EXHIBIT 10.2

[Urologix letterhead]

July 14, 2008

Dear Greg:

Although your employment is “at will” and may be terminated by you or Urologix
at any time for any reason, Urologix has agreed to provide you with a particular
severance pay benefit following a Change in Control in the event your employment
is terminated without Cause, or by you for Good Reason. Terms not otherwise
defined in this letter (the “Letter Agreement”) shall have the meaning given
such terms on Schedule 1, which is incorporated herein by reference.

Specifically, we have agreed as follows:

1. Change in Control. If a Change in Control shall occur and your employment is
terminated without Cause, or by you for Good Reason, within twelve months of a
Change in Control, Urologix shall pay you a severance payment in cash in a
single sum within sixty (60) days of the date of termination equal to 100% of
the sum of your annual target compensation (base salary and bonus) in effect on
such date. In addition, Urologix shall continue the health, dental and life
insurance benefits substantially similar to those you are receiving or are
entitled to receive prior to your termination for a period of twelve
(12) months. You shall pay the employee’s share of the premiums for such
benefits.

2. Arbitration. All disputes or claims arising out of or in any way related to
this Letter Agreement, including the making of this Letter Agreement, shall be
submitted to and determined by final and binding arbitration under the Rules of
the American Arbitration Association. Arbitration proceedings may be initiated
by either of us upon notice to the other and to the American Arbitration
Association, and shall be conducted by three arbitrators under the Rules of the
American Arbitration Association in Minneapolis, Minnesota, unless we agree to
have the person or persons to serve as arbitrators within thirty (30) days of
delivery of the list of proposed arbitrators by the American Arbitration
Association, then, at the request of either of us, the three arbitrators shall
be selected at the discretion of the American Arbitration Association.

3. Entire Agreement. This Letter Agreement constitutes our entire agreement and
supersedes all prior discussions, understandings and agreements with respect to
the severance benefits which Urologix has agreed to provide to you. This Letter
Agreement shall be governed and construed by the laws of the State of Minnesota
and may be amended only in writing signed by both of us.

4. Successors. This Letter Agreement shall not be assignable, in whole or in
part, by you. This Letter Agreement shall be binding upon and inure to the
benefit of Urologix and its successors and assigns and upon any person
acquiring, by merger, consolidation, purchase of assets or otherwise, all or
substantially all of the assets and business of Urologix, and the successor
shall be substituted for Urologix under this Letter Agreement.

--------------------------------------------------------------------------------

Fluet Greg

July 14, 2008

Page 2

If this Letter Agreement accurately sets forth our agreement and understanding
in regard to these matters, will you please sign this Letter Agreement where
indicated below and return the executed letter to me for our files. A separate
copy is enclosed for your records.

 

UROLOGIX, INC. By:  

/s/ Stryker Warren, Jr.

  Stryker Warren, Jr.   Chief Executive Officer READ AND AGREED:  

/s/ Greg Fluet

  Greg Fluet

--------------------------------------------------------------------------------

SCHEDULE 1

Definition of “Cause”:

1. The failure by you to use your best efforts to perform the material duties
and responsibilities of your position or to comply with any material policy or
directive Urologix has in effect from time to time.

2. Any act on your part which is harmful to the reputation or business of
Urologix, including, but not limited to, conduct which is inconsistent with
federal or state law respecting harassment of, or discrimination against, any
Urologix employee.

3. A material breach of your fiduciary responsibilities to Urologix, such as
embezzlement or misappropriation of Urologix funds or properties.

4. Your indictment for, conviction of, or guilty plea or nolo contendere plea to
a felony or any crime involving moral turpitude, fraud or misrepresentation.

Definition of “Change in Control”:

Change in Control of Urologix shall mean a change in control which would be
required to be reported in response to Item 1 of Form 8-K promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not
Urologix is then subject to such reporting requirement, including without
limitation, if:

 

  (a) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly of securities of Urologix representing 20%
or more of the combined voting power of Urologix’ then outstanding securities;

 

  (b) there ceases to be a majority of the Board of Directors comprised of
(A) individuals who, on the date of this Letter Agreement, constituted the Board
of Directors of Urologix; and (B) any new director who subsequently was elected
or nominated for election by a majority of the directors who held such office
prior to a Change in Control; or

 

  (c) Urologix disposes of at least 75% of its assets, other than to an entity
owned 50% or greater by Urologix or any of its subsidiaries.

Definition of “Good Reason”:

Good Reason shall mean, without your express written consent, any of the
following:

 

  (a) the assignment to you of any duties inconsistent with your status or
position as Executive Vice President and Chief Operating Officer of Urologix or
a substantial reduction in the nature or status of your responsibilities from
those in effect immediately prior to the Change in Control;

--------------------------------------------------------------------------------

  (b) a reduction by Urologix of your annual base salary in effect immediately
prior to a Change in Control;

 

  (c) the relocation of Urologix’ principal executive offices to a location
outside of the Minneapolis metropolitan area or requiring you to be based
anywhere other than Urologix’ principal executive offices, except for required
travel for Urologix business to any extent substantially consistent with your
prior business obligations;

 

  (d) the failure by Urologix to continue to provide you with benefits at least
as favorable to those enjoyed by you under Urologix plans which you participated
in at the time of the Change in Control, the taking of any action which would,
directly or indirectly, materially reduce any of such benefits or deprive you of
any benefit enjoyed at the time of the Change in Control, or the failure to
provide you with the number of paid vacation days to which you are entitled at
the time of the Change in Control; provided, however, Urologix may amend any
such program so long as such amendments do not reduce any benefits to which you
would be entitled upon termination;

 

  (e) the failure of Urologix to obtain a satisfactory agreement from any
successor to assume and agree to perform this Letter Agreement.