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                                                                   EXHIBIT 10.1


                               SEVERANCE AGREEMENT


        THIS AGREEMENT is entered into as of March 26, 2001, by and between
___________ (the "Employee") and MICROCIDE PHARMACEUTICALS, INC., a Delaware
corporation (the "Company").

        1. Term of Agreement.

        This Agreement shall remain in effect from the date hereof until the
earlier of:

           (a) The date when the Employee's employment with the Company
terminates for any reason not described in Section 6; or

           (b) The date when the Company has met all of its obligations under
this Agreement following a Termination Event, as defined in Section 6, below.

        2. Definition of Change in Control.

        For all purposes under this Agreement, "Change in Control" shall mean
(i) a merger, reorganization or other transaction or series of related
transactions (other than financings) following which the shareholders of the
Company do not own a majority of the capital stock of the surviving corporation
or (ii) the sale of all or substantially all of the assets of the Company.

        3. Definition of Good Reason.

        For all purposes under this Agreement, "Good Reason" shall mean that the
Employee:

           (a) Has been demoted or has incurred a material reduction in his
authority or responsibility as an employee of the Company, including (without
limitation) a reduction or elimination of his authority to approve expenditures
or to hire, promote, demote or terminate subordinates;

           (b) Has incurred a reduction in his total compensation (including
benefits) as an employee of the Company, other than pursuant to a Company-wide
reduction of total compensation (including benefits) for employees of the
Company generally;

           (c) Has not received a contemporaneous increase in his total
compensation (including benefits) which is commensurate with increases in total
compensation (including benefits) received by a majority of executive-level
employees of the Company with duties and responsibilities substantially
comparable to those of the Employee;


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           (d) Has not received a bonus commensurate with bonuses (if any)
received by a majority of executive-level employees of the Company with duties
and responsibilities substantially comparable to those of the Employee; or

           (e) Has been notified that his principal place of work as an employee
of the Company will be relocated by a distance of 50 miles or more.

        4. Definition of Cause.

        For all purposes under this Agreement, "Cause", shall mean:

           (a) A willful act by the Employee which constitutes misconduct or
fraud and which is injurious to the Company; provided, however, that no act, or
failure to act, by the Employee shall be considered "willful" unless committed
without good faith and without a reasonable belief that the act or omission was
in the Company's best interest; or

           (b) Conviction of, or a plea of "guilty" or "no contest" to, a
felony.

        The Board of Directors of the Company shall have sole discretion with
respect to whether any act or failure to act constitutes "Cause" for purposes of
this Agreement.

        5. Definition of Continuation Period.

        For all purposes under this Agreement, "Continuation Period" shall mean
the period commencing on the date when the termination of the Employee's
employment under Section 6 is effective and ending on the earlier of:

           (a) The date twelve (12) months after the date when the employment
termination was effective; or

           (b) The date of the Employee's death.

        6. Entitlement to Severance Pay and Benefits.

        The Employee shall be entitled to receive the severance pay described in
Section 7 (the "Severance Pay") and the benefits described in Section 8 from the
Company if, and only if, one of the following events occurs (each a "Termination
Event"):

           (a) Within the first 12-month period after the occurrence of a Change
in Control, the Employee voluntarily resigns his employment for Good Reason; or


           (b) Within the first 12-month period after the occurrence of a Change
in Control, the Company terminates the Employee's employment for any reason
other than Cause.

        7. Amount of Severance Pay.

        During the Continuation Period, the Company shall pay the Employee
Severance Pay at an annual rate equal to the sum of:


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           (a) The Employee's base compensation at the annual rate in effect on
the date when the termination of his employment with the Company is effective;
plus

           (b) The arithmetic mean of the Employee's annual bonuses for the last
three calendar years completed prior to the date when the termination of his
employment with the Company is effective. In the event that the Employee
received no bonus from the Company for one or more of such calendar years, the
years in which no bonus was paid shall be disregarded and the arithmetic mean of
the Employee's bonuses for the remaining years (if any) shall be used.

        Such amount shall be paid pro-rata at periodic intervals in accordance
with the Company's standard payroll procedures.

        8. Other Benefits.

           (a) Stock options and Restricted Stock. All unvested stock options
and shares of restricted stock granted to Employee by the Company shall vest
immediately upon the occurrence of a Termination Event. The post-termination
exercise grace period under the Employee's stock options shall commence at the
end of the Continuation Period. The Employee represents that he has consulted or
will consult a tax adviser regarding the impact of this Subsection (a) on the
tax treatment of incentive stock options and shares of restricted stock.

           (b) Group Insurance. At the commencement of the Continuation Period,
the Employee (and, where applicable, his dependents) shall he entitled to
convert his key employee long-term disability policy and group life insurance
policy into individual policies pursuant to the terms of such policies. Should
the Employee elect to convert either or both of such policies, the Company will
pay the premiums for such policy or policies during the Continuation Period. At
the commencement of the Continuation Period, the Employee shall be eligible to
continue his group health continuation coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1986, and the Company will pay the premiums for
such coverage during the Continuation Period. The foregoing notwithstanding, in
the event that the Employee becomes eligible for comparable group insurance
coverage in connection with new employment, the premium payments by the Company
under this Subsection (b) shall terminate immediately.

