Document:

AMENDMENT TO INVESTMENT AND LOAN AGREEMENT

EXHIBIT 10.1

ADDENDUM TO EMPLOYMENT AGREEMENT

THIS ADDENDUM TO EMPLOYMENT AGREEMENT (this "Addendum"), effective as of June 1, 2005, is entered into by and between TXU Corp., a Texas corporation (the "Company") and Erle Nye, an individual ("Consultant").

RECITALS

WHEREAS, the parties hereto have previously entered into that certain Employment Agreement dated as of June 1, 2002, by and between the Company and Consultant (the "Employment Agreement");

WHEREAS, Consultant and the Board of Directors of the Company have concluded that the transition between his tenure as Chief Executive Officer and that of C. John Wilder has progressed more quickly and efficiently than was contemplated at the time of signing of the Employment Agreement;

WHEREAS, pursuant to Section 5(b) of the Employment Agreement, Consultant has notified the Company that he has elected to retire and become a consultant to the Company, effective June 1, 2005; and

WHEREAS, Consultant and the Company desire to establish a consulting relationship by modifying the Employment Agreement in the manner provided below; 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows:

1.Inoperability of Certain Provisions of the Employment Agreement.  The following Sections (the "Inoperative Provisions") of the Employment Agreement shall, effective June 1, 2005, be no longer operative or in effect: 

	Section 2 (because of Consultant's retirement); 

	Section 4 (because of the extension of Consultant's consulting responsibilities beyond the term of the Employment Agreement); 

	Section 5 (because of the changed nature of Consultant's title and duties to the Company as a consultant); 

	Subsection 6(a) (because the "Initial Term" (as defined in the Employment Agreement) has expired); 

	The phrase "and shall not impact the Company's normal annual compensation review of Employee" in the penultimate sentence of Subsection 6(b) (because the Consultant shall no longer be subject to an annual review); 

	Subsections 6(c) through (g) (because the "Initial Term" as defined in the Employment Agreement has expired); 

	Subsections 7(a) and (b) (because Consultant shall be compensated only as set forth in Section 3 of this Addendum and the Surviving Provisions (defined below)); 

	Subsection 7(d) (because Consultant has agreed to forego this benefit);

	The first three sentences of Subsection 7(e) (because the continuation of employee benefits shall be governed by Section 7 of this Addendum and the Surviving Provisions), except that for purposes of interpreting the fourth and last sentence of Section 7(e) of the Employment Agreement (which shall constitute a Surviving Provision), the term "Secondary Term" shall mean the First Consulting Term (as defined below); 

	Subsection 8(a) (because the rights of Consultant to office and administrative support shall be governed by Sections 4 and 5 of this Addendum); 

	Subsection 8(b) (because Consultant has agreed to forego this benefit); 

	Section 10 (because any termination of Consultant's consulting relationship shall be governed by Section 10 of this Addendum); 

	Sections 11 and 12 (because as a consultant, Consultant shall not be entitled to the enumerated benefits in the event of a "Change in Control" (as defined in the Employment Agreement)); and 

	Section 18 (because the Employment Agreement has been amended by this Addendum).  

Consultant hereby waives and relinquishes all his rights provided in the Inoperative Provisions and forever releases the Company from any obligation to provide the rights set forth in the Inoperative Provisions.  For the purposes of the provisions (collectively, the "Surviving Provisions") of the Employment Agreement continuing in effect after June 1, 2005, the term "Employee" as used therein shall mean Consultant.

2.Terms and Consulting Duties.  Effective June 1, 2005, Consultant shall no longer be, act in the capacity of, or be treated as, an employee of the Company.  From June 1, 2005 until May 31, 2007 (the "First Consulting Term"), Consultant shall serve the Company as an independent contractor in a consulting capacity, as requested by the Chief Executive Officer of the Company (the "CEO"), in the areas of public relations, political and civic affairs and industry relations for up to 120 hours per month.  Consultant's duties shall include providing the Company with counsel, support, advice and public representation as requested by the Company.  From June 1, 2007 until May 31, 2012 (the "Second Consulting Term"), Consultant shall be available as an independent contractor to serve the Company in the same manner as during the First Consulting Term, as requested by the CEO, for up to 40 hours per month.  The period from June 1, 2005 through May 31, 2012 is herein called the "Full Term."

In his capacity as a consultant to the Company, Consultant shall directly control the performance of his consulting services including the manner and method of providing such services.  Consultant shall be solely responsible for his own taxes and assessments arising out of or relating to his receipt of consulting fees, including without limitation, social security, unemployment insurance, withholding taxes and income taxes.  

3.Consulting Fees.    During the First Consulting Term, the Company shall pay the Consultant a monthly consulting fee of $31,250 per month, payable in 24 consecutive monthly installments on the first day of each calendar month beginning with June 1, 2005 and ending on, and including, May 1, 2007.  During the Second Consulting Term, Consultant shall not be entitled to any compensation for his consulting services.

4.Consulting Expenses.  Except as provided in Section 5 of this Addendum, the Company shall not be liable for any travel, entertainment or other out-of-pocket business expenses paid or incurred by Consultant (collectively, the "Consulting Expenses"), including any expenses associated with secretarial or clerical assistance.

5.Continuing Office and Administrative Support.  During the Full Term, the Company shall pay Consultant a monthly allowance of $5,000 for the costs of maintaining a private office.  At Consultant's election, during the first 12 months of the First Consulting Term, such office space may be Consultant's current office space (including his personal office, conference room, secretarial area, and coffee bar) in Company facilities, as currently furnished, in which case no $5,000 monthly allowance shall be paid or accrued during that period.  At such time as Consultant relocates his office space from Company facilities, the Company shall, at the Consultant's election, provide the Consultant either: (i) title to all office equipment and furniture currently located in such current office space or (ii) reimbursement for the reasonable out-of-pocket expenses of Consultant incurred in furnishing similar offsite office space not to exceed $15,000.

6.Indemnification.  The Company shall indemnify and hold harmless Consultant to the fullest extent permitted by law against claims arising out of Consultant's performance of his consulting services for the Company, except that the Company shall not indemnify Consultant for claims arising or resulting from his gross negligence and/or willful misconduct.  The Company's obligations under this Section 6 shall continue after the termination of this Addendum and the Surviving Provisions.  The Company shall provide Consultant any rights to indemnification and contribution afforded Consultant under the indemnification agreement between Consultant and the Company dated October 19, 2002 (the "Indemnification Agreement") and under the Company's articles of incorporation and by-laws.  The Company shall indemnify and hold harmless Consultant from any and all tax liability, including interest and penalties (but excluding income tax assessed upon compensation received by Consultant under Sections 3 and 5 of this Addendum in his capacity as a consultant), on a fully grossed-up after-tax basis, incurred by Consultant (a) pursuant to Section 409A of the Internal Revenue Code of 1986, as amended, relating to the Surviving Provisions and this Addendum including the benefits described in Section 7 and (b) resulting from the waiver of the Waived Benefits (as defined below).  In addition, the Company shall continue to provide Consultant with tax gross-up payments to offset the effect of taxes incurred by Consultant with respect to premium payments made to, or for the benefit of, Consultant under the Split-Dollar Life Insurance Program on a basis consistent with other participants in the Split-Dollar Life Insurance Program.

7.Retirement Benefits.  Except for the Waived Benefits, Consultant shall be entitled to participate (including, without limitation, to make elections, determinations and withdrawals) as a retiree in, and to receive all benefits to which he is entitled as a retiree under, the Company's employee benefit plans, programs, arrangements and fringe benefit policies, subject to the terms, conditions and limitations of such plans, programs, arrangements and policies, as they may be amended, altered or terminated from time to time.  Without limiting the generality of the foregoing, and subject to the waiver of the Waived Benefits, Consultant shall continue to have the right to receive all benefits to which he is entitled as a retiree, granted to, or contributed to by, Consultant prior to May 31, 2005, under all employee benefits plans of the Company, including without limitation the LTICP, the DICP, the Retirement Plan, the SDP, the Split-Dollar Life Insurance Program, the Supplemental Retirement Plan, the Trust, the Indemnification Agreement and the restricted stock award and performance unit award agreements between Consultant and the Company entered into under the LTICP, the TXU Thrift Plan, the medical and life insurance plan or otherwise, all subject to the terms, conditions and limitations thereof, as they may be amended, altered or terminated from time to time, and, except for the Waived Benefits, none of such benefits shall be adversely affected, diminished, waived or terminated by this Addendum or by the termination of this Addendum or the Surviving Provisions.  The parties acknowledge that the cessation of Consultant's employment with the Company shall be deemed to be a "retirement" approved by the Company for all purposes including where such characterization would result in the retention of, or eligibility for, employee benefits for Consultant.

