Document:

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                                                                    Exhibit 10.6

                                 UROLOGIX, INC.
                             STOCK OPTION AGREEMENT

This Option is hereby issued pursuant to the terms and conditions set forth in
this Option Agreement and is not issued pursuant to any existing Stock Option
Plan of the Company.

I.   NOTICE OF STOCK OPTION GRANT

     Optionee: Fred B. Parks

     As an inducement essential to you entering into your Employment Agreement
with the Company, you have been granted an option to purchase Common Stock of
the Company, subject to the terms and conditions of this Option Agreement, as
follows:

Date of Grant                    May 27, 2003
Vesting Commencement Date        May 27, 2004
Exercise Price per Share         $2.75
Total Number of Shares Granted   225,000
Type of Option                   Nonstatutory Stock Option
Term/Expiration Date             May 27, 2013

     1. Exercise and Vesting Schedule. This Option may be exercised, in whole or
in part, and shall vest in accordance with the following vesting schedule:

56,268 Shares shall vest one year from the date of grant and 4,687 of the
remaining Shares shall vest on the 27th day in each of the thirty-six months
following the one-year anniversary of the option grant.

     2. Termination Period. This Option may be exercised, to the extent it is
then vested, for 30 days after termination of employment. Upon death or
Disability of Optionee (defined as permanent and total disability as determined
by the Compensation Committee of the Board of Directors), this option may be
exercised, to the extent it is then vested, for a period of twelve months after
termination of employment as a result of Optionee's death or Disability.
Notwithstanding the foregoing, the exercise period for this Option shall
automatically be extended and Options shall continue to vest in the event
Optionee continues as Chairman of the Board or in some other consulting role
with the Company after termination of employment, in which case this Option may
be exercised for 30 days, to the extent it is then vested, after the later of
(i) resignation or removal as Chairman of the Board and (ii) termination of any
such consulting relationship. If either of the events in (i) or (ii) is caused
by the death or Disability of the Optionee, this Option may be exercised, to the
extent it is then vested, for a period of twelve months after such event. In no
event may this Option be exercised later than the Term/Expiration as provided
above.

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II.  AGREEMENT

     1. Grant of Option. The Company hereby grants to the Optionee named in the
Notice of Grant above (the "Optionee"), an option (the "Option") to purchase a
number of Shares, as set forth above, at the exercise price per share set forth
above (the "Exercise Price"), subject to the terms and conditions set forth in
this Option Agreement.

          The Option will be administered by the Compensation Committee of the
Company's Board of Directors (the "Committee"). Any or all functions of the
Committee specified in this Agreement may be exercised by the Board of
Directors, unless this Agreement specifically states otherwise. The Committee
has the authority to adopt, alter and repeal such administrative rules,
guidelines and practices governing the Option as it may, from time-to-time, deem
advisable; to interpret the terms and provisions of this Option Agreement and to
otherwise supervise the administration of the Option. The Committee may not
amend, alter or terminate the Option without the written consent of Optionee.
All decisions made by the Committee pursuant to this Agreement will be final and
binding on all persons, including the Company and Optionee.

     2. Exercise of Option.

          (a) Right to Exercise. Subject to subsection (i) and (ii) below, this
Option is exercisable during its term in accordance with the Vesting Schedule
set out in the Notice of Grant and the provisions of this Option Agreement. In
the event of Optionee's death, disability or other termination of Optionee's
employment or consulting relationship, the exercisability of the Option is
governed by Section 2 of Article I of this Option Agreement.

               (i) This Option may not be exercised for a fraction of a Share.

               (ii) Upon a Change of Control, the Option shall become
exercisable in full as to all of the shares covered thereby without regard to
any installment exercise or vesting provisions. For purposes of this Section
2(a)(ii), the term "Change of Control" means any of the following:

                    (A) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) becomes a "beneficial owner" (as defined in Rule
13d-3 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 and is required to file a Schedule 13D under the
Exchange Act; or

                    (B) the Incumbent Directors cease for any reason to
constitute at least a majority of the Board of Directors. The term, "Incumbent
Directors," shall mean those individuals who are members of the Board of
Directors on May 27, 2003 and any individual who subsequently becomes a member
of the Board of Directors whose election or nomination for election by the
Company's shareholders was approved by a vote of at least a majority of the then
Incumbent Directors; or

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                    (C) all or substantially all of the assets of the Company
are sold, leased, exchanged or otherwise transferred and immediately thereafter,
there is no substantial continuity of ownership with respect to the Company and
the entity to which such assets have been transferred.

