Exhibit 10.3
 
January 3, 2008

John G. Cooper
c/o Discovery Laboratories, Inc.
2600 Kelly Road
Suite 100
Warrington, PA 18976

Re:
Amendment to Employment Agreement

Dear Mr. Cooper,

This amendment is attached to and made part of the Amended and Restated
Employment Agreement dated as of May 4, 2006 between you and Discovery
Laboratories, Inc. (as it may have been previously amended, the “Agreement”).
Effective as of the date hereof the parties hereby agree that certain provisions
of the Agreement are revised as set forth below. Capitalized terms used herein
and not otherwise defined shall have the meanings ascribed to such terms as set
forth in the Agreement.

1.    Section 2 of the Agreement is hereby amended to provide (i) that the Term
of the Agreement shall continue through May 3, 2010, and (ii) that, commencing
on May 4, 2010, and on each May 4th thereafter, the Term of the Agreement shall
automatically be extended for one additional year, except in the event of notice
as provided for therein.

2.    The first sentence of Section 6(b) of the Agreement is hereby amended and
restated in its entirety to read as follows:

“Notwithstanding any provision to the contrary in any Company equity or other
incentive plan or any stock option or restricted stock agreement between the
Company and the Executive, all shares of stock and all options to acquire
Company stock held by the Executive shall accelerate and become fully vested
and, with respect to restricted stock, all restrictions shall be lifted, upon
the Change of Control Date.”

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

“Within 10 days after the Date of Termination, a lump sum cash payment in an
amount equal to the product of one and one-half (1.5) times the sum of (A) the
Executive’s Base Salary then in effect (determined without regard to any
reduction in such Base Salary constituting Good Reason) and (B) the Highest
Annual Bonus;”
 

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

“Within 10 days after the Date of Termination, a lump sum cash payment in an
amount equal to the product of two and one-half (2.5) times the sum of (A) the
Executive’s Base Salary then in effect (determined without regard to any
reduction in such Base Salary constituting Good Reason) and (B) the Highest
Annual Bonus;”

Except as amended herein, the remaining terms and conditions of the Agreement
shall remain in full force and effect. This addendum confirms an agreement
between you and the Company with respect to the subject matter hereof and is a
material part of the consideration stated in the Agreement and mutual promises
made in connection therewith. Please indicate your acceptance of the terms
contained herein by signing both copies of this amendment, retaining one copy
for your records, and forwarding the remaining copy to the Company.

DISCOVERY LABORATORIES, INC.

By:
                                                                                       
Name: Robert J. Capetola, Ph.D.
Title: President and Chief Executive Officer

Accepted and Agreed to:

                                                                                       
Name: John G. Cooper
 

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