8.Waiver of Portion of 2004 and 100% of 2005 AIP Awards.  Consultant hereby waives and relinquishes his right to receive all but $600,000 of the bonus to which he was otherwise entitled for his services in 2004 under the AIP (the "2004 Waived AIP Amount") and forever releases the Company from any obligation to provide such right.  Consultant also hereby waives and relinquishes his right to receive any bonus to which he would otherwise be entitled for his services in 2005 under the AIP (the "2005 Waived AIP Amount") and forever releases the Company from any obligation to provide such right.

9.Termination of the 2003 Restricted Stock Award Vesting in 2005.  Consultant hereby waives and relinquishes all his rights to the shares of restricted stock of the Company vesting in 2005 and referred to as the "Two Year Award" in that certain Restricted Stock Award Agreement dated as of April 1, 2003, by and between the Company and Consultant (the "2003 Restricted Stock Agreement") and forever releases the Company from any obligation to provide such rights.  Collectively, the waived Two Year Award, the 2004 Waived AIP Amount and the 2005 Waived AIP Amount and any other benefits to which Consultant is entitled that have been expressly waived under this Addendum shall be referred to as the "Waived Benefits."  Nothing in this Amended Agreement shall affect the shares of restricted stock of the Company vesting in 2006 and referred to as the "Three Year Award," as defined in the 2003 Restricted Stock Agreement, or any other shares of restricted stock or performance units of the Company granted to Consultant except as specifically waived herein.

10.Termination.  The Company shall have the right to terminate the consulting relationship with Consultant and any further payments under Sections 3 and 5 of this Addendum upon the earlier occurrence of: (i) Consultant's death or Disability (as defined in Section 1(e) of the Employment Agreement); (ii) the material breach by Consultant of this Addendum or the Surviving Provisions; (iii) any action or failure to act on the part of Consultant which results in material injury to the assets, business prospects or reputation of the Company or any Affiliate of the Company; or (iv) Consultant's failure to substantially perform his duties and responsibilities hereunder or under the Surviving Provisions, including without limitation Consultant's breach of the Company's Code of Conduct, as amended from time to time; provided, that in the event of Consultant's death or Disability prior to any termination of this Addendum and the Surviving Provisions, all amounts payable thereafter under Section 7(c) of the Employment Agreement and Sections 3, 6 and 7 of this Addendum shall be made to Consultant's spouse, or if Consultant's spouse does not survive him, to his estate as if this Addendum and the Surviving Provisions had not been terminated.  The parties understand and agree that this Addendum is not being entered into, nor are any payments or benefits provided for herein being paid in connection with, any event or transaction which could be construed as a change in control of the Company.  However, in the event that any payments or benefits provided in Sections 3, 5 or 7 of this Addendum, or any portion thereof, constitute an "excess parachute payment" under Section 4999 of the Code, or any successor provision, the Company shall, in addition to providing such payments and benefits, pay Consultant a tax gross-up cash payment(s) in an amount mutually agreed upon by Consultant and the Company to be sufficient to fully offset the excise tax which Consultant is, or may be, required to pay as a result thereof.  Such tax gross-up payment shall be paid to Consultant prior to the date such excise tax must be paid by Consultant; provided that if the amount of such tax gross-up payment cannot be finally determined by the date such excise tax payment must be made, the Company shall pay Consultant, prior to the date any such excise tax must be paid by Consultant, an estimate, determined in good faith by the Company, of the minimum amount of the required tax gross-up payment.  Thereafter, the Company shall promptly determine in good faith the total amount of the tax gross-up payment and seek to obtain Consultant's approval thereof.   The remaining portion of the tax gross-up payment shall be paid to Consultant promptly after Consultant approves the total amount.  The parties agree and acknowledge that the retirement of the Consultant from the Company did not waive, forfeit or terminate his rights under any of the restricted stock award and performance unit award agreements between Consultant and the Company entered into under the LTICP other than those expressly waived pursuant to Section 9 herein.

 

11.Entire Agreement.  This Addendum, the Surviving Provisions and the relevant documents memorializing Consultant's employee benefits (including but not limited to the LTICP, the DICP, the Retirement Plan, the SDP, the Split-Dollar Life Insurance Program, the Supplemental Retirement Plan, the Trust, the Indemnification Agreement and the restricted stock award and performance unit award agreements between Consultant and the Company entered into under the LTICP, the TXU Thrift Plan, and the medical and life insurance plan, all subject to the terms, conditions and limitations thereof, as they may be amended, altered or terminated from time to time) contain the complete understanding and agreement between the parties and supersede any and all other agreements, understandings, or communications of any kind, either oral or in writing, between the parties hereto with respect to the subject matter hereof.  Each party to this Addendum acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein or in the Surviving Provisions, and that no other agreement, statement, or promise with respect to the subject matter of this Addendum shall be valid or binding.  Any modification of this Addendum or the Surviving Provisions will be effective only if it is in writing signed by both of the parties hereto. 

12.Authority; No Conflicts or Consents.  The Consultant represents that he has full power and authority to execute, deliver and perform this Addendum.  The Consultant further represents that neither the execution and delivery of this Addendum, nor its performance by Consultant, will: (i) conflict with or violate any agreement to which Consultant is a party or (ii) require the consent of any other person, entity or governmental authority.

13.Payment of Legal Fees.  The Company shall promptly pay up to $35,000 of the legal fees and expenses reasonably incurred by Consultant on or prior to the execution of this Addendum in connection with the negotiation and execution of this Addendum.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Addendum on May 27, 2005 to be effective as of June 1, 2005.

	

TXU CORP.

	

By:
	

/s/ J. E. Oesterreicher 

J. E. Oesterreicher 

Director and Chairman, Organization and

Compensation Committee

	 	

 

	 	

CONSULTANT

	

By:
	

/s/ Erle Nye 

  Erle NyeSeverance Agreement / James MacLennan

 

Exhibit
10.1

 

SEVERANCE
AGREEMENT

THIS
SEVERANCE AGREEMENT (the “Severance Agreement”) is made and entered into as of
the 26th day of May, 2005, by and between JAMES MACLENNAN, an individual
resident of the State of Georgia (the “Employee”), and THERAGENICS CORPORATION,
a Delaware Corporation (the “Company”). 

W I T N E S S E T H:

WHEREAS,
the Employee and the Company entered into that certain Amended Employment
Agreement dated as of July 24, 2002 (the “Amended Employment Agreement”),
pursuant to which the Company has employed the Employee in the capacity of Chief
Financial Officer and Treasurer (the “CFO Position”); and 

WHEREAS,
the Employee has resigned from the CFO Position, and in connection therewith,
the parties desire to set forth herein the terms and conditions pertaining to
such resignation and the Severance Period (as hereinafter defined);

NOW,
THEREFORE, for and in consideration of the premises and mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

AGREEMENT:

	1)  	
      Resignation;
      To be Treated as Termination Without Cause Pursuant to the Amended
      Employment Agreement.

	a)   
       	
      Effective
      as of May 8, 2005, the Employee has voluntarily and permanently resigned
      from the CFO Position and any other employment with the Company or its
      subsidiaries. For purposes of this Severance Agreement, the Employee’s
      resignation shall be treated as a termination without “Cause” (as that
      term is defined in the Amended Employment Agreement), pursuant to Section
      4(b)(iv) of the Amended Employment Agreement.

	2)  	
      Payment
      and Benefits.

	a)
          	
      Incentive
      Compensation.
      Notwithstanding Section 1 hereof and as exclusive consideration for the
      releases in Section 4(d) herein, the Employee shall be compensated as if
      the Employee had been terminated without Cause pursuant to the Amended
      Employment Agreement. The parties hereby agree that the Employee’s right
      to salary continuation, long-term incentives, and other compensation is as
      set forth below:

 

	i)   
        	
      Employee
      shall receive a certificate for 5,334 shares of common stock of the
      Company (the
      “Shares”), issuable as soon as administratively practicable following
      December 31, 2005, in payment of the Company’s grant of 10,000 Restricted
      Stock Rights pursuant to the Company’s Stock Incentive Plan to the
      Employee on August 10, 2004, prorated in the proportion of 271 (the
      number of days elapsed from August 10, 2004 through May 8, the date the
      Employee resigned from employment 

 

 

with the Company) to 508 (the number of days elapsed
from August 10, 2004 through December 31, 2005). Any resulting fractional shares
will be disregarded and will not be issued. The Company’s obligation to issue
the share certificate will be subject to Exhibit
A
hereto.

