EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT ("Agreement") shall be effective as of the 15th day of
May, 2000 between Salix Pharmaceuticals, Ltd., a British Virgin Islands
International Business Company having an office at 3600 W. Bayshore Road, Suite
205, Palo Alto, CA 94303 (together with its subsidiaries, affiliates and
successors hereafter referred to as "Employer"), and Robert P. Ruscher who is an
individual having a residence at 7808 Hardwick Drive, Raleigh, NC 27615
("Employee").


                                    RECITALS

         WHEREAS, Employee currently is employed by Employer as President, Chief
Executive Officer and a member of the Board of Directors; and

         WHEREAS, the Board of Directors of Employer believes it is in the best
interests of Employer and its shareholders to ensure the continued employment of
Employee in the position set forth above and to dissuade Employee from pursuing
other employment opportunities outside of Employer; and

         WHEREAS, the Board of Directors of Employer believes it is imperative
to provide the Employee with certain benefits upon termination of Employee's
employment under certain circumstances, which benefits are intended to provide
the Employee with incentive to remain with the Employer.

         NOW THEREFORE, in consideration of the recitals above and the mutual
promises, covenants, and undertakings set forth below, Employer and Employee
agree as follows:

                                   OBLIGATIONS

                                    ARTICLE I
                                   EMPLOYMENT

         1.1 Employer hereby agrees to continue to employ Employee as an
executive in the position(s) set forth above with such duties as are reasonably
assigned by the Board of Directors (or its designee) from time to time that are
consistent with such position(s). Such employment shall continue until
terminated in accordance with the terms of this Agreement.

         1.2 Employee accepts employment with Employer as set forth herein.
Employee agrees to perform fully, faithfully, competently, and effectively such
duties as shall be reasonably assigned by the Board of Directors (or its
designee) and to devote Employee's best efforts to the business of Employer.
Employee shall be specifically obligated to work to maximize the success of
Employer's business throughout the world.


                                   ARTICLE II
                               TERM OF EMPLOYMENT

         2.1 The term of Employee's employment at Employer shall continue unless
and until Employee's employment terminates pursuant to Article VI of this
Agreement.


                                   ARTICLE III
                                  COMPENSATION

         3.1 During the term of this Agreement, Employer shall pay to Employee
for services which Employee may render to Employer an annual salary to be
determined by the Employer in its sole discretion (subject to the terms of this
Agreement, with the initial Base Salary set forth in Appendix A) and subject to
periodic adjustment. For purposes of this Agreement, the term "Base Salary"
shall mean the annual salary referred to above, but shall exclude all
reimbursements for medical, professional, or transportation expenses, excess
group-term life insurance coverage, or other "fringe benefits." Employee's Base
Salary shall be paid in equal installments on Employer's regular payroll dates,
but shall be computed pro-rata in any partial year or other partial period of
employment. Employer shall also pay Employee an annual bonus (the "Bonus") to be
determined by the Board of Directors or its designee in its sole discretion and
subject to periodic adjustment. Employer shall withhold from all of Employee's
compensation, including without limitation the Base Salary and Bonus, such sums
as are required by federal, state and local laws, including, but not limited to,
federal, state, and local income taxes, FICA and Medicare, and such other sums
on which Employer and Employee may agree from time-to-time in writing.

         3.2 In addition to any compensation paid to Employee pursuant to
Section 3.1 of this Agreement, Employer shall provide Employee during the period
of Employee's employment with Employer with (A) benefits consistent with those
generally provided to similarly situated executives at Employer, (B)
reimbursement for professional license fees and continuing professional
education costs incurred by Employee; and (C) equipment (fax machine, printer,
computer, cell phone, PDA, copier and related accessories) and reimbursement for
related costs (internet connection fees, cell phone costs, office supplies,
phone/fax costs) to work in a home office (collectively, the "Benefits").

         3.3 Employee's Base Salary, Bonus, and Benefits are set forth in
Appendix "A" to this Agreement as may be amended from time-to-time at the sole
discretion of the Board of Directors or its designee, provided such amendments
are made in accordance with the terms of this Agreement.

