<PAGE>


                                                                   Exhibit 10.40


                 EXECUTIVE CHANGE OF CONTROL SEVERANCE AGREEMENT


                  THIS EXECUTIVE CHANGE OF CONTROL SEVERANCE AGREEMENT dated as
of January 1, 2000 by and between Dura Pharmaceuticals, Inc., (the "Company"),
and _____________ ("Executive");

                             W I T N E S S E T H:

                  WHEREAS, the Company desires to create a greater incentive for
Executive to remain in the employ of the Company, particularly in the event of
any possible change or threatened change of control of the Company,

                  NOW, THEREFORE, in partial consideration of Executive's past
and future services to the Company and the mutual covenants contained herein,
the parties hereto hereby agree as follows:

1.       TERMINATION FOLLOWING A CHANGE OF CONTROL.

         (a) QUALIFYING TERMINATION. Executive shall be entitled to the
compensation and benefits listed in Paragraph 1(b), in addition to compensation
and benefits to which Executive would otherwise be entitled as of the date of
termination, if Executive's employment with the Company is terminated either (i)
by the Company for any reason other than for Cause or (ii) by Executive for Good
Reason, in each case within two (2) years following the occurrence of any Change
of Control or successive Change of Control that occurs during the Period of
Coverage (in each case a "Qualified Termination") and Executive properly
executes, and does not revoke or attempt to revoke, a release of claims against
the Company, its affiliates and their employees and agents in the form attached
as EXHIBIT A.

         (b) COMPENSATION AND BENEFITS.

             (i) LUMP SUM PAYMENT OF SALARY AND BONUS. Within ten (ten)
business days after a Qualified Termination (or, if later, the last day of
any period during which the release referred to in Paragraph 3 may be revoked
by Executive), the Company shall make a lump sum cash payment to Executive,
subject to any mandatory tax withholding, equal to ____ times the sum of
Executive's Base Salary and Executive's Average Annual Bonus.

             (ii) WELFARE BENEFIT COVERAGE. The Company will, at normal employee
rates, provide Executive and, to the extent available before the Qualified
Termination, Executive's eligible dependents with coverage under the Company's
medical/dental plan, life insurance and accident plan and disability plan until
the earlier of (A) ___________ months after the date of Executive's Qualified
Termination or (B) the first date that Executive is covered under another
employer's program which provides substantially the same level of benefit
coverage without exclusion for pre-existing conditions. After this period of
coverage, Executive (and, if


                                       1.
<PAGE>


applicable, Executive's eligible dependents) may elect to continue coverage
under the Company's group medical/dental plan at Executive's own expense in
accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA") and, for purposes of determining the maximum period of COBRA
coverage, such maximum period will begin immediately following the end of
Company-subsidized coverage.

             (iii) ACCELERATION OF STOCK OPTIONS. Each outstanding Company stock
option which Executive holds at the time of a Qualified Termination, to the
extent not otherwise exercisable for all the shares of Company common stock
subject to that stock option, will immediately become exercisable for all those
option shares and may be exercised for any or all of those shares as fully
vested shares.

             (iv) ACCELERATION OF RESTRICTED STOCK. All contractual restrictions
and repurchase rights shall immediately lapse with respect to any shares of
Company restricted stock held by Executive at the time of a Qualified
Termination.

             (v) DEFERRED COMPENSATION PLAN. Solely for purposes of
determining the commencement date for the payment of any deferred
compensation to which Executive may be entitled under a Company non-qualified
deferred compensation plan, Executive's employment with the Company will be
deemed to continue for a period of ____ months after a Qualifying
Termination. However, no portion of the payments Executive is entitled to
receive under Section 1 of this Agreement will be eligible for deferral under
such plan.

             (vi) CASH-OUT OF AFFILIATE STOCK OPTIONS. Each outstanding option
granted to Executive on stock of Spiros Development Corporation II, Inc. and any
similar outstanding option granted to Executive on securities of an affiliate of
the Company shall be cancelled as of the date of Executive's Qualified
Termination. With respect to each such option, whether or not vested, Executive
shall be entitled to an immediate cash payment equal to the excess, if any, of
the aggregate Fair Market Value (as defined below) of the securities subject to
such option and the aggregated exercise price of such option.

