that such arbitration shall be held in St. Louis, Missouri in the event
that the Company's principal executive offices is located at the time of such
dispute in St. Louis, Missouri. Such arbitration shall be conducted in
accordance with the rules of the American Arbitration Association. Any award or
decision of the arbitration shall be conclusive in the absence of fraud and
judgment thereon may be entered in any court having jurisdiction thereof. The
costs of such arbitration shall be paid by the non-prevailing party to the
extent directed by the arbitrator(s).

THIS AGREEMENT CONTAINS BINDING ARBITRATION PROVISIONS WHICH MAY BE ENFORCED BY
THE PARTIES.

                                       11
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.

                                  SHEFFIELD MEDICAL TECHNOLOGIES INC.

                                  By:   /s/ George Lombardi
                                      ------------------------------------
                                            George Lombardi
                                            Vice President and Chief
                                            Financial Officer

                                        /s/ Carl F. Siekmann
                                      ------------------------------------
                                            Carl F. Siekmann

                                       12
<PAGE>

                                                                  EXHIBIT A-1 TO
                                                            EMPLOYMENT AGREEMENT

                       SHEFFIELD MEDICAL TECHNOLOGIES INC.
                        30 ROCKEFELLER PLAZA, SUITE 4515
                            NEW YORK, NEW YORK 10112

                                                       April 25, 1997

Carl F. Siekmann
15915 Wetherburn Road
Chesterfield, Missouri 63017

            At a meeting of the Board of Directors of Sheffield Medical
Technologies Inc. (the "Company") held on April 22, 1997, the Board authorized
the grant to you of an option (the "Option") to purchase one hundred thousand
(100,000) shares (the "Shares") of Common Stock, par value $.01 per share, of
the Company. The Option is being granted in connection with the Employment
Agreement dated as of April 25, 1997 between the Company and you (the
"Employment Agreement"). The terms of the Option are set forth below.

            1. No part of the Option is currently exercisable. Subject to any
adjustment pursuant to paragraph 5 below, the Option is exercisable at an
exercise price of $2.75 per Share. Subject to the paragraph 2 below, the Option
may first be exercised on April 25, 1998 for 10,000 Shares and shall become
exercisable for an additional 10,000 Shares on each April 25 thereafter to and
including April 25, 2007. Subject to paragraph 2 below, the Option must be
exercised as to any and all Shares on or prior to April 25, 2007 (on which date
the Option will, to the extent not previously exercised, expire).

            2. Notwithstanding anything to the contrary contained herein or in
the Plan (as defined below):

                        (a) In the event your employment by the Company is
            terminated for Cause (as such term is defined in the Employment
            Agreement) prior to the expiration of the Option, the Option will be
            exercisable for 90 days from the date of such termination, but only
            as to such Shares that had become exercisable pursuant to paragraph
            1 above (and not previously purchased) prior to such date. The
            Option shall then expire to the extent not exercised within such 90
            day period.

                        (b) In the event that your employment by the Company is
            terminated by the Company for any reason other than for Cause, by
            you as a result of an Employer Breach (as such term is defined in
            the Employment Agreement) or by the Company by reason of your
            disability or death prior to the expiration of the Option, the
            Option shall become immediately exercisable for one year as to all
            Shares not previously purchased. The Option shall then expire to the
            extent not exercised within such one year period.

                        (c) In the event that your employment by the Company is
            terminated by you for any reason other than an Employer Breach prior
            to the expiration of the Option, the Option will be exercisable for
            90 days from the date of such termination, but only as to such
            Shares that had become exercisable pursuant to paragraph 1 above
            (and not previously purchased) prior to such date; provided,
            however, that if such termination occurs after the second
            anniversary of the date of this letter, the Option shall become
            immediately exercisable for such 90 day period as to all Shares not
            previously purchased. The Option shall then expire to the extent not
            exercised within such 90 day period.

                        (d) In the event that your employment by the Company is
            terminated by the Company by reason of your death or disability, the
            Option shall become immediately exercisable for one year as to all
            Shares not previously purchased. The Option shall then expire to the
            extent not exercised within such one year period.

                        (e) In the event of a Change of Control, the Option
            shall, at your option exercised by written notice delivered to the
            Company, become immediately exercisable for one year as to all
            Shares not previously purchased. The Option shall then expire to the
            extent not exercised within such one year period. As used in this
            paragraph, "Change of Control" shall mean (i) the merger,
            consolidation or other business combination of the Company with

                                       13
<PAGE>

            or into another corporation with the effect that the shareholders of
            the Company immediately following the merger, consolidation or other
            business combination, hold 50% or less of the combined voting power
            of the then outstanding equity interests of the surviving
            corporation of such merger, consolidation or other business
            combination ordinarily (and apart from rights accruing under special
            circumstances) having the right to vote in the election of directors
            or (ii) the replacement of a majority of the Board of Directors of
            the Company in any given year as compared to the directors who
            constituted the Board at the beginning of such year, and such
            replacement shall not have been approved by the Board of Directors
            of the Company as constituted at the beginning of such year.

            If any of the options granted hereunder are treated as nonqualified
stock options ("NQO") as the result of exceeding the $100,000 exercise limit
contained in Section 422(d) of the Internal Revenue Code of 1986, as amended,
the Company shall issue separate certificates representing those shares
constituting incentive stock options ("ISO") and those shares constituting NQO's
and shall identify the ISO shares as such on its stock transfer records.

            3. Unless at the time of the exercise of the Option a registration
statement under the Securities Act of 1933, as amended (the "Act"), is in effect
as to such Shares, any Shares purchased by you upon the exercise of the Option
shall be acquired for investment and not for sale or distribution, and if the
Company so requests, upon any exercise of the Option, in whole or in part, you
will execute and deliver to the Company a certificate to such effect. The
Company shall not be obligated to issue any Shares pursuant to the Option if, in
the opinion of counsel to the Company, the Shares to be so issued are required
to be registered or otherwise qualified under the Act or under any other
applicable statute, regulation or ordinance affecting the sale of securities,
unless and until such Shares have been so registered or otherwise qualified.

            4. You understand and acknowledge that, under existing law, unless
at the time of the exercise of the Option a registration statement under the Act
is in effect as to such Shares (i) any Shares purchased by you upon exercise of
this option may be required to be held indefinitely unless such Shares are
subsequently registered under the Act or an exemption from such registration is
available; (ii) any sales of such Shares made in reliance upon Rule 144
promulgated under the Act may be made only in accordance with the terms and
conditions of that Rule (which, under certain circumstances, restrict the number
of shares which may be sold and the manner in which shares may be sold); (iii)
in the case of securities to which Rule 144 is not applicable, compliance with
Regulation A promulgated under the Act or some other disclosure exemption will
be required; (iv) certificates for Shares to be issued to you hereunder shall
bear a legend to the effect that the Shares have not been registered under the
Act and that the Shares may not be sold, hypothecated or otherwise transferred
in the absence of an effective registration statement under the Act relating
thereto or an opinion of counsel satisfactory to the Company that such
registration is not required; and (v) the Company will place an appropriate
"stop transfer" order with its transfer agent with respect to such Shares. In
addition, you understand and acknowledge that the Company has no obligation to
you to furnish information necessary to enable you to make sales under Rule 144.

