COMPANY WITHOUT CAUSE, (X) THAT PORTION OF HIS
ANNUAL SALARY
($300,000), LESS APPLICABLE TAXES AND WITHHOLDING, THAT HAS NOT ALREADY BEEN
PAID DURING THE PART-TIME PERIOD, AND (Y) THE SALARY AND COBRA BENEFIT DEFINED
AND SET FORTH IN PARAGRAPH 2(II) (PROVIDED, HOWEVER, THAT IN NO CASE SHALL SUCH
COBRA BENEFIT CONTINUE FOR A PERIOD LONGER THAN EIGHTEEN (18) MONTHS), AND (II)
IN THE CASE OF THE CONCLUSION OF THE PART-TIME PERIOD IN THE NORMAL COURSE
(I.E., TWELVE (12) MONTHS AFTER THE EFFECTIVE DATE), (A) CONTINUATION OF HIS
THEN-CURRENT ANNUAL BASE SALARY ($300,000) FOR A PERIOD OF TWELVE (12) MONTHS
AND (B) CONTRIBUTIONS TO THE COST OF COBRA (CONSOLIDATED OMNIBUS BUDGET
RECONCILIATION ACT) COVERAGE (THE "COBRA BENEFIT"), PROVIDED THAT IN THE CASE OF
BOTH CLAUSE (A) AND CLAUSE (B) OF THIS PARAGRAPH 2(II), THE SALARY CONTINUATION
AND COBRA BENEFIT SHALL ONLY CONTINUE FOR A PERIOD OF TWELVE (12) MONTHS FROM
THE CONCLUSION OF THE PART-TIME PERIOD IN THE NORMAL COURSE.
FOR PURPOSES OF
THIS AGREEMENT, "CAUSE" SHALL BE DETERMINED BY THE COMPANY IN ITS SOLE
DISCRETION, AND CAN INCLUDE, BUT IS NOT LIMITED TO, (I) ANY ACT OR OMISSION BY
DR. LETTS THAT MAY HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY'S BUSINESS OR
ON HIS ABILITY TO PERFORM SERVICES FOR THE COMPANY, INCLUDING, WITHOUT
LIMITATION, THE COMMISSION OF ANY CRIME (OTHER THAN ORDINARY TRAFFIC
VIOLATIONS); OR (II) ANY WILLFUL MISCONDUCT OR GROSS NEGLECT OF DUTIES BY DR.
LETTS IN CONNECTION WITH THE BUSINESS OR AFFAIRS OF THE COMPANY, INCLUDING, BUT
NOT LIMITED TO, MISAPPROPRIATION OF COMPANY ASSETS, OR FAILURE TO PERFORM
REASONABLE ASSIGNED DUTIES AS SCIENTIFIC AND TECHNOLOGY ADVISOR.
3.
RETENTION AGREEMENT.
DURING THE PART-TIME PERIOD, DR. LETTS WILL BE
ELIGIBLE TO RECEIVE THE CHANGE OF CONTROL BENEFITS IN ACCORDANCE WITH THE TERMS
OF THE AGREEMENT EXECUTED BY HIM AND THE COMPANY DATED APRIL 5, 2006 (THE
"RETENTION AGREEMENT").
4.
TERMINATION OF BENEFITS.
EXCEPT WITH RESPECT TO THE COBRA BENEFIT, ALL
BENEFITS, INCLUDING LIFE INSURANCE AND LONG-TERM DISABILITY, WILL END UPON THE
TERMINATION OF THE PART-TIME PERIOD.
5.
OPTIONS VESTING AND EXERCISE PERIODS.
SIMULTANEOUSLY WITH THE EXECUTION
OF THIS TRANSITION AGREEMENT, EACH OF DR. LETTS' OUTSTANDING OPTION AGREEMENTS,
ALL OF WHICH ARE LISTED ON EXHIBIT B HERETO (COLLECTIVELY, THE "AWARDS"), WILL
BE MODIFIED TO PROVIDE THAT (A) UPON THE CONCLUSION OF THE PART-TIME PERIOD IN
THE NORMAL COURSE (I.E., TWELVE (12) MONTHS AFTER THE EFFECTIVE DATE), THE
PERIOD OF EXERCISABILITY OF THE VESTED PORTION OF SUCH OPTIONS SHALL BE TWO
YEARS FOLLOWING SUCH CESSATION OF EMPLOYMENT AND (B) IN THE CASE OF AN EARLY
TERMINATION OF THE PART-TIME PERIOD BY THE COMPANY WITHOUT CAUSE (EXCLUDING A
TERMINATION IN CONNECTION WITH A CHANGE IN CONTROL OF THE COMPANY, WHICH SHALL
BE GOVERNED BY THE RETENTION AGREEMENT REFERENCED IN PARAGRAPH 3), (I) ANY
OPTIONS COVERED BY THE AWARDS THAT WOULD HAVE VESTED DURING THE PART-TIME PERIOD
BUT FOR THE EARLY TERMINATION OF THE PART-TIME PERIOD WILL VEST IMMEDIATELY AS
OF THE DATE OF SUCH EARLY TERMINATION AND (II) THE PERIOD OF