Exhibit 10.1

GENERAL RELEASE AND SEPARATION AGREEMENT

This General Release and Separation Agreement (hereafter “Agreement”) is entered
into between Bradford S. Goodwin (the “Executive”), and Novacea, Inc. (the
“Company”), effective eight days after the date of the Executive’s signature
(the “Effective Date”), unless he revokes his acceptance as provided in
Paragraph 7(c), below.

WHEREAS, the Executive is the Chief Executive Officer of the Company;

WHEREAS, the parties entered into an Executive Severance Benefits Agreement
dated April 13, 2006, pursuant to which the Executive is entitled to payment of
certain benefits upon a termination of his employment by the Company other than
for Cause;

WHEREAS, the Company and Executive both wish to terminate the Executive’s
employment other than for Cause, effective January 1, 2007;

WHEREAS, the Company and the Executive now wish to document the termination of
their employment relationship and fully and finally to resolve all matters
between them;

THEREFORE, in exchange for the good and valuable consideration set forth herein,
the adequacy of which is specifically acknowledged, the Executive and the
Company hereby agree as follows:

1. Separation of Employment. The Executive resigned all positions that the
Executive held as an officer and member of the Board of Directors of the
Company, and of all subsidiaries of the Company, effective December 7, 2006. The
Executive’s employment shall terminate effective January 1, 2007 (the
“Separation Date”).

2. Payment of Accrued Wages and Expenses. On the Separation Date, the Executive
shall be paid an amount equal to accrued wages, including any remaining accrued,
unused Vacation, through the Separation Date, less applicable taxes and other
authorized withholding. The Company shall promptly reimburse the Executive for
all reasonable and properly documented business expenses incurred through the
Separation Date that are submitted by him on or before January 1, 2007, in
accordance with the Company’s travel and expense policies. As of the Separation
Date, the Executive shall no longer have the right to participate in any Company
benefit plans, except as required by law. The Executive shall be permitted to
participate in the Company’s 401(k) Plan in calendar year 2007, to the full
extent permitted by law.

3. Bonus for the Fiscal Years Ending December 31, 2006 and December 31, 2007.

(a) The Executive shall be paid a bonus for the fiscal year ending December 31,
2006, in the amount of fifty-six percent (56%) of the Executive’s FY 2006 bonus
target. The bonus shall be paid in a lump sum no later than thirty (30) days
following the Separation Date, less applicable taxes and other authorized
withholding. In no event shall the Executive have the ability to affect the
timing of the payment of compensation by acceleration, deferral, or otherwise
under this Section 3(a).

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(b) For the fiscal year ending December 31, 2007, the Executive shall be paid a
bonus equal to fifty percent (50%) of the Executive’s FY 2006 bonus target. The
bonus shall be paid in a single lump sum on a date which is no earlier than six
(6) months and two days following the Separation Date, but no later than
July 31, 2007, less applicable taxes and other authorized withholding. The
payment of this bonus is intended to comply with the requirements of Internal
Revenue Code Sections 409A(a)(2(A)(i) and 409A(a)(2)(B)(i) and the proposed or
final Treasury regulations promulgated thereunder. In no event shall the
Executive have the ability to affect the timing of the payment of compensation
by acceleration, deferral, or otherwise under this Section 3(b).

4. Stock Options.

(a) Executive has been granted the options to purchase shares of the Company’s
common stock described in Exhibit A hereto (collectively, the “Options”). As of
the Separation Date, the Executive shall be vested in that number of shares of
the Company’s common stock set forth next to each such Option (the “Vested
Options”), which includes an amount equal to vesting that would have occurred
over the twelve-month period following the Separation Date, had the Executive
remained continuously employed by the Company during such period. Except as
otherwise provided in this Agreement, the Executive acknowledges and agrees that
the portion of each Option that is unvested as of the Separation Date is
forfeited and shall cease to be exercisable as of the Separation Date. The
Executive may exercise the Vested Options in accordance with their original
terms of grant as modified by this Paragraph 4.

(b) Consistent with the other terms of the Plan(s) under which the options were
issued, the Executive shall be permitted, subject to subparagraph (d) below, to
exercise Vested Options on or before December 31, 2007.

(c ) In the event that the Separation Date falls within the Change of Control
Benefits Period, as defined in the Executive Severance Benefits Agreement dated
April 13, 2006 (the “April 13 Agreement”), the vesting and/or exercisability of
each of Executive’s stock awards shall be immediately accelerated 100%.

(d) Notwithstanding anything in the Agreement to the contrary, within 29 days of
the execution of this Agreement, the Executive will inform the Company whether
or not the Executive elects to accept any of the benefits of an extended
exercisability period with respect to all or any portion of his Incentive Stock
Options. Any failure of the Executive to so notify the Company shall be treated
as an acceptance of such extended exercisability period.

