EMPLOYEE MATTERS AGREEMENT

EXHIBIT 10.3

EMPLOYEE MATTERS AGREEMENT

by and between

BENTLEY PHARMACEUTICALS, INC.

and

CPEX PHARMACEUTICALS, INC.

Dated as of June 13, 2008

INDEX OF DEFINED TERMS

TERM		SECTION IN WHICH DEFINED
Agreement		Preamble
Bentley		Preamble
Bentley Welfare Plans		4.1(a)
CPEX		Preamble
CPEX 401(k) Plan		3.1(a)
CPEX Ratio		5.1(a)(ii)
CPEX Stock Plan		2.4
CPEX Welfare Plans		4.1(a)
Delaware Courts		9.11
Parties		Preamble
Post-Distribution Bentley Option		5.1(a)(i)
Post-Distribution Spanish Employee Option		5.1(b)(i)
Post-Distribution Spanish Employee Restricted     Stock Unit		5.2(b)(i)
Pre-Distribution Bentley Option Price		5.1(a)(ii)
Separation Agreement		Recitals
Service Crediting Date		2.3(b)(i)
Spanish Employee Option		5.1(a)
Spanish Employee Restricted Stock Unit		5.2(a)

EMPLOYEE MATTERS AGREEMENT

     EMPLOYEE MATTERS AGREEMENT (this “Agreement”), dated as of June 13, 2008, by and between Bentley Pharmaceuticals, Inc., a Delaware corporation (“Bentley”), and CPEX Pharmaceuticals, Inc., a Delaware corporation (“CPEX”). Each of Bentley and CPEX is herein referred to as a “Party” and collectively, as the “Parties”.

RECITALS:

     WHEREAS, Bentley, acting through its direct and indirect Subsidiaries, currently conducts a number of businesses, including (i) the Bentley Business and (ii) the CPEX Business;

     WHEREAS, the Board of Directors of Bentley has determined that it is appropriate, desirable and in the best interests of Bentley and its stockholders to separate Bentley into two independent companies (the “Separation”), one for each of: (i) the Bentley Business, which shall continue to be owned and conducted, directly or indirectly, by Bentley, and (ii) the CPEX Business, which shall be owned and conducted, directly or indirectly, by CPEX;

     WHEREAS, to effect the Separation the Parties entered into that certain Separation and Distribution Agreement dated as of even date hereof (as amended or otherwise modified from time to time, the “Separation Agreement”); and

     WHEREAS, pursuant to the Separation Agreement, Bentley and CPEX have agreed to enter into this Agreement for the purpose of allocating Assets, Liabilities and responsibilities with respect to certain employee compensation and benefit plans and programs between them.

     NOW, THEREFORE, in consideration of the foregoing premises, the mutual promises and covenants hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

          Section 1.1 Definitions. Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Separation Agreement and the following terms shall have the following meanings:

     “Benefit Plan” shall mean, with respect to an entity, each plan, program, arrangement, agreement or commitment that is an employment, change in control/severance, consulting, non-competition or deferred compensation agreement, or an executive compensation, incentive bonus or other bonus, employee pension, profit-sharing, savings, retirement, supplemental retirement, stock option, stock purchase, stock appreciation rights, restricted stock, other equity-based compensation, severance pay, salary continuation, life, health, hospitalization, sick leave, vacation pay, disability or accident insurance plan, corporate-owned or key-man life insurance or other employee benefit plan, program, arrangement, agreement or commitment, including any “employee benefit plan” (as defined in Section 3(3) of ERISA), sponsored or maintained by such entity (or to which such entity contributes or is required to contribute).

     “Bentley Benefit Plan” shall mean any Benefit Plan sponsored, maintained or contributed to by any member of the Bentley Group or any ERISA Affiliate thereof immediately following the Distribution Date.

     “Bentley Employee” shall mean an active employee or an employee on vacation or on approved leave of absence (including maternity, paternity, family, sick leave, salary continuation, qualified military service under the Uniformed Services Employment and Reemployment Rights Act of 1994, and leave under the Family Medical Leave Act and other approved leaves) who, on the Distribution Date, is employed by or will be employed by Bentley or any member of the Bentley Group.

     “Bentley 401(k) Plan” shall mean the Bentley 401(k) Plan.

