Unassociated Document


    Exhibit
      10.2

     

    Lumera
      Corporation

    19910
      North Creek Parkway, Suite 100

    Bothell,
      Washington 98011

    


                                                     
      August 15, 2007

    


    Joseph
      J.
      Valiner Ph.D

    10723
      Magdalena Road

    Los
      Altos
      Hills, CA 94924

    


    Dear
      Dr.
      Valiner:

    


    This
      letter will confirm our offer to you of employment with Lumera Corporation
      (“Lumera”
      or the “Company”), under the terms and conditions that follow:

     

        1.  Position
      and Duties.

             
(a)    Effective
      August 14, 2007, you will be employed by the Company, on a temporary part-time
      basis, as its interim chief executive officer (“Interim CEO”). This role is in
      addition to, and not in lieu of, your membership on the Board of Directors
      of
      the Company (the “Board”), and
      your duties
      as Interim CEO will be in addition to your obligations as a member of the Board.
      You will also continue to fulfill your obligations as CEO of Plexera Bioscience
      LLC (“Plexera”), and agree that the letter agreement between you and Plexera
      dated July 1, 2007 is cancelled and that you will serve both Lumen and Plexera
      pursuant to the terms of this agreement. Your compensation as a member of the
      Board of Lumera shall continue, unaffected by this agreement.

     

             
(b)    You
      agree
      to perform the duties of Interim CEO and such other duties as may reasonably
      be
      assigned to you from time to time by the Board. In this position, you will
      report directly to, and be subject to the direction and control of, the Board.
      You agree that, while employed by the Company, you will devote sufficient
      business time and your best efforts, business judgment, skill and knowledge
      to
      the advancement of the business and interests of the Company and its Affiliates
      and to the discharge of your duties and responsibilities for them. You have
      agreed with the Board that as a general matter you will be expected to devote
      four days per week to your duties as Interim CEO and that, while not all work
      will require your presence in the Company’s headquarters, you will be expected
      to work from its headquarters as appropriate.

     

        2.    Term.  Subject
      to
      earlier termination in accordance with Section 6 hereof your employment under
      this Agreement shall be for an initial term of nine (9) months, commencing
      on
      the effective date hereof, and may be extended or renewed thereafter only by
      a
      written agreement signed by you and an expressly authorized representative
      of
      the Board. Should your employment contlinue beyond expiration of the initial
      term of this Agreement, however, without such an extension or renewal, it will
      continue under this Agreement, but on an at-will basis, meaning that,
      notwithstanding anything to the contrary contained in this Agreement, your
      employment hereunder shall be for an indefinite term that may be terminated
      by
      either party at any time, with or without cause, upon notice to the other.
      The
      term of this Agreement, as from time to time extended or renewed, is referred
      to
      herein as “the term of this Agreement” or “the term hereof.”


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

        3.   Compensation
      and
      Benefits.  During your employment
      under this
      Agreement, as compensation for all services performed by you for the Company
      and
      its Affiliates, you shall receive the following pay and benefits:

     

              (a)    Base
      Salary.   For your service as Interim CEO and CEO of Plexera,
      you will receive a base salary at the rate of Three Hundred Thousand Dollars
      ($300,000) per year. Your base salary shall be payable in accordance with the
      regular payroll practices of the Company and its Affiliates and subject to
      adjustment from time to time by the Board in its discretion. Your base salary,
      as from time to time adjusted, is referred to below as the “Base
      Salary.”

     

              (b)      
      Stock Options.   You will be granted an option to purchase
      50,000 shares of the Company’s common stock at fair market value on the date of
      grant (the “Option”). The Option and the shares that are subject to it shall be
      subject to the terms and conditions of the Company’s 2004 Equity Incentive Plan
      (the “Incentive Plan”) and any applicable option certificate, stockholders’
agreement and other restriction generally applicable to stock options issued
      to
      employees of the Company, as each may be amended from time to time. Pursuant
      to
      the terms of the Incentive Plan, the Board, under its authority set forth in
      the
      Incentive Plan, has determined that the Option will vest on March 1, 2008,
      unless you are terminated as Interim CEO for Cause or you resign, in which
      case
      the Option shall immediately terminate and no shares thereunder shall vest.
      For
      the sake of clarity, your termination as Interim CEO will not affect the
      Restricted Stock Units granted to you pursuant to that certain Independent
      Contractor Agreement dated as of June 8,
      2007.