5. Severance. Beginning on the date which is no earlier than six (6) months and
two days following the Separation Date, but no later than July 31, 2007, the
Company shall:

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(a) Pay to the Executive in a single lump sum six (6) months of salary at the
Executive’s final base rate, less applicable taxes and other authorized
withholding; and

(b) Commencing on July 3, 2007, pay to the Executive in accordance with the
Company’s normal payroll practices, six (6) months of salary at the Executive’s
final base rate, less applicable taxes and other authorized withholding.

The payments of severance detailed under this Section 5 are intended to comply
with the requirements of Internal Revenue Code Sections 409A(a)(2(A)(i) and
409A(a)(2)(B)(i) and the proposed or final Treasury regulations promulgated
thereunder.

6. COBRA. Executive’s health care coverage shall continue until January 31,
2007. Thereafter, the Executive shall be eligible to continue, at his own cost,
health care benefits in accordance with the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”). The Executive shall receive
detailed instructions regarding his COBRA rights following the Separation Date.

7. General Release of Claims by the Executive.

(a) The Executive, on behalf of himself and his executors, heirs,
administrators, representatives and assigns, hereby releases and forever
discharges the Company and all predecessors, successors and their respective
parent corporations, affiliates, related, and/or subsidiary entities, and all of
their past and present investors, directors, shareholders, officers, general or
limited partners, employees, attorneys, agents and representatives, and employee
benefit plans in which the Executive is or has been a participant by virtue of
his employment with the Company (the “Company Releasees”), from any and all
claims, debts, demands, accounts, judgments, rights, causes of action, equitable
relief, damages, costs, charges, complaints, obligations, promises, agreements,
controversies, suits, expenses, compensation, responsibility and liability of
every kind and character whatsoever (including attorneys’ fees and costs),
whether in law or equity, known or unknown, asserted or unasserted, suspected or
unsuspected (collectively, “Claims”), which the Executive has or may have had
against such entities based on any events or circumstances arising or occurring
on or prior to the date hereof or on or prior to the Separation Date, arising
directly or indirectly out of, relating to, or in any other way involving in any
manner whatsoever the Executive’s employment by the Company or the separation
thereof, and any and all claims arising under federal, state, or local laws
relating to employment, including without limitation claims of wrongful
discharge, breach of express or implied contract, fraud, misrepresentation,
defamation, or liability in tort, claims of any kind that may be brought in any
court or administrative agency, any claims arising under Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, the Older Workers Benefit Protection Act, the Fair Labor
Standards Act, the Employee Retirement Income Security Act, the Family and
Medical Leave Act, the California Fair Employment and Housing Act, the
California Family Rights Act, the California Labor Code and similar state or
local statutes, ordinances, and regulations. Notwithstanding the generality of
the foregoing, the Executive does not release the following claims and rights:

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(i) Claims for indemnity pursuant to California Labor Code Section 2802, and the
Company’s by-laws and Indemnity Policy;

(ii) The Company’s obligations under this Agreement;

(iii) Claims by the Executive for unemployment compensation or state disability
insurance benefits pursuant to the terms of applicable state law

(iv) Claims for pension and 401(k) Plan benefits fully vested as of the
Separation Date;

(v) The right of the Executive to bring to the attention of the Equal Employment
Opportunity Commission claims of discrimination; provided, however, that the
Executive does release his right to secure any damages for alleged
discriminatory treatment.

(b) THE EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN ADVISED OF AND IS FAMILIAR WITH
THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

BEING AWARE OF SAID CODE SECTION, THE EXECUTIVE HEREBY EXPRESSLY WAIVES ANY
RIGHTS HE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW
PRINCIPLES OF SIMILAR EFFECT, TO THE EXTENT OF THE FOREGOING RELEASE.

(c) In accordance with the Older Workers Benefit Protection Act of 1990, the
Executive acknowledges that he is aware of the following:

 

  (i) He has a right to consult with an attorney before signing this Agreement;

 

  (ii) He has 21 days from the date this offer is received to consider this
Agreement; and

 

  (iii) He has seven days after signing this Agreement to revoke his acceptance
of it in writing, addressed and delivered no later than the expiration of the
seventh day to the Chairman of the Company’s Board of Directors, and the
Executive’s acceptance will not be effective until that revocation period has
expired.

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(d) The Executive represents and warrants to the Company Releasees that there
has been no assignment or other transfer of any interest in any Claim that the
Executive may have against the Company Releasees, or any of them. The Executive
agrees to indemnify and hold harmless the Company Releasees from any liability,
claims, demands, damages, costs, expenses and attorneys’ fees incurred as a
result of any person asserting such assignment or transfer of any right or
claims under any such assignment or transfer from the Executive.

