And if he breached, what would he have to give back to the founders that was given to him for the code?
Also, if the code was given in return for equity (or the promise of equity), then he is an owner and should have a say in the decision to accept the investment and negotiate the terms.
I agree that the final stock agreement depends on the investor's lawyers (provided everything works out), but how the equity is divided before that is between the founder and the coder.
That is true, but only if you can prove there was an oral agreement. That is why written agreements are considered better, you have physical proof.
With an oral agreement you'll need to convince a judge or jury that both sides agreed to said contract, otherwise you could be SOL.
I know in Canada at least, unless otherwise stated copyright stays with the creator (in a contractor relationship, other way around for employees) and you've simply licensed them use of the code. So you're only bound to anything you've verbalized (that can be proven) and written down (think emails). I know our copyright laws are a bit different from the US though, so it's worth being prudent first (always is :).