Exhibit 10.3

# CONSULTING AGREEMENT

This
Consulting Agreement, including the attached Exhibit A (this Agreement), is
made and entered into as of July 28, 2003 (the Effective Date) by and between
Adolor Corporation, a Delaware corporation having offices at 700 Pennsylvania Drive,
Exton, PA 19352 (the Company), and Paul Goddard, an individual residing at
(Consultant).

Consultant
currently serves as a member of the Board of Directors of the Company (the
Board).

The
Company desires to retain Consultant as an independent contractor to perform consulting
services for the Company, and Consultant is willing to perform such services, on terms set
forth more fully below, in consideration of the mutual promises contained herein. The
parties agree as follows:

# 1. SERVICES AND
COMPENSATION

(a)    
          Consultant agrees to perform for the Company the services described in Exhibit A
          attached hereto (Services).

(b)The Company agrees to pay to Consultant the compensation set forth in
          Exhibit A for the performance of the Services, subject to the limitations on
          such compensation set forth in Exhibit A.

# 2. CONFIDENTIALITY

(a)       
          Confidential Information means any Company proprietary information,
          technical data, trade secrets or know-how, including, but not limited to,
          research and product plans, products, services, markets, developments,
          inventions, processes, formulas, technology, marketing, finances or other
          business information disclosed to Consultant by the Company, either directly or
          indirectly, in writing, orally or otherwise.

(b)       
          Consultant will not, during or subsequent to the term of this Agreement, use
          Confidential Information for any purpose whatsoever other than the performance
          of the Services on behalf of the Company or the fulfillment of Consultants
          duties as a member of the Board, if applicable, or disclose Confidential
          Information to any third party. Consultant agrees that Confidential Information
          shall remain the sole property of the Company. Consultant further agrees to take
          all reasonable precautions to prevent any unauthorized disclosure of
          Confidential Information. Notwithstanding the above, Consultants
          obligation under this Section 2(b) relating to Confidential Information shall
          not apply to information which (i) is known to Consultant at the time of
          disclosure to Consultant by the Company as evidenced by written records of
          Consultant, (ii) has become publicly known and made generally available through
          no wrongful act of Consultant, or (iii) has been rightfully received by
          Consultant from a third party authorized to make such disclosure.

(c)       
          Consultant agrees that Consultant will not, during the term of this Agreement,
          improperly use or disclose to the Company any proprietary information or trade
          secrets of any former or current employer or other person or entity with which
          Consultant has an agreement or duty to keep in confidence information acquired
          by Consultant in confidence and that Consultant will not bring onto the premises
          of the Company any unpublished document or proprietary information belonging to
          such employer, person or entity unless consented to in writing by such employer,
          person or entity.

(d)       
          Consultant recognizes that the Company has received and in the future will
          receive from third parties their confidential or proprietary information subject
          to a duty on the Companys part to maintain the confidentiality of such
          information and to use it only for certain limited purposes. Consultant agrees
          that Consultant owes the Company and such third parties, during the term of this
          Agreement and thereafter, a duty to hold all such confidential or proprietary
          information in the strictest confidence and not to disclose it to any person,
          firm or corporation or to use it except as necessary in carrying out the
          Services for the Company or in carrying out Consultants duties as a member
          of the Board, if applicable, consistent with the Companys agreement with
          such third party.

(e)       
          Upon the termination of this Agreement, or upon the Companys earlier
          request, Consultant will deliver to the Company all of the Companys
          property relating to, and all tangible embodiments of, Confidential Information
          in Consultants possession or control.

# 3. OWNERSHIP

(a)       
          Consultant hereby irrevocably assigns to the Company all right, title and
          interest in and to information (including, without limitation, business plans
          and/or business information), technology, know-how, materials, notes, records,
          designs, ideas (whether or not patentable), inventions, improvements, devices,
          developments, discoveries, compositions, trade secrets, processes, methods
          and/or techniques conceived, reduced to practice or made by Consultant alone or
          jointly with others in the course of performing the Services hereunder
          (collectively, Inventions).

(b)       
          Consultant agrees that Consultant shall sign, execute and acknowledge without
          cost, but at the expense of the Company, any and all documents and to perform
          such acts as may be necessary, useful or convenient for the purposes of
          perfecting the foregoing assignments and obtaining, enforcing and defending
          intellectual property rights in any and all countries with respect to
          inventions. It is understood and agreed that the Company or the Companys
          designee shall have the sole right, but not the obligation, to prosecute and
          maintain patent applications and patents worldwide with respect to Inventions.

