Exhibit 10.3

ADVANCIS PHARMACEUTICAL CORPORATION

EXECUTIVE EMPLOYMENT AGREEMENT

          THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made this
1st day of July 2004 by and between David J. Kudla, Jr., a resident of
Frederick, Maryland (the “Employee”), and Advancis Pharmaceutical Corporation, a
corporation organized and existing under the laws of the State of Delaware (the
“Company”).

BACKGROUND

          The Company is engaged in the business of developing, improving and
promoting antibiotic therapies and the delivery and dosage of antibacterials, as
well as extending the market and patent life of important anti-infectives and
oncology (as may be modified or expanded by the Company during the term of this
Agreement, collectively and individually, the “Business”).

          The Company desires to employ the Employee and the Employee desires to
be employed by the Company, upon the terms and conditions set forth in this
Agreement.

          NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, and intending to be legally bound, the parties,
subject to the terms and conditions set forth herein, agree as follows:

          1. Employment and Term. The Company hereby employs the Employee and
the Employee hereby accepts employment with the Company, as Vice President,
Quality Assurance, (the “Position”) commencing on July 1, 2004 (the
“Commencement Date”). Employee is employed by the Company on an at will basis.
The Employee shall be entitled to terminate this Agreement at any time upon
ninety (90) days prior written notice to the Company. The Company shall be
entitled to terminate this Agreement at any time subject to the provisions of
Section 8 hereof. (The entire period of time during which the Employee is
employed by the Company is referred to herein as the “Term”).

          2. Duties. During the Term, the Employee shall serve the Company
faithfully and to the best of his ability and shall devote his full time,
attention, skill and efforts to the performance of the duties required by or
appropriate for the Position. Subject to the oversight of the Chairman & CEO,
the Employee shall (i) have responsibility for the planning, directing and
prioritizing of quality assurance activities, and (ii) such duties and
responsibilities as may be assigned to him from time to time by the Chairman &
CEO. The Employee shall perform such duties and responsibilities at the
Company’s facility located in Germantown, Maryland or at such other location as
may be mutually agreed upon by the Company and the Employee in accordance with
the business needs of the Company. The Employee, as Vice President shall report
to the Chairman & CEO.

 

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          3. Other Business Activities. Except with the prior written consent of
the Company in its sole discretion, the Employee shall not engage, directly or
indirectly, during the Term, in any other business activities or pursuits
whatsoever, except activities in connection with charitable or civic activities,
personal investments and serving as an executor, trustee or in other similar
fiduciary capacity; provided that any such activities do not interfere with the
performance of his responsibilities and obligations pursuant to this Agreement.

          4. Compensation. The Company shall pay the Employee, and the Employee
hereby agrees to accept, as compensation for all services to be rendered to the
Company and for the Employee’s intellectual property covenants and assignments
and covenant not to compete, as provided in Sections 6 and 7 hereof, the
compensation set forth in this Section 4.

               4.1 Salary. The Company shall pay the Employee a base salary at
the annual rate of Two Hundred Five Thousand Dollars ($205,000.00) (as the same
may hereafter be adjusted, the “Salary”) during the Term of this Agreement. The
Salary shall be inclusive of all applicable income, social security and other
taxes and charges that are required by law to be withheld by the Company
(collectively, “Taxes”) and shall be paid and withheld in accordance with the
Company’s normal payroll practice for its executive employees from time to time
in effect. The Salary shall be subject to increase at the option and in the sole
discretion of the Company based upon the demonstrated performance of the
Employee.

               4.2 Bonus. Upon the execution of this Agreement, the Employee
shall be eligible to be awarded an annual cash bonus, which bonus shall be
determined by the Chairman & CEO and the Board of Directors and shall be in a
target amount of twenty five percent (25%) of Salary paid during such applicable
period, less Taxes, provided that the Employee shall have achieved all of his
performance objectives established for such period. Such bonus shall be
determined and paid within ninety (90) days after the conclusion of such year.

               4.3 Fringe Benefits. The Employee shall be entitled to
participate in the following programs and receive the following benefits
(collectively, the “Benefits”) in accordance with the following provisions.

                    (a) The Employee shall be entitled to participate in any
retirement, health or dental programs generally made available to executive
employees of the Company.

                    (b) The Employee shall be entitled to participate in all
vacation, life and disability insurance and other fringe benefit programs of the
Company to the extent and on the same terms and conditions as are accorded to
other executive employees of the Company.

