Document:

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                                                                    EXHIBIT 10.8

                               CELL PATHWAYS, INC.

                      NON-QUALIFIED STOCK OPTION AGREEMENT

         STOCK OPTION AGREEMENT ("Agreement") made as of this 29th day of
November, 2000, by and between CELL PATHWAYS, INC., a Delaware corporation
("Company"), and , a resident of the State of Pennsylvania ("Grantee").

         The Parties Hereto Do Hereby Agree As Follows:

         1. Grant of Option. The Company considers it desirable and in its best
interest that Grantee as an employee, director and/or consultant to the Company
be given an inducement to acquire a proprietary interest in the Company and an
added incentive to advance the interests of the Company by being granted an
option to purchase share of the Company's Common Stock, $0.01 par value ("Common
Stock"), in accordance with the Company's 1997 Equity Incentive Plan, as amended
(the "Plan"). In consideration of Grantee's rendering services ("Services") as
an employee, director and/or consultant of the Company during the requisite
vesting periods, and in further consideration of the agreements set forth
herein, the Company therefore hereby grants to Grantee the right, privilege and
option ("Option") to purchase an aggregate of       shares of Common Stock (the
"Optioned Shares") at the price ("Exercise Price") of $ _____ per share thereof,
in the manner and subject to the conditions hereinafter provided This Option
shall be treated as a non-qualified stock option under the Internal Revenue Code
of 1986, as amended (the "Code").

         2. Option Exercise Period. This Option may be exercised, with respect
to vested shares, from the time such shares have vested pursuant to Section 3
hereof until the termination of the option pursuant to Section 5 hereof.

         3. Option Vesting Period. The Optioned Shares shall vest based upon the
following fifty (50) month schedule:

                  a. First Anniversary: On the last business day prior to the
         first anniversary of the date of this Agreement, twenty-four percent
         (24%) of the Optioned Shares shall vest, provided that Grantee
         continues to render Services to the Company or a subsidiary of the
         Company on such date. Failure of the Grantee to continue to render
         Services to the Company or a subsidiary during the period ending on the
         last business day prior to said first anniversary shall mean that no
         Optioned Shares shall vest, regardless of whether the cessation of
         Services is at the election of the Grantee for any reason, is at the
         election of the Company for any reason, or is the result of death,
         disability or other intervening cause.

                  b. Monthly Vesting Thereafter: After the first anniversary of
         the date of this Agreement, another two percent (2%) of the Optioned
         Shares will vest at the end of each succeeding month, provided that
         Grantee continues to render Services to the Company or a subsidiary of
         the Company on such date. If Grantee shall not continue to render
         Services to the Company or a subsidiary for the full fifty (50) month
         vesting period, there shall be vested at the cessation of Services only
         those Optioned Shares which were vested as of the last vesting event
         (first anniversary or last full completed month after the first
         anniversary).

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         4. Method of Exercise. As to those Optioned Shares that have vested,
the Option may be exercised by the Grantee executing, dating and delivering to
the Secretary of the Company at the Company's principal place of business a
written Option Exercise Notice in the form of Exhibit A attached hereto,
accompanied by a check made payable to the Company in the amount of the
aggregate Exercise Price for the number of shares for which the Option is then
being exercised. If the Company is required to withhold on account of any
present or future tax imposed as a result of such exercise, the notice of
exercise shall be accompanied by a check made payable to the Company in the
amount of such withholding.

         5. Termination of Option. Except as otherwise stated in this Agreement
or as the parties may otherwise agree, the Option (to the extent not theretofore
exercised) shall terminate and expire at 5:00 p.m., Philadelphia time, on the
first to occur of (i) the day immediately prior to the 10th anniversary of the
date of this Agreement, and (ii) the ninetieth day following the day on which
Grantee ceases for any reason to render Services to the Company or its
subsidiaries.

         6. Transfer of Option. Grantee may not transfer this Option except by
will or the laws of descent and distribution. This Option shall not be otherwise
sold, assigned, pledged, hypothecated or otherwise transferred or disposed of in
any way, whether by operation of law or otherwise, and during the Grantee's
lifetime shall be exercisable only by the Grantee or his guardian or legal
representative.

         7. Capitalization Adjustments. Subject to the provisions of the Plan,
if the outstanding shares of stock or other securities of the class then subject
to the Option are increased or decreased, or are changed into or exchanged for a
different number or kind of Company shares or other Company securities, in any
such case as a result of one or more recapitalizations, stock splits, reverse
stock splits, stock dividends or the like, then appropriate adjustments shall be
made in the number and/or kind of Company shares or other Company securities for
which the unexercised portion of this Option may thereafter be exercised, all
without any change in the aggregate Exercise Price applicable to the unexercised
portion of the Option, but with a corresponding adjustment in the Exercise Price
per share of other unit. No fractional share of Company stock shall be issued
under the Option in connection with any such adjustment. Such adjustments shall
be made by or under authority of the Company's Board of Directors or duly
authorized Committee thereof, whose determinations as to what adjustments shall
be made, and the extent thereof, shall be final, binding and conclusive.