(c)       
          Upon the termination of this Agreement, or upon the Companys earlier
          requests, Consultant will deliver to the Company all property relating to, and
          all tangible embodiments of, Inventions in Consultants possession or
          control.

(d)       
          Consultant agrees that if in the course of performing the Services, Consultant
          incorporates into any invention developed hereunder any invention, improvement,
          development concept, discovery or other proprietary information owned by
          Consultant or in which Consultant has an interest (Item), the
          Company is hereby granted and shall have a non-exclusive, royalty-free,
          perpetual, irrevocable, worldwide license to make, have made, modify, reproduce,
          display, use and sell such Item as part of or in connection with such Invention.

(e)       
          Consultant agrees that if the Company is unable because of Consultants
          unavailability, dissolution, mental or physical incapacity, or for any other
          reason, to secure Consultants signature to apply for or to pursue any
          application for any United States or foreign patents or copyright registrations
          covering any Invention assigned to the Company above, then Consultant hereby
          irrevocably designates and appoints the Company and its duly authorized officers
          and agents as Consultants agent and attorney-in-fact, to act for and in
          Consultants behalf and stead to execute and file any such applications and
          to do all other lawfully permitted acts to further the prosecution and issuance
          of patents and copyright registrations thereon with the same legal force and
          effect as if executed by Consultant.

# 4. REPORTS.

Consultant agrees that Consultant will from time to time
          during the term of this Agreement or any extension thereof keep the Company
          advised as to Consultants progress in performing the Services hereunder
          and that Consultant will, as reasonably requested by the Company, prepare
          written reports with respect thereto. It is understood that the time required in
          the preparation of such written reports shall be considered time devoted to the
          performance of the Services by Consultant. Reports prepared by Consultant shall
          be the sole property of the Company.

# 5. CONFLICTING OBLIGATIONS.

Consultant certifies that Consultant has
          no outstanding agreement or obligation that is in conflict with any of the
          provisions of this Agreement or with Consultants responsibilities to the
          Company, or that would preclude Consultant from complying with the provisions
          hereof, and further certifies that Consultant will not enter into any such
          conflicting agreement during the term of this Agreement. Consultant acknowledges
          his obligations under the Companys Statement of Policy Concerning Trading
          Policies and Conflicts of Interest and agrees that he will promptly notify the
          Company of any development that could conflict with his obligations to the
          Company as a member of the Board or under this Agreement.

# 6. TERMS AND
TERMINATION

(a)       
          This Agreement will commence on the date first written above and will
          automatically terminate one (1) year after such date.

(b)       
          Either party may terminate this Agreement upon giving thirty (30) days
          prior written notice thereof to the other party. Any such notice shall be given
          at the applicable address shown above or such other address as either party may
          notify the other of and shall be deemed given upon delivery if personally
          delivered, or forty-eight (48) hours after deposited in the United States mail,
          postage prepaid, registered or certified mail, return receipt requested.

(c)       
          Upon termination of this Agreement, all rights and duties of the parties
          hereunder shall cease except:

| | (i)                        the
Company shall be obliged to pay, within thirty (30) days after receipt of
          Consultants final statement, all amounts owing to Consultant for unpaid
          Services and related expenses, if any, in accordance with the provisions of
          Section 1 (Services and Compensation) hereof, and
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)                        Sections
2 (Confidentiality), 3 (Ownership), 7 (Independent Contractor), 8           (Arbitration
and Equitable Relief) and 9 (General) shall survive termination of           this
Agreement.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.
          INDEPENDENT CONTRACTOR. Nothing in this Agreement shall in any way
          be construed to constitute Consultant as an agent, employee or representative of
          the Company, but Consultant shall perform the Services hereunder as an
          independent contractor. Consultant acknowledges and agrees that Consultant is
          obligated to report as income all compensation received by Consultant pursuant
          to this Agreement.