     “Bentley Liabilities” shall mean all liabilities of Bentley other than the CPEX Liabilities.

     “Bentley Option” shall mean an option to purchase shares of Bentley Common Stock granted pursuant to one of the Bentley Stock Plans.

     “Bentley Participant” shall mean any individual who, immediately following the Distribution Date, is a Bentley Employee, a Former Bentley Employee or a beneficiary, dependent or alternate payee of any of the foregoing.

     “Bentley Restricted Stock Unit” shall mean a unit granted by Bentley or one of its Affiliates pursuant to one of the Bentley Stock Plans representing a general unsecured promise by Bentley or one of its Affiliates to deliver a share of Bentley Common Stock or dividend equivalents, if applicable (or the cash equivalent of either), upon the satisfaction of a vesting requirement (other than performance based vesting requirements).

     “Bentley Service Plans” shall mean, collectively, the Bentley 401(k) Plan and the severance and health and welfare benefit plans maintained by a member of the Bentley Group to the extent eligibility for or level of benefits thereunder is dependent upon length of service, including the Bentley vacation, health and welfare, sick leave, salary continuation and retiree medical, dental and life programs, if any.

     “Bentley Stock Plan” shall mean, collectively, the Bentley Pharmaceuticals, Inc. 1991 Stock Option Plan, Bentley Pharmaceuticals, Inc. 2001 Employee Stock Option Plan, Bentley Pharmaceuticals, Inc. 2001 Directors’ Stock Option Plan, and Bentley Pharmaceuticals, Inc. 2005 Equity and Incentive Plan.

     “COBRA” shall mean the continuation coverage requirements for “group health plans” under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and as codified in Code Section 4980B and Sections 601 through 608 of ERISA, together with all regulations and proposed regulations promulgated thereunder.

     “CPEX Benefit Plan” shall mean any Benefit Plan sponsored, maintained or contributed to by any member of the CPEX Group or any ERISA Affiliate thereof immediately following the Distribution Date, including the CPEX 401(k) Plan and the CPEX Welfare Plans.

     “CPEX Employee” shall mean a person listed on Exhibit A to the Separation Agreement.

     “CPEX Option” shall mean an option to purchase shares of CPEX Common Stock as of the Distribution Date, which shall be issued pursuant to the CPEX Stock Plan as part of the adjustment to Bentley Options in connection with the Distribution.

     “CPEX Participant” shall mean any individual who, immediately following the Distribution Date, is a CPEX Employee, a Former CPEX Employee or a beneficiary, dependent or alternate payee of any of the foregoing.

     “CPEX Restricted Stock Unit” shall mean a unit issued by CPEX or one of its Affiliates representing a general unsecured promise by CPEX or one of its Affiliates to deliver a share of CPEX Common Stock or dividend equivalents, if applicable (or the cash equivalent of either), upon the satisfaction of a service based vesting requirement, which unit is issued pursuant to the CPEX Stock Plan as part of the adjustment to Bentley Restricted Stock Units in connection with the Distribution.

     “CPEX Service Plans” shall mean, collectively, the CPEX 401(k) Plan and the severance and health and welfare plans maintained by a member of the CPEX Group to the extent eligibility for or level of benefits thereunder is dependent upon length of service, including the CPEX vacation, health and welfare, sick leave, salary continuation and retiree medical, dental and life programs, if any.

     “CPEX Stock Plan” shall mean the CPEX 2008 Equity and Incentive Plan.

     “ERISA Affiliate” shall mean with respect to any Person, each business or entity which is a member of a “controlled group of corporations,” under “common control” or a member of an “affiliated service group” with such Person within the meaning of Sections 414(b), (c) or (m) of the Code, or required to be aggregated with such Person under Section 414(o) of the Code, or under “common control” with such Person within the meaning of Section 4001(a)(14) of ERISA.

     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

     “Former Bentley Employee” shall mean, as of the Distribution Date, any individual who, before the Distribution Date, terminated employment with Bentley or its predecessors or any member of the Bentley Group and is not listed on Exhibit A to the Separation Agreement, other than any Former CPEX Employee.

