Exhibit
10.2

    


    LECTEC
CORPORATION

    NON–QUALIFIED
STOCK OPTION AGREEMENT

     

    This Non–Qualified Stock Option
Agreement (the “Agreement”), made as of this
1st day of June, 2010 (the “Effective Date”), by and
between LecTec Corporation, a Minnesota corporation (the “Company”), and Greg Freitag,
a resident of Minneapolis, Minnesota (the “Optionee”).

    


    1.           Grant of
Option.  The Company hereby grants to Optionee the right and
option (the “Option”)
to purchase all or any part of an aggregate of 125,000 shares (the “Shares”) of the common stock,
par value $0.01 per share (the “Common Stock”), of the
Company at the price of $3.50 per Share on the terms and conditions set forth
herein.  It is understood and agreed that such price is not less than
100% of the fair market value of a share of Common Stock on the date of this
Agreement.  The Option is not intended to qualify as an incentive
stock option within the meaning of Section 422A of the Internal Revenue Code of
1986, as amended (the “Code”).

    


    2.           Duration and
Exerciseability.  The Option may not be exercised by Optionee
except as set forth herein, and the Option shall in all events terminate ten
(10) years from the Effective Date.  Subject to the other terms and
conditions set forth herein, the Option shall vest and may be exercised by
Optionee in cumulative installments as follows:

    


    
      
        
          
            
              	
                      On or after each of the following dates

                    	     	
                      Percentage of Shares as to

                      which the Option is exercisable

                    	 
	
                      90th
      day following the Effective Date

                    	 	 	20	%
	
                      180th
      day following the Effective Date

                    	 	 	20	%
	
                      270th
      day following the Effective Date

                    	 	 	20	%
	
                      360th
      day following the Effective Date

                    	 	 	20	%
	
                      450th
      day following the Effective Date

                    	 	 	20	%


            

          

        

      

    

    


    During
the lifetime of Optionee, the Option shall be exercisable only by
Optionee.  The vesting of the Option is subject to acceleration under
the circumstances described in Sections 3 and 4.

    


    3.           Effect of Termination of Relationship
with the Company.

     

    (a)           In
the event that Optionee shall cease to be employed by the Company, for any
reason other than by the Company for Cause (as defined below) or due to
Optionee’s death or disability, Optionee shall have the right to exercise the
Option at any time within twelve (12) months after such termination of
employment to the extent of the full number of Shares Optionee was entitled to
purchase under the Option on the date of termination, subject to the condition
that the Option shall not be exercisable after the expiration of its
term.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    (b)           In
the event that Optionee shall cease to be employed by the Company by reason of
Optionee’s termination by the Company for Cause (as defined below), the Option
shall terminate as of the date of the misconduct and shall not be exercisable
thereafter.

     

    (c)           If
Optionee shall die while employed by the Company, or within three (3) months
after termination of his employment with the Company for any reason other than
by the Company for Cause, or if Optionee’s employment with the Company is
terminated because the Optionee has become disabled within the meaning of
Section 22(e)(3) of the Code, and Optionee shall not have fully exercised the
Option, the Option may be exercised at any time within twelve (12) months after
the date of Optionee’s death or termination of employment because of disability
by the legal representative or, if applicable, guardian of Optionee or by any
person to whom the Option is transferred by will or the applicable laws of
descent and distribution to the extent of the full number of Shares Optionee was
entitled to purchase under the Option on the date of death (or termination of
his employment, if earlier) or termination of Optionee’s employment because of
disability and subject to the condition that the Option shall not be exercisable
after the expiration of its term.

    


    4.           Effect of Change in Control and
Termination.

    


    (a)                 Notwithstanding
the vesting schedule set forth in Section 2 of this Agreement, the entire Option
shall vest and be immediately exercisable in the event that there shall have
been a Change in Control of the Company (as defined below) and Optionee’s
employment by the Company shall have been terminated within 15 months following
the Change in Control of the Company for any reason other than (i) because of
Optionee’s death, (ii) by the Company for Cause (as defined below) or (iii) by
Optionee other than for Good Reason (as defined below).

     