               4.4 Reimbursement of Expenses. During the Term, the Employee
shall be reimbursed for items of travel, food and lodging and miscellaneous
expenses reasonably incurred by him on behalf of the Company, provided that such
expenses are incurred,

      Employee Name: David J. Kudla, Jr.   Employment Agreement Ver. 01/2003
Dated July 1, 2004   Page 2 of 14

 

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documented and submitted to the Company, all in accordance with the
reimbursement policies of the Company as in effect from time to time.

          5. Confidentiality. The Employee recognizes and acknowledges that the
Proprietary Information (as hereinafter defined) is a valuable, special and
unique asset of the Company. As a result, both during the Term and thereafter,
the Employee shall not, without the prior written consent of the Company, for
any reason either directly or indirectly divulge to any third-party or use for
his own benefit, or for any purpose other than the exclusive benefit of the
Company, any confidential, proprietary, business and technical information or
trade secrets of the Company or of any subsidiary or affiliate of the Company
(the “Proprietary Information”) revealed, obtained or developed in the course of
his employment with the Company. Proprietary Information shall include any
confidential or proprietary information or trade secrets relating to any patents
or other intellectual property assigned by the Employee to the Company.
Proprietary Information also shall include, but shall not be limited to the
intangible personal property described in Section 6(b) hereof and, in addition,
technical information, including research design, results, techniques and
processes; apparatus and equipment design; computer software; technical
management information, including project proposals, research plans, status
reports, performance objectives and criteria, and analyses of areas for business
development; and business information, including project, financial, accounting
and personnel information, business strategies, plans and forecasts, customer
lists, customer information and sales and marketing plans, efforts, information
and data. In addition, “Proprietary Information” shall include all information
and materials received by the Company or Employee from a third party subject to
an obligation of confidentiality and/or non-disclosure. Nothing contained herein
shall restrict the Employee’s ability to make such disclosures during the course
of his employment as may be necessary or appropriate to the effective and
efficient discharge of the duties required by or appropriate for the Position or
as such disclosures may be required by law. Furthermore, nothing contained
herein shall restrict the Employee from divulging or using for his own benefit
or for any other purpose any Proprietary Information that is readily available
to the general public so long as such information did not become available to
the general public as a direct or indirect result of the Employee’s breach of
this Section 5. Failure by the Company to mark any of the Proprietary
Information as confidential or proprietary shall not affect its status as
Proprietary Information under the terms of this Agreement.

          6. Property.

               6.1 Removal and Distribution. All right, title and interest in
and to Proprietary Information shall be and remain the sole and exclusive
property of the Company. During the Term, the Employee shall not remove from the
Company’s offices or premises any documents, records, notebooks, files,
correspondence, reports, memoranda or similar materials of or containing
Proprietary Information, or other materials or property of any kind belonging to
the Company, unless necessary or appropriate in accordance with the duties and
responsibilities required by or appropriate for the Position and, in the event
that such materials or property are removed, all of the foregoing shall be
returned to their proper files or places of safekeeping as promptly as possible
after the removal shall serve its specific purpose. The Employee shall not make,
retain, remove and/or distribute any copies of any of the foregoing for any
reason

      Employee Name: David J. Kudla, Jr.   Employment Agreement Ver. 01/2003
Dated July 1, 2004   Page 3 of 14

 

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whatsoever, except as may be necessary in the discharge of the assigned duties
and shall not divulge to any third person the nature of and/or contents of any
of the foregoing or of any other oral or written information to which he may
have access or with which for any reason he may become familiar, except as
disclosure shall be necessary in the performance of the duties; and upon the
termination of his employment with the Company, the Employee shall return to the
Company all originals and copies of the foregoing then in his possession or
under his control, whether prepared by the Employee or by others.