         8. Certain Transactions. If at any time while this Option remains
outstanding:

                  a. any "person" (as such term is used in Sections 13(d) and
         14(d) of the Exchange Act) other than the Company, any trustee or other
         fiduciary holding securities under an employee benefit plan of the
         Company, any person acquiring securities from the Company solely
         pursuant to written agreement with the Company, or any corporation
         owned, directly or indirectly, by the stockholders of the Company in
         substantially the same proportions as their ownership of stock in the
         Company, is

                                       2.
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         or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
         Exchange Act), directly or indirectly, of securities of the Company
         representing 20% or more of the combined voting power of the Company's
         then outstanding securities, or

                  b. during any period of two consecutive years commencing the
         day after the first election of directors following termination of the
         stockholder voting provisions of the Company's Stockholders' Agreement
         dated as of December 10, 1992, as amended, 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 Company to effect a transaction described in clauses
         (a) (c) or (d) of this Section) whose election by the Board or
         nomination for election by the Company's stockholders was approved by a
         vote of at least two-thirds of the directors then still in office who
         either were directors at the beginning off the period or whose election
         or nomination for election was previously so approved, cease for any
         reason to constitute at least a majority thereof, or

                  c. the stockholders of the Company approve a merger or
         consolidation of the Company with any other corporation, other than a
         merger or consolidation where no person within the meaning of
         subsection (a) above becomes the "beneficial owner" (as defined above)
         of 20% or more of the resulting voting power and where the voting
         securities of the Company outstanding immediately prior thereto
         continue to represent (either by remaining outstanding or by being
         converted into voting securities of the surviving or controlling
         entity) more than 50% of the combined voting power of the voting
         securities of the Company or such surviving or controlling entity
         outstanding immediately after such merger or consolidation, or

                  d. the stockholders of the Company approve a plan of complete
         liquidation of the Company or an agreement for the sale or disposition
         by the Company of all or substantially all of the Company's assets,

(each of (a), (b), (c) and (d) above, an "Acceleration Event"), then the Option
shall become vested and may be exercised as to all Optioned Shares for which it
has not previously been exercised and as to all Optioned Shares for which the
Option has been exercised but which have not yet vested such Optioned Shares
shall vest.

         Upon the occurrence of an Acceleration Event the Company's Stock Option
Committee shall provide for cancellation of the unexercised portion of the
Option as of the Cancellation Date; provided, however, that (i) if the Option
has been held for less than six months then for purposes of such cancellation
the Acceleration Event and/or Cancellation Date shall be restricted in such
manner as the Company's Stock Option Committee may determine necessary to comply
with the conditions and requirements of Rule 16b-3; (ii) in the event of a
transaction described in clause (c) that is treated as a pooling of interests
for accounting purposes, if required for such accounting treatment, outstanding
options shall not be cancelled but, instead, the surviving corporation (or the
parent of the surviving corporation) shall assume outstanding options (or grant
options in substitution for the outstanding options) on terms comparable to the
outstanding options; and (iii) in the event of a transaction described in clause
(c) that is not treated as a pooling of interests for accounting

                                       3.
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purposes, the Committee may determine that outstanding options will not be
cancelled and that the surviving corporation (or the parent of the surviving
corporation) shall assume outstanding options (or grant options in substitution
for the outstanding options) on terms comparable to the outstanding options.

         "Cancellation Date" shall mean (i) the 60th day following the
occurrence of any Acceleration Event described in clause (a) or (b) of the first
sentence hereof, and (ii) the closing of any merger, consolidation, liquidation
or sale of assets stockholder approval of which constituted an Acceleration
Event under clause (c) or (d) of the first sentence hereof. Upon cancellation of
the Option pursuant to an Acceleration Event under clause (a), (b) or (d) of the
first sentence hereof, the Company shall make, and upon cancellation of the
Option following an Acceleration Event under clause (c) of the first sentence
hereof, the Company may make, in exchange therefor, a cash payment under the
Option in an amount equal to the product of the number of Optioned Shares
covered by the unexercised portion of the Option multiplied by the difference
between the Exercise Price and (i) in the case of a transaction described in
clause (a) or (b) of the first sentence hereof, the highest fair market value of
an Optioned Share at any time during the 60-day period immediately preceding the
Cancellation Date, and (ii) in the case of a transaction described in clause (c)
or (d) of the first sentence hereof, the fair market value of an Optioned Share
on the Cancellation Date. The "fair market value" of Optioned Shares shall be
determined by the Company's Stock Option Committee by reference to any national
securities market on which the Optioned Shares may then be trading, or as
otherwise determined by the Company's Stock Option Committee.

         9. Securities Laws. Grantee hereby represents and agrees for himself,
and for his transferees by will or the laws of descent and distribution, that
unless a registration statement under the Securities Act of 1933, as amended, is
in effect as to shares purchased upon any exercise of the Option, (i) any and
all shares so purchased shall be acquired for his personal account and not with
a view to or for sale in connection with any distribution, and (ii) each notice
of the exercise of any portion of the Option shall be accompanied by a
representation and warranty in writing, signed by the person entitled to
exercise the same, that the shares are being so acquired in good faith for his
personal account and not with a view to or for sale in connection with any
distribution. Notwithstanding anything else contained in this Agreement, no
share of stock or other securities shall be issued pursuant to any exercise of
the Option unless and until, in the opinion of counsel for the Company, such
securities may be issued and delivered without causing the Company to be in
violation of or incur any liability under any federal, state or other securities
laws, any requirement of any securities exchange listing agreement to which the
Company may be a party, or any other requirement of law or of any regulatory
body having jurisdiction over the Company.

