MACROCHEM CORPORATION SEVERANCE AGREEMENT

Exhibit 10.3

MACROCHEM CORPORATION

SEVERANCE AGREEMENT

This is an AGREEMENT entered into between MACROCHEM CORPORATION (the

"Company," which term shall include any successor by merger, consolidation, sale

of substantially all of the Company's assets or otherwise) and MELVIN A. SNYDER

("Executive") effective as of the 17th day of December, 2004 ("Effective Date").

1. DEFINITIONS.

"Cause" means (a) willful malfeasance or gross negligence in the

performance by Executive of his or her duties, resulting in harm to the Company,

(b) fraud or dishonesty by Executive with respect to the Company, or (c)

Executive's conviction of any felony. The Company may treat a termination of

Executive's employment as termination for Cause only after (i) giving Executive

written notice of the intention to terminate for Cause and of his or her right

to a hearing and (ii) at least 15 days after giving the notice, conducting a

hearing at which Executive may be represented by counsel. Executive may be

suspended with pay during the notice period.

"Change of Control" is defined in Exhibit A.

"Good Reason" means, following a Change of Control, (i) failure by the

Company to maintain Executive in at least the positions he occupies on the date

of this Agreement or assignment to Executive of duties materially inconsistent

with such positions, (ii) failure by the Company to provide Executive with the

compensation and benefits he is receiving on the date of this Agreement, or as

they may hereafter be increased, other than in connection with a Company-wide

reduction of compensation and benefits, (iii) breach by the Company of any

material provision of this Agreement, (iv) relocation of Executive's principal

place of work to a location more than 50 miles from its location immediately

prior to the Change of Control or (v) any material reduction in Executive's

duties, responsibilities or authority or any other action that has the effect of

a demotion of the Executive. To the extent the Change of Control results in the

Company (or a successor to the Company by merger, consolidation or the like),

continuing in existence as a direct or indirect subsidiary of an acquirer, the

Executive shall be considered to have been demoted unless given the same

position, duties and authority in the ultimate parent of the acquirer. By way of

example, the Chief Executive Officer, Chief Financial Officer and/or Chief Legal

Officer of a public company would be considered to have reduced duties,

responsibility and authority, and hence to have been demoted if, as a result of

the Change of Control, such Executive did not have the same role in the ultimate

parent of the acquirer.

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1.2 Severance Benefits.

(a) Entitlement to Severance Benefits. In the event that the Company

terminates Executive's employment other than for Cause, the Company will,

subject to Section 2 below, provide severance benefits to Executive as set forth

below in this Section 1.2.

(b) Severance Benefits. The Company will provide severance benefits as

follows:

(i) The Company will pay to Executive within 30 days of the

termination a lump-sum cash amount equal to 100% of Executive's then current

annual base salary in effect immediately prior to the termination (or, if his

base salary has been reduced within 60 days of the termination or at any time

after a Change of Control, his base salary in effect prior to the reduction)

provided that Executive may in his sole discretion elect to have such payment

made in monthly installments over a period not to exceed 12 months. The

foregoing payments are in addition to and not in lieu of salary and bonus for

the current year that has been earned but not yet paid. If current year target

bonus is tied, in whole or in part, to annualized performance benchmarks, it

will be equitably prorated.

(ii) The Company will continue to provide Executive, for a period

of 12 months from the date of termination or until commencement of new

employment providing substantially similar benefits, whichever is earlier, with

any medical, dental, disability, life insurance and automobile reimbursement

benefits and other perquisites in effect at the time of his termination (or, if

his level of benefits has been reduced within 60 days of the termination, his

level of benefits in effect prior to the reduction), provided the Company is

able to provide such benefits to Executive under its existing plans and

arrangements.

(iii) The Company will make outplacement services available to

Executive for a period of 6 months from the date of termination.

(iv) To the extent not otherwise provided for under the Company's

stock plans, all options to purchase Company stock held by Executive will become

exercisable and remain exercisable for the period of time set forth in the

instruments governing such options, and all restricted stock held by Executive

under restricted stock plans and arrangements of the Company will become vested.

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1.3 Severance Benefits Upon Change of Control.

(a) Entitlement to Severance Benefits. In the event that, following or

in connection with a Change of Control, the Company terminates Executive's

employment without Cause, or if Executive terminates his employment for Good

Reason, the Company will, subject to Section 2 below, provide severance benefits

to Executive as set forth below in this Section 1.3.

(b) Severance Benefits. The Company will provide severance benefits as

follows:

(i) The Company will pay to Executive within 30 days of the

termination a lump-sum cash amount equal to the sum of (a) 100% of Executive's

then current annual base salary in effect immediately prior to the termination

(or, if his base salary has been reduced within 60 days of the termination or at

any time after a Change of Control, his base salary in effect prior to the

reduction), plus (b) 100% of the Executive's target bonus for the current year

or for the year immediately prior to the Change of Control, whichever is higher;

provided that Executive may in his sole discretion elect to have such payment

made in monthly installments over a period not to exceed 12 months. The

foregoing payments are in addition to and not in lieu of salary and bonus for

the current year that has been earned but not yet paid. If current year target

bonus is tied, in whole or in part, to annualized performance benchmarks, it

will be equitably prorated.

(ii) The Company will continue to provide Executive, for a period

of 12 months from the date of termination or until commencement of new

employment providing substantially similar benefits, whichever is earlier, with

any medical, dental, disability, life insurance and automobile reimbursement

benefits and other perquisites in effect at the time of his termination (or, if

his level of benefits has been reduced within 60 days of the termination, his

level of benefits in effect prior to the reduction), provided the Company is

able to provide such benefits to Executive under its existing plans and

arrangements.

(iii) The Company will make outplacement services available to

Executive for a period of 6 months from the date of termination.

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(iv) To the extent not otherwise provided for under the Company's

stock plans, all options to purchase Company stock held by Executive will become

exercisable and remain exercisable for the period of time set forth in the

instruments governing such options, and all restricted stock held by Executive

under restricted stock plans and