Document:

Exhibit 10.7

                          CELLEGY PHARMACEUTICALS, INC.

                           1995 EQUITY INCENTIVE PLAN

                            As Adopted June 26, 1995
                        and Amended through June 6, 2002

         1.  PURPOSE.  The  purpose  of this Plan is to  provide  incentives  to
attract,  retain and  motivate  eligible  persons  whose  present and  potential
contributions  are  important  to  the  success  of  the  Company,  its  Parent,
Subsidiaries  and Affiliates,  by offering them an opportunity to participate in
the Company's future performance through awards of Options, Restricted Stock and
Stock Bonuses.  Capitalized terms not defined in the text are defined in Section
23.

         2. SHARES SUBJECT TO THE PLAN.

                  2.1 Number of Shares  Available.  Subject to Sections  2.2 and
18, the total  number of Shares  reserved and  available  for grant and issuance
pursuant to this Plan will be 4,850,000 (giving effect to a reverse split of the
Company's  Common  Stock  effective  at or before the  closing of the  Company's
registered  initial public  offering of  securities),  less any shares which are
issued,  or are issuable upon exercise of options  granted  pursuant to the 1992
Stock Option Plan adopted by the Company (the "Prior Plan").  The pool of Shares
issuable  hereunder is comprised of any Shares not subject to an option  granted
pursuant  to the Prior Plan plus any Shares  issuable  upon  exercise of options
granted pursuant to the Prior Plan that expire or become  unexercisable  for any
reason  without  having been  exercised  in full.  Upon the  Effective  Date (as
defined below) of this Plan, no further stock options shall be granted  pursuant
to the Prior Plan.  Options granted pursuant to the Prior Plan shall continue to
be  governed by the terms of the Prior  Plan.  Subject to  Sections  2.2 and 18,
Shares that: (a) are subject to issuance upon exercise of an Option but cease to
be subject to such Option for any reason other than exercise of such Option; (b)
are subject to an Award granted  hereunder but are forfeited or are  repurchased
by the Company at the original issue price;  or (c) are subject to an Award that
otherwise  terminates  without Shares being issued;  will again be available for
grant and issuance in  connection  with future  Awards  under this Plan.  At all
times the Company shall reserve and keep available a sufficient number of Shares
as shall be required  to satisfy the  requirements  of all  outstanding  Options
granted under this Plan and all other  outstanding  but unvested  Awards granted
under this Plan.

                  2.2  Adjustment  of  Shares.  In the event  that the number of
outstanding  Shares is  changed  by a stock  dividend,  recapitalization,  stock
split,  reverse  stock  split,  subdivision,  combination,  reclassification  or
similar change in the capital  structure of the Company  without  consideration,
then (a) the number of Shares  reserved  for issuance  under this Plan,  (b) the
Exercise Prices of and number of Shares subject to outstanding  Options, and (c)
the number of Shares subject to other outstanding Awards will be proportionately
adjusted, subject to any required action by the Board or the shareholders of the
Company and compliance with applicable securities laws; provided,  however, that
fractions  of a Share will not be issued but will  either be  replaced by a cash
payment  equal to the Fair Market  Value of such  fraction of a Share or will be
rounded up to the nearest whole Share, as determined by the Committee.

         3.  ELIGIBILITY.  ISOs (as  defined  in Section 5 below) may be granted
only to employees  (including  officers and directors who are also employees) of
the Company or of a Parent or Subsidiary of the Company. All other Awards may be
granted to  employees,  officers,  directors,  consultants  and  advisors of the
Company or any Parent,  Subsidiary  or Affiliate of the Company;  provided  such
consultants  and advisors  render bona fide services not in connection  with the
offer and sale of securities in a capital-raising transaction. No person will be
eligible to receive  more than 350,000  Shares in any  calendar  year under this
Plan  pursuant to the grant of Awards  hereunder.  A person may be granted  more
than one Award under this Plan.

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                                                   Cellegy Pharmaceuticals, Inc.
                                                      1995 Equity Incentive Plan

         4. ADMINISTRATION.

                  4.1 Committee Authority. This Plan will be administered by the
Committee  or by the  Board  acting as the  Committee.  Subject  to the  general
purposes,  terms and conditions of this Plan, and to the direction of the Board,
the Committee will have full power to implement and carry out this Plan. Without
limitation, the Committee will have the authority to:

         (a)      construe and interpret this Plan, any Award  Agreement and any
                  other agreement or document executed pursuant to this Plan;

         (b)      prescribe, amend and rescind rules and regulations relating to
                  this Plan;

         (c)      select persons to receive Awards;

         (d)      determine  the form and  terms of  Awards  (which  need not be
                  identical), including but not limited to, the time or times at
                  which  Options  shall  be  exercisable  and the  extension  or
                  acceleration of any such  provisions or limitations,  based in
                  each case on such factors as the Committee shall determine, in
                  its sole discretion;

         (e)      determine the number of Shares or other consideration  subject
                  to Awards;

         (f)      determine   whether   Awards  will  be  granted   singly,   in
                  combination  with,  in tandem with, in  replacement  of, or as
                  alternatives  to,  other  Awards  under this Plan or any other
                  incentive or  compensation  plan of the Company or any Parent,
                  Subsidiary or Affiliate of the Company;

         (g)      grant waivers of Plan or Award conditions;

         (h)      determine the vesting, exercisability and payment of Awards;

         (i)      correct  any defect,  supply any  omission  or  reconcile  any
                  inconsistency in this Plan, any Award or any Award Agreement;

         (j)      determine whether an Award has been earned;

         (k)      make all other  determinations  necessary or advisable for the
                  administration of this Plan.

                  4.2  Committee  Discretion.  Any  determination  made  by  the
Committee  with respect to any Award will be made in its sole  discretion at the
time of grant of the Award or,  unless in  contravention  of any express term of
this Plan or Award, at any later time, and such  determination will be final and
binding on the Company and on all persons  having an interest in any Award under
this Plan. The Committee may delegate to one or more officers of the Company the
authority to grant an Award under this Plan to Participants who are not Insiders
of the Company.

                  4.3  Compliance  with  Code  Section  162(m).  If two or  more
members of the Board are Outside Directors,  the Committee shall be comprised of
at least two members of the Board, all of whom are Outside Directors.

                  4.4 Liability and Indemnification of the Committee.  No member
of the group constituting the Committee,  or any employee of the Company to whom
the Committee delegates certain administrative responsibilities, shall be liable
for any act or omission on such member's or employee's  own part,  including but
not limited to the exercise of any power or discretion given to such member,  or
employee  as  delegatee,  under  this Plan,  except for those acts or  omissions
resulting  from such  member's or  employee's  own gross  negligence  or willful
misconduct.  The Company shall  indemnify  each present and future member of the
group  constituting the Committee and each present and future employee delegated
administrative  responsibilities  by such Committee against,  and each member of
the group  constituting  the  Committee  or  employee  delegated  administrative

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                                                   Cellegy Pharmaceuticals, Inc.
                                                      1995 Equity Incentive Plan

responsibilities  by such Committee shall be entitled without further act on his
or her part to  indemnity  from the Company for,  all  expenses  (including  the
amount of judgments or settlements  approved by the Company and made with a view
to the  curtailment  of costs of  litigation,  other  than  amounts  paid to the
Company itself) reasonably incurred by such person in connection with or arising
out of any action, suit or proceeding to the full extent permitted by law and by
the Articles of Incorporation and Bylaws of the Company.

         5. OPTIONS.  The  Committee  may grant Options to eligible  persons and
will determine  whether such Options will be Incentive  Stock Options within the
meaning of the Code ("ISOs") or Nonqualified Stock Options ("NQSOs"), the number
of Shares subject to the Option,  the Exercise  Price of the Option,  the period
during which the Option may be exercised,  and all other terms and conditions of
the Option, subject to the following:

                  5.1 Form of Option Grant.  Each Option granted under this Plan
will be evidenced by an Award Agreement which will expressly identify the Option
as an ISO or an NQSO ("Stock  Option  Agreement"),  and will be in such form and
contain such provisions (which need not be the same for each Participant) as the
Committee  may from time to time  approve,  and which  will  comply  with and be
subject to the terms and conditions of this Plan.