            5. In the event that the Company shall at any time prior to the
expiration of the Option and prior to the exercise thereof: (i) declare or pay
to the holders of the Common Stock a dividend payable in any kind of shares of
stock of the Company; or (ii) change or divide or otherwise reclassify its
Common Stock into the same or a different number of shares with or without par
value, or into shares of any class or classes; or (iii) consolidate or merge
with, or transfer its property as an entirety or substantially all of its assets
to any other corporation; or (iv) make any distribution of its assets to holders
of its Common Stock as a liquidation, or partial liquidation dividend or by way
of return of capital; then, upon the subsequent exercise of the Option, the
exercise price of the Shares issuable upon the exercise hereof shall be
appropriately adjusted by the Board of Directors of the Company so that you
shall receive for the exercise price, in addition to or in substitution for the
Shares to which you would be entitled upon such exercise, such additional shares
of stock of the Company, or such reclassified shares of stock of the Company, or
such securities or property of the Company resulting from such consolidation or
merger or transfer, of such assets of the Company, which you would have been
entitled to receive had you exercised the Option prior to the happening of any
of the foregoing events.

            6. The Option (or installment thereof) is to be exercised by
delivering to the Company a written notice of exercise in the form attached
hereto as Annex A, specifying the number of Shares to be purchased, together
with payment of the purchase price of the Shares to be purchased. The purchase
price is to be paid in cash.

            7. The Option does not confer upon you any right whatsoever as a
stockholder of the Company. The Option is granted to you under the Company's
1993 Stock Option Plan, as amended, (the "Plan") and is intended to be an
incentive stock option. The terms of the Plan are incorporated by reference into
the Option, except as modified in accordance with the Plan by the terms set
forth herein. A copy of the Plan has been delivered to you with this letter. The
Option shall be binding upon any successors or assigns of the Company.

            If the foregoing correctly sets forth our understanding of the
option, please indicate your acceptance by signing this letter in the space
provided below.

                                          Very truly yours,

                                          SHEFFIELD MEDICAL TECHNOLOGIES INC.

                                          By: /s/ George Lombardi
                                              ----------------------------
                                              George Lombardi
                                              Chief Financial Officer

AGREED TO AND ACCEPTED:

/s/ Carl F. Siekmann
--------------------
Carl F. Siekmann

                                       14
<PAGE>

                                                                         Annex A

                             STOCK SUBSCRIPTION FORM

To:            Sheffield Medical Technologies Inc.

Gentlemen:

            I hereby exercise my option to purchase from Sheffield Medical
Technologies Inc. (the "Company"), pursuant to the Stock Option Letter Agreement
between us dated as of April 25, 1997, ________ shares of the Company's Common
Stock, $.01 par value, and herewith tender payment therefor at the rate of $____
per share. The option was originally granted pursuant to the terms of the
Company's 1993 Stock Option Plan.

            I represent and warrant that I am acquiring the said shares for my
own account for investment purposes only; that I have no present intention of
selling or otherwise disposing of such shares or any part thereof; that I will
not transfer said shares in violation of the securities laws of the United
States; that I am familiar with the business operations, management and
financial condition and affairs of the Company; that I have not relied upon any
representation of the Company with respect thereto; and that I have the personal
financial means to comply with all of said representations. I further confirm
that I have been advised that said shares will not be registered under the
Securities Act of 1933, as amended, and that I have consulted with and been
advised by counsel as to the restrictions on resale to which said shares will
thereby be subject.

            The form in which I wish my name and address to appear on the
Company's stock records is as follows:

                                     Name:
                                               -----------------------

                                     Address:
                                               -----------------------
                                               -----------------------
                                               -----------------------

                                                        Very truly yours,

                                                        ---------------------
                                                        Carl F. Siekmann

                                       15
<PAGE>

                                                                  EXHIBIT A-2 TO
                                                            EMPLOYMENT AGREEMENT

                       SHEFFIELD MEDICAL TECHNOLOGIES INC.
                        30 ROCKEFELLER PLAZA, SUITE 4515
                            NEW YORK, NEW YORK 10112

                                                                  April 25, 1997

Carl F. Siekmann
15915 Wetherburn Road
Chesterfield, Missouri 63017

            At a meeting of the Board of Directors of Sheffield Medical
Technologies Inc. (the "Company") held on April 22, 1997, the Board authorized
the grant to you of an option (the "Option") to purchase one hundred thousand
(150,000) shares (the "Shares") of Common Stock, par value $.01 per share, of
the Company. The Option is being granted in connection with the Employment
Agreement dated as of April 25, 1997 between the Company and you (the
"Employment Agreement"). The terms of the Option are set forth below.

            1. No part of the Option is currently exercisable. Subject to any
adjustment pursuant to paragraph 5 below, the Option is exercisable at an
exercise price of $2.75 per Share. Subject to the paragraph 2 below, the Option
may first be exercised on April 25, 1998 for 15,000 Shares and shall become
exercisable for an additional 15,000 Shares on each April 25 thereafter to and
including April 25, 2007. Subject to paragraph 2 below, the Option must be
exercised as to any and all Shares on or prior to April 25, 2007 (on which date
the Option will, to the extent not previously exercised, expire).

            2. Notwithstanding anything to the contrary contained herein or in
the Plan (as defined below):

                        (a) In the event your employment by the Company is
            terminated for Cause (as such term is defined in the Employment
            Agreement) prior to the expiration of the Option, the Option will be
            exercisable for 90 days from the date of such termination, but only
            as to such Shares that had become exercisable pursuant to paragraph
            1 above (and not previously purchased) prior to such date. The
            Option shall then expire to the extent not exercised within such 90
            day period.

                        (b) In the event that your employment by the Company is
            terminated by the Company for any reason other than for Cause, by
            you as a result of an Employer Breach (as such term is defined in
            the Employment Agreement) or by the Company by reason of your
            disability or death prior to the expiration of the Option, the
            Option shall become immediately exercisable for one year as to all
            Shares not previously purchased. The Option shall then expire to the
            extent not exercised within such one year period.

                        (c) In the event that your employment by the Company is
            terminated by you for any reason other than an Employer Breach prior
            to the expiration of the Option, the Option will be exercisable for
            90 days from the date of such termination, but only as to such
            Shares that had become exercisable pursuant to paragraph 1 above
            (and not previously purchased) prior to such date; provided,
            however, that if such termination occurs after the second
            anniversary of the date of this letter, the Option shall become
            immediately exercisable for such 90 day period as to all Shares not
            previously purchased. The Option shall then expire to the extent not
            exercised within such 90 day period.

                        (d) In the event that your employment by the Company is
            terminated by the Company by reason of your death or disability, the
            Option shall become immediately exercisable for one year as to all
            Shares not previously purchased. The Option shall then expire to the
            extent not exercised within such one year period.

