8-K

BIODEL INC.

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K8e2TbxP7epkhwgWtRGGxigJDgGzuEXMCepbtkWyMGD+am0M0Xzb0IlKQCCsAEZA BDcmglqE70ax6U/cI4NQTw== 0000950123-09-000216.txt : 20090107 0000950123-09-000216.hdr.sgml : 20090107 20090107161811 ACCESSION NUMBER: 0000950123-09-000216 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20081231 ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090107 DATE AS OF CHANGE: 20090107 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Biodel Inc CENTRAL INDEX KEY: 0001322505 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-33451 FILM NUMBER: 09513288 BUSINESS ADDRESS: STREET 1: 100 SAW MILL ROAD CITY: DANBURY STATE: CT ZIP: 06810 BUSINESS PHONE: 203-796-5000 MAIL ADDRESS: STREET 1: 100 SAW MILL ROAD CITY: DANBURY STATE: CT ZIP: 06810 8-K 1 y73827e8vk.htm FORM 8-K 8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): January 7, 2009 (December 31, 2008)

BIODEL INC.

(Exact name of registrant as specified in its charter)

Commission File Number 001-33451


Delaware		90-0136863
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

100 Saw Mill Road Danbury, Connecticut		06810
(Address of principal executive offices)		(Zip code)

(203) 796-5000
(Registrant’s telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Change of Control and Executive Severance Agreements

Effective as of December 31, 2008, Biodel Inc. (the “Company”) entered into new change of control and executive severance agreements with certain specified employees, including its named executive officers (as used in Instruction 4 to Item 5.02 of Form 8-K) in order to comply with the final regulations issued under Section 409A of the Internal Revenue Code of 1986, as amended (“409A”).

The change of control agreement and executive severance agreement provide that:

(A) the executive’s annual bonus, if any, will not be permitted to be deferred;

(B) the definition of “good reason” no longer includes notice of non-renewal of the agreement by the Company;

(C) the executive officer will not be considered to have terminated employment for “good reason” unless: (1) the executive officer provides notice to the Company within 90 days of the initial existence of the basis for his or her claim to have “good reason” to terminate his or her employment, (2) the Company fails to remedy the condition that is claimed to constitute “good reason” within 30 days of receiving such notice and (3) the executive’s subsequent termination of employment actually occurs no more than one year following the Company’s receipt of such notice;

(D) if the executive officer is a “specified employee” as of the date of his or her “separation from service” from the Company (as each term is defined in 409A), each installment of severance payments and benefits due to him or her that would be payable before the six month anniversary of his or her separation from service will not be paid until the date that is six months and one day after his or her separation from service, with any installments that accumulate during the six month period being paid in a lump sum on such date and any subsequent installments being paid in installments as set forth in the agreement; and

(E) the term of the agreement will continue through the duration of the executive’s employment with the Company and not expire unless and until there is a termination of employment.

All other terms of the previous form of change of control agreement and form of executive severance agreement remained unchanged.

The foregoing description is qualified in its entirety by reference to the full text of the form of change of control agreement and the form of executive severance agreement, which are filed as Exhibit 10.1 and Exhibit 10.2 to this Current Report on Form 8-K.

Employment Agreements

Effective as of December 31, 2008, the Company entered into new employment agreements with Solomon S. Steiner, its chief executive officer and president and Roderike Pohl, its Vice President, Research.

Drs. Steiner and Pohl’s employment agreements provide for the changes described above in clauses (C) and (D).

The foregoing description is qualified in its entirety by reference to the full text of the employment agreements, which are filed as Exhibit 10.3 and Exhibit 10.4 to this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

See Exhibit Index attached hereto

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Date: January 7, 2009	BIODEL INC.
	By:	/s/ Gerard J. Michel
		Gerard J. Michel, Chief Financial Officer

EXHIBIT INDEX


Exhibit No.		Description

10.1		Form of Change of Control Agreement entered into between the registrant and certain of its executive officers.

10.2		Form of Executive Severance Agreement entered into between the registrant and certain of its executive officers.

10.3		Employment Agreement entered into between the registrant and Solomon S. Steiner, dated December 31, 2008.

10.4		Employment Agreement entered into between the registrant and Roderike Pohl, dated December 31, 2008.

EX-10.1 2 y73827exv10w1.htm EX-10.1: FORM OF CHANGE OF CONTROL AGREEMENT EX-10.1

Exhibit 10.1

BIODEL INC.

CHANGE OF CONTROL AGREEMENT

This Change of Control Agreement (this “Agreement”), dated and effective as of , is between Biodel Inc., a Delaware corporation (the “Company”), and (the “Executive”).

WHEREAS the board of directors of the Company (the “Board”) has determined that it is in the best interests of the Company and its shareholders to ensure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined in Section 1 hereof) of the Company;

WHEREAS the Board believes it is imperative to diminish the inevitable distraction of the Executive arising from the personal uncertainties and risks created by a pending or threatened Change of Control, to encourage the Executive’s attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Executive with reasonable compensation and benefit arrangements upon a Change of Control;

WHEREAS the parties entered into a change of control agreement as of ___; and

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

NOW THEREFORE, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement.

1. DEFINITIONS

For purposes of this Agreement, the following terms shall have the respective meanings:

(a) “Accrued Obligations” shall have the meaning set forth in Section 8.1;

(b) “Change of Control” shall have the Definition set forth in Appendix A hereto, which is hereby incorporated by reference;

(d) “Change of Control Period” shall mean the two (2) year period commencing on the Change of Control Date and ending on the second anniversary of such date;

(e) “Incumbent Directors” includes only those persons who are: (i) serving as directors of the Company on the date of this Agreement or, (ii) elected by a majority of the directors who then constitute Incumbent Directors or selected by a majority of such directors to be nominated for election by the stockholders

and are elected. In no event, however, shall any director whose election to office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents on behalf of a person or entity other than the Board be an Incumbent Director;

(f) “Person”, “Acquisition”, “Beneficial Ownership” and “Group.” The term “person” shall have the meaning set forth in the Securities Exchange Act of 1934 and the terms “beneficial ownership,” “acquisition,” and “group” shall have the meanings set forth in Rules 13d-3 and 13d-5 of the Rules of the Security and Exchange Commission adopted under the Securities Exchange Act of 1934 except that shares which a person or group has the right to acquire shall not be deemed beneficially owned until the right is exercised and the shares are so acquired.

(g) “Three-Year Average Annual Bonus” shall have the meaning set forth in Section 5.2.

2. TERM

The term of this Agreement (“Term”) shall commence on the date this Agreement is executed by the Executive and the Company and shall continue through the duration of the Executive’s employment with the Company.

3. EMPLOYMENT

3.1 CHANGE OF CONTROL PERIOD

During the Change of Control Period, the Company hereby agrees to continue the Executive in its employ or in the employ of its affiliated companies, and the Executive hereby agrees to remain in the employ of the Company or its affiliated companies, in accordance with the terms and provisions of this Agreement; provided, however, that either the Company or the Executive may terminate the employment relationship during the Change of Control Period subject to the terms of this Agreement.

3.2 POSITION AND DUTIES

During the Change of Control Period, the Executive’s position, authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held immediately preceding the Change of Control Date.

3.3 LOCATION

During the Change of Control Period, the Executive’s services shall be performed at the location of the Executive’s assigned worksite as of the Change of Control Date.

3.4 EMPLOYMENT AT WILL

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The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment of the Executive by the Company or its affiliated companies is “at will” and may be terminated by either the Executive or the Company or its affiliated companies at any time with or without cause. Moreover, if prior to the Change of Control Date, the Executive’s employment with the Company or its affiliated companies terminates for any reason, then the Executive shall have no further rights under this Agreement; provided, however, that the Company may not avoid liability for any termination payments that would have been required during the Change of Control Period pursuant to Section 8 hereof by terminating the Executive prior to the Change of Control Period where such termination is carried out in anticipation of a Change of Control and the principal motivating purpose is to avoid liability for such termination payments.