                  5.2 Date of Grant.  The date of grant of an Option will be the
date on which the Committee makes the determination to grant such Option, unless
otherwise  specified by the Committee.  The Stock Option Agreement and a copy of
this Plan will be delivered to the  Participant  within a reasonable  time after
the granting of the Option.

                  5.3  Exercise  Period.  Unless  otherwise  established  by the
Committee with respect to any individual or group of individuals, an Option will
become exercisable with respect to 25% of the Shares on the first anniversary of
the Vesting Start Date (as defined below),  with respect to an additional 25% of
the Shares on the second  anniversary of the Vesting Start Date, with respect to
an additional  25% of the Shares on the third  anniversary  of the Vesting Start
Date, with respect to an additional 25% of the Shares on the fourth  anniversary
of the Vesting Start Date. The Vesting Start Date is the date of grant,  or such
other date as the Committee determines in its discretion.  The Committee may use
its  discretion to establish  different  vesting  schedules  with respect to any
individual  or group of  individuals.  No Option will be  exercisable  after the
expiration  of ten (10) years from the date the Option is granted;  and provided
further that no ISO granted to a person who directly or by attribution owns more
than ten  percent  (10%) of the total  combined  voting  power of all classes of
stock of the Company or of any Parent or Subsidiary of the Company ("Ten Percent
Shareholder")  will be  exercisable  after the expiration of five (5) years from
the date the ISO is granted.  The Committee also may provide for the exercise of
Options to become exercisable at one time or from time to time,  periodically or
otherwise,  in such number of Shares or  percentage  of Shares as the  Committee
determines.  Options granted to Insiders,  however,  may not be exercisable,  in
whole or in part, at any time prior to the six-month  anniversary of the date of
grant,  unless the  Committee  determines  that the  foregoing  provision is not
necessary  to comply  with the  provisions  of Rule 16b-3 as  promulgated  under
Section 16 of the Exchange Act or that such Rule is not  applicable  to the Plan
or the Participant.

                  5.4  Exercise  Price.  The  Exercise  Price of an NQSO will be
determined by the Committee when the Option is granted; provided,  however, that
if expressly  required by one or more state securities  authorities or laws as a
condition of issuing Awards and Shares in compliance with the securities laws of
such state, the exercise price of an NQSO shall not be less than 85% of the Fair
Market  Value of the Shares on the date of grant and the  Exercise  Price of any
NQSO  granted to a Ten  Percent  Shareholder  shall not be less than 110% of the
Fair Market Value of the Shares on the date of grant.  The Exercise  Price of an
ISO will be not less than  100% of the Fair  Market  Value of the  Shares on the
date of  grant  and the  Exercise  Price  of any ISO  granted  to a Ten  Percent
Shareholder will not be less than 110% of the Fair Market Value of the Shares on
the date of grant.  Payment for the Shares  purchased  may be made in accordance
with Section 8 of this Plan.

                  5.5  Method of  Exercise.  Options  may be  exercised  only by
delivery  to the  Company of a written  stock  option  exercise  agreement  (the
"Exercise Agreement") in a form approved by the Committee (which need not be the
same for each  Participant),  stating the number of Shares being purchased,  the
restrictions  imposed on the Shares purchased under such Exercise Agreement,  if
any, and such representations and agreements regarding Participant's  investment
intent and access to information  and other matters,  if any, as may be required
or

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                                                   Cellegy Pharmaceuticals, Inc.
                                                      1995 Equity Incentive Plan

desirable by the Company to comply with  applicable  securities  laws,  together
with  payment  in full of the  Exercise  Price for the  number  of Shares  being
purchased.

                  5.6  Termination.  Notwithstanding  the  exercise  periods set
forth in the  Stock  Option  Agreement,  exercise  of an Option  will  always be
subject to the following:

         (a)      If the  Participant  is Terminated for any reason except death
                  or  Disability,   then  the   Participant  may  exercise  such
                  Participant's  Options  only to the extent  that such  Options
                  would have been exercisable upon the Termination Date no later
                  than  three (3)  months  after the  Termination  Date (or such
                  shorter or longer time period not exceeding  five (5) years as
                  may be determined by the Committee,  with any exercise  beyond
                  three (3) months  after the  Termination  Date deemed to be an
                  NQSO),  but in any event, no later than the expiration date of
                  the Options.

         (b)      If the  Participant  is  Terminated  because of  Participant's
                  death or Disability (or the Participant  dies within three (3)
                  months after a Termination other than because of Participant's
                  death  or  Disability),  then  Participant's  Options  may  be
                  exercised only to the extent that such Options would have been
                  exercisable by Participant on the Termination Date and must be
                  exercised   by    Participant    (or    Participant's    legal
                  representative  or  authorized  assignee) no later than twelve
                  (12) months after the  Termination  Date (or such shorter (but
                  not less than six months) or longer time period not  exceeding
                  five (5) years as may be determined by the Committee, with any
                  such   exercise   beyond  (a)  three  (3)  months   after  the
                  Termination  Date when the Termination is for any reason other
                  than the Participant's  death or disability other than defined
                  in Section  22(e)(3)  of the Code,  or (b) twelve  (12) months
                  after  the  Termination  Date  when  the  Termination  is  for
                  Participant's death or Disability,  deemed to be an NQSO), but
                  in any event no later than the expiration date of the Options.

                  5.7  Limitations  on  Exercise.  The  Committee  may specify a
reasonable  minimum number of Shares that may be purchased on any exercise of an
Option,  provided  that such minimum  number will not prevent  Participant  from
exercising  the  Option  for the full  number  of  Shares  for  which it is then
exercisable.

                  5.8  Limitations  on ISOs.  The  aggregate  Fair Market  Value
(determined  as of the date of grant) of Shares  with  respect to which ISOs are
exercisable for the first time by a Participant  during any calendar year (under
this Plan or under any other  incentive  stock option plan of the Company or any
Affiliate, Parent or Subsidiary of the Company) will not exceed $100,000. If the
Fair Market  Value of Shares on the date of grant with respect to which ISOs are
exercisable for the first time by a Participant during any calendar year exceeds
$100,000,  then the  Options  for the first  $100,000  worth of Shares to become
exercisable in such calendar year will be ISOs and the Options for the amount in
excess of $100,000 that become  exercisable in that calendar year will be NQSOs.
In the event that the Code or the regulations promulgated thereunder are amended
after the  Effective  Date of this Plan to provide for a different  limit on the
Fair Market  Value of Shares  permitted  to be subject to ISOs,  such  different
limit will be  automatically  incorporated  herein and will apply to any Options
granted after the effective date of such amendment.

                  5.9  Modification,  Extension or Renewal.  The  Committee  may
modify,  extend or renew  outstanding  Options  and  authorize  the grant of new
Options in substitution therefor, provided that any such action may not, without
the written consent of a Participant,  impair any of such  Participant's  rights
under any Option  previously  granted.  Any  outstanding  ISO that is  modified,
extended,  renewed or  otherwise  altered  will be treated  in  accordance  with
Section  424(h) of the Code.  The  Committee  may reduce the  Exercise  Price of
outstanding  Options without the consent of  Participants  effected by a written
notice to them;  provided,  however,  that the Exercise Price may not be reduced
below the minimum  Exercise  Price that would be permitted  under Section 5.4 of
this Plan for  Options  granted  on the date the  action is taken to reduce  the
Exercise Price.

                  5.10 No Disqualification.  Notwithstanding any other provision
in this Plan, no term of this Plan relating to ISOs will be interpreted, amended
or altered,  nor will any  discretion  or authority  granted  under

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                                                   Cellegy Pharmaceuticals, Inc.
                                                      1995 Equity Incentive Plan

this Plan be exercised,  so as to disqualify  this Plan under Section 422 of the
Code or, without the consent of the Participant  affected, to disqualify any ISO
under Section 422 of the Code.

