Document:

EXHIBIT 10.1

FIRST AMENDMENT TO THE AMENDED AND
RESTATED RIGHTS AGREEMENT

THIS FIRST AMENDMENT TO THE AMENDED AND RESTATED
RIGHTS AGREEMENT, is made and entered into as of August 11, 2006, between
International Rectifier Corporation, a Delaware corporation (the “Company”),
and Mellon Investor Services LLC (f/k/a ChaseMellon Shareholder Services,
L.L.C.) as Rights Agent (“Rights Agent”).

W
I  T  N  E  S  S  E  T  H

WHEREAS, The Company and the Rights Agent have
previously entered in a certain Amended and Restated Rights Agreement, dated as
of December 15, 1998 (the “Rights Agreement”);

WHEREAS, Section 7(a) of the Rights Agreement
provides that the Rights Agreement shall expire as of the tenth anniversary of
the Record Date (as defined therein), unless otherwise extended in accordance
with its provisions, which expiration date would be August 14, 2006; and

WHEREAS, the Board of Directors of the Company has
authorized the Company to extend the Rights Agreement until November 21, 2006
pending further review.

NOW, THEREFORE, the
parties agree as follows:

1.    The Expiration Date (as defined in the
Rights Agreement) is hereby extended to November 21, 2006.

2.   Except as set forth herein, the Rights
Agreement remains unmodified and in full force and effect.

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

	
  

  	
  INTERNATIONAL RECTIFIER CORPORATION:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald R. Dancer

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MELLON INVESTOR SERVICES LLC (f/k/a CHASEMELLON

  SHAREHOLDER SERVICES, L.L.C.):

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph Campbell

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Vice PresidentEXHIBIT 10.2

May 8, 2006

 

Ms. Deidre Samuels

Director, Global
Treasury and Risk Management

International
Rectifier Corp.

233 Kansas Street

El Segundo, CA 90245

Dear Deidre:

Pursuant to the ISDA Master Agreement entered into
between BNP Paribas Paris and International Rectifier Corp. dated as of July 1,
1999 as amended, the following is a list of the economic terms and related
information as to the transaction entered into by the parties on May 8, 2006.
The details included in this memorandum are solely for information and
reference purposes only, and are not meant to replace, modify or otherwise
amend the terms contained in the Confirmations or Master Agreement executed
between the parties.

	
  Value Date

  	
   

  	
  International Rectifier

  Sells JPY

  	
   

  	
  International Rectifier

  Buys USD

  	
   

  	
  Rate

  	
   

  	
  Our Confirmation

  Reference Number

  	
   

  
	
  27-Jun-2006

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-1

  	
   

  
	
  27-Sep-2006

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-2

  	
   

  
	
  27-Dec-2006

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-3

  	
   

  
	
  27-Mar-2007

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-4

  	
   

  
	
  27-Jun-2007

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-5

  	
   

  
	
  27-Sep-2007

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-6

  	
   

  
	
  27-Dec-2007

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-7

  	
   

  
	
  27-Mar-2008

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-8

  	
   

  
	
  27-Jun-2008

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-9

  	
   

  
	
  26-Sep-2008

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-10

  	
   

  
	
  26-Dec-2008

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-11

  	
   

  
	
  27-Mar-2009

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-12

  	
   

  
	
  26-Jun-2009

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-13

  	
   

  
	
  25-Sep-2009

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-14

  	
   

  
	
  24-Dec-2009

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-15

  	
   

  
	
  26-Mar-2010

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-16

  	
   

  
	
  25-Jun-2010

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-17

  	
   

  
	
  27-Sep-2010

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-18

  	
   

  
	
  24-Dec-2010

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-19

  	
   

  
	
  25-Mar-2011

  	
   

  	
  507,500,000

  	
   

  	
  5,000,000

  	
   

  	
  101.50

  	
   

  	
  3093570-20

  	
   

  
	
  Client Notional

  	
   

  	
  10,150,000,000

  	
   

  	
  100,000,000

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Very truly yours,

James M. Kaufman

Director

BNP Paribas

787 SEVENTH AVENUE • NEW
YORK, NY 10019-6016 • (212) 841-2000 • FAX (212) 841-2146 • TELEX 666928 •
www.bnpparibas.comExhibit
10.1

EMPLOYMENT
AGREEMENT

THIS EMPLOYMENT AGREEMENT is
entered into as of the 11th day of September 2006 (the “Effective Date”) by and
between Bentley Pharmaceuticals, Inc., a Delaware corporation (the “Employer”),
and Richard Lindsay (the “Employee”).

