EXHIBIT 10.60 January 6, 2005
Thomas Paulson 557 Creedon Circle Alameda, CA 94502 Dear Tom: This letter agreement (this “Agreement”) confirms our understanding and agreement with respect to your resignation as Chief Financial Officer of Avigen, Inc. and sets forth the substance of the terms that Avigen, Inc. (the “Company”) is offering to you to aid in your employment transition. 1. Separation. Effective as of the date of this Agreement, you hereby resign your position of Chief Financial Officer, Vice President of Finance, and Corporate Secretary and all other positions you hold on behalf of Avigen, Inc. Your last day of work with the Company and your employment termination date will be January 10, 2006 (the “Separation Date”). 2. Accrued Salary And Paid Time Off. On the Separation Date, the Company will pay you all accrued salary, and all accrued and unused vacation earned through the Separation Date, subject to standard payroll deductions and withholdings. You are entitled to these payments by law. 3. Severance Payment. If you sign this Agreement, and allow the release contained herein to become effective, then the Company will pay you severance in the form of salary continuation through October 10, 2006. In the event you have not begun employment on a full-time basis with another employer by October 10, 2006, the Company will continue your salary payments through January 10, 2007 or until such time you begin employment on a full-time basis, whichever is earlier. These payments will be made on the Company’s regular payroll cycle beginning on the first regularly scheduled payroll date following the Effective Date (as defined in paragraph 14 below), and will be subject to standard payroll deductions and withholdings. [Tom, the Company is willing to provide a lump-sum payment if you prefer] 4. Health Insurance. To the extent provided by the federal COBRA law or, if applicable, state insurance laws, and by the Company’s current group health insurance policies, you will be eligible to continue your group health insurance benefits at your own expense following the Separation Date. Later, you may be able to convert to an individual policy through the provider of the Company’s health insurance, if you wish. You will be provided with a separate notice describing your rights and obligations under COBRA. If you timely elect continued coverage under COBRA, then the Company, as part of this Agreement, will pay the COBRA premiums necessary to continue your current level of coverage through January 10, 2007. The Company’s obligation to make these payments will cease upon you becoming eligible for benefits under another employer’s health plan. You agree to promptly notify the Company of such eligibility. 5. Services. Spherion Outplacement. You will receive three months of Spherion Outplacement
6. Stock Options. During your employment with the Company, you were granted options to purchase shares of the Company’s common stock (the “Options”). If you sign this Agreement, and allow the release contained herein to become effective, then the Company will extend the post- termination exercise period with respect to each Option until the earlier to occur of: (a) October 10, 2006 (b) in the event you have not begun employment on a full-time basis with another employer by October 10, 2006, the Company will continue your exercise period through January 10, 2007 or until such time you begin employment on a full-time basis, whichever is earlier or (c) the end of the original contract life of the Option (this extension is explicitly understood to impact the exercis