             (vii) EXCESS TAX GROSS-UP PAYMENT. If any compensation payable
hereunder, either alone or when aggregated with other compensation payable to
Executive, would constitute a parachute payment that would subject Executive to
an excise tax under Section 4999 of the Internal Revenue Code, Executive shall
be entitled to receive an additional lump sum cash payment, subject to mandatory
tax withholding, which, when added to all compensation payable to Executive that
constitutes a parachute payment, provides Executive with the same after
tax-compensation that he would have received from such parachute payments had
none of such compensation constituted a parachute payment. The procedures for
making such payment are set forth in Section 2 hereof.

             (viii) JOB SEARCH ASSISTANCE. The Company will, at its sole
expense, provide Executive with individual outplacement counseling for up to
twelve (12) months by a provider selected by the Company at levels customary for
positions held by Executive.

             (ix) LIMITATION ON ACCELERATION. Notwithstanding the above, if it
is reasonably determined by the Company's Board of Directors, upon consultation
with Company management


                                       2.
<PAGE>


and the Company's independent auditors, that the acceleration of vesting of
stock options or restricted stock or the acceleration and cash-out of affiliate
options provided under Paragraph 1(b)(iii), (iv) or (vi) above upon a Change in
Control (to the extent that those Paragraphs provide for acceleration or
cash-out that would not otherwise occur under the terms of the instruments
evidencing such options or restricted stock) would preclude accounting for any
proposed business combination of the Company as a pooling of interests, and the
Board of Directors otherwise desires to approve such a proposed business
transaction which requires as a condition to the closing of such transaction
that it be accounted for as a pooling of interests, then, solely to the extent
necessary to permit such accounting, such acceleration or cash-out shall not
occur. The previous sentence shall not limit any acceleration of vesting or
cash-out of any option or restricted stock that would occur, in absence of
Paragraphs 1(b)(iii) (iv) and (vi) above, under the terms of the instruments
underlying such option or restricted stock.

The compensation and benefits payable hereunder shall not be reduced or offset
by any amounts that Executive earns or could earn from any other sources
following Executive's Qualified Termination. However, except to the extent the
Company expressly agrees otherwise in writing, if the Company becomes obligated
to pay Executive any severance pay or severance benefits (excluding any amounts
deemed to be received by Executive on account of the forgiveness of any loan due
by Executive, if applicable) under a separate employment or severance agreement
or arrangement, the benefits payable hereunder shall be reduced by the amount of
benefits payable under such other agreement or arrangement.

         (c) TERMINATIONS BY REASON OF SUBSEQUENT TRANSACTIONS. Notwithstanding
the foregoing, if an otherwise Qualifying Termination occurs by reason of the
sale of a subsidiary of the Company or all or a portion or the assets or
business of the Company or one of its subsidiaries and Executive is offered a
Comparable Position (as defined below) with the purchaser or the parent of the
purchaser or the sold subsidiary, then Executive shall not be entitled to any
benefits under this Paragraph 1, whether or not Executive accepts such position.
However, if Executive accepts such position and, within two (2) years following
the Change of Control, Executive's employment is involuntarily terminated
without Cause or by Executive for Good Reason, Executive shall be entitled to
the benefits under Paragraph 1(b), less any severance benefits (excluding any
amounts deemed to be received by Executive on account of the forgiveness of any
loan due by Executive, if applicable) or similar benefits payable by the entity
from which his or her employment is terminated.