 

	ii)   
       	
      Employee
      shall receive a share certificate for a number of shares of common stock
      of the Company, in payment of the Company’s grant of 9,500 Performance
      Restricted Stock Rights pursuant to the Company’s Stock Incentive Plan
      granted to the Employee by the Company on June 21, 2004, payable at the
      time set forth in, determined in accordance with, and subject to
      Exhibit
      B
      hereto.

 

	iii)  
       	
      Employee
      shall receive a share certificate for a number of shares of common stock
      of the Company, in payment of the Company’s grant of 9,500 Performance
      Restricted Stock Rights pursuant to the Company’s Stock Incentive Plan
      granted to the Employee by the Company on February 8, 2005, payable at the
      time set forth in, determined in accordance with, and subject to
      Exhibit
      C
      hereto.

 

	iv)   	
      Employee
      has an option to purchase up to 60,000 shares of the Company’s common
      stock pursuant to the Incentive Stock Option Award granted August 7, 2002,
      to the extent permitted by, for the time period allowed, and subject to
      all the terms and conditions of such Incentive Stock Option
      Award.

 

	b)  
      	
      Salary
      Continuation.
      In accordance with Section 4(e) of the Amended Employment Agreement, the
      Company shall pay to the Employee the equivalent amount of his annual base
      salary of $270,000 per year for a period of two (2) years after
      termination of the Employee’s employment with the Company (the “Severance
      Period”), for a total gross sum of $540,000, subject to normal deductions
      and withholdings for payroll taxes and any other legally required
      deductions and withholdings in effect at the time of the payment made
      hereunder. The Company shall pay the sum of $540,000 (less all required
      deductions and withholdings determined with respect to this gross amount,
      and less $39,159.20 in attorneys’ fees and expenses previously incurred by
      the Employee and paid by the Company) in a lump sum payment to the
      Employee, made on the Effective Date of this Severance Agreement.
      

	c) 
        	
      Unused
      Vacation.
      On the Effective Date of this Severance Agreement, the Company will pay
      the Employee for the Employee’s accrued unused vacation time in the total
      amount of $8,227.82 (subject to required deductions and withholdings), in
      accordance with the Amended Employment Agreement and the Company’s
      existing policies and procedures concerning unused vacation time. The
      Employee shall not accrue any additional vacation time during the
      Severance Period.

	d) 
        	
      No
      Other Payments or Benefits.
      The Employee acknowledges and agrees that, other than (1) the payments
      described specifically in this Severance Agreement, (2) benefits, if any,
      payable under the terms of the Company’s 401(k) Plan, (3) unpaid claims
      for benefits, if any, that are payable under the terms of the Company’s
      Group Health Insurance Plans, (4) benefits, if any, payable from the
      Company's Insured Security Option Plan, and (5) the right to any shares
      payable to Employee, if any, under the terms of the Company's
    

 

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23

 

Employee Stock Purchase Plan, the Employee shall not be
entitled to receive any other benefits, payments, bonuses, severance,
termination benefits, or compensation of any kind or for any reason,
specifically including but not limited to any wages, bonuses, payments,
benefits, commission payments, stock options (whether vested or unvested), stock
or any other payment or compensation of any kind or from any source. All
payments provided for in this Severance Agreement will be reported as taxable
wages to the Employee. Nothing in this Severance Agreement shall affect the
Employee’s rights to COBRA continuation coverage as to any Company-provided
medical, dental or vision plan in which Employee participated during his
employment, or Employee’s right to indemnification under the Company’s
Certificate of Incorporation (as amended) or the Directors and Officers
Indemnification Agreement.

 

	3)  	
      The
      Amended Employment Agreement.

	a)   
       	
      The
      terms of the Severance Agreement shall control and shall be deemed to
      modify, amend or supersede the terms of the Amended Employment Agreement.
      Except for the rights, duties and obligations reflected in sections 1, 5
      through 9, and 11 thereof, which shall continue in full force in
      accordance with their terms, the Amended Employment Agreement is hereby
      terminated and replaced by the Severance
Agreement.

	4)  	
      Release
      and Covenant Not to Sue

	a)  
        	
      Employee
      Representations. Employee
      represents and agrees that he has had a full and adequate opportunity to
      discuss and consider his claims, if any. Further, Employee represents and
      agrees that:

	i)   
        	
      This
      Agreement is written in a manner that Employee understands; 

       

	ii)  
        	
      This
      Agreement and the promises made in this Agreement by Employee are granted
      in exchange for consideration which is in addition to anything of value to
      which he is entitled;

	iii) 
        	
      Employee
      has been advised to and has had the opportunity to consult with an
      attorney prior to deciding whether to enter into this Agreement;
      and

	iv) 
        	
      Employee
      has no existing claims to any benefits, rights, entitlements or payments
      from the Company other than those specifically identified in this
      Severance Agreement, including any claims for
    indemnification.

	b) 
        	
      Effective
      Date.
      Employee has been offered twenty-one (21) days from receipt of the
      Severance Agreement within which to consider the Severance Agreement. The
      Effective Date of this Severance Agreement shall be the date
      eight (8) days after the date on which the Employee signs the
      Severance Agreement (“the Effective Date”). For a period of seven (7) days
      following the Employee’s execution of the Severance Agreement, the
      Employee may revoke the Severance Agreement, and the Severance Agreement
      shall not become effective or enforceable until such seven (7) day period
      has expired. Should 

 

Page 3 of
23

 

Employee elect to revoke this Severance Agreement, he
shall provide notice to the Company as set forth in Section 20 below during the
Revocation Period. The Employee understands that he may sign the Severance
Agreement at any time before the expiration of the twenty-one (21) day review
period. If the Employee chooses not to wait twenty-one (21) days to execute the
Severance Agreement, it is because the Employee freely and unilaterally chooses
to execute the Severance Agreement before that time. The Employee’s signing of
the Severance Agreement triggers the commencement of the seven (7) day
Revocation Period specified above. Notwithstanding the foregoing, if the
Employee revokes this Severance Agreement as provided above, his employment will
nonetheless be considered to have terminated effective as of May 8, 2005, and in
that event shall be treated for all purposes as a termination “by mutual
agreement of the Employee and the Company”, under subsection 4(b)(i) of the
Amended Employment Agreement.

 

	c)  	
      Compliance.
      The Employee acknowledges and agrees that the Severance Agreement is in
      compliance with the Age Discrimination in Employment Act and the Older
      Workers Benefit Protection Act and that the releases set forth in the
      Severance Agreement shall be applicable, without limitation, to any claims
      brought under these Acts.

	d)  	
      Release
      of Claims by the Employee.
      As a material inducement to the Company to enter into the Severance
      Agreement, the Employee hereby irrevocably releases the Company and each
      of the owners, stockholders, predecessors, successors, directors,
      officers, employees, representatives, attorneys, subsidiaries and
      affiliates (and agents, directors, officers, employees, representatives
      and attorneys of such subsidiaries and affiliates) of the Company, and all
      persons acting by, through, under or in concert with them, including
      without limitation, M. Christine Jacobs, Bruce Smith, Otis W. Brawley,
      M.D., Orwin L. Carter, Ph. D., Earnest W. Deavenport, Jr., Patrick L.
      Flinn, John V. Herndon, Peter A.A. Saunders F.R.S.A., Philip A. Incarnati,
      Richard H. Miller, Eliot W. Robinson, Powell Goldstein LLP and its
      partners, members and employees, Edward J. Hardin, and Rogers & Hardin
      LLP and its partners, members and employees (collectively, the
      “Releasees”), from any and all charges, claims, liabilities, agreements,
      damages, causes of action, suits, costs, losses, debts and expenses
      (including attorneys’ fees and costs actually incurred) of any nature
      whatsoever, known or unknown, including, but not limited to, any claim of
      breach of fiduciary duty, rights arising out of alleged violations of any
      contracts, express or implied, any covenant of good faith and fair
      dealing, express or implied, or any tort, or any legal restrictions on the
      Company’s right to terminate employees, or any federal, state or other
      governmental statute, regulation, or ordinance, including, without
      limitation: 

	 (1)  	
          Title
      VII of the Civil Rights Act of 1964, as amended by the Civil
      Rights

                 
      Act
      of 1991 (race, color, religion, sex, and national origin discrimination);
      

	(2)  	
          the
      Employee Retirement Income Security Act (“ERISA”);

	(3)  	
          42
      U.S.C. § 1981 (discrimination); 