         3.4 Upon the request of Employee, Employer shall loan Employee an
aggregate principal amount of up to US$100,000 (the "Loan"). The Loan shall
accrue

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interest compounded annually at the lowest Applicable Federal Rate stated by the
Internal Revenue Service on the date of the Loan. The principal plus accrued
interest on the Loan shall be payable on the earlier to occur of (A) the date
three (3) years from the date of the Loan, or (B) unless the provisions of
Clause 6.4 and Exhibit B apply, the date one hundred twenty (120) days following
termination of Employee's employment with Employer. The Loan shall be a full
recourse obligation from Employee to Employer, as evidenced by this Agreement.
All unpaid principal and unpaid accrued interest of the Loan may be prepaid
without penalty, in whole or in part, at any time. Any prepayment of the Loan
will be credited first against accrued interest, then principal.


                                   ARTICLE IV
               SECRET, CONFIDENTIAL AND/OR PROPRIETARY INFORMATION

           4.1 Employee will hold for the benefit of Employer, its affiliates,
subsidiaries, related entities, and designees, and shall not disclose to any
person or entity other than Employer or persons or entities designated by
Employer, all secret, confidential or proprietary information, knowledge,
computer data and/or information, patents, trade secrets, customer identities,
marketing and other business methods, techniques, processes, practices,
procedures, plans and strategies regarding Employer, its subsidiaries and
affiliated corporations or business enterprises, and their customers obtained by
Employee during Employee's employment with Employer, and any other secret,
confidential or proprietary information pertaining to Employer, its subsidiaries
and affiliated corporations or business enterprises, and their customers, during
the term of this Agreement and at all times after Employee's termination of
employment with Employer, unless the Board in writing consents to the contrary.

           4.2 Immediately upon notice of termination of employment, Employee
shall give to Employer the originals and all copies of all documents,
correspondence, memoranda, records, notes, manuals, materials, customer and
prospective customer lists and information, including without limitation
computer data, and other things relating, either directly or indirectly, to
Employer's business, including, but not limited to, secret, confidential or
proprietary information, in Employee's possession, custody or control, unless
otherwise agreed to by the Board in writing.


                                    ARTICLE V
                       AGREEMENT NOT TO SOLICIT EMPLOYEES

           5.1 In recognition and consideration of Employee's employment,
compensation and benefits, the training in and information regarding Employer's
business which Employer will give Employee, Employee's introduction to
Employer's customers, and the carefully guarded methods of doing business which
Employer utilizes and deems crucial to the success of its business, Employee
shall not during the term of this Agreement, and for a period of one (1) year
following the termination of Employee's employment by Employer, regardless of
the reason for termination, either directly or

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indirectly, solicit the employment of any person who was employed by the
Employer or any of its affiliates on a full time basis at the time of Employee's
termination of employment, unless such person (a) was involuntarily discharged
by the Employer or such affiliate or (b) voluntarily terminated his or her
relationship with Employer or such affiliate prior to contact by Employee.

           5.2 Employee acknowledges that any breach of any obligation contained
in this Article and the preceding Article is not adequately compensable by
monetary damages, and Employee agrees that any such breach shall cause Employer
irreparable harm for which Employer shall be entitled to a temporary restraining
order and preliminary injunction without prior notice to Employee. Any and all
attorneys' fees, costs and expenses incurred by Employer in enforcing the terms
of this Article and the preceding Article shall be reimbursed to Employer by
Employee.

           5.3 In the event that any body of competent jurisdiction shall
determine that any of the restrictive covenants in this Article V is inequitably
broad, it is the intention and agreement of the parties that the decision-maker
shall equitably adjust the obligations of Employee under this Agreement rather
than entirely eliminate any such obligations. In the event that the
decision-maker shall equitably adjust or eliminate any of the restrictive
covenants in this Agreement, all other aspects of this Agreement shall remain in
full force and effect.

           5.4 The enumeration of remedies in this Agreement to which Employer
is entitled does not limit any rights Employer otherwise possesses, including,
but not limited to, the right to monetary damages.


                                   ARTICLE VI
                                   TERMINATION

           6.1 This Agreement and Employee's employment with Employer may be
terminated by Employer only upon the occurrence of any of the following events
(each of which shall constitute "Reasonable Cause" for termination):

                  (i) Employee commits any act of gross negligence, fraud,
dishonesty, or willful violation of any law or material violation of any
significant written policy of Employer, that causes material harm to Employer;

                  (ii) Conviction of the Employee of (a) a felony or (b) a
serious crime involving moral turpitude;

                  (iii) Willful or gross failure by Employee to substantially
perform the duties reasonably assigned to Employee, or any intentional refusal
without compelling reason by Employee to discharge Employee's job
responsibilities and/or respond to Employer's legitimate job-related requests,
insofar as such duties, responsibilities and/or requests do not contravene law
and are consistent with Employee's position(s);

