SEVERANCE AGREEMENT

SEVERANCE AGREEMENT

This Severance Agreement (Agreement) is entered into as of June 5, 2006, by and between Jay B. Knoll ("Employee") and Energy Conversion Devices, Inc., a Delaware corporation (the "Corporation").

Section 1 – Employment

The Employee's employment with the Corporation began on June 5, 2006.

Section 2 – Right to Terminate; Automatic Termination of Employment

(a)         Termination Without Cause . Subject to Section 3 of this Agreement, the Corporation may terminate Employee’s employment at any time and for any reason.

(b)           Termination For Cause . The Corporation may terminate Employee’s employment at any time for “Cause” (as defined below) by giving ten (10) business days notice to Employee stating the basis for such termination. Employee shall have the opportunity to respond or cure the reasons stated in the Corporation notice during the ten (10) business day notice period. “Cause” shall mean any of the following:

(i)   Employee has materially breached this Agreement or any other agreement to which Employee and the Corporation or its subsidiaries are parties or has materially breached any other obligation or duty owed to the Corporation or its subsidiaries;

(ii)   Employee has committed gross negligence, gross misconduct or conviction of a violation of law in the performance of Employee’s duties for the Corporation or its subsidiaries (Violation of the law shall not include traffic violations or misdemeanors);

(iii)   Employee has materially failed to follow reasonable, ethical and lawful instructions from the Board, officer, body or other entity or individual to whom Employee reports concerning the operations or business of the Corporation or its subsidiaries;

(iv)   Employee has been convicted of a felony the circumstances of which substantially relate to Employee’s employment duties with the Corporation or its subsidiaries;

(v)   Employee has misappropriated funds or property of the Corporation or its subsidiaries;

(vi)   Employee has attempted to obtain a personal profit from any transaction in which the Corporation or its subsidiaries has an interest, and which constitutes a corporate opportunity of the Corporation or its subsidiaries, or which is adverse to the interests of the Corporation or its subsidiaries, unless the transaction was approved in writing by the Corporation’s Board after full disclosure of all details relating to such transaction.

(c)           Termination by Death or Disability . Employee’s employment and the Corporation’s obligations under this Agreement shall terminate automatically, effective immediately and without any notice being necessary, upon Employee’s death or upon expiration of three (3) months after a determination of Disability of Employee. For purposes of this Agreement, “Disability” means the inability of Employee, due to a physical or mental

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impairment, to perform the essential functions of Employee’s job with the Corporation for a period of three (3) months, despite all reasonable accommodations having been made by the Corporation. A determination of Disability shall be made by an independent physician selected by the Corporation and the Employee who specializes in the area associated with Employee’s disability. Employee shall cooperate with any efforts to make such determination by the independent designated physician. Should the physician for the Employee disagree with the determination, the Corporation and Employee will select a third independent physician pursuant to the regulations pertaining to the Family and Medical Leave Act. Any such determination by the third physician shall be conclusive and binding on the Corporation and Employee. Any determination of Disability under this Section 2(c) is not intended to alter any benefits any party may be entitled to receive under any short-term or long-term disability insurance policy carried by either the Corporation or Employee with respect to Employee, which benefits shall be governed solely by the terms of any such insurance policy.

(d)           Termination by Resignation . Employee’s employment and the Corporation’s obligations under this Agreement shall terminate automatically, effective upon ten (10) business day written notice to the Corporation of Employee’s resignation from employment with the Corporation without “Good Reason” or at such other time as may be mutually agreed between the Corporation and Employee following the provision of such notice.

(e)           Termination for Good Reason . Employee may terminate Employee’s employment upon ten (10) business days advance written notice for “Good Reason” (as defined below) by giving notice to the Corporation stating the basis for such Good Reason termination. The Corporation will have the opportunity to cure the items set forth in the Good Reason notice within the ten (10) business day cure period. “Good Reason” shall mean:

Notwithstanding the foregoing to the contrary, Good Reason shall not exist unless Employee first provides the Board with notice of the facts alleged to constitute Good Reason and the provision of this Section 2 (e) which Employee alleges applies, and until such breach, reduction or requirement remains uncured for ten (10) business days following the Board’s receipt of such written notice from Employee.

Section 3 – Rights Upon Termination

(a)           Termination Without Cause and Termination for Good Reason . If Employee’s employment is terminated Without Cause or for Good Reason, Employee shall, after executing the Release of Claims described in Section 4 (m), receive (i) any unpaid Base Salary and accrued but unused vacation pay with respect to the period prior to the effective date of termination; (ii) severance payments equal to the Employee’s annual base salary (at the highest rate i