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                                                                   EXHIBIT 10.30



                        SEVERANCE COMPENSATION AGREEMENT

SEVERANCE COMPENSATION AGREEMENT dated as of October 21, 1996 and between
PROTEON, INC. (the "Company"), a Massachusetts corporation with its principal
offices at Nine Technology Drive Westborough, Massachusetts 01581, and Robert J.
Connaughton, Jr. (the "Executive"), residing at 102 Den Quarry Road, Lynn
Massachusetts 01904.

     WHEREAS, the Company's Board of Directors has recognized that the
possibility of a change in control of the Company may cause uncertainty among
the Company's senior management and may result in the departure or distraction
of its senior management to the detriment of the Company and its stockholders;

     WHEREAS, the Company's Board of Directors has determined that it is
appropriate to reinforce and encourage the continued attention and dedication of
members of the Company's senior management, including the Executive, to their
duties without distraction arising from the possibility of a change in control
of the Company;

     WHEREAS, the Executive desires assurance as to his compensation and
benefits in the event of any change in control of the company;

     NOW, THEREFORE, in consideration of the covenants and agreements herein
contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Executive agree
as follows:

1. TERM. This Agreement shall terminate, except to the extent that any
obligation of the Company hereunder remains unpaid as such time, upon the
earliest to occur of:

          (a) two (2) years from the date hereof;

          (b) the termination of the Executive's employment with the Company
based on (i) the death of the Executive, (ii) the Disability of the Executive,
(iii) termination by the Company for Cause, or (iv) termination by the Executive
other than for Good Reason; and

          (c) one year after the date of a Change in Control. As used in this
Agreement the term "Term" shall mean the period beginning on the date hereof and
ending upon the earliest to occur of events specified above.




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2. CHANGE IN CONTROL. No compensation shall be payable under this Agreement
unless and until there shall have been a Change in Control. As used in this
Agreement, the term "Change in Control" means that any of the following events
has occurred:

     (i)  any person (as defined in Section 3(a)(9) of the Securities Exchange
          Act of 1934, as amended (the "1934 Act")) (or any successor
          provision), becomes the beneficial owner (determined in accordance
          with Rule 13d-3 under the 1934 Act, or any successor provision)
          directly or indirectly, of more than fifty percent (50%) of the
          outstanding Common Stock of the Company or otherwise becomes entitled
          to vote more than fifty percent (50%) of the voting power entitled
          to be cast at elections for directors ("Voting Power") of the Company;

     (ii) there shall have been consummated any consolidation merger of the
          Company (A) in which the Company is not the continuing or
          surviving corporation unless such merger is with a corporation at
          least eighty percent (80%) of the Voting Power of which is held by the
          Company, or (B) pursuant to which the holders of the Company's shares
          of Common Stock immediately prior to such merger or consolidation are
          not the holders immediately after such merger or consolidation of at
          least a majority of the Voting Power of the entity resulting from such
          consolidation or merger;

    (iii) there shall have been consummated any sale, lease, exchange or other
          transfer (in one transaction or a series of related transactions) of
          all or substantially all of the assets of the Company; or

     (iv) during any period of two consecutive years, individuals who at the
          beginning of such period were members of the Board of Directors of the
          Company ceased for any reason to constitute a majority thereof, unless
          the election, or the nomination for election by the Company's
          stockholders, of each new director was approved by a vote of at least
          two-thirds of the directors still in office at the time of such
          election or nomination who were directors at the beginning of such
          Period.

As used in this definition of Change in Control, "Common Stock" means the Common
Stock, or if changed, the capital stock of the Company as it shall be
constituted from time to time entitling the holders thereof to share generally
in the distribution of all assets available for distribution to the Company's
stockholders



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after the distribution to any holders of capital stock with preferential rights.