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                  (iv) Failure to cooperate in an investigation conducted and/or
undertaken by Employer or a governmental agency which has reasonable and
legitimate objectives; and

                  (v) Any act of intentional conflict of interest by Employee
related to Employer which results in material economic and/or other material
damage to Employer;

provided, however, that Employee shall not be deemed to have been terminated for
Reasonable Cause unless and until there shall have been delivered to Employee a
Notice of Termination (as defined below) and a resolution adopted by the Board
of Directors of Employer at a meeting held for such purpose (after reasonable
notice to Employee and an opportunity for Employee, together with Employee's
counsel, to be heard before the Board), finding that, in the good faith opinion
of the Board, Employee has engaged in the conduct set forth above and specifying
the particulars thereof in reasonable detail. "Notice of Termination" shall mean
a written notice of termination of Employee's employment with Employer, which
notice indicates the specific termination provision in this Section 6.1 relied
upon and which sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for such termination.

           6.2 This Agreement and Employee's employment with Employer may be
terminated by Employee at any time for any or no reason upon prior written
notice to Employer. This Agreement shall also terminate in the event of the
death or incapacitating disability of Employee. This provision, by itself, shall
not be interpreted to effect the eligibility, if any, of Employee under any
disability policy maintained by Employer under which Employee is entitled to
disability benefits. Subject to the provisions of Subsection 6.4 and Appendix B
(with respect to termination by Employee for Good Reason), termination of this
Agreement under this Subsection 6.2 shall excuse Employer from any and all
future payments of cash under this Agreement, provided, however, Employee (or a
personal representative) shall be entitled to all compensation and benefits
earned hereunder to the date of termination of employment.

           6.3 Subject to the provisions of Section 6.4 and Appendix B, this
Agreement and Employee's employment with Employer may be terminated by Employer
at any time upon one (1) month written notice to Employee without, Reasonable
Cause and at Employer's sole discretion.

           6.4 In the event that (1) this Agreement and/or Employee's employment
with Employer is terminated by Employer without Reasonable Cause, or (2)
Employee terminates this Agreement and/or Employee's employment with Employer
for Good Reason (as defined below), in any of those instances and only then
Employer shall pay Employee severance pay as set forth in the Schedule of
Severance Benefits attached hereto as Appendix "B." For purposes of this
Agreement, "Good Reason" shall mean the occurrence of any of the following
events or conditions: (A) a material adverse change in, or the assignment to
Employee of any duties or responsibilities which are inconsistent with,
Employee's status, title, position or responsibilities (including

                                       5


reporting responsibilities) with Employer, (B) a reduction in Employee's salary
and/or benefits except to the extent such reduction is comparable to percentage
reductions in salary and/or benefits of all other employees of Employer, or any
failure to pay Employee any compensation or benefits to which Employee is
entitled within five (5) days of the date due, (C) Employer or its successor
requires Employee to relocate beyond a twenty-five (25) mile radius from
Employee's current residence, (D) any purported termination of this Agreement or
Employee's employment by Employer without grounds therefor or any material
breach by Employer of any provision of this Agreement, or (E) the failure of
Employer to obtain an agreement in writing delivered to Employee, satisfactory
to the Employee, from any successor or assignee of the Employer to assume and
agree to perform this Agreement.


                                   ARTICLE VII
                               GENERAL PROVISIONS

           7.1 Employee represents and warrants that Employee is not currently
subject to any restrictive covenant, any other restriction on employment, or any
confidentiality agreement with any prior employer or other party except as
already disclosed to Employer. Employee shall indemnify and hold Employer
harmless with respect to any and all claims, causes of action, damages and
liability of any kind whatsoever, including reasonable attorneys' fees and
costs, successfully brought by a third-party arising out of any acts taken by
Employee which violate any such restrictive covenant, other restriction on
employment, or confidentiality agreement. Employee shall be entitled to
indemnification, in accordance with the applicable provisions of Employer's
charter documents and indemnification agreement, against all expense, liability
and loss (including reasonable attorneys' fees and settlement payments) that
Employee may incur by reason of any action, suit or proceeding arising from or
relating to the performance of Employee's duties as an officer or director of
Employer or any affiliate.