               (iii) In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, other change in corporate structure affecting
the Shares or spin-off or other distribution of assets to shareholders, such
substitution or adjustment shall be made in the number and option price of
Shares subject to this Option, as may be determined to be appropriate by the
Committee, in its sole discretion, provided that the number of Shares subject to
any award shall always be a whole number. The grant of the Option shall not
limit in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, exchange or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.

          (b) Method of Exercise. This Option is exercisable by delivery of an
exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company. The
Exercise Notice shall be signed by the Optionee and shall be delivered in person
or by certified mail to the principal financial officer of the Company. The
Exercise Notice shall be accompanied by payment of the aggregate Exercise Price
as to all Exercised Shares. This Option shall be deemed to be exercised upon
receipt by the Company of such fully executed Exercise Notice accompanied by
such aggregate Exercise Price.

          No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with all relevant provisions of law
and the requirements of any stock exchange upon which the Shares are then
listed. Assuming such compliance, for income tax purposes the Exercised Shares
shall be considered transferred to the Optionee on the date the Option is
exercised with respect to such Exercised Shares.

     3. Method of Payment. Payment of the aggregate Exercise Price shall be by
any of the following, or a combination thereof, at the election of the Optionee:

          (a) cash; or

          (b) check.

     4. Non-Transferability of Option. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by the Optionee. The terms of
this Option Agreement shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.

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     5. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the terms of this Option Agreement.

     6. Registration. As promptly as practicable, the Company shall prepare,
file and maintain with the Securities and Exchange Commission, an effective
registration statement on Form S-8 (or, in the Company's sole discretion, on any
appropriate comparable form under the Securities Act of 1933, as amended, as may
then be available to the Company) relating to the resale of the Shares issued
pursuant to exercise of the Option granted hereunder.

     7. Tax Withholding. Optionee shall, no later than the date as of which any
part of the value of the Option first becomes includible as compensation in the
gross income of Optionee for Federal income tax purposes, pay to the Company, or
make arrangements satisfactory to the Committee regarding payment of, any
Federal, state, or local taxes of any kind required by law to be withheld with
respect to the Option. The obligations of the Company under this Option shall be
conditional on such payment or arrangements and the Company shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment of
any kind otherwise due to Optionee.

     8. Notices. Notices required hereunder shall be given in person or by first
class mail to the address of Optionee shown on the records of the Company, and
to the Company at its principal executive office.

     9. Survival of Terms. This Agreement shall apply to and bind Optionee and
the Company and their respective permitted assignees and transferees, heirs,
legatees, executors, administrators and legal successors.

     10. Entire Agreement; Governing Law; Notice. This Option Agreement,
together with Exhibit A, constitute the entire agreement of the parties with
respect to the subject matter of this Option Agreement and supersedes in its
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This Option Agreement is governed by the internal substantive laws but
not the choice of law rules of Minnesota.

     OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
OPTION IS EARNED ONLY BY CONTINUING EMPLOYMENT, CONSULTANCY OR SERVING AS
CHAIRMAN OF THE BOARD AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING
HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE
FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT SHALL CONFER UPON
OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY
THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE
COMPANY'S RIGHT TO TERMINATE OPTIONEE'S EMPLOYMENT, CONSULTANCY OR POSITION AS
ITS CHAIRMAN OF THE BOARD AT ANY TIME, WITH OR WITHOUT CAUSE.

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     By your signature and the signature of the Company's representative below,
you and the Company agree that this Option is granted under and governed by the
terms and conditions of this Option Agreement. Optionee has reviewed Option
Agreement in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Option Agreement and fully understands all
provisions of this Option Agreement.

OPTIONEE                                  UROLOGIX, INC.

/s/ Fred B. Parks                         By: /s/ Craig Palmer
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                                              Signature

Fred B. Parks                             Title: Vice-President, U.S. Sales
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Print Name

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                                    EXHIBIT A

                                 UROLOGIX, INC.

                                 EXERCISE NOTICE

Urologix, Inc.
14405 21st Avenue North
Minneapolis, Minnesota 55447
Attention: Principal Financial Officer

     1. Exercise of Option. Effective as of today,                      ,
                                                   ---------------------
                     , the undersigned ("Purchaser") hereby elects to purchase
---------------------
          shares (the "Shares") of the Common Stock of Urologix, Inc. (the
---------
"Company") under and pursuant to the Stock Option Agreement dated May 27, 2003
(the "Option Agreement"). The purchase price for the Shares shall be
$              , as required by the Option Agreement.
 --------------

     2. Delivery of Payment. Purchaser herewith delivers to the Company the full
purchase price for the Shares.

     3. Representation of Optionee. Optionee acknowledges that Optionee has
received, read and understood the Option Agreement and agrees to abide by and be
bound by their terms and conditions.