                        (e) In the event of a Change of Control, the Option
            shall, at your option exercised by written notice delivered to the
            Company, become immediately exercisable for one year as to all
            Shares not previously purchased. The Option shall then expire to the
            extent not exercised within such one year period. As used in this
            paragraph, "Change of Control" shall mean (i) the merger,
            consolidation or other business combination of the Company with or
            into another corporation with the effect that the shareholders of
            the Company immediately following the merger, consolidation or other
            business combination, hold 50% or less of the combined voting power
            of the then outstanding equity interests of the surviving
            corporation of such merger, consolidation or other business
            combination ordinarily (and apart from rights accruing under special
            circumstances) having the right to vote in the election of directors
            or (ii) the replacement of a majority of the Board of Directors of
            the Company in any given year as compared to the directors who
            constituted the Board at the beginning of such year, and such
            replacement shall not have been approved by the Board of Directors
            of the Company as constituted at the beginning of such year.

            If any of the options granted hereunder are treated as nonqualified
stock options ("NQO") as the result of exceeding the $100,000 exercise limit
contained in Section 422(d) of the Internal Revenue Code of 1986, as amended,
the Company shall issue separate certificates representing those shares
constituting incentive stock options ("ISO") and those shares constituting NQO's
and shall identify the ISO shares as such on its stock transfer records.

            3. Unless at the time of the exercise of the Option a registration
statement under the Securities Act of 1933, as amended (the "Act"), is in effect
as to such Shares, any Shares purchased by you upon the exercise of the Option
shall be acquired for investment and not for sale or distribution, and if the
Company so requests, upon any exercise of the Option, in whole or in part, you
will execute and deliver to the Company a certificate to such effect. The
Company shall not be obligated to issue any Shares pursuant to the Option if, in
the opinion of counsel to the

                                       16
<PAGE>
Company, the Shares to be so issued are required to be registered or otherwise
qualified under the Act or under any other applicable statute, regulation or
ordinance affecting the sale of securities, unless and until such Shares have
been so registered or otherwise qualified.

            4. You understand and acknowledge that, under existing law, unless
at the time of the exercise of the Option a registration statement under the Act
is in effect as to such Shares (i) any Shares purchased by you upon exercise of
this option may be required to be held indefinitely unless such Shares are
subsequently registered under the Act or an exemption from such registration is
available; (ii) any sales of such Shares made in reliance upon Rule 144
promulgated under the Act may be made only in accordance with the terms and
conditions of that Rule (which, under certain circumstances, restrict the number
of shares which may be sold and the manner in which shares may be sold); (iii)
in the case of securities to which Rule 144 is not applicable, compliance with
Regulation A promulgated under the Act or some other disclosure exemption will
be required; (iv) certificates for Shares to be issued to you hereunder shall
bear a legend to the effect that the Shares have not been registered under the
Act and that the Shares may not be sold, hypothecated or otherwise transferred
in the absence of an effective registration statement under the Act relating
thereto or an opinion of counsel satisfactory to the Company that such
registration is not required; and (v) the Company will place an appropriate
"stop transfer" order with its transfer agent with respect to such Shares. In
addition, you understand and acknowledge that the Company has no obligation to
you to furnish information necessary to enable you to make sales under Rule 144.

            5. In the event that the Company shall at any time prior to the
expiration of the Option and prior to the exercise thereof: (i) declare or pay
to the holders of the Common Stock a dividend payable in any kind of shares of
stock of the Company; or (ii) change or divide or otherwise reclassify its
Common Stock into the same or a different number of shares with or without par
value, or into shares of any class or classes; or (iii) consolidate or merge
with, or transfer its property as an entirety or substantially all of its assets
to any other corporation; or (iv) make any distribution of its assets to holders
of its Common Stock as a liquidation, or partial liquidation dividend or by way
of return of capital; then, upon the subsequent exercise of the Option, the
exercise price of the Shares issuable upon the exercise hereof shall be
appropriately adjusted by the Board of Directors of the Company so that you
shall receive for the exercise price, in addition to or in substitution for the
Shares to which you would be entitled upon such exercise, such additional shares
of stock of the Company, or such reclassified shares of stock of the Company, or
such securities or property of the Company resulting from such consolidation or
merger or transfer, of such assets of the Company, which you would have been
entitled to receive had you exercised the Option prior to the happening of any
of the foregoing events.

            6. The Option (or installment thereof) is to be exercised by
delivering to the Company a written notice of exercise in the form attached
hereto as Annex A, specifying the number of Shares to be purchased, together
with payment of the purchase price of the Shares to be purchased. The purchase
price is to be paid in cash.

            7. The Option does not confer upon you any right whatsoever as a
stockholder of the Company. The Option is granted to you under the Company's
1993 Stock Option Plan, as amended, (the "Plan") and is intended to be an
incentive stock option. The terms of the Plan are incorporated by reference into
the Option, except as modified in accordance with the Plan by the terms set
forth herein. A copy of the Plan has been delivered to you with this letter. The
Option shall be binding upon any successors or assigns of the Company.

            If the foregoing correctly sets forth our understanding of the
option, please indicate your acceptance by signing this letter in the space
provided below.

                                        Very truly yours,

                                        SHEFFIELD MEDICAL TECHNOLOGIES INC.

                                    By: /s/ George Lombardi
                                        -------------------
                                        George Lombardi
                                        Chief Financial Officer

AGREED TO AND ACCEPTED:

/s/ Carl F. Siekmann
---------------------
Carl F. Siekmann

                                       17
<PAGE>

                                                                         Annex A

                             STOCK SUBSCRIPTION FORM

To: Sheffield Medical Technologies Inc.

Gentlemen:

            I hereby exercise my option to purchase from Sheffield Medical
Technologies Inc. (the "Company"), pursuant to the Stock Option Letter Agreement
between us dated as of April 25, 1997, ________ shares of the Company's Common
Stock, $.01 par value, and herewith tender payment therefor at the rate of $____
per share. The option was originally granted pursuant to the terms of the
Company's 1993 Stock Option Plan.

            I represent and warrant that I am acquiring the said shares for my
own account for investment purposes only; that I have no present intention of
selling or otherwise disposing of such shares or any part thereof; that I will
not transfer said shares in violation of the securities laws of the United
States; that I am familiar with the business operations, management and
financial condition and affairs of the Company; that I have not relied upon any
representation of the Company with respect thereto; and that I have the personal
financial means to comply with all of said representations. I further confirm
that I have been advised that said shares will not be registered under the
Securities Act of 1933, as amended, and that I have consulted with and been
advised by counsel as to the restrictions on resale to which said shares will
thereby be subject.