           7.2 All material furnished to Employee by Employer during the course
of employment shall remain the property of Employer and shall be returned by
Employee to Employer at any time upon demand and upon termination of employment.

           7.3 Neither this Agreement nor any right or interest hereunder shall
be assignable by Employee without Employer's prior written consent.

           7.4 This Agreement shall be deemed automatically assigned by Employer
(and assumed by the successor) in the event of any sale, transfer, merger,
and/or similar disposition of its business (whether direct or indirect and
whether by purchase, lease, merger, consolidation, liquidation or otherwise),
and shall inure to the benefit of and bind Employer's successors and assigns.
For purposes of this Agreement, the term "Employer" shall include the party
acquiring the business/assets of Employer upon any sale, transfer, merger,
and/or similar disposition of its business.

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           7.5 The validity, interpretation, performance and enforcement of this
Agreement shall be governed by and construed in accordance with the laws of the
State of California. All actions brought under Paragraph 7.10 or otherwise shall
be brought and occur in Palo Alto, California. The parties agree that service of
notice of arbitration or any other process may be made as set forth in Paragraph
7.8 below and that service so made shall be as effective as if personally made.

           7.6 The waiver by a party of any breach by the other party of any
provision of this Agreement shall not operate or be construed as a waiver of any
other breach by the other party.

           7.7 In the event that any provision of this Agreement is determined
by any body of competent jurisdiction to be unenforceable, illegal or contrary
to public policy, that body shall modify such provision to conform to public
policy, or to interpret it in such a way as to render it enforceable and legal,
in accordance with the intent of the parties as expressed herein. In the event
that a body of competent jurisdiction decides that any provision of this
Agreement is unenforceable, illegal or contrary to public policy and cannot be
reformed, only such provision shall be affected and all other provisions of this
Agreement shall remain in full force and effect.

           7.8 Any notice given to Employee pursuant to this Agreement shall be
sufficiently given if sent to Employee by registered or certified mail addressed
to Employee's address set forth at the beginning of this Agreement or such other
address as Employee shall have designated in writing to Employer. Any notice
given to Employer pursuant to this Agreement shall be sufficiently given if sent
to Employer by registered or certified mail to Employer's address set forth at
the beginning of this Agreement or such other address as Employer shall have
designated in writing to Employee.

           7.9 This Agreement and Appendices "A" and "B" set forth the entire
understanding of the parties and the agreement they desire to reach relating to
the subject matter hereof. This Agreement supersedes all prior agreements of the
parties hereto on the subject matter hereof (excluding confidentiality and
invention agreements between or effecting the parties) including, but not
limited to, any prior negotiations, correspondence, agreements, proposals, or
understandings. Negotiations, correspondence, agreements, proposals, or
understandings not expressly incorporated into this Agreement shall be deemed to
be of no force or effect. There are no representations, warranties, or
agreements, whether express or implied, or oral or written, with respect to the
subject matter hereof, except as set forth herein. No modification, waiver or
agreement of termination of this Agreement shall be binding upon either party
unless made in writing and signed for or on behalf of each party. Any such
signature of the Employer must be that of the representative duly authorized by
the Board. In the event of any inconsistency between this Agreement and any
benefit plan of the Employer, the language of this Agreement shall control both
documents. This Agreement may be signed in counterparts.

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           7.10 Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, shall be finally settled under the Arbitration
Rules and Procedures of JAMS/Endispute ("JAMS"), as modified below, by a neutral
arbitrator appointed by the JAMS in accordance with said rules.

                     (a) the arbitration shall be conducted before one (1)
arbitrator selected by mutual agreement of the Employer and Employee; if no
agreement is made within ten (10) business days from the date a demand for
arbitration was filed with the JAMS, then the arbitrator shall be selected
according to the JAMS rules;

                     (b) the arbitration hearing shall take place no later than
thirty (30) days following the JAMS' notice of the selection of an arbitrator;

                     (c) the arbitration hearing shall last no more than one
day;

                     (d) no discovery shall be permitted, including depositions,
interrogatories, requests for admissions, or production of documents, except in
the case of extreme hardship as determined by the arbitrator;

                     (e) the arbitrator shall give his/her decision at the
conclusion of the arbitration proceeding if possible, but no later than two
business days following the conclusion of the proceeding;

                     (f) any arbitration proceeding under this Agreement shall
(1) be conducted in such a manner that the proprietary or confidential
information of the Employer remains protected, and (2) occur in Raleigh, North
Carolina, and

                     (g) the decision of the arbitrator is final, binding,
non-reviewable, and non-appealable, and may be entered as a final judgment in
any court having jurisdiction.