3. TERMINATION FOLLOWING CHANGE IN CONTROL. The Executive shall be entitled to
the compensation provided in Section 4 hereof upon the termination of the
Executive's employment with the Company during the Term of this Agreement and
after a Change in Control unless such termination is as a result of (i) the
Executive's death, (ii) the Executive's Disability, (iii) termination by the
Company for Cause, or (iv) termination by the Executive other than for Good
Reason. As used in this Agreement, the following terms shall have the following
meanings:

     (a)  the term "Disability" shall mean that as a result the Executive's
          incapacity due to physical or mental illness or physical injury
          (excluding illness or injury which was caused by repeated substance
          abuse by the Executive), the Executive shall have been absent from his
          duties with the Company on a full-time basis (i] for a period of sixty
          (60) consecutive days or (ii) for an aggregate of ninety (90) days
          during any period of twelve (12) consecutive months;

     (b)  the term "Cause" shall mean any of (i) the willful and continued
          failure by the Executive to perform his duties with the Company, other
          than any such willful continued failure resulting from his incapacity
          due to physical or mental illness or physical injury (provided that if
          such willful and continued failure resulted from illness or injury
          which was caused by repeated substance abuse by the Executive, then
          the foregoing exception for physical or mental illness or physical
          injury shall not be applicable), (ii) the willful or knowingly
          reckless engaging by the Executive in misconduct which is materially
          injurious to the Company, financially or otherwise, including, without
          limitation, willful breach by the Executive of any employment or other
          agreement between the Executive and the Company, or (iii) the
          conviction of the Executive of a felony by a court of competent
          jurisdiction. For the purposes of the foregoing, (x) the failure of
          the Company to achieve desired or projected results shall not
          constitute Cause, but Cause shall only mean and include acts and/or
          omissions by the Executive which are specified in clauses (i), (ii)
          and (iii) of the immediately preceding sentence, and (y) no act or
          failure to act on the part of the Executive shall be considered
          "willful" unless done or admitted to be done by him not in good
          faith and without reasonable belief that his action or omission was
          in the best interest



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          of the Company. Notwithstanding the first sentence of this
          subparagraph (b), the Executive's employment shall not be deemed to
          have been terminated for Cause unless (A) reasonable notice shall
          have been given to him setting forth in detail the reasons for the
          Company's intention to terminate for Cause and, if such termination
          is pursuant to clause (i) or (ii) above only if the Executive has
          been provided a period of five (5) business days from receipt of
          such notice to cease the actions or inactions, and if he has not
          done so (B) an opportunity shall  have been provided for Executive,
          together with his counsel, to be heard before the Board of Directors
          of the Company, and (C) if such termination is pursuant to clause (i)
          or (ii) above, delivery shall have been made to the Executive of a
          Notice of Termination from the Board of Directors stating that in
          the good faith opinion of a majority of the Board of Directors
          (excluding the Executive) he was guilty of conduct set forth in
          clause (i) or (ii) above and specifying the particulars thereof in
          detail;

     (c)  the term "Good Reason" shall mean any of the following (without the
          Executive's express written consent):

          (i)  after a Change in Control, the assignment to the Executive by the
               Company of duties inconsistent with the Executive's position,
               duties, responsibilities and status with the Company immediately
               prior to such Change in Control, or change in the Executive's
               titles or offices as in effect immediately prior to such Change
               in Control, or any removal of the Executive from or any failure
               to reelect the Executive to any of such positions, except in
               connection with the termination of his employment for Disability,
               for Cause, as a result of the Executive's death or by the
               Executive other than for Good Reason:

          (ii) after a Change in Control, a reduction by the Company in the
               Executive's base salary as in effect on the date hereof or as the
               same may be increased from time to time during the Term of this
               Agreement, or the Company's failure after a Change in Control to
               increase (within 12 months of the Executive's last increase in
               base salary) the Executive's base salary by an amount which, on
               percentage basis, is not more than two percentage points below
               the average percentage increase in base salary effected in the
               preceding 12 months


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               for all officers of the Company having severance compensation
               agreements similar to this Agreement