	(4)  	
          Section
      806 of the Sarbanes-Oxley Act, 18 U.S.C. Section 1514A;

	(5)  	
          the
      Americans with Disabilities Act (disability discrimination);
    

	(6)  	
          the Age
      Discrimination in Employment Act; 

 

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23

 

	(7)   	
          the
      Older Workers Benefit Protection Act; 

	 (8)   	
          the
      Equal Pay Act; 

	(9) 
 	    Executive Order
      11246 (race, color, religion, sex, and national origin discrimination);
      

	(10)  	
          Executive Order
      11141 (age discrimination); 

	(11)  	
          Section
      503 of the Rehabilitation Act of 1973 (disability discrimination);
      

	(12)  	
          the
      Family and Medical Leave Act;

	(13)  	
          the
      Consolidated Omnibus Budget Reconciliation Act
  (“COBRA”);

	(14)  	
          the
      Occupational Safety and Health Act;

	(15)  	
          the
      National Labor Relations Act;

	(16)  	
          negligence;
      

	(17)  	
          negligent
      hiring and/or negligent retention; 

	(18)  	
          intentional or
      negligent infliction of emotional distress or outrage;

	(19)  	
          defamation;
      

	(20)  	
          interference
      with employment; 

	(21)  	
          wrongful
      discharge; 

	(22)  	
          invasion of
      privacy; 

	(23)  	
          the
      Georgia AIDS Confidentiality Act;

	(24)  	
          Georgia’s Law
      Regarding Equal Pay, O.C.G.A. § 34-5-1 et
seq.;

	(25)  	
          the
      Georgia Equal Employment for Persons with Disabilities Code;
      or

	       (26)    
    	 
      violation of any other legal or contractual duty arising under the laws of
      the State of Georgia or the laws of the United States (“Claim” or
      “Claims”),

which the
Employee now has, or claims to have, or which the Employee at any time
heretofore had, or claimed to have, or which the Employee at any time
hereinafter may have, or claim to have, against each or any of the Releasees, in
each case as to acts or omissions by each or any of the Releasees occurring up
to and including the Effective Date. The Employee covenants and agrees not to
institute, or participate in any way in anyone else’s actions involved in
instituting, any action against any of the Releasees with respect to any Claim
released herein, except as required by any subpoena, court order, or other
compulsory process. Notwithstanding the foregoing, the Severance Agreement shall
not release (1) the payments described specifically in this Severance Agreement,
(2) benefits, if any, payable under the terms of the Company’s 401(k) Plan, (3)
unpaid claims for benefits, if any, that are payable under the terms of the
Company’s Group Health Insurance Plans, (4) benefits, if any, payable from the
Company's Insured Security Option Plan, (5) the right to any shares payable to
Employee, if any, under the terms of the Company's Employee Stock Purchase Plan,
(6) rights to COBRA continuation coverage as to any Company-provided medical,
dental or vision plan in which Employee participated during his employment, and
(7) rights to indemnification under the Company’s Articles of Incorporation (as
amended) or the Directors and Officers Indemnification Agreement.

	e) 
       	
      Release
      of Claims by the Company.
      The Company hereby irrevocably releases the Employee from any and all
      charges, claims, liabilities, agreements, damages, causes of action,
      suits, costs, losses, debts and expenses (including attorneys’ fees and
      costs 

 

Page 5 of
23

 

actually incurred) of any nature whatsoever, known or
unknown, including, but not limited to, any claim of breach of fiduciary duty,
rights arising out of alleged violations of any contracts, express or implied,
any covenant of good faith and fair dealing, express or implied, or any tort
or violation of any other legal or contractual duty arising under the laws
of the State of Georgia or the laws of the United States (“Claim” or “Claims”),
which the Company now has, or claims to have, or which the Company at any time
heretofore had, or claimed to have, or which the Company at any time hereinafter
may have, or claim to have, against the Employee, in each case as to acts or
omissions by the Employee occurring up to and including the Effective Date. The
Company covenants and agrees not to institute, or participate in any way in any
action against the Employee with respect to any Claim released herein, except as
required by any subpoena, court order, or other compulsory process.
Notwithstanding the foregoing, the Severance Agreement shall not release any
Claims based on any rights, duties or obligations reflected in or deriving from
sections 1, 5 through 9, and 11 thereof of the Amended Employment Agreement, as
described in Section 3(a) above.

 

	f)  	
      Employee’s
      Warranty of No Wrongful Acts. As
      a material inducement to the Company to release its Claims against the
      Employee, the Employee represents and warrants that he has committed no
      wrongful acts with respect to the Company, and that no wrongful acts have
      been committed with respect to the Company at his direction, to his
      knowledge, or with his assent (either explicit or implicit). For purposes
      of this subsection, “wrongful acts” include, but are not limited to,
      violations of any state, federal or local law, regulation, or ordinance,
      actions that could give rise to civil or criminal liability of the Company
      or of any Releasee, and conduct that breaches any legal duty owed by the
      Employee to the Company. The Employee hereby agrees that a breach of the
      foregoing representations and warranties shall render the Release of
      Claims by the Company (Section 4(e)) and the Covenant Not to Sue to the
      extent given by the Company (Section 4(g)) voidable at the election of the
      Company only with respect to any such alleged wrongful act, and shall
      enable the Company to pursue any claims against the Employee that it may
      have only with respect to any such alleged wrongful
act.

	g)  	
      Covenant
      Not to Sue. Except
      as necessary to enforce the terms of this Severance Agreement, Employee
      covenants and agrees not to sue or otherwise assert a claim against the
      Company or the Releasees concerning any of the Claims released by the
      Employee pursuant to Section 4(d), including, without limitation, any
      matters arising out of the Employee’s employment with the Company. Except
      as necessary to enforce the terms of this Severance Agreement or the
      provisions of the Amended Employment Agreement specified in Section 3(a)
      above, the Company covenants and agrees not to sue or otherwise assert a
      claim against the Employee concerning any of the Claims released by the
      Company pursuant to Section 4(e), including, without limitation, any
      matters arising out of the Employee’s employment with the Company. In the
      event that any party hereto sues another or Employee sues a Releasee
      concerning any of the Claims released by this Severance Agreement, the
      party bringing suit shall (i) provide to the other parties or Releasee, as
      applicable, at least ten (10) days prior to filing suit, written notice of
      such suit or proceeding and a copy of the Complaint or other document by
      which such lawsuit is to be initiated; (ii) file the Complaint or other
      legal document by which the suit is  

 

Page 6 of
23

 

commenced only in the United States District Court
for the Northern District of Georgia or, if such Court does not have
subject-matter jurisdiction, then in the Superior Court of Fulton County,
Georgia, as the parties consent to personal jurisdiction in that county; and
(iii) hold the sued party or Releasee, as applicable, harmless from any claim
asserted in such lawsuit and indemnify the sued party or Releasee, as
applicable, from all costs and expenses, including attorneys’ fees, arising from
the defense of such claim. In the event that said suit is brought by the
Employee, Employee shall be obligated to repay to the Company all of the amounts
paid to Employee pursuant to Section 2, unless any suit is solely brought under
the ADEA. Further, should any party sue or otherwise assert a claim against any
of the other parties or Releasees, as applicable, the party suing agrees that
injunctive relief is available to the parties or Releasees sued in addition to
the legal relief described above and that any obligations under Section 2 shall
cease.

 

	h)  	
      Representation
      of No Pending Actions.
      The Employee warrants and represents that he has not filed any
      administrative action or claim against the Company or the Releasees with
      any local, state or federal agency. The Company warrants and represents
      that it has not filed any administrative action or claim against Employee
      with any local, state or federal agency. The Employee and the Company
      further warrant and represent that they are not plaintiffs in any law suit
      or any other action filed in any jurisdiction against the Company or any
      other party or Releasee. If any of the warranties and representations of
      the Employee in this Section 4(h) is inaccurate in any respect as of the
      date made, the Company shall be excused from its obligations under
      Sections 2 and 4 of this Agreement. If any of the warranties and
      representations of the Company in this Section 4(h) are inaccurate in any
      respect as of the date made, the Employee shall be excused from his
      obligations under Section 4 of this Agreement. Further, the parties or
      Releasees, as applicable, shall be indemnified and held harmless by the
      breaching party for any breach of the warranties and representations
      contained in this Section, and shall be entitled to recover from the
      breaching party all costs and expenses incurred as a result of that breach
      of the warranty and representation contained in this Section, and all
      costs and expenses incurred in defending any breaching legal or
      administrative proceeding in which the Company or any other party or
      Releasee is named. Costs and expenses, for purposes of this Section, shall
      include, but not be limited to, attorneys’ fees and other legal
      costs.