         10. Stock Restrictions. No shares of stock or other securities issued
upon exercise of the Option may be sold, assigned, pledged, hypothecated or
otherwise transferred or disposed of in any way unless and until, in the opinion
of counsel for the Company, such securities may be so transferred or disposed of
without causing the Company to be in violation of or incur any liability under
any federal, state or other securities laws, any requirement of any securities
exchange listing agreement to which the Company may be a party, or any other
requirement of law or of any regulatory body having jurisdiction over the
Company.

                                       4.
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         11. Restrictive Legends. Unless and until otherwise permitted by this
Section 11, or unless in the opinion of counsel for the Company such legend is
not necessary, each certificate for stock or other securities issued pursuant to
exercise of this Option shall be stamped or otherwise imprinted with a legend in
substantially the following form:

         "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, ARE HELD FOR INVESTMENT PURPOSES ONLY AND MAY
NOT BE SOLD, TRANSFERRED OR DISTRIBUTED AT ANY TIME UNLESS A REGISTRATION
STATEMENT IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO THE
SECURITIES ACT OF 1933 COVERING SUCH SHARES OR UNLESS, IN THE OPINION OF COUNSEL
FOR THE COMPANY, SUCH A REGISTRATION STATEMENT IN NOT REQUIRED".

The Company may order its stock transfer agents to stop the transfer of any
shares of stock or other securities bearing the legend set forth in this Section
11 until the conditions of Section 10 hereof with respect to the transfer of
such stock or other securities have been satisfied.

         12. Stock Option Plan. The Option is subject to, and the Company and
Grantee agree to be bound by, all of the terms and conditions of the Plan
(including the clarifying amendment considered by the Committee on November 29,
2000 and adopted by the Board on January 10, 2001), as the same shall have been
amended from time to time in accordance with the terms thereof, provided that no
such amendment shall deprive Grantee, without his consent, of this Option or any
of his rights hereunder. Pursuant to the Plan, the Company's Stock Option
Committee is vested with final authority to interpret and construe the Plan and
the Option, and is authorized to adopt rules and regulations for carrying out
the Plan. A copy of the Plan in its present form is available for inspection
during business hours by Grantee or other persons entitled to exercise this
Option at the Company's principal office.

         13. No Employment or Stockholder Rights. Neither this Agreement nor the
establishment of the Plan shall be construed to (i) give Grantee any right to
become employed by, or continue to be a director of, or consultant to, the
Company or any of its subsidiaries, (ii) give Grantee any benefits not
specifically provided by this Agreement, or (iii) in any manner limit the right
of the Company or any of its subsidiaries to modify, amend or terminate the Plan
or any of its other benefit plans. Grantee shall not have any rights as a
stockholder of the Company with respect to any of the Optioned Shares until such
time as such shares have been delivered to him.

         14. Notices. Any notice to be given to the Company shall be addressed
to the Company in care of its Secretary at its principal office, and any notice
to be given to Grantee shall be addressed to him at the address given beneath
his signature hereto or at such other address as Grantee may hereafter designate
in writing to the Company.

         15. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware, other than its conflict laws provisions.

                                       5.
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         IN WITNESS WHEREOF, the Company has entered into this Agreement and
granted the Option as of the date of this Agreement first written above.

                            CELL PATHWAYS, INC.

                            By__________________________________________________
                            Martha E. Manning
                            Senior Vice President, General Counsel and Secretary

                            ACCEPTED:

                            ____________________________________________________
                            Street Address

                            ____________________________________________________
                            City and State

                                       6.
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EXHIBIT A

                             OPTION EXERCISE NOTICE

To:  Cell Pathways, Inc.

Attention:  Secretary

         The undersigned hereby exercises his/her option to acquire     shares
of      [e.g., Common Stock] (the "Securities") pursuant to the option granted
to the undersigned in that certain Stock Option Agreement (the "Agreement")
dated        , 19__, by and between Cell Pathways, Inc. (the "Company") and the
undersigned, and in connection with this exercise does hereby tender herewith as
provided in the Agreement the full Exercise Price (as defined in the Agreement)
with respect to the Securities, and does hereby represent and warrant to the
Company that the Securities are being acquired in good faith for the
undersigned's own account and not with a view to or for sale in connection with
any distribution.

         IN WITNESS WHEREOF, the undersigned has signed this Option Exercise
Notice as of the date written below.

                                            ____________________________________
                                            Signature

                                            ____________________________________
                                            Print Name

                                            ____________________________________
                                            Date

                                       7.<PAGE>   1
                                                                   EXHIBIT 10.14

                           CHANGE IN CONTROL AGREEMENT

         THIS CHANGE IN CONTROL AGREEMENT is dated as of November 30, 2000
between Cell Pathways, Inc. (together with its successors or assigns as
permitted under this Agreement, the "Company") and Robert J. Towarnicki
("Executive").

                              W I T N E S S E T H:

         WHEREAS, the Company considers it essential to the best interest of its
stockholders to foster the continuous employment of key management personnel:

         WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
change in control may exist and that such possibility, and the uncertainty and
questions which it may give rise to among management, may result in the
departure or distraction of management personnel to the detriment of the Company
and its stockholders;

         WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
certain members of the Company's management, including Executive, to their
assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a change in control of the
Company, although no such change is now contemplated; and

         WHEREAS, in order to induce Executive to remain in the employ of the
Company and in consideration of Executive's undertakings set forth herein, the
Company agrees that Executive shall receive the severance benefits set forth in
this Agreement under the circumstances as described below.

