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                                                                    Exhibit 10.2


                                 CELERITEK, INC.

                      CHANGE OF CONTROL SEVERANCE AGREEMENT

         This Change of Control Severance Agreement (the "Agreement") is made
and entered into effective as of November 22, 2002 (the "Effective Date"), by
and between Margaret Smith (the "Employee") and Celeritek, Inc., a California
corporation (the "Company"). Certain capitalized terms used in this Agreement
are defined in Section 1 below.

                                    RECITALS

         A. It is expected that the Company from time to time will consider the
possibility of a Change of Control. The Board of Directors of the Company (the
"Board") recognizes that such consideration can be a distraction to the Employee
and can cause the Employee to consider alternative employment opportunities.

         B. The Board believes that it is in the best interests of the Company
and its shareholders to provide the Employee with an incentive to continue her
employment and to maximize the value of the Company upon a Change of Control for
the benefit of its shareholders.

         C. In order to provide the Employee with enhanced financial security
and sufficient encouragement to remain with the Company notwithstanding the
possibility of a Change of Control, the Board believes that it is imperative to
provide the Employee with certain severance benefits upon the Employee's
termination of employment in connection with a Change of Control.

                                    AGREEMENT

         In consideration of the mutual covenants herein contained and the
continued employment of the Employee by the Company, the parties agree as
follows:

         1. Definition of Terms. The following terms referred to in this
Agreement shall have the following meanings:

            (a) Cause. "Cause" shall mean (i) the Employee's willful, repeated
failure to substantially perform her duties (except due to physical or mental
illness), if the Employee fails to cure within fifteen (15) days after there has
been delivered to the Employee from the Company written notice of such failure;
(ii) a willful act by the Employee that constitutes gross misconduct and is
injurious to the Company; (iii) any act of personal dishonesty taken by the
Employee in connection with her responsibilities as an employee which is
intended to result in substantial personal enrichment of the Employee; or (iv)
the Employee's conviction of or plea of no contest to a felony.
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            (b) Change of Control. "Change of Control" shall mean the occurrence
of any of the following events:

                (i) the approval by the shareholders of the Company of a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets;


                (ii) the approval by shareholders of the Company of a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than sixty percent (60%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation;

                (iii) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended) becoming the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing forty percent (40%) or
more of the total voting power represented by the Company's then outstanding
voting securities; or

                (iv) a change in the composition of the Board, as a result of
which fewer than sixty-six percent (66%) of the directors are Incumbent
Directors. "Incumbent Directors" shall mean directors who either (A) are
directors of the Company as of the date hereof, or (B) are elected, or nominated
for election, to the Board with the affirmative votes of at least a majority of
those directors whose election or nomination was not in connection with any
transactions described in subsections (i), (ii), or (iii) or in connection with
an actual or threatened proxy contest relating to the election of directors of
the Company.

            (c) High Bonuses. "High Bonuses" shall mean the two (2) highest
annual bonuses paid by the Company for the preceding five (5) fiscal years,
payable in a lump sum.

            (d) Involuntary Termination. "Involuntary Termination" shall mean:

                (i) without the Employee's express written consent, a
significant reduction of the Employee's title, authority, duties, position or
responsibilities relative to the Employee's title, authority, duties, position
or responsibilities in effect immediately prior to such reduction, or the
removal of the Employee of such title, authority, position, duties and
responsibilities, unless the Employee is provided with comparable title,
authority, duties, position and responsibilities; provided, however, that a
reduction in title solely by virtue of the Company being acquired and made part
of a larger entity shall not constitute an "Involuntary Termination";

                (ii) without the Employee's express written consent, a material
reduction, without good business reasons, of the facilities and perquisites
(including office space and location) available to the Employee immediately
prior to such reduction;

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                (iii) without the Employee's express written consent, a
reduction by the Company of the Employee's base salary or bonus as in effect
immediately prior to such reduction;

                (iv) without the Employee's express written consent, a material
reduction by the Company in the kind or level of employee benefits to which the
Employee is entitled immediately prior to such reduction with the result that
the Employee's overall benefits package is materially reduced;

                (v) without the Employee's express written consent, the
relocation of the Employee's principal place of employment to a facility or a
location more than thirty (30) miles from her current location;

                (vi) any purported termination of the Employee by the Company
which is not effected for Cause or for which the grounds relied upon are not
valid; or

                (vii) the failure of the Company to obtain the assumption of
this Agreement by any successors contemplated in Section 7 below.