           (c) Outplacement Services. Upon the occurrence of a Termination
Event, the Employee shall be entitled to reasonable outplacement services at the
Company's expense. Such services shall be provided by a firm selected by the
Employee from a list compiled by the Company and shall be limited to a period of
six consecutive months.

        9. Limitation on Payments.

           (a) Basic Rule. Any other provision of this Agreement
notwithstanding, the Company shall not be required to make any payment or
property transfer to, or for the benefit of, the Employee (under this Agreement
or otherwise) that would be nondeductible by the Company by reason of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), or that
would subject the Employee to the excise tax described in Section 4999 of the
Code. All calculations required by this Section 9 shall be performed by the
independent auditors retained by the Company most recently prior to the Change
in Control (the "Auditors"), based on information supplied by the


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Company and the Employee, and shall be binding on the Company and the Employee.
All fees and expenses of the Auditors shall be paid by the Company.

           (b) Reductions. If the amount of the aggregate payments or property
transfers to the Employee must be reduced under this Section 9, then the
Employee shall direct in which order the payments or transfers are to be
reduced, but no change in the timing of any payment or transfer shall be made
without the Company's consent. As a result of uncertainty in the application of
sections 280G and 4999 of the Code at the time of an initial determination by
the Auditors hereunder, it is possible that a payment will have been made by the
Company that should not have been made (an "Overpayment") or that an additional
payment that will not have been made by the Company could have been made (an
"Underpayment"). In the event that the Auditors, based upon the assertion of a
deficiency by the Internal Revenue Service against the Company or the Employee
that the Auditors believe has a high probability of success, determine that an
Overpayment has been made, such Overpayment shall be treated for all purposes as
a loan to the Employee that he shall repay to the Company, together with
interest at the applicable federal rate specified in section 7872(f)(2) of the
Code; provided, however, that no amount shall be payable by the Employee to the
Company if and to the extent that such payment would not reduce the amount that
is nondeductible under section 280G of the Code or is subject to an excise tax
under section 4999 of the Code. In the event that the Auditors determine that an
Underpayment has occurred, such Underpayment shall promptly be paid or
transferred by the Company to, or for the benefit of, the Employee, together
with interest at the applicable federal rate specified in section 7872(f)(2) of
the Code.

        10. Non-Solicitation.

            After the occurrence of a Termination Event, the Employee agrees
that for a period of two years from the date of the Termination Event (the
"Non-Solicitation Term") he will not directly or indirectly solicit for
employment any employee of the Company who was employed by the Company at the
time of the occurrence of the Termination Event and remains in the employment of
the Company during the Non-Solicitation Term.

        11. Successors.

            (a) Company's Successors. The Company shall require any successor
(whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets, by an agreement in substance and form
satisfactory to the Employee, to assume this Agreement and to agree expressly to
perform this Agreement in the same manner and to the same extent as the Company
would be required to perform it in the absence of a succession. For all purposes
under this Agreement, the term "Company" shall include any successor to the
Company's business and/or assets which executes and delivers the assumption
agreement described in this Subsection (a) or which becomes bound by this
Agreement by operation of law.

            (b) Employee's Successors. This Agreement and all rights of the
Employee hereunder shall inure to the benefit of, and be enforceable by, the
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.


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        12. Miscellaneous Provisions.

            (a) Notice. Notices and all other communications contemplated by
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by U.S. registered or certified mail,
return receipt requested and postage prepaid. In the case of the Employee,
mailed notices shall be addressed to him at the home address which he most
recently communicated to the Company in writing. In the case of the Company,
mailed notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary.

            (b) Waiver. No provision of this Agreement shall be modified, waived
or discharged unless the modification, waiver or discharge is agreed to in
writing and signed by the Employee and by an authorized officer of the Company
(other than the Employee). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at another time.

            (c) Whole Agreement. No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof.

            (d) No Setoff; Withholding Taxes. There shall be no right of setoff
or counterclaim, with respect to any claim, debt or obligation, against payments
to the Employee under this Agreement. All payments made under this Agreement
shall be subject to reduction to reflect taxes required to be withheld by law.

            (e) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California.

            (f) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.

            (g) Potential Pooling Transactions. In the event the Board
determines that the acceleration of options pursuant to Sections 8(a) above
would preclude accounting for a proposed business transaction involving a Change
in Control as a "Pooling of Interests," but the Board otherwise desires to
approve and account for such transaction as a "Pooling of Interests," the
acceleration of options described in Sections 8(a) above shall be null and void,
and the Company shall enter into a consulting agreement with the employee
covering services and compensation to be determined by the parties at that time.
Such agreement shall be for a period of three years and shall not be subject to
earlier termination unless by mutual consent of the parties.

            (h) Arbitration. Except as otherwise provided in Section 9, any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in San Jose, California, in accordance
with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrator's award in any court having jurisdiction.
Punitive damages shall not be awarded.


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            (i) No Assignment of Benefits. The rights of any person to payments
or benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process, and any action in violation of this subsection (i) shall be
void.

            (j) Employment Taxes. All payments made pursuant to this Agreement
will be subject to withholding of applicable income and employment taxes.

Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together will constitute one and
the same instrument.



                                        Microcide Pharmaceuticals, Inc.


                                        ---------------------------------------
                                        By:
                                        Title:


                                        [Employee]

                                        ---------------------------------------