4. ATTENTION AND EFFORT

During the Change of Control Period, and excluding any periods of paid time-off to which the Executive is entitled, the Executive will devote such of his productive time, ability, attention and effort as shall be reasonably necessary to the business and affairs of the Company and the discharge of the responsibilities assigned to him hereunder, and will use his reasonable best efforts to perform faithfully and efficiently such responsibilities. It shall not be a violation of this Agreement for the Executive to (a) serve on corporate, civic or charitable boards or committees, (b) deliver lectures, fulfill speaking engagements or teach at educational institutions, (c) manage personal investments, (d) continue to conduct any business or profession conducted by Employee at the date of this Agreement or (e) engage in activities permitted by the policies of the Company or as specifically permitted by the Company, so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities in accordance with this Agreement. It is expressly understood and agreed that to the extent any such activities have been conducted by the Executive prior to the Change of Control Period, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) during the Change of Control Period shall not thereafter be deemed to interfere with the performance of the Executive’s responsibilities to the Company.

5. COMPENSATION

As long as the Executive remains employed by the Company during the Change of Control Period, the Company agrees to pay or cause to be paid to the Executive, and the Executive agrees to accept in exchange for the services rendered hereunder by him, the following compensation:

5.1 SALARY

The Executive shall receive an annual base salary (the “Annual Base Salary”), at least equal to the annual salary established by the Board or the Compensation Committee of the Board (the “Compensation Committee”) or the Chief Executive Officer for the fiscal year in which the Change of Control Date occurs. The Annual Base Salary shall be paid in substantially equal installments and at the same intervals as the salaries of other executives of the Company are paid. The Board or the Compensation Committee or the Chief Executive Officer shall review the Annual Base Salary at least annually and shall determine in good faith and consistent with any generally applicable Company policy any increases for future years.

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5.2 BONUS

In addition to the Annual Base Salary, the Executive shall be offered the opportunity to earn, for each fiscal year ending during the Change of Control Period, an annual bonus (the “Annual Bonus”) payable, if the performance criteria for the bonus are satisfied, in cash in an amount at least equal to the Three-Year Average Annual Bonus. The performance criteria shall be set so that, in the good faith judgment of the Board of Directors of the Company or a committee thereof, the Executive has approximately the same probability of earning at least the same amount as the Annual Bonus as his or her Three-Year Average Annual Bonus. “Three-Year Average Annual Bonus” shall mean the average of bonuses paid or payable to the Executive by the Company for each of the three fiscal years immediately preceding the year in which the Change of Control occurs (including the annualized amount of any such bonus paid or payable for any partial year, but not stock options or stock awards, which became fully vested and any deferred compensation earned during any of those years and excluding any sign-on or other one-time-only bonus). If the Executive has not been an executive officer of the Company during the entire three year period referred to above or was not offered a bonus during any of those years, then the Three-Year Average Annual Bonus shall be calculated for such shorter time that he or she was an executive officer of the Company and had been offered a bonus. If the Executive had been offered an opportunity to earn a bonus for the year in which the Change of Control occurs and not in anticipation of the Change of Control, the Three-Year Average Annual Bonus shall exceed the maximum he or she could have earned under that bonus arrangement if all performance criteria were satisfied. Each Annual Bonus, if earned, shall be paid no later than ninety (90) days after the end of the fiscal year for which the Annual Bonus is awarded.

6. BENEFITS

6.1 INCENTIVE, RETIREMENT AND WELFARE BENEFIT PLANS; VACATION

During the Change of Control Period, the Executive shall be entitled to participate, subject to and in accordance with applicable eligibility requirements, in such fringe benefit programs as shall be generally made available to other comparable executives of the Company and its affiliated companies from time to time during the Change of Control Period by action of the Board (or any person or committee appointed by the Board to determine fringe benefit programs and other emoluments), including, without limitation, paid vacations; any stock purchase, savings or retirement plan, practice, policy or program; and all welfare benefit plans, practices, policies or programs (including, without limitation, medical, prescription, dental, disability, salary continuance, executive life, group life accidental death and travel accident insurance plans or programs) to the extent such fringe benefits are made available to other comparable executives of the Company.

6.2 EXPENSES

During the Change of Control Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable employment expenses incurred by him in accordance with the policies, practice and procedures of the Company and its affiliated companies in effect for the executives of the Company and its affiliated companies during the Change of Control Period.

7. TERMINATION

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During the Change of Control Period, employment of the Executive may be terminated as follows, but, in any case, the nondisclosure provisions set forth in Section 10 hereof shall survive the termination of this Agreement and the termination of the Executive’s employment with the Company:

7.1 BY THE COMPANY OR THE EXECUTIVE

At any time during the Change of Control Period, the Company may terminate the employment of the Executive with or without Cause (as defined below), and the Executive may terminate his employment for Good Reason (as defined below) or for any reason, upon giving the Notice of Termination (as defined below).

7.2 AUTOMATIC TERMINATION

This Agreement and the Executive’s employment during the Change of Control Period shall terminate automatically upon the death or Disability of the Executive. The term “Disability” as used herein shall mean the Executive’s inability (with such accommodation as may be required by law and which places no undue burden on the Company) to perform the duties set forth in Section 3.2 hereof for a period or periods aggregating twelve (12) weeks in any three hundred sixty-five (365) day period as result of physical or mental illness, loss of legal capacity or any other cause. The Executive and the Company hereby acknowledge that the duties specified in Section 3.2 hereof are essential to the Executive’s position and that the Executive’s ability to perform those duties is the essence of this Agreement.

7.3 NOTICE OF TERMINATION

Any termination by the Company or by the Executive during the Change of Control Period shall be communicated by Notice of Termination to the other party given in accordance with Section 11 hereof. The term “Notice of Termination” shall mean a written notice that (a) indicates the specific termination provision in this Agreement relied upon and (b) to the extent applicable, sets forth briefly the facts and circumstances claimed to provide the basis for termination of the Executive’s employment under the provision so indicated. The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company hereunder to preclude the Executive or the Company from asserting such fact or circumstance in connection with any enforcement of the Executive’s or the Company’s rights hereunder.

7.4 DATE OF TERMINATION

During the Change of Control Period, “Date of Termination” means (a) if the Executive’s employment is terminated by reason of death, the date of death, (b) if the Executive’s employment is terminated by reason of Disability, immediately upon a determination by the Company of the Executive’s Disability, and (c) in all other cases, upon the giving of the Notice of Termination. Notwithstanding the foregoing, the party giving the notice in the case of (c) above will have the right, but not the obligation, to have the termination of employment be effective upon the expiration of any period specified in the Notice of Termination. In that event, the Executive’s employment and performance of services will continue during such specified period unless the

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other party (the Company in the event of a termination by the Executive or the Executive in the case of a termination by the Company) elects thereafter to terminate the employment of the Executive pursuant to Section 3.4 and that termination is effective as of an earlier date. Notwithstanding the foregoing, the Company may, upon notice to the Executive and without reducing the Executive’s compensation during such period, excuse the Executive from any or all of his duties during such period.

8. TERMINATION PAYMENTS

In the event of termination of the Executive’s employment during the Change of Control Period, all compensation and benefits set forth in this Agreement shall terminate except as specifically provided in this Section 8.

8.1 TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE OR BY THE EXECUTIVE FOR GOOD REASON

If during the Change of Control Period the Company terminates the Executive’s employment other than for Cause or the Executive terminates his employment for Good Reason, the Executive shall be entitled to:

(a) Payment of the following accrued obligations (the “Accrued Obligations”):

(i) the Annual Base Salary through the Date of Termination to the extent not theretofore paid;

(ii) if the performance criteria for earning the Annual Bonus for the full fiscal year of termination have been fully satisfied at the time of termination (excluding any requirement that the Executive be employed by the Company at the end of the fiscal year), the product of (x) the amount of the Annual Bonus for that year and (y) a fraction the numerator of which is the number of days in the current fiscal year through the Date of Termination and the denominator of which is three hundred sixty-five (365);

(iii) if the performance criteria for earning the Annual Bonus for the full fiscal year of termination have not been fully satisfied and the Board of Directors of the Company determines that all such criteria could not have been satisfied if the Executive remained employed for the full fiscal year, no amount for the Annual Bonus

(v) any accrued paid time-off that would be payable under the

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Company’s standard policy, to the extent not theretofore paid.