         WHEREAS, the Company and Executive are parties to an Employment
Agreement dated October 12, 1996 (the "Employment Agreement"), and the Company
and Executive intend that the Employment Agreement shall continue in effect
except as specifically provided herein.

         NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the Company and
Executive agree as follows:

1. DEFINITIONS.

                  (a) "Base Salary" shall mean Executive's annual base salary
payable by the Company.

                  (b) "Board" shall mean the Board of Directors of the Company.

                  (c) "Cause" shall mean any of the following grounds for
termination of Executive's employment:
<PAGE>   2

                           (i) Executive is convicted of a crime involving moral
         turpitude.

                           (ii) Executive willfully refuses or fails to perform
         his or her material duties for the Company (other than a failure
         resulting from Executive's incapacity due to physical or mental
         illness), which refusal or failure has continued for a period of at
         least 30 days after a written notice of demand for substantial
         performance, signed by a duly authorized officer of the Company, has
         been delivered to Executive specifying the manner in which Executive
         has refused or failed substantially to perform.

                           (iii) Executive engages in gross misconduct in the
         performance of his or her duties that is materially injurious to the
         Company.

For purposes of clauses (ii) and (iii) of this definition, (x) no act or failure
to act on Executive's part shall constitute grounds for termination for Cause
unless done, or omitted to be done, by Executive not in good faith and without
reasonable belief that Executive's act, or failure to act, was in the best
interest of the Company and (y) in the event of a dispute concerning the
application of this provision, no claim by the Company that Cause exists shall
be given effect unless the Company establishes to the Board by clear and
convincing evidence that Cause exists.

                  (d) "Change in Control" shall mean the occurrence of one of
the following:

                           (i) any "person" (as such term is used in Sections
         13(d) and 14(d) of the Exchange Act), other than the Company or any
         trustee or other fiduciary holding securities under an employee benefit
         plan of the Company, any person acquiring securities from the Company
         solely pursuant to written agreement with the Company, or any
         corporation owned, directly or indirectly by the stockholders of the
         Company in substantially the same proportions as their ownership of
         stock in the Company, is or becomes the "beneficial owner" (as defined
         in Rule 13d-3 under the Exchange Act), directly or indirectly, of
         securities of the Company representing 20% or more of the combined
         voting power or the Company's then outstanding securities,

                           (ii) during any period of two consecutive years
         commencing the day after 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 Company to effect a transaction described in clauses
         (i), (iii) or (iv) of this Section 1(d)) whose election by the board or
         nomination for election by the Company's stockholders was approved by a
         vote of at least two-thirds of the directors then still in office who
         either were directors at the beginning of the period or whose election
         or nomination for election was previously so approved, cease for any
         reason to constitute at least a majority of the Board,

                           (iii) the stockholders of the Company approve a
         merger or consolidation of the Company with any other corporation,
         other than a merger or

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         consolidation where no person within the meaning of subsection (i)
         above becomes the "beneficial owner" (as defined above) of 20% or more
         of the resulting voting power and where the voting securities of the
         Company outstanding immediately prior thereto continue to represent
         (either by remaining outstanding or by being converted into voting
         securities of the surviving or controlling entity) more than 50% of the
         combined voting power of the voting securities of the Company or such
         surviving or controlling entity outstanding immediately after such
         merger or consolidation, or

                           (iv) the stockholders of the Company approve a plan
         of complete liquidation of the Company or an agreement for the sale or
         disposition by the Company of all or substantially all of the Company's
         assets.

                  (e) "Code" shall mean the Internal Revenue Code of 1986, as
amended.

                  (f) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.

                  (g) "Good Reason" shall mean any of the following events,
except in connection with the termination of Executive's employment for Cause,
as a result of death or by Executive other than for Good Reason and except as
provided in the last sentence of this subsection (g):

                           (i) The assignment to Executive of any duties
         inconsistent with Executive's status as an executive officer of the
         Company or a change in Executive's position and responsibilities that
         represents a substantial diminution of Executive's position and
         responsibilities.

                           (ii) A decrease in Executive's Base Salary or a
         decrease in the aggregate level of target incentive compensation and
         benefits payable to Executive.

                           (iii) The failure of the Company to obtain an
         agreement from any successor to assume and agree to perform this
         Agreement, as required by Section 11 hereof.

                           (iv) The relocation of the offices of the Company at
         which Executive is principally employed to a location more than 50
         miles from the location of such offices immediately prior to the date
         that is six months before the Change in Control, or the Company's
         requiring Executive to be based anywhere other than such offices,
         except for required travel on the Company's business to any extent
         substantially consistent with Executive's business travel obligations
         as of the date of this Agreement.

Notwithstanding the foregoing, Executive's termination of employment for Good
Reason must occur within 90 days after Executive receives written notice of the
event that gives rise to Good Reason, or in the event no such written notice is
received, 90 days after the event that gives rise to Good Reason. Executive
shall not have Good Reason for termination if, within 30 days after the date on
which Executive gives Notice of Termination, as provided in Section 2(b), the
Company corrects

                                      -3-
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the action or failure to act that constitutes the grounds for termination for
Good Reason as set forth in Executive's Notice of Termination.

                  (h) "Notice of Termination" shall mean a notice 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 Executive's employment under the provision so
indicated.

                  (i) "Termination Upon a Change in Control" shall mean a
termination of Executive's employment described in Section 2(a) below.

                  (j) "Severance Period" shall mean the three-year period after
Executive's Termination Upon a Change in Control, with respect to which
Executive shall be entitled to receive severance benefits from the Company.