         6.  RESTRICTED  STOCK.  A  Restricted  Stock  Award  is an offer by the
Company to sell to an eligible  person Shares that are subject to  restrictions.
The Committee will determine to whom an offer will be made, the number of Shares
the  person  may  purchase,  the price to be paid (the  "Purchase  Price"),  the
restrictions  to which the Shares will be subject,  if any,  and all other terms
and conditions of the Restricted Stock Award, subject to the following:

                  6.1 Form of  Restricted  Stock Award.  All  purchases  under a
Restricted  Stock Award made pursuant to this Plan will be evidenced by an Award
Agreement  ("Restricted  Stock  Purchase  Agreement")  that will be in such form
(which need not be the same for each  Participant)  as the  Committee  will from
time to time  approve,  and will  comply  with and be  subject  to the terms and
conditions of this Plan.  The offer of Restricted  Stock will be accepted by the
Participant's  execution and delivery of the Restricted Stock Purchase Agreement
and full payment for the Shares to the Company  within thirty (30) days from the
date the Restricted Stock Purchase Agreement is delivered to the person. If such
person does not execute and deliver  the  Restricted  Stock  Purchase  Agreement
along with full payment for the Shares to the Company  within  thirty (30) days,
then the offer will terminate, unless otherwise determined by the Committee. The
Committee,  however,  may provide that, if required under Rule 16b-3 promulgated
under  Section  16 of the  Exchange  Act,  Restricted  Stock  Awards  granted to
Insiders  shall not  become  exercisable  until six months and one day after the
grant date and shall then be  exercisable  for 10 trading  days at the  Purchase
Price specified by the Committee in accordance with Section 6.2.

                  6.2 Purchase Price. The Purchase Price of Shares sold pursuant
to a Restricted Stock Award will be determined by the Committee;  provided, that
if expressly required by any state securities  authorities as a condition of the
offer and sale of Shares subject to Restricted  Stock Awards in compliance  with
the  securities  laws of such state,  the Purchase Price will be at least 85% of
the Fair Market  Value of the Shares on the date the  Restricted  Stock Award is
granted,  except in the case of a sale to a Ten  Percent  Shareholder,  in which
case the Purchase  Price will be 100% of the Fair Market  Value.  Payment of the
Purchase Price may be made in accordance with Section 8 of this Plan.

                  6.3  Restrictions.  Restricted Stock Awards will be subject to
such  restrictions  (if any) as the  Committee  may impose.  The  Committee  may
provide for the lapse of such restrictions in installments and may accelerate or
waive  such  restrictions,  in whole  or  part,  based  on  length  of  service,
performance or such other factors or criteria as the Committee may determine.

         7. STOCK BONUSES.

                  7.1  Awards  of Stock  Bonuses.  A Stock  Bonus is an award of
Shares  (which may consist of  Restricted  Stock) for  services  rendered to the
Company or any Parent, Subsidiary or Affiliate of the Company. A Stock Bonus may
be awarded for past  services  already  rendered to the Company,  or any Parent,
Subsidiary or Affiliate of the Company  (provided that the Participant  pays the
Company  the par value,  if any,  of the Shares  awarded by such Stock  Bonus in
cash) pursuant to an Award Agreement (the "Stock Bonus  Agreement") that will be
in such form (which need not be the same for each  Participant) as the Committee
will from time to time approve, and will comply with and be subject to the terms
and conditions of this Plan. A Stock Bonus may be awarded upon  satisfaction  of
such performance goals as are set out in advance in the Participant's individual
Award Agreement (the  "Performance  Stock Bonus Agreement") that will be in such
form (which need not be the same for each  Participant)  as the  Committee  will
from time to time approve,  and will comply with and be subject to the terms and
conditions of this Plan.  Stock Bonuses may vary from Participant to Participant
and between groups of Participants, and may be based upon the achievement of the
Company,  Parent,  Subsidiary or Affiliate and/or individual performance factors
or upon such other criteria as the Committee may determine.

                  7.2 Terms of Stock  Bonuses.  The Committee will determine the
number of Shares to be awarded to the  Participant  and whether such Shares will
be Restricted Stock. If the Stock Bonus is being earned upon the satisfaction of
performance  goals  pursuant to a Performance  Stock Bonus  Agreement,  then the
Committee will determine: (a) the nature, length and starting date of any period
during which performance is to be measured

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                                                   Cellegy Pharmaceuticals, Inc.
                                                      1995 Equity Incentive Plan

(the  "Performance  Period") for each Stock Bonus; (b) the performance goals and
criteria to be used to measure the performance, if any; (c) the number of Shares
that may be awarded to the  Participant;  and (d) the extent to which such Stock
Bonuses have been earned.  Performance  Periods may overlap and Participants may
participate  simultaneously  with  respect to Stock  Bonuses that are subject to
different   Performance  Periods  and  different  performance  goals  and  other
criteria.  The number of Shares may be fixed or may vary in accordance with such
performance  goals and  criteria  as may be  determined  by the  Committee.  The
Committee may adjust the  performance  goals  applicable to the Stock Bonuses to
take into account  changes in law and  accounting  or tax rules and to make such
adjustments  as the  Committee  deems  necessary or  appropriate  to reflect the
impact of  extraordinary  or unusual  items,  events or  circumstances  to avoid
windfalls or hardships.

                  7.3 Form of Payment.  The earned  portion of a Stock Bonus may
be paid  currently  or on a  deferred  basis  with  such  interest  or  dividend
equivalent,  if any, as the Committee may determine.  Payment may be made in the
form of  cash,  whole  Shares,  including  Restricted  Stock,  or a  combination
thereof,  either in a lump sum payment or in installments,  all as the Committee
will determine.

                  7.4 Termination During Performance Period. If a Participant is
Terminated  during a Performance  Period for any reason,  then such  Participant
will be entitled to payment (whether in Shares,  cash or otherwise) with respect
to the Stock Bonus only to the extent  earned as of the date of  Termination  in
accordance  with the  Performance  Stock Bonus  Agreement,  unless the Committee
determines otherwise.

         8. PAYMENT FOR SHARE PURCHASES.

                  8.1  Payment.  Payment for Shares  purchased  pursuant to this
Plan  may be made in cash  (by  check)  or,  where  expressly  approved  for the
Participant by the Committee and where permitted by law:

         (a)      by   cancellation  of  indebtedness  of  the  Company  to  the
                  Participant;

         (b)      by  surrender  of shares that  either:  (1) have been owned by
                  Participant  for more than six (6)  months  and have been paid
                  for within the  meaning of SEC Rule 144 (and,  if such  shares
                  were purchased  from the Company by use of a promissory  note,
                  such note has been fully paid with respect to such shares); or
                  (2) were obtained by Participant in the public market;

         (c)      by tender of a full recourse promissory note having such terms
                  as may be approved by the Committee and bearing  interest at a
                  rate  sufficient to avoid  imputation of income under Sections
                  483 and 1274 of the Code; provided, however, that Participants
                  who are not  employees or directors of the Company will not be
                  entitled to purchase  Shares with a promissory note unless the
                  note is  adequately  secured  by  collateral  other  than  the
                  Shares;  provided,  further,  that the portion of the Purchase
                  Price  equal to the par value of the Shares,  if any,  must be
                  paid in cash;

         (d)      by waiver of  compensation  due or accrued to the  Participant
                  for services rendered;  provided, further, that the portion of
                  the  Purchase  Price equal to the par value of the Shares,  if
                  any, must be paid in cash;

         (e)      with respect only to purchases upon exercise of an Option, and
                  provided that a public market for the Company's stock exists:

                  (1)      through  a  "same  day  sale"   commitment  from  the
                           Participant and a  broker-dealer  that is a member of
                           the National  Association  of Securities  Dealers (an
                           "NASD Dealer")  whereby the  Participant  irrevocably
                           elects to  exercise  the Option and to sell a portion
                           of the Shares so  purchased  to pay for the  Exercise
                           Price,  and  whereby  the  NASD  Dealer   irrevocably
                           commits  upon  receipt of such  Shares to forward the
                           Exercise Price directly to the Company; or

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                                                   Cellegy Pharmaceuticals, Inc.
                                                      1995 Equity Incentive Plan

                  (2)      through a "margin"  commitment  from the  Participant
                           and a NASD Dealer whereby the Participant irrevocably
                           elects to  exercise  the  Option  and to  pledge  the
                           Shares so  purchased  to the NASD  Dealer in a margin
                           account as  security  for a loan from the NASD Dealer
                           in the amount of the Exercise Price,  and whereby the
                           NASD Dealer irrevocably  commits upon receipt of such
                           Shares to forward the Exercise  Price directly to the
                           Company; or

         (f)      by any combination of the foregoing.