(b) For eighteen (18) months after the Date of Termination or until the Executive qualifies for comparable medical and dental insurance benefits from another employer, whichever occurs first, and subject to the satisfactory execution by the Executive (including the expiration of any revocation period) of an agreement substantially in the form of Exhibit A hereof, the Company shall pay the Executive’s premiums for

(i) health insurance benefit continuation for the Executive and his family members, if applicable, which the Company provides to the Executive under the provisions of the federal Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), to the extent that the Company would have paid such premium had the Executive remained employed by the Company (such continued payment is hereinafter referred to as “COBRA Continuation”); and

(ii) additional health coverage, life, accidental death and disability and other insurance programs for the Executive and his family members, if applicable, to the extent such programs existed on the Change of Control Date.

(c) Continuation of the payment of the Annual Base Salary for the fiscal year in which the Date of Termination occurs for a period of eighteen (18) months after the Date of Termination, subject to the satisfactory execution by the Executive (including the expiration of any revocation period) of an agreement substantially in the form of Exhibit A hereof.

(d) An amount equal to one and one-half times the Three-Year Average Annual Bonus, subject to the satisfactory execution by the Executive (including the expiration of any revocation period) of an agreement substantially in the form of Exhibit A hereof.

(e) Immediate vesting of all outstanding stock options previously granted to the Executive by the Company, subject to the satisfactory execution by the Executive (including the expiration of any revocation period) of an agreement substantially in the form of Exhibit A hereof.

(f) The provision in any agreement evidencing any outstanding stock option causing the option to terminate upon the expiration of three months (or any other period relating to termination of employment) after termination of employment shall be of no force or effect, except that nothing herein shall extend any such option beyond its original term or shall affect its termination for any reason other than termination of employment. The provisions of this clause (f) are subject to the satisfactory execution by the Executive (including the expiration of any revocation period) of an agreement substantially in the form of Exhibit A.

8.2 TERMINATION FOR CAUSE OR OTHER THAN FOR GOOD REASON

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If during the Change of Control Period the Executive’s employment shall be terminated by the Company for Cause or by the Executive for other than Good Reason, this Agreement shall terminate without further obligation on the part of the Company to the Executive, other than the Company’s obligation to pay the Executive the amounts in Section 8.1(a)(i) and (v).

8.3 TERMINATION BECAUSE OF DEATH OR DISABILITY

Upon the Executive’s death or Disability, this Agreement shall terminate automatically without further obligation on the part of the Company to the Executive or his legal representatives under this Agreement other than the Company’s obligation, if any, to pay the Executive the amounts specified in Section 8.1(a) to (e).

8.4 PAYMENT SCHEDULE

All payments of Accrued Obligations, or any portion thereof payable pursuant to this Section 8, shall be made to the Executive within ten (10) working days of the Date of Termination except that (a) any amount payable to the Executive pursuant to Section 8.1(a)(ii), (iii) or (iv) or Section 8.1(d) shall be paid to Executive when his or her bonus would have been paid if he or she were still employed; and (b) any payments payable to the Executive pursuant to Section 8.1(c) hereof shall be made to the Executive in the form of salary continuation payable at normal payroll intervals during the eighteen (18) month severance period on the dates when the Executive would have received his or her payments of salary if he or she were still employed and in the amounts he or she would have received.

8.5 CAUSE

For purposes of this Agreement, termination of Executive’s employment shall be for “Cause” if it is for any of the following:

(a) A refusal of the Executive to carry out any material lawful duties of the Executive or any directions or instructions of the Board or senior management of the Company which are reasonably consistent with those duties;

(b) Failure to perform satisfactorily any lawful duties of the Executive that are consistent with those duties hereof or any directions or instructions of the Board or senior management that are consistent with those duties, provided, however, that the Executive has been given notice and has failed to correct any such failure within ten (10) days thereafter (unless any such correction by its nature cannot be done in 10 days, in which event the Executive will have a reasonable time to correct the failure) and provided further that the Company shall have no such obligation to give notice and the Executive shall have no such opportunity to correct failures more than two times in any twelve calendar month period;

(c) Violation by the Executive of a local, state or federal law involving the commission of a crime, other than minor traffic violations, or any other criminal act involving moral turpitude;

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(d) The Executive’s gross negligence, willful misconduct, or breach of his or her duty to the Company involving self-dealing or personal profit;

(e) Current abuse by the Executive of alcohol or controlled substances; deception, fraud, misrepresentation or dishonesty by the Executive; or any incident materially compromising the Executive’s reputation or ability to represent the Company with investors, customers or the public; or

(f) Any other material violation of any provision of this Agreement by the Executive not described in (a) or (b) above, subject to the same notice and opportunity-to-correct provisions as are set forth in (b) above.

8.6 GOOD REASON

For purposes of this Agreement, “Good Reason” means:

(a) Any failure by the Company to comply with any of the provisions of Section 5 or Section 6 hereof, other than isolated and inadvertent failure not taken in bad faith and that is remedied by the Company promptly after receipt of notice thereof given by the Executive;

(b) Any material diminution in Executive’s position, authority, duties or responsibilities as contemplated by Section 3.2 hereof or any other action by the Company that results in a material diminution in such position, authority, duties or responsibilities;

(c) The Company’s requiring the Executive to be based at any office or location that is more than fifty (50) miles from the location of the Executive’s assigned worksite immediately prior to the Change of Control Date and Executive’s residence at the time any such requirement is imposed;

(d) Any failure by the Company to comply with and satisfy Section 12 hereof; provided, however, that the Company’s successor has received at least ten (10) days’ prior written notice from the Company or the Executive of the requirements of Section 12 hereof; or

(e) Any other material violation of any provision of this Agreement by the Company.

Notwithstanding the foregoing, no basis for a termination for Good Reason will be deemed to exist unless Executive notifies the Company in writing of any event in (a) through (f) above within 90 days after the initial occurrence of such event and the Company or its successor fails to cure any such event within 30 days after receipt of the notice. Furthermore, the Executive’s termination of employment for Good Reason must occur no later than one year following the initial existence of such event.

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8.7 WITHHOLDING TAXES

Any payments provided for in this Agreement shall be paid net of any applicable withholding required under federal, state or local law.

8.8 WARN ACT

Notwithstanding the provisions of Sections 8.1 through 8.5, in the event the Executive is entitled, by operation of any act or law, to unemployment compensation benefits or benefits under the Worker Adjustment and Retraining Act of 1988 (known as the “WARN Act”) in connection with the termination of his or her employment in addition to those required to be paid to him or her under this Agreement, then to the extent permitted by applicable law governing severance payments or notice of termination of employment, the Company shall be entitled to offset against the amounts payable hereunder the amounts of any such mandated payments.

8.9 TERMINATION BEFORE CHANGE OF CONTROL

In the case of termination of employment prior to the Change of Control Date as contemplated by Section 3.4, the Date of Termination shall be deemed to be the Change of Control Date, except that, if any of the benefits referred to in Section 8.1 have been paid or provided for all or any portion of the period between the Date of Termination and the Change of Control Date, the amount of benefits which would otherwise be paid or provided shall be reduced by the amount of the benefits paid or provided for the period prior to the Change of Control Date.

8.10 PAYMENTS SUBJECT TO SECTION 409A

Subject to the provisions in this Section 8.10, 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 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:

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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 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 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.

9. REPRESENTATIONS AND WARRANTIES

In order to induce the Company to enter into this Agreement, the Executive represents and warrants to the Company that neither the execution nor the performance of this Agreement by the Executive will violate or conflict in any way with any other agreement by which the Executive may be bound.