 

 

 

Page 7 of
23

	5)  	
      No
      Disparagement.

	a)  
       	
      By
      the Employee.
      The Employee further agrees that, as part of the consideration for the
      Severance Agreement, and for a period of five (5) years from the Effective
      Date, he will not, directly or indirectly, in any capacity or manner,
      make, cause, encourage or assist to be made any statements, comments or
      remarks, whether oral, verbal, in writing, or electronically transmitted,
      which might reasonably be considered to be derogatory, defamatory or
      critical of, or negative towards, or to malign, harm, defame, disparage or
      damage the reputation and good name of the Company, its subsidiaries or
      affiliates, their respective officers, directors, agents or employees, or
      the Releasees. Provided, however, that if the Employee is required by any
      applicable law, regulation, statute, subpoena, court order, or other
      compulsory process to disclose information related to his Employment with
      the Company, such disclosure of truthful information shall not constitute
      a breach of this section or of the Severance
Agreement.

	b) 
        	
      By
      the Company.
      The Company further agrees that, as part of the consideration for the
      Severance Agreement, and for a period of five (5) years from the Effective
      Date, the members of the Board of Directors, and all Company officers
      covered by Section 16(a) of the Securities Exchange Act of 1934, as
      amended, will not, directly or indirectly, in any capacity or manner,
      make, cause, encourage or assist to be made any statements, comments or
      remarks, whether oral, verbal, in writing or electronically transmitted,
      which might reasonably be considered to be derogatory, defamatory or
      critical of, or negative towards, or to malign, harm, defame or damage the
      reputation and good name of the Employee, nor will they authorize,
      condone, or encourage any such disparagement from others. The Company will
      advise the members of the Board of Directors, all Company officers covered
      by Section 16(a) of the Securities Exchange Act of 1934, as amended, and
      all employees of the Company who reported directly to the Employee
      (collectively, the “Persons to be Advised”), that a non-disparagement
      agreement is in effect, and will use reasonable efforts to enforce
      compliance with this agreement. The Company shall also direct the Persons
      to be Advised not to make, cause, encourage or assist to be made any
      statements, comments, or remarks, whether oral, verbal, in writing or
      electronically transmitted, which might reasonably be considered to be
      derogatory, defamatory, or critical of, or negative towards, or to malign,
      harm, defame or damage the reputation and good name of the Employee.
      Notwithstanding the foregoing agreement, the parties hereto recognize and
      acknowledge that the Company will not be liable for unauthorized remarks
      by individuals employed by or otherwise associated with the Company, other
      than the members of the Board of Directors and the Company officers
      covered by Section 16(a) of the Securities Exchange Act of 1934, as
      amended. Provided, however, that if the Company, the Releasees, or the CEO
      are required by any applicable law, regulation, statute, subpoena, court
      order, or other compulsory process to disclose information related to the
      Employee’s employment, such disclosure of truthful information shall not
      constitute a breach of the Severance Agreement. Moreover, this subsection
      5(b) shall not apply to any communications (1) between the Company and its
      independent public auditors; (2) necessary to comply fully with all
      applicable requirements and policies of federal and state laws, stock
      exchange rules, and the rules and regulations of the Securities and
      Exchange Commission and other federal and state

 

Page 8 of
23

 

agencies; (3) necessary to cooperate fully with any
investigation or request for information from any state or federal governmental
agency, stock exchange, or regulatory organization; (4) necessary in the course
of preparing and filing appropriate tax returns or dealing with federal or state
taxing authorities; (5) necessary in the performance of personal or business
financial planning; (6) necessary in connection with any party hereto or any
Releasee obtaining advice from counsel; or (7) made in connection with any
judicial or administrative proceeding or arbitration with respect to which such
communications are relevant.

 

	6)  	
      Third-Party
      Beneficiaries.

	a) 
         	
      The
      Employee and the Company hereby acknowledge and agree that the Releasees
      described above are intended third-party beneficiaries for the purpose of
      providing them, and each of them, with enforceable rights under Sections
      4(d), 4(g), and 5(a) hereunder.

	7)  	
      No
      Admission; No Further Uses.

	a) 
         	
      The
      Employee and the Company acknowledge and agree that the Severance
      Agreement is the result of a compromise and shall never at any time or for
      any purpose be construed as an admission by any party to the Severance
      Agreement of any wrongdoing or any liability or responsibility to the
      other party to the Severance Agreement (or to any other person), and each
      of the parties to the Severance Agreement specifically and vigorously
      disclaims any wrongdoing or any liability or responsibility to the other
      party to the Severance Agreement (or to any other person). The Severance
      Agreement shall not be used in any legal proceeding or for any purpose
      except to enforce the provisions hereof or as otherwise required by
      applicable law. All negotiations, proceedings and statements made in
      connection herewith shall be made without prejudice to any party hereto
      and shall not be deemed or construed to be admissions by any party of any
      act, omission, matter or proposition.

	8)  	
      No
      Additional Reliance.

	a)
          	
      The
      Employee and the Company acknowledge and agree that, in executing the
      Severance Agreement, they did not rely upon and have not relied upon any
      representations or statements not expressly a part hereof that have been
      made by the other party to the Severance Agreement or by the agents,
      representatives or attorneys of the other party hereto with regard to the
      subject matter, basis or effect hereof. Without limiting the general
      applicability of the foregoing statement, the parties expressly
      acknowledge that the Company has made no representation regarding the tax
      effect of any payment or other benefit conferred
  hereunder.

	9)  	
      No
      Assignments.

	a)   
       	
      Each
      of the parties hereto represents that such party has not heretofore
      assigned or transferred, or purported to assign or transfer, to any person
      or entity, any claim or any portion thereof or interest therein, and
      agrees to indemnify, defend and hold the other

 

Page 9 of
23

 

party hereto harmless from any and all claims based
on or arising out of any such assignment or transfer, or purported assignment or
transfer, of any Claims or any portion thereof or interest therein.

 

	10)  	
      Further
      Assurances.

	a)
          	
      Each
      party hereto covenants and agrees, without the necessity of any further
      consideration, to execute and deliver any and all such further documents
      and take any and all such other actions, including, without limitation,
      any and all resignations, substitutions, and designations as may be
      necessary and appropriate to carry out the intent and purposes of the
      Severance Agreement and to consummate the transactions contemplated
      hereby.

	11)  	
      Binding
      Effect.
      

	a)   
       	
      The
      Severance Agreement shall be binding upon and inure to the benefit of the
      parties hereto and upon their respective heirs, personal representatives,
      administrators, successors and assigns, as the case may be.
    

	12)  	
      No
      Waiver.

	a) 
         	
      Failure
      by either party to insist upon strict compliance with any term of the
      Severance Agreement shall not be construed as a waiver thereof or of any
      right or remedy resulting from any breach of the Severance
      Agreement.

	13)  	
      Governing
      Law.
      

	a) 
         	
      The
      Severance Agreement shall be governed by, construed and enforced in
      accordance with the laws of the State of Georgia, without giving effect to
      any principles of conflicts of laws.

	14)  	
      Specific
      Performance; Attorneys’ Fees.

	a)  
        	
      The
      Severance Agreement may be specifically enforced, and injunctive relief
      may be granted to prevent a breach of the Severance Agreement since there
      is no adequate remedy at law. The prevailing party in any proceeding
      brought to obtain specific performance or injunctive relief pursuant to
      this Severance Agreement shall be entitled to an award of its reasonable
      costs and expenses, including, without limitation, attorneys’
      fees.

 

 

Page 10 of
23

 

	15)  	
      Severability.
      

	a)  
        	
      Except
      for Section 4(d), should
      any part, term or provision of the Severance Agreement be declared or
      determined by any court to be illegal, invalid or otherwise unenforceable,
      the legality, validity and enforceability of the remaining parts, terms or
      provisions hereof shall be deemed not to be affected, and the Severance
      Agreement shall be interpreted and enforced as if such illegal, invalid or
      unenforceable part, term or provision, to the extent possible, is not
      contained herein. If Section 4(d) is declared illegal, invalid or
      otherwise unenforceable, the Company may, at its option, declare this
      entire Severance Agreement null and void.

	16)  	
      Construction.
      

	a)  
        	
      As
      used in the Severance Agreement, the masculine shall include the feminine
      or neuter gender, and the singular shall include the plural, whenever the
      context so indicates or requires. Both parties acknowledge and agree that
      they participated jointly in the negotiation and drafting of this
      Agreement and the rule of construction that ambiguities are construed
      against the drafter is hereby waived.