2.       EXCISE TAX GROSS-UP PROCEDURES.

                  The amount of any such Tax Gross-Up to which Executive becomes
entitled under Paragraph 1(b)(vii), will be determined pursuant to the
following:

                           X  =  Y divided by (1 - (A + B + C)), where

                           X is the total dollar amount of the Tax Gross-Up
                           payable to Executive;

                           Y is the total Excise Tax imposed on Executive;


                                       3.
<PAGE>


                           A is the Excise Tax rate in effect at the time;

                           B is the highest combined marginal federal income and
                           applicable state income tax rate in effect for
                           Executive, after taking into account the
                           deductibility of state income taxes against federal
                           income taxes to the extent allowable, for the
                           calendar year in which the Tax Gross-Up is paid; and

                           C is the applicable Hospital Insurance (Medicare) Tax
                           Rate in effect for Executive for the calendar year in
                           which the Tax Gross-Up is paid;

provided if there is a change in the tax laws after the date hereof that would
render the amount determined above insufficient to fully reimburse Executive on
an after-tax basis for the amount of any Excise Tax, Executive shall be entitled
to such additional amount as may be necessary to provide him with such
reimbursement.

                  Within ninety (90) days after a determination is made by the
Internal Revenue Service or Executive's tax advisor that an item of compensation
or benefit payable hereunder constitutes a parachute payment under Code Section
280G for which Executive is liable for an Excise Tax, Executive shall identify
the nature of the payment to the Company and submit to the Company the
calculation of the Excise Tax attributable to that payment and the Tax Gross-Up
to which Executive is entitled with respect to such tax liability. The Company
will pay such Tax Gross-Up to Executive (net of all applicable withholding
taxes, including any taxes required to be withheld under Code Section 4999)
within ten (10) business days after Executive's submission of the calculation of
such Excise Tax and the resulting Tax Gross-Up, provided such calculations
represent a reasonable interpretation of the applicable law and regulations.

                  In the event that Executive's actual Excise Tax liability is
determined by a Final Determination to be greater than the Excise Tax liability
previously taken into account for purposes of the Tax Gross-Up paid to Executive
pursuant to this Section 2, then within ninety (90) days following the Final
Determination, Executive shall submit to the Company a new Excise Tax
calculation based upon the Final Determination. Within ten (10) business days
after receipt of such calculation, the Company shall pay Executive the
additional Tax Gross-Up attributable to such excess Excise Tax liability.

                  In the event that Executive's actual Excise Tax liability is
determined by a Final Determination to be less than the Excise Tax liability
previously taken into account for purposes of the Tax Gross-Up paid to Executive
pursuant to this Section 2, then Executive shall refund to the Company, promptly
upon receipt, any federal or state tax refund attributable to the Excise Tax
overpayment.

                  For purposes of this Paragraph 2, a "Final Determination"
means an audit adjustment by the Internal Revenue Service that is either (i)
agreed to by both Executive (or his estate) and the Company (such agreement by
the Company to be not unreasonably withheld) or


                                       4.
<PAGE>


(ii) sustained by a court of competent jurisdiction in a decision with which
Executive and the Company concur (such concurrence by the Company to be not
unreasonably withheld) or with respect to which the period within which an
appeal may be filed has lapsed without a notice of appeal being filed.

3.       FAILURE TO EXECUTE A RELEASE.

                  All compensation and benefits under Paragraph 1 above are in
consideration for Executive's execution of a release of claims against the
Company, its affiliates and their employees and agents in the form attached as
EXHIBIT A hereto, which release Executive does not subsequently revoke or
attempt to revoke. If Executive doesn't properly execute such a release or if
Executive attempts to revoke such release, Executive will not be entitled to any
of the benefits provided under Paragraph 1.

4.       DEFINITIONS.

         (a)      AVERAGE ANNUAL BONUS. "Average Annual Bonus" means, at any
                  time, the greatest of (i) the average of the annual bonuses
                  paid to Executive in each of the two (2) years prior to the
                  Change of Control, (ii) the average of the annual bonuses paid
                  to Executive in each of the two (2) years prior to the
                  Qualifying Termination or (iii) in the event Executive is
                  entitled to receive an annual bonus under a written agreement
                  for the year during which the Qualifying Termination occurs,
                  the annual bonus to which Executive is entitled under such
                  written agreement. In the event Executive, at the time of the
                  Qualifying Termination, has received only one (1) annual
                  bonus, the Average Annual Bonus for such Executive shall be
                  the amount of such bonus.