            The form in which I wish my name and address to appear on the
Company's stock records is as follows:

                                     Name:
                                               -----------------------

                                     Address:
                                               -----------------------
                                               -----------------------
                                               -----------------------

                                                        Very truly yours,

                                                        ---------------------
                                                        Carl F. Siekmann

                                       18
<PAGE>

                                                                    EXHIBIT B TO
                                                            EMPLOYMENT AGREEMENT

                       SHEFFIELD MEDICAL TECHNOLOGIES INC.
                        30 ROCKEFELLER PLAZA, SUITE 4515
                            NEW YORK, NEW YORK 10112

April 25, 1997

Carl F. Siekmann
15915 Wetherburn Road
Chesterfield, Missouri 63017

            At a meeting of the Board of Directors of Sheffield Medical
Technologies Inc. (the "Company") held on April 22, 1997, the Board authorized
the grant to you of an option (the "Option") to purchase one hundred and fifty
(150,000) shares (the "Shares") of Common Stock, par value $.01 per share, of
the Company. The Option is being granted in connection with the Employment
Agreement dated as of April 25, 1997 between the Company and you (the
"Employment Agreement"). The terms of the Option are set forth below.

            1. No part of the option is currently exercisable. Subject to any
adjustment pursuant to paragraph 5 below, the Option is exercisable at an
exercise price of $2.75 per Share. Subject to the paragraph 2 below, the Option
may first be exercised on April 25, 1998 for 15,000 Shares and shall become
exercisable for an additional 15,000 Shares on each April 25 thereafter to and
including April 25, 2007. Subject to paragraph 2 below, the Option must be
exercised as to any and all Shares on or prior to April 25, 2007 (on which date
the Option will, to the extent not previously exercised, expire).

            2. Notwithstanding anything to the contrary contained herein or in
the Plan (as defined below):

                        (a) In the event your employment by the Company is
            terminated for Cause (as such term is defined in the Employment
            Agreement) prior to the expiration of the Option, the Option will be
            exercisable for 90 days from the date of such termination, but only
            as to such Shares that had become exercisable pursuant to paragraph
            1 above (and not previously purchased) prior to such date. The
            Option shall then expire to the extent not exercised within such 90
            day period.

                        (b) In the event that your employment by the Company is
            terminated by the Company for any reason other than for Cause, by
            you as a result of an Employer Breach (as such term is defined in
            the Employment Agreement) or by the Company by reason of your
            disability or death prior to the expiration of the Option, the
            Option shall be exercisable for one year from the date of such
            termination, but only as to such Shares that had become exercisable
            pursuant to paragraph 1 above (and not previously purchased) prior
            to such date; provided, however, that if such termination occurs
            after the fifth anniversary of the date of this letter, the Option
            shall become immediately exercisable for such one year period as to
            all Shares not previously purchased. The Option shall then expire to
            the extent not exercised within such one year period.

                        (c) In the event that your employment by the Company is
            terminated by you for any reason other than an Employer Breach other
            than an Employer Breach prior to the expiration of the Option, the
            Option will be exercisable for 90 days from the date of such
            termination, but only as to such Shares that had become exercisable
            pursuant to paragraph 1 above (and not previously purchased) prior
            to such date; provided, however, that if such termination occurs
            after the fifth anniversary of the date of this letter, the Option
            shall become immediately exercisable for such 90 day period as to
            all Shares not previously purchased. The Option shall then expire to
            the extent not exercised within such 90 day period.

                        (d) In the event that your employment by the Company is
            terminated by the Company by reason of your death or disability, the
            Option shall be exercisable for one year from the date of such
            termination, but only as to such Shares that had become exercisable
            pursuant to paragraph 1 above (and not previously purchased) prior
            to such date; provided, however, that if such termination occurs
            after the fifth anniversary of the date of this letter, the Option
            shall become immediately exercisable for such one year period as to
            all Shares not previously purchased. The Option shall then expire to
            the extent not exercised within such one year period.

                        (e) in the event of a Change of Control, the Option
            shall, at your option exercised by written notice delivered to the
            Company, be exercisable for one year from the date of such
            termination, but only as to such Shares that had become exercisable
            pursuant to paragraph 1 above (and not previously purchased) prior
            to such date; provided, however, that if such termination occurs
            after the fifth anniversary of the date of this letter, the Option
            shall become immediately exercisable for such one year period as to
            all Shares not previously purchased. The Option shall then expire to
            the extent not exercised within such one year period. As used in
            this paragraph, "Change of Control" shall mean (i) the merger,
            consolidation or other business combination of the Company with or
            into another corporation with the effect that the shareholders of
            the Company immediately following the merger, consolidation or other
            business combination, hold 50% or less of the combined voting power
            of the then outstanding equity interests of the surviving
            corporation of such merger, consolidation or other business
            combination ordinarily (and apart from rights accruing under special
            circumstances) having the right to vote in the election of directors
            or (ii) the replacement of a majority of the Board of Directors of
            the Company in any given year as compared to the directors who
            constituted the Board at the beginning of such year, and such
            replacement shall not have been approved by the Board of Directors
            of the Company as constituted at the beginning of such year.

                                       19
<PAGE>

            If any of the options granted hereunder are treated as nonqualified
stock options ("NQO") as the result of exceeding the $100,000 exercise limit
contained in Section 422(d) of the Internal Revenue Code of 1986, as amended,
the Company shall issue separate certificates representing those shares
constituting incentive stock options ("ISO") and those shares constituting NQO's
and shall identify the ISO shares as such on its stock transfer records.

            3. Unless at the time of the exercise of the Option a registration
statement under the Securities Act of 1933, as amended (the "Act"), is in effect
as to such Shares, any Shares purchased by you upon the exercise of the Option
shall be acquired for investment and not for sale or distribution, and if the
Company so requests, upon any exercise of the Option, in whole or in part, you
will execute and deliver to the Company a certificate to such effect. The
Company shall not be obligated to issue any Shares pursuant to the Option if, in
the opinion of counsel to the Company, the Shares to be so issued are required
to be registered or otherwise qualified under the Act or under any other
applicable statute, regulation or ordinance affecting the sale of securities,
unless and until such Shares have been so registered or otherwise qualified.

            4. You understand and acknowledge that, under existing law, unless
at the time of the exercise of the Option a registration statement Under the Act
is in effect as to such Shares (i) any Shares purchased by you upon exercise of
this option may be required to be held indefinitely unless such Shares are
subsequently registered under the Act or an exemption from such registration is
available; (ii) any sales of such Shares made in reliance upon Rule 144
promulgated under the Act may be made only in accordance with the terms and
conditions of that Rule (which, under certain circumstances, restrict the number
of shares which may be sold and the manner in which shares may be sold) ; (iii)
in the case of securities to which Rule 144 is not applicable, compliance with
Regulation A promulgated under the Act or some other disclosure exemption will
be required; (iv) certificates for Shares to be issued to you hereunder shall
bear a legend to the effect that the Shares have not been registered under the
Act and that the Shares may not be sold, hypothecated or otherwise transferred
in the absence of an effective registration statement under the Act relating
thereto or an opinion of counsel satisfactory to the Company that such
registration is not required; and (v) the Company will place an appropriate
"stop transfer" order with its transfer agent with respect to such Shares. In
addition, you understand and acknowledge that the Company has no obligation to
you to furnish information necessary to enable you to make sales under Rule 144.