           7.11 Employee shall not be required to mitigate the amount of any
payment contemplated by this Agreement (whether by seeking new employment or in
any other manner), nor shall any such payment be reduced by any earnings that
Employee may receive from any other sources.

           7.12 In the event that Employee is required to institute action
against Employer to enforce this Agreement or any term of provision thereof, and
such action results in a finding in whole or in part in favor of Employee, then
Employer hereby agrees Employer shall pay immediately all legal fees and other
costs reasonably incurred by Employee in implementing and maintaining such
action.

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


"EMPLOYER"


By:      _________________________
         Lawrance Brown, Chairman of
         The Compensation Committee of
         The Board of Directors


"EMPLOYEE"


____________________
Robert P. Ruscher


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                                  APPENDIX "A"

Employee's Base Salary and Benefits shall be as set forth in Paragraphs "A"
through "G" below:

           A. Base Salary. Employer shall pay Employee an initial annual salary
in the gross amount of Two Hundred Thirty Thousand Dollars ($230,000.00) per
annum as Employee's base salary ("Base Salary"). The Base Salary may be changed
from time-to-time in accordance with the normal business practices of the
Employer, however, in no instance shall the Base Salary be decreased below the
initial annual salary set forth above during the term of this Agreement except
for decreases to Base Salary applied on a equal percentage basis to all
employees of the Employer.

           B. Bonus. In addition to the Base Salary and in the sole discretion
of the Board of Directors (or its designee), the Employee may be given an annual
bonus (the "Bonus"). If Employee has not been discharged for Reasonable Cause as
that term is defined in Article VI of this Agreement, then Employer shall pay to
Employee on or before ninety (90) days following December 31 of the relevant
year the Bonus, if any, as determined by the Employer.

           C. Paid Vacation. During each twelve (12) month calendar period of
Employee's employment, Employee shall be entitled to twenty (20) days of paid
vacation (in addition to customary holidays, sick days and personal days in
accordance with the Employer's normal personnel policies). Unused vacation days
during any calendar year can be carried forward to the next calendar year.

           D. Other Employee Benefits. Employee shall be entitled to participate
and receive any and all other benefits that are generally available to other
executives of Employer pursuant to any benefit programs existing during the term
of this Agreement, including, among other things, participation in group life
insurance, hospital, vision, disability, dental, medical or other group health
and accident benefit plans. In addition, Employee shall be entitled to
participate in all 401(k), bonus, profit sharing, pension or retirement plans as
may be in existence during the term of this Agreement in accordance with their
respective terms and provisions; provided, however, that to the extent
participation or the amount of participation is in the discretion of the Board
or any committee thereof, then Employee's participation shall likewise be solely
in such discretion.

           E. Benefits Solely from General Assets. The benefits provided
hereunder shall be paid solely from the general assets of Employer. Nothing
herein shall be construed to require Employer to maintain any fund or segregate
any amount for the benefit of Employee, and neither Employee nor any other
person shall have any claim against, right to, or security or other interest in,
any fund, account or asset of Employer from which any payment under this
Agreement may be made.

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           F. Withholding for Taxes. Employer makes no commitment that any
amounts paid to or for the benefit of Employee under Paragraphs A through E
above will be excluded from Employee's gross income for federal, state, and
local income tax purposes, or that any other federal, state, or local tax
treatment will apply to such payments or be available to Employee. Employer may
make such provisions as it deems appropriate for the withholding of any taxes
which Employer determines it is required to withhold in connection with this
Agreement and the payments contemplated hereby.

           G. Effect on Computation of Benefits. Any reimbursement of expenses
payable under this Agreement shall not be deemed salary or other compensation to
Employee for purposes of computing benefits to which Employee may be entitled
under any 401(k) plan, bonus, deferred compensation plan, or other arrangement
of Employer for the benefit of its employees.

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                                  APPENDIX "B"

                         SCHEDULE OF SEVERANCE BENEFITS

                     A. Entitlement to Severance Benefit. In the event that the
provisions of Subsection 6.4 apply, then in addition to any other benefits
payable under this Agreement the Employer shall provide to the Employee the
severance benefits set forth in Sections B, C and D below. No such severance
benefits shall be payable under the Agreement for the Employee's termination of
employment for any other reason, including, but not limited to, voluntary
termination of employment by Employee (for other than Good Reason) or
termination of employment by Employer for Reasonable Cause, death or
incapacitating disability.