                  8.2 Loan  Guarantees.  The Committee may help the  Participant
pay for Shares  purchased  under this Plan by  authorizing  a  guarantee  by the
Company of a third-party loan to the Participant.

         9. WITHHOLDING TAXES.

                  9.1 Withholding Generally. Whenever Shares are to be issued in
satisfaction  of Awards  granted  under this Plan,  the  Company may require the
Participant  to remit to the Company an amount  sufficient  to satisfy  federal,
state  and local  withholding  tax  requirements  prior to the  delivery  of any
certificate or certificates for such Shares. Whenever, under this Plan, payments
in satisfaction of Awards are to be made in cash, such payment will be net of an
amount  sufficient  to  satisfy  federal,   state,  and  local  withholding  tax
requirements.

                  9.2 Stock  Withholding.  When,  under  applicable  tax laws, a
Participant  incurs tax liability in connection  with the exercise or vesting of
any Award that is subject to tax withholding and the Participant is obligated to
pay the Company the amount required to be withheld,  the Committee may allow the
Participant  to satisfy the minimum  withholding  tax  obligation by electing to
have the  Company  withhold  from the Shares to be issued  that number of Shares
having a Fair Market Value equal to the minimum amount  required to be withheld,
determined on the date that the amount of tax to be withheld is to be determined
(the "Tax Date").  All  elections by a Participant  to have Shares  withheld for
this purpose will be made in writing in a form  acceptable  to the Committee and
will be subject to the following restrictions:

         (a)      the election  must be made on or prior to the  applicable  Tax
                  Date;

         (b)      once made, then except as provided below, the election will be
                  irrevocable  as to  the  particular  Shares  as to  which  the
                  election is made;

         (c)      all elections will be subject to the consent or disapproval of
                  the Committee;

         (d)      if the Participant is an Insider and if the Company is subject
                  to Section 16(b) of the Exchange Act: (1) the election may not
                  be made  within  six (6)  months  of the  date of grant of the
                  Award,  except as  otherwise  permitted  by SEC Rule  16b-3(e)
                  under the Exchange Act, and (2) either (A) the election to use
                  stock  withholding  must be irrevocably  made at least six (6)
                  months prior to the Tax Date  (although  such  election may be
                  revoked at any time at least six (6)  months  prior to the Tax
                  Date) or (B) the  exercise  of the Option or  election  to use
                  stock  withholding  must be made in the ten  (10)  day  period
                  beginning  on the  third  day  following  the  release  of the
                  Company's  quarterly or annual  summary  statement of sales or
                  earnings; and

         (e)      in the  event  that the Tax  Date is  deferred  until  six (6)
                  months after the delivery of Shares under Section 83(b) of the
                  Code, the  Participant  will receive the full number of Shares
                  with   respect  to  which  the  exercise   occurs,   but  such
                  Participant will be  unconditionally  obligated to tender back
                  to the Company the proper number of Shares on the Tax Date.

                                       7
<PAGE>

                                                   Cellegy Pharmaceuticals, Inc.
                                                      1995 Equity Incentive Plan

         10. PRIVILEGES OF STOCK OWNERSHIP.

                  10.1 Voting and Dividends. No Participant will have any of the
rights of a  shareholder  with respect to any Shares until the Shares are issued
to the Participant.  After Shares are issued to the Participant, the Participant
will be a shareholder  and have all the rights of a shareholder  with respect to
such  Shares,  including  the right to vote and receive all  dividends  or other
distributions made or paid with respect to such Shares;  provided,  that if such
Shares are Restricted  Stock, then any new,  additional or different  securities
the  Participant  may become  entitled to receive with respect to such Shares by
virtue of a stock dividend,  stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock; provided,  further, that the Participant will have no right to
retain such stock dividends or stock  distributions  with respect to Shares that
are repurchased at the Participant's original Purchase Price pursuant to Section
12.

                  10.2 Financial Statements.  If expressly required by any state
securities  authorities  as a condition  of the offer and  issuance of Awards in
compliance with the securities laws of such state,  the Company shall provide to
each Participant during the period such Participant holds an outstanding Award a
copy of the  financial  statements  of the  Company  as  prepared  either by the
Company  or  independent  certified  public  accountants  of the  Company.  Such
financial statements shall be delivered as soon as practicable following the end
of the Company's fiscal year during the period Awards are outstanding; provided,
however,  the Company will not be required to provide such financial  statements
to Participants whose services in connection with the Company assure them access
to equivalent information.

         11.  TRANSFERABILITY.  Awards granted under this Plan, and any interest
therein,  will not be transferable or assignable by Participant,  and may not be
made subject to execution, attachment or similar process, otherwise than by will
or by the laws of descent and  distribution  or as consistent  with the specific
Plan and Award Agreement provisions relating thereto. During the lifetime of the
Participant  an  Award  will be  exercisable  only by the  Participant,  and any
elections with respect to an Award, may be made only by the Participant.

         12.  RESTRICTIONS  ON SHARES.  At the discretion of the Committee,  the
Company may reserve to itself and/or its  assignee(s)  in the Award  Agreement a
right to repurchase a portion of or all Shares that are not "Vested" (as defined
in  the  Stock  Option   Agreement)   held  by  a  Participant   following  such
Participant's Termination at any time within ninety (90) days after the later of
Participant's  Termination Date and the date Participant  purchases Shares under
this Plan, for cash and/or cancellation of purchase money  indebtedness,  at the
Participant's  original Purchase Price,  provided,  that the right to repurchase
lapses at the rate of at least  20% per year  over five (5) years  from the date
the Shares were  purchased  (or from the date of grant of options in the case of
Shares obtained  pursuant to a Stock Option  Agreement and Stock Option Exercise
Agreement),  and if the right to repurchase is assignable, the assignee must pay
the  Company,  upon  assignment  of the right to  repurchase,  cash equal to the
excess of the Fair Market Value of the Shares over the original Purchase Price.

         13.  CERTIFICATES.  All  certificates  for  Shares or other  securities
delivered under this Plan will be subject to such stock transfer orders, legends
and  other  restrictions  as the  Committee  may deem  necessary  or  advisable,
including restrictions under any applicable federal, state or foreign securities
law, or any rules,  regulations  and other  requirements of the SEC or any stock
exchange or  automated  quotation  system upon which the Shares may be listed or
quoted.

         14.  ESCROW;  PLEDGE  OF  SHARES.  To  enforce  any  restrictions  on a
Participant's  Shares,  the Committee may require the Participant to deposit all
certificates  representing  Shares  (other  than  Shares  with  respect to which
consideration  has been fully paid by the  Participant  (in forms  other than by
promissory  notes) and received by the  Company),  together with stock powers or
other instruments of transfer approved by the Committee,  appropriately endorsed
in blank,  with the  Company or an agent  designated  by the  Company to hold in
escrow until such restrictions have lapsed or terminated,  and the Committee may
cause a legend or  legends  referencing  such  restrictions  to be placed on the
certificates.  Any  Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under this Plan will be
required  to pledge and  deposit  with the  Company all or part of the Shares so
purchased as collateral to secure the payment of Participant's obligation to the
Company under the promissory  note;  provided,  however,  that the Committee may
require or accept other or additional  forms of collateral to secure the payment
of such  obligation  and,  in any event,  the  Company  will have full

                                       8
<PAGE>

                                                   Cellegy Pharmaceuticals, Inc.
                                                      1995 Equity Incentive Plan

recourse against the Participant under the promissory note  notwithstanding  any
pledge of the  Participant's  Shares or other collateral or the Company's resort
to any or all of such  collateral.  In connection with any pledge of the Shares,
Participant  will be required to execute and deliver a written pledge  agreement
in such  form as the  Committee  will  from  time to time  approve.  The  Shares
purchased with the promissory note may be released from the pledge on a pro rata
basis as the promissory  note is paid.  Notwithstanding  any other  provision in
this Plan,  the Committee may not require  deposit in escrow or retain in escrow
evidence of unencumbered  Shares for which  consideration has been fully paid by
the Participant  (in a form other than by promissory  notes) and received by the
Company.