2. TERMINATION UPON A CHANGE IN CONTROL.

                  (a) Termination. If a Change in Control of the Company occurs
and the Change in Control transaction is consummated, Executive shall be
entitled to the benefits provided in Section 3 below (i) if Executive's
employment is terminated by the Company without Cause or if Executive terminates
employment for Good Reason, and the termination occurs upon or within two years
following the Change in Control, or (ii) if Executive's employment is terminated
by the Company without Cause within six months prior to the Change in Control
upon the direction or request of another party to the Change in Control.

                  (b) Notice of Termination. Any purported Termination Upon a
Change in Control shall be communicated by written Notice of Termination to the
other party hereto in accordance with Section 19 below. The Notice of
Termination shall specify an effective date for Executive's termination of
employment, which shall not be less than 15 days after the date of the Notice of
Termination.

3. COMPENSATION PAYABLE IN THE EVENT OF TERMINATION UPON A CHANGE IN CONTROL.

                  (a) If Executive's employment terminates upon a Termination
Upon a Change in Control, Executive shall be entitled to receive the following
payments and benefits from the Company promptly following the later of his or
her termination of employment or the consummation of the Change in Control:

                           (i) Executive shall receive a lump sum payment of his
         or her unpaid Base Salary earned through his or her date of termination
         and a pro-rated amount of the annual incentive bonus that Executive
         would have received for the year of termination. The pro-rated bonus
         shall be computed as the target annual bonus in effect for Executive
         for the year in which his or her termination of employment occurs,
         multiplied by a fraction (i) the

                                      -4-
<PAGE>   5

         numerator of which is the number of the days in such year preceding
         Executive's termination date and (ii) the denominator of which is 365.

                           (ii) Executive shall receive a lump-sum payment equal
         to the three times Executive's Base Salary and annual incentive bonus.
         Executive's Base Salary shall be based on Executive's Base Salary in
         effect at Executive's termination date or the date of the Change in
         Control, whichever is higher. The annual incentive bonus shall be based
         on Executive's target annual bonus in effect at Executive's termination
         date or the date of the Change in Control, whichever is higher.

                           (iii) The Company shall pay Executive an amount equal
         to the after-tax cost to Executive of continuing the Company's medical
         and dental coverage in effect for Executive, and, where applicable, his
         or her spouse and dependents, for the Severance Period as if Executive
         had continued in employment during the Severance Period. The COBRA
         health care continuation coverage period under Section 4980B of the
         Code shall run concurrently with the period described in the preceding
         sentence.

                           (iv) Executive shall receive a lump sum payment equal
         to the matching contributions that the Company would have made for
         Executive under the Company's 401(k) plan and any supplemental defined
         contribution plan applicable to Executive, as in effect immediately
         before Executive's termination of employment, had Executive continued
         in employment for the Severance Period receiving Executive's
         compensation and making the same level of contributions to the
         applicable plans as in effect immediately before Executive's
         termination date.

                           (v) All stock options and restricted stock with
         respect to stock of the Company that are then held by Executive shall
         become fully vested and exercisable as of Executive's termination date
         (if not already vested and exercisable pursuant to the terms of the
         applicable plan). All stock options granted on or after the date of
         this Agreement, and all nonqualified stock options granted before the
         date of this Agreement, shall remain exercisable until the later of (A)
         the end of the post-termination exercise period provided under the
         applicable option agreement or (B) one year after Executive's
         termination date (but not later than the expiration of the option
         term).

                           (vi) Executive shall receive outplacement assistance
         services for a period of 12 months (for a cost not to exceed a total of
         $10,000) provided by an outplacement agency selected by Executive.

                           (vii) Reimbursement for out-of-pocket business
         expenses properly incurred but not yet reimbursed by the Company.

                           (viii) Any other amounts earned, accrued or owing but
         not yet paid and any other benefits in accordance with the terms of any
         applicable plans and programs of the Company; provided, however, that
         the severance benefits provided under this Section 3 shall

                                      -5-
<PAGE>   6

         be in lieu of and shall replace any severance benefits due under the
         Employment Agreement or any severance plan or other agreement of the
         Company.

                  (b) Notwithstanding the foregoing, if Executive's employment
terminates on account of disability, any benefits payable pursuant to this
Section 3 shall be reduced by any disability benefits received by Executive
under any long-term disability plan maintained by the Company that covers
Executive.

4. TERMINATION FOR CAUSE, DEATH OR BY EXECUTIVE WITHOUT GOOD REASON. Executive
shall not be entitled to the benefits provided in Section 3 if Executive's
employment terminates for Cause or death, or by Executive without Good Reason.

5. INCREASE IN PAYMENTS UPON A CHANGE IN CONTROL.

                  (a) Anything in this Agreement to the contrary
notwithstanding, but subject to subsection (b) below, in the event that it shall
be determined that any payment or distribution by the Company to or for the
benefit of Executive, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise (a "Payment"), would
constitute an "excess parachute payment" within the meaning of Section 280G of
the Code, the Company shall pay Executive an additional amount (the "Gross-Up
Payment") such that the net amount retained by Executive after deduction of any
excise tax imposed under Section 4999 of the Code, and any federal, state and
local income tax, employment tax and excise tax imposed upon the Gross-Up
Payment, shall be equal to the Payment.