               6.2 Developments.

                    (a) The Employee acknowledges that all right, title and
interest in and to any and all writings, documents, inventions, discoveries,
ideas, developments, information, computer programs or instructions (whether in
source code, object code, or any other form), algorithms, formulae, plans,
memoranda, tests, research, designs, innovations, systems, analyses,
specifications, models, data, diagrams, flow charts, and/or techniques (whether
patentable or non-patentable or whether reduced to written or electronic form or
otherwise) that the Employee creates, makes, conceives, discovers or develops,
either solely or jointly with any other person, at any time during the Term,
whether during working hours or at the Company’s facility or at any other time
or location, and whether upon the request or suggestion of the Company or
otherwise, (collectively, “Intellectual Work Product”) shall be the sole and
exclusive property of the Company. The Employee shall promptly disclose to the
Company all Intellectual Work Product, and the Employee shall have no claim for
additional compensation for the Intellectual Work Product, except for any
excluded Intellectual Work Product that is wholly unrelated to the
pharmaceutical industry, in the broadest sense, provided that such Intellectual
Work Product is not conceived, discovered or developed, either solely or jointly
with any other person during working hours or at the Company’s facility or using
any other Company resource.

                    (b) The Employee acknowledges that all the Intellectual Work
Product that is copyrightable shall be considered a work made for hire under
United States Copyright Law. To the extent that any copyrightable Intellectual
Work Product may not be considered a work made for hire under the applicable
provisions of the United States Copyright Law, or to the extent that,
notwithstanding the foregoing provisions, the Employee may retain an interest in
any Intellectual Work Product, the Employee hereby irrevocably assigns and
transfers to the Company any and all right, title, or interest that the Employee
may have in the Intellectual Work Product under copyright, patent, trade secret
and trademark law, in perpetuity or for the longest period otherwise permitted
by law, without the necessity of further consideration. The Company shall be
entitled to obtain and hold in its own name all copyrights, patents, trade
secrets, and trademarks with respect thereto.

                    (c) The Employee shall reveal promptly all information
relating to any such Intellectual Property to the Board of Directors of the
Company, and, at the Company’s expense, shall cooperate with the Company and
execute such documents as may be necessary or appropriate (i) in the event that
the Company desires to seek copyright, patent or trademark protection, or other
analogous protection, thereafter relating to the Intellectual Work Product, and
when such protection is obtained, renew and restore the same, or (ii) to defend
any

      Employee Name: David J. Kudla, Jr.   Employment Agreement Ver. 01/2003
Dated July 1, 2004   Page 4 of 14

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opposition proceedings in respect of obtaining and maintaining such copyright,
patent or trademark protection, or other analogous protection.

                    (d) In the event the Company is unable after reasonable
effort to secure the Employee’s signature on any of the documents referenced in
Section 6.2 (c) hereof, whether because of the Employee’s physical or mental
incapacity or for any other reason whatsoever, the Employee hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents
as the Employee’s agent and attorney-in-fact, to act for and on the behalf and
stead to execute and file any such documents and to do all other lawfully
permitted acts to further the prosecution and issuance of any such copyright,
patent or trademark protection, or other analogous protection, with the same
legal force and effect as if executed by the Employee.

                    (e) The Employee represents that the innovations, designs,
systems, analyses, ideas, and all copyrights, patents, trademarks and trade
names, or similar intangible personal property (collectively, the “Pre-existing
Property”) identified on Schedule I hereof comprise all of the innovations,
designs, systems, analyses, ideas and all copyrights, patents, trademarks and
trade names, or similar intangible personal property that the Employee has made
or conceived of prior to the date hereof, and same are excluded from the
operation of the other provisions of this Section 6.2. In the event that the
Employee learns of any Pre-existing Property that he inadvertently failed to
include in Schedule I, and the circumstances surrounding the failure of such
inclusion are reasonably satisfactory to the Company, the Employee and the
Company shall jointly amend Schedule I to include such property.

          7. Covenant not to Compete.

               7.1 Restrictions. Provided that the Company is in compliance with
Section 8.4 hereof, if applicable, the Employee shall not, during the Term and
for a period of two (2) years thereafter (the “Restricted Period”), except as an
employee of the Company and in order to carry out the Employee’s duties
hereunder, do any of the following directly or indirectly without the prior
written consent of the Company in its sole discretion:

                    (a) engage or participate, directly or indirectly, in any
business activity competitive with the Business or the business of the Company
or any of the Company’s subsidiaries or affiliates as conducted during the Term;

                    (b) become interested (as owner, stockholder, lender,
partner, co-venturer, director, officer, employee, agent, consultant or
otherwise) in any person, firm, corporation, association or other entity engaged
in any business that is competitive with the Business or of the business of the
Company or any subsidiary or affiliate of the Company as conducted during the
Term, or become interested in (as owner, stockholder, lender, partner,
co-venturer, director, officer, employee, agent, consultant or otherwise) any
portion of the business of any person, firm, corporation, association or other
entity where such portion of such business is competitive with the Business of
the Company or the business of any subsidiary or affiliate of the Company as
conducted during the Term (notwithstanding the foregoing, the

      Employee Name: David J. Kudla, Jr.   Employment Agreement Ver. 01/2003
Dated July 1, 2004   Page 5 of 14

 

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Employee may hold not more than one percent (1%) of the outstanding securities
of any class of any publicly-traded securities of a company that is engaged in
activities referenced in this Section 7.1.