         (b)      BASE SALARY. "Base Salary" means the greater of the annual
                  rate of base salary in effect for Executive at the time of
                  Executive's Qualified Termination or the annual rate of base
                  salary in effect for Executive immediately before the Change
                  of Control.

         (c)      CAUSE. "Cause" means Executive's conviction of any felony,
                  Executive's commission of any act of fraud or embezzlement, or
                  Executive's unauthorized use or disclosure of confidential
                  information or trade secrets of the Company or its
                  subsidiaries.

         (d)      CHANGE OF CONTROL. A "Change of Control" shall have occurred
                  if:

                  (i)      a majority of the directors of the Company are
                           persons other than persons: (A) for whose election
                           proxies shall have been solicited by the Board of
                           Directors of the Company, or (B) who are then serving
                           as directors appointed by the Board of Directors to
                           fill vacancies on the Board of Directors caused by
                           death or resignation (but not by removal) or to fill
                           newly-created directorships; or

                  (ii)     thirty percent (30%) or more of the outstanding
                           voting power of the Company shall have been acquired
                           or beneficially owned (as defined in


                                       5.
<PAGE>


                           Rule 13d-3 under the 1934 Act or any successor rule
                           thereto) by any person or group of two or more
                           persons acting as a partnership, limited partnership,
                           syndicate, or other group acting in concert for the
                           purpose of acquiring, holding or disposing of voting
                           stock of the Company; or

                  (iii)    a reorganization, merger, consolidation or other
                           corporate transaction or sale or other disposition of
                           all or substantially all of the assets of the Company
                           occurs (other than (i) a transaction with a
                           subsidiary of the Company or (ii) a transaction in
                           which the holders of voting stock of the Company
                           immediately before the merger as a class continue to
                           hold immediately after the merger more than fifty
                           percent (50%) of all outstanding voting power of the
                           surviving or resulting corporation or its parent
                           (including, without limitation, a company which owns
                           directly or indirectly the Company or all or
                           substantially all of its pre-acquisition assets) in
                           substantially the same proportion as their ownership
                           of common stock of the Company immediately before the
                           transaction); or

                  (iv)     the Company's shareholders approve the complete
                           liquidation or dissolution of the Company.

         (e)      COMPARABLE POSITION. A Comparable Position, for purposes of
                  this Agreement, means a position with a successor to part or
                  all of the business of the Company if the terms of the
                  position do not differ from Executive's prior position with
                  the Company in any manner that would constitute Good Reason,
                  assuming that the terms of Executive's employment were changed
                  to the terms of such position with the successor.

         (f)      FAIR MARKET VALUE. For purposes of Paragraph 1(b)(vi), "Fair
                  Market Value" per unit of a security subject to an option on
                  any relevant date shall be determined under the terms of the
                  instruments evidencing the option, if such instrument provides
                  an objective method for determining such fair market value or,
                  if such instrument does not so provide, shall be determined in
                  accordance with the following provisions:

                  (i) If the security is not at the time listed or admitted to
                  trading on any Stock Exchange but is traded on the NASDAQ
                  National Market System, the Fair Market Value shall be the
                  closing selling price per unit of security on the date in
                  question, as the price is reported by the National Association
                  of Securities Dealers through the NASDAQ National Market
                  System or any successor system. If there is no closing selling
                  price for the security on the date in question, then the Fair
                  Market Value shall be the closing selling price on the last
                  preceding date for which such quotation exists; or

                  (ii) If the security is at the time listed or admitted to
                  trading on any Stock Exchange, then the Fair Market Value
                  shall be the closing selling price per unit of security on the
                  date in question on the Stock Exchange determined by the Plan
                  Administrator to be the primary market for the security, as
                  such price is officially


                                       6.
<PAGE>


                  quoted in the composite tape of transactions on such exchange.
                  If there is no closing selling price for the security on the
                  date in question, then the Fair Market Value shall be the
                  closing selling price on the last preceding date for which
                  such quotation exists; or

                  (iii) If the security is at the time neither listed nor
                  admitted to trading on any Stock Exchange nor traded on the
                  NASDAQ National Market System, then such Fair Market Value
                  shall be determined pursuant to an appraisal made by an
                  independent appraiser mutually agreed to by the Company and
                  Executive.