         15.  EXCHANGE AND BUYOUT OF AWARDS.  The Committee  may, at any time or
from time to time,  authorize  the Company,  with the consent of the  respective
Participants, to issue new Awards in exchange for the surrender and cancellation
of any or all outstanding Awards.  Notwithstanding the foregoing,  the Committee
may at any time buy from a Participant an Award previously  granted with payment
in cash, Shares (including  Restricted Stock) or other  consideration,  based on
such terms and conditions as the Committee and the  Participant  may agree.  The
Committee  may at any time cancel  Options upon payment to each  Participant  in
cash, with respect to each Option to the extent then exercisable,  of any amount
which,  in  the  absolute  discretion  of the  Committee,  is  determined  to be
equivalent  to any excess of the  market  value (at the  effective  time of such
event) of the  consideration  that such  Participant  would have received if the
Option had been  exercised  before the effective time over the Exercise Price of
the Option.

         16. SECURITIES LAW AND OTHER REGULATORY  COMPLIANCE.  An Award will not
be effective unless such Award is in compliance with all applicable  federal and
state securities  laws, rules and regulations of any governmental  body, and the
requirements of any stock exchange or automated  quotation system upon which the
Shares may then be listed or quoted,  as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance. Notwithstanding
any other  provision in this Plan,  the Company will have no obligation to issue
or deliver  certificates  for Shares under this Plan prior to: (a) obtaining any
approvals from governmental  agencies that the Company  determines are necessary
or advisable;  and/or (b) completion of any registration or other  qualification
of such Shares under any state or federal law or ruling of any governmental body
that the Company  determines to be necessary or  advisable.  The Company will be
under no obligation to register the Shares with the SEC or to effect  compliance
with the  registration,  qualification  or  listing  requirements  of any  state
securities laws, stock exchange or automated  quotation system,  and the Company
will have no liability for any inability or failure to do so.

         17. NO OBLIGATION TO EMPLOY.  Nothing in this Plan or any Award granted
under this Plan will confer or be deemed to confer on any  Participant any right
to continue in the employ of, or to continue any other  relationship  with,  the
Company or any Parent,  Subsidiary  or  Affiliate of the Company or limit in any
way the right of the  Company or any  Parent,  Subsidiary  or  Affiliate  of the
Company to terminate Participant's employment or other relationship at any time,
with or without cause.

         18. CORPORATE TRANSACTIONS.

                  18.1 Assumption or Replacement of Awards by Successor.  In the
event of (a) a  dissolution  or  liquidation  of the  Company,  (b) a merger  or
consolidation in which the Company is not the surviving  corporation (other than
a merger or consolidation with a wholly-owned  subsidiary,  a reincorporation of
the Company in a different jurisdiction,  or other transaction in which there is
no substantial change in the shareholders of the Company or their relative stock
holdings  and the Awards  granted  under  this Plan are  assumed,  converted  or
replaced by the successor  corporation,  which assumption will be binding on all
Participants),  (c) a merger in which the Company is the  surviving  corporation
but after  which the  shareholders  of the Company  (other than any  shareholder
which merges (or which owns or controls another  corporation  which merges) with
the Company in such merger) cease to own their shares or other equity  interests
in the Company,  (d) the sale of substantially all of the assets of the Company,
or (e) any other transaction which qualifies as a "corporate  transaction" under
Section 424(a) of the Code wherein the  shareholders  of the Company give up all
of their equity  interest in the Company  (except for the  acquisition,  sale or
transfer of all or  substantially  all of the outstanding  shares of the Company
from or by the shareholders of the Company),  any or all outstanding  Awards may
be assumed,  converted or replaced by the successor  corporation (if any), which
assumption,  conversion or replacement will be binding on all  Participants.  In
the alternative,  the successor  corporation may substitute equivalent Awards or
provide  substantially  similar

                                       9
<PAGE>

                                                   Cellegy Pharmaceuticals, Inc.
                                                      1995 Equity Incentive Plan

consideration to Participants as was provided to shareholders (after taking into
account the existing  provisions of the Awards).  The successor  corporation may
also  issue,  in  place  of  outstanding  Shares  of  the  Company  held  by the
Participant,   substantially   similar  shares  or  other  property  subject  to
repurchase restrictions no less favorable to the Participant.  In the event such
successor  corporation  (if any)  refuses to assume or  substitute  Options,  as
provided above,  pursuant to a transaction  described in this  Subsection  18.1,
such  Options  shall  expire  on  such  transaction  at  such  time  and on such
conditions as the Board will determine.

                  18.2 Other Treatment of Awards.  Subject to any greater rights
granted to  Participants  under the foregoing  provisions of this Section 18, in
the event of the  occurrence of any  transaction  described in Section 18.1, any
outstanding  Awards will be treated as provided in the  applicable  agreement or
plan of merger, consolidation, dissolution, liquidation, sale of assets or other
"corporate transaction."

                  18.3  Assumption of Awards by the Company.  The Company,  from
time to time,  also may  substitute  or assume  outstanding  awards  granted  by
another company, whether in connection with an acquisition of such other company
or otherwise,  by either;  (a) granting an Award under this Plan in substitution
of such other  company's  award;  or (b)  assuming  such award as if it had been
granted  under this Plan if the terms of such assumed  award could be applied to
an Award  granted  under this Plan.  Such  substitution  or  assumption  will be
permissible  if the holder of the  substituted  or assumed award would have been
eligible to be granted an Award under this Plan if the other company had applied
the rules of this Plan to such grant.  In the event the Company assumes an award
granted by another  company,  the terms and conditions of such award will remain
unchanged  (except that the  exercise  price and the number and nature of Shares
issuable  upon  exercise  of any  such  option  will be  adjusted  appropriately
pursuant  to Section  424(a) of the Code).  In the event the  Company  elects to
grant a new Option rather than assuming an existing option,  such new Option may
be granted with a similarly adjusted Exercise Price.

         19. ADOPTION AND SHAREHOLDER APPROVAL.  This Plan will become effective
on the closing of the Company's registered initial public offering of securities
(the "Effective Date");  provided,  however, that if the Effective Date does not
occur  on or  before  December  31,  1995,  this  Plan and any  Options  granted
hereunder will terminate as of December 31, 1995 having never become  effective.
This Plan shall be approved by the shareholders of the Company (excluding Shares
issued pursuant to this Plan),  consistent with applicable  laws,  within twelve
(12) months before or after the date this Plan is adopted by the Board. Upon the
Effective  Date,  the Board may grant  Awards  pursuant to this Plan;  provided,
however,  that:  (a) no Option may be  exercised  prior to  initial  shareholder
approval  of this Plan;  (b) no Option  granted  pursuant  to an increase in the
number of Shares  subject to this Plan  approved by the Board will be  exercised
prior to the time such  increase has been  approved by the  shareholders  of the
Company;  and (c) in the event that shareholder approval of such increase is not
obtained within the time period provided  herein,  all Awards granted  hereunder
will be canceled,  any Shares issued pursuant to any Award will be canceled, and
any purchase of Shares  hereunder  will be rescinded.  So long as the Company is
subject to Section  16(b) of the Exchange  Act, the Company will comply with the
requirements of SEC Rule 16b-3  promulgated  thereunder (or its  successor),  as
amended, with respect to shareholder approval.

         20. TERM OF PLAN.  Unless earlier  terminated as provided herein,  this
Plan will  terminate  ten (10)  years  from the date this Plan is adopted by the
Board or, if earlier, the date of shareholder approval.

         21.  AMENDMENT  OR  TERMINATION  OF  PLAN.  The  Board  may at any time
terminate  or amend  this  Plan in any  respect,  including  without  limitation
amendment of any form of Award  Agreement or instrument to be executed  pursuant
to this Plan; provided,  however,  that the Board will not, without the approval
of the shareholders of the Company,  amend this Plan in any manner that requires
such shareholder  approval  pursuant to the Code or the regulations  promulgated
thereunder as such  provisions  apply to ISO plans or (if the Company is subject
to the  Exchange  Act or Section  16(b) of the  Exchange  Act)  pursuant  to the
Exchange Act or SEC Rule 16b-3  promulgated  thereunder (or its  successor),  as
amended, respectively.