     

             
(c)    
      Participation in Employee Benefit Plans.   You will
      be eligible to participate in all Employee Benefits Plans to the same extent
      as,
      and subject to the same terms, conditions and limitations applicable to, other
      employees of the Company of similar rank and tenure. Your eligibility to
      participate in and receive benefits under any of the Company’s Employee Benefits
      Plans, however, will be subject to the terms of the applicable plan documents
      and generally applicable Company policies, including without limitation terms
      or
      policies requiring regular employment or a regular work schedule of a specified
      number of hours and policies requiring documentation of time worked for the
      purpose of determining benefits eligibility. If you are not eligible to
      participate in or receive benefits under some or all of the Employee Benefit
      Plans maintained by the Company due to the terms of any applicable plan
      documents or Company policies, the Company will have no obligation to provide
      you with additional compensation or alternative benefits. For purposes of this
      Agreement, “Employee Benefit Plan” shall have the meaning ascribed to that term
      in Section 3(3) of ERISA, as amended from time to time.

     

    -2-


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


          (d)    Vacations. 
       You will be entitled to earn up to four (4) weeks of vacation per
      year, in addition to holidays observed by the Company. Vacation may be taken
      at
      such times and intervals as you shall determine, subject to the business needs
      of the Company and the prior approval of the Board or its designee.

     

             
(e)     Business
      Expenses.   The Company will pay or reimburse you for all
      reasonable business expenses incurred or paid by you in the perfonnance of
      your
      duties and responsibilities for the Company, subject to the Company’s policies
      on business expenses and business travel, which include, among other provisions,
      requirements with respect to the documentation and substantiation of expenses.
      Among the business expenses that the Company will reimburse will be the cost
      of
      your travel from your home to the Company’s headquarters and of other
      Company-related travel. You agree to use reasonable efforts to minimize those
      costs, including working with the Company’s CFO to rent a short-term executive
      apartment and car, if less expensive than standard hotel accommodations and
      car
      rental. The Company also will reimburse you for the cost of Blackberry or Treo
      and cell phone equipment and their monthly service charges.

     

        4.   Confidential
      Information and Restricted Activities.

     

             
(a)    
      Confidential Information.   During the term of your
      membership on the Board you have had occasion to learn of Confidential
      Information, as defined below, and during the course of your employment with
      the
      Company, you also will learn of Confidential Information and you may develop
      Confidential Information on behalf of the Company and its Affiliates. You agree
      that you will not use or disclose to any Person any Confidential Information
      obtained by you incident to your employment or any other association with the
      Company or any of its Affiliates, other than as required for the proper
      performance of your duties and responsibilities for the Company and its
      Affiliates or as required by applicable law or legal process after notice to
      the
      Board and a reasonable opportunity for the Board to seek protection of the
      Confidential Information prior to such disclosure. You understand that this
      restriction shall continue to apply after your employment tenninates, regardless
      of the reason for termination.

     

             
(b)    Protection
      of
      Documents.   All documents, records and files, in any media
      of whatever kind and description, relating to the business, present or
      otherwise, of the Company or any of its Affiliates, and any copies, in whole
      or
      in part, thereof (the “Documents”), whether or not prepared by you, shall be the
      sole and exclusive property of the Company. You agree to safeguard all Documents
      and to surrender to the Company, at the time your employment terminates or
      at
      such earlier time or times as the Board or its designee may specify, all
      Documents and all other property of the Company and its Affiliates then in
      your
      possession or control.

     

        5.   Conflicts
      of Interest.

     

             
(a)    
You
      hereby
      represent and warrant that the execution of this Agreement and the performance
      of your obligations hereunder will not breach or be in conflict with any other
      agreement to which you are a party or are bound and that you are not now subject
      to any covenants against competition or similar covenants or any court order
      or
      other legal obligation that would affect the performance of your obligations
      hereunder.

     

    -3-


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


             
(b)    
In
      addition,
      you hereby give the Board assurance that you have disclosed in writing to the
      Chairman of the Board all of your current obligations to and affiliations with
      other professional and corporate entities and you agree that you will promptly
      update that disclosure if you undertake any new obligation or affiliation during
      the term of this Agreement. You agree that, in speaking on behalf of any entity
      with which you are affiliated, you will not to make any public remarks or
      statements (whether directly or to the media) that could reasonable be
      anticipated to be injurious to the business, interests or reputation of the
      Company or any of its Affiliates.

     

             
(c)     You
      also
      agree that you will not disclose to or use on behalf of the Company any
      proprietary information of a third party without such party’s consent. In
      addition, you agree to comply with the policies of the Company and its
      Affiliates regarding conflicts of interest, as established or modified from
      time
      to time.