	17)  	
      No
      Release from Future Actions or Inactions.

	a) 
         	
      Nothing
      contained herein shall be construed as a release by either of the parties
      hereto of, or an agreement by either of the parties hereto not to sue on
      any claims, manner of actions, causes of action, whether at law or in
      equity, suits, judgments, debts, liens, contracts, agreements, promises,
      liabilities, demands, damages, losses, costs, expenses or disputes
      (including attorneys’ fees and costs) arising out of any act, omission,
      matter, cause, conduct, claim, event or thing whatsoever which may occur
      after the Effective Date of this Severance Agreement to the end of
      time.

	18)  	
      Entire
      Agreement.

	a)
          	
      The
      Severance Agreement, including those provisions of the Amended Employment
      Agreement incorporated herein by Section 3(a) above, sets forth the
      complete and exclusive statement of the terms of the agreement between the
      parties hereto and fully supersedes any and all prior agreements or
      understandings between the parties hereto pertaining to the subject matter
      hereof.

	19)  	
      Amendment.

	a)  
        	
      The
      Severance Agreement may not be modified, amended, supplemented, or
      terminated except by a written instrument executed by the parties
      hereto.

 

 

Page 11 of
23

 

	20)  	
      Notice.

	a)  
        	
      All
      notices, requests, demands, and other communications required hereunder
      shall be in writing and shall be deemed to have been duly given if
      delivered or if mailed, by United States certified or registered mail,
      postage prepaid, to the party to which the same is directed at the
      following addresses (or at such other addresses as shall be given in
      writing by the parties to one another):

If to the
Company:     Theragenics
Corporation

5203
Bristol Industrial Way

Buford,
Georgia 30518

Attn:
Chief Executive Officer

and

Richard
H. Miller

Powell
Goldstein LLP

One
Atlantic Center - Fourteenth Floor 

1201 West
Peachtree Street, NW 

Atlanta,
GA 30309-3488

If to the
Employee:     James
MacLennan

325
9th Street
NE

Atlanta,
GA 30309

and

Walter E.
Jospin

Elizabeth
Noe

Paul,
Hastings, Janofsky & Walker LLP

600
Peachtree Street, N.E.

Suite
2400

Atlanta,
GA 30308

Notices
shall be deemed to be effective upon delivery, or in the case of notice by mail,
receipt of the notice, in each case by either the party to be notified or a
designated attorney for that party. Each party has the right to rely upon the
foregoing addresses and designated attorneys unless and until notified in
writing by the other party of a change. 

	21)  	
      Counterparts.
      

	a) 
         	
      The
      Severance Agreement may be executed in one or more counterparts, each of
      which shall be an original, and all of which together shall be deemed to
      be one and the same Severance Agreement. Executed counterparts may be
      delivered via facsimile transmission.

 

Page 12 of
23

 

	22)  	
      Arbitration.

	a) 
         	
      Any
      controversy or claim arising out of or relating to the Severance
      Agreement, or the breach thereof, shall be adjudicated through binding
      arbitration before a single arbitrator in accordance with the Commercial
      Arbitration Rules of the American Arbitration Association (the “AAA”) in
      Atlanta, Georgia, with the Company bearing financial responsibility for
      the filing costs charged by the AAA for such arbitration. However, the
      provisions of this section will not prevent the Company or the Employee
      from instituting an action in a court of law under the Severance Agreement
      for specific performance of the Severance Agreement or temporary or
      permanent injunctive relief. The parties hereto agree that the exclusive
      venue for any such lawsuit will be in the United States District Court for
      the Northern District of Georgia or, if such Court does not have
      subject-matter jurisdiction, then in the Superior Court of Fulton County,
      Georgia, and the Company and the Employee consent to the exercise of
      personal jurisdiction by either court for purposes of such
      lawsuit.

	b) 
        	
      Any
      party who desires to submit a claim to arbitration in accordance with this
      Section shall file its demand for arbitration with the AAA within thirty
      (30) days of the event or incident giving rise to the claim. A copy of
      said demand shall be served on the other party in accordance with the
      notice provisions of the Severance Agreement. The parties agree that they
      shall attempt in good faith to select an arbitrator by mutual agreement
      within twenty (20) days after the responding party’s receipt of the demand
      for arbitration. If the parties do not agree on the selection of an
      arbitrator within that timeframe, the selection shall be made pursuant to
      the rules from the panels of arbitrators maintained by the AAA. If the
      Employee (or the Employee’s estate in the event of his death) prevails in
      the dispute, the Company will pay and be financially responsible for all
      costs, expenses, and reasonable attorneys’ fees incurred by the Employee
      in connection with the dispute, including but not limited to the
      reasonable expenses of the arbitrator incurred by the Employee. Any award
      rendered by the arbitrator shall be accompanied by a written opinion
      providing the reasons for the award. The arbitrator’s award shall be final
      and non-appealable. Nothing in this Section shall prevent the parties from
      settling any dispute or controversy by mutual agreement at any
      time.

	23)  	
      Participation
      in Negotiations.

	a)  
        	
      EACH
      OF THE UNDERSIGNED PARTIES ACKNOWLEDGES AND AGREES THAT SUCH PARTY HAS
      PARTICIPATED IN THE NEGOTIATION OF AND CAREFULLY READ EACH OF THE TERMS
      AND PROVISIONS OF THIS SEVERANCE AGREEMENT AND UNDERSTANDS ITS CONTENTS,
      AND THAT SUCH PARTY EXECUTED THIS SEVERANCE AGREEMENT AS SUCH PARTY’S OWN
      FREE ACT AND DEED.

(Signatures
On Next Page)

Page 13 of
23

THERAGENICS
CORPORATION

By:

Title:

 

James
MacLennan

 

 

 

Page 14 of
23

EXHIBIT
A

	  1.  	The
      Employee (the “Recipient”) must deliver to the Company, within ten (10)
      days after written notification from the Company as to the amount of the
      tax withholding that is due, either (i) cash, or (ii) a certified check
      payable to the Company, in the amount of all tax withholding obligations
      imposed on the Company by reason of the vesting of the Shares, or (iii) by
      tendering a number of whole shares of Common Stock of the Company (“Common
      Stock”) which, when multiplied by the Fair Market Value (determined in
      accordance with the Company’s 2000 Stock Incentive Plan) of the Common
      Stock on the vesting date, is sufficient to satisfy the minimum amount of
      the required tax withholding obligations imposed on the Company (the
      “Stock Tendering Election”); provided, however, the Compensation Committee
      of the Board of Directors of the Company (the “Committee”) may in its sole
      discretion, disapprove and give no effect to the Stock Tendering Election
      by giving written notice to the Recipient within ten (10) days after
      receipt of the Stock Tendering Election, in which event the Recipient must
      deliver, within ten (10) days after receiving such notice, the tax
      withholding in the manner provided in clause (i) or (ii). If the Recipient
      does not timely satisfy payment of the tax withholding obligation, the
      Recipient will forfeit the Shares.

 

	  2.  	In
      lieu of paying the tax withholding obligation as described in Paragraph 1,
      the Recipient may elect to have the actual number of Shares reduced by the
      number of whole shares of Common Stock which, when multiplied by the Fair
      Market Value of the Common Stock on the vesting date, is sufficient to
      satisfy the minimum amount of the required tax obligations imposed on the
      Company by reason of the vesting of the Shares (the “Withholding
      Election”). Recipient may make a Withholding Election only if all of the
      following conditions are met:-

 

           
(i)    the
Withholding Election must be made within ten (10) days after the Recipient
receives written notification from the Company as to the amount of the tax

withholding
that is due (the “Tax Notice Date”), by executing and delivering to the Company
a properly completed Notice of Withholding Election, in the form provided by the
Company; and

 

           
(ii)    any
Withholding Election made will be irrevocable; however, the Committee may, in
its sole discretion, disapprove and give no effect to any Withholding

Election,
by giving written notice to the Recipient no later than ten (10) days after the
Company’s receipt of the Notice of Withholding Election, in which event the
Recipient must deliver to the Company, within ten (10) days after receiving such
notice, the amount of the tax withholding pursuant to Paragraph 1.

 

	  3.  	The
      Restricted Stock Rights are subject to the terms of the Company’s 2000
      Stock Incentive Plan.

 

Page 15 of
23

 

EXHIBIT
B

 

SCHEDULE
OF SHARES OF COMMON STOCK TO BE ISSUED

PURSUANT
TO PERFORMANCE RESTRICTED STOCK RIGHTS

 

	
      A.
	