            (e) Termination Date. "Termination Date" shall mean the effective
date of any notice of termination delivered by one party to the other hereunder.

         2. Term of Agreement. This Agreement shall terminate upon the date that
all obligations of the parties hereto under this Agreement have been satisfied.

         3. At-Will Employment. The Company and the Employee acknowledge that
the Employee's employment is and shall continue to be at-will, as defined under
applicable law. If the Employee's employment terminates for any reason, the
Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement, or as may otherwise be
established under the Company's then existing employee benefit plans or policies
at the time of termination.

         4. Severance Benefits.

            (a) Termination in Connection with a Change of Control. If the
Employee's employment with the Company terminates as a result of an Involuntary
Termination at any time within twenty-four (24) months after a Change of Control
or within three (3) months on or before a Change of Control, and the Employee
signs and does not revoke a standard release of claims with the Company in a
form acceptable to the Company, then the Employee shall be entitled to the
following severance benefits:

                (i) two (2) times the Employee's annual base salary as in effect
as of the date of such termination, less applicable withholding, payable in a
lump sum within thirty (30) days of the Involuntary Termination;


                (ii) two (2) times the average of the High Bonuses, less
applicable withholding, payable in a lump sum within thirty (30) days of the
Involuntary Termination;

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                (iii) all stock options granted by the Company to the Employee
prior to the Change of Control shall become fully vested and exercisable as of
the date of the termination to the extent such stock options are outstanding and
unexercisable at the time of such termination and all stock subject to a right
of repurchase by the Company (or its successor) that was purchased prior to the
Change of Control shall have such right of repurchase lapse with respect to all
of the shares;

                (iv) to the extent eligible on the date of termination, the
Employee will be permitted to convert her coverage under the Company's life
insurance plan to an individual policy for six (6) months from the date of the
Employee's termination, at no additional after-tax cost than the Employee would
have had as an employee. To the extent such individual coverage cannot be
provided without jeopardizing the tax status of the Company's life insurance
plan such plan, for underwriting reasons or otherwise, the Company shall pay the
Employee an amount such that the Employee can purchase such benefits separately
at no greater after-tax cost to the Employee than she would have had if the
benefits were provided to the Employee as an employee; and

                (v) reimbursement by the Company of the group health
continuation coverage premiums for the Employee and the Employee's eligible
dependents under Title X of the Consolidated Budget Reconciliation Act of 1985,
as amended ("COBRA") as in effect through the lesser of (x) eighteen (18) months
from the date of such termination, (y) the date upon which the Employee and the
Employee's eligible dependents become covered under similar plans, or (z) the
date the Employee no longer constitutes a "Qualified Beneficiary" (as such term
is defined in Section 4980B(g) of the Code); provided, however, that the
Employee will be solely responsible for electing such coverage within the
required time period.

            (b) Termination Apart from a Change of Control. If the Employee's
employment with the Company terminates other than as a result of an Involuntary
Termination within the twenty-four (24) months following a Change of Control or
within three (3) months on or before a Change of Control, then the Employee
shall not be entitled to receive severance or other benefits hereunder, but may
be eligible for those benefits (if any) as may then be established under the
Company's then existing severance and benefits plans and policies at the time of
such termination.

            (c) Accrued Wages and Vacation; Expenses. Without regard to the
reason for, or the timing of, the Employee's termination of employment: (i) the
Company shall pay the Employee any unpaid wages due for periods prior to the
Termination Date; (ii) the Company shall pay the Employee all of the Employee's
accrued and unused vacation through the Termination Date; and (iii) following
submission of proper expense reports by the Employee, the Company shall
reimburse the Employee for all expenses reasonably and necessarily incurred by
the Employee in connection with the business of the Company prior to the
Termination Date. These payments shall be made promptly upon termination and
within the period of time mandated by law.

         5. Limitation on Payments. In the event that the severance and other
benefits provided for in this Agreement or otherwise payable to the Employee (i)
constitute "parachute payments" within the meaning of Section 280G of the Code,
and (ii) would be subject to the excise tax imposed by Section 4999 of the Code
(the "Excise Tax"), then the Employee's benefits under this Agreement shall be
either:

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            (a) delivered in full, or

            (b) delivered as to such lesser extent which would result in no
portion of such benefits being subject to the Excise Tax,

whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the Excise Tax, results in the receipt by the
Employee on an after-tax basis, of the greatest amount of benefits,
notwithstanding that all or some portion of such benefits may be taxable under
Section 4999 of the Code.