8.
          ARBITRATION AND EQUITABLE RELIEF. The Company and Consultant agree
          that any dispute or controversy arising out of, in relation to, or in connection
          with this Agreement, or the making, interpretation, construction, performance or
          breach thereof, shall be finally settled by binding arbitration in Pennsylvania
          under the then current rules of the American Arbitration Association by one (1)
          arbitrator appointed in accordance with such rules. The arbitrator may grant
          injunctive or other relief in such dispute or controversy. The decision of the
          arbitrator, shall be final, conclusive and binding on the parties to the
          arbitration. Judgment may be entered on the arbitrators decision in any
          court of competent jurisdiction. The parties agree that, any provision of
          applicable law notwithstanding, they will not request and the arbitrator shall
          have no authority to award, punitive or exemplary damages against any party. The
          costs of the arbitration, including administrative and arbitrators fees,
          shall be shared equally by the parties. Each party shall bear the cost of its
          own attorneys fees and expert witness fees.

# 9. GENERAL

(a)       
          Notices. Any required notice shall be given in writing at the address of
          each party set forth above, or to such other address as either party may
          substitute by written notice to the other in the manner contemplated in this
          Section 9, and shall be deemed given when delivered or, if delivery is not
          accomplished by reason or some fault of the addressee, when tendered.

(b)       
          Assignment. Neither this Agreement nor any right hereunder or interest
          herein may be assigned or transferred by Consultant without the express written
          consent of the Company. The Company may assign this Agreement to an entity that
          succeeds to substantially all of the business or assets of the Company.

(c)       
          Governing Law. This Agreement shall be governed by, and construed and
          interpreted under, the laws of the Commonwealth of Pennsylvania without
          reference to conflicts of laws principles.

(d)       
          No Subcontracting. Consultant shall not subcontract any portion of
          Consultants duties under this Agreement without the prior written consent
          of the Company.

(e)       
          Severability. In the event that any provision of this Agreementbecomes or is declared by a court of competent jurisdiction to be illegal,
          unenforceable or void, this Agreement shall continue in full force and effect
          without said provision, provided that no such severability shall be effective if
          it materially changes the economic benefit of this Agreement to either the
          Company or Consultant.

(f)       
          Modification Waiver. This Agreement may not be altered, amended or
          modified in any way except by writing signed by both parties. Waiver of any term
          or provision of this Agreement or forbearance to enforce any term or provision
          by either party shall not constitute a waiver as to any subsequent breach or
          failure of the same term or provision or a waiver of any other term or provision
          of this Agreement.

(g)       
          Entire Agreement. The parties hereto acknowledge that this Agreement and
          the Exhibits hereto set forth the entire agreement and understanding of the
          parties as to the subject matter hereof, and supersedes all prior discussion,
          agreements and writings in respect hereto.

(h)Counterparts. This Agreement may be executed in counterpart, each of
          which shall be deemed an original, but both of which together shall constitute
          one and the same instrument.

IN
WITNESS WHEREOF, the undersigned are duly authorized to execute this Agreement on behalf
of the Company and Consultant, as applicable.

|                        |                 
|----------------------- | ----------------
|ADOLOR CORPORATION      | CONSULTANT      
|By /s/ Bruce A. Peacock | /s/ Paul Goddard
|Bruce A. Peacock        | Paul Goddard    
|Chief Executive Officer

EXHIBIT A

SERVICES AND
COMPENSATION

1.    
          Description of Services.

|a. | Consultant shall provide strategic business advice and related assistance to
          the Companys Chief Executive Officer and management team in the role of
          advisor.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|b. | Consultant shall make himself reasonably available for consultation with the
          Companys management for up to a
          maximum of 17 days per year, as the Company may reasonably request. The Company
          shall not request Consultant to work less than a minimum 17 days per year.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2.    
          Consideration for Services.

|a. | $8,500, paid quarterly.
|-- | -----------------------

|b. | Option to purchase 4,000 shares of the Companys Common Stock, subject to
          the terms and conditions of the applicable option agreement and 2003 Stock-Based
          Incentive Compensation Plan.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|c. | Reasonable expenses as authorized.
|-- | ----------------------------------

|d. | Notwithstanding anything in this Agreement to the contrary, in no event shall
          the aggregate consideration (on an annual or other basis) paid by the Company to
          Consultant pursuant to this Agreement exceed an amount such that Consultant
          would not be considered an independent member of the Board under any
          applicable laws, rules or regulations promulgated by the Securities and Exchange
          Commission, the National Association of Securities Dealers, the Nasdaq National
          Market or any other regulatory authority or body to which the Company is
          subject.
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