         (g)      GOOD REASON. "Good Reason" means (i) a material reduction in
                  Executive's level of duties or responsibilities or the nature
                  of Executive's functions or (ii) a reduction in Executive's
                  base salary or a reduction in Executive's total cash
                  compensation (consisting of base salary and target bonus), or
                  (iii) the failure to provide Executive with employee benefits
                  (including medical/dental, disability and life insurance) that
                  are substantially equivalent to the benefits provided to
                  Executive immediately before the Change of Control, or (iv) a
                  relocation of Executive's principal place of employment by
                  more than thirty (30) miles, if the new location is both (A)
                  more than thirty (30) miles from Executive's principal
                  residence and (B) farther from Executive's principal residence
                  than Executive's principal place of employment immediately
                  before such relocation, or (v) the breach of the terms of any
                  compensation agreement or arrangement between the Company and
                  Executive or (vi) the repudiation or failure by the Company or
                  its successor to acknowledge (upon Executive's written
                  request) or to comply with any of its obligations under this
                  Agreement.

         (h)      PERIOD OF COVERAGE. The "Period of Coverage" shall be the
                  period commencing with the date of this Agreement and ending
                  ten (10) years thereafter, unless either (i) the Company, by
                  written action of its Board of Directors, extends the period
                  or (ii) the Company has entered into a definitive agreement to
                  consummate a transaction that would constitute a Change of
                  Control, in which case the period of coverage will continue
                  until the date specified by the Board of Directors or the date
                  on which the pending transaction is consummated or abandoned,
                  respectively.

5.       ARBITRATION.

                  Except as otherwise provided in Paragraph 2, any controversy
between Executive and the Company involving the construction or application of
any of the terms, provisions, or conditions of this Agreement or otherwise
arising out of or relating to this Agreement shall be settled by binding
arbitration in accordance with the then current applicable rules of the American
Arbitration Association, and judgment on the award rendered by the arbitrator(s)
may be entered by any court having jurisdiction thereof. The location of the
arbitration shall be in San Diego, California. The expenses incurred by both
parties in settling such controversy, including the expenses of arbitration and
reasonable attorney fees, shall be born by the Company.


                                       7.
<PAGE>


6.       MISCELLANEOUS.

         (a)      CAPTIONS. The captions in this Agreement are not part of the
                  provisions hereof, are merely for the purpose of reference and
                  shall have no force or effect.

         (b)      GOVERNING LAW. This Agreement is made in, and shall be
                  governed by and construed in accordance with the laws of, the
                  State of California, to the extent not preempted by the
                  Employee Retirement Income Security Act of 1974, as amended.
                  This Agreement, to the extent that it provides for severance
                  benefits, together with similar agreements with other
                  executives of the Company, is intended, for purposes of ERISA,
                  to qualify as an employee welfare benefit plan for a select
                  group of management or highly compensated employees.

         (c)      AMENDMENT OR MODIFICATION. This Agreement contains the entire
                  agreement of the parties with respect to the subject matter
                  hereof and no amendment or modification shall be effective
                  unless made in writing executed by an authorized officer of
                  the Company and Executive.

         (d)      SUCCESSORS AND BENEFICIARIES. This Agreement shall be binding
                  on and inure to the benefit of the successors, assigns, heirs,
                  devisees and personal representatives of the parties,
                  including any successor to the Company by merger or
                  combination and any purchaser of all or substantially all of
                  the assets of the Company. Should Executive die before receipt
                  of all benefits to which Executive becomes entitled under this
                  Agreement, the payment of such benefits will be made, on the
                  due date or dates hereunder had Executive survived, to the
                  executors or administrators of Executive's estate.

