Exhibit 10.2


 


Compensation of Directors


 


Non-employee
directors of the Company are paid $3,000 for each regular meeting and $500 for
each special meeting attended.  In
addition, directors serving on committees of the Board are paid for attendance
at each committee meeting as follows: $1,000 for the committee chair and $500
for non-chair committee members.  The
co-chairs of the Research and Development Committee of the Board of Directors
(the ‘‘RDC’’) each receive $40,000 per year and do not receive per-meeting fees
for RDC meeting attendance.  Directors
are also reimbursed for their cost incurred in attending Board and committee
meetings.  In April 2004, the Board added
an annual retainer of $10,000, payable quarterly, for all non-employee
directors, and an additional annual retainer of $10,000 for the chair of the
Audit Committee.


 


Each non-employee
director of the Company also receives stock option grants under the Company’s
2004 Non-Employee Directors’ Stock Option Plan (the ‘‘2004 Directors’ Plan’’).  Only non-employee directors of the Company are
eligible to receive options under the 2004 Directors’ Plan.  Options granted under the 2004 Directors’
Plan are intended by the Company not to qualify as incentive stock options
under the Internal Revenue Code.  Prior
to approval of the 2004 Directors’ Plan by the Company’s stockholders in July
2004, non-employee directors received grants of stock options under the Company’s
1994 Long-Term Performance Incentive Plan, as amended.  Options to purchase 10,000 shares of common
stock are granted automatically under the 2004 Directors’ Plan to each
non-employee director who (i) is elected or re-elected as a director of the
Company at an annual meeting of stockholders, (ii) continues service as a
director of the Company after an annual meeting of stockholders at which the
director is not subject to re-election, or (iii) is otherwise appointed as a
director of the Company in accordance with the Company’s bylaws, in each case
on the business day next following each such annual meeting or appointment.


 


Options to
purchase 10,000 shares of common stock are granted automatically to each
non-employee director who is appointed or continues to serve after an annual
meeting of stockholders as chair of the Audit, Compensation and Nominating and
Corporate Governance Committees of the Board of Directors on the business day
next succeeding each such appointment or continuation of service, as the case
may be.  In addition, options to purchase
7,500 shares of common stock are automatically granted to each non-employee who
is appointed to the RDC upon initial appointment to the committee, and options
to purchase 3,000 shares of common stock are automatically granted to each
non-employee director who continues service as a RDC member after an annual
meeting of stockholders, in each case on the business day next succeeding such
appointment or continuation of service, as the case may be.  Non-employee directors also may be granted
options to purchase shares of common stock at the discretion of the Board of
Directors.  All such options are
exercisable at an exercise price equal to the fair market value of the common
stock on the date of grant.  Options
granted as annual grants will become exercisable in full on the first
anniversary following the date of grant, so long as the optionee has provided
continuous service through such date.  Options
granted as initial grants will become exercisable in full on the first business
day immediately following the later of the Company’s annual meeting of stockholders
next following the date of grant or six months following the date of grant, so
long as the optionee has provided continuous service through such date.  The term of options granted under the 2004
Directors’ Plan is ten years.  In the
event of a change-in-control transaction involving the Company or if a
non-employee director is required to resign in connection with such
change-in-control, the vesting of each option will accelerate in full.


 


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