     “Former CPEX Employee” shall mean, as of the Distribution Date, any individual who, before the Distribution Date, terminated employment with Bentley or its predecessors or any member of the Bentley Group and whose principal services to the Bentley Group related to the CPEX Business.

     “HIPAA” shall mean the Health Insurance Portability and Accountability Act of 1996, as amended.

     “Initial CPEX Stock Price” shall mean, unless otherwise determined by the Compensation Committee of the Bentley Board of Directors in its sole discretion in order to effect an equitable adjustment of a Bentley Option in connection with the Distribution, the closing per share trading price of CPEX Common Stock on a when issued basis on the Distribution Date or, if none, the opening per share trading price of CPEX Common Stock on the first date following the Distribution Date on which there is trading.

     “Participating Company” shall mean Bentley or any Person (other than an individual) participating in a Bentley Benefit Plan.

     “Pre-Distribution Bentley Stock Price” shall mean the closing per share trading price of Bentley Common Stock on the day immediately preceding the Distribution Date.

     “Post-Distribution Bentley Stock Price” shall mean, unless otherwise determined by the Compensation Committee of the Bentley Board of Directors in its sole discretion in order to effect an equitable adjustment of a Bentley Option in connection with the Distribution, the closing per share trading price of Bentley Common Stock on an ex-distribution basis on the Distribution Date or, if none, the closing per share trading price of Bentley Common Stock on the Distribution Date

(or, if there is no trading on the Distribution Date, on the first following date on which there is trading).

     “Spanish Employee” shall mean an active employee or an employee on vacation or on approved leave of absence (including maternity, paternity, family, sick leave, salary continuation, qualified military service under the Uniformed Services Employment and Reemployment Rights Act of 1994, and leave under the Family Medical Leave Act and other approved leaves) who, on the Distribution Date, is employed by or will be employed by Laboratorios Belmac, S.A., Laboratorios Rimafor, S.L., Laboratorios Davur, S.L. or Bentley A.P.I., S.L. or any former employee who immediately prior to his or her termination of employment was employed by such entities.

          Section 1.2 References; Interpretation. References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa. Unless the context otherwise requires, the words “include”, “includes” and “including” when used in this Agreement shall be deemed to be followed by the phrase “without limitation”. Unless the context otherwise requires, references in this Agreement to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement. Unless the context otherwise requires, the words “hereof”, “hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement.

ARTICLE II

GENERAL PRINCIPLES

          Section 2.1 Assumption and Retention of Liabilities; Related Assets.

               (a) As of the Distribution Date, except as otherwise expressly provided in this Agreement, Bentley shall, or shall cause one or more members of the Bentley Group to, assume or retain, as applicable, and pay, perform, fulfill and discharge, in due course in full (i) all Liabilities under all Bentley Benefit Plans, (ii) all Liabilities (excluding Liabilities incurred under a Benefit Plan except as otherwise provided in this Agreement) with respect to the employment, service, termination of employment or termination of service of all Bentley Employees, Former Bentley Employees and their dependents and beneficiaries (and any alternate payees in respect thereof) and other service providers (including any individual who is, or was, an independent contractor, temporary employee, temporary service worker, consultant, freelancer, agency employee, leased employee, on-call worker, incidental worker, or non-payroll worker or in any other employment, non-employment, or retainer arrangement, or relationship with any member of the Bentley Group), in each case to the extent arising in connection with or as a result of employment with or the performance of services for any member of the Bentley Group, and (iii) any other Liabilities or obligations expressly assigned to Bentley or any of its Affiliates (other than any member of the CPEX Group) under this Agreement. For purposes of clarification, the Liabilities assumed or retained by the Bentley Group as provided for in this Section 2.1(a) or elsewhere in this Agreement are intended to be Bentley Liabilities.