         (e)      NOTICES. All notices given hereunder shall be in writing and
                  shall be sent by registered or certified mail or delivered by
                  hand and, if intended for the Company, shall be addressed to
                  it (if sent by mail) or delivered to it (if delivered by hand)
                  at its principal office for the attention of the Secretary of
                  the Company or at such other address and for the attention of
                  such other person of which the Company shall have given notice
                  to Executive in the manner herein provided; and, if intended
                  for Executive, shall be delivered personally or shall be
                  addressed (if sent by mail) at the then current residence
                  address as reflected in the personnel records of the Company,
                  or at such other address or to such designee of which
                  Executive shall have given notice to the Company in the manner
                  herein provided. Each such notice shall be deemed to be given
                  on the date received at the address of the addressee or, if
                  delivered personally, on the date so delivered.

         (f)      DISTRIBUTIONS. The benefits to which Executive may become
                  entitled under this Agreement will be paid, when due, from the
                  general assets of the Company. Executive's right (or the right
                  of the executors or administrators of Executive's estate) to
                  receive any such payments will at all times be that of a
                  general creditor of the Company and will have no priority over
                  the claims of other general creditors of the Company. The
                  benefits provided under this Agreement are


                                       8.
<PAGE>


                  intended to be unfunded for purposes of the Employee
                  Retirement Security Act of 1974.

         (g)      RIGHTS AND REMEDIES. All rights and remedies provided pursuant
                  to this Agreement or by law will be cumulative, and no such
                  right or remedy will be exclusive of any other. A party may
                  pursue any one or more rights or remedies hereunder or may
                  seek damages or specific performance in the event of another
                  party's breach hereunder or may pursue any other remedy by law
                  or equity, whether or not stated in this Agreement.

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

                                    DURA PHARMACEUTICALS, INC.


                                    By
                                      --------------------------------------
                                       Cam L. Garner
                                       Chairman and Chief Executive Officer



                                    EXECUTIVE:


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



                                       9.
<PAGE>


                                     [LOGO]


                                    EXHIBIT A

                    SEPARATION AGREEMENT AND GENERAL RELEASE

         In consideration of the severance benefits to be provided to ______
("Employee") under the Executive Change of Control Severance Agreement (the
"Severance Agreement"), dated as of January 1, 2000, by and between Dura
Pharmaceuticals, Inc., a Delaware corporation ("Dura") and Employee, this
General Release (the "Release") is entered into as of ___________, 20__, by
and between Dura and Employee with respect to the following:

         (a) Employee has been employed as a _______________ for Dura.

         (b) The employment relationship was terminated effective ______________
, 20__.

         (c) Dura and Employee desire to enter into an agreement with regard to
termination of that employment relationship to resolve any and all known or
unknown claims between them, neither party admitting any liability or fault.

         THE PARTIES THEREFORE HEREBY AGREE AND PROMISE in consideration of all
of the following terms and conditions as follows:

         1.       Employee's employment with Dura is terminated effective
                  ____________, 20__ .

         2.       As contemplated by the Severance Agreement, and in
                  consideration of the severance benefit (excluding any amounts
                  deemed to be received by Employee on account of the
                  forgiveness of any loan due by Employee, if applicable) to be
                  provided to Employee under the Severance Agreement, Employee
                  irrevocably and unconditionally releases forever Dura and each
                  of its stockholders, predecessors, successors, assigns,
                  agents, directors, officers, employees, representatives,
                  affiliates, and all persons acting by, through, under, or in
                  concert with any of them (collectively referred to as
                  "Releases"), from any and all claims, complaints, liabilities,
                  obligations, agreements, damages, and actions of any nature,
                  known or unknown, suspected or unsuspected, that he/she ever
                  had, now has, or hereafter may have by reason of any matter,
                  cause, or thing relating in any way to his/her employment
                  relationship or the termination of his/her employment
                  relationship with Dura.