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10. NONDISCLOSURE; RETURN OF MATERIALS; NONSOLICITATION

10.1 NONDISCLOSURE

Except as required by his employment with the Company, the Executive will not, at any time during the term of employment by the Company, or at any time thereafter, directly, indirectly or otherwise, use, communicate, disclose, disseminate, lecture upon or publish articles relating to any confidential, proprietary or trade secret information without the prior written consent of the Company. The Executive understands that the Company will be relying on this Agreement in continuing the Executive’s employment, paying him compensation, granting him any promotions or raises, or entrusting him with any information that helps the Company compete with others.

10.2 RETURN OF MATERIALS

All documents, records, notebooks, notes, memoranda, drawings, computer files or other documents made or compiled by the Executive at any time, or in his possession, including any and all copies thereof, shall be the property of the Company and shall be held by the Executive in trust and solely for the benefit of the Company, and shall be delivered to the Company by the Executive upon termination of employment or at any other time upon request by the Company.

10.3 NONSOLICITATION

During the period that Executive is receiving payments described in Section 8.1(c), he or she will not actively solicit any employees of the Company or its Affiliates to accept employment from any other person or entity. “Affiliate” is defined as any entity controlling, controlled by or under common control with, the Company within the meaning of Rule 405 of the Security and Exchange Commission under the Securities Act of 1933.

11. FORM OF NOTICE

Every notice required by the terms of this Agreement shall be given in writing by serving the same upon the party to whom it was addressed personally or by registered or certified mail, return receipt requested, at the address set forth below or at such other address as may hereafter lie designated by notice given in compliance with the terms hereof:

If to the Executive:


If to the Company:		Biodel Inc. Attn: President 100 Saw Mill Road Danbury, CT 06810

or such other address as shall be provided in accordance with the terms hereof. Except as set forth in Section 7.4 hereof, if notice is mailed, such notice shall be effective upon mailing. Notices sent in any other manner specified above shall be effective upon receipt.

12. ASSIGNMENT

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13. WAIVERS

No delay or failure by any party hereto in exercising, protecting or enforcing any of its rights, titles, interests or remedies hereunder, and no course of dealing or performance with respect thereto, shall constitute a waiver thereof. The express waiver by a party hereto of any right, title, interest or remedy in a particular instance or circumstance shall not constitute a waiver thereof in any other instance or circumstance. All rights and remedies shall be cumulative and not exclusive of any other rights or remedies.

14. AMENDMENTS IN WRITING

No amendment, modification, waiver, termination or discharge of any provision of this Agreement, or consent to any departure therefrom by either party hereto, shall in any event be effective unless the same shall be in writing, specifically identifying this Agreement and the provision intended to be amended, modified, waived, terminated or discharged and signed by the President or Chief Executive Officer of the Company and the Executive, and each such amendment, modification, waiver, termination or discharge shall be effective only in the specific instance and for the specific purpose for which given. No provision of this Agreement shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and signed by the Company and the Executive.

15. APPLICABLE LAW

This Agreement shall in all respects, including all matters of construction, validity and performance, be governed by, and construed and enforced in accordance with, the laws of the State of New York, without regard to any rules governing conflicts of laws.

16. ARBITRATION; ATTORNEYS’ FEES

Except in connection with enforcing Section 10 hereof, for which legal and equitable remedies may be sought in a court of law, any dispute arising under this Agreement shall be subject to arbitration. The arbitration proceeding shall be conducted in accordance with the Employment Arbitration Rules of the American Arbitration Association (the “AAA Rules”) then in effect, conducted by one arbitrator either mutually agreed upon or selected in accordance with the AAA Rules. The arbitration shall be conducted in New York County, New York, under the jurisdiction of the New York office of the American Arbitration Association. The arbitrator shall have authority only to interpret and apply the provisions of this Agreement, and shall have no authority to add to, subtract

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from or otherwise modify the terms of this Agreement. Any demand for arbitration must be made within sixty (60) days of the event(s) giving rise to the claim that this Agreement has been breached. The arbitrator’s decision shall be final and binding, and each party agrees to be bound to by the arbitrator’s award, subject only to an appeal therefrom in accordance with the laws of the State of New York. Either party may obtain judgment upon the arbitrator’s award in the Superior Court of New York County, New York. If it becomes necessary to pursue or defend any legal proceeding, whether in arbitration or court, in order to resolve all disputes arising under this Agreement, the prevailing party in any such proceeding shall be entitled to recover its reasonable costs and attorneys’ fees.

17. SEVERABILITY

If any provision of this Agreement shall be held invalid, illegal or unenforceable in any jurisdiction, for any reason, including, without limitation, the duration of such provision, its geographical scope or the extent of the activities prohibited or required by it, then, to the full extent permitted by law, (a) all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intent of the parties hereto as nearly as may be possible, (b) such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision hereof, and (c) any court or arbitrator having jurisdiction thereover shall have the power to reform such provision to the extent necessary for such provision to be enforceable under applicable law.

18. COORDINATION WITH SEVERANCE AGREEMENT

The agreement regarding the Executive’s employment with the Company that the parties are entering into contemporaneously with this Agreement provides for certain forms of severance and benefit payments in the event of termination of the Executive’s employment under certain conditions (the “Severance Agreement”). This Agreement is in addition to the Severance Agreement and in no way supersedes or nullifies the that agreement. Nevertheless, it is possible for termination of employment to fall within the scope of both agreements. In such event, payments made to the Executive under Section 8.1 hereof shall be coordinated with payments made to the Executive under the Severance Agreement as follows: (a) the obligations under Section 5.1(a) of the Severance Agreement shall be paid first, in which case the Accrued Obligations under this Agreement need not be paid; (b) COBRA Contribution under this Agreement need not be provided to the extent COBRA continuation is provided under the Severance Agreement; and (c) the severance payments required under Sections 8.1(c) and 8.1(d) hereof shall be paid first, in which case any severance payments required under Sections 5.1(c) and 5.1(d) of the Severance Agreement need not be provided.

19. EXCESS PARACHUTE LIMITATION

If any portion of the payments or benefits for the Executive under this Agreement, taken together with any other agreement or benefit plan of the Company (including stock options), would be characterized as an “excess parachute payment” to the Executive under Section 280G of the Internal Revenue Code of 1986, amended (the “Code”), the payments and benefits shall be reduced to the extent necessary to avoid the imposition of any tax that would otherwise be owed under Section 4999 of the Code. Such reductions shall first be made to the bonus payments referred to in Section 8.1(d) and Section 8.1(a)(ii), (iii) or (iv), whichever is applicable, then to the salary

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payments referred to in Section 8.1(c), then to the salary payments under Section 8.1(a)(i) and finally to the number of shares subject to options that are accelerated pursuant to Section 8.1(e) in the reverse order of grant of those options. The determination of whether and the extent to which payments and benefits are to be reduced pursuant to this Section 19 shall be made in writing by tax accountants and/or tax lawyers selected by the Company and reasonably acceptable to the Executive.

20. ENTIRE AGREEMENT

Except as described in Section 18 hereof, this Agreement constitutes the entire agreement between the Company and the Executive with respect to the subject matter hereof, and all prior or contemporaneous oral or written communications, understandings or agreements between the Company and the Executive with respect to such subject matter are hereby superseded and nullified in their entireties, except that the agreement relating to proprietary information and inventions between the Company and the Executive shall continue in full force and effect.

21. COUNTERPARTS

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

22. 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 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 have executed and entered into this Agreement effective on the date first set forth above.