         Unless the Company and the Employee otherwise agree in writing, any
determination required under this Section shall be made in writing by the
Company's independent public accountants (the "Accountants"), whose
determination shall be conclusive and binding upon the Employee and the Company
for all purposes. For purposes of making the calculations required by this
Section, the Accountants may make reasonable assumptions and approximations
concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Sections 280G and 4999 of the
Code. The Company and the Employee shall furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to
make a determination under this Section. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section.

         6. Legal Fees. The Company shall reimburse the Employee up to twenty
thousand dollars ($20,000) for reasonable legal fees incurred as a result of any
dispute between the Employee and the Company relating to this Agreement, payable
within thirty (30) business days of the Company's receipt of a written invoice
from the Employee for such incurred fees.

         7. Successors.

            (a) Company's Successors. Any successor to the Company (whether
direct or indirect and whether by purchase, lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's business
and/or assets shall assume the Company's obligations under this Agreement and
agree expressly to perform the Company's obligations under this Agreement in the
same manner and to the same extent as the Company would be required to perform
such obligations in the absence of a succession. For all purposes under this
Agreement, the term "Company" shall include any successor to the Company's
business and/or assets which executes and delivers the assumption agreement
described in this subsection (a) or which becomes bound by the terms of this
Agreement by operation of law.

            (b) Employee's Successors. Without the written consent of the
Company, the Employee shall not assign or transfer this Agreement or any right
or obligation under this Agreement to any other person or entity.
Notwithstanding the foregoing, the terms of this Agreement and all rights of the
Employee hereunder shall inure to the benefit of, and be enforceable by, the
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.

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         8. Notices.

            (a) General. Notices and all other communications contemplated by
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by U.S. registered or certified mail,
return receipt requested and postage prepaid. In the case of the Employee,
mailed notices shall be addressed to her at the home address which she most
recently communicated to the Company in writing. In the case of the Company,
mailed notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary.

            (b) Notice of Termination. Any termination by the Company for Cause
or by the Employee as a result of a voluntary resignation or an Involuntary
Termination shall be communicated by a notice of termination to the other party
hereto given in accordance with this Section. Such notice shall indicate the
specific termination provision in this Agreement relied upon, shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination under the provision so indicated, and shall specify the Termination
Date (which shall be not more than thirty (30) days after the giving of such
notice). The failure by the Employee to include in the notice any fact or
circumstance which contributes to a showing of Involuntary Termination shall not
waive any right of the Employee hereunder or preclude the Employee from
asserting such fact or circumstance in enforcing her rights hereunder.

         9. Non-Solicitation. Until the date that is two (2) years from the date
of termination of the Employee's employment with the Company, the Employee
agrees and acknowledges that the Employee shall not either directly or
indirectly solicit, induce, attempt to hire, recruit, encourage, take away, hire
any employee of the Company or cause an employee to leave his or her employment
either for the Employee or for any other entity or person. Upon any breach of
this section, all severance payments pursuant to this Agreement shall
immediately cease.

         10. Arbitration.

            (a) General. In consideration of the Employee's service to the
Company, its promise to arbitrate all employment related disputes the Employee's
receipt of the compensation, pay raises and other benefits paid to the
Employee's by the Company, at present and in the future, the Employee agrees
that any and all controversies, claims, or disputes with anyone (including the
Company and any employee, officer, director, shareholder or benefit plan of the
Company in their capacity as such or otherwise) arising out of, relating to, or
resulting from the termination of the Employee's service with the Company,
including any breach of this Agreement, shall be subject to binding arbitration
under the Arbitration Rules set forth in California Code of Civil Procedure
Section 1280 through 1294.2, including Section 1283.05 (the "Rules") and
pursuant to California law. Disputes which the Employee agrees to arbitrate, and
thereby agrees to waive any right to a trial by jury, include any statutory
claims under state or federal law, including, but not limited to, claims under
Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act
of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers
Benefit Protection Act, the California Fair Employment and Housing Act, the
California Labor Code, claims of harassment, discrimination or wrongful
termination and any statutory claims. The Employee further understands

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that this Agreement to arbitrate also applies to any disputes that the Company
may have with the Employee.