         3.       Employee further waives any an all claims based on state or
                  federal statutes prohibiting discrimination involving age,
                  sex, race, color, national origin, physical or mental
                  impairment, marital status, or religion, including but not
                  limited to Title VII, the Equal Pay Act, or the Fair
                  Employment and Housing Act, whether such claim be based upon
                  an action filed by the Employee or by a governmental agency.


                                        1
<PAGE>


         4.       Employee expressively waives and relinquishes all rights and
                  benefits afforded by Section 1542 of the Civil Code of the
                  State of California, and does so understanding and
                  acknowledging the significance of this waiver of Section 1542.
                  Section 1542 of the Civil Code of the State of California
                  states as follows:

                  "A General release does not extend to claims which the
                  creditor does not know or suspect to exist in his/her favor at
                  the time of the executing the release, which if known by
                  his/her must have materially affected his/her settlement with
                  the debtor."

                  Thus, notwithstanding the provisions of Section 1542, and for
                  the purpose of implementing a full and complete release and
                  discharge of the Releasees, Employee expressly acknowledges
                  that this Agreement is intended to include in its effect,
                  without limitation, all claims that Employee does not know or
                  suspect to exist in his/her favor at the time of execution,
                  and the extinguishment of any of these claims.

         5.       Employee hereby reaffirms his/her obligations under the
                  Confidentiality Agreement and Acknowledgement of
                  Confidentiality previously executed by Employee.

         6.       This Agreement shall be governed by and interpreted according
                  to the laws of the State of California without regard to its
                  conflict of laws provisions. Any controversy or claim arising
                  out of or relating to this Agreement, or the breach thereof,
                  shall be settled by binding arbitration in San Diego County,
                  California, administered by the American Arbitration
                  Association in accordance with its applicable rules. Judgment
                  on the award rendered by the arbitrator may be entered in any
                  court having jurisdiction thereof.

         7.       Should any provision of this Agreement be declared or be
                  determined by a court to be illegal or invalid, the validity
                  of the remaining parts, terms, and provisions shall not be
                  affected thereby and said illegal or invalid part, term, or
                  provision shall be deemed not to be a part of this Agreement.

         8.       This Agreement and all of its provisions shall be binding
                  upon, and inure to the benefit of, any successors, assigns,
                  personal representatives or heirs of the parties hereto.

         9.       Employee represents and acknowledges that in executing this
                  Agreement, he/she does not rely and has not relied upon any
                  representation or statement not set forth herein made by any
                  of the Releasees, their agents or representatives. Employee
                  confirms that he/she has been encouraged to and has had the
                  opportunity to seek the advice of legal counsel with respect
                  to executing this Agreement. The parties acknowledge that each
                  has read this Agreement, that each fully understands their
                  rights, privileges and duties under this Agreement, and that
                  each enters into this Agreement voluntarily and without
                  coercion or duress.

         10.      [INCLUDE FOR EMPLOYEES AGE 40+] Employee acknowledges he/she
                  is entitled to twenty-one (21) days' time in which to consider
                  this Agreement. Employee acknowledges that he/she has obtained
                  or had the opportunity to obtain the advice and counsel from
                  the legal representative of his/her choice and that he/she
                  executes this


                                        2
<PAGE>


                  Agreement having had sufficient time within which to consider
                  its terms. Employee represents that if he/she executes this
                  Agreement before twenty-one (21) days have elapsed, he/she
                  does so voluntarily, upon the advice and with the approval of
                  his/her legal counsel, and that he/she voluntarily waives any
                  remaining consideration period.

         11.      [INCLUDE FOR EMPLOYEES AGE 40+] Employee understands that
                  after executing this Agreement, he/she has the right to revoke
                  it within seven (7) days after his/her execution of it.
                  Employee understands that this Agreement will not become
                  effective and enforceable unless the seven (7) day revocation
                  period passes and Employee does not revoke the Agreement in
                  writing. Employee understands that this Agreement may not be
                  revoked after the seven (7) day revocation period has passed.
                  Employee understands that any revocation of this Agreement
                  must be in writing and delivered to Dura within the seven (7)
                  day period.