         22.  NONEXCLUSIVITY  OF THE PLAN.  Neither the adoption of this Plan by
the Board,  the submission of this Plan to the  shareholders  of the Company for
approval,  nor any  provision  of this Plan will be  construed  as creating  any
limitations  on the power of the  Board to adopt  such  additional  compensation
arrangements  as it may  deem  desirable,  including,  without  limitation,  the
granting of stock options and bonuses  otherwise  than under this Plan, and such
arrangements may be either  generally  applicable or applicable only in specific
cases.

                                       10
<PAGE>

                                                   Cellegy Pharmaceuticals, Inc.
                                                      1995 Equity Incentive Plan

         23.  DEFINITIONS.  As used in this Plan, the following  terms will have
the following meanings:

                  "Affiliate" means any corporation that directly, or indirectly
through one or more  intermediaries,  controls or is controlled  by, or is under
common control with, another  corporation,  where "control" (including the terms
"controlled by" and "under common control with") means the possession, direct or
indirect,  of the power to cause the direction of the management and policies of
the corporation, whether through the ownership of voting securities, by contract
or otherwise.

                  "Award" means any award under this Plan, including any Option,
Restricted Stock or Stock Bonus.

                  "Award  Agreement"  means,  with  respect to each  Award,  the
signed written agreement  between the Company and the Participant  setting forth
the terms and conditions of the Award.

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

                  "Code" means the Internal Revenue Code of 1986, as amended.

                  "Committee"  means  the  committee  appointed  by the Board to
administer this Plan, or if no such committee is appointed, the Board.

                  "Company"  means Cellegy  Pharmaceuticals,  Inc. a corporation
organized  under  the  laws  of  the  State  of  California,  or  any  successor
corporation.

                  "Disability"   means  a  disability,   whether   temporary  or
permanent, partial or total, as determined by the Committee.

                  "Exchange Act" means the  Securities  Exchange Act of 1934, as
amended.

                  "Exercise  Price"  means  the  price at  which a holder  of an
Option may purchase the Shares issuable upon exercise of the Option.

                  "Fair  Market  Value"  means,  as of any date,  the value of a
share  of the  Company's  Common  Stock  determined  by the  Board  in its  sole
discretion, exercised in good faith; provided, however, that if the Common Stock
of the Company is quoted on the Small Cap Market of the National  Association of
Securities  Dealers  Automated  Quotation  System  or is  regularly  quoted by a
recognized  securities dealer, and selling prices are reported,  the Fair Market
Value per share shall be the  closing  sales price for such stock or the closing
bid if no sales were reported,  as quoted on such system or by such dealer,  for
the date the value is to be determined (or if there are not sales for such date,
then for the last preceding  business day on which there were sales);  provided,
however,  that if the Common  Stock of the Company is listed on any  established
stock exchange or a national  market system,  including  without  limitation the
National  Market  System  of the  National  Association  of  Securities  Dealers
Automated Quotation System, the Fair Market Value per share shall be the closing
sales  price for such stock or the  closing  bid if no sales were  reported,  as
quoted on such system or exchange  (or the largest such  exchange)  for the date
the value is to be determined (or if there are not sales for such date, then for
the last preceding  business day on which there were sales),  as reported in the
Wall Street Journal or similar publication.

                  "Insider"  means an officer or  director of the Company or any
other person whose  transactions  in the  Company's  Common Stock are subject to
Section 16 of the Exchange Act.

                  "Option"  means an  award  of an  option  to  purchase  Shares
pursuant to Section 5.

                                       11
<PAGE>

                                                   Cellegy Pharmaceuticals, Inc.
                                                      1995 Equity Incentive Plan

                  "Outside  Directors"  shall mean any director who is not (i) a
current  employee of the Company or any Parent,  Subsidiary  or Affiliate of the
Company,  (ii) a former  employee of the Company or any  Parent,  Subsidiary  or
Affiliate of the Company who is receiving  compensation for prior service (other
than benefits under a  tax-qualified  pension  plan),  (iii) a current or former
officer of the Company or any Parent,  Subsidiary or Affiliate of the Company or
(iv) currently  receiving  compensation  for personal  services in any capacity,
other  than as a  director,  from  the  Company  or any  Parent,  Subsidiary  or
Affiliate  of the  Company;  provided,  however,  that at such  time as the term
"Outside  Director",  as  used in  Section  162(m)  is  defined  in  regulations
promulgated under Section 162(m) of the Code,  "Outside Director" shall have the
meaning  set  forth in such  regulations,  as  amended  from time to time and as
interpreted by the Internal Revenue Service.

                  "Parent" means any corporation  (other than the Company) in an
unbroken chain of  corporations  ending with the Company,  if at the time of the
granting of an Award under this Plan, each of such  corporations  other than the
Company owns stock  possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.

                  "Participant"  means a person who receives an Award under this
Plan.

                  "Plan" means this  Cellegy  Pharmaceutical,  Inc.  1995 Equity
Incentive Plan, as amended from time to time.

                  "Restricted  Stock Award" means an award of Shares pursuant to
Section 6.

                  "SEC" means the Securities and Exchange Commission.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Shares"  means shares of the Company's  Common Stock reserved
for issuance under this Plan, as adjusted pursuant to Sections 2 and 18, and any
successor security.

                  "Stock  Bonus"  means an award of  Shares,  or cash in lieu of
Shares, pursuant to Section 7.

                  "Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations  beginning with the Company if, at the time of
granting of the Award, each of the corporations  other than the last corporation
in the unbroken  chain owns stock  possessing  50% or more of the total combined
voting  power of all classes of stock in one of the other  corporations  in such
chain.

                  "Termination" or "Terminated" means, for purposes of this Plan
with respect to a Participant, that the Participant has for any reason ceased to
provide services as an employee, director,  consultant or advisor to the Company
or a Parent,  Subsidiary or Affiliate of the Company, except in the case of sick
leave,  military leave, or any other leave of absence approved by the Committee,
provided  that such leave is for a period of not more than ninety (90) days,  or
reinstatement  upon the  expiration  of such leave is  guaranteed by contract or
statute.  The  Committee  will  have  sole  discretion  to  determine  whether a
Participant  has ceased to provide  services and the effective date on which the
Participant ceased to provide services (the "Termination Date").

                                       12Exhibit 10.8

                          CELLEGY PHARMACEUTICALS, INC.

                        1995 DIRECTORS STOCK OPTION PLAN

                          Amended through June 6, 2002

         1.  Purpose.  This 1995  Directors  Stock Option Plan (this  "Plan") is
established to provide equity incentives for nonemployee members of the Board of
Directors of Cellegy Pharmaceuticals, Inc. (the "Company"), who are described in
Section 6.1 below,  by granting such persons options to purchase shares of stock
of the Company.

         2. Adoption and Shareholder Approval. After this Plan is adopted by the
Board of Directors of the Company (the "Board"), this Plan will become effective
on the closing of the Company's registered initial public offering of securities
(the "Effective Date");  provided,  however, that if the Effective Date does not
occur  on or  before  December  31,  1995,  this  Plan and any  Options  granted
hereunder will terminate as of December 31, 1995 having never become  effective.
Upon the Effective  Date of this Plan, no further stock options shall be granted
pursuant  to the 1992 Stock  Option  Plan of the  Company  (the  "Prior  Plan").
Options granted  pursuant to the Prior Plan shall continue to be governed by the
terms of the Prior Plan. This Plan shall be approved by the  shareholders of the
Company,  consistent with applicable  laws,  within twelve (12) months after the
date this Plan is adopted by the Board. Options ("Options") may be granted under
this Plan after the Effective Date provided that, in the event that  shareholder
approval is not obtained within the time period provided herein,  this Plan, and
all Options granted  hereunder,  shall terminate.  No Option that is issued as a
result of any  increase in the number of shares  authorized  to be issued  under
this Plan shall be exercised  prior to the time such  increase has been approved
by the shareholders of the Company and all such Options granted pursuant to such
increase shall similarly terminate if such shareholder approval is not obtained.
So long as the Company is subject to Section  16(b) of the  Securities  Exchange
Act of 1934, as amended,  (the "Exchange  Act") the Company will comply with the
requirements of Rule 16b-3 with respect to shareholder approval.

         3. Types of Options and Shares.  Options  granted under this Plan shall
be  nonqualified  stock  options  ("NQSOs").  The  shares  of stock  that may be
purchased  upon exercise of Options  granted under this Plan (the  "Shares") are
shares of the Common Stock of the Company.