      The
      number of shares of Common Stock of the Company (“Common Stock”) to be
      issued to the Employee (the “Recipient”) for each Performance Restricted
      Stock Right will be determined pursuant to the following schedule, but the
      resulting number will be multiplied by a fraction, the numerator of which
      is 492 (the number of days of the Recipient’s employment by the Company
      and its Affiliates from January
      1, 2004,
      through the date the Employee resigned from the Company, and the
      denominator of which is 1096 (the number of days from and including
      January
      1, 2004
      through December
      31,
      2006).
      Fractional shares will be disregarded and will not be
    issued.

	 	 
	
      Company
      Total 

      Shareholder
      Return Peer 

      Percentile
      Raking
	
       

      Number
      of Shares of Performance 

      Common
      Stock to be issued for each 

      Restricted
      Stock Right

	
      >
      85th

       

      ≥
      75th
      to < 85
      th

       

      ≥
      50th
      to < 75
      th

       

      < 30th
      to < 50th 

       
	
      2

       

      *
      1.5

       

      *
      1

       

      *
      0.30

 

	
      
	
      *  
      Plus a number of shares of Common Stock for each Performance Restricted
      Stock Right determined by interpolation for Company Total Shareholder
      Return Peer Percentile Ranking that falls between 30th
      and 50th,
      50th
      and 75th,
      or 75th
      and 85th.
      (For example, a Company Total Shareholder Return Peer Percentile Ranking
      of 40th
      would result in 0.65 of one share of Common Stock to be issued for each
      Restricted Stock Right.)

 

	
      B.
	
      “Company
      Total Shareholder Return Peer Percentile” shall mean the percentile
      ranking of the Company’s total shareholder return for the period beginning
      January 1, 2004, and ending December 31, 2006, as compared to the total
      shareholder return (where publicly available) for each of the following
      peer companies: ArQule, Inc., Cell Genesys, Inc., Corixa Corporation,
      Digene Corporation, Oscient Pharmaceuticals Corporation, Hybridon, Inc.,
      Ilex Oncology, Inc., Medarex, Inc., Mentor Corporation, Myriad Genetics,
      Inc., Neogen Corporation, North American Scientific, Inc., Novoste
      Corporation, Nuvelo, Inc., OSI Pharmaceuticals, Inc., Protein Design Labs,
      Inc., Quidel Corporation, Synovis Life Technologies, Inc., Third Wave
      Technologies, Inc., Transkaryotic Therapies, Inc., Xoma Ltd.,
      Zymogenetics, Inc. In the event that any of

 

Page 16 of
23

 

the above companies ceases to exist, shall cease to
be a peer company (as determined by the Compensation Committee of the Board of
Directors (the “Compensation Committee”) in its sole discretion), or shall be
merged into another company, the Committee may make such adjustment to the list
of peer companies as it determines in its sole discretion to be appropriate.
Total shareholder return will be determined using a consistent methodology
determined in the sole discretion of the Committee.

 

	
      C.
	
      Notwithstanding
      any other provision of this Schedule, if a Change in Control occurs before
      December 31, 2006, then 492/1096 of one share of Common Stock will be
      issuable as of the date of the Change of Control for each Performance
      Restricted Stock Right and the Performance Restricted Stock Rights will
      terminate as of such date. Fractional shares will be disregarded and will
      not be issued.

 

	
      D.
	
      “Change
      in Control” means any one of the following events which occurs following
      the date of grant:

 

(1)    the
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of voting securities of the
corporation where such acquisition causes such person to own thirty-five percent
(35%) or more of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that
for purposes of this Subsection (1), the following acquisitions shall not be
deemed to result in a Change in Control: (i) any acquisition directly from the
Company, (ii) any acquisition by the Company, (iii) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or (iv) any
acquisition by any corporation pursuant to a transaction that complies with
clauses (i), (ii) and (iii) of Subsection (3) below; and provided, further, that
if any Person’s beneficial ownership of the Outstanding Company Voting
Securities reaches or exceeds thirty-five percent (35%) as a result of a
transaction described in clause (i) or (ii) above, and such Person subsequently
acquires beneficial ownership of additional voting securities of the Company,
such subsequent acquisition shall be treated as an acquisition that causes such
Person to own thirty-five percent (35%) or more of the Outstanding Company
Voting Securities; or

 

       
(2)    individuals
who as of the date hereof, constitute the Board of Directors of the Company (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board of Directors; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company’s shareholders, was approved by a vote of at least two-thirds of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with 

 

Page 17 of
23

 

respect
to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board of Directors; or

 

        (3)    the
approval by the shareholders of the Company of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Company (“Business Combination”) or, if consummation of such
Business Combination is subject, at the time of such approval by shareholders,
to the consent of any government or governmental agency, the obtaining of such
consent (either explicitly or implicitly by consummation); excluding, however,
such a Business Combination pursuant to which (i) all or substantially all of
the individuals and entities who were the beneficial owners of the Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation that as a result of
such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Company Voting Securities, (ii) no Person
(excluding any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, thirty-five percent (35%) or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of the
members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for
such Business Combination; or

 

       
(4)    approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company.

	
      
	
      Notwithstanding
      the foregoing, no Change in Control shall be deemed to have occurred by
      reason of any actions or events in which the Recipient
      participates. 

 

	
      E.
	
      A
      share certificate shall be issued as soon as reasonably practicable after
      the Company determines the number of shares to be issued, subject to
      Section G below.

 

	
      F.
	
      If
      the Company declares a dividend (other than a stock dividend) payable to
      shareholders of Common Stock and if the dividend is payable to
      shareholders of record before a share certificate for Common Stock has
      been issued hereunder, the number of Performance Restricted Stock Rights
      shall be increased by a number equal to the amount of the dividend per
      share, multiplied by the number of Performance Restricted Stock Rights
      (before adjustment), divided by the Fair Market Value per share of Common
      Stock as of the dividend declaration date.

 

Page 18 of
23

 

G.    (a)    The
Recipient must deliver to the Company, within ten (10) days after written
notification from the Company as to the amount of the tax withholding that is
due, 

either
(i) cash, or (ii) a certified check payable to the Company, in the amount of all
tax withholding obligations imposed on the Company by reason of the earning of
the shares of Common Stock issuable hereunder, except as provided in Section
G(b), or (iii) by tendering a number of whole shares of Common Stock which, when
multiplied by the Fair Market Value (as defined in the Company’s 2000 Stock
Incentive Plan) of the Common Stock on the date the Common Stock is issuable to
the Recipient, is sufficient to satisfy the minimum amount of the required tax
withholding obligations imposed on the Company (the “Stock Tendering Election”);
provided, however, the Compensation Committee may in its sole discretion,
disapprove and give no effect to the Stock Tendering Election by giving written
notice to the Recipient within ten (10) days after receipt of the Stock
Tendering Election, in which event the Recipient must deliver, within ten (10)
days after receiving such notice, the tax withholding in the manner provided in
clause (i) or (ii). If the Recipient does not timely satisfy payment of the tax
withholding obligation, the Recipient will forfeit the Performance Restricted
Stock Rights and shares of Common Stock issuable hereunder.

 

         (b)    In lieu
of paying the tax withholding obligation as described in Section G(a), Recipient
may elect to have the actual number of shares of Common Stock 

issuable
hereunder reduced by the number of whole shares of Common Stock which, when
multiplied by the Fair Market Value of the Common Stock on the date the Common
Stock is issuable to the Recipient, is sufficient to satisfy the minimum amount
of the required tax obligations imposed on the Company by reason of the earning
of the shares (the “Withholding Election”). Recipient may make a Withholding
Election only if all of the following conditions are met:

 

                        
(i)    the
Withholding Election must be made within ten (10) days after the Recipient
receives written notification from the Company as to the amount of 

the tax
withholding that is due (the “Tax Notice Date”), by executing and delivering to
the Company a properly completed Notice of Withholding Election, in the form
provided by the Company; and

 

                 (ii)    any
Withholding Election made will be irrevocable; however, the Committee may, in
its sole discretion, disapprove and give no effect to any 

Withholding
Election, by giving written notice to the Recipient no later than ten (10) days
after the Company’s receipt of the Notice of Withholding Election, in which
event the Recipient must deliver to the Company, within ten (10) days after
receiving such notice, the amount of the tax withholding pursuant to Section
G(a).

	
      H.
	
      The
      Performance Restricted Stock Rights are subject to the terms of the
      Company’s 2000 Stock Incentive Plan.

 

 

Page 19 of
23

EXHIBIT
C

SCHEDULE
OF SHARES OF COMMON STOCK TO BE ISSUED

PURSUANT
TO PERFORMANCE RESTRICTED STOCK RIGHTS

 

	
      A.
	