         (iii) after a Change in Control, any failure by the Company to continue
               in effect any benefit plan or arrangement (including, without
               limitation, the Company's group life insurance plan, and medical,
               dental, accident and disability plans) in which the Executive is
               participating at the time of a Change in Control (or any other
               substitute plans providing the Executive with substantially
               similar benefits) (hereinafter referred to as "Benefit Plans"),
               or the taking of any action by the Company which would adversely
               affect the Executive's participation in or materially reduce
               the Executive's benefits under any such Benefit Plan or deprive
               the Executive of any material fringe benefit enjoyed by the
               Executive at the time of a Change in Control;

          (iv) after a Change in Control, any failure by the Company to continue
               in effect any incentive plan or arrangement (including, without
               limitation, the Company's Management Incentive Plan, and the
               right to receive performance awards and similar incentive
               compensation benefits) in which the Executive is participating
               at the time of a Change in Control (or any other substitute
               plans or arrangements providing him with substantially similar
               benefits) (hereinafter referred to as "Incentive Plans") or the
               taking of any action by the Company which would adversely affect
               the Executive's participation in any such Incentive Plan or
               reduce the Executive's benefits under any such Incentive Plan,
               expressed as a percentage of his base salary, by more than 10
               percentage points in any fiscal year as compared to the
               immediately preceding fiscal year;

          (v)  after a Change in Control, any failure by the Company to continue
               in effect any plan or arrangement to receive securities of the
               Company (including, without limitation, the Company's 199_
               Restated Stock Option Plan and any other plan or arrangement to
               receive and exercise stock options, stock appreciation rights,
               restricted stock or grants thereof) in which the Executive is
               participating at the time of a Change in Control of the Company
               (or substitute plans or arrangements providing him with
               substantially



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               similar benefits) (hereinafter referred to as "Securities Plans")
               or the taking of any action by the Company which would adversely
               affect the Executive's participation in or materially reduce the
               Executive's benefits under any such Securities Plans;

          (vi) after a Change in Control, requirement by the Company of the
               Executive's relocation to any place other than the location at
               which the Executive performed the Executive's duties prior to a
               Change in Control, except for required travel by the Executive on
               the Company's business to an extent substantially consistent with
               the Executive's business travel obligations at the time of a
               Change in Control;

         (vii) after a Change in Control, any failure by the Company to provide
               the Executive with the number of paid vacation days to which the
               Executive is entitled at the time of a Change in Control;

        (viii) any material breach by the Company of any provision of this
               Agreement;

          (xi) any failure by the Company to obtain the assumption of this
               Agreement by any successor assign of the Company in accordance
               with Section 7 hereof: or

          (x)  any purported termination of the Executive's employment which is
               not effected pursuant Notice of a Termination, and for purposes
               of this Agreement, no such purported termination shall be
               effective.

     (d)  The term "Notice of Termination" shall mean a written notice which
          shall indicate those specific termination provisions in this Agreement
          relied upon and which sets forth in reasonable detail the facts and
          circumstances claimed to provide a basis for termination of the
          Executive's employment under the provision so indicated. For purposes
          of this Agreement, no such purported termination by the Company shall
          be effective without such Notice of Termination.

     (e)  the term "Date of Termination" shall mean (i) if the Executive's
          employment is terminated by the Company for Disability, 30 days after
          Notice of Termination is




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        given to the Executive (provided that the Executive shall not have
        returned to the performance of the Executive's duties on a full-time
        basis during such 30 day period) or (b) if the Executive's employment
        is terminated by the Company for any other reason, the date on which a
        Notice Of Termination is given; PROVIDED that if within 30 days after
        any Notice of Termination is given to the Executive by the Company the
        Executive notifies the Company that a dispute exists concerning the
        Termination, the Date of Termination shall be the date the dispute is
        finally determined, whether by mutual agreement by the parties or upon
        final judgment, order or decree of a court of Competent jurisdiction
        (the time for appeal therefrom having expired and no appeal having been
        perfected)