               (b) As of the Distribution Date, except as otherwise expressly provided in this Agreement, CPEX shall, or shall cause one or more members of the CPEX Group to, assume or retain, as applicable, and pay, perform, fulfill and discharge, in due course in full (i) all Liabilities under all CPEX Benefit Plans, (ii) all Liabilities (excluding Liabilities incurred under a Benefit Plan except as otherwise provided in this Agreement) with respect to the employment, service, termination of employment or termination of service of all CPEX Employees, Former CPEX Employees and their dependents and beneficiaries (and any alternate payees in respect thereof) and other service providers (including any individual who is, or was, an independent contractor, temporary employee, temporary service worker, consultant, freelancer, agency employee, leased employee, on-call worker, incidental worker, or non-payroll worker or in any other employment, non-employment, or retainer arrangement, or relationship with any member of the Bentley Group or CPEX Group), in each case to the extent arising in connection with or as a result of employment with or the performance of services for any member of the CPEX Group, or in the case of Former CPEX Employees, the Bentley Group and (iii) any other Liabilities or obligations expressly assigned to CPEX or any of its Affiliates (other than any member of the Bentley Group) under this Agreement. For purposes of clarification, the Liabilities assumed or retained by the CPEX Group as provided for in this Section 2.1(b) or elsewhere in this Agreement are intended to be CPEX Liabilities as such term is defined in the Separation Agreement.

               (c) From time to time after the Distribution Date, the Parties shall promptly reimburse one another, upon reasonable request of the Party requesting reimbursement and the presentation by such Party of such substantiating documentation as the other Party shall reasonably request, for the cost of any obligations or Liabilities satisfied or assumed by the Party requesting reimbursement or its Affiliates that are, or that have been made pursuant to this Agreement, the responsibility of the other Party or any of its Affiliates. Any such request for reimbursement must be made not later than the first anniversary of the Distribution Date.

               (d) Bentley shall retain responsibility for all employee-related regulatory filings for reporting periods ending at or prior to the Distribution Date except for Equal Employment Opportunity Commission EEO-1 reports and affirmative action program (AAP) reports and responses to Office of Federal Contract Compliance Programs (OFCCP) submissions, for which Bentley will provide data and information (to the extent permitted by applicable Laws and consistent with Section 8.1) to CPEX, who will be responsible for making such filings in respect of CPEX Employees.

          Section 2.2 Participation in Bentley Benefit Plans. Except as otherwise expressly provided for in this Agreement or as otherwise expressly agreed to in writing between or among the affected Parties, (i) effective as of the Distribution Date, CPEX and each member of the CPEX Group shall cease to be a Participating Company in any Bentley Benefit Plan, and (ii) each CPEX Participant and any other service providers (including any individual who is, or was, an independent contractor, temporary employee, temporary service worker, consultant, freelancer, agency employee, leased employee, on-call worker, incidental worker, or nonpayroll worker of any member of the CPEX Group or in any other employment, non-employment, or retainer arrangement, or relationship with any member of the CPEX Group), effective as of the Distribution Date, shall cease to participate in, be covered by, accrue benefits under, be eligible to contribute to or have any rights under any Bentley Benefit Plan (except to the extent of obligations

that accrued before the Distribution Date, including benefits that are not otherwise addressed herein), and CPEX and Bentley shall take all necessary action to effectuate each such cessation.

          Section 2.3 Service Recognition. CPEX shall give each CPEX Participant full credit for purposes of eligibility, vesting, determination of level of benefits, and, to the extent applicable, benefit accruals under any CPEX Benefit Plan, respectively, for such CPEX Participant’s service with any member of the Bentley Group prior to the Distribution Date to the same extent such service was recognized by the applicable Bentley Benefit Plans immediately prior to the Distribution Date; provided, that, such service shall not be recognized to the extent that such recognition would result in the duplication of benefits.

          Section 2.4 Approval by Bentley As Sole Stockholder. Effective as of the Distribution Date, CPEX shall have adopted the CPEX Pharmaceuticals, Inc. 2008 Equity and Incentive Plan (the “CPEX Stock Plan”), which shall permit the issuance of long-term incentive awards that have material terms and conditions substantially similar to those long-term incentive awards issued under the relevant Bentley Stock Plans in respect of which CPEX long-term incentive awards will be issued in connection with the Distribution. The CPEX Stock Plan shall be approved prior to the Distribution Date by Bentley as the sole stockholder of CPEX.

ARTICLE III

QUALIFIED DEFINED CONTRIBUTION PLAN

          Section 3.1 CPEX 401(k) Plan.