            5. In the event that the Company shall at any time prior to the
expiration of the Option and prior to the exercise thereof: (i) declare or pay
to the holders of the Common Stock a dividend payable in any kind of shares of
stock of the Company; or (ii) change or divide or otherwise reclassify its
Common Stock into the same or a different number of shares with or without par
value, or into shares of any class or classes; or (iii) consolidate or merge
with, or transfer its property as an entirety or substantially all of its assets
to any other corporation; or (iv) make any distribution of its assets to holders
of its Common Stock as a liquidation, or partial liquidation dividend or by way
of return of capital; then, upon the subsequent exercise of the Option, the
exercise price of the Shares issuable upon the exercise hereof shall be
appropriately adjusted by the Board of Directors of the Company so that you
shall receive for the exercise price, in addition to or in substitution for the
Shares to which you would be entitled upon such exercise, such additional shares
of stock of the Company, or such reclassified shares of stock of the Company, or
such securities or property of the Company resulting from such consolidation or
merger or transfer, of such assets of the Company, which you would have been
entitled to receive had you exercised the option prior to the happening of any
of the foregoing events.

            6. The Option (or installment thereof) is to be exercised by
delivering to the Company a written notice of exercise in the form attached
hereto as Annex A, specifying the number of Shares to be purchased, together
with payment of the purchase price of the Shares to be purchased. The purchase
price is to be paid in cash.

            7. The Option does not confer upon you any right whatsoever as a
stockholder of the Company. The Option is granted to you under the Company's
1993 Stock Option Plan, as amended, (the "Plan") and is intended to be an
incentive stock option. The terms of the Plan are incorporated by reference into
the option, except as modified in accordance with the Plan by the terms set
forth herein. A copy of the Plan has -been delivered to you with this letter.
The option shall be binding upon any successors or assigns of the Company.

            If the foregoing correctly sets forth our understanding of the
Option, please indicate your acceptance by signing this letter in the space
provided below.

                                        Very truly yours,

                                        SHEFFIELD MEDICAL TECHNOLOGIES INC.

                                        By:  /s/ George Lombardi
                                             ------------------------
                                             George Lombardi
                                             Chief Financial Officer

AGREED TO AND ACCEPTED:

/s/ Carl F. Siekmann
-----------------------
Carl F. Siekmann

                                       20
<PAGE>

                                                                         Annex A

                             STOCK SUBSCRIPTION FORM

To: Sheffield Medical Technologies Inc.

Gentlemen:

            I hereby exercise my option to purchase from Sheffield Medical
Technologies Inc. (the "Company"), pursuant to the Stock Option Letter Agreement
between us dated as of April 25, 1997, _________ shares of the Company's Common
Stock, $.01 par value, and herewith tender payment therefor at the rate of
$______ per share. The option was originally granted pursuant to the terms of
the Company's 1993 Stock Option Plan.

            I represent and warrant that I am acquiring the said shares for my
own account for investment purposes only; that I have no present intention of
selling or otherwise disposing of such shares or any part thereof; that I will
not transfer said shares in violation of the securities laws of the United
States; that I am familiar with the business operations, management and
financial condition and affairs of the Company; that I have not relied upon any
representation of the Company with respect thereto; and that I have the personal
financial means to comply with all of said representations. I further confirm
that I have been advised that said shares will not be registered under the
Securities Act of 1933, as amended, and that I have consulted with and been
advised by counsel as to the restrictions on resale to which said shares will
thereby be subject.

            The form in which I wish my name and address to appear on the
Company's stock records is as follows:

                                     Name:
                                               -----------------------

                                     Address:
                                               -----------------------
                                               -----------------------
                                               -----------------------

                                                        Very truly yours,

                                                        ---------------------
                                                        Carl F. Siekmann

                                       21
<PAGE>

                                    EXHIBIT C

                  OPTION LETTER AGREEMENT DATED AUGUST 28, 1998

                         SHEFFIELD PHARMACEUTICALS, INC.
                            425 SOUTH WOODSMILL ROAD
                            ST. LOUIS, MISSOURI 63017

                                                                 August 28, 1998

To:           Carl F. Siekmann
              15915 Wetherburn Road
              Chesterfield, Missouri 63017

            At a meeting of the Stock Option Committee of the Board of Directors
of Sheffield Pharmaceuticals, Inc. (the "Company") held on August 25, 1998, the
Company authorized the grant to you as of the date hereof of an option (the
"Option") to purchase one Hundred Fifty Five Thousand (105,000) shares (the
"Shares") of Common Stock, par value $.01 per share, of the Company (the "Common
Stock").

            No part of the option is currently exercisable. On or after August
28, 1999 and prior to August 28, 2008 (on which date the Option, to the extent
it has not previously been exercised or has not previously expired, will
expire), the Option may be exercised as follows: (i) as to 35,000 Shares,
subsequent to the time that the Fair Market Value (as hereinafter defined) of
the Common Stock equals or exceeds $1.2375 for 10 consecutive trading days (such
Shares constituting the "First Tranche" of the Option); (ii) as to 35,000
Shares, subsequent to the time that the Fair Market Value of the Common Stock
equals or exceeds $2.125 for 10 consecutive trading days (such shares
constituting the "Second Tranche" of the Option) and (iii) as to the remaining
35,000 Shares, subsequent to the time that the Fair Market Value of the Common
Stock exceeds $3.125 for 10 consecutive trading days (such Shares constituting
the "Third Tranche" of the Option). As used herein, "Fair Market Value" means
the closing price of the Common Stock on the principal U.S. national securities
exchange on which the Common Stock is listed for trading (if the shares are so
listed) or on the Nasdaq National Market or Small Cap Market (if the Common
Shares are regularly quoted on the Nasdaq National Market or Small Cap Market),
or, if not so listed or regularly quoted or if there is no such closing price,
the mean between the closing bid and asked prices of the Common Stock on such
exchange or on Nasdaq or in the over-the-counter market or, if such bid and
asked prices shall not be available, as reported by any nationally recognized
quotation service selected by the Company.

            Shares may be purchased by you upon exercise of the Option at the
following respective purchase prices: (i) Shares constituting the First Tranche
$1.2375 per Share; (ii) Shares constituting the Second Tranche $2.125 per Share;
and (iii) Shares constituting the Third Tranche - $3.125 per Share.

            This Option must be exercised as to any and all Shares on or prior
to August 28, 2008 (on which date the Option, to the extent it has not
previously been exercised or has not previously expired, will expire).

            Notwithstanding anything to the contrary contained in this letter
agreement, the following provisions shall apply:

            (a) In the event that Fair Market Value does not equal or exceed
            $1.2375 for 10 consecutive trading days prior to August 28, 2001
            (the "Target Date"), the First Tranche of the Option may be
            exercised on the Target Date and for 60 days thereafter (after which
            60th day the Option in respect of the First Tranche will, to the
            extent not previously exercised, expire);

            (b) In the event that Fair Market Value does not equal or exceed
            $2.125 for 10 consecutive trading days prior to the Target Date, the
            Second Tranche of the Option may be exercised on the Target Date and
            for 60 days thereafter (after which 60th day the Option in respect
            of the Second Tranche will, to the extent not previously exercised,
            expire); and

                                       22
<PAGE>

            (c) In the event that Fair Market Value does not equal or exceed
            $3.125 for 10 consecutive trading days prior to the Target Date, the
            Third Tranche of the Option may be exercised on the Target Date and
            for 60 days thereafter (after which 60th day the Option in respect
            of the Third Tranche will, to the extent not previously exercised,
            expire).