RECITALS

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

WITNESSETH

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

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

2.             Term.  Subject to the termination provisions
hereinafter contained, the term of employment under this Agreement shall be for
an initial term commencing on the Effective Date and terminating on December
31, 2007.  This Agreement shall
thereafter be automatically renewed for successive one (1) year terms, unless
the Employee’s employment with the Employer has been terminated, as hereinafter
provided, or unless either party shall have given the other party notice of
termination of this Agreement as of its then applicable date of expiration of
the Term at least one year before the then applicable date of expiration. The
initial term of employment hereunder, and any extension thereof pursuant to
this paragraph, are referred to as the “Term”.

3.             Compensation,
Reimbursement, Etc.

a.                                       Base Salary.  Commencing
on the Effective Date, the Employer shall pay to the Employee as compensation
for all services rendered by the Employee a base salary of $19,166.67 per month (“Base Salary”), payable in
accordance with the Employer’s regular payroll practices, plus annual
bonuses on a calendar year basis as determined by the Compensation Committee of
the Board of Directors (the “Compensation Committee”), subject to Sections 3(d)
and 3(e).  If an increase in Base Salary
is determined for a calendar year after January 1 and before April 30 of that
year, the increase shall be retroactive to the beginning of that year.  Any 

 

                                                bonus
for 2006 will be prorated based on the portion of 2006 that the Employee is
employed by the Employer.  Annual reviews
of the Employee will be on a calendar year basis, and will be provided to
Employee in or around April of the following year.

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

c.                                       Benefits.  The
Employee shall be entitled to health and other benefits on the same terms and
conditions as the Employer has made available to other comparable senior
executives of Employer, including participation in the Employer’s health
plans.  If the Employee elects not to
participate in the Employer’s health plans, Employee shall be entitled to
reimbursement for the premiums paid for an alternate plan in amounts not to
exceed the premiums that would have been paid on behalf of the Employee for
Employer’s health plan and the Employee assumes the responsibility for any
taxes due on reimbursed premiums.  The
Employer shall obtain a term life insurance and disability policy for the
Employee with a value equal to at least two year’s Base Salary payable to the
estate or beneficiaries of the Employee upon the Employee’s death or to the
Employee in the event of disability as provided in Section 7(b) hereof.

d.                                       Bonuses.  The Employee
shall be eligible for a bonus each year of the Term of up to 40% of his annual
Base Salary, based upon achievement of the bonus targets for the year, payable
in cash and/or common stock, stock options, or restricted stock units as
determined by the Compensation Committee. 
Such annual bonus will be prorated as provided in Section 3(a) for 2006,
and the annual bonus will be awarded for each year as soon as practicable after
March 15, but not later than June 30, of the following year.

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

f.                                         Initial Stock Option.  Upon commencement of employment, the Employee
will be granted an award of a nonstatutory stock option (the “Initial Option”)
under the Employer’s Amended and Restated 2005 Equity and Incentive Plan (the “Plan”)
to purchase 50,000 shares of common stock of the Employer at fair market value,
which option shall vest one third each year over a three year period from the
initial option grant date.

g.                                      Equity Incentive Plan. 
The Employee will be eligible for periodic equity awards (“Plan Awards”)
under the Plan or another plan as determined by the Compensation Committee of
the Board of Directors (collectively, the “Plan”).

 2
 

 

 

4.             Duties.  The Employee will be engaged as Vice President, Chief Financial Officer of
the Employer.  In addition, the Employee
shall have such other duties and hold such offices as may from time to time be
reasonably assigned to him by the President of the Employer.

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

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

7.             Termination
Following Death or Incapacity.

a.                                       Death.  All rights of
the Employee under this Agreement shall terminate upon death (other than rights
accrued prior thereto).  All Plan Awards
(along with the Initial Award) shall vest and be exercisable for a period of
twelve (12) months from death, in accordance with the Plan.  The Employer shall pay to the estate of the
Employee any unpaid salary and other benefits due as well as reimbursable
expenses accrued and owing to the Employee at the time of his death.  The Employer agrees to maintain life
insurance coverage on the Employee in an amount equivalent to two year’s
salary, which insurance will be payable to the Employee’s estate or
beneficiaries upon his death as the Employee may designate.  The Employer shall have no additional
financial obligation under this Agreement to the Employee or his estate beyond
the term-life insurance benefit describe above.

b.                                       Disability.

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

ii.                                       The
term “permanent disability” as used in this Agreement shall mean the inability
of the Employee, as determined by the Board of Directors of the Employer, by
reason of physical or mental disability to perform the duties required of him
under this Agreement after a period of: 
(a) 120 

 3
 

 

                                                consecutive
days of such disability; or (b) disability for at least six months during any
twelve month period.  Upon such
determination, the Board of Directors may terminate the Employee’s employment
under this Agreement upon thirty (30) days prior written notice.  In the event of permanent disability all Plan
Awards shall vest in accordance with the terms of the Plan and shall be
exercisable for a period of time as set forth in the Plan.

