EX-10.3






Exhibit 10.3




EMPLOYMENT AGREEMENT




     THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of December 30, 2004, as
amended and restated effective March 20, 2007, as further amended and restated effective November
20, 2007 and as further amended and restated effective December 31, 2008 by and among Biodel Inc.,
a Delaware corporation with an address at 6 West Kenosia Avenue, Danbury, CT 06810-7352 (“BIODEL”,
“Employer” or the “Company”), and Solomon S. Steiner, Ph.D., an individual residing at 24 Old Wagon
Road, Mt. Kisco, New York 10509 (“Employee”).



WITNESSETH:




     WHEREAS, Employer desires to secure the services of Employee as President and Chief Executive
Officer; and



     WHEREAS, Employee desires to enter into the employ of Employer in accordance with the terms
and conditions herein set forth;



     WHEREAS, the parties entered into an agreement as of December 30, 2004, which was amended and
restated effective March 20, 2007 and further amended and restated as of November 20, 2007;



     WHEREAS, the parties wish to further amend such agreement so that such agreement as so amended
shall read in its entirety as follows.



     NOW, THEREFORE, in consideration of the premises and of the covenants and agreements of the
parties herein set forth, the parties hereto hereby covenant and agree as follows:



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     1. Position of Employment. Subject to the terms and conditions hereof, Employer
hereby agrees to employ the services of Employee as President and Chief Executive Officer and
Employee hereby accepts such employment and agrees to serve the Company in such capacity. Employee
shall have the duties, authority and responsibilities customarily associated with the offices of
President and Chief Executive Officer and shall report to the Company’s Board of Directors. During
the period that Employee is employed by Employer, Employee shall devote substantially all of his
business time and attention to the performance of the duties described herein. Notwithstanding the
foregoing, Employee shall be entitled to serve on the Board of Directors of Vyteris, Inc. and the
Boards of other Companies if approved by the Company’s Board of Directors, to pursue charitable
endeavors and to participate in professional organizations, provided that such activities do not
interfere in any material respect with the performance by Employee of his duties hereunder.
Employee shall at all time act in good faith in the performance of his duties. Employee agrees to
abide by the rules, regulations, instructions, personnel practices and policies of the Company and
any changes therein which may be adopted from time to time by the Company applicable to employees
generally, including, but not limited to, those relating to the protection of the Company’s
proprietary trade secrets and confidential information.



     2. Contract Term. Unless terminated earlier pursuant to Section 4 below, the initial
term of Employee’s employment under this Agreement shall be for the period from the date of this
Agreement (the “Commencement Date”) to November 20, 2009 (the
“Initial Termination Date”). Following the Initial Termination Date, this Agreement shall be
automatically renewed for successive one-year terms (each, a “Renewal Term”) unless, at least three
months prior to the Initial Termination Date or the expiration of a



2









 







Renewal Term, as applicable,
Employee or BIODEL in his or its respective sole discretion notifies the other party in writing of
his or its intent to terminate this Employment Agreement as of the Initial Termination Date or the
expiration of a Renewal Term, as applicable. The term of Employee’s employment hereunder,
including any renewal periods pursuant to the immediately preceding sentence, shall be hereafter
referred to as the “Contract Term.” Notwithstanding the foregoing, if a Change of Control occurs
during the Contract Term, the Contract Term shall automatically extend for a period of two (2)
years from the effective date of Change of Control and shall automatically terminate at the end of
such period. “Change of Control” shall have the Definition set forth in Appendix A hereto, which is
hereby incorporated by reference.



     3. Salary and Additional Benefits.



          3.1 Employer shall pay to Employee and Employee agrees to accept as compensation for his
services to be rendered hereunder, an initial base salary of Three Hundred and Seventy-Five
Thousand Dollars ($375,000) (“Base Salary”) per year for the period commencing with the
Commencement Date and ending on the completion of the Contract Term, payable in equal installments
on the 15th and last day of each month. In the event the Board of Directors shall by resolution
increase the base salary, then this agreement shall be deemed so amended as of the effective date
of such resolution or such other date specified in such resolution.




          3.2 During the term of this Agreement, Employee, as President and CEO, shall be entitled to
receive an annual year-end bonus in cash in an amount of not more than fifty percent (50%) of Base
Salary as determined by the Board of Directors.