                  (b) Notwithstanding subsection (a), and notwithstanding any
other provisions of this Agreement, if the net after-tax benefit to Executive of
receiving the Gross-Up Payment does not equal or exceed the greater of (i)
$50,000 or (ii) 110% of the Safe Harbor Amount (as defined below) (as compared
to the net-after tax proceeds to Executive resulting from elimination of the
Gross-Up Payment and reduction of the Payments to the Safe Harbor Amount), then
(i) the Company shall not pay Executive the Gross-Up Payment and (ii) the
Payments due to Executive under this Agreement shall be reduced so that the
Parachute Value (as defined below) of all Payments, in the aggregate, equals the
Safe Harbor Amount. Such reduction shall be carried out in such a manner as to
maximize the value of the Payments received by Executive while still reducing
them to the foregoing reduced amount. The term "Parachute Value" means the
present value as of the date of the Change in Control of the portion of such
Payment that constitutes a "parachute payment" under Section 280G(b)(2) of the
Code, as determined by the Accounting Firm (as defined below). The term "Safe
Harbor Amount" means 2.99 times the Executive's "base amount," within the
meaning of Section 280G(b)(3) of the Code.

                  (c) For purposes of determining the amount of the Gross-Up
Payment, unless Executive specifies that other rates apply, Executive shall be
deemed to pay federal income tax and employment taxes at the highest marginal
rate of federal income and employment taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local income taxes

                                      -6-
<PAGE>   7

at the highest marginal rate of taxation in the state and locality of
Executive's residence on Executive's date of termination, net of the maximum
reduction in federal income taxes that may be obtained from the deduction of
such state and local taxes.

                  (d) All determinations to be made under this Section 5 shall
be made by the Company's independent public accountant immediately prior to the
Change in Control ("Accounting Firm"), which Accounting Firm shall provide its
determinations and any supporting calculations both to the Company and Executive
within 20 days after the Change in Control. Any such determination by the
Accounting Firm shall be binding upon the Company and Executive. Within ten days
after the Accounting Firm's determination, the Company shall pay the Gross-Up
Payment to Executive.

                  (e) Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of a Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten business days after Executive knows of such
claim and shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. Executive shall not pay such claim
prior to the expiration of the 30-day period following the date on which
Executive gives such notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If the
Company notifies Executive in writing prior to the expiration of such period
that it desires to contest such claim, Executive shall:

                           (i) give the Company any information reasonably
         requested by the Company relating to such claim,

                           (ii) take such action in connection with contesting
         such claim as the Company shall reasonably request in writing from time
         to time, including, without limitation, accepting legal representation
         with respect to such claim by an attorney reasonably selected by the
         Company,

                           (iii) cooperate with the Company in good faith in
         order to contest such claim effectively, and

                           (iv) permit the Company to participate in any
         proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any excise tax, income tax or employment tax, including
interest and penalties, with respect thereto, imposed as a result of such
representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this subsection (e), the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings and

                                      -7-
<PAGE>   8

conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct Executive to pay the tax claimed and sue for a refund
or contest the claim in any permissible manner, and Executive agrees to
prosecute such contest to a termination before any administrative tribunal, in a
court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine. If the Company directs Executive to pay such claim and
sue for a refund, the Company shall advance the amount of such payment to
Executive, on an interest-free basis and shall indemnify and hold Executive
harmless, on an after-tax basis, from any excise tax, income tax or employment
tax, including interest or penalties with respect thereto, imposed with respect
to such advance or with respect to any imputed income with respect to such
advance. Any extension of the statute of limitations relating to payment of
taxes for the taxable year of Executive with respect to which such contested
amount is claimed to be due shall be limited solely to such contested amount.
The Company's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder, and Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.

                  (f) If, after the receipt by Executive of an amount advanced
by the Company pursuant to this Section, Executive becomes entitled to receive
any refund with respect to such claim, Executive shall (subject to the Company's
complying with the requirements of this Section 5) promptly pay to the Company
the amount of such refund, together with any interest paid or credited thereon
after taxes applicable thereto. If, after the receipt by Executive of an amount
advanced by the Company pursuant to this Section 5, a determination is made that
Executive shall not be entitled to any refund with respect to such claim and the
Company does not notify Executive in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such determination,
then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.

                  (g) All of the fees and expenses of the Accounting Firm in
performing the determinations referred to in this Section 5 shall be borne
solely by the Company. The Company agrees to indemnify and hold harmless the
Accounting Firm from any and all claims, damages and expenses resulting from or
relating to its determinations pursuant to Section 5, except for claims, damages
or expenses resulting from the gross negligence or willful misconduct of the
Accounting Firm.

6. CONFIDENTIAL INFORMATION. Executive recognizes and acknowledges that, by
reason of Executive's employment by and service to the Company during and, if
applicable, after the period of Executive's employment, Executive will continue
to have access to certain confidential and proprietary information relating to
the business of the Company, which may include, but is not limited to, trade
secrets, trade "know-how," customer information, supplier information, cost and
pricing information, marketing and sales techniques, strategies and programs,
computer programs and software and financial information (collectively referred
to as "Confidential Information"). Executive acknowledges that such Confidential
Information is a valuable and unique asset of the Company and Executive
covenants that Executive will not, unless expressly authorized in writing by the
Board, at any time during the course of Executive's employment, use any
Confidential Information or divulge or disclose any Confidential Information to
any person, firm

