Document:

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                                                                    Exhibit 10.3

[LIGHTBRIDGE LOGO]
                                LIGHTBRIDGE, INC.
                                30 Corporate Drive
                                Burlington, MA 01803

NOTICE OF GRANT OF STOCK OPTIONS

ROBERT DONAHUE                                      OPTION NUMBER: _____________
296 HOWARD STREET                                   PLAN:          2004
NORTHBORO, MA USA 01532

Effective January 7, 2005, you have been granted a Non-Qualified Stock Option to
buy 150,000(1) shares of Lightbridge, Inc. (the "Company") stock at $6.11 per
share.

The total option price of the shares granted is $916,500.00.

Shares will become vested as follows:

(i) in the event that the average closing price of Common Stock of the Company
(as reported by the Nasdaq National Market) over any 20 consecutive trading day
period beginning on or after January 7, 2005 and ending on or before the date
your employment under your Employment Agreement with the Company dated January
7, 2005 terminates (the "Average Closing Price") equals or exceeds $12.50, the
Stock Option shall immediately vest as to 50,000 of the shares purchasable
hereunder; (ii) in the event that the Average Closing Price during such period
equals or exceeds $15.00, such Stock Option shall immediately vest as to an
additional 50,000 of the shares purchasable hereunder; and (iii) in the event
that the Average Closing Price during such period equals or exceeds $17.50, the
Stock Option shall immediately vest in full. If all or any of the Stock Option
has not vested within four years of the date of grant, such unvested portion of
the Stock Option shall terminate as of that date. In the event of a change of
control, the Average Closing Price shall be determined as set forth in your
Employment Agreement referred to above. If your employment with the Company is
terminated without cause (as defined in your Employment Agreement), you shall
have the right to exercise your options until ninety (90) days following your
twelve-month salary continuation period.

(1) These options are subject to certain terms as set forth in your Employment
Agreement with the Company dated January 7, 2005. In the event of a conflict
between your Employment Agreement terms and the Terms and Conditions of Stock
Options, your Employment Agreement terms shall prevail.

NOTICE, ACCESS AND CONSENT. BY YOUR SIGNATURE AND THE COMPANY'S SIGNATURE BELOW,
YOU AND THE COMPANY AGREE THAT THESE OPTIONS ARE GRANTED UNDER AND GOVERNED BY
THE TERMS AND CONDITIONS OF THE COMPANY'S 2004 STOCK INCENTIVE PLAN, AS AMENDED
(THE "PLAN"), AND THE TERMS AND CONDITIONS OF STOCK OPTIONS, BOTH OF WHICH ARE
INCORPORATED HEREIN AND MADE A PART OF THIS DOCUMENT. THE CURRENT PROSPECTUS
RELATING TO THE SHARES OF COMMON STOCK OFFERED UNDER THE 2004 INCENTIVE PLAN,
THE PLAN AND THE TERMS AND CONDITIONS OF STOCK OPTIONS ARE AVAILABLE ON THE
COMPANY'S INTRANET WEBSITE AT WWW.INSIDE.LIGHTBRIDGE.COM AND AT
WWW.OPTIONSLINK.COM AND CAN BE DOWNLOADED OR PRINTED FOR YOUR CONVENIENCE, OR
PROVIDED IN WRITTEN FORM BY CONTACTING THE COMPANY'S HUMAN RESOURCES DEPARTMENT
AT 30 CORPORATE DRIVE, BURLINGTON, MA 01803, 781-359-4000. BY YOUR SIGNATURE
BELOW, YOU CONSENT TO THE DELIVERY OF THOSE DOCUMENTS IN THE MANNER DESCRIBED
HEREIN.

                                                        01/07/05
___________________________________________          ___________________________
Robert E. Donahue                                               Date
Chief Executive Officer, Lightbridge, Inc.

___________________________________________          ___________________________
Robert Donahue                                                  Date<PAGE>
                                                                    Exhibit 10.4

December 30, 2004

Ms. Judith A. Dumont
43 Maple Avenue
Nahant, MA 01908

RE:   SEPARATION AGREEMENT AND RELEASE

Dear Judy:

      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. TERMINATION AS OFFICER; TERMINATION OF EMPLOYMENT.

      You hereby agree to terminate your position as an officer of the Company
effective January 31, 2005. Your status as an employee and all employee benefits
will also be terminated effective January 31, 2005.

      2. TRANSITION PERIOD.

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

      3. SALARY CONTINUATION PERIOD.

      Provided that you remain an employee in good standing through the date of
termination of your employment, you will receive (i) your current base salary
for a period of four weeks beyond the date of termination of your employment,
and (ii) thereafter, if you sign and return a copy of this letter agreement to
the Company on or before January 19, 2005, your current base salary through
December 31, 2005; provided, however, that if you commence employment with a new
employer during the salary continuation period in this clause (ii), then the
income generated by such employment or shall be deducted from the salary
continuation payments during such salary continuation period. The payments
pursuant to clause (ii) above shall become effective only upon the expiration of
the seven-day period immediately following your indication of acceptance of the
terms of this letter agreement as specified below. All payments will continue to
be paid on the normal payroll cycle (less required withholdings and deductions
for taxes). You agree that you will promptly notify the Company if you commence
new employment at any time prior to December 31, 2005. 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; 2004 BONUS.