       

        6.   Termination
      of Employment.   Subject to the exception contained in the
      second sentence of Section 2 of this Agreement, this Agreement may be terminated
      prior to the expiration of the term hereof under the following circumstances:
      (a) the Board may terminate your employment at any time during the term hereof
      other than for Cause on two (2) weeks’ notice to you; provided, however, that
      the Board may elect to pay you the Base Salary in lieu of some or all of that
      period of notice; (b) the Board may terminate your employment for Cause at
      any
      time on notice to you stating the basis for Cause; or (c) you may terminate
      your
      employment during the term hereof on two (2) weeks’ notice to the Company;
      provided, however, that the Board may elect to waive all or any portion of
      that
      notice period, in which event the Company will pay you Base Salary for the
      initial two weeks of your notice or any remaining portion of that two-week
      period. In the event of a termination pursuant to (b) or (c) above, all stock
      options shall immediately terminate.

     

        7.   Effect
      of Termination.

     

             
(a)    
In
      the event
      of termination of your employment with the Company, however occurring, the
      Company will pay you any Base Salary earned, but not paid, for the last payroll
      period of your employment, through the date of termination, pay for any vacation
      accrued but not used to that date and reimbursement of any as yet outstanding
      business expenses eligible for reimbursement which are submitted with required
      documentation and substantiation within sixty (60) days following the date
      of
      termination (in the aggregate, “Final Compensation”). Except for any right you
      may have to continue your participation or that of your dependents in the
      Company’s group health or dental plan at your cost under the federal law
      generally known as “COBRA,” your participation in Company Employee Benefit Plans
      shall terminate in accordance with those terms based on the date your employment
      tenninates, without regard to any continuation of Base Salary or other payment
      to you following termination. The Company will have no further obligation to
      you
      under this Agreement, other than for Base Salary for any pay in lieu of notice
      or for any notice period waived pursuant to Section 6(a) or Section
      6(c).

     

    -4-


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


             
(b)    
Provisions
      of this Agreement shall survive any termination if so provided in this Agreement
      or if necessary or desirable to accomplish the purposes of other surviving
      provisions, including without limitation your obligations under Section 4 of
      this Agreement. On termination by either you or the Company, all rights, duties
      and obligations of you and the Company to each other shall cease, except as
      otherwise expressly provided in this Agreement.

     

        8.   Definitions.  
      For purposes of this Agreement, the following definitions
      apply:

     

        “Affiliates”
      means all persons and entities directly or indirectly controlling, controlled
      by
      or under common control with the Company, where control may be by management
      authority, contract or equity interest.

     

        “Cause”
means
      your (a) conviction of a felony or other serious misconduct, (b) willful or
      persistent failure to follow the direction of the Board in the performance
      of
      your duties as Interim CEO or CEO of Plexera, (c) breach of fiduciary duties,
      or
      (d) material breach of this Agreement. 

     

        “Confidential
      Information” means any and all information of the Company and its Affiliates
      that is not generally known or readily available to those Persons with whom
      the
      Company or any of its Affiliates competes or does business or with whom the
      Company or any of its Affiliates plans to compete or do business and any and
      all
      information, publicly known in whole or in part or not, which, if disclosed
      by
      the Company or any of its Affiliates, would assist in competition against them.
      Confidential Information includes without limitation such information relating
      to (i) the development, research, testing, manufacturing, marketing and
      financial activities of the Company and its Affiliates, (ii) the Products,
      (iii)
      the costs, sources of supply, financial performance and strategic plans of
      the
      Company and its Affiliates, (iv) the identity and special needs of the customers
      of the Company and its Affiliates and (v) the people and organizations with
      whom
      the Company and its Affiliates have business relationships and those
      relationships. Confidential Information also includes any information received
      by the Company or any of its Affiliates from any Person with any understanding,
      express or implied, that it will not be disclosed. Confidential Information
      does
      not include information that enters the public domain hereafter other than
      through your breach of your obligations under this Agreement or the breach
      by
      any other Person of a duty of confidentiality owed to the Company or any of
      its
      Affiliates.

     

        “Person”
      means an individual, a corporation, a limited liability company, an association,
      a partnership, an estate, a trust or any other entity or organization, other
      than the Company or any of its Affiliates.

     

        “Products”
      mean all products planned, researched, developed, tested, manufactured, sold,
      licensed, leased or otherwise distributed or put into use by the Company or
      any
      of its Affiliates, together with all services provided or planned by the Company
      or any of its Affiliates, during your employment or other associations with
      the
      Company or any of its Affiliates.