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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;

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

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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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EXHIBIT A

GENERAL RELEASE AND SETTLEMENT AGREEMENT

The parties to this General Release and Settlement Agreement (“Release”) between (“Employee”) and Biodel Inc. (“the Company”) state that:

The parties desire to terminate their employment relationship. Both parties desire to fully and finally resolve all differences and disputes without further costs;

THEREFORE, the parties agree:

1. Employee and the Company stipulate, agree, and understand that, in consideration of the following mutual releases and, in the case of the Employee, the payments to Employee as provided in the Executive Severance Agreement between the Employee and the Company , each, on behalf of itself, its successors, and assigns, and, in the case of the Employee, on behalf of the Employee’s heirs, administrators and executors, releases the other, and, in the case of the Company, its subsidiaries, affiliates, related companies and their directors, officers, employees and agents, from any and all debts, obligations, claims, demands, judgments or causes of action of any kind whatsoever in tort, contract, by statute, or on any other basis which either have or may have arising out of the Employee’s employment by the Company and the termination thereof from the beginning of time to the date of the signing this Release including but not limited to any claims of harassment or discrimination (for example, on the basis of sex, race, age, national origin, handicap or disability) under any federal, state or local law, rule or regulation including, but not limited to, the Age Discrimination in Employment Act, 29 U.S.C. §621, et seq., Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act or any claim arising under the Employment Retirement Income Security Act (“ERISA”) (except for claims for vested benefits under ERISA), breach of contract, express or implied but excluding from the foregoing mutual releases Workmen’s Compensation claims and obligations of the parties (i) under this Release, (ii) under the Executive Severance and Change of Control Agreements between the Employee and the Company dated , (iii) under any stock option or other award granted under any stock option or other plan of the Company including without limitation [here describe options or awards by date of grant], (iv) under the Biodel Inc. Employee Proprietary Information and Inventions Agreement executed by Employee, (v) relating to shares of Common Stock of Biodel Inc. owned by Employee, (vi) under any indemnity provisions in favor of Employee contained in the certificate of incorporation or bylaws of the Company or under Delaware law, (vii) under the Indemnification Agreement with the Company dated executed by Employee or (viii) under any policy of liability insurance of the Company for directors and officers. The obligations set forth in (i) through (viii) are herein sometimes collectively referred to as “the Continuing Obligations”.

2. Employee agrees not to seek reemployment with the Company or any of its affiliates.

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3. This Release shall be governed by the substantive law of the State of New York. In the event of any dispute concerning the interpretation of this Release or in any way related to Employee’s employment or termination of employment, the dispute shall be resolved by arbitration within the County of New York, New York, in accordance with the then existing rules for employment dispute arbitration of the American Arbitration Association, and judgment upon any arbitration award may be entered by any state or federal court having jurisdiction thereof. The parties intend this arbitration provision to be valid and construed as broadly as possible. The prevailing party in such arbitration shall recover its reasonable costs and attorneys’ fees.

4. If any provision of this General Release and Settlement Agreement is determined to be invalid or unenforceable, all of the other provisions shall remain valid and enforceable notwithstanding, unless the provision found to be unenforceable is of such material effect that this Release cannot be performed in accordance with the intent of the parties in the absence thereof.

5. Except for the Continuing Obligations, no promise or agreement other than that expressed herein has been made. Except for the Continuing Obligations, this General Release and Settlement Agreement constitutes a single integrated contract expressing the entire agreement of the parties hereto. Except for the Continuing Obligations, there are no other agreements, written or oral, express or implied, between the parties concerning the subject matter hereof, except the provisions set forth in this Release. Except for the Continuing Obligations, this Release supersedes all previous agreements and understandings, whether written or oral. This Release can be amended, modified or terminated only by a writing executed by both Employee and the President of the Company.

6. In compliance with the Older Workers Benefit Protection Act, Employee has been given twenty-one (21) days to review this Release before signing it. Employee also understands that he may revoke this General Release and Settlement Agreement within seven (7) days after it has been signed and that it is not enforceable or effective until the seven (7) day revocation period has expired. Additionally, employee has been advised in this writing to consult with an attorney before executing this General Release and Settlement Agreement.

7. THE EMPLOYEE STATES THAT HE/SHE IS IN GOOD HEALTH AND FULLY COMPETENT TO MANAGE HIS/HER BUSINESS AFFAIRS, THAT HE/SHE HAS CAREFULLY READ THIS GENERAL RELEASE AND SETTLEMENT AGREEMENT, THAT HE/SHE FULLY UNDERSTANDS ITS FINAL AND BINDING EFFECT, THAT THE ONLY PROMISES MADE TO HIM/HER TO SIGN THIS RELEASE ARE THOSE STATED AND CONTAINED IN THIS RELEASE OTHER THAN FOR THE CONTINUING OBLIGATIONS, AND THAT HE/SHE IS SIGNING THIS AGREEMENT KNOWINGLY AND VOLUNTARILY.

AGREED AND ACCEPTED this day of , :


BIODEL INC.		EXECUTIVE

By:

	Its:

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EX-10.2 3 y73827exv10w2.htm EX-10.2: FORM OF EXECUTIVE SEVERANCE AGREEMENT EX-10.2

Exhibit 10.2

BIODEL INC.

EXECUTIVE SEVERANCE AGREEMENT

This Executive Severance Agreement (this “Agreement”), dated and effective as of is between Biodel Inc., a Delaware corporation (the “Company”), and (the “Executive”).

WHEREAS the board of directors of the Company (the “Board”) has determined that it is in the best interests of the Company and its shareholders to ensure that the Company will have the continued dedication of the Executive, notwithstanding the fact that the Executive does not have any form of traditional employment contract or other assurance of job security;

WHEREAS the Board believes it is imperative to diminish any distraction of the Executive arising from the personal uncertainty and insecurity that arises in the absence of any assurance of job security by providing the Executive with reasonable compensation and benefit arrangements in the event of termination of the Executive’s employment by the Company under certain defined circumstances;

WHEREAS the parties entered into an executive severance agreement as of ; and

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

NOW THEREFORE, in order to accomplish these objectives, the Board has caused the Company to enter into this agreement.

1. TERM

The term of this Agreement (the “Term”) shall commence on the date this Agreement is executed by the Executive and the Company and shall continue through the duration of the Executive’s employment with the Company.

2. EMPLOYMENT

3. ATTENTION AND EFFORT

During any period of time that the Executive remains in the employ of the Company, and excluding any periods of paid time-off to which the Executive is entitled, the Executive will devote such of his productive time, ability, attention, and effort as shall be reasonably necessary to the business and affairs of the Company and the discharge of the responsibilities assigned to him hereunder, and

will seek to perform faithfully and efficiently such responsibilities. It shall not be a violation of this Agreement for the Executive to (a) serve on corporate, civic or charitable boards or committees, (b) deliver lectures, fulfill speaking engagements or teach at educational institutions, (c) manage personal investments, (d) continue to conduct any business or profession conducted by Employee at the date of this Agreement or (e) continue to engage in activities permitted by the policies of the Company or as specifically permitted by the Company, so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities in accordance with this Agreement. It is expressly understood and agreed that to the extent any such activities have been conducted by the Executive prior to the Term, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) during the Term shall not thereafter be deemed to interfere with the performance of the Executive’s responsibilities to the Company.

4. TERMINATION

During the Term, employment of the Executive may be terminated as follows, but, in any case, the nondisclosure provisions set forth in Section 7 hereof shall survive the termination of this Agreement and the termination of the Executive’s employment with the Company:

4.1 BY THE COMPANY OR THE EXECUTIVE

At any time during the Term, the Company may terminate the employment of the Executive with or without Cause (as defined below), and the Executive may terminate his employment for Good Reason (as defined below) or for any reason, upon giving Notice of Termination (as defined below).

4.2 AUTOMATIC TERMINATION

This Agreement and the Executive’s employment shall terminate automatically upon the death or Disability of the Executive. The term “Disability” as used herein shall mean the Executive’s inability (with such accommodation as may be required by law and which places no undue burden on the Company), to perform the Executive’s essential duties for a period or periods aggregating twelve (12) weeks in any three hundred sixty-five (365) day period as a result of physical or mental illness, loss of legal capacity or any other cause.