         4. Number of Shares.  The  maximum  number of Shares that may be issued
pursuant to Options  granted under this Plan (the  "Maximum  Number") is 350,000
Shares (giving effect to a reverse split of the Company's Common Stock effective
at or before the closing of the Company's  registered initial public offering of
securities),  subject to  adjustment  as provided in this Plan. If any Option is
terminated  for any reason  without  being  exercised  in whole or in part,  the
Shares  thereby  released from such Option shall be available for purchase under
other Options subsequently granted under this Plan. At all times during the term
of this Plan, the Company shall reserve and keep available such number of Shares
as shall be required to satisfy the requirements of outstanding  Options granted
under  this  Plan;  provided,  however  that if the  aggregate  number of Shares
subject to outstanding Options granted under this Plan plus the aggregate number
of Shares  previously  issued by the Company pursuant to the exercise of Options
granted  under this Plan equals or exceeds the  Maximum  Number of Shares,  then
notwithstanding  anything  herein to the  contrary,  no further  Options  may be
granted  under this Plan until the Maximum  Number is increased or the aggregate
number of Shares subject to outstanding Options granted under this Plan plus the
aggregate  number of Shares  previously  issued by the  Company  pursuant to the
exercise of Options granted under this Plan is less than the Maximum Number.

         5. Administration. This Plan shall be administered by the Board or by a
committee of not less than two members of the Board appointed to administer this
Plan (the "Committee").  As used in this Plan, references to the Committee shall
mean either such  Committee or the Board if no Committee  has been  established.
The interpretation by the Committee of any of the provisions of this Plan or any
Option  granted  under this Plan shall be

<PAGE>

                                                   Cellegy Pharmaceuticals, Inc.
                                                1995 Directors Stock Option Plan

final and binding  upon the  Company  and all persons  having an interest in any
Option or any Shares purchased pursuant to an Option.

         6. Eligibility and Award Formula.

                  6.1  Eligibility.  Options may be granted only to directors of
the Company who are not  employees of the Company or any Parent,  Subsidiary  or
Affiliate of the Company, as those terms are defined in Section 17 below.

                  6.2 Initial Grant.  Each Optionee who after the Effective Date
becomes a member of the Board will automatically be granted an Option for 30,000
Shares (the "Initial Grant"). Initial Grants shall be made on the first business
day after the date such Optionee is first elected to the Board.

                  6.3 Succeeding Grants. On the first business day after each of
the Company's annual meeting of shareholders,  if the Optionee is still a member
of the Board and has served  continuously  as a member of the Board for at least
one year, the Optionee will  automatically be granted an Option for 8,000 Shares
(a "Succeeding Grant").

         7. Terms and  Conditions  of Options.  Subject to the  following and to
Section 6 above:

                  7.1 Form of Option Grant.  Each Option granted under this Plan
shall be evidenced by a written Stock Option Grant ("Grant") in such form (which
need not be the same for each Optionee) as the Committee shall from time to time
approve,  which  Grant  shall  comply  with  and be  subject  to the  terms  and
conditions of this Plan.

                  7.2  Vesting.   Options  granted  under  this  Plan  shall  be
exercisable  as they vest.  The date an Optionee  receives an Initial Grant or a
Succeeding  Grant is  referred  to in this  Plan as the  "Start  Date"  for such
Option.

                           (a) Initial  Grants.  Each Initial Grant will vest as
follows, so long as the Optionee continuously remains a director of the Company:
(i) on the Start Date of the  Initial  Grant the  Initial  Grant will vest as to
twenty-five  percent  (25%) of the Shares;  (ii) with  respect to the  remaining
22,500 Shares:  (a) on the first (1st)  anniversary  of the Initial  Grant,  the
Initial  Grant will vest as to an  additional  twenty-five  percent (25%) of the
remaining Shares;  (b) on the second (2nd) anniversary of the Initial Grant, the
Initial  Grant will vest as to an  additional  twenty-five  percent (25%) of the
remaining  Shares;  (c) on the third (3rd) anniversary of the Initial Grant, the
Initial  Grant will vest as to an  additional  twenty-five  percent (25%) of the
remaining Shares;  and (d) on the fourth (4th) anniversary of the Initial Grant,
the Initial Grant will vest as to an additional twenty-five percent (25%) of the
remaining Shares.

                           (b) Succeeding  Grants.  Each  Succeeding  Grant will
vest as to  twenty-five percent (25%) of the Shares upon each of the first three
(3) successive  anniversaries  of the Start Date for such  Succeeding  Grant, so
long as the Optionee continuously remains a director of the Company.

                  7.3 Exercise  Price.  The exercise price of an Option shall be
the Fair Market  Value (as defined in Section  17.4) of the Shares,  at the time
that the Option is granted.

                  7.4  Termination  of Option.  Except as provided below in this
Section,  each  Option  shall  expire ten (10)  years  after its Start Date (the
"Expiration  Date"). The Option shall cease to vest if the Optionee ceases to be
a member of the Board.  The date on which the Optionee  ceases to be a member of
the Board  shall be  referred  to as the  "Termination  Date".  An Option may be
exercised after the Termination Date only as set forth below:

                           (a) Termination Generally.  If the Optionee ceases to
be a member of the Board for any reason except death or disability (as described
in 7.4(b)  below),  then each Option then held by such  Optionee,  to the extent
(and only to the extent) that it would have been  exercisable by the Optionee on
the  Termination  Date, may be exercised by the Optionee within three (3) months
after the Termination Date, but in no event later than the Expiration Date.

                                       2
<PAGE>

                                                   Cellegy Pharmaceuticals, Inc.
                                                1995 Directors Stock Option Plan

                           (b) Death or Disability. If the Optionee ceases to be
a member of the Board  because of the death of the Optionee or the  temporary or
permanent,  partial or total  disability  of the Optionee as  determined  by the
Board,  then each Option then held by such Optionee,  to the extent (and only to
the  extent)  that  it  would  have  been  exercisable  by the  Optionee  on the
Termination  Date,  may be exercised by the  Optionee (or the  Optionee's  legal
representative)  within twelve (12) months after the Termination Date, but in no
event later than the Expiration Date.

         8. Exercise of Options.

                  8.1 Notice.  Options may be exercised  only by delivery to the
Company of an exercise agreement in a form approved by the Committee stating the
number of Shares being  purchased,  the  restrictions  imposed on the Shares and
such representations and agreements  regarding the Optionee's  investment intent
and access to  information  as may be  required  by the  Company to comply  with
applicable  securities laws, together with payment in full of the exercise price
for the number of Shares being purchased.

                  8.2 Payment. Payment for the Shares purchased upon exercise of
an Option  may be made (a) in cash or by check;  (b) by  surrender  of shares of
Common  Stock of the Company  that have been owned by the Optionee for more than
six (6) months  (and which have been paid for within the  meaning of  Securities
and Exchange Commission ("SEC") Rule 144 and, if such shares were purchased from
the  Company  by use of a  promissory  note,  such note has been fully paid with
respect to such  shares) or were  obtained  by the  Optionee  in the open public
market,  having a Fair Market Value equal to the  exercise  price of the Option;
(c) by waiver of  compensation  due or  accrued  to the  Optionee  for  services
rendered;  (d) provided  that a public  market for the  Company's  stock exists,
through a "same day sale" commitment from the Optionee and a broker-dealer  that
is a member of the National Association of Securities Dealers (an "NASD Dealer")
whereby the  Optionee  irrevocably  elects to exercise  the Option and to sell a
portion of the Shares so purchased to pay for the exercise price and whereby the
NASD  Dealer  irrevocably  commits  upon  receipt of such  Shares to forward the
exercise  price  directly to the Company;  (e) provided that a public market for
the Company's stock exists,  through a "margin" commitment from the Optionee and
a NASD Dealer whereby the Optionee irrevocably elects to exercise the Option and
to pledge  the Shares so  purchased  to the NASD  Dealer in a margin  account as
security  for a loan from the NASD Dealer in the amount of the  exercise  price,
and whereby the NASD Dealer  irrevocably  commits upon receipt of such Shares to
forward the exercise price directly to the Company; or (f) by any combination of
the foregoing.