    (b)                 For
purposes of this Agreement, a “Change in Control of the
Company” shall be deemed to have occurred if (i) a change in control
occurs of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), whether or
not the Company is then subject to such reporting requirement; (ii) any “person”
or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the “beneficial owner” (as defined in Rule 13d–3 promulgated
under the Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company’s then
outstanding securities; iii) individuals who at the date hereof constitute the
Board of Directors of the Company cease for any reason to constitute at least a
majority thereof (unless the election or the nomination for election of each new
director was approved by a vote of at least a majority of the directors then
still in office who were directors at the date hereof and/or their successor
directors who were recommended or elected to succeed a beginning director by at
least a majority of the directors who were directors at the date hereof); or
(iv) the shareholders of the Company approve (A) any consolidation or merger of
the Company in which the Company is not the continuing or surviving corporation
or pursuant to which shares of Company stock would be converted into cash,
securities or other property, other than a merger of the Company in which
shareholders immediately prior to the merger have the same proportionate
ownership of stock of the surviving corporation immediately after the merger;
(B) any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all or substantially all of the assets of the
Company; or (C) any plan of liquidation or dissolution of the
Company.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    (c)                 For
purposes of this Agreement, termination by the Company of Optionee’s employment
for “Cause” shall mean
termination upon (i) the willful and continued failure by Optionee to
substantially perform his duties with the Company (other than any such failure
resulting from his disability or from termination by Optionee for Good Reason),
after a demand for substantial performance is delivered to Optionee that
specifically identifies the manner in which the Company believes that Optionee
has not substantially performed his duties, and Optionee has failed to resume
substantial performance of his duties on a continuous basis within 30 days of
receiving such demand, (ii) the willful engaging by Optionee in conduct which is
demonstrably and materially injurious to the Company, monetarily or otherwise or
(iii) Optionee’s conviction of a felony.  For purposes of this Section
4(c), no act, or failure to act, on Optionee’s part shall be deemed “willful”
unless done, or omitted to be done, by Optionee not in good faith and without
reasonable belief that his action or omission was in the best interest of the
Company.  Failure to perform duties with the Company during any period
of disability shall not constitute Cause.

     

    (d)                 For
purposes of this Agreement, termination by Optionee of his employment for “Good
Reason” shall mean termination within 15 months following a Change in Control of
the Company upon the occurrence of any one or more of the
following:

     

    (i) the
assignment to Optionee of any duties inconsistent in any respect with his
position (including status, offices, titles, and reporting requirements),
authorities, duties, or other responsibilities as in effect immediately prior to
the Change in Control of the Company or any other action of the Company which
results in a diminishment in such position, authority, duties, or
responsibilities, other than an insubstantial and inadvertent action which is
remedied by the Company promptly after receipt of notice thereof given by
Optionee;

     

    (ii) a
reduction by the Company in Optionee’s base salary as in effect on the date
hereof and as the same shall be increased from time to time hereafter;
and

     

    (iii) the
failure by the Company to (A) continue in effect any material compensation or
benefit plan, program, policy or practice in which Optionee was participating at
the time of the Change in Control of the Company or (B) provide Optionee with
compensation and benefits at least equal (in terms of benefit levels and/or
reward opportunities) to those provided for under each employee benefit plan,
program, policy and practice as in effect immediately prior to the Change in
Control of the Company (or as in effect following the Change in Control of the
Company, if greater).

     

    Optionee’s
right to terminate his employment pursuant to this Section 4(d) shall not be
affected by his incapacity due to physical or mental
illness.  Optionee’s continued employment shall not constitute consent
to, or a waiver of rights with respect to, any circumstance constituting Good
Reason hereunder.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    (e)                 Any
purported termination of Optionee’s employment by the Company or by Optionee
(other than by reason of Optionee’s death) within 15 months following the month
in which a Change in Control of the Company occurs, shall be communicated by
Notice of Termination to the other party hereto.  For purposes of this
Agreement, a “Notice of
Termination” shall mean a written notice which shall indicate the
specific termination provision in this Agreement relied upon and the Date of
Termination (as defined below) and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of Optionee’s
employment under the provision so indicated.

     

    (f)                 For
purposes of this Agreement, “Date of Termination” shall
mean the date specified in the Notice of Termination (except in the case of
Optionee’s death, in which case Date of Termination shall be the date of death);
provided, however, that if Optionee’s employment is terminated by the Company
other than for Cause, the date specified in the Notice of Termination shall be
at least 30 days from the date the Notice of Termination is given to Optionee
and if Optionee’s employment is terminated by Optionee for Good Reason, the date
specified in the Notice of Termination shall not be more than 60 days from the
date the Notice of Termination is given to the Company.

     

    (g)                 Any
termination of Optionee’s employment by the Company without Cause prior to a
Change in Control of the Company which occurs at the request or insistence of
any person (other than the Company) related to the Change in Control of the
Company shall be deemed to have occurred after the Change in Control of the
Company for purposes of this Agreement.

     

    5.           Manner of
Exercise.

    


    (a)           The
Option may only be exercised by Optionee or other proper party within the option
period by delivering written notice of exercise to the Company at its principal
executive office.  The notice shall state the number of Shares as to
which the Option is being exercised and shall be accompanied by payment in full
of the option price for all of the Shares designated in the notice.

    


    (b)           Optionee
may, at the Company’s election, pay the option price in cash, by check (bank
check, certified check or personal check) or by any other means approved by the
Board of Directors of the Company (the “Board”) in its
discretion.

    


    (c)           The
exercise of the Option is contingent upon receipt from Optionee (or other proper
person exercising the Option) of a representation that, at the time of such
exercise, it is Optionee’s intention to acquire the Shares being purchased for
investment and not with a view to the distribution or sale thereof within the
meaning of the Securities Act of 1933, as amended (the “Securities Act”); provided, however, that the
receipt of such representation shall not be required upon exercise of the Option
if, at the time of such exercise, the issuance of the Shares subject to the
Option shall have been properly registered under the Securities Act and all
applicable state securities laws.  Such representation shall be in
writing and in such form as the Company may reasonably request.  The
certificate representing the Shares so issued for investment shall be imprinted
with an appropriate legend setting forth all applicable restrictions on their
transferability.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    6.           Adjustments.  If
there shall be any change in the Common Stock through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split or other change in
the corporate structure of the Company, appropriate adjustments shall be made by
the Board in the number of Shares and the price per Share of the Shares subject
to this Option in order to prevent dilution or enlargement of option rights
granted hereunder.