4.3 NOTICE OF TERMINATION

Any termination by the Company or by the Executive during the Term shall be communicated by Notice of Termination to the other party given in accordance with Section 8 hereof. The term “Notice of Termination” shall mean a written notice that (a) indicates the specific termination provision in this Agreement relied upon, and (b) to the extent applicable, sets forth briefly the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated. The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance that contributed to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company hereunder or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

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4.4 DATE OF TERMINATION

“Date of Termination” means (a) if the Executive’s employment is terminated by reason of death, the date of death, (b) if the Executive’s employment is terminated by reason of Disability, immediately upon a determination by the Company of the Executive’s Disability, and (c) in all other cases, upon the giving of the Notice of Termination. Notwithstanding the foregoing, the party giving the notice in the case of (c) above will have the right, but not the obligation, to have the termination be effective upon the expiration of any period specified in the Notice of Termination. In that event the Executive’s employment and performance of services will continue during the specified period unless the other party (the Company in the event of a termination by the Executive or the Executive in the event of a termination by the Company) thereafter elects to terminate the employment of the Executive pursuant to Section 2 and that termination is as of an earlier date. Notwithstanding the foregoing, the Company may, upon notice to the Executive and without reducing the Executive’s compensation during such period, excuse the Executive from any or all of his duties during such period.

5. TERMINATION PAYMENTS

In the event of termination of the Executive’s employment, all compensation and benefits shall terminate, except as specifically provided in this Section 5.

5.1 TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE OR BY THE EXECUTIVE FOR GOOD REASON

If during the Term the Company terminates the Executive’s employment other than for Cause or the Executive terminates his employment for Good Reason, the Executive shall be entitled to:

(a) Payment of the following accrued obligations (the “Accrued Obligations”):

(i) the Executive’s then current annual base salary through the Date of Termination to the extent not theretofore paid; and

(ii) if the performance criteria for earning the annual bonus for the full fiscal year of termination have been fully satisfied at the time of termination (excluding any requirement that the Executive be employed by the Company at the end of the fiscal year), the product of (x) the amount of the annual bonus for that year and (y) a fraction the numerator of which is the number of days in the current fiscal year through the Date of Termination and the denominator of which is three hundred sixty-five (365);

(iii) if the performance criteria for earning the annual bonus for the full fiscal year of termination have not been fully satisfied and the Board of Directors of the Company determines that all such criteria could not have been satisfied if the Executive remained employed for the full fiscal year, no amount for the annual bonus; and

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(iv) if neither (ii) nor (iii) apply, the product of (x) the Three-Year Average Annual Bonus and (y) a fraction the numerator of which is the number of days in the current fiscal year through the Date of Termination and the denominator of which is three hundred sixty-five (365). “Three-Year Average Annual Bonus” shall mean the average of bonuses paid or payable to the Executive by the Company for each of the three fiscal years immediately preceding the year of termination (including the annualized amount of any such bonus paid or payable for any partial year, but not stock options or stock awards, which became fully vested and any deferred compensation earned during any of those years and excluding any sign-on or other one-time-only bonus). If the Executive has not been an executive officer of the Company during the entire three-year period referred to above or was not offered a bonus during any of those years, then the Three-Year Average Annual Bonus shall be calculated for such shorter time that he or she was an executive officer of the Company and had been offered a bonus; and

(v) any accrued paid time-off that would be payable under the Company’s standard policy to the extent not theretofore paid.

(i) health insurance benefit continuation for the Executive and his family members, if applicable, that the Company provides to the Executive under the provisions of the federal Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), to the extent that the Company would have paid such premiums had the Executive remained employed by the Company (such continued payment is hereinafter referred to as “COBRA Continuation”); and

(c) Continuation of the Executive’s then current annual base salary for the fiscal year in which the Date of Termination occurs for a period of eighteen (18) months after the Date of Termination, subject to the satisfactory execution by the Executive (including the expiration of any revocation period) of an

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agreement substantially in the form of Exhibit A hereof.

5.2 TERMINATION FOR CAUSE OR OTHER THAN FOR GOOD REASON

If during the Term the Executive’s employment shall be terminated by the Company for Cause or by the Executive for other than Good Reason, this Agreement shall terminate without further obligation on the part of the Company to the Executive, other than the Company’s obligation to pay the Executive the amounts in Section 5.1(a) (i) and (v).

5.3 TERMINATION BECAUSE OF DEATH OR DISABILITY

Upon the Executive’s death or Disability, this Agreement shall terminate automatically without further obligation on the part of the Company to the Executive or his legal representatives under this Agreement, other than the Company’s obligation, if any, to pay the Executive the benefits in Section 5.1(a) to (e).

5.4 PAYMENT SCHEDULE

All payments, or any portion thereof, payable pursuant to Section 5.1, shall be made to the Executive within ten (10) working days of the Date of Termination except that

(a) any amount payable to the Executive pursuant to Section 5.1(a)(ii), (iii) or (iv) or Section 5.1(d) shall be paid to Executive when his or her bonus would have been paid if he or she were still employed; and

(b) any payments payable to the Executive pursuant to Section 5.1(c) hereof shall

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be made to the Executive in the form of salary continuation payable at normal payroll intervals during the eighteen (18) month severance period on the dates when the Executive would have received his or her payments of salary if he or she were still employed and in the amounts he or she would have received.

5.5 CAUSE

For purposes of this Agreement, termination of the Executive’s employment shall be for “Cause” if it is for any of the following:

(a) A refusal to carry out any material lawful duties of the Executive or any directions or instructions of the Board or senior management of the Company reasonably consistent with those duties;

(b) Failure to perform satisfactorily any lawful duties of the Executive or any directions or instructions of the Board or senior management reasonably consistent with those duties; provided, however, that the Executive has been given notice and has failed to correct any such failure within (10) days thereafter (unless any such correction by its nature cannot be done in 10 days, in which event the Executive will have a reasonable time to correct failures), and provided further that the Company shall have no obligation to give notice and the Executive will have no such opportunity to correct more than two times in any twelve calendar month period;

(c) Violation by the Executive of a local, state or federal law involving the commission of a crime, other than minor traffic violations, or any other criminal act involving moral turpitude;

(d) The Executive’s gross negligence, willful misconduct or breach of his or her duty to the Company involving self-dealing or personal profit;

(f) Any other material violation of any provision of this Agreement by the Executive not described in (a) or (b) above, subject to the same notice and opportunity to correct provisions as are set forth in (b) above.

5.6 GOOD REASON

For purposes of this Agreement, “Good Reason” means:

(a) Reduction of the Executive’s annual base salary to a level below the level in effect on the date of this Agreement, regardless of any change in the Executive’s duties or responsibilities;

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(b) Any material diminution in Executive’s position, authority, duties or responsibilities or any other action by the Company that results in a material diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated and inadvertent action not taken in bad faith and that is remedied by the Company within ten (10) days after receipt of notice thereof is provided to the Company by the Executive;

(c) The Company’s requiring the Executive to be based at any office or location more than fifty (50) miles from the location of the Executive’s assigned worksite prior to the Date of Termination and the Executive’s residence at any such time such requirement is imposed;

(d) Any failure by the Company to comply with and satisfy Section 9 hereof; provided, however, that the Company’s successor has received at least ten (10) days’ prior written notice from the Company or the Executive of the requirements of Section 9 hereof; or

(e) Any other material violation of any provision of this Agreement by the Company.

Notwithstanding the foregoing, no basis for a termination for Good Reason will be deemed to exist unless the Executive notifies the Company in writing of any event in (a) through (f) above within 90 days of the first occurrence of such event and the Company or its successor fails to cure any such event within thirty (30) days after receipt of the notice. Furthermore, the Executive’s termination of employment for good reason must occur no later than one year following the initial existence of such condition.

5.7 WITHHOLDING TAXES

Any payments provided for in this Agreement shall be paid net of any applicable withholding required under federal, state or local law.