(e) The Executive agrees that if he hereafter commences, joins in, or in any
manner seeks relief through any suit arising out of, based upon, or relating to
any of the Claims released hereunder or in any manner asserts against the
Company Releasees any of the Claims released hereunder, then the Executive will
pay to the Company Releasees against whom such claim(s) is asserted, in addition
to any other damages caused thereby, all attorneys’ fees incurred by such
Company Releasees in defending or otherwise responding to said suit or Claim.

8. Nondisparagement. The Executive agrees that neither he nor anyone acting by,
through, under or in concert with him shall disparage or otherwise communicate
negative statements or opinions about the Company, its Board members, officers,
employees or business. Likewise, the Officers and Directors of the Company, and
each of them, shall not disparage, or otherwise communicate negative statements
or opinions about the Executive or his performance while employed by the
Company.

9. No Solicitation. For a period of one (1) year following the Separation Date,
the Executive shall not solicit or encourage, or cause others to solicit or
encourage, any employees, contractors or vendors of the Company to terminate
their employment, service or contractual relationship with the Company.

10. Cooperation. The Executive agrees to give reasonable cooperation to the
Company, at the Company’s request, in any pending or future litigation or
arbitration brought against the Company and in any investigation the Company or
any governmental agency may conduct, which shall include up to two days per
month during the 12 months following the Separation Date. The Company agrees to
pay Executive $2,000 per day for any additional assistance. The Company shall
reimburse the Executive for all out of pocket expenses reasonably incurred by
him in compliance with this Paragraph. Notwithstanding the foregoing, and
subject to the Executive’s right, if any, to indemnification under California
law, the Company’s by-laws or the Indemnity Policy, the Company shall have no
obligation to pay the Executive for time spent and expenses incurred by the
Executive in any pending or future litigation or arbitration where the Executive
is a co-defendant or party to the arbitration or litigation. Other than at the
Company’s request, or in response to a request by a governmental agency for
informal cooperation by the Executive, the Executive shall not, in the absence
of a valid subpoena, give information, evidence or testimony in any matter in
which the Company is a party, or which affects the interests of the Company. The
Executive shall promptly inform the Company of any intention by him to provide
information on an informal basis to a governmental agency about the Company, or
about the Executive’s actions while in the Company’s employ. The Executive shall
further promptly inform the Company of any subpoena issued to him to testify
about the Company or about matters affecting the Company’s interests.

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11. Confidential Information; Return of Company Property.

(a) The Executive acknowledges that, in the course of his employment by the
Company, he was given access to competitive, confidential information that is
proprietary to the Company (the “Confidential Information”). The Executive
agrees:

 

  (i) that all Confidential Information shall remain a trade secret and the sole
property of the Company;

 

  (ii) to keep in strict confidence all Confidential Information and not
disclose or allow the disclosure of any Confidential Information to any third
party;

 

  (iii) not to publish, disclose or allow disclosure to others of any
Confidential Information, in whole or in part; and

 

  (iv) that the Company shall have the right to such injunctive or other
equitable relief from a court of competent jurisdiction as may be necessary or
appropriate to prevent any use or disclosure of Confidential Information in any
manner which has not been authorized by the Company and to such damages as are
occasioned by such improper use or disclosure.

(b) The Executive represents and warrants that, on or before the Separation
Date, he shall deliver to the Company all originals and copies of
correspondence, drawings, manuals, letters, notes, notebooks, reports, programs,
plans, proposals, financial documents, or any other documents concerning the
Company’s customers, business plans, marketing strategies, products, processes
or business of any kind and the originals and copies of all documents containing
Confidential Information which are in the possession or control of the Executive
or his agents or representatives.

(c) The Executive represents and warrants that, on or before the Separation
Date, he shall return to the Company all equipment of the Company in his
possession or control.

12. Taxes.

(a) It is the Executive’s and Company’s intent that any amounts of compensation
paid to the Executive pursuant to this Agreement, which are identified as
deferred compensation under a nonqualified deferred compensation plan as defined
in Code Section 409A and the proposed or final Treasury regulations promulgated
thereunder, be deferred pursuant to an election properly made pursuant to the
requirements of Code Section 409A and the proposed or final Treasury regulations
thereunder. Further, since the Executive is a “Specified Employee” as defined in
Code Section 409A and the Treasury regulations

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promulgated thereunder, no payments of deferred compensation within the meaning
of Section 409A shall be payable to the Executive until a date not sooner than
six months after the Separation Date as specified herein.

(b) To the extent any taxes may be payable by the Executive for the benefits
provided to him by this Agreement beyond those withheld by the Company, the
Executive agrees to pay them himself and to indemnify and hold the Company and
the other entities released herein harmless for any tax claims or penalties, and
associated attorneys’ fees and costs, resulting from any failure by him to make
required payments.