4. Severance Compensation
   ----------------------

(a) Subject to the provisions of section 4 (b) below, and subject to the
Executive's continuing compliance with the provisions of Section 6 hereof and
the Agreement Regarding Confidential Information and Intellectual Property
attached hereto as EXHIBIT A, the compensation and benefits payable to the
Executive pursuant to this Agreement shall be the following (collectively the
"Severance Benefits"):

     (i}  The Company shall pay to the Executive in cash an amount equal to the
          Executive's aggregate compensation from the Company for the twelve
          (12) months ending upon the Change in Control. Such amount shall be
          payable the Company in twelve (12) equal monthly installment payable
          on the first day of each month commencing with the month following the
          Executive's Date of Termination. For purposes of this Section 4(a)(1),
          the Executive's "compensation" preceding a Change in Control shall
          include the Executive's base salary an any amounts paid or accrued
          pursuant to any Incentive Plans, but shall not include any amounts or
          benefits paid or accrued pursuant to any Benefit Plans or any
          Securities Plan nor shall it include the value of an other fringe
          benefits,

     (ii} Within thirty (30) days following the Date of Termination, the Company
          shall pay to the Executive, in a lump sum in cash, any accrued but
          unpaid salary, vacation and awards under any Incentive Plans earned
          but not paid as of the Date of Termination;


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    (iii) Effective not later than the Date of Termination, the Company shall
          (notwithstanding any contrary provision in any Securities Plan or any
          employment agreement) accelerate and make immediately exercisable in
          full unvested options and other rights which the Executive holds under
          any Securities Plans as of the Date of Termination, and all such
          options and rights shall be exercisable for an exercise period of 60
          days following the Date of Termination; and

     (iv) The Company at its own expense shall maintain in full force and effect
          for the Executive's continued benefit until the earlier of (i) two
          (2) years after the Date of Termination or (ii) the Executive's
          commencement of full-time employment with a new employer, medical
          and dental (but not life insurance or disability) plans, programs or
          arrangements in which the Executive was entitled to participate
          immediately prior to the Date of Termination, provided that his
          continued participation is possible under the general terms and
          provisions of such plans and programs. In the event that his
          participation in any such plan or program is barred, the Company
          shall arrange to provide the Executive with benefits substantially
          similar to those which he was entitled to receive under such plan and
          programs.

(b) Notwithstanding the foregoing, any Severance Benefits otherwise payable to
the Executive hereunder shall be as limited follows:

     (I)  No Severance Benefits shall be payable to the Executive under this
          Agreement to the extent that the total of such Severance Benefits and
          any payments otherwise payable to the Executive by the Company on or
          after a Change in Control, which would be deemed under Section 280(of
          the Internal Revenue Code of 1986 as amendment (the "Code"), to
          constitute "parachute payments" without regard to Section 280G(b) (2}
          (A)(ii), would equal or exceed in their present value (as determined
          under Section 280G(d)(4) of the Code and any regulations thereunder)
          300% of the Executive's base amount (as defined in Section 280G (b)
          (3) of the Code and regulations thereunder). In the event that the
          present value of such payments equals or exceeds such amount, the
          provisions set forth below will apply, and Severance Benefits payable
          to the Executive under this Agreement will be made only in accordance
          with this Section 4(b) notwithstanding any other provision to the
          contrary in this Agreement.


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     (ii) Not later than thirty (30) days after the Date of Termination, the
          Company will provide the Executive with a schedule specifying the
          present value of such Severance Benefits payable to the Executive
          under this Agreement (specifying the Section hereof under which each
          such payment is to be made) and any other payment otherwise payable
          to the Executive by the Company on or after the Change in Control
          which, in the Company's opinion, could constitute parachute payments
          under Section 280G. No payments under this Agreement shall be made
          until after thirty (30) days from the receipt of such schedule by the
          Executive. At any time prior to the expiration of said 30-day period,
          the Executive shall have the right to select from all or part of any
          category of payment to be made under this Agreement those payments to
          be made to the Executive in an amount the present value of which
          (when combined with the present value of any other payments otherwise
          payable to the Executive by the Company that may be deemed be
          parachute payments) the Company determines is than 300% of the
          Executive's base amount. If the Executive fails to exercise   his
          right to make a selection, the selection shall be made by the Company