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Such bonus shall be paid no later than March 15 of
the calendar year next following the calendar year for which the bonus is paid. At the time the
Board of Directors considers the Employee’s bonus but not less than annually, the Board of
Directors shall also consider an award to the employee of stock or options to acquire stock under
any stock award plan then in effect.




          3.3 Employee shall be entitled to vacations, at such times as Employee shall reasonably
determine, of at least four weeks each year of employment hereunder.




          3.4 In addition to the foregoing, Employee shall also(i) participate in and be entitled to
receive medical insurance and other benefits substantially equivalent to the normal benefits
provided by BIODEL to its employees generally and (ii) participate in various retirement, welfare,
fringe benefit and executive perquisite plans, programs and arrangements of the Company to the
extent the senior executives of the Company generally are eligible for participation under the
terms of such plans, programs and arrangements including, without limitation, plans, programs and
arrangements for the granting of options to purchase securities of the Company or other equity
based compensation. Employee acknowledges the right of Employer to change, amend, or terminate any
of the benefits referred to in this paragraph, at any time in a manner which does not discriminate
between Employee and other company employees who are eligible to participate in such benefits.




          3.5 Employer shall reimburse Employee for any ordinary, necessary and reasonable travel,
maintenance and entertainment expenses incurred by the Employee in the course of his duties under
this Agreement, in accordance with the Employer’s



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customary policies and practices in effect from
time to time, upon submission to the Employer of appropriate vouchers and receipts evidencing the
same.




          3.6 The Company shall pay a mandatory bonus of $250,000 (payable to Steiner Ventures) upon (a)
stockholders equity of the Company exceeding $20mm, (b) if any class of securities of the Company
are registered under the Securities Act of 1933, (b) the Company enters into stategic partnership
with an initial advance, payment or investment of $5 mm, or (d) five years from the date of
execution. Such bonus shall be paid in any event, including, without limitation, whether or not
the employeed is then employed by the Company and whether or not the employee is then deceased.




     4. Termination. The employment of the Employee by the Company pursuant to this
Agreement shall terminate upon the occurrence of any of the following:



          4.1 Expiration of the Contract Term in accordance with Section 2;




          4.2 At the election of the Company, for cause, upon written notice by the Company to the
Employee. For the purposes of this Section 4.2, cause for termination shall be deemed to exist upon
(a) a good faith finding by the Board of Directors of the Company of (i) failure of the Employee to
perform in any material respect his assigned duties for the Company customarily associated with the
Office of Chief Executive Officer, which failure continues for ten (10) days subsequent to written
notice from the
Company to the Employee of such failure, or (ii) dishonesty, gross negligence or misconduct not
involving any exercise of business judgment in good faith relating to the performance of his duties
for the Company; (b) the conviction of the Employee of, or the entry of a pleading of guilty or
nolo contendere by the Employee to, any crime involving



5









 






moral turpitude or any felony; or (c) the
material breach by the Employee of any terms of this Agreement, which breach continues for ten (10)
days subsequent to written notice from the Company to the Employee of the breach;




          4.3 Upon the death or, at the election of the Company, disability of the Employee. As used in
this Agreement, the term “disability” shall mean the inability of the Employee, due to a physical
or mental disability, for a period of 180 days, whether or not consecutive, during any 360-day
period to perform the services contemplated under this Agreement. A determination of disability
shall be made by a physician satisfactory to both the Employee and the Company; provided that if
the Employee and the Company do not agree on a physician, the Employee and the Company shall each
select a physician and these two together shall select a third physician, whose determination as to
disability shall be binding on all parties. Nothing herein shall be construed to violate any
Federal or State law including the Family and Medical Leave Act of 1993, 29 U.S.C.S. §2601 et
seq., and the Americans With Disabilities Act, 42 U.S.C.S. §12101 et seq.