                    (c) solicit, call on or transact or engage in any business
activity with, either directly or indirectly, any (i) customer with whom the
Company shall have dealt at any time during the one (1) year period immediately
preceding the termination of the Employee’s employment hereunder, or
(ii) corporate partner, collaborator, independent contractor or supplier with
whom the Company shall have dealt at any time during the one (1) year period
immediately preceding the termination of the Employee’s employment hereunder;

                    (d) influence or attempt to influence any then current or
prospective supplier, customer, corporate partner, collaborator, or independent
contractor of the Company to terminate or modify any written or oral agreement
or course of dealing with the Company; or

                    (e) influence or attempt to influence any person either
(i) to terminate or modify an employment, consulting, agency, distributorship or
other arrangement with the Company, or (ii) to employ or retain, or arrange to
have any other person or entity employ or retain, any person who has been
employed or retained by the Company as an employee, consultant, agent or
distributor of the Company at any time during the one (1) year period
immediately preceding the termination of the Employee’s employment hereunder.

               7.2 Acknowledgment. The Employee acknowledges that he has
carefully read and considered the provisions of this Section 7. The Employee
acknowledges that the foregoing restrictions will limit his ability to earn a
livelihood in a business competitive with the Business, but he nevertheless
believes that he has received and will receive sufficient consideration and
other benefits in connection with the payment by the Company of the compensation
set forth in Sections 4 and 8.4 to justify such restrictions, which restrictions
the Employee does not believe would prevent him from earning a living in
businesses that are not competitive with the Business and without otherwise
violating the restrictions set forth herein.

               8. Early Termination. The Employee’s employment hereunder may be
terminated during the Term upon the occurrence of any one of the events
described in this Section 8. Upon termination, the Employee shall be entitled
only to such compensation and benefits as described in this Section 8.

      Employee Name: David J. Kudla, Jr.   Employment Agreement Ver. 01/2003
Dated July 1, 2004   Page 6 of 14

 

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               8.1 Involuntary Termination.

                    (a) Termination for Disability.

                         (i) In the event of the disability of the Employee such
that the Employee is unable to perform the duties and responsibilities hereunder
to the full extent required by this Agreement by reasons of illness, injury or
incapacity for a period of more than one hundred eighty (180) consecutive days
or more than one hundred eighty (180) days, in the aggregate, during any three
hundred sixty-five (365) day period (“Disability”), the Company shall have the
right to terminate Employee’s employment hereunder by written notice to the
Employee.

                         (ii) In the event of a termination of the Employee’s
employment hereunder pursuant to Section 8.1(a)(i), the Employee will be
entitled to receive all accrued and unpaid (as of the date of such termination)
Salary and applicable Benefits; provided that the Employee has complied with all
of his obligations under this Agreement and continues to comply with all of his
surviving obligations hereunder listed in Section 10 and a pro-rata percentage
of the bonus (provided in Section 4.2) for the last fiscal year of the Company
prior to the date of Employee’s termination. Except as specifically set forth in
this Section 8.1(a)(ii) or as provided by applicable law, the Company shall have
no liability or obligation to the Employee for compensation or benefits
hereunder by reason of, or subsequent to, such termination.

                    (b) Termination by Death. In the event that the Employee
dies during the Term, the Employee’s employment hereunder shall be terminated
thereby and the Company shall pay to the Employee’s executors, legal
representatives or administrators an amount equal to the accrued and unpaid
portion of the Salary for the month in which he dies and a pro-rata percentage
of the bonus (provided in Section 4.2) for the last fiscal year of the Company
prior to the date of Employee’s termination. Except as specifically set forth in
this Section 8.1(b) or as provided by applicable law, the Company shall have no
liability or obligation hereunder to the Employee’s executors, legal
representatives, administrators, heirs or assigns or any other person claiming
under or through him by reason of or subsequent to the Employee’s death.