            Unless at the time of the exercise of the Option a registration
statement under the Securities Act of 1933, as amended (the "Act"), is in effect
as to such Shares, any Shares purchased by you upon the exercise of the Option
shall be acquired for investment and not for sale or distribution, and if the
Company so requests, upon any exercise of the Option, in whole or in part, you
will execute and deliver to the Company a certificate to such effect. The
Company shall not be obligated to issue any Shares pursuant to the Option if, in
the opinion of counsel to the Company, the Shares to be so issued are required
to be registered or otherwise qualified under the Act or under any other
applicable statute, regulation or ordinance affecting the sale of securities,
unless and until such Shares have been so registered or otherwise qualified.

            You understand and acknowledge that, under existing law, unless at
the time of the exercise of the Option a registration statement under the Act is
in effect as to such Shares (i) any Shares purchased by you upon exercise of
this Option may be required to be held indefinitely unless such Shares are
subsequently registered under the Act or an exemption from such registration is
available; (ii) any sales of such Shares made in reliance upon Rule 144
promulgated under the Act may be made only in accordance with the terms and
conditions of that Rule (which, under certain circumstances, restrict the number
of shares which may be sold and the manner in which shares may be sold); (iii)
in the case of securities to which Rule 144 is not applicable, compliance with
Regulation A promulgated under the Act or some other disclosure exemption will
be required; (iv) certificates for Shares to be issued to you hereunder shall
bear a legend to the effect that the Shares have not been registered under the
Act and that the Shares may not be sold, hypothecated or otherwise transferred
in the absence of an effective registration statement under the Act relating
thereto or an opinion of counsel satisfactory to the Company that such
registration is not required; and (v) the Company will place an appropriate
"stop transfer" order with its transfer agent with respect to such Shares. In
addition, you understand and acknowledge that the Company has no obligation to
you to furnish information necessary to enable you to make sales under Rule 144.

            In the event that the Company shall at any time prior to the
expiration of the Option and prior to the exercise thereof: (i) declare or pay
to the holders of the Common Stock a dividend payable in any kind of shares of
stock of the Company; or (ii) change or divide or otherwise reclassify its
Common Stock into the same or a different number of shares with or without par
value, or into shares of any class or classes; or (iii) consolidate or merge
with, or transfer its property as an entirety or substantially all of its assets
to any other corporation; or (iv) make any distribution of its assets to holders
of its Common Stock as a liquidation, or partial liquidation dividend or by way
of return of capital; then, upon the subsequent exercise of the Option, the
purchase price of the Shares issuable upon the exercise hereof shall be
appropriately adjusted by the Board of Directors of the Company so that you
shall receive for the exercise price, in addition to or in substitution for the
Shares to which you would be entitled upon such exercise, such additional shares
of stock of the Company, or such reclassified shares of stock of the Company, or
such securities or property of the Company resulting from such consolidation or
merger or transfer, of such assets of the Company, which you would have been
entitled to receive had you exercised the Option prior to the happening of any
of the foregoing events.

            The Option (or installment thereof) is to be exercised by delivering
to the Company a written notice of exercise in the form attached hereto as Annex
A, specifying the number of Shares to be purchased, together with payment of the
purchase price of the Shares to be purchased. The purchase price is to be paid
in cash.

            The Option does not confer upon you any right whatsoever as a
stockholder of the Company.

            By accepting the Option, you acknowledge your agreement to advise
the Company in writing at least five trading days prior to selling, assigning or
otherwise transferring any of the Shares.

            The Option is granted to you under the Company's 1993 Stock Option
Plan, as amended, (the "Plan") and is not intended to be an incentive stock
option. The terms of the Plan are incorporated by reference into the Option,

                                       23
<PAGE>

except as modified by the terms set forth herein. A copy of the Plan has been
delivered to you with this letter.

            The Option shall be binding upon any successors or assigns of the
Company.

            If the foregoing correctly sets forth our understanding, please
indicate your acceptance by signing this letter in the space provided below.

                                      Very truly yours,

                                      Sheffield Pharmaceuticals, Inc.

                                      By:    /s/ Loren G. Peterson
                                             --------------------------
                                                 Loren G. Peterson
                                                 President and CEO
AGREED TO AND ACCEPTED:

/s/ Carl F. Siekmann
 --------------------
Carl F. Siekmann

                                       24
<PAGE>

                                                                         Annex A

                             STOCK SUBSCRIPTION FORM

To: Sheffield Pharmaceuticals, Inc.

Gentlemen:

            I hereby exercise my option to purchase from Sheffield
Pharmaceuticals, Inc. (the "Company"), pursuant to the Stock Option Letter
Agreement between us dated August 28, 1998, ______ shares of the Company's
Common Stock, $.01 par value, and herewith tender payment therefore at the rate
of $____ per share. The option was originally granted pursuant to the terms of
the Company's 1993 Stock Option Plan, as amended.

            I represent and warrant that I am acquiring the said shares for my
own account for investment purposes only; that I have no present intention of
selling or otherwise disposing of such shares or any part thereof; that I will
not transfer said shares in violation of the securities laws of the United
States; that I am familiar with the business operations, management and
financial condition and affairs of the Company; that I have not relied upon any
representation of the Company with respect thereto; and that I have the personal
financial means to comply with all of said representations. I further confirm
that I have been advised that said shares will not be registered under the
Securities Act of 1933, as amended, and that I have consulted with and been
advised by counsel as to the restrictions on resale to which said shares will
thereby be subject.

            The form in which I wish my name and address to appear on the
Company's stock records is as follows:

                                     Name:
                                               -----------------------

                                     Address:
                                               -----------------------
                                               -----------------------
                                               -----------------------

                                                        Very truly yours,

                                                        ---------------------
                                                        Carl F. Siekmann

                                       25
<PAGE>

                                    EXHIBIT D

                   OPTION LETTER AGREEMENT DATED MARCH 1, 2000

                         SHEFFIELD PHARMACEUTICALS, INC.
                            425 SOUTH WOODSMILL ROAD
                            ST. LOUIS, MISSOURI 63017

                                  March 1, 2000

To:         Carl F. Siekmann
            15915 Wetherburn
            Chesterfield, MO 63017

            At a meeting of the Stock Option Committee of the Board of Directors
of Sheffield Pharmaceuticals, Inc. (the "Company") held on February 29, 2000,
the Company authorized the grant to you as of the date hereof of an option (the
"Option") to purchase Ninety Thousand (90,000) shares (the "Shares") of Common
Stock, par value $.01 per share, of the Company (the "Common Stock").