    (iii) At any time prior to exercising the right to make a selection under
          paragraph (ii) of this Section 4(b), the Executive shall have the
          right to request that the Company obtain a ruling from the Internal
          Revenue Service ("Service") as to whether any or all payments listed
          on the schedule provided hereunder are, in the view of the Service,
          parachute payments under section 280G. Such ruling shall be sought
          made at the Company expense unless, in the written opinion of
          independent counsel for the Company, there is no reasonable
          likelihood of obtaining a favorable ruling, in which event such
          expense shall be borne by the Executive. If a ruling is sought
          pursuant to such request, no Severance Benefit under this Agreement
          shall be paid to the Executive until after thirty (30) days from the
          date the Company provides the Executive with a copy of such ruling,
          and the period during which the Executive may exercise his right to
          make a selection under paragraph (ii) hereof shall be extended to a
          date thirty (30) days from such date. For purposes of this Section
          4(b), the Executive and the Company hereby agree to be bound by the
          Service's ruling as to whether payments constitute parachute payments
          under Section 280G. If the Service declines, for any reason, to
          provide the ruling requested, the Company's


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          determination with respect to what payments constitute parachute
          payments shall control, and the period during which the Executive may
          exercise his right to make selection under paragraph (ii) hereof shall
          be extended to a date thirty (30) days from the date of the Service's
          notice indicating that no ruling will be forthcoming.

     (iv) The references to Section 280G herein are specific references to
          Section 280G as amended to date. If Section 280G is amended prior to
          the expiration or termination of this Agreement, or replaced by a
          successor statute, the limitations imposed by this Section 4(b) upon
          payments to be made to the Executive under this Agreement shall be
          deemed modified without further action of the parties so as to
          provide only for such limitations that are consistent with such
          amendment(s) or successor statute(s), as the case may be. In the
          event that Section 280G, or any successor statute, is repealed, this
          Section 4(b) shall cease to be effective on the date of such repeal.
          The parties to this Agreement recognize that final Treasury
          Regulations under Section 280G may affect the amount that may be paid
          hereunder and agree that, upon issuance of such final Regulations,
          this Agreement may be modified as in good faith deemed necessary in
          light of the provisions of such Regulations to achieve purposes
          hereof, and that consent to such modification(s) shall not be
          unreasonably withheld

5. No Obligation To Mitigate Damages; No Effect on Other Contractual Rights.
   ------------------------------------------------------------------------

(a) The Executive shall not be required to mitigate damages or the amount of
any payment provided for under this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment provided for under this
Agreement be reduced by any compensation earned by the Executive as the result
of employment by another employer after the Date of Termination, or otherwise

(b) The provisions of this Agreement, and any payment provided for hereunder,
shall not reduce any amounts otherwise payable, in any way diminish the
Executive's existing rights, or rights which would accrue solely as a result of
the passage of time, under any Benefit Plan, Incentive Plan or Securities Plan,
employment agreement or other contract, plan or arrangement; PROVIDED, HOWEVER,
IF THE EXECUTIVE ELECTS TO TAKE PAYMENT, AND IS PAID, UNDER SECTION 4(a)(i)
HEREOF, SUCH SEVERANCE PAYMENTS SHALL BE IN LIEU OF ANY OTHER SEVERANCE
PAYMENTS DUE FROM THE




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COMPANY UNDER ANY EMPLOYMENT AGREEMENT OR OTHER CONTRACT, PLAN OR ARRANGEMENT
WITH THE COMPANY.