          4.4 The Company may terminate the employment of the Employee at any time without cause
immediately upon giving the Employee 30 days’ prior written notice of termination or payment in
lieu of notice. The Employee may terminate his employment at any time for good reason immediately
upon giving the Employer thirty (45) days prior written notice of termination; provided, however,
that the Employee may terminate his employment for good reason only if such notice is given within 90 days of the initial
existence of any of the conditions described in the following sentence and the Employee provides
the Company a period of 30 days after the receipt of such notice during which the Company may
remedy such conditions. Furthermore, the Executive’s



6









 






termination of employment for good reason
must occur no later than one year following the initial existence of such condition. For the
purpose of this Section 4.4, good reason for termination shall exist upon (i) the material breach
by the Company of any terms of this Agreement or (ii) the assignment of the Employee of any duties
inconsistent in any material respect with the Employee’s positions with the Company as set forth in
this Agreement (including status, offices and titles), authority, duties or responsibilities as
contemplated by this Agreement or any action by the Company which results in a material diminution
in such positions, authority, duties or responsibilities, excluding for this purpose any isolated,
insubstantial and inadvertent action not taken in bad faith and which is promptly remedied by the
Company.




     5. Effect of Termination.



          5.1 Termination for Cause. In the event the Employee’s employment is terminated for
cause pursuant to Section 4.2, the Company shall pay to the Employee the compensation and benefits
which would otherwise be payable or accrued to him through the last day of his actual employment by
the Company.




          5.2 Termination for Death or Disability. If the Employee’s employment is terminated
by death or because of disability pursuant to Section 4.3, the Company shall pay to the estate of
the Employee or to the Employee, as the case may be, the compensation and benefits which would
otherwise be payable or accrued to the
Employee through the date of his termination and an additional six months because of death or
disability; such payments shall be made at the time they would otherwise have been paid as set
forth in Section 3. The Company will continue health benefits for one year after the date of
termination.




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          5.3 Termination Without Cause. If the Employee’s employment is terminated (a) at the
election of the Company pursuant to Section 4.4 without cause, or (b) at the election of the
Employee pursuant to Section 4.4 for good reason, and in consideration of the post-termination
non-compete and non-solicitation agreement set forth in Section 6, the Company shall pay to the
Employee the compensation and benefits payable or accrued to him under Section 4 (including the
provision of medical insurance, disability and life insurance), at the times provided in Section 3,
through the longer of (x) two (2) years following the termination date or (y) the balance of the
term of this Agreement.




          5.4 Payments Subject to Section 409A. Subject to the provisions in this Section 5.4,
any severance payments or benefits under this Agreement shall begin only upon the date of the
Employee’s “separation from service” (determined as set forth below) which occurs on or after the
date of termination of the Employee’s employment. The following rules shall apply with respect to
distribution of the payments and benefits, if any, to be provided to the Employee under this
Agreement:




               a. It is intended that each installment of the severance payments and benefits provided under
this Agreement shall be treated as a separate “payment” for purposes of Section 409A of the Code
and the guidance issued thereunder (“Section 409A”). Neither the Company nor the Employee shall
have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically
permitted or required by Section 409A.



               b. If, as of the date of Employee’s “separation from service” from the Company, the Employee
is not a “specified employee” (within the meaning of



8









 







Section 409A), then each installment of the
severance payments and benefits shall be made on the dates and terms set forth in this Agreement.



               c. If, as of the date of the Employee’s “separation from service” from the Company, the
Employee is a “specified employee” (within the meaning of Section 409A), then:



                    i. Each installment of the severance payments and benefits due under this Agreement that, in
accordance with the dates and terms set forth herein, will in all circumstances, regardless of when
the separation from service occurs, be paid within the Short-Term Deferral Period (as hereinafter
defined) shall be treated as a short-term deferral within the meaning of Treasury Regulation §
1.409A-1(b)(4) to the maximum extent permissible under § 409A. For purposes of this Agreement, the
“Short-Term Deferral Period” means the period ending on the later of the fifteenth day of the third
month following the end of the Employee’s tax year in which the separation from service occurs and
the fifteenth day of the third month following the end of the Company’s tax year in which the
separation from service occurs; and



                    ii. Each installment of the severance payments and benefits due under this Agreement that is
not described in paragraph (c)(i) above and that would, absent this subsection, be paid within the
six-month period following the Employee’s “separation from service” from the Company shall not be
paid until the date that is six months and one day after such separation from service (or, if earlier, the Employee’s
death), with any such installments that are required to be delayed being accumulated during the
six-month period and paid in a lump sum on the date that is six months and one day following the
Employee’s separation from service and any