      All accrued but unused vacation time or paid time off earned through
January 31, 2005 will be paid on that date. Your accrued bonus earned under your
bonus plan for the year ending December 31, 2004 will be paid to you in the
Company's regular payroll cycle following the calculation of such bonus.

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

      Use of voicemail will be provided through January 31, 2005, and network
access will also be provided through the date of termination of your employment.
You will return all property, equipment, materials and confidential information
of the Company to the Company by January 31, 2005.

      6. COBRA GROUP INSURANCE COVERAGE.

      After January 31, 2005, you and your family members will be eligible to
continue your group health insurance coverage in accordance with the federal
COBRA law. If you or any of your family members elect to continue this coverage,
you and the Company will continue to pay the same share of the monthly premium
(subject to any applicable carrier or Company rate adjustments) as if you were
still employed throughout the salary continuation period. After such salary
continuation 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

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under COBRA and forms for electing COBRA continuation coverage will be provided
to you via a home mailing from Ceridian Benefit Services.

      7. OUTPLACEMENT ASSISTANCE.

      To assist you in regard to outplacement, the Company will pay up to
$10,000.00 for outplacement services which are provided to you by a
Company-approved agency prior to the earlier of July 31, 2005 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 December 19, 1989
and which remains in effect according to its terms.

      9. NON-DISPARAGEMENT.

      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.

      10. RELEASE AND WAIVER.

      In exchange for the consideration from Lightbridge described in Paragraphs
3,6 and 7, the sufficiency of which is hereby acknowledged, you, on your own
behalf and on behalf of your heirs, personal representatives, and assigns,
hereby voluntarily and irrevocably release, acquit and forever discharge
Lightbridge, and all of Lightbridge's affiliated and related entities and their
respective officers, directors, agents, representatives, attorneys, servants,
employees, predecessors, successors, and assigns (hereinafter the "Releasees"),
from any and all claims, demands, liabilities, debts, judgments, damages,
expenses (including attorneys' fees and costs), actions, causes of action or
suits of any kind whatsoever which you, your heirs, personal representatives and
assigns, and each of them, may have had or may now have, whether known or
unknown, including, but not limited to, common law claims, statutory claims,
claims for wages, commissions, bonuses or earnings or benefits, claims for
overtime, claims or causes of action under the Civil Rights Act, the Employee
Retirement Income Security Act, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act (29 U.S.C. Section 2101 et seq.), the
Americans with Disabilities Act, the Older Workers Benefit Protection Act, the
Family and Medical Leave Act, the Age Discrimination in Employment Act, the
Equal Pay Act, the Massachusetts Fair Employment Practices Act, M.G.L. c.151B,
Section l et seq. tort law, contract law, law of wrongful discharge,
discrimination, harassment, fraud, misrepresentation, defamation, libel,
emotional distress, breach of the implied covenant of good faith and fair
dealing, any other federal, state or municipal statute or ordinance, and claims
or causes of action under any other theory, which arise out of or are related in
any way, directly or indirectly, to your employment by Lightbridge or the
termination of such employment. You acknowledge that through this Letter
Agreement you are receiving consideration from Lightbridge beyond that to which
you would otherwise be entitled.

      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.

      THIS MEANS YOU MAY NOT SUE LIGHTBRIDGE FOR ANY CURRENT OR PRIOR CLAIMS
ARISING OUT OF YOUR EMPLOYMENT WITH OR TERMINATION FROM LIGHTBRIDGE.

      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.

      This letter agreement shall be governed by the substantive laws of The
Commonwealth of Massachusetts.

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      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 5, 8 or 9 of
   this letter agreement or the Company determines that you have breached your
   fiduciary duty to the Company, then any remaining salary payments described
   in paragraph 3 shall cease. In the event that you violate paragraphs 5, 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 or benefits under this letter
agreement will be made or provided 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.

      17. ENTIRE AGREEMENT; SEVERABILITY; BINDING EFFECT.

      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. Should any provision of this letter agreement be declared or
be determined by any court of competent jurisdiction to be illegal or invalid,
the validity of the remaining parts, terms, or provisions shall not be affected
thereby and such illegal and invalid part, term or provision shall be deemed not
to be a part of this letter agreement. This letter agreement shall be binding on
the parties hereto and their respective successors and assigns.

      18. 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, options
under the Company's 1996 Incentive and Non-Qualified Stock Option Plan and 1998
Non-Statutory Stock Option Plan shall remain exercisable in accordance with
their terms until May 1, 2005. You understand that, as a result of the foregoing
agreement, your options under such plans 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,

/s/ Robert E. Donahue

Robert Donahue
President and CEO

AGREED:     /s/ Judith A. Dumont                January 7, 2005
        -----------------------------     ----------------------------------
           Judith A. Dumont               Date signed

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