13. In the Event of a Claimed Breach. Any dispute, claim or controversy based
on, arising out of or relating to Executive’s employment or this Agreement shall
be settled by final and binding arbitration in San Mateo County, California,
before a single neutral arbitrator in accordance with the National Rules for the
Resolution of Employment Disputes (the “Rules”) of the American Arbitration
Association, and judgment on the award rendered by the arbitrator may be entered
in any court having jurisdiction. Arbitration may be compelled pursuant to the
California Arbitration Act (Code of Civil Procedure §§ 1280 et seq.). If the
parties are unable to agree upon an arbitrator, one shall be appointed by the
AAA in accordance with its Rules. Each party shall pay the fees of its own
attorneys, the expenses of its witnesses and all other expenses connected with
presenting its case. Other costs of the arbitration, including the cost of any
record or transcripts of the arbitration, AAA’s administrative fees, the fee of
the arbitrator, and all other fees and costs, shall be borne by the Company.
Notwithstanding the foregoing, it is acknowledged that it will be impossible to
measure in money the damages that would be suffered if the parties fail to
comply with any of the obligations imposed on them under Paragraphs 11(a) and
11(b) hereof, and that in the event of any such failure, an aggrieved person
will be irreparably damaged and will not have an adequate remedy at law. Any
such person shall, therefore, be entitled to injunctive relief, including
specific performance, to enforce such obligations, and if any action shall be
brought in equity to enforce any of the provisions of Paragraphs 11(a) and 11(b)
of this Agreement, none of the parties hereto shall raise the defense that there
is an adequate remedy at law. In the event of any legal action and/or
arbitration relating to or arising out of this Agreement, the prevailing party
shall be entitled to recover from the losing party its attorneys’ fees and costs
incurred in that action to the extent permissible by law.

14. Choice of Law. This Agreement shall in all respects be governed and
construed in accordance with the laws of the State of California, including all
matters of construction, validity and performance, without regard to conflicts
of law principles.

15. Notices. All notices, demands or other communications regarding this
Agreement shall be in writing and shall be sufficiently given if either
personally delivered or sent by facsimile or overnight courier, addressed as
follows:

 

  (a) If to the Company:

       Novacea, Inc.

       Attention: Chief Executive Officer

       601 Gateway Blvd., Suite 800

       South San Francisco, CA 94080

       Phone: (650) 228-1800

       Fax: (650) 228-1088

 

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       Copy to:

 

       Latham & Watkins LLP

       Attention: Mark Roeder

       140 Scott Drive

       Menlo Park, CA 94025

       Phone: 650-328-4600

       Fax: 650-463-2600

 

  (b) If to the Executive:

 

       Bradford S. Goodwin

       Via home address on file with Company

 

       Copy to:

 

       Fred Caspersen

       Holly L. Sutton

       Farella, Braun + Martel LLP

       235 Montgomery Street, Ste. 30

       San Francisco, CA 94104

16. Severability. Except as otherwise specified below, should any portion of
this Agreement be found void or unenforceable for any reason by a court of
competent jurisdiction, the parties intend that such provision be limited or
modified so as to make it enforceable, and if such provision cannot be modified
to be enforceable, the unenforceable portion shall be deemed severed from the
remaining portions of this Agreement, which shall otherwise remain in full force
and effect. If any portion of this Agreement is so found to be void or
unenforceable for any reason in regard to any one or more persons, entities, or
subject matters, such portion shall remain in full force and effect with respect
to all other persons, entities, and subject matters.

17. Understanding and Authority. The parties understand and agree that all terms
of this Agreement are contractual and are not a mere recital, and represent and
warrant that they are competent to covenant and agree as herein provided.

18. Integration Clause. This Agreement contains the entire agreement of the
parties with regard to the separation of the Executive’s employment, and
supersedes and replaces any prior agreements as to that matter. This Agreement
may not be changed or modified, in whole or in part, except by an instrument in
writing signed by the Executive and the Company’s Chief Executive Officer.

19. Execution in Counterparts. This Agreement may be executed in counterparts
with the same force and effectiveness as though executed in a single document.

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The parties have carefully read this Agreement in its entirety; fully understand
and agree to its terms and provisions; and intend and agree that it is final and
binding on all parties.

IN WITNESS WHEREOF, and intending to be legally bound, the parties have executed
the foregoing on the dates shown below.

 

BRADFORD S. GOODWIN     NOVACEA, INC.

/s/ Bradford S. Goodwin

   

/s/ John Walker

    By:   John Walker     Title:   Chairman Date 12/12/06     Date 12/13/06