      The
      number of shares of Common Stock of the Company (“Common Stock”) to be
      issued to the Employee (the “Recipient”) for each Performance Restricted
      Stock Right will be determined pursuant to the following schedule, but the
      resulting number will be multiplied by a fraction, the numerator of which
      is 126 (the number of days of the Recipient’s employment by the Company
      and its Affiliates from January
      1, 2005,
      through the date the Employee resigned from the Company, and the
      denominator of which is 1095 (the number of days from and including
      January
      1, 2005
      through December
      31,
      2007).
      Fractional shares will be disregarded and will not be
    issued.

 

	 	 
	
      Company
      Total 

      Shareholder
      Return Peer 

      Percentile
      Raking
	
       

      Number
      of Shares of Performance 

      Common
      Stock to be issued for each 

      Restricted
      Stock Right

	
      >
      85th

       

      ≥
      75th
      to < 85
      th

       

      ≥
      50th
      to < 75
      th

       

      <
      30th
      to < 50th

       
	
      2

       

      *
      1.5

       

      *
      1

       

      *
      0.30

 

	
      
	
      *
      Plus a number of shares of Common Stock for each Performance Restricted
      Stock Right determined by interpolation for Company Total Shareholder
      Return Peer Percentile Ranking that falls between 30th
      and 50th,
      50th
      and 75th,
      or 75th
      and 85th.
      (For example, a Company Total Shareholder Return Peer Percentile Ranking
      of 40th
      would result in 0.65 of one share of Common Stock to be issued for each
      Restricted Stock Right.)

 

	
      B.
	
      “Company
      Total Shareholder Return Peer Percentile” shall mean the percentile
      ranking of the Company’s total shareholder return for the period beginning
      January 1, 2005, and ending December 31, 2007, as compared to the total
      shareholder return (where publicly available) for each of the following
      peer companies: ArQule, Inc., Cell Genesys, Inc., Corixa Corporation,
      Digene Corporation, Oscient Pharmaceuticals Corporation, Hybridon, Inc.,
      Ilex Oncology, Inc., Medarex, Inc., Mentor Corporation, Myriad Genetics,
      Inc., Neogen Corporation, North American Scientific, Inc., Novoste
      Corporation, Nuvelo, Inc., OSI Pharmaceuticals, Inc., Protein Design Labs,
      Inc., Quidel Corporation, Synovis Life Technologies, Inc., Third Wave
      Technologies, Inc., Transkaryotic Therapies, Inc., Xoma Ltd.,
      Zymogenetics, Inc. In the event that any of the above companies ceases to
      exist, shall cease to be a peer company (as determined by
  

 

Page 20 of
23

 

the Compensation Committee of the Board of Directors
(the “Compensation Committee”) in its sole discretion), or shall be merged into
another company, the Committee may make such adjustment to the list of peer
companies as it determines in its sole discretion to be appropriate. Total
shareholder return will be determined using a consistent methodology determined
in the sole discretion of the Committee.

 

	
      C.
	
      Notwithstanding
      any other provision of this Schedule, if a Change in Control occurs before
      December 31, 2007, then 126/1095 of one share of Common Stock will be
      issuable as of the date of the Change of Control for each Performance
      Restricted Stock Right and the Performance Restricted Stock Rights will
      terminate as of such date. Fractional shares will be disregarded and will
      not be issued.

 

	
      D.
	
      “Change
      in Control” means any one of the following events which occurs following
      the date of grant:

 

        (1)    the
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the

“Exchange
Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of voting securities of the corporation
where such acquisition causes such person to own thirty-five percent (35%) or
more of the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors (the
“Outstanding Company Voting Securities”); provided, however, that for purposes
of this Subsection (1), the following acquisitions shall not be deemed to result
in a Change in Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company or (iv) any acquisition by any
corporation pursuant to a transaction that complies with clauses (i), (ii) and
(iii) of Subsection (3) below; and provided, further, that if any Person’s
beneficial ownership of the Outstanding Company Voting Securities reaches or
exceeds thirty-five percent (35%) as a result of a transaction described in
clause (i) or (ii) above, and such Person subsequently acquires beneficial
ownership of additional voting securities of the Company, such subsequent
acquisition shall be treated as an acquisition that causes such Person to own
thirty-five percent (35%) or more of the Outstanding Company Voting Securities;
or

 

        (2)    individuals
who as of the date hereof, constitute the Board of Directors of the Company (the
“Incumbent Board”) cease for any reason to constitute at least a 

majority
of the Board of Directors; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company’s shareholders, was approved by a vote of at least
two-thirds of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board of Directors; or

 

Page 21 of
23

 

 

        (3)    the
approval by the shareholders of the Company of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets 

of the
Company (“Business Combination”) or, if consummation of such Business
Combination is subject, at the time of such approval by shareholders, to the
consent of any government or governmental agency, the obtaining of such consent
(either explicitly or implicitly by consummation); excluding, however, such a
Business Combination pursuant to which (i) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation that as a result of
such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Company Voting Securities, (ii) no Person
(excluding any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, thirty-five percent (35%) or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of the
members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for
such Business Combination; or

 

        (4)    approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company.

Notwithstanding
the foregoing, no Change in Control shall be deemed to have occurred by reason
of any actions or events in which the Recipient participates.

 

	
      E.
	
      A
      share certificate shall be issued as soon as reasonably practicable after
      the Company determines the number of shares to be issued, subject to
      Section G below.

 

	
      F.
	
      If
      the Company declares a dividend (other than a stock dividend) payable to
      shareholders of Common Stock and if the dividend is payable to
      shareholders of record before a share certificate for Common Stock has
      been issued hereunder, the number of Performance Restricted Stock Rights
      shall be increased by a number equal to the amount of the dividend per
      share, multiplied by the number of Performance Restricted Stock Rights
      (before adjustment), divided by the Fair Market Value per share of Common
      Stock as of the dividend declaration date.

 

Page 22 of
23

 

G.    (a)    The
Recipient must deliver to the Company, within ten (10) days after written
notification from the Company as to the amount of the tax withholding that is
due, 

either
(i) cash, or (ii) a certified check payable to the Company, in the amount of all
tax withholding obligations imposed on the Company by reason of the earning of
the shares of Common Stock issuable hereunder, except as provided in Section
G(b), or (iii) by tendering a number of whole shares of Common Stock which, when
multiplied by the Fair Market Value (as defined in the Company’s 2000 Stock
Incentive Plan) of the Common Stock on the date the Common Stock is issuable to
the Recipient, is sufficient to satisfy the minimum amount of the required tax
withholding obligations imposed on the Company (the “Stock Tendering Election”);
provided, however, the Compensation Committee may in its sole discretion,
disapprove and give no effect to the Stock Tendering Election by giving written
notice to the Recipient within ten (10) days after receipt of the Stock
Tendering Election, in which event the Recipient must deliver, within ten (10)
days after receiving such notice, the tax withholding in the manner provided in
clause (i) or (ii). If the Recipient does not timely satisfy payment of the tax
withholding obligation, the Recipient will forfeit the Performance Restricted
Stock Rights and shares of Common Stock issuable hereunder.

 

        (b)    In lieu
of paying the tax withholding obligation as described in Section G(a), Recipient
may elect to have the actual number of shares of Common Stock issuable

hereunder
reduced by the number of whole shares of Common Stock which, when multiplied by
the Fair Market Value of the Common Stock on the date the Common Stock is
issuable to the Recipient, is sufficient to satisfy the minimum amount of the
required tax obligations imposed on the Company by reason of the earning of the
shares (the “Withholding Election”). Recipient may make a Withholding Election
only if all of the following conditions are met:

 

               (i)    the
Withholding Election must be made within ten (10) days after the Recipient
receives written notification from the Company as to the amount of the

tax
withholding that is due (the “Tax Notice Date”), by executing and delivering to
the Company a properly completed Notice of Withholding Election, in the form
provided by the Company; and

 

              
(ii)    any
Withholding Election made will be irrevocable; however, the Committee may, in
its sole discretion, disapprove and give no effect to any 

Withholding
Election, by giving written notice to the Recipient no later than ten (10) days
after the Company’s receipt of the Notice of Withholding Election, in which
event the Recipient must deliver to the Company, within ten (10) days after
receiving such notice, the amount of the tax withholding pursuant to Section
G(a).

	
      H.
	
      The
      Performance Restricted Stock Rights are subject to the terms of the
      Company’s 2000 Stock Incentive Plan. 

 

 

Page 23
of 23

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