     

        9.   Withholding.  
      All payments made by the Company under this Agreement shall be reduced by any
      tax or other amounts required to be withheld by the Company under applicable
      law.

     

    -5-


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


        10.  
  Assignment.  
      Neither you nor the Company may make any assignment of this Agreement
      or any interest in it, by operation of law or otherwise, without the prior
      written consent of the other; provided, however, that the Company may assign
      its
      rights and obligations under this Agreement without your consent in the event
      that the Company shall hereafter affect a reorganization, consolidate with,
      or
      merge into, any Person or transfer all or substantially all of its properties
      or
      assets to any Person. This Agreement shall inure to the benefit of and be
      binding upon you and the Company, and each of our respective successors,
      executors, administrators, heirs and permitted assigns.

     

        11.  
  Severability. 
       If any portion or provision of this Agreement shall to any extent
      be declared illegal or unenforceable by a court of competent jurisdiction,
      then
      the remainder of this Agreement, or the application of such portion or provision
      in circumstances other than those as to which it is so declared illegal or
      unenforceable, shall not be affected thereby, and each portion and provision
      of
      this Agreement shall be valid and enforceable to the fullest extent permitted
      by
      law.

     

        12.   
      Miscellaneous.

        

             
(a)    
This
      Agreement sets forth the entire agreement between you and the Company and
      replaces all prior and contemporaneous communications, agreements and
      understandings, written or oral, with respect to the terms and conditions of
      your employment, and any obligations, contractual or at law, including without
      limitation with respect to confidentiality, non-competition or non-solicitation
      of employees or customers, that you owe to the Company or any of its Affiliates
      in connection with or arising out of your membership on the Board or any other
      associations you have with the Company or any of its Affiliates, all of which
      shall remain in full force and effect in accordance with their terms. This
      Agreement may not be modified or amended, and no breach shall be deemed to
      be
      waived, unless agreed to in writing by you and an expressly authorized
      representative of the Board. The headings and captions in this Agreement are
      for
      convenience only and in no way define or describe the scope or content of any
      provision of this Agreement. This Agreement may be executed in two or more
      counterparts, each of which shall be an original and all of which together
      shall
      constitute one and the same instrument. This is a Washington contract and shall
      be governed and construed in accordance with the laws of the State of
      Washington, without regard to the conflict of laws principles
      thereof.

     

             
(b)    
As
      you are
      aware, the Company is currently searching for an individual to fill its Chief
      Executive Officer position on a regular full-time basis. The Company gives
      you
      assurance that you are eligible to apply for this position and will receive
      the
      same consideration as other applicants if you elect to do so. If you are
      selected for the regular full-time position, it is agreed that the Company
      will
      terminate this Agreement under Section 6(a) and the parties will enter into
      renegotiations concerning the terms and conditions of your regular employment
      in
      that position.

     

        12.   
      Notices.   Any notices provided for in this Agreement
      shall be in writing and shall be effective when delivered in person, consigned
      to a reputable national courier service or deposited in the United States mail,
      postage prepaid, and addressed to you at your last known address
      on the books of the Company or, in the case of the Company, to it at its
      principal place of business, attention of Chairman of the Board of Directors,
      with a copy (which shall not constitute notice) to Christopher Austin, Ropes
      & Gray LLP, One International Place, Boston, MA 02110, or to such other
      address as either party may specify by notice to the other actually
      received.

     

    [Signature
      page follows immediately.]

     

    -6-


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


        If
      the
      foregoing is acceptable to you, please sign this letter in the space provided
      and return it to me no later than August 15, 2007. At the time you sign and
      return this letter, it will take effect as a binding agreement between you
      and
      the Company on the basis set forth above. The enclosed counterpart is for your
      records.

     

                                                                       Sincerely,                                                           

    
      
        	 	 	 
	 	LUMERA
                CORPORATION
	 
 	 
 	 
 
	 	By:  	/s/ C.
                James Judson
	 	
                

                C.
                  James Judson

                Chairman of the Board of
                  Directors

              


      

       

       

      
        	Accepted
                and
                Agreed:	 	 	 
	/s/
                Joseph J.
                Vallner, Ph. D.	 	 	 
	
                

                Joseph
                  J. Vallner, Ph. D.

              	 	 	
              
	
                 

                Date: August 15, 2007

              	 	 	 


      

       

    

     

    -7-