                     B. Term of Benefits. The Employer shall provide to Employee
the severance benefits described in Paragraph C below commencing on termination
of the Employee's employment with Employer or termination of this Agreement that
qualifies under the terms of Paragraph 6.4 of this Agreement for severance
benefits, with such severance benefits continuing for a period of twelve (12)
months (the "Benefit Period").

                     C. Amount of Benefits. Severance benefits shall consist of
the following:

                               1. Base. The Employer shall pay to Employee a
monthly cash payment in an amount that is equivalent to one-twelfth of the Base
Salary of Employee that is then in effect (or if a new, higher Base Salary has
been set by the Employer in a signed writing given to employee for an upcoming
year, or if the Base Salary for any period during the prior 24 month period was
greater, than by that higher Base Salary). The monthly cash payment above shall
also include an amount that is equivalent to one-twelfth of any cash Bonus that
was paid to Employee for the last full calendar year prior to the termination of
employment. Payment shall commence in the first regular pay period following the
date of termination. The monthly cash payments may be made monthly or otherwise
(e.g., on a two week or semi-monthly cycle) under the then existing regular
payroll payments dates of Employer.

                               2. Non-Compensation Benefits. The Employer shall
continue to cover the Employee and Employee's dependents for the Benefit Period
under all benefit plans covering other employees in positions similar to that of
Employee. Employee's and Employee's dependents continued participation in such
plans shall be at no greater cost to Employee than the cost Employee bore for
such participation immediately prior to the date of termination.

                                          (a) Legal Continuation Restrictions.
If Employee's participation in any such plan or program is barred or limited,
Employer shall arrange upon comparable terms, and at no greater cost to Employee
than the cost Employee bore for such plans and programs prior to the date of
termination, to provide Employee and

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Employee's dependents with benefits substantially similar to those which
Employee was entitled to receive under any such plan or program

                                          (b) COBRA Continuation. Any benefits
provided under this Paragraph 2 following the Employee's termination of
employment shall count against the continuation period the Employee is otherwise
entitled to under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA"), or any similar federal or state statute, as a result of the
termination of employment.

                               3. Employee Loans, Advances, Equipment. All
outstanding loans and advances from Employer to Employee shall be forgiven and
cancelled in their entirety. Employee shall have the option to purchase at book
value (or fair market value if lower) all home office equipment (computers,
printer, copier, fax machine, PDA, cell phone and related accessories) used by
Employee.

                  D. Stock Option Vesting. In the event that the provisions of
Subsection 6.4 apply, the shares subject to each stock option for the Employer's
(or its affiliate or successor) Common Stock held by Employee shall become fully
and immediately vested. Each stock option shall be exercisable to the extent so
vested in accordance with the provisions of the Option Agreement and related
stock option plan pursuant to which such stock option was granted.

                  E. Consulting Relationship. In the event that Employee's
employment with Employer and/or this Agreement is terminated for any reason
other than for Reasonable Cause (by Employer) or Employee's death or disability,
Employer (or its successor) and Employee (to the extent Employee is so allowed
by any new employer of Employee) shall immediately enter into a consulting
arrangement (the "Consulting Agreement") pursuant to which (a) to the extent not
already vested pursuant to Clause D above, all options granted to Employee by
Employer (or any affiliate or successor entity) shall continue to vest and be
exercisable in accordance with the terms thereof (without any interruption or
termination in Employee's continuous status as an employee or consultant); and
(b) Employee shall agree to provide up to an average of 16 hours per month of
consulting services to Employer as reasonably requested by Employer during the
term of the Consulting Agreement in order to ensure the smooth transition of
Employee's duties and responsibilities. Employer shall pay Employee for such
services monthly at an hourly rate equal to (1) the Base Salary of Employee that
is then in effect (or if a new, higher Base Salary has been set by the Employer
for an upcoming year, or if the Base Salary for any period during the prior 24
month period was greater, than by that higher Base Salary), (2) divided by
1350). The Consulting Agreement will terminate on the date twelve (12) months
from the date of such employment termination, unless terminated earlier by the
mutual written agreement of Employer and Employee. Employer agrees to reimburse
Employee for all reasonable out-of-pocket expenses incurred by Employee in
providing services to Employer at the request of Employer pursuant to the
Consulting Agreement.

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