    


    7.           Miscellaneous.

    


    (a)           This
Agreement contains all of the terms governing this grant, and this Agreement is
intended to be complete, final and conclusive.

     

    (b)           This
Agreement shall not confer on Optionee any right with respect to continuance of
employment by the Company or any of its subsidiaries, nor will it interfere in
any way with the right of the Company to terminate such employment at any
time.  Optionee shall have none of the rights of a shareholder with
respect to the Shares until such Shares shall have been issued to him or her
upon exercise of the Option.

     

    (c)           The
Company shall at all times during the term of the Option reserve and keep
available such number of Shares as will be sufficient to satisfy the
requirements thereof.  The exercise of all or any part of the Option
shall only be effective at, and may be deferred until, such time as the sale of
the Shares pursuant to such exercise will not violate any federal or state
securities laws, it being understood that the Company shall have no obligation
to register the issuance or sale of the Shares for such purpose.

     

    (d)           This
Option may not be transferred, except by will or the laws of descent and
distribution to the extent provided in Section 3(c) or pursuant to a qualified
domestic relations order as defined by the Code.

    


    (e)           The
Board may amend the terms and conditions of this Agreement, accelerate the
exercisability of the Option, and waive any conditions of or rights of the
Company under this Agreement, prospectively or
retroactively.  Notwithstanding the foregoing, except as otherwise
provided in this Agreement, the Board may not amend, alter, suspend, discontinue
or terminate this Agreement, prospectively or retroactively, if such action
would adversely affect the rights of Optionee, without the consent of the
Optionee (or such other person entitled to hold this Option pursuant to Section
3(c) above).

    


    (g)           In
order to comply with all applicable federal or state income tax laws or
regulations, the Company may take such action as it deems appropriate to ensure
that all applicable federal or state payroll, withholding, income or other
taxes, which are the sole and absolute responsibility of the Optionee, are
withheld or collected from such Optionee.  In order to assist an
Optionee in paying all or a portion of the federal and state taxes to be
withheld or collected upon exercise of the Option, the Board, in its discretion
and subject to such additional terms and conditions as it may adopt, may permit
the Optionee to satisfy such tax obligation
by (i) electing to have the Company withhold a portion of the Shares otherwise
to be delivered upon exercise or receipt of (or the lapse of restrictions
relating to) such Option with a Fair Market Value (as defined below) equal to
the amount of such taxes or (ii) delivering to the Company Shares other than
Shares issuable upon exercise such Option with a Fair Market Value equal to the
amount of such taxes. The election, if any, must be made on or before the date
that the amount of tax to be withheld is determined.  For purposes of
this Agreement, “Fair Market
Value” shall mean, with respect to property (including without limitation
any Shares), the fair market value of such property determined by such methods
or procedures as shall be established from time to time by the
Board.  Notwithstanding the foregoing, unless otherwise determined by
the Board, the Fair Market Value of Shares as of a given date shall be, if the
Shares are then quoted on the Over–the–Counter Bulletin Board (“OTCBB”), the closing price as
reported on the OTCBB on such date or, if the OTCBB is not open for trading on
such date, on the most recent preceding date when it is open for
trading.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (h)           The
validity, construction and effect of the terms of this Agreement and any rules
and regulations relating to this Agreement shall be determined in accordance
with the laws of the State of Minnesota.

    


    (i)           If
any provision of this Agreement is or becomes or is deemed to be invalid,
illegal or unenforceable in any jurisdiction or would disqualify the Option
under any law deemed applicable by the Company, such provision shall be
construed or deemed amended to conform to applicable laws, or if it cannot be so
construed or deemed amended without, in the determination of the Company,
materially altering the purpose or intent of the Agreement, such provision shall
be stricken from this Agreement, and the remainder of the Agreement shall remain
in full force and effect.

    


    (j)           This
Agreement shall not create or be construed to create a trust or separate fund of
any kind or a fiduciary relationship between the Company or any affiliate of the
Company and the Optionee or any other person.

    


    (k)           No
fractional shares of Common Stock shall be issued or delivered pursuant to this
Agreement, and the Company shall determine whether cash shall be paid in lieu of
any fraction share or whether such fractional share or any rights thereto shall
be canceled, terminated or otherwise eliminated.

    


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    IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed on the Effective
Date.

    


    
      
        
          
            
              
                
                  
                    	
                            LECTEC
      CORPORATION

                          
	 
      	 
      
	
                            By:

                          	
                            /s/ Judd A. Berlin

                          
	 
      	
                            Judd
      A. Berlin, Chairman of the Board

                          
	 
      	 
      
	
                            OPTIONEE

                          
	 
      	 
      
	
                            /s/ Greg Freitag

                          
	
                            Greg
      Freitag