               8.2 Termination for Cause.

                    (a) The Company shall have the right to terminate the
Employee’s employment hereunder at any time for “cause” upon written notice to
the Employee. For purposes of this Agreement, “cause” shall mean the Employee’s
(including, if the Employee is not a natural person, any employee of or
contractor to the Employee who is involved, directly or indirectly, in the
provision of services to the Corporation) (a) dishonesty, embezzlement, theft or
fraudulent misconduct; (b) abuse of a controlled substance that materially
impairs the performance of the Employee’s duties to the Corporation; (c) conduct
adverse to the business, interests, or reputation of the Corporation;
(d) material breach of any of the terms hereof or of any agreement between the
Corporation and the Employee, (including, but not limited to, terms relating to
non-disclosure, non-competition and invention assignment) which, if curable,
remains

      Employee Name: David J. Kudla, Jr.   Employment Agreement Ver. 01/2003
Dated July 1, 2004   Page 7 of 14

 

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uncured thirty (30) days after the Employee receives written notice of such
breach; or (e) commission of a felony.

                    (b) In the event of a termination of the Employee’s
employment hereunder pursuant to Section 8.2(a), the Employee shall be entitled
to receive all accrued but unpaid (as of the effective date of such termination)
Salary and Benefits. All Salary and Benefits shall cease at the time of such
termination, subject to the requirements of applicable law. Except as
specifically set forth in this Section 8.2, the Company shall have no liability
or obligation hereunder by reason of or subsequent to such termination.

               8.3 Termination by the Company Without Cause.

                    (a) Notwithstanding anything to the contrary set forth
herein, the Company shall have the right to terminate the Employee’s employment
hereunder at any time, for any reason or no reason, with or without cause,
effective upon the date designated by the Company upon written notice to the
Employee.

                    (b) In the event of a termination of the Employee’s
employment hereunder pursuant to Section 8.3(a), the Employee shall be entitled
to receive all accrued but unpaid (as of the effective date of such termination)
Salary; a pro-rata percentage of the bonus (provided in Section 4.2) for the
last fiscal year of the Company prior to the date of the Employee’s termination;
and the severance payments and Benefits in the manner set forth in Section 8.4;
provided that the Employee has complied with all of his obligations under this
Agreement and continues to comply with all of his surviving obligations
hereunder listed in Section 10. All Salary shall cease at the time of such
termination, except as required under applicable law. Except as specifically set
forth in this Section 8.3, the Company shall have no liability or obligation
hereunder by reason of or subsequent to such termination.

               8.4 Severance.

                    (a) In the event of the termination of the Employee’s
employment under Section 8.3 the Employee shall be entitled to severance pay in
an amount equal to twenty-four (24) months of Salary, subject to all withholding
obligations, calculated on the basis of the Salary in effect at the date of
termination and paid in the same manner as Salary was then paid hereunder.

                    (b) The Employee shall be entitled to receive all Benefits
to which he was entitled on the date preceding his termination for the period of
time during which he is entitled to receive severance pay hereunder.

                    (c) Except as provided in subsections (a) and (b) above, the
Company shall have no liability or obligation by reason of or subsequent to the
termination of the employment relationship between the Company and the Employee.

      Employee Name: David J. Kudla, Jr.   Employment Agreement Ver. 01/2003
Dated July 1, 2004   Page 8 of 14

 

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          9. Representations, Warranties and Covenants of the Employee.

               9.1 Restrictions. The Employee represents and warrants to the
Company that:

                    (a) There are no restrictions, agreements or understandings
whatsoever to which the Employee is a party which would prevent or make unlawful
the Employee’s execution of this Agreement or the Employee’s employment
hereunder, or which is or would be inconsistent or in conflict with this
Agreement or the Employee’s employment hereunder, or, except as set forth in any
agreements previously provided to the Company, would prevent, limit or impair in
any way the performance by the Employee of the obligations hereunder; and

                    (b) The Employee has disclosed to the Company all
restraints, confidentiality commitments or other employment restrictions that he
has with any other employer, person or entity.

               9.2 Obligations to Former Employers. The Employee covenants that
in connection with his provision of services to the Company, he shall not breach
any obligation (legal, statutory, contractual or otherwise) to any former
employer or other person, including, but not limited to obligations relating to
confidentiality and proprietary rights.