                                      -8-
<PAGE>   9

or corporation except in connection with the performance of Executive's duties
for the Company and in a manner consistent with the Company's policies regarding
Confidential Information. Executive also covenants that at any time after the
termination of such employment, Executive will not use any Confidential
Information or divulge or disclose any Confidential Information to any person,
firm or corporation, unless such information is in the public domain through no
fault of Executive or except when required to do so by law or legal process, in
which case Executive will inform the Company in writing promptly of such
required disclosure, but in any event at least two business days prior to
disclosure. All written Confidential Information (including, without limitation,
in any computer or other electronic format) which comes into Executive's
possession during the course of Executive's employment shall remain the property
of the Company. Except as required in the performance of Executive's duties for
the Company, or unless expressly authorized in writing by the Board, Executive
shall not remove any written Confidential Information from the Company's
premises, except in connection with the performance of Executive's duties for
the Company and in a manner consistent with the Company's policies regarding
Confidential Information. Upon termination of Executive's employment, Executive
agrees immediately to return to the Company all written Confidential Information
in Executive's possession. For the purposes of this Section 6, the term
"Company" shall be deemed to include the Company, its subsidiaries and their
successors.

7. NON-COMPETITION; NON-SOLICITATION.

                  (a) During Executive's employment by the Company and for a
period of six months after Executive's Termination Upon a Change in Control, if
Executive receives the benefits set forth in Section 3 hereof, Executive will
not, except with the prior written consent of the Board, directly or indirectly,
own, manage, operate, join, control, finance or participate in the ownership,
management, operation, control or financing of, or be connected as an officer,
director, employee, partner, principal, agent, representative, consultant or
otherwise with, or use or permit Executive's name to be used in connection with,
any business or enterprise which is engaged in any business that is competitive
with any business or enterprise in which the Company is engaged, during
Executive's employment or (with respect to the application of this covenant
after Executive's termination of employment) at the date of Executive's
termination of employment. Based upon the Company's current and anticipated
programs, competition with the Company shall be understood to be managing,
advising on or engaging in the research, discovery, pharmaceutical development,
clinical development, manufacture, application, delivery or commercialization of
compounds designed to inhibit or induce a cyclic GMP-phosphodiesterase for the
purposes of the inhibition or induction of apoptosis and to be utilized for the
treatment or prevention or precancerous or cancerous conditions.

                  (b) The foregoing restrictions shall not be construed to
prohibit the ownership by Executive of less than five percent of any class of
securities of any corporation which is engaged in any of the foregoing
businesses having a class of securities registered pursuant to the Exchange Act,
provided that such ownership represents a passive investment and that neither
Executive nor any group of persons including Executive in any way, either
directly or indirectly, manages or exercises control of any such corporation,
guarantees any of its financial obligations, otherwise takes any part in its
business, other than exercising Executive's rights as a shareholder, or seeks to
do any of the

                                      -9-
<PAGE>   10

foregoing.

                  (c) Executive further covenants and agrees that during
Executive's employment by the Company and for a period of six months after
Executive's Termination Upon a Change in Control, if Executive receives the
benefits set forth in Section 3 hereof, Executive will not, except with the
prior written consent of the Board, directly or indirectly, solicit or hire, or
encourage the solicitation or hiring of, any person who was a managerial or
higher level employee of the Company at any time during the term of Executive's
employment by the Company by any employer other than the Company for any
position as an employee, independent contractor, consultant or otherwise. The
foregoing covenant of Executive shall not apply to any person after 12 months
have elapsed after the date on which such person's employment by the Company has
terminated.

                  (d) For the purposes of this Section 7, the term "Company"
shall be deemed to include the Company, its subsidiaries and their successors.

8. EQUITABLE RELIEF.

                  (a) Executive acknowledges and agrees that the restrictions
contained in Sections 6 and 7 are reasonable and necessary to protect and
preserve the legitimate interests, properties, goodwill and business of the
Company, that the Company would not have entered into this Agreement in the
absence of such restrictions and that irreparable injury will be suffered by the
Company should Executive breach any of the provisions of those Sections.
Executive represents and acknowledges that (i) Executive has been advised by the
Company to consult Executive's own legal counsel in respect of this Agreement,
and (ii) Executive has had full opportunity, prior to execution of this
Agreement, to review thoroughly this Agreement with Executive's counsel.

                  (b) Executive further acknowledges and agrees that a breach of
any of the restrictions in Sections 6 and 7 cannot be adequately compensated by
monetary damages. Executive agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as an equitable accounting of all earnings, profits and
other benefits arising from any violation of Sections 6 or 7 hereof, which
rights shall be cumulative and in addition to any other rights or remedies to
which the Company may be entitled. In the event that any of the provisions of
Sections 6 or 7 hereof should ever be adjudicated to exceed the time,
geographic, service, or other limitations permitted by applicable law in any
jurisdiction, it is the intention of the parties that the provision shall be
amended to the extent of the maximum time, geographic, service, or other
limitations permitted by applicable law, that such amendment shall apply only
within the jurisdiction of the court that made such adjudication and that the
provision otherwise be enforced to the maximum extent permitted by law.

                  (c) Executive irrevocably and unconditionally (i) agrees that
any suit, action or other legal proceeding arising out of Section 6 or 7 hereof,
including without limitation, any action commenced by the Company for
preliminary and permanent injunctive relief and other equitable relief, may be
brought in a United States District Court in Philadelphia or Montgomery County,
Pennsylvania, or if such court does not have jurisdiction or will not accept
jurisdiction, in any court

                                      -10-
<PAGE>   11

of general jurisdiction in Philadelphia or Montgomery Country, Pennsylvania,
(ii) consents to the non-exclusive jurisdiction of any such court in any such
suit, action or proceeding, and (iii) waives any objection which Executive may
have to the laying of venue of any such suit, action or proceeding in any such
court. Executive also irrevocably and unconditionally consents to the service of
any process, pleadings, notices or other papers in a manner permitted by the
notice provisions of Section 19 hereof.