            No part of the Option is currently exercisable. On or after March 1,
2001 and prior to March 1, 2010 (on which date the Option, to the extent it has
not previously been exercised or has not previously expired, will expire), the
Option may be exercised as follows: (i) as to 30,000 Shares, subsequent to the
time that the Fair Market Value (as hereinafter defined) of the Common Stock
equals or exceeds $4.75 for 10 consecutive trading days (such Shares
constituting the "First Tranche" of the Option); (ii) as to 30,000 Shares,
subsequent to the time that the Fair Market Value of the Common Stock equals or
exceeds $5.3125 for 10 consecutive trading days (such shares constituting the
"Second Tranche" of the Option) and (iii) as to the remaining 30,000 Shares,
subsequent to the time that the Fair Market Value of the Common Stock exceeds
$6.3125 for 10 consecutive trading days (such Shares constituting the "Third
Tranche" of the Option). As used herein, "Fair Market Value" means the closing
price of the Common Stock on the principal U.S. national securities exchange on
which the Common Stock is listed for trading (if the shares are so listed) or on
the Nasdaq National Market or Small Cap Market (if the Common Shares are
regularly quoted on the Nasdaq National Market or Small Cap Market), or, if not
so listed or regularly quoted or if there is no such closing price, the mean
between the closing bid and asked prices of the Common Stock on such exchange or
on Nasdaq or in the over-the-counter market or, if such bid and asked prices
shall not be available, as reported by any nationally recognized quotation
service selected by the Company.

            Shares may be purchased by you upon exercise of the Option at the
following respective purchase prices: (i) Shares constituting the First Tranche
- $4.75 per Share; (ii) Shares constituting the Second Tranche - $5.3125 per
Share; and (iii) Shares constituting the Third Tranche - $6.3125 per Share.

            This Option must be exercised as to any and all Shares on or prior
to March 1, 2010 (on which date the Option, to the extent it has not previously
been exercised or has not previously expired, will expire).

            Notwithstanding anything to the contrary contained in this letter
agreement, the following provisions shall apply:

                        (a) In the event that Fair Market Value does not equal
            or exceed $4.75 for 10 consecutive trading days prior to March 1,
            2003 (the "Target Date"), the First Tranche of the Option may be
            exercised on the Target Date and for 60 days thereafter (after which
            60th day the Option in respect of the First Tranche will, to the
            extent not previously exercised, expire);

                        (b) In the event that Fair Market Value does not equal
            or exceed $5.3125 for 10 consecutive trading days prior to the
            Target Date, the Second Tranche of the Option may be exercised on
            the Target

                                       26
<PAGE>
            Date and for 60 days thereafter (after which 60th day the Option in
            respect of the Second Tranche will, to the extent not previously
            exercised, expire); and

                        (c) In the event that Fair Market Value does not equal
            or exceed $6.3125 for 10 consecutive trading days prior to the
            Target Date, the Third Tranche of the Option may be exercised on the
            Target Date and for 60 days thereafter (after which 60th day the
            Option in respect of the Third Tranche will, to the extent not
            previously exercised, expire).

            Unless at the time of the exercise of the Option a registration
statement under the Securities Act of 1933, as amended (the "Act"), is in effect
as to such Shares, any Shares purchased by you upon the exercise of the Option
shall be acquired for investment and not for sale or distribution, and if the
Company so requests, upon any exercise of the Option, in whole or in part, you
will execute and deliver to the Company a certificate to such effect. The
Company shall not be obligated to issue any Shares pursuant to the Option if, in
the opinion of counsel to the Company, the Shares to be so issued are required
to be registered or otherwise qualified under the Act or under any other
applicable statute, regulation or ordinance affecting the sale of securities,
unless and until such Shares have been so registered or otherwise qualified.

            You understand and acknowledge that, under existing law, unless at
the time of the exercise of the Option a registration statement under the Act is
in effect as to such Shares (i) any Shares purchased by you upon exercise of
this Option may be required to be held indefinitely unless such Shares are
subsequently registered under the Act or an exemption from such registration is
available; (ii) any sales of such Shares made in reliance upon Rule 144
promulgated under the Act may be made only in accordance with the terms and
conditions of that Rule (which, under certain circumstances, restrict the number
of shares which may be sold and the manner in which shares may be sold); (iii)
in the case of securities to which Rule 144 is not applicable, compliance with
Regulation A promulgated under the Act or some other disclosure exemption will
be required; (iv) certificates for Shares to be issued to you hereunder shall
bear a legend to the effect that the Shares have not been registered under the
Act and that the Shares may not be sold, hypothecated or otherwise transferred
in the absence of an effective registration statement under the Act relating
thereto or an opinion of counsel satisfactory to the Company that such
registration is not required; and (v) the Company will place an appropriate
"stop transfer" order with its transfer agent with respect to such Shares. In
addition, you understand and acknowledge that the Company has no obligation to
you to furnish information necessary to enable you to make sales under Rule 144.

            In the event that the Company shall at any time prior to the
expiration of the Option and prior to the exercise thereof: (i) declare or pay
to the holders of the Common Stock a dividend payable in any kind of shares of
stock of the Company; or (ii) change or divide or otherwise reclassify its
Common Stock into the same or a different number of shares with or without par
value, or into shares of any class or classes; or (iii) consolidate or merge
with, or transfer its property as an entirety or substantially all of its assets
to any other corporation; or (iv) make any distribution of its assets to holders
of its Common Stock as a liquidation, or partial liquidation dividend or by way
of return of capital; then, upon the subsequent exercise of the Option, the
purchase price of the Shares issuable upon the exercise hereof shall be
appropriately adjusted by the Board of Directors of the Company so that you
shall receive for the exercise price, in addition to or in substitution for the
Shares to which you would be entitled upon such exercise, such additional shares
of stock of the Company, or such reclassified shares of stock of the Company, or
such securities or property of the Company resulting from such consolidation or
merger or transfer, of such assets of the Company, which you would have been
entitled to receive had you exercised the Option prior to the happening of any
of the foregoing events.

            The Option (or installment thereof) is to be exercised by delivering
to the Company a written notice of exercise in the form attached hereto as Annex
A, specifying the number of Shares to be purchased, together with payment of the
purchase price of the Shares to be purchased. The purchase price is to be paid
in cash.

            The Option does not confer upon you any right whatsoever as a
stockholder of the Company.

            By accepting the Option, you acknowledge your agreement to advise
the Company in writing at least five trading days prior to selling, assigning or
otherwise transferring any of the Shares.

                                       27
<PAGE>

            The Option is granted to you under the Company's 1993 Stock Option
Plan, as amended, (the "Plan") and is not intended to be an incentive stock
option. The terms of the Plan are incorporated by reference into the Option,
except as modified by the terms set forth herein. A copy of the Plan has been
delivered to you with this letter.

            The Option shall be binding upon any successors or assigns of the
Company.

            If the foregoing correctly sets forth our understanding, please
indicate your acceptance by signing this letter in the space provided below.

                                      Very truly yours,

                                      Sheffield Pharmaceuticals, Inc.