               9.3 Obligations Upon Termination. Upon and after his termination
or cessation of employment with the Company and until such time as no
obligations of the Employee to the Company hereunder exist, the Employee
(i) shall provide a complete copy of this Agreement to any prospective employer
or other person, entity or association engaged in the Business, with whom or
which the Employee proposes to be employed, affiliated, engaged, associated or
to establish any business or remunerative relationship prior to the commencement
thereof and (ii) shall notify the Company of the name and address of any such
person, entity or association prior to his employment, affiliation, engagement,
association or the establishment of any business or remunerative relationship.

          10. Survival of Provisions. The provisions of this Agreement set forth
in Sections 5, 6, 7, 8, 9, 10, 19 and 20 hereof shall survive the termination of
the Employee’s employment hereunder.

          11. Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the Company and the Employee and their respective
successors, executors, administrators, heirs and/or assigns; provided that
neither party shall make any assignment of this Agreement or any interest
herein, by operation of law or otherwise, without the prior written consent of
the other party.

          12. Notice. Any notice hereunder by either party shall be given by
personal delivery or by sending such notice by certified mail, return-receipt
requested, or telecopied, addressed or telecopied, as the case may be, to the
other party at its address set forth below or at

      Employee Name: David J. Kudla, Jr.   Employment Agreement Ver. 01/2003
Dated July 1, 2004   Page 9 of 14

 

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such other address designated by notice in the manner provided in this section.
Such notice shall be deemed to have been received upon the date of actual
delivery if personally delivered or, in the case of mailing, two (2) days after
deposit with the U.S. mail, or, in the case of facsimile transmission, when
confirmed by the facsimile machine report.

     
 
(a)       if to the Company, to:
 
   

  Advancis Pharmaceutical Corporation

  20425 Seneca Meadows Parkway

  Germantown, Maryland 20876

  Attention: Human Resources

  Facsimile: (301) 944-6701
 
   

  with a copy to:
 
   

  Howard Schwartz, Esquire

  Piper Rudnick LLP

  6225 Smith Avenue

  Baltimore, Maryland 21209-3600

  Facsimile: (410) 580-3251

     
 
(b)      if to the Employee, to:
 
   

  David J. Kudla, Jr.

  4826 Marsden Court

  Frederick, MD 21703

          13. Entire Agreement; Amendments. This Agreement contains the entire
agreement and understanding of the parties hereto relating to the subject matter
hereof, and merges and supersedes all prior and contemporaneous discussions,
agreements and understandings of every nature between the parties hereto
relating to the employment of the Employee with the Company. This Agreement may
not be changed or modified, except by an agreement in writing signed by each of
the parties hereto.

          14. Waiver. The waiver of the breach of any term or provision of this
Agreement shall not operate as or be construed to be a waiver of any other or
subsequent breach of this Agreement.

          15. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware, without regard to the
principles of conflicts of laws of any jurisdiction.

          16. Invalidity. If any provision of this Agreement shall be determined
to be void, invalid, unenforceable or illegal for any reason, the validity and
enforceability of all of the remaining provisions hereof shall not be affected
thereby. If any particular provision of this

      Employee Name: David J. Kudla, Jr.   Employment Agreement Ver. 01/2003
Dated July 1, 2004   Page 10 of 14

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Agreement shall be adjudicated to be invalid or unenforceable, such provision
shall be deemed amended to delete therefrom the portion thus adjudicated to be
invalid or unenforceable, such amendment to apply only to the operation of such
provision in the particular jurisdiction in which such adjudication is made;
provided that, if any provision contained in this Agreement shall be adjudicated
to be invalid or unenforceable because such provision is held to be excessively
broad as to duration, geographic scope, activity or subject, such provision
shall be deemed amended by limiting and reducing it so as to be valid and
enforceable to the maximum extent compatible with the applicable laws of such
jurisdiction, such amendment only to apply with respect to the operation of such
provision in the applicable jurisdiction in which the adjudication is made.

          17. Section Headings. The section headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.

          18. Number of Days. In computing the number of days for purposes of
this Agreement, all days shall be counted, including Saturdays, Sundays and
legal holidays; provided that, if the final day of any time period falls on a
Saturday, Sunday or day which is a legal holiday in Delaware or Maryland, then
such final day shall be deemed to be the next day which is not a Saturday,
Sunday or legal holiday.

