EXHIBIT 10.1
BIODEL INC.
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (this “Agreement”), dated and effective as of
June 9, 2008, is between Biodel Inc., a Delaware corporation (the “Company”),
and Gerard Michel (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; and
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.
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;
(c) “Change of Control Date” shall mean the first date on which a Change of
Control occurs;
(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;

 

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(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 be for a period of two (2) years from
the date of this Agreement as first appearing; provided, however, that the Term
shall automatically renew for additional one (1) year periods, unless notice of
non-renewal is given by either party to the other party at least ninety
(90) days prior to the initial Term or any renewal Term. If such notice is
given, this Agreement shall terminate at the end of the Term or the then current
renewal Term without further action by either the Company or the Executive.
Notwithstanding the foregoing, if a Change of Control occurs during the Term,
the Term shall automatically extend for the duration of the Change of Control
Period and shall automatically terminate at the end of the Change of Control
Period.
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.

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3.4 EMPLOYMENT AT WILL
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, unless the Executive and the Company agree to defer the receipt of the
Annual Bonus.
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.

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7. TERMINATION
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

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employment and performance of services will continue during such specified
period unless the 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
(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); and

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(v) any compensation previously deferred by the Executive (together with accrued
interest or earnings thereon, if any) and any accrued paid time-off that would
be payable under the Company’s standard policy, in each case 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.

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8.2 TERMINATION FOR CAUSE OR OTHER THAN FOR GOOD REASON
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 EXPIRATION OF TERM
In the event the Executive’s employment is not terminated prior to expiration of
the Term and notice of nonrenewal is given pursuant to Section 2, this Agreement
shall terminate without further obligation on the part of the Company to the
Executive upon the expiration of the Term.
8.4 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).
8.5 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.
8.6 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

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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;
(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.
8.7 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 non-renewal by the Company of this Agreement; provided, however, that
the Executive may only utilize this paragraph (d) during the 30-day period
immediately following his receipt of the notice of non-renewal given by the
Company pursuant to Section 2 hereof;

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(e) 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
(f) 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 and the Company or its successor fails to cure any such
event within 30 days after receipt of the notice.
8.8 WITHHOLDING TAXES
Any payments provided for in this Agreement shall be paid net of any applicable
withholding required under federal, state or local law.
8.9 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.
8.10 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.
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.
10. NONDISCLOSURE; RETURN OF MATERIALS; NONSOLICITATION

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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
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

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Company would be required to perform it if no such succession had taken place.
As used in this Agreement, “Company” shall mean Biodel Inc. and any successor to
its business and/or assets as aforesaid that assumes and agrees to perform this
Agreement by operation of law, or otherwise. All the terms and provisions of
this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors and permitted
assigns.
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 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

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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 OTHER AGREEMENTS
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.
Reference is made to the offer of employment made to Executive by letter
addressed to Executive from Solomon Steiner dated November 12, 2007 (the “Offer
Letter”). In the event of any inconsistency between the terms and provision of
the Offer Letter and the terms and provisions of this Agreement, the terms and
provisions of this Agreement shall govern and control. Except as so provided,
the Offer Letter is ratified and confirmed in all respects.
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

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Section 8.1(d) and Section 8.1(a)(ii), (iii) or (iv), whichever is applicable,
then to the salary 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.
IN WITNESS WHEREOF, the parties have executed and entered into this Agreement
effective on the date first set forth above.
IN WITNESS WHEREOF, the parties have executed and entered into this Agreement
effective on the date first set forth above.

                  BIODEL INC.       EXECUTIVE    
 
               
By:
  /s/ Solomon S. Steiner
 
      /s/ Gerard J. Michel
 
    Its: President & CEO            

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APPENDIX A
For purposes of this Agreement, a “Change of Control” shall be deemed to have
occurred, if any one of the following events occurs:
(a) the acquisition by any person or group of beneficial ownership of more than
50% of the outstanding shares of Common Stock of the Company, or, if there are
then outstanding any other voting securities of the Company, such acquisition of
more than 50% of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors, except for any of the following acquisitions of beneficial ownership
of Common Stock or other voting securities of the Company: (i) by the Company or
any Employee benefit plan (or related trust) sponsored or maintained by the
Company or any entity controlled by the Company; (ii) by Solomon S. Steiner; or
(iii) by any person or entity during the lifetime Solomon S. Steiner if the
shares acquired were beneficially owned by Solomon S. Steiner immediately prior
to their acquisition and the acquisition is a transfer to a trust, partnership,
corporation or other entity in which Solomon S. Steiner owns a majority of the
beneficial interests;
(b) the Company sells all or substantially all of its assets (or consummates any
transaction having a similar effect) or the Company merges or consolidates with
another entity or completes a reorganization unless the holders of the voting
securities of the Company outstanding immediately prior to the transaction own
immediately after the transaction in approximately the same proportions 50% or
more of the combined voting power of the voting securities of the entity
purchasing the assets or surviving the merger or consolidation or the voting
securities of its parent company, or, in the case of a reorganization, 50% or
more of the combined voting power of the voting securities of the Company;
Notwithstanding the foregoing, any purchase or redemption of outstanding shares
of Common Stock or other voting securities by the Company resulting in an
increase in the percentage of outstanding shares or other voting securities
beneficially owned by any person or group shall be deemed to constitute a
reorganization; however, no increase in the percentage of outstanding shares or
other voting securities beneficially owned by Solomon S. Steiner or any person
or entities referred to in (a)(i) or (iii) above resulting from any redemption
of shares or other voting securities by the Company shall result in a Change of
Control;
(c) the Company is liquidated; or
(d) the Board (if the Company continues to own its business) or the 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 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                     ,
(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.
     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

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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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