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                                                                    Exhibit 10.1

May 20, 2004

Mr. Harlan Plumley
83 Ferncroft Road
Waban, MA 02468

RE: SEPARATION AGREEMENT AND RELEASE

Dear Harlan:

      This letter agreement will confirm our mutual understanding with respect
to the arrangements we have made in connection with the termination of your
position as an officer of Lightbridge, Inc. ("Lightbridge" or the "Company") and
the termination of your employment.

      1.    RESIGNATION AS OFFICER; TERMINATION OF EMPLOYMENT.

      You hereby agree to resign as an officer of the Company effective June 30,
2004. Your status as an employee and all employee benefits will also be
terminated effective June 30, 2004.

      2.    TRANSITION PERIOD.

      You will continue to perform in a professional manner your current duties
and any transition duties through the date of termination of your employment.

      3.    SEVERANCE PAYMENT.

      If you sign this letter agreement and release (and do not timely revoke
your agreement as set forth in Paragraph 16), then you will be paid a lump sum
amount equal to twelve months of your current base salary (less required
withholdings and deductions for taxes).You agree that the payments described in
this letter agreement are above and beyond and in full satisfaction of any
payments or compensation otherwise owed to you under the terms of your
employment with Lightbridge or as required by law.

      4.    ACCRUED PAID VACATION AND TIME OFF.

      All accrued but unused vacation time earned through June 30, 2004 will be
paid on that date.

      5.    VOICEMAIL, COMPUTER, AND RETURN OF COMPANY PROPERTY.

      Use of voicemail will be provided through September 30, 2004, and network
access will also be provided through June 30, 2004. You will return all other
property, equipment and materials of the Company, other than your laptop
computer, to the Company promptly after June 30, 2004.

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      6.    COBRA GROUP INSURANCE COVERAGE.

      As of June 30 2004, you and your family members will be eligible to
continue your group health insurance coverage in accordance with the federal
COBRA law. Should you or any of your family members elect COBRA continuation
coverage for the twelve month period immediately following June 30, 2004, the
Company shall be responsible for paying the difference between the cost of COBRA
continuation coverage and the premium contribution amount applicable to you as
of June 30, 2004 subject to any applicable carrier and Company rate adjustments.
After such twelve month period ends, if you or any of your family members elect
to continue COBRA coverage, you will be responsible for all of the premium
payments. Information about your rights under COBRA and forms for electing
continuation coverage will be provided to you by a separate letter on or about
June 30, 2004.

      7.    OUTPLACEMENT ASSISTANCE.

      To assist you in regard to outplacement, the Company will pay up to
$25,000.00 for outplacement services which are provided to you by a
Company-approved agency prior to the earlier of December 31, 2004 or the date
you commence new employment. Appropriate invoices for outplacement services
should be submitted promptly to the Company.

      8.    CONFIDENTIAL INFORMATION.

      You understand and agree that the Company's confidential information
belongs exclusively to the Company, and that the confidential information of the
Company's customers or of other organizations with which the Company does
business remains their exclusive property. You agree that you will not use or
disclose any such confidential information, whether for your benefit or for the
benefit of another, and that you will hold and treat such information as
confidential information, unless you have specific prior written authorization
from the Company to disclose it. Incorporated herein is a confidentiality and
non-competition agreement that was signed by you on or about June 7, 2000 and
which remains in effect according to its terms.

      9.    NON-DISPARAGEMENT; COOPERATION.

      You agree that you will not make any disparaging statements about the
Company or any of its subsidiaries, affiliates, officers, directors or
employees, or its business or prospects. Through June 30, 2005, you agree to
provide the Company with reasonable assistance and support as reasonably
requested from time to time by the Company without additional compensation with
respect to any matters required for the orderly transition of your former
employment responsibilities.