5.8 WARN ACT

Notwithstanding the provisions of Section 5.1 through 5.5, in the event the Executive is entitled, by operation of any act or law, to unemployment compensation benefits or benefits under the Work Adjustment and Retraining Act of 1988 (known as the “WARN Act”) in connection with the termination of his or her employment in addition to those required to be paid to him or her under this Agreement, then to the extent permitted by applicable law governing severance payments or notice of termination of employment, the Company shall be entitled to offset against the amount payable hereunder the amounts of any such mandated payments.

5.9 PAYMENTS SUBJECT TO SECTION 409A

Subject to the provisions in this Section 5.9, any severance payments or benefits under this Agreement shall begin only upon the date of the Executive’s “separation from service” (determined as set forth below) which occurs on or after the date of termination of the Executive’s employment.

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The following rules shall apply with respect to distribution of the payments and benefits, if any, to be provided to the Executive 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 Executive 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 Executive’s “separation from service” from the Company, the Executive is not a “specified employee” (within the meaning of 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 Executive’s “separation from service” from the Company, the Executive 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 Executive’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 Executive’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 Executive’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 Executive’s separation from service and any 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 Executive’s second taxable year following the taxable year in which the separation from service occurs.

d. The determination of whether and when the Executive’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.

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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 Executive’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 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. REPRESENTATIONS AND WARRANTIES

7. NONDISCLOSURE; RETURN OF MATERIALS; NONSOLICITATION

7.1 NONDISCLOSURE

Except as required by his employment with the Company, the Executive will not, at any time during the term of employment with the Company, or at any time thereafter, directly, indirectly or otherwise, use, communicate, disclose, disseminate, lecture upon or publish articles relating to any confidential, proprietary or trade secret information without the prior written consent of the Company. The Executive understands that the Company will be relying on this covenant in continuing the Executive’s employment, paying him compensation, granting him any promotions or raises, or entrusting him with any information that helps the Company compete with others.

7.2 RETURN OF MATERIALS

All documents, records, notebooks, notes, memoranda, drawings, computer files or other documents made or compiled by the Executive at any time while employed by the Company, or in his possession, including any and all copies thereof, shall be the property of the Company and shall be held by the Executive in trust and solely for the benefit of the Company, and shall be delivered to the Company by the Executive upon termination of employment or at any other time upon request by the Company.

7.3 NONSOLICITATION

During the period that Executive is receiving the payments described in Section 5.1(c) he or she will not actively solicit any employees of the Company or its Affiliates to accept employment from any other person or entity. “Affiliate” is defined as any entity controlling, controlled by or under common control with the Company within the meaning of Rule 405 of the Securities and Exchange Commission under the Securities Act of 1933.

8. FORM OF NOTICE

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Every notice required by the terms of this Agreement shall be given in writing by serving the same upon the party to whom it was addressed personally or by registered or certified mail, return receipt requested, at the address set forth below or at such other address as may hereafter be designated by notice given in compliance with the terms hereof:

If to the Executive:


If to the Company:		Biodel Inc. Attn: President 100 Saw Mill Road Danbury, CT 06810

or such other address as shall be provided in accordance with the terms hereof. Except as set forth in Section 4.4 hereof, if notice is mailed, such notice shall be effective upon mailing. Notices sent in any other manner specified above shall be effective upon receipt.

9. ASSIGNMENT

This Agreement is personal to the Executive and shall not be assignable by the Executive. The Company shall assign to and require any successor (whether by purchase of assets, merger or consolidation) to all or substantially all the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, the “Company” shall mean Biodel Inc. and any affiliated company or successor to its business and/or assets as aforesaid that assumes and agrees to perform this Agreement by contract, operation of law or otherwise; and as long as such successor assumes and agrees to perform this Agreement, the termination of the Executive’s employment by one such entity and the immediate hiring and continuation of the Executive’s employment by the succeeding entity shall not be deemed to constitute a termination or trigger any severance obligation under this Agreement. All the terms and provisions of this Agreement shall be binding upon and insure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns.

10. WAIVERS

11. AMENDMENTS IN WRITING

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be amended, modified, waived, terminated or discharged and signed by the President or Chief Executive Officer of the Company and the Executive, and each such amendment, modification, waiver, termination or discharge shall be effective only in the specific instance and for the specific purpose for which given. No provision of this Agreement shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and signed by the Company and the Executive.

12. APPLICABLE LAW

This Agreement shall in all respects, including all matters of construction, validity and performance, be governed by, and construed and enforced in accordance with, the laws of the State of New York without regard to any rules governing conflicts of laws.

13. ARBITRATION; ATTORNEYS’ FEES

Except in connection with enforcing Section 7 hereof, for which legal and equitable remedies may be sought in a court of law, any dispute arising under this Agreement shall be subject to arbitration. The arbitration proceeding shall be conducted in accordance with the Employment Arbitration Rules of the American Arbitration Association (the “AAA Rules”) then in effect, conducted by one (1) arbitrator either mutually agreed upon or selected in accordance with the AAA Rules. The arbitration shall be conducted in New York County, New York, under the jurisdiction of the New York office of the American Arbitration Association. The arbitrator shall have authority only to interpret and apply the provisions of this Agreement, and shall have no authority to add to, subtract from or otherwise modify the terms of this Agreement. Any demand for arbitration must be made within sixty (60) days of the event(s) giving rise to the claim that this Agreement has been breached. The arbitrator’s decision shall be final and binding, and each party agrees to be bound by the arbitrator’s award, subject only to an appeal therefrom in accordance with the laws of the State of New York. Either party may obtain judgment upon the arbitrator’s award in the Supreme Court of New York County, New York. If it becomes necessary to pursue or defend any legal proceeding, whether in arbitration or court, in order to resolve a dispute arising under this Agreement, the prevailing party in any such proceeding shall be entitled to recover costs and attorneys’ fees.

14. SEVERABILITY

If any provision of this Agreement shall be held invalid, illegal or unenforceable in any jurisdiction, for any reason, including, without limitation, the duration of such provision, its geographical scope or the extent of the activities prohibited or required by it, then, to the full extent permitted by law: (a) all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intent of the parties hereto as nearly as may be possible, (b) such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision hereof, and (c) any court or arbitrator having jurisdiction thereover shall have the power to reform such provision to the extent necessary for such provision to be enforceable under applicable law.

15. COORDINATION WITH CHANGE OF CONTROL AGREEMENT

The Company and the Executive are contemporaneously with this Agreement entering into a Change of Control Agreement (the “Change of Control Agreement”), which agreement provides for

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certain forms of severance and benefit payments in the event of termination of Executive’s employment under certain defined circumstances. This Agreement is in addition to the Change of Control Agreement, providing certain assurances to the Executive in circumstances that the Change of Control Agreement does not cover, and in no way supersedes or nullifies the Change of Control Agreement. Nevertheless, it is possible that a termination of employment by the Company or by the Executive may fall within the scope of both agreements. In such event, payments made to the Executive under Section 5.1 hereof shall be coordinated with payments made to the Executive under Section 8.1 of the Change of Control Agreement as follows:

(a) Accrued Obligations under this Agreement shall be paid first, in which case the obligations under Section 8.1(a) of the Change of Control Agreement need not be paid;

(b) COBRA Continuation under this Agreement shall be provided first, in which case the obligations under Section 8.1(b) of the Change of Control Agreement need not be provided; and

(c) The severance payments required under Sections 8.1(c) and 8.1(d) of the Change of Control Agreement shall be paid first, in which case any severance payment required under Sections 5.1(c) and 5.1(d) hereof need not be provided.

16. EXCESS PARACHUTE PAYMENTS

If any portion of the payments or benefits under this Agreement, taken together with any other agreement or benefit plan of the Company (including stock options), would be characterized as an “excess parachute payment” to the Executive under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), the payments and benefits shall be reduced to the extent necessary to avoid the imposition of any tax that would otherwise be owed under Section 4999 of the Code. Such reductions shall first be made to the bonus payments referred to in Section 5.1(a)(ii), (iii) or (iv), whichever is applicable, then to the salary continuation payments referred to in Section 5.1(c) and then to the salary payments under Section 5.1(a)(i). The determination of whether and the extent to which payments and benefits are to be reduced pursuant to this Section 16 shall be made in writing by tax accountants and/or tax lawyers selected by the Company and reasonably acceptable to the Executive.