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

8.             Other
Terminations.

a.                                       Without Cause.

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

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

iii.                                    Notwithstanding
any provisions hereof to the contrary, the Employer may terminate Employee’s
employment hereunder without cause at any time. 
If the Employer terminates the Employee’s Employment pursuant to the provisions
of this section 8(a), it shall pay to the Employee as a severance benefit, in
cash, an amount equal to the Employee’s annual Base Salary plus bonus (the
higher of the bonus target for the current year or the bonus paid in the prior
year), which amount shall be due and payable in a lump sum within not more than
ten (10) days after such termination or such later date as the Employee
delivers the release contemplated by 
Section 17.  Additionally, the
vesting of Plan Awards shall be accelerated on a pro rata basis determined by
the number of completed months of service during the 

 4
 

 

                                                then
current annual vesting period, and all other vesting of Plan Awards shall
cease.

b.                                       For Cause.

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

ii.                                       The
term “good cause” as used in this Agreement shall mean:  (a) any breach by Employee of any of Employee’s
fiduciary duties to Employer or material obligations under this Agreement
(other than as a result of incapacity due to physical or mental illness), in
each case if such breach is not cured within ten (10) calendar days after
written notice thereof to Employee by Employer, (b) conviction of a felony or a
crime involving moral turpitude or other commission of any act or omission of
Employee involving, fraud, embezzlement, theft, substance abuse or sexual
misconduct with respect to the Employer or any of its subsidiaries or any of
their employees, vendors, suppliers or customers, (c) Employee’s substantial
neglect of duties or failure to follow an explicit, lawful directive of the
President of Employer, provided that such act of neglect or failure is not
cured within ten (10) calendar days after written notice thereof to Employee by
Employer, (d) the Employee’s willful, knowing or deliberate misappropriation of
funds or assets of Employer or one of its subsidiaries for personal use, or (e)
the Employee’s willful, knowing or deliberate misconduct in the performance of
Employee’s duties.

iii.                                    If
the Employee’s employment is terminated pursuant to Section 8(b), the Employer
shall pay to the Employee any unpaid salary and other benefits and reimbursable
expenses accrued and owing to the Employee in a lump sum within not more than
ten (10) days after such termination. 
Such payment shall be in full and complete discharge of any and all
liabilities or obligations of the Employer to the employee hereunder.  The Employee shall be entitled to no further
benefits under this Agreement other than extension of health benefits as
required by law, at the Employee’s expense. All Plan
Awards shall cease vesting in accordance with the terms thereof and the Plan.

c.                                       Whenever
the Employee’s employment is terminated under this Agreement, the Employee
shall resign all offices and any other positions he shall hold with the
Employer or any parent corporation and any subsidiaries or divisions of the
Employer or any such parent corporation.

 5
 

 

 

9.             Termination
of Employment Upon Change in Control.

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

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

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

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

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

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

 6
 

 

 

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

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

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

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

iv.                                   the
Employer reduces the Employee’s Base Salary without the prior written consent
of the Employee.

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

If the Employer
terminates the Employee without cause pursuant to Section 8(a) hereof within 12
months after a Change in Control has occurred, such termination shall be deemed
an election by the Employee to terminate his employment pursuant to this
Section 9(b) and Employee shall have the right to the compensation set forth in
Section 9(c) instead of the compensation set forth in Section 8(a).  In addition, in the event of such termination,
the Employee shall continue to have the obligations provided for in Sections 11
and 12 hereof.

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

i.                                          the
Employee shall be paid in a lump sum, 185 days after termination of employment,
in cash, severance pay in an amount equal to two times (2x) the average of his
aggregate cash compensation paid during the two prior calendar years
(consisting of annual Base Salary and bonuses, if any).

 7
 

 

 

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

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

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

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

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

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

10.          Disclosure,
Proprietary Rights. 
The Employee agrees that during the Term of his employment by the
Employer, he will disclose only to the Employer all ideas, methods, plans,
formulas, processes, trade secrets, developments, or improvements known by him
which relate directly or indirectly to the business of the Employer, including any
lines of business, acquired by the Employee during his employment by the
Employer; provided, that nothing in this Section 

 8
 

 

10 shall be construed as requiring any such communication where the
idea, plan, method or development is lawfully protected from disclosure,
including but not limited to trade secrets of third parties.  For purposes of the Agreement, the term “the
business of the Employer” shall include, without limitation, the
following:  the design, development,
obtaining regulatory approval, production, manufacturing, marketing, and
licensing of prescription and non-prescription drugs, medical devices, and
methods for the diagnosis, evaluation, treatment or correction of any disease,
injury, illness or other medical or health condition and such other lines of
business as the Employer shall engage in during the Term hereof.  The parties further agree that any
inventions, formulas, trade secrets, ideas, or secret processes which shall
arise from any disclosure made by the Employee pursuant to this paragraph,
whether or not patentable, shall be and remain the sole property of the
Employer.