                 PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES
                    A RELEASE OF ALL KNOWN OR UNKNOWN CLAIMS.


         Executed as of the date first written above at ___________________.
                                                         (City and State)

                  After signature by Employee, an original of this Separation
Agreement and General Release is to be forwarded to the Human Resources
Development Department.



DURA PHARMACEUTICALS, INC.                          EMPLOYEE


By:
   ----------------------------------               ----------------------------

Name:                                                      (Employee name)
     --------------------------------

Title:
      -------------------------------



                                        3
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                           DURA PHARMACEUTICALS, INC.
                EXECUTIVE CHANGE OF CONTROL SEVERANCE AGREEMENTS
                          ENTERED INTO JANUARY 1, 2000
                          ----------------------------

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                                                                        SECTION 1(b)(i)                  SECTION 1(b)(ii)
                                                               (b)      Lump   Sum   Payment   of         WELFARE BENEFIT
               NAME                           TITLE            Salary and Bonus                              COVERAGE
------------------------------------ ------------------------- ----------------------------------- -----------------------------
------------------------------------ ------------------------- ----------------------------------- -----------------------------
<S>                                  <C>                       <C>                                 <C>
Cam L. Garner                        Chairman and CEO          2.0 times the sum of Base Salary    Continuation for 24 months
                                                               plus Average Annual Bonus           following a Qualified
                                                                                                   Termination

------------------------------------ ------------------------- ----------------------------------- -----------------------------
------------------------------------ ------------------------- ----------------------------------- -----------------------------
Robert S. Whitehead                  President                 1.5 times the sum of Base Salary    Continuation for 18 months
David S. Kabakoff                    President                 plus Average Annual Bonus           following a Qualified
Mitchell R. Woodbury                 Sr. Vice President                                            Termination
Michael T. Borer                     Sr. Vice President
Lloyd E. Flanders                    Sr. Vice President
------------------------------------ ------------------------- ----------------------------------- -----------------------------
------------------------------------ ------------------------- ----------------------------------- -----------------------------
John R. Cook                         Vice President            .75 times the sum of Base Salary    Continuation for 9 months
Chester Damecki                      Vice President            plus Average Annual Bonus           following a Qualified
Diane S. Goostree                    Vice President                                                Termination
Susan M. Hanan                       Vice President
Malcolm R. Hill                      Vice President
Robert W. Keith                      Vice President
Damien Lamendola                     Vice President
Erle T. Mast                         Vice President
Peter W. Schineller                  Vice President
Robert K. Schultz                    Vice President
J. Gregory Wease                     Vice President
Carol A. Wells                       Vice President
Clyde L. Witham                      Vice President
------------------------------------ ------------------------- ----------------------------------- -----------------------------

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

                                                  SECTION 1(b)(v)
                                             DEFERRED COMPENSATION PLAN
                                     ----------------------------------------------
                                     ----------------------------------------------
<S>                                  <C>
Cam L. Garner                        Continuation as a non-employee participant
                                     for 24 months following a Qualified
                                     Termination

------------------------------------ ----------------------------------------------
------------------------------------ ----------------------------------------------
Robert S. Whitehead                  Continuation as a non-employee participant
David S. Kabakoff                    for 18 months following a Qualified
Mitchell R. Woodbury                 Termination
Michael T. Borer
Lloyd E. Flanders
------------------------------------ ----------------------------------------------
------------------------------------ ----------------------------------------------
John R. Cook                         Continuation as a non-employee participant
Chester Damecki                      for 9 months following a Qualified
Diane S. Goostree                    Termination
Susan M. Hanan
Malcolm R. Hill
Robert W. Keith
Damien Lamendola
Erle T. Mast
Peter W. Schineller
Robert K. Schultz
J. Gregory Wease
Carol A. Wells
Clyde L. Witham
------------------------------------


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