Exhibit 10.2

AGREEMENT

THIS AGREEMENT (this “Agreement”) is entered into as of October 10, 2007, by and
between STAR SCIENTIFIC, INC., a Delaware corporation (the “Company”) and Park
A. Dodd, III (“Employee”).

RECITALS

A. The Company is engaged in the research, development, manufacturing and
commercialization of less toxic and potentially reduced-risk smokeless tobacco
products, cessation products, and other allied consumer tobacco products.

B. Employee has been engaged as an employee to Star Scientific since May, 2007.
The Company wishes to have the continued benefit of Employee’s professional
skills and services as the Company’s Chief Financial Officer (“CFO”) and to
provide Employee, in addition to his current salary, a Stock Option to purchase
up to 250,000 shares of the Company’s Common Stock under its 2000 Equity
Incentive Plan.

C. In his role as CFO, employee will have access to the Company’s most sensitive
financial and commercial information and the Company wishes to take reasonable
steps to protect this information.

AGREEMENT

NOW, THEREFORE, the parties hereto hereby agree as follows with respect to the
issuance of a stock option to employee, the treatment of confidential
information and Employee’s competition with the Company, if he cease to be an
Employee.

1. Stock Option.

(i) Stock Option Grant. The parties acknowledge and agree that, as additional
incentive, management will recommend and upon Board approval, the Company will
grant to Executive a Stock Option (the “Option”) to purchase up to two-hundred
and fifty thousand (250,000) shares of Common Stock of the Company at fair
market value as of the date of grant, pursuant to the Company’s standard form of
stock option agreement under its 2000 Stock Option Plan (the “Plan”).

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(ii) Vesting. The Option shall vest and become exercisable on the following
schedule.

 

Number of Shares

  

Date Vested

90,000

   October 10, 2007

80,000

   October 10, 2008

80,000

   October 10, 2009

(iii) Other Option Terms. All other terms of the Option shall be determined in
accordance with the Plan and the Company’s standard Stock Option Agreement.

2. Restriction on Competition.

(a) Covenant Not to Compete. The parties acknowledge that the Company is placing
Employee in a position of great trust, responsibility, and as a result, that
Employee will be exposed to the Company’s most sensitive commercial and
proprietary information. The parties also recognize and acknowledge that by
virtue of his position, Employee will come to be identified closely with the
Company in the business and industries in which the Company operates. Employee
further acknowledges that the Company’s interests in protecting its confidential
information and its relationships are both significant and difficult to quantify
economically. Therefore, Employee agrees that for a period of twelve (12) months
from the termination of his employment, Employee shall not, without the prior
written consent of the Company, either directly or indirectly, for himself or on
behalf of or in conjunction with any other Person (i) own, manage, operate,
control, be employed by, participate in, render services to, or be associated in
any manner with the ownership, management, operation or control of, any business
similar to the type of business conducted by the Company or any of its
Affiliates within any of the geographic territories in which the Company or any
of its Affiliates conducts business, (ii) solicit business of the same or
similar type being carried on by the Company or any of its Affiliates from any
Person or entity known by Employee to be a customer of the Company or any of its
Affiliates, whether or not Employee had personal contact with such Person or
entity during and by reason of Employee’s employment with the Company, or
(iii) solicit any employee or contractor of the Company to terminate that
relationship or endeavor or attempt in any way to interfere with or induce a
breach of any contractual relationship that the Company or any of its Affiliates
may have with any employee, customer, contractor, supplier, representative or
distributor.

(b) No Breach for Activities Deemed Not Competitive. It is further agreed that,
in the event that Employee shall cease to be employed by the Company and enter
into a business or pursue other activities that, at such time, are not in
competition with the Company or any of its Affiliates, Employee shall not be
chargeable with a

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violation of this Section if the Company subsequently enters the same (or a
similar) competitive business or activity.