               (a) Establishment of the CPEX 401(k) Plan. Effective as of the Distribution Date, CPEX shall, or shall have caused one of its Affiliates to, establish a defined contribution plan and trust for the benefit of CPEX Participants (the “CPEX 401(k) Plan”). CPEX shall be responsible for taking all necessary, reasonable and appropriate action to establish, maintain and administer the CPEX 401(k) Plan so that it is qualified under Section 401(a) of the Code and that the related trust thereunder is exempt from Federal income tax under Section 501(a) of the Code. CPEX (acting directly or through its Affiliates) shall be responsible for any and all Liabilities and other obligations with respect to the CPEX 401(k) Plan.

               (b) Transfer of Savings Plan Assets. Not later than ninety (90) days following the Distribution Date (or such later time as mutually agreed by Bentley and CPEX), Bentley shall cause the accounts (including any outstanding loan balances) in the Bentley 401(k) Plan attributable to CPEX Participants and all of the Assets in the Bentley 401(k) Plan related thereto, to be transferred to the CPEX 401(k) Plan and CPEX shall cause the CPEX 401(k) Plan to accept such transfer of accounts and underlying Assets and, effective as of the date of such transfer, to assume and to fully perform, pay and discharge, all obligations of the Bentley 401(k) Plan relating to the accounts of CPEX Participants (to the extent the Assets related to those accounts are actually transferred from the Bentley 401(k) Plan to the CPEX 401(k) Plan). Any transfer of Assets pursuant to this Section 3.1(b) shall be conducted in accordance with Section 414(l) of the Code, Treasury Regulation Section 1.414(1)-1, and Section 208 of ERISA.

               (c) Continuation of Elections. As of the Distribution Date, CPEX (acting directly or through its Affiliates) shall cause the CPEX 401(k) Plan to recognize and maintain all Bentley 401(k) Plan and CPEX 401(k) Plan elections, including, but not limited to, deferral, investment, and payment form elections, dividend elections, beneficiary designations, and the rights of alternate payees under qualified domestic relations orders with respect to CPEX Participants, to the extent such election or designation is available under the CPEX 401(k) Plan.

               (d) Form 5310-A. No later than thirty (30) days prior to the date of any transfer of Assets and Liabilities pursuant to Section 3.1(b), Bentley and CPEX (each acting directly or through their respective Affiliates) shall, to the extent necessary, file Internal Revenue Service Form 5310-A regarding the transfer of Assets and Liabilities from the Bentley 401(k) Plan to the CPEX 401(k) Plan as described in this Section 3.1.

               (e) Contributions as of the Distribution Date. All contributions payable to the Bentley 401(k) Plan with respect to employee deferrals and contributions, matching contributions and other contributions for CPEX Participants through the Distribution Date, determined in accordance with the terms and provisions of the Bentley 401(k) Plan, ERISA and the Code, shall be paid by Bentley to the Bentley 401(k) Plan prior to the date of the Asset transfer described in subsection (b), above.

ARTICLE IV

HEALTH AND WELFARE PLANS

          Section 4.1 Health And Welfare Plans Maintained By Bentley Prior To The Distribution Date.

               (a) Establishment of Welfare Plans. Bentley or one or more of its Affiliates maintain health and welfare plans (the “Bentley Welfare Plans”) for the benefit of eligible Bentley Participants and CPEX Participants. Effective as of the Distribution Date, CPEX shall, or shall cause a CPEX Affiliate to, adopt, for the benefit of eligible CPEX Participants, health and welfare plans (collectively, the “CPEX Welfare Plans”).

               (b) Terms of Participation in CPEX Welfare Plans. CPEX (acting directly or through its Affiliates) shall use reasonable best efforts to cause all CPEX Welfare Plans, respectively, to (i) waive all limitations as to preexisting conditions, exclusions, and service conditions with respect to participation and coverage requirements applicable to CPEX Participants, respectively, other than limitations that were in effect with respect to CPEX Participants as of the Distribution Date under the Bentley Welfare Plans, and (ii) waive any waiting period limitation or evidence of insurability requirement that would otherwise be applicable to a CPEX Participant, respectively, following the Distribution Date to the extent such CPEX Participant had satisfied any similar limitation under the analogous Bentley Welfare Plan.

               (c) Employees on Leave. Notwithstanding any other provision of this Agreement to the contrary, CPEX shall assume Liability for payment of any salary continuation, short term disability or health