17. ENTIRE AGREEMENT

Except as described in Section 15 hereof, this Agreement constitutes the entire agreement between the Company and the Executive with respect to the subject matter hereof, and all prior or contemporaneous oral or written communications, understandings, or agreements between the Company and the Executive with respect to such subject matter are hereby superseded and nullified in their entireties, except that the agreement relating to proprietary information and inventions between the Executive and the Company shall continue in full force and effect.

18. COUNTERPARTS

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

19. 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 therewith. The Company makes no representation or warranty and shall have no liability to the Executive 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 have executed and entered into this Agreement effective on the date first set forth above.

BIODEL INC.

EXECUTIVE

By:

Its:

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EXHIBIT A

GENERAL RELEASE AND SETTLEMENT AGREEMENT

The parties to this General Release and Settlement Agreement (“Release”) between (“Employee”) and Biodel Inc. (“the Company”) state that:

The parties desire to terminate their employment relationship. Both parties desire to fully and finally resolve all differences and disputes without further costs;

THEREFORE, the parties agree:

1. Employee and the Company stipulate, agree, and understand that, in consideration of the following mutual releases and, in the case of the Employee, the payments to Employee as provided in the Executive Severance Agreement between the Employee and the Company dated , each, on behalf of itself, its successors, and assigns, and, in the case of the Employee, on behalf of the Employee’s heirs, administrators and executors, releases the other, and, in the case of the Company, its subsidiaries, affiliates, related companies and their directors, officers, employees and agents, from any and all debts, obligations, claims, demands, judgments or causes of action of any kind whatsoever in tort, contract, by statute, or on any other basis which either have or may have arising out of the Employee’s employment by the Company and the termination thereof from the beginning of time to the date of the signing this Release including but not limited to any claims of harassment or discrimination (for example, on the basis of sex, race, age, national origin, handicap or disability) under any federal, state or local law, rule or regulation including, but not limited to, the Age Discrimination in Employment Act, 29 U.S.C. §621, et seq., Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act or any claim arising under the Employment Retirement Income Security Act (“ERISA”) (except for claims for vested benefits under ERISA), breach of contract, express or implied but excluding from the foregoing mutual releases Workmen’s Compensation claims and obligations of the parties (i) under this Release, (ii) under the Executive Severance and Change of Control Agreements between the Employee and the Company dated , (iii) under any stock option or other award granted under any stock option or other plan of the Company including without limitation [here describe options or awards by date of grant], (iv) under the Biodel Inc. Employee Proprietary Information and Inventions Agreement executed by Employee, (v) relating to shares of Common Stock of Biodel Inc. owned by Employee, (vi) under any indemnity provisions in favor of Employee contained in the certificate of incorporation or bylaws of the Company or under Delaware law, (vii) under the Indemnification Agreement with the Company dated executed by Employee or (viii) under any policy of liability insurance of the Company for directors and officers. The obligations set forth in (i) through (viii) are herein sometimes collectively referred to as “the Continuing Obligations”.

2. Employee agrees not to seek reemployment with the Company or any of its affiliates.

AGREED AND ACCEPTED this day of , :

BIODEL INC.

EXECUTIVE

By:

Its:

EX-10.3 4 y73827exv10w3.htm EX-10.3: EMPLOYMENT AGREEMENT 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:

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.

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.

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

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

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

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.

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:

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

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:

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.

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:

(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

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

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

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.

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;

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.

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.

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

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

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:

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

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.”

EX-10.4 5 y73827exv10w4.htm EX-10.4: EMPLOYMENT AGREEMENT EX-10.4

Exhibit 10.4

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of December 30, 2004, as amended and restated effective March 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 Roderike Pohl, an individual residing at 9 Coburn Road East, Sherman, CT. 06784 (“Employee”).

WITNESSETH:

WHEREAS, Employer desires to retain the services of Employee as

Vice President, Research; and

WHEREAS, Employee desires to continue 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;

WHEREAS, the parties wish to 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:

1. Position of Employment. Subject to the terms and conditions hereof,

Employer hereby agrees to employ the services of Employee as Vice President, Research 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 office of Vice President, Research. During the period that Employee is employed by Employer, Employee shall devote substantially all of her business time and attention to the performance of the duties described herein. Notwithstanding the foregoing, Employee shall be entitled 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 her duties hereunder. Employee shall at all times act in good faith in the performance of her 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 March 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 Renewal Term, as applicable, Employee or BIODEL in her or its respective sole discretion notifies the other party in writing of her or its intent to terminate the 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 her services to be rendered hereunder, an initial base salary of One Hundred Fifty Thousand Dollars ($150,000.00) (“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 or, if not a business day, the next preceding day which is a business day.

3.2 During the term of this Agreement, Employee, as Vice President, shall be entitled to receive an annual year-end bonus in cash in an amount determined by the Board of Directors. 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.

3.5 Employer shall reimburse Employee for any ordinary, necessary and reasonable travel, maintenance and entertainment expenses incurred by the Employee in the course of her duties under this Agreement, in accordance with the Employer’s customary policies and practices in effect from time to time, upon submission to the Employer of appropriate vouchers and receipts evidencing the same.

4. Termination. The employment of the Employee by the Company pursuant to the 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 her assigned duties for the Company customarily associated with the Office of Vice President, 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 her 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 moral turpitude or any felony; or (c) the material breach by the Employee of any terms of the Agreement, which breach continues for ten (10) days subsequent to written notice from the Company to the Employee of the breach;

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 ninety (90) days’ prior written notice of termination or payment in lieu of notice. The Employee may terminate her 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 her 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 Employee’s termination of employment for good reason must occur no later than one year following the initial existence of such condition. For the purpose of the Section 4.4, good reason for termination shall exist upon (i) the material breach by the Company of any term of this Agreement, (ii) the relocation of the principal office of the Company to a location which is more than 50 miles away from the present location, or (iii) 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 her through the last day of her 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 her termination and an additional six months because of death or disability. The Company will continue health benefits for one year after the date of termination.

5.3 Termination Without Cause or For Good Reason. 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 her under Section 4 (including the provision of medical insurance, disability and life insurance), at the times provided in Section 4, 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:

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:

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

6. Non-Compete and Non-Solicitation.

6.1 The Employee recognizes that her willingness to enter into the restrictive covenants contained in the 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 her 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 her 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:

(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 not more than 5% of the outstanding stock or equity of another entity), engage in the business of delivering insulin by the oral, sublingual or injectable route of administration; or

6.3. In the event that any court of competent jurisdiction determines that the duration or the 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, in the greatest area and to the greatest number of persons and entities that would not render them unenforceable.

6.4 The restrictions contained in this Section 6 and in Section 7 are necessary for the protection of the Company’s legitimate interests, confidential, proprietary or trade secret information, or goodwill; to protect the Company from the misuse or disclosure of its confidential, proprietary or trade secret information; and to protect the Company from unfair competition. The Employee agrees that any breach of this Section 6 or Section 7 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 other 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 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 her 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 her and not used by her 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 her 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 customer’s 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 her. 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 disclosure to her as shown by her 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;

8.4 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 her, since the commencement of her employment by the Company belongs to the Company.

9. Indemnification. Employer shall indemnify Employee and hold her 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 or breach of a representation set forth in Article 8.

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;

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;

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

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.

(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 11. 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, 13 and 14 shall survive the termination of this Agreement.

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

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

19. Miscellaneous.

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.

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 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/ Solomon S. Steiner
	Name:	Solomon S. Steiner
	Title:	Chief Executive Officer



	/s/ Roderike Pohl
	Roderike Pohl

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:

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

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