(c) Fair and Reasonable. Employee has carefully read and considered the
provisions of this Section and, having done so, agrees that the restrictive
covenants in this Section impose a fair and reasonable restraint on Employee,
are reasonably required to protect the interests of the Company, its Affiliates
and their respective officers, directors, employees and stockholders and that
the provisions would not unduly restrict his ability to make an adequate living
following the termination of his employment with the Company. It is further
agreed that the Company and Employee intend that such covenants be construed and
enforced in accordance with the changing activities, business and locations of
the Company throughout the term of these covenants.

3. Confidential Information.

(a) Confidential Information. Employee hereby agrees to hold in strict
confidence and not to disclose to any third party any of the confidential and
proprietary business, financial, technical, economic, sales and/or other types
of proprietary business information relating to the Company or any of its
Affiliates (including all trade secrets) in whatever form, whether oral,
written, or electronic (collectively, the “Confidential Information”), to which
Employee has, or is given (or has had or been given), access during the course
of his employment with the Company. It is agreed that the Confidential
Information is confidential and proprietary to the Company because such
Confidential Information encompasses technical know-how, trade secrets, or
technical, financial, organizational, sales or other valuable aspects of the
business and trade of the Company or its Affiliates, including without
limitation, technologies, products, processes, plans, clients, personnel,
operations and business activities. This restriction shall not apply to any
Confidential Information that (a) becomes known generally to the public through
no fault of the Employee, (b) is required by applicable law, legal process, or
any order or mandate of a court or other governmental authority to be disclosed,
or (c) is reasonably believed by Employee, based upon the advice of legal
counsel, to be required to be disclosed in defense of a lawsuit or other legal
or administrative action brought against Employee; provided, however, that in
the case of clause (b) or (c), Employee shall give the Company reasonable
advance written notice of the Confidential Information intended to be disclosed
and the reasons and circumstances surrounding such disclosure, in order to
permit the Company to seek a protective order or other appropriate request for
confidential treatment of the applicable Confidential Information.

(b) Return of Company Property. In the event of termination of Employee’s
employment with the Company for whatever reason or no reason, (a) Employee
agrees not to copy, make known, disclose or use, any of the Confidential
Information without the Company’s prior written consent, and (b) Employee or
Employee’s personal representative shall return to the Company (i) all
Confidential

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Information, (ii) all other records, designs, patents, patent applications,
business plans, financial statements, manuals, memoranda, lists, correspondence,
reports, records, charts, advertising materials and other data or property
delivered to or compiled by Employee by or on behalf of the Company or its
respective representatives, vendors or customers that pertain to the business of
the Company or any of its Affiliates, whether in paper, electronic or other
form, and (iii) all keys, credit cards, vehicles and other property of the
Company. Employee shall not retain or cause to be retained any copies of the
foregoing. Employee hereby agrees that all of the foregoing shall be and remain
the property of the Company and the applicable Affiliates and be subject at all
times to their discretion and control.

4. Representation. Employee acknowledges that he (a) has reviewed this Agreement
in its entirety, and/or (b) has had an opportunity to obtain the advice of
separate legal counsel prior to executing this Agreement, and (c) fully
understands all provisions of this Agreement.

5. Governing Law and Governing Venue. Any or all disputes, disagreements, or
litigation relating to or under terms of this Agreement, shall be litigated in
the Commonwealth of Virginia. In order to effectuate this provision, the parties
expressly consent to personal jurisdiction in Virginia and to a Virginia venue.
This Agreement shall in all respects be construed according to the substantive
laws of the Commonwealth of Virginia, without regard to its conflict of laws
principles.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

COMPANY   EMPLOYEE: STAR SCIENTIFIC, INC.  

By

 

 

 

 

(Signature)   (Signature) Paul L. Perito, Chairman, President and Chief
Operating Officer   Park A. Dodd, III 7475 Wisconsin Avenue   1 Foxmere Suite
850   Richmond, VA 23238 Bethesda, Maryland 20814