      10.   RELEASE AND WAIVER.

      This letter agreement and the agreement referenced in paragraph 8 contain
the entire agreement between you and the Company (and supersede any prior
communications, written or oral) with respect to your employment by the Company
and the termination of such employment, and with respect to all matters
pertaining thereto including, without limitation, those set forth in your
employment agreement dated May 25, 2000. This letter agreement shall be in
complete and final settlement of any and all causes of action or claims that you
have had, now have or may now have, in any way related to or arising out of or
in connection with such employment and/or its termination or pursuant to any
federal, state or local employment laws, regulations, executive orders or other
requirements, including without limitation Massachusetts General Laws c. 151B
("Unlawful Discrimination"), Title VII of the Civil Rights Act of 1964, and the
Age Discrimination in Employment Act of 1967. In consideration of the pay and
benefits that you will receive under this letter agreement, you hereby release,
waive and discharge any and all such causes of action or claims (including

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without limitation claims for attorney's fees and costs) against the Company,
its parent, subsidiary and affiliated organizations, and their respective past,
present and future directors, officers, agents, employees, successors and
assigns, and you hereby agree that, to the extent permitted by law, neither you
nor any of your heirs or personal representatives will ever assert in any forum
any such cause of action or claim. THIS MEANS YOU MAY NOT SUE LIGHTBRIDGE FOR
ANY CURRENT OR PRIOR CLAIMS ARISING OUT OF YOUR EMPLOYMENT WITH OR TERMINATION
FROM LIGHTBRIDGE.

      You further agree that you will not bring any lawsuits, file any charges
or complaints, or make any other demands against Lightbridge, or further pursue
any lawsuits, cases or complaints already brought, based on your employment by
Lightbridge. You further represent that you have no current or pending actions,
charges, lawsuits, or complaints against Lightbridge. You acknowledge and
understand that the consideration provided for in this letter agreement
constitutes a full, fair and complete payment for the release and waiver of all
of your possible claims. You acknowledge and understand that Lightbridge does
not owe you anything for your employment in addition to the consideration set
forth in this letter agreement.

      11.   COMPLIANCE.

      All payments to be made to you in accordance with the terms of this letter
agreement, and the performance by the Company of its other obligations hereunder
shall be conditioned on your compliance with your obligations hereunder.

      12.   GOVERNING LAW.

      The parties intend this letter agreement to be governed by the substantive
laws of The Commonwealth of Massachusetts.

      13.   CHALLENGE TO VALIDITY OF LETTER AGREEMENT.

      Lightbridge and you shall never bring a proceeding to challenge the
validity of this letter agreement. If you do, you will first be required to pay
back to Lightbridge any monies received from Lightbridge under paragraph 3 of
this letter agreement.

      14.   ENFORCEMENT.

      In the event that you violate any of the terms of paragraphs 8 or 9 of
this letter agreement or the Company determines that you have breached your
fiduciary duty to the Company, then any payments required to be made hereunder
shall cease. In the event that you violate paragraphs 8 or 9, in addition to any
money damages that Lightbridge may be owed, Lightbridge shall also be entitled
to seek and obtain an order enjoining any future violations.

      15.   CONSIDERATION PERIOD.

      In signing this letter agreement, you acknowledge that you understand its
provisions, that your agreement is knowing and voluntary, that you have been
afforded a full and reasonable opportunity of at least 21 days to consider its
terms and to consult with or seek advice from an attorney or any other person of
your choosing, and that you have been advised by the Company to consult with an
attorney prior to executing this letter agreement and the release and waiver of
claims in paragraph 10.

      16.   REVOCATION PERIOD.

      For a period of seven (7) days following your execution of this letter
agreement and release, you may revoke your agreement, and this letter agreement
and release shall not become effective or enforceable until this seven (7) day
revocation period has expired. No payments provided for by this letter agreement
will be made until after this seven-day period has expired without your revoking
your agreement. You understand and acknowledge that the terms of your employment
and the Company's usual severance policies or practices would have provided you
less severance pay and benefits than those provided to you under this letter
agreement.

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      17.   STOCK OPTIONS.

      You are currently the holder of certain options to purchase shares of the
Company's common stock, $.01 par value per share. The Company agrees that,
notwithstanding the terms of the option agreements and related plans, such
options shall remain exercisable in accordance with their terms until December
31, 2004. You understand that, as a result of the foregoing agreements, your
options will no longer qualify for incentive stock option treatment under the
Internal Revenue Code.

      If you agree to the foregoing, would you kindly sign and return the
enclosed copy of this letter agreement, whereupon this letter agreement and such
copy will constitute a binding agreement between you and the Company on the
basis set forth above.

Very truly yours,

Pamela D.A. Reeve
President and CEO

/s/ Pamela D. A. Reeve                        6/4/04
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                                              Date

                                              6/4/04
AGREED: /s/ Harlan Plumley                    ----------------------------------
        Employee's Signature                  Date signed