**Exhibit 10.2**

 

**Compensation of Directors**

 

Non-employeedirectors of the Company are paid $3,000 for each regular meeting and $500 foreach special meeting attended.  Inaddition, directors serving on committees of the Board are paid for attendanceat each committee meeting as follows: $1,000 for the committee chair and $500for non-chair committee members.  Theco-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 feesfor RDC meeting attendance.  Directorsare also reimbursed for their cost incurred in attending Board and committeemeetings.  In April 2004, the Board addedan annual retainer of $10,000, payable quarterly, for all non-employeedirectors, and an additional annual retainer of $10,000 for the chair of theAudit Committee.

 

Each non-employeedirector of the Company also receives stock option grants under the Company’s2004 Non-Employee Directors’ Stock Option Plan (the ‘‘2004 Directors’ Plan’’).  Only non-employee directors of the Company areeligible 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 optionsunder the Internal Revenue Code.  Priorto approval of the 2004 Directors’ Plan by the Company’s stockholders in July2004, non-employee directors received grants of stock options under the Company’s1994 Long-Term Performance Incentive Plan, as amended.  Options to purchase 10,000 shares of commonstock are granted automatically under the 2004 Directors’ Plan to eachnon-employee director who (i) is elected or re-elected as a director of theCompany at an annual meeting of stockholders, (ii) continues service as adirector of the Company after an annual meeting of stockholders at which thedirector is not subject to re-election, or (iii) is otherwise appointed as adirector of the Company in accordance with the Company’s bylaws, in each caseon the business day next following each such annual meeting or appointment.

 

Options topurchase 10,000 shares of common stock are granted automatically to eachnon-employee director who is appointed or continues to serve after an annualmeeting of stockholders as chair of the Audit, Compensation and Nominating andCorporate Governance Committees of the Board of Directors on the business daynext succeeding each such appointment or continuation of service, as the casemay be.  In addition, options to purchase7,500 shares of common stock are automatically granted to each non-employee whois appointed to the RDC upon initial appointment to the committee, and optionsto purchase 3,000 shares of common stock are automatically granted to eachnon-employee director who continues service as a RDC member after an annualmeeting of stockholders, in each case on the business day next succeeding suchappointment or continuation of service, as the case may be.  Non-employee directors also may be grantedoptions to purchase shares of common stock at the discretion of the Board ofDirectors.  All such options areexercisable at an exercise price equal to the fair market value of the commonstock on the date of grant.  Optionsgranted as annual grants will become exercisable in full on the firstanniversary following the date of grant, so long as the optionee has providedcontinuous service through such date.  Optionsgranted as initial grants will become exercisable in full on the first businessday immediately following the later of the Company’s annual meeting of stockholdersnext following the date of grant or six months following the date of grant, solong as the optionee has provided continuous service through such date.  The term of options granted under the 2004Directors’ Plan is ten years.  In theevent of a change-in-control transaction involving the Company or if anon-employee director is required to resign in connection with suchchange-in-control, the vesting of each option will accelerate in full.

 

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