9









 




subsequent installments, if any, being paid in
accordance with the dates and terms set forth herein; provided, however, that the preceding
provisions of this sentence shall not apply to any installment of severance payments and benefits
if and to the maximum extent that that such installment is deemed to be paid under a separation pay
plan that does not provide for a deferral of compensation by reason of the application of Treasury
Regulation § 1.409A-1(b)(9)(iii) (relating to separation pay upon an involuntary separation from
service). Any installments that qualify for the exception under Treasury Regulation §
1.409A-1(b)(9)(iii) must be paid no later than the last day of the Employee’s second taxable year
following the taxable year in which the separation from service occurs.




               d. The determination of whether and when the Employee’s separation from service from the
Company has occurred shall be made and in a manner consistent with, and based on the presumptions
set forth in, Treasury Regulation § 1.409A-1(h). Solely for purposes of this paragraph d,
“Company” shall include all persons with whom the Company would be considered a single employer
under Section 414(b) and 414(c) of the Code.



               e. All reimbursements and in-kind benefits provided under this Agreement shall be made or
provided in accordance with the requirements of Section 409A to the extent that such reimbursements
or in-kind benefits are subject to Section 409A, including, where applicable, the requirements that (i) any reimbursement is for expenses
incurred during the Employee’s lifetime (or during a shorter period of time specified in this
Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not
affect the expenses eligible for reimbursement in any



10









 




other calendar year, (iii) the reimbursement
of an eligible expense will be made on or before the last day of the calendar year following the
year in which the expense is incurred and (iv) the right to reimbursement is not subject to set off
or liquidation or exchange for any other benefit.




     6. Non-Compete and Non-Solicitation.



          6.1 The Employee recognizes that his willingness to enter into the restrictive covenants
contained in this Section 6 are a critical condition precedent to the willingness of BIODEL to
enter into and perform under this Agreement. The Employee also acknowledges that the restrictions
contained in this Section 6 will not materially or unreasonably interfere with the Employee’s
ability to earn a living. The Employee acknowledges that the restrictions contained in this
Section 6 are necessary to protect the legitimate interests of BIODEL and to ensure that Employee
will not reveal or use BIODEL’s confidential, proprietary or trade secret information or unfairly
compete with BIODEL after his termination.




          6.2 During the Contract Term and, in the event the Employee’s employment is terminated for
cause pursuant to Section 4.2, through the day immediately prior to the first anniversary of the
termination date, or, if the Employee’s employment is terminated (a) at the election of the Company
pursuant to Section 4.4 without cause, or (b) at the election of the Employee pursuant to Section
4.4 for good reason, for so long as the Company shall pay to the Employee the compensation and benefits payable or accrued to him under
Section 4 (including the provision of medical insurance, disability and life insurance), at the
times provided in Section 4, the Employee will not directly or indirectly:



11









 







               (a) as an individual proprietor, partner, stockholder, officer, employee, consultant,
director, joint venturer, investor, agent, distributor, dealer, representative, lender, or in any
other capacity whatsoever (other than as the holder of outstanding stock or equity of another
entity), engage in the business of delivering insulin by the oral, sublingual or injectable route
of administration; or



               (b) recruit, solicit or induce, or attempt to induce, any employee or employees of the Company
to terminate their employment with, or otherwise cease their relationship with, the Company, or
hire any such employee; or



               (c) knowingly solicit, divert, limit or take away, or attempt to divert or to take away, the
business or patronage of any of the clients, customers, dealers, distributors, representatives or
accounts, or prospective clients, customers, dealers, distributors, representatives or accounts, of
the Company which were contacted, solicited or served by employees of the Company while the
Employee was employed by the Company.



          6.3. In the event that any court of competent jurisdiction determines that the duration or the
geographic scope, or both, of the non-competition and non-solicitation provisions set forth in this
Section 6 are unreasonable and that such provisions are to that extent unenforceable, the parties
hereto agree that the provisions shall remain in full force and effect for the greatest time period and in the greatest area that
would not render them unenforceable.