                  8.3  Withholding  Taxes.  Prior to issuance of the Shares upon
exercise of an Option, the Optionee shall pay or make adequate provision for any
federal or state withholding obligations of the Company, if applicable.

                  8.4  Limitations  on  Exercise.  Notwithstanding  the exercise
periods set forth in the Grant, exercise of an Option shall always be subject to
the following limitations:

                           (a) An Option  shall not be  exercisable  until  such
time as this Plan (or, in the case of Options  granted  pursuant to an amendment
increasing the number of shares that may be issued  pursuant to this Plan,  such
amendment)  has been approved by the  shareholders  of the Company in accordance
with Section 15 hereof.

                           (b) An Option  shall not be  exercisable  unless such
exercise is in  compliance  with the  Securities  Act of 1933,  as amended  (the
"Securities  Act") and all  applicable  state  securities  laws,  as they are in
effect on the date of exercise.

                           (c) The  Committee  may specify a reasonable  minimum
number of Shares that may be purchased upon any exercise of an Option,  provided
that such minimum number will not prevent the Optionee from  exercising the full
number of Shares as to which the Option is then exercisable.

         9.  Nontransferability of Options. During the lifetime of the Optionee,
an  Option  shall  be  exercisable  only by the  Optionee  or by the  Optionee's
guardian or legal  representative,  unless otherwise permitted by the Committee.
No Option may be sold, pledged, assigned, hypothecated,  transferred or disposed
of in any manner other than by will or by the laws of descent and distribution.

                                       3
<PAGE>

                                                   Cellegy Pharmaceuticals, Inc.
                                                1995 Directors Stock Option Plan

         10.  Privileges of Stock  Ownership.  No Optionee shall have any of the
rights of a  shareholder  with respect to any Shares  subject to an Option until
the Option has been validly exercised. No adjustment shall be made for dividends
or  distributions or other rights for which the record date is prior to the date
of exercise,  except as provided in this Plan. The Company shall provide to each
Optionee a copy of the annual financial  statements of the Company, at such time
after the close of each fiscal  year of the Company as they are  released by the
Company to its shareholders.

         11.  Adjustment  of  Option  Shares.  In the event  that the  number of
outstanding  shares  of  Common  Stock  of the  Company  is  changed  by a stock
dividend,  stock split,  reverse stock split,  combination,  reclassification or
similar change in the capital  structure of the Company  without  consideration,
the number of Shares  available under this Plan and the number of Shares subject
to  outstanding  Options and the  exercise  price per share of such  outstanding
Options shall be proportionately adjusted, subject to any required action by the
Board or shareholders  of the Company and compliance with applicable  securities
laws; provided, however, that no fractional shares shall be issued upon exercise
of any Option and any resulting  fractions of a Share shall be rounded up to the
nearest whole Share.

         12. No Obligation to Continue as Director.  Nothing in this Plan or any
Option  granted  under  this  Plan  shall  confer on any  Optionee  any right to
continue as a director of the Company.

         13.  Compliance  With Laws.  The grant of Options  and the  issuance of
Shares upon  exercise of any Options  shall be subject to and  conditioned  upon
compliance with all applicable requirements of law, including without limitation
compliance with the Securities Act,  compliance with all other  applicable state
securities  laws and compliance  with the  requirements of any stock exchange or
national  market system on which the Shares may be listed.  The Company shall be
under no obligation to register the Shares with the SEC or to effect  compliance
with the registration or qualification requirement of any state securities laws,
stock exchange or national market system.

         14.  Acceleration  of  Options.  In the event of (a) a  dissolution  or
liquidation of the Company,  (b) a merger or  consolidation in which the Company
is not the surviving  corporation  (other than a merger or consolidation  with a
wholly-owned  subsidiary,  a  reincorporation  of  the  Company  in a  different
jurisdiction,  or other  transaction in which there is no substantial  change in
the shareholders of the Company or their relative stock holdings),  (c) a merger
in  which  the  Company  is  the  surviving  corporation  but  after  which  the
shareholders of the Company (other than any  shareholder  which merges (or which
owns or controls  another  corporation  which  merges)  with the Company in such
merger) cease to own their shares or other equity interests in the Company,  (d)
the sale of  substantially  all of the assets of the  Company,  or (e) any other
transaction  which qualifies as a "corporate  transaction"  under Section 424 of
the  Internal  Revenue  Code of  1986,  as  amended  (the  "Code")  wherein  the
shareholders of the Company give up all of their equity interests in the Company
(except for the acquisition, sale or transfer of all or substantially all of the
outstanding  shares of the Company from or by the  shareholders of the Company),
the vesting of all options granted pursuant to this Plan will accelerate and the
options will become  exercisable in full prior to the consummation of such event
at such times and on such  conditions as the Committee  determines,  and if such
options  are  not  exercised   prior  to  the   consummation  of  the  corporate
transaction,  they shall  terminate in  accordance  with the  provisions of this
Plan.

         15.  Amendment or  Termination  of Plan.  The Committee may at any time
terminate  or amend this Plan (but may not  terminate  or amend the terms of any
outstanding option without the consent of the Optionee); provided, however, that
the  Committee  shall not,  without  the  approval  of the  shareholders  of the
Company,  increase the total number of Shares  available under this Plan (except
by operation of the  provisions  of Sections 4 and 11 above) or change the class
of persons  eligible to receive Options.  Further,  the provisions in Sections 6
and 7 of this Plan  shall not be amended  more than once  every six (6)  months,
other than to comport with changes in the Code, the Employee  Retirement  Income
Security Act or the rules thereunder. In any case, no amendment of this Plan may
adversely  affect  any then  outstanding  Options  or any  unexercised  portions
thereof without the written consent of the Optionee.

                                       4
<PAGE>

                                                   Cellegy Pharmaceuticals, Inc.
                                                1995 Directors Stock Option Plan

         16.  Term of Plan.  Options  may be granted  pursuant to this Plan from
time to time  within  a period  of ten (10)  years  from the date  this  Plan is
adopted by the Board.

         17.  Certain  Definitions.  As used in this Plan,  the following  terms
shall have the following meanings:

                  17.1 "Parent" means any  corporation  (other than the Company)
in an unbroken chain of corporations  ending with the Company if, at the time of
the  granting of the Option,  each of such  corporations  other than the Company
owns stock  possessing  50% or more of the total  combined  voting  power of all
classes of stock in one of the other corporations in such chain.

                  17.2  "Subsidiary"  means  any  corporation  (other  than  the
Company) in an unbroken chain of corporations  beginning with the Company if, at
the time of granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock  possessing  fifty percent (50%) or
more of the total  combined  voting  power of all classes of stock in one of the
other corporations in such chain.

                  17.3  "Affiliate"  means any  corporation  that  directly,  or
indirectly through one or more intermediaries,  controls or is controlled by, or
is under common control with, another  corporation,  where "control"  (including
the terms "controlled by" and "under common control with") means the possession,
direct or indirect,  of the power to cause the direction of the  management  and
policies of the corporation, whether through the ownership of voting securities,
by contract or otherwise.

                  17.4 "Fair Market Value" shall mean, as of any date, the value
of a share of the  Company's  Common Stock  determined  by the Board in its sole
discretion, exercised in good faith; provided, however, that if the Common Stock
of the Company is quoted on the Small Cap Market of the National  Association of
Securities  Dealers  Automated  Quotation  System  or is  regularly  quoted by a
recognized  securities  dealer but  selling  prices are not  reported,  the Fair
Market  Value per share shall be the  closing  sales price for such stock or the
closing  bid if no sales  were  reported,  as quoted  on such  system or by such
dealer  for the date the  value is to be  determined  (or if there are no quoted
prices for the date of grant, then for the last preceding  business day on which
there were quoted prices);  provided,  however,  that if the Common Stock of the
Company is listed on any established stock exchange or a national market system,
including  without  limitation  the  National  Market  System  of  the  National
Association of Securities  Dealers Automated  Quotation System,  the Fair Market
Value per share shall be the  closing  sales price for such stock or the closing
bid if no sales were  reported,  as quoted on such  system or  exchange  (or the
largest such  exchange) for the date the value is to be determined  (or if there
are not sales for such date,  then for the last preceding  business day on which
there  were  sales),   as  reported  in  the  Wall  Street  Journal  or  similar
publication.

                                       5

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