Re: First Amendment to Employment Agreement

Exhibit 10.1

June 8, 2009

Mr. David R. Bethune
16430 N. Scottsdale
Road, Suite 450
Scottsdale, AZ 85254

     Re: First Amendment to Employment Agreement

Dear David:

     By letter dated May 8, 2008, you entered into a letter agreement with Zila, Inc. (the “Company”) with respect to your employment (the “Agreement”) pursuant to which you are entitled to a payment if the Company terminates your employment in certain limited circumstances. The Company has decided to provide you with limited additional protection in the event that certain material adverse changes are made to the terms of your employment with the Company. The Company proposes to amend the Agreement as follows effective as of June 8, 2009:

     1. Section 7 ( Term ) of the Agreement is hereby amended and restated in its entirety to read as follows:

7. Term . This Agreement shall continue in full force and effect until terminated by either party pursuant to Section 10.

     2. Section 11 ( Severance Benefits ) of the Agreement is hereby amended and restated in its entirety to read as follows:

11. Severance Benefits . If the Company terminates your employment or if you terminate your employment for “Good Reason” (as defined below), you shall be eligible to receive severance benefits in accordance with the following:

      11.1 Change in Control . If your employment is terminated (with or Without Cause) by the Company or if you terminate your employment for Good Reason because of a change in control of the Company (“Change in Control”), you shall be entitled to receive severance pay in (i) an amount equivalent to twenty-four (24) months of your annual base salary in effect on the date your employment is terminated; and (ii) an amount equivalent to the maximum cash bonus (expressed as a percentage of your annual base salary in effect on the date your employment is terminated) for which you would have been eligible during the twenty-four (24) months following termination of your employment had your employment not terminated and had you

Mr. David R. Bethune
June 8, 2009
Page 2

stayed in the position you occupied as of termination of your employment, under any employee incentive bonus plan(s) in effect on the date your employment is terminated. For purposes of this Agreement, “Change in Control” shall be defined and governed by the definition of “change in control” contained in the Stock Option Plan, or such amended or restated stock option plan as may then be in effect or, in the absence of such plan, in the last such plan that was in effect. If the Company terminates your employment or you terminate your employment for Good Reason within eighteen (18) months following a Change in Control, a presumption shall arise that the termination was because of a Change in Control. This presumption, however, shall be rebutted if a preponderance of the evidence shows that the reason for your termination was something other than a Change in Control. Notwithstanding the foregoing, “Change in Control” shall not include any such transaction in which you participate (as an investor or otherwise) on behalf of any party other than the Company.

      11.2 Termination Without Cause . If, for a reason other than a Change in Control, the Company terminates your employment without cause (“Without Cause”) or you terminate your employment for Good Reason, you shall be entitled be entitled to receive a payment equal to twelve (12) months of your base salary. For purposes of this Agreement, “Cause” shall mean (i) your failure to correct a specific conduct or job-performance issue or issues about which you have been informed in writing and given an opportunity to correct; or (ii) conduct or job performance that the Company believes is sufficiently willful and/or egregious that providing you with written notice and an opportunity to correct is an inadvisable business practice; or (iii) your inability to perform your job ( e.g. , due to incapacity or death). If your employment terminates for any other reason (with the exception of a termination because of a Change in Control), such termination shall be deemed Without Cause and th