          6.4 The restrictions contained in this Section 6 are necessary for the protection of the
Company’s legitimate interests, confidential, proprietary or trade secret information, or goodwill;
or to protect the Company from the misuse or disclosure of its



12









 






confidential, proprietary or trade
secret information; or to protect the Company from unfair competition. The Employee agrees that any
breach of this Section 6 will cause the Company substantial and irreparable damage and therefore,
in the event of any such breach, in addition to such other remedies which may be available, the
Company shall have the right to seek specific performance and injunctive relief.




          6.5 The Employee agrees that the duration and geographic restrictions imposed in this
Agreement are fair and reasonable and are reasonably required for the protection of the Company.
To the extent any portion of this Agreement, or any portion of any provision of this Agreement, is
held to be invalid or unenforceable, it shall be revised to reflect most nearly the parties’ intent
and the remainder of the provision or provisions of this Agreement shall be unaffected and shall
continue in full force and effect.




          6.6 For purposes of this Section 6 and Section 7, the “Company” refers to the Company and any
of its affiliates.




     7. Confidential Information



          7.1. By executing this Agreement, the Employee recognizes and agrees that he is employed in a
position with the Company in which he will have access to certain confidential and proprietary
information concerning the business of the Company which is of great value to the Company and which, if used in competition with the Company, would
render great and irreparable harm to the Company. Such information includes, but is not limited
to, information relating to business operations; services; network; systems; strategic business
plans; marketing plans; long-range goals; assets and liabilities; technical and engineering
methods, processes, and/or know-how; research and



13









 






development activities; products; computer
software and programs; marketing data; pricing; product designs; discoveries; inventions; budgets;
projections; customers and suppliers; development plans, strategies and forecasts; new products and
services; and financial statements. This information is provided to the Employee solely for use in
the course of his employment with, and for the benefit of, the Company.




          7.2. To ensure that such confidential information provided to the Employee is maintained in
confidence by him and not used by him to unfairly compete with the Company, the Employee shall not,
during the course of the Employee’s employment and at any time within two (2) years thereafter
following the termination of his employment (regardless of whether the Employee’s termination is
voluntary or involuntary, or with or without cause), divulge, furnish or make accessible to anyone,
or use in any way other than in furtherance of the interests of the Company: (i) any confidential,
proprietary or secret knowledge or information which the Employee has acquired or become acquainted
with, or will acquire or become acquainted with, during the course of the Employee’s employment
with the Company; (ii) any confidential or proprietary information concerning the Company’s
customers, including but not limited to, information concerning a customers need, practice or
preferences; (iii) any confidential, proprietary or trade secret research and development
activities of the Company; and (iv) any other confidential, proprietary or trade secret information relating to the
business of the Company. The Employee agrees that this restriction applies to all such information
regardless of whether such information was developed by him. This restriction shall not apply to
information (i) which is or becomes public knowledge through no fault of the Employee, (ii) is
known to the Employee at the time of its



14









 






disclosure as shown by his prior written records, or (iii)
is disclosed to the Employee by a third party who is under no confidential obligation to the
Company. The Employee further agrees that upon request by the Company, or upon the termination of
the Employee’s employment, the Employee will immediately return to the Company any and all such
information in the Employee’s possession or under the Employee’s control.




     8. Representations and Warranties of the Employee. The Employee represents and
warrants to the Company as follows:



          8.1. All facts concerning the Employee’s background, education, experience and employment
history as described to the Company in writing are true and correct;




          8.2 The Employee’s execution of this Agreement and employment with the Company does not and
will not conflict with any obligations that the Employee has to any current or former employer, any
other individual, corporation, partnership, association, trust or any other entity or organization,
including any instrumentality of government;




          8.3 All files, records, compilations, reports, studies, manuals, memoranda, notebooks,
documents, financial reports and statements, correspondence, and other confidential information
whether prepared by the Employee or otherwise coming into the possession of the Employee, and all copies thereof, are, and shall remain, the
exclusive property of the Company, and shall be delivered to the Company as soon as reasonably
practicable and at the expense of the Company in the event of the Employee’s termination or at any
other time if requested by the Company.



15









 







          8.4 The Employee acknowledges that the Company may, and contemplates, purchasing “key man life
insurance” on Employee with the Company as sole benificiary.