            (b) Procedure. The Employee agrees that any arbitration will be
administered by the American Arbitration Association ("AAA") and that a neutral
arbitrator will be selected in a manner consistent with its National Rules for
the Resolution of Employment Disputes. The arbitration proceedings will allow
for discovery according to the rules set forth in the NATIONAL RULES FOR THE
RESOLUTION OF EMPLOYMENT DISPUTES or CALIFORNIA CODE OF CIVIL PROCEDURE. The
Employee agrees that the arbitrator shall have the power to decide any motions
brought by any party to the arbitration, including motions for summary judgment
and/or adjudication and motions to dismiss and demurrers, prior to any
arbitration hearing. The Employee agrees that the arbitrator shall issue a
written decision on the merits. The Employee also agrees that the arbitrator
shall have the power to award any remedies, including attorneys' fees and costs,
available under applicable law, subject to Section 6. The Employee understands
the Company will pay for any administrative or hearing fees charged by the
arbitrator or AAA except that the Employee shall pay the first $200.00 of any
filing fees associated with any arbitration initiated by the Employee. The
Employee agrees that the arbitrator shall administer and conduct any arbitration
in a manner consistent with the Rules and that to the extent that the AAA's
National Rules for the Resolution of Employment Disputes conflict with the
Rules, the Rules shall take precedence.

            (c) Remedy. Except as provided by the Rules, arbitration shall be
the sole, exclusive and final remedy for any dispute between the Employee and
the Company. Accordingly, except as provided for by the Rules, neither the
Employee nor the Company will be permitted to pursue court action regarding
claims that are subject to arbitration. Notwithstanding, the arbitrator will not
have the authority to disregard or refuse to enforce any lawful Company policy,
and the arbitrator shall not order or require the Company to adopt a policy not
otherwise required by law which the Company has not adopted.

            (d) Availability of Injunctive Relief. In addition to the right
under the Rules to petition the court for provisional relief, the Employee
agrees that any party may also petition the court for injunctive relief where
either party alleges or claims a violation of this Agreement or the
Confidentiality Agreement or any other agreement regarding trade secrets,
confidential information, non-solicitation or Labor Code Section 2870. In the
event either party seeks injunctive relief, the prevailing party shall be
entitled to recover reasonable costs and attorneys' fees, subject to Section 6.

            (e) Administrative Relief. the Employee understands that this
Agreement does not prohibit the Employee from pursuing an administrative claim
with a local, state or federal administrative body such as the Department of
Fair Employment and Housing, the Equal Employment Opportunity Commission or the
workers' compensation board. This Agreement does, however, preclude the Employee
from pursuing court action regarding any such claim.

            (f) Voluntary Nature of Agreement. The Employee acknowledges and
agrees that the Employee is executing this Agreement voluntarily and without any
duress or undue influence by the Company or anyone else. The Employee further
acknowledges and agrees that the Employee has carefully read this Agreement and
that the Employee has asked any questions needed for her to

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understand the terms, consequences and binding effect of this Agreement and
fully understand it, including that the Employee is waiving her right to a jury
trial. Finally, the Employee agrees that she has been provided an opportunity to
seek the advice of an attorney of her choice before signing this Agreement.

         11. Miscellaneous Provisions.

            (a) No Duty to Mitigate. The Employee shall not be required to
mitigate the amount of any payment contemplated by this Agreement, nor shall any
such payment be reduced by any earnings that the Employee may receive from any
other source.

            (b) Waiver. No provision of this Agreement may be modified, waived
or discharged unless the modification, waiver or discharge is agreed to in
writing and signed by the Employee and by an authorized officer of the Company
(other than the Employee). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at another time.

            (c) Integration. This Agreement and any outstanding stock option
agreements and restricted stock purchase agreements referenced herein represent
the entire agreement and understanding between the parties as to the subject
matter herein and supersede all prior or contemporaneous agreements, whether
written or oral, with respect to this Agreement and any stock option agreement
or restricted stock purchase agreement.

            (d) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the internal substantive
laws, but not the conflicts of law rules, of the State of California.

            (e) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.


            (f) Employment Taxes. All payments made pursuant to this Agreement
shall be subject to withholding of applicable income and employment taxes.

            (g) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year first
above written.

COMPANY:                            CELERITEK, INC.

                                    By:    /s/ Tamer Husseini
                                          -------------------------------------

                                    Title: CEO
                                          -------------------------------------



EMPLOYEE:                           /s/ Margaret Smith
                                    -------------------------------------------
                                    Signature

                                    Margaret Smith
                                    -------------------------------------------
                                    Printed Name

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