6. Non-Competition; Confidentiality.
   --------------------------------

(a) The Executive covenants and agrees that if the Executive shall become
entitled to compensation hereunder as provided in Section 3 hereof, then for a
period of twelve (12) months following the Date of Termination, the Executive
shall not, without the Company's prior written consent, engage, directly or
indirectly, in any work or other activity which is in competition with the
business of the Company in the local area network or internetworking field in
any geographical area in which the Company conducts or is then actively
planning to conduct business at the Date of Termination. By way of example only
of the type of activities prohibited hereby, the Executive shall not solicit or
accept (or assist any person or entity in soliciting or accepting) any business
in the local area network or internetworking field from any person or entity
who or which was an active account of the Company at the Date of Termination

(b) Contemporaneously with the execution and delivery of this Agreement, the
Executive and the Company shall enter into an Agreement Regarding Confidential
Information and Intellectual Property in the Company's standard form, a copy of
which is attached hereto as EXHIBIT A.

7. Successors.
   ----------

(a) The Company will require any successor or assign (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to the Executive, expressly, absolutely and
unconditionally to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession or assignment had taken place. Any failure of the Company
to obtain such agreement prior to the effectiveness of any such succession or
assignment shall be a material breach of this Agreement and shall entitle the
Executive to terminate the Executive's employment for Good Reason. As used in
this Agreement, "Company" shall mean the Company as hereinbefore defined and
any successor or assign to its business and/or assets as aforesaid which
executes and delivers the agreement provided for in this Section 7 or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law. If at any time during the Term of this Agreement the
Executive is employed by any corporation a majority of the Voting Power of
which is then owned by the


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Company, directly or indirectly, "Company" as used in Section 3,4 and 12 hereof
shall in addition include such employer. In such event, the Company agrees that
it shall pay or shall cause such employer to pay any amounts owed to the
Executive pursuant to Section 4 hereof

(b) This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal and legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amounts are still payable to him hereunder, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Executive's devisee, legatee, or other designee or, if
there be no such designee, to the Executive's estate.

8. NOTICE. For purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered in person (including by any commercial courier
service or three (3) days after mailing by United States certified or
registered mail, return receipt requested, postage prepaid, to a party at his or
its address set forth at the beginning of this Agreement or such other address
as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon
receipt.

9. MISCELLANEOUS. No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and the Company. No waiver by either party
hereto at any time of a breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts (without
regard to conflicts of laws rules).

10. VALIDITY. The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect

11. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but


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all of which together will constitute one and the same instrument.

12. LEGAL FEES AND EXPENSES. The Company shall pay all legal fees and expenses
which the Executive may incur as a result of the Company's contesting the
validity, enforceability or the Executive's interpretation of, or determinations
under, this Agreement.

13. FURTHER ASSURANCES. The Company shall do, make, execute and deliver all
such additional and further acts, things, assurances and instruments as the
Executive may reasonably request in order to assure to the Executive his rights
hereunder and to carry into effect the provisions and intent of this Agreement.
Without limiting the generality of the foregoing, the Company shall, upon
request of the Executive, convert any options under any Securities Plan which
are "incentive stock options" into "non-qualified options" and amend
outstanding option agreements in a manner not inconsistent with such Securities
Plans.

IN WITNESS WHEREOF, the parties have executed this Severance Compensation
Agreement as of the date first above written.


                                      PROTEON, INC.

                                      By: /s/ Daniel J. Capone, Jr.
                                          --------------------------------------
                                          Daniel J. Capone, Jr.    President and
                                          Officer


Chief Executive

                                          /s/ Robert J. Connaughton, Jr.
                                          --------------------------------------
                                          Robert J. Connaughton, Jr.






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<PAGE>   14



                                    EXHIBIT A
                                    ---------

                      AGREEMENT REGARDING CONFIDENTIAL AND
                              INTELLECTUAL PROPERTY

                                [to be attached]

                                       14




<PAGE>   15


                                   RESOLUTION

                      PROTEON BOARD OF DIRECTOR'S MEETING

                          WEDNESDAY, OCTOBER 23, 1996

VOTED:    The Directors hereby authorize and direct Daniel J. Jr., President and
          Chief Executive Officer of the Company to execute in the name and on
          behalf of the Company and deliver to the person named below a
          severance compensation agreement in the form attached to these
          minutes:

                         Robert J. Connaughton, Jr.
                         Vice President, Finance and Chief
                         Financial Officer