          8.5 The Employee confirms that all IP created or owned by Steiner Ventures, since it’s
inception in April, 2003 belongs to the Comapany.




     9. Indemnification. Employer shall indemnify Employee and hold him harmless against
any and all claims and liabilities asserted against Employee which arise in connection with the
performance of Employee’s duties and responsibilities while acting in Employee’s capacity as an
employee of Employer, except Employer shall not be obligated to indemnify or hold Employee harmless
against any claim or liability which arises out of Employee’s bad faith or intentional misconduct.



     10. Property Rights. With respect to information, inventions and discoveries
developed, made or conceived of by Employee, either alone or with others, at any time during
Employee’s employment by the Company and whether or not within working hours, arising out of such
employment or pertinent to any field of business or research in which, during such employment, the
Company is engaged or (if such is known to or ascertainable by Employee) is considering engaging,
Employee agrees:



          10.1 that all such information, inventions and discoveries, whether or not patented or
patentable, shall be and remain the exclusive property of the Company;




          10.2 to disclose promptly to an authorized representative of the Company all such information
in Employee’s possession as to possible applications and uses thereof;



16









 







          10.3 not to file any patent application relating to any such invention or discovery except
with the prior written consent of an authorized officer of the Company;




          10.4 that Employee hereby waives and releases any and all rights Employee may have in and to
such information, inventions and discoveries and hereby assigns to the Company and/or its nominees
all of Employee’s right, title and interest in them, and all Employee’s right, title and interest
in any patent, patent application, copyright or other property right based thereon. Employee hereby
irrevocably designates and appoints the Company and each of its duly authorized officers and agents
as Employee’s agent and attorney-in-fact to act for Employee and in Employee’s behalf and stead to
execute and file any document and to do all other lawfully permitted acts to further the
prosecution, issuance and enforcement of any such patent, patent application, copyright or other
property right with the same force and effect as if executed and delivered by Employee; and




          10.5 at the request of the Company and without expense to Employee, to execute such documents
and perform such other acts as the Company deems necessary or appropriate for the Company to obtain
patents on such inventions in a jurisdiction or jurisdictions designated by the Company, and to
assign to the Company or its designee such inventions and any patent applications and patents
relating thereto.




     11. Notices. All notices required or permitted under this Agreement shall be in
writing and shall be deemed effective upon personal delivery or upon deposit in the
United States Post Office, by registered or certified mail, postage prepaid, addressed to the other
party at the address shown above, or at such other address or addresses as either party shall
designate to the other in accordance with this Section 10.



17









 





     12. Governing Law. This Agreement shall be construed, interpreted and enforced in
accordance with the internal laws (and not the law of conflicts) of the State of New York.



     13. Jurisdiction. Except as otherwise provided for herein, each of the parties (a)
submits to the exclusive jurisdiction of any state court sitting in New York County, New York or
federal court sitting in the Southern District of New York in any action or proceeding arising out
of or relating to this Agreement, (b) agrees that all claims in respect of the action or proceeding
may be heard and determined in any such court and (c) agrees not to bring any action or proceeding
arising out of or relating to this Agreement in any other court. Each of the parties waives any
defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives
any bond, surety or other security that might be required of any other party with respect thereto.
Any party may make service on another party by sending or delivering a copy of the process to the
party to be served at the address and in the manner provided for giving of notices in Section 13.
Nothing in this Section 13, however, shall affect the right of any party to serve legal process in
any other manner permitted by law.



     14. Survival. The provisions of Sections 6, 7, 8, 9, 10, 11, 12 and 13 shall survive
the termination of this Agreement.



     15. Pronouns. Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the singular forms of
nouns and pronouns shall include the plural, and vice versa.



18









 





     16. Entire Agreement. This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings, whether written or oral, relating
to the subject matter of this Agreement.



     17. Amendment. This Agreement may be amended or modified only by a written
instrument executed by all of the parties hereto.



     18. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of all of the parties hereto and their respective successors and assigns, including any
corporation with which or into which the Company may be merged or which may succeed to its assets
or business; provided, however, that the obligations of the Employee are personal and shall not be
assigned by him.



