EX-10.1






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;



 









 






(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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