          19. Specific Enforcement The Employee acknowledges that the
restrictions contained in Sections 5, 6, and 7 hereof are reasonable and
necessary to protect the legitimate interests of the Company and its affiliates
and that the Company would not have entered into this Agreement in the absence
of such restrictions. The Employee also acknowledges that any breach by him of
Sections 5, 6, or 7 hereof will cause continuing and irreparable injury to the
Company for which monetary damages would not be an adequate remedy. The Employee
shall not, in any action or proceeding to enforce any of the provisions of this
Agreement, assert the claim or defense that an adequate remedy at law exists. In
the event of such breach by the Employee, the Company shall have the right to
enforce the provisions of Sections 5, 6, and 7 of this Agreement by seeking
injunctive or other relief in any court, and this Agreement shall not in any way
limit remedies of law or in equity otherwise available to the Company.

          20. Consent to Suit. Subject to the provisions of Section 21 hereof,
any legal proceeding arising out of or relating to this Agreement shall be
instituted in the Court of Chancery of New Castle County, or if such court does
not have jurisdiction or will not accept jurisdiction, in any state or federal
court of general jurisdiction in the State of Delaware, and each of the Company
and the Employee hereby consents to the personal and exclusive jurisdiction of
such court and hereby waives any objection that either party may have to the
laying of venue of any such proceeding and any claim or defense of inconvenient
forum. If an action at law or in equity is necessary to enforce or interpret the
terms of this Agreement, the prevailing party shall be entitled to recover, in
addition to any other relief, reasonable attorneys’ fees, costs and
disbursements.

          21. Arbitration. Subject to the last sentence of this Section 21, if
any dispute arises over the terms of this Agreement between the parties to this
Agreement, either Employee or Company may submit the dispute to binding
arbitration within thirty (30) days after such

      Employee Name: David J. Kudla, Jr.   Employment Agreement Ver. 01/2003
Dated July 1, 2004   Page 11 of 14

 

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dispute arises, to be governed by the evidentiary and procedural rules of the
American Arbitration Association (Commercial Arbitration). Employee and Company
shall mutually select one (1) arbitrator within ten (10) days after a dispute is
submitted to arbitration. In the event that the parties do not agree on the
identity of the arbitrator within such period, the arbitrator shall be selected
by the American Arbitration Association. The arbitrator shall hold a hearing on
the dispute in Wilmington, Delaware within thirty (30) days after having been
selected and shall issue a written opinion within fifteen (15) days after the
hearing. The arbitrator shall also decide on the allocation of the costs of the
arbitration to the respective parties, but Employee and Company shall each be
responsible for paying the fees of their own legal counsel, if legal counsel is
obtained. Either Employee or Company, or both parties, may file the decision of
the arbitrator as a final, binding and unappealable judgment in a court of
appropriate jurisdiction. Notwithstanding the foregoing provisions of this
Section 21 to the contrary, matters in which an equitable remedy or injunctive
relief is sought by a party, including but not limited to the remedies referred
to in Section 19 hereof, shall not be required to be submitted to arbitration,
if the party seeking such remedy or relief objects thereto, but shall instead be
subject to the provisions of Sections 19 and 20 hereof.

          22. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.

          23. Authorization. In connection with the execution of this Agreement,
the Employee shall be provided with a copy of the resolutions of the Board of
Directors of the Company authorizing the execution of this Agreement on behalf
of the Company.

[SIGNATURES ON FOLLOWING PAGE]

      Employee Name: David J. Kudla, Jr.   Employment Agreement Ver. 01/2003
Dated July 1, 2004   Page 12 of 14

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          IN WITNESS WHEREOF, the parties have caused this Executive Employment
Agreement to be executed the day and year first written above.

         

  ADVANCIS PHARMACEUTICAL CORPORATION
 
       

  By:   /s/ Edward M. Rudnic, Ph.D.

     

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      Edward M. Rudnic, Ph.D.

      Chairman & CEO
 
       

      /s/ David J. Kudla, Jr.

     

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      David J. Kudla, Jr.

      Employee Name: David J. Kudla, Jr.   Employment Agreement Ver. 01/2003
Dated July 1, 2004   Page 13 of 14

 

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Schedule I

Preexisting Property:

      Employee Name: David J. Kudla, Jr.   Employment Agreement Ver. 01/2003
Dated July 1, 2004   Page 14 of 14