     19. Miscellaneous.



          19.1 No delay or omission by either party in exercising any right under this Agreement shall
operate as a waiver of that or any other right. A waiver or consent given by the Company on any one
occasion shall be effective only in that instance and shall not be construed as a bar or waiver of
any right on any other occasion.




          19.2 The captions of the sections of this Agreement are for convenience of reference only and
in no way define, limit or affect the scope or substance of any section of this Agreement.




          19.3 In case any provision of this Agreement shall be invalid, illegal or otherwise
unenforceable, the validity, legality and enforceability of the remaining provisions shall in no
way be affected or impaired thereby.




     20. Section 409A. This Agreement is intended to comply with the provisions of Section
409A and this Agreement shall, to the extent practicable, be construed in accordance



19









 




therewith.
The Company makes no representation or warranty and shall have no liability to the Employee or any
other person if any provisions of this Agreement are determined to constitute deferred compensation
subject to Section 409A and do not satisfy an exemption from, or the conditions of, Section 409A.




     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first
written above.



	 	 	 	 	 
	 	BIODEL INC.

 	 
	 	By:  	/s/ Gerard Michel
 	 
	 	 	Name:  	Gerard Michel 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	 	 
	 	                                 /s/ Solomon S. Steiner
 	 
	 	Solomon S. Steiner 	 
	 	 	 



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APPENDIX A



For purposes of this Agreement, a “Change of Control” shall be deemed to have occurred, if any one
of the following events occurs:






(a) the acquisition by any person or group of beneficial ownership of more than
50% of the outstanding shares of Common Stock of the Company, or, if there are
then outstanding any other voting securities of the Company, such acquisition
of more than 50% of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors, except for any of the following acquisitions of beneficial ownership
of Common Stock or other voting securities of the Company: (i) by the Company
or any Employee benefit plan (or related trust) sponsored or maintained by the
Company or any entity controlled by the Company; (ii) by Solomon S. Steiner; or
(iii) by any person or entity during the lifetime Solomon S. Steiner if the
shares acquired were beneficially owned by Solomon S. Steiner immediately prior
to their acquisition and the acquisition is a transfer to a trust, partnership,
corporation or other entity in which Solomon S. Steiner owns a majority of the
beneficial interests;




(b) the Company sells all or substantially all of its assets (or consummates
any transaction having a similar effect) or the Company merges or consolidates
with another entity or completes a reorganization unless the holders of the
voting securities of the Company outstanding immediately prior to the
transaction own immediately after the transaction in approximately the same
proportions 50% or more of the combined voting power of the voting securities
of the entity purchasing the assets or surviving the merger or consolidation or
the voting securities of its parent company, or, in the case of a
reorganization, 50% or more of the combined voting power of the voting
securities of the Company; Notwithstanding the foregoing, any purchase or
redemption of outstanding shares of Common Stock or other voting securities by
the Company resulting in an increase in the percentage of outstanding shares or
other voting securities beneficially owned by any person or group shall be
deemed to constitute a reorganization; however, no increase in the percentage
of outstanding shares or other voting securities beneficially owned by Solomon
S. Steiner or any person or entities referred to in (a)(i) or (iii) above
resulting from any redemption of shares or other voting securities by the
Company shall result in a Change of Control;




(c) the Company is liquidated; or




(d) the Board (if the Company continues to own its business) or the



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board of
directors or comparable governing body of any successor owner of its business
(as a result of a transaction which is not itself a Change of Control) consists
of a majority of directors or members who are not Incumbent Directors. For
purposes of this Agreement, (A) “voting securities” means securities whose
holders are entitled to vote in the election of all or a majority of the
authorized number of directors at the time the determination of ‘voting
securities” status is being made and (B) 50% or more of the combined voting
power shall refer to the voting power to elect a majority of the authorized
number of directors determined at that time. “Voting securities” shall not
include preferred stock or other securities whose holders are entitled to vote
in the election of all or a majority of the authorized number of directors upon
the occurrence of some event or circumstance which has not occurred and such
rights to vote are not in effect at the time of the determination of “voting
securities” status. Preferred stock and other securities whose holders are then
entitled to vote for less than a majority of the authorized number of
directors, shall not be considered “voting securities.”




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