11.          Confidentiality.  As a condition to Employee’s employment by
the Company, Employee shall execute and deliver to the Employer the Employer’s
Confidentiality Agreement in the form attached hereto as Exhibit A (the “Employee
Agreement”), which sets forth, among other things, Employee’s obligations with
respect to the Employer’s confidential and proprietary information.

12.  Covenant not to
Compete.

a.                                       The
Employee shall not, during the Term and for a period of one year thereafter (such period, the “Restricted Period”) do any
of the following directly or indirectly, within the United States, without the
prior written consent of the Employer:

(i)            engage or participate in any
business activity competitive with the business of the Employer;

(ii)           become interested in (as owner,
stockholder, lender, partner, co-venturer, director, officer, employee, agent,
consultant or otherwise) any person, firm, corporation, association or other
entity engaged in any business that is competitive with the business of the
Employer.  Notwithstanding the foregoing,
Employee may hold not more than one percent (1%) of the outstanding securities
of any class of any publicly-traded securities of a company;

(iii)          solicit or call on, either directly or
indirectly, in connection with any business which is competitive with the
business of the Employer, any (a) customer or prospective customer with whom
the Employer shall have dealt at any time or (b) any supplier or prospective
supplier with whom the Employer shall have dealt, (provided, however, that it shall not be a violation of this clause (iii)
if Employee enters into discussions with any person who responds to a newspaper
advertisement or other general solicitation issued by Employee’s then employer
which employer is not engaged in a business activity competitive with the
business of  the Employer);

(iv)          influence or attempt to influence any
supplier, customer or potential customer of the Employer to terminate or modify
any written or oral agreement or course of dealing with the Employer; or

 9
 

 

 

b.                                       (v)           influence or attempt to influence any
person to either (a) terminate or modify any employment, consulting, agency,
distributorship or other arrangement with the Employer or (b) employ or retain,
or arrange to have any other person or entity employ or retain, any person who
has been employed or retained by the Employer as an employee, consultant, agent
or distributor of the Employer at any time during the two year period
immediately preceding the termination of Employee’s employment hereunder.

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

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

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

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

17.          Release.  In the event of the termination of the
Employee’s employment with the Employer, Employee shall execute a release that
is substantially in the form attached hereto as Exhibit B (the “Release”)
or that is the standard form of release that the Employer has in place at the
time of such termination.  If Employee
declines or refuses to execute the Release at such time, Employer shall have no
obligation to make any future payments to Employee which would otherwise be
owed to Employee under the terms of this Agreement.

 10
 

 

 

18.          Binding
Effect, Assignment. 
The rights and obligations of the Employer under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of
the Employer.  This Agreement is a
personal employment contract and the rights, obligations and interests of the
Employee hereunder may not be sold or assigned or hypothecated.  Whenever in this Agreement reference is made
to any party, such reference shall be deemed to include the successors,
assigns, heirs, and legal representatives of such party, and without limiting
the generality of the foregoing, all representations, warranties, covenants and
other agreements made by or on behalf of the Employee in this Agreement shall
inure to the benefit of the successors and assigns of the Employer; provided,
however, that nothing herein shall be deemed to authorize or permit the
Employee to assign any of his rights or obligations under this Agreement to any
other person (whether or not a family member or other affiliate of the
Employee, other than as specifically provided in this Agreement), and the
Employee covenants and agrees that he shall not make any such assignments.

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

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

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

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

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

24.          Governing
Law; Forum.  This
Agreement shall be construed and enforced in accordance with the laws of the
State of New Hampshire.  Any action
brought pursuant to this Agreement or in relation to its breach may be heard by
any court of competent jurisdiction having jurisdiction thereof.   The parties hereby expressly consent to the
personal jurisdiction of 

 11
 

 

the state and federal courts located in New Hampshire for any lawsuit
filed arising from or relating to this Agreement and expressly waive any and
all objections to venue, including, without limitation, the inconvenience of
such forum.

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

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

	
  Employer:

  	
   

  	
  Employee:

  
	
  BENTLEY
  PHARMACEUTICALS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John A.
  Sedor

  	
   

  	
  /s/ Richard Lindsay

  
	
   

  	
  John A. Sedor

  	
   

  	
  Richard Lindsay

  
	
   

  	
  President

  	
   

  	
   

  

 

 12

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