                  (d) For the purposes of this Section 8 the term "Company"
shall be deemed to include the Company, its subsidiaries and their successors.

9. INDEMNIFICATION. The Company shall indemnify Executive with respect to his or
her actions in the performance of his or her duties to the Company to the
fullest extent permitted by the Company's bylaws as in effect from time to time.

10. NO MITIGATION: NO OFFSET. In the event of any termination of Executive's
employment under the Agreement, Executive shall be under no obligation to seek
other employment, and there shall be no offset against amounts due Executive
under the Agreement on account of any remuneration attributable to any
subsequent employment that Executive may obtain.

11. SUCCESSORS, BINDING AGREEMENT.

                  (a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.

                  (b) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devises and legatees. If
Executive should die after Executive's termination of employment under
circumstances entitling Executive to benefits hereunder and while any amount
would still be payable to Executive hereunder if Executive had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the personal representative of
Executive's estate.

12. REPRESENTATION. The Company and Executive respectively represent and warrant
to each other that, subject to any approval that may be necessary from any
pertinent regulatory authority, each respectively is fully authorized and
empowered to enter into the Agreement and that its or his or her entering into
this Agreement and the performance of its or his or her respective obligations
under the Agreement will not violate any agreement between the Company or
Executive respectively and any other person, firm or organization or any law or
governmental regulation.

13. ENTIRE AGREEMENT; EMPLOYMENT AGREEMENT. The Agreement (along with the
Employment Agreement) contains the entire agreement between the parties
concerning the subject matter hereof

                                      -11-
<PAGE>   12

and supersedes all prior agreements, understandings, discussions, negotiations
and undertakings, whether written or oral, between the parties with respect
thereto. If Executive receives benefits under Section 3 of this Agreement, (i)
Executive shall not receive severance benefits under the Employment Agreement,
(ii) the provisions of Sections 7 and 8 of this Agreement shall supercede the
non-competition and non-solicitation covenants of the Employment Agreement, and
(iii) the Employment Agreement shall be deemed to be amended accordingly.

14. AMENDMENT OR WAIVER. The Agreement cannot be changed, modified or amended
without the consent in writing of both Executive and the Company. No waiver by
either party at any time of any breach by the other party of any condition or
provision of the Agreement shall be deemed a waiver of a similar or dissimilar
condition or provision at the same or at any prior or subsequent time. Any
waiver must be in writing and signed by Executive or an authorized officer of
the Company, as the case may be.

15. SEVERABILITY. In the event that any provision or portion of the Agreement
shall be determined to be invalid or unenforceable for any reason, in whole or
in part, the remaining provisions of the Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law.

16. SURVIVORSHIP. The respective rights and obligations of the parties hereunder
shall survive any termination of the Agreement to the extent necessary to the
intended preservation of such rights and obligations. The Agreement shall
continue in effect until all amounts required to be paid under the Agreement
have been paid, or until Executive's employment with the Company terminates
under circumstances that do not entitle Executive to benefits under Section 3.

17. GOVERNING LAW. The Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Delaware without
reference to principles of conflict of laws.

18. LEGAL FEES. It is the intent of the parties that Executive not be required
to incur any expenses associated with the enforcement of his or her rights under
this Agreement by litigation or other legal action. Accordingly, the Company
agrees to pay as incurred, to the full extent permitted by law, all expenses
(including all attorney's fees and legal expenses) which Executive may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company, Executive or others concerning the validity or enforceability
of, or liability under, any provision of this Agreement, regardless of whether
such contest is between the Company and Executive or between either of them and
a third party, including any contest regarding the amount of the Gross-Up
Payment pursuant to this Agreement.

19. NOTICES. Any notice given to either party shall be in writing and shall be
deemed to have been given when delivered personally or sent by certified or
registered mail, postage prepaid, return receipt requested, duly addressed to
the party concerned at the address indicated below or to such changed address as
such party may subsequently give notice of:

                  If to the Company:

                                      -12-
<PAGE>   13

                  Cell Pathways, Inc.
                  702 Electronic Drive
                  Horsham, PA  19044
                  Attention:  General Counsel

                  If to Executive:

                  Robert J. Towarnicki
                  7 Larkspur Lane
                  Newtown, PA 18940

20. WITHHOLDING TAXES. All payments under this Agreement shall be made subject
to applicable tax withholding, and the Company shall withhold from any payments
under this Agreement all such federal, state and local taxes as the Company is
required to withhold pursuant to any law or governmental rule or regulation.

21. HEADINGS. The headings of the Sections contained in the Agreement are for
convenience of reference only, do not constitute a part of this Agreement and
shall not be deemed to limit or affect any of the provisions hereof.

22. COUNTERPARTS. The Agreement may be executed in two or more counterparts.

         IN WITNESS WHEREOF, the undersigned have executed the Agreement as of
the date first above.

                                               Cell Pathways, Inc.

                                               By:_____________________________
                                                        Brian Hayden

                                               As its:  Chief Financial Officer

                                               ________________________________
                                               Robert J. Towarnicki

                                      -13-

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