                                      By:  /s/ Loren G. Peterson
                                           ----------------------------------
                                               Loren G. Peterson
                                               President

AGREED TO AND ACCEPTED:

/s/ Carl F. Siekmann
 -----------------------
Carl F. Siekmann

                                       28
<PAGE>

                                                                         Annex A

                             STOCK SUBSCRIPTION FORM

To: Sheffield Pharmaceuticals, Inc.

Gentlemen:

            I hereby exercise my option to purchase from Sheffield
Pharmaceuticals, Inc. (the "Company"), pursuant to the Stock Option Letter
Agreement between us dated March 1, 2000, _______ shares of the Company's Common
Stock, $.01 par value, and herewith tender payment therefor at the rate of $____
per share. The option was originally granted pursuant to the terms of the
Company's 1993 Stock Option Plan, as amended.

            I represent and warrant that I am acquiring the said shares for my
own account for investment purposes only; that I have no present intention of
selling or otherwise disposing of such shares or any part thereof; that I will
not transfer said shares in violation of the securities laws of the United
States; that I am familiar with the business operations, management and
financial condition and affairs of the Company; that I have not relied upon any
representation of the Company with respect thereto; and that I have the personal
financial means to comply with all of said representations. I further confirm
that I have been advised that said shares will not be registered under the
Securities Act of 1933, as amended, and that I have consulted with and been
advised by counsel as to the restrictions on resale to which said shares will
thereby be subject.

            The form in which I wish my name and address to appear on the
Company's stock records is as follows:

                                     Name:
                                               -----------------------

                                     Address:
                                               -----------------------
                                               -----------------------
                                               -----------------------

                                                        Very truly yours,

                                                        ---------------------
                                                        Carl F. Siekmann

                                       29
<PAGE>

                                    EXHIBIT E

                                IRREVOCABLE PROXY

            The undersigned, Carl F. Siekmann ("Holder"), an individual with a
residential address of 15915 Wetherburn Road, Chesterfield, Missouri, 63017,
hereby revokes any and all proxies heretofore granted with respect to any shares
of common stock, $.01 par value (the "Stock"), of Sheffield Pharmaceuticals,
Inc. ("Sheffield") held by Holder and, hereby irrevocably appoints the President
of Sheffield, Loren G. Peterson, or his designee, and each of them, as
attorney-in-fact and proxy of Holder to attend any and all meetings of the
stockholders of Sheffield and to vote such Holder's Stock, to represent and
otherwise to act for Holder in the same manner and with the same effect as if
such Holder were personally present and to act by consent in the same manner and
with the same effect as if Holder were executing such consent, with respect to
any matter.

            Holder agrees that, so long as this Irrevocable Proxy remains in
effect, Holder will not execute or deliver to any persons, any proxy forms
relating to any meeting, or written consent in lieu of a meeting, of
stockholders of Sheffield, will promptly provide Sheffield with copies of any
communications related to Sheffield received by Holder and will not take any
action inconsistent with this Irrevocable Proxy.

            The foregoing appointment shall be (a) absolute and irrevocable and
(b) deemed coupled with an interest.

            This Irrevocable Proxy shall be effective for a period of one (1)
year in accordance with Delaware law and may be relied upon by any third party.

            IN WITNESS WHEREOF, the undersigned Holder has executed this
Irrevocable Proxy as of February 18, 2002.

Witness:
                                        CARL F. SIEKMANN

/s/ Sally Reiter                        /s/ Carl F. Siekmann
----------------                        --------------------

Witness print name: Sally Reiter
                    ------------

                                       30

<PAGE>

                                    EXHIBIT F

                                 GENERAL RELEASE

            Carl F. Siekmann, in consideration of the good and valuable
consideration contained in the attached Agreement ("the Agreement"), the receipt
and sufficiency of which is hereby acknowledged, on behalf of himself, his
heirs, administrators, representatives, executors, successors, and assigns,
hereby irrevocably and unconditionally releases, acquits, and forever discharges
Sheffield Pharmaceuticals, Inc. and its predecessors (including without
limitation Sheffield Medical Technologies Inc.), parents, subsidiaries,
affiliates, divisions, successors and assigns, and all of their current and
former agents, officers, directors, employees, members, trustees, fiduciaries,
representatives and attorneys (the "Released Parties") from any and all charges,
complaints, claims, liabilities, obligations, promises, agreements, damages,
causes of action, suits, demands, losses, debts, and expenses of any nature
whatsoever, known or unknown ("Claims") which he has, had or claims to have
against any Released Party up to and including the date he signs this General
Release. This General Release of Claims shall include, without limitation,
Claims relating to his employment and separation from employment with the
Company, Claims of discrimination under the common law or any federal or state
statute (including, without limitation, the Civil Rights Act of 1964, the
Americans with Disabilities Act and the Age Discrimination in Employment Act,
all as amended), Claims for wrongful discharge, Claims for the payment of any
salary, wages, vacation time, bonuses or commissions, Claims for severance or
other benefits (other than as specifically set forth in paragraphs 2, 3 and 4 of
the Agreement), Claims of detrimental reliance, and all other statutory, common
law or other Claims of any nature whatsoever. This General Release of Claims
does not apply to any Claims concerning a breach of the Agreement, including the
option letter agreements referred to in Paragraph 4 of the Agreement as amended
by the Agreement, or any claims arising after the date you sign this General
Release. With respect to the Claims being waived herein, Siekmann acknowledges
that he is waiving his right to receive money or any other relief in any action
instituted by him or on his behalf by any other person, entity or government
agency.

            IN WITNESS WHEREOF, the undersigned Carl F. Siekmann has executed
this General Release as of February 18, 2002.

Witness:                                 CARL F. SIEKMANN

/s/ Sally Reiter                         /s/ Carl F. Siekmann
----------------                         --------------------

Witness print name: Sally Reiter
                    ------------

                                       31
<PAGE>

                                    EXHIBIT G

                      OLDER WORKERS BENEFIT PROTECTION ACT
                               NOTICE TO EMPLOYEES
                          AGE AND JOB TITLE INFORMATION

In connection with the Agreement and the offer of benefits described therein,
you are being provided with information as to (i) any class, unit or group of
individuals covered by such offer; (ii) the job titles and ages of all
individuals eligible or selected for the offer, and (iii) the ages of all
individuals in the same job classification or organizational unit who are not
eligible or selected for the offer. Eligible employees age forty (40) and over
shall have forty-five (45) days to consider the Company's offer and may revoke
their agreement to the offer within seven (7) days after their execution of the
Agreement.

<Table>
<Caption>
Departments or                                             Ages of Employees    Ages of Ineligible
Units Affected          Job Title                          Affected             Employees
--------------          ---------                          -----------------    ------------------
<S>                     <C>                                <C>                  <C>
Executive Officers      Chairman                                                51
                        President and Chief
                        Executive Officer                                       45
                        Executive Vice President,
                        Corporate Development              58
                        Executive Vice President,
                        Scientific Affairs                 53
                        Vice President, Finance and
                        Administration and                                      37
                        Chief Financial Officer
                        Vice President, Pulmonary
                        Delivery Systems                                        48
</Table>

                                       32

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