     4. Rights as Shareholder. Subject to the terms and conditions of this
Agreement, Optionee shall have all of the rights of a shareholder of the Company
with respect to the Shares from and after the date that Optionee delivers full
payment of the Exercise Price until such time as Optionee disposes of the
Shares.

     5. Tax Consultation. Optionee understands that Optionee may suffer adverse
tax consequences as a result of Optionee's purchase or disposition of the
Shares. Optionee represents that Optionee has consulted with any tax consultants
Optionee deems advisable in connection with the purchase or disposition of the
Shares and that Optionee is not relying on the Company for any tax advice.

     6. Entire Agreement; Governing Law. The Option Agreement is incorporated
herein by reference. This Agreement and the Option Agreement constitute the
entire agreement of the parties and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof, and such agreement is governed by Minnesota law except
for that body of law pertaining to conflict of laws.

                                       A-1

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Submitted by:                             Accepted by:

OPTIONEE:                                 UROLOGIX, INC.

                                          By:
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               Signature

                                          Its:
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               Print Name

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         Social Security Number

Address:

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                                                                    Exhibit 10.7

                                 UROLOGIX, INC.

                                  May 23, 2003

Mr. Michael M. Selzer, Jr.
205 Black Oaks Lane N.
Plymouth, MN 55447

Dear Mike:

This letter outlines our agreement regarding the termination of your employment
with Urologix, Inc. ("Urologix") effective May 31, 2003 (the "Termination
Date"). You are resigning as Chief Executive Officer and a director as of May
23, 2003. If, after reading this letter, you feel there is any discrepancy
between our conversations and the content of this letter, please contact me.

Urologix is terminating your employment without "Cause," as that term is defined
in your Employment Agreement dated November 20, 1998 (the "Employment
Agreement"), a copy of which is attached hereto. As stipulated in the Employment
Agreement, in consideration for your voluntary release of claims, Urologix will
provide you with the following benefits in connection with the termination of
your employment:

1.   We will continue to pay you your base salary (excluding bonus) in
     accordance with Urologix' regular payroll practices for a period of up to
     twelve months (the "Severance Period") after the Termination Date. If you
     secure other employment during the Severance Period, you must notify me. As
     of the first day of the start of your new employment, Urologix' obligation
     to continue to pay your base salary during the Severance Period will
     terminate. Your last payment will be prorated through the day before the
     first day of your new employment.

2.   During the Severance Period in which Urologix is obligated to continue your
     base salary, the health, dental and life insurance benefits you are
     receiving at the time of termination will also continue. Pursuant to our
     health, dental and life insurance coverages, you may be required to sign an
     acceptance form for continuation coverage. Urologix will pay your share of
     the monthly premium payments to continue these insurance coverages during
     the Severance Period in which Urologix is obligated to continue your base
     salary by deducting the premium amount from the severance payments. Upon
     termination of the Severance Period, or earlier termination of Urologix'
     obligation as provided for in paragraph 1 above, you will have to pay the
     entire monthly premiums yourself to continue coverage. A notice detailing
     your rights to continue insurance coverage under COBRA will be sent to you.

3.   No stock options will vest after the Termination Date and you may not
     continue to participate in Urologix' Employee Stock Purchase Plan.

4.   Urologix agrees that it will not directly or indirectly make any derogatory
     comments to any person or entity about you.

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In consideration for the benefits outlined above, you agree to the following:

1.   You hereby release Urologix, Inc., its past and present affiliates,
     officers, directors, agents, shareholders, employees, insurers and
     indemnitors (collectively, the "Releasees") from any and all claims and
     causes of action, known or unknown, which you may have against any and all
     of them. Through this release, you extinguish all causes of action against
     the Releasees occurring up to the date on which you sign this agreement,
     including but not limited to any contract, commission, wage or benefit
     claims; intentional infliction of emotional distress, defamation or any
     other tort claims; and all claims arising from any federal, state or
     municipal law or ordinance, including the Employee Retirement Income
     Security Act. This release extinguishes any potential claims of
     discrimination arising from your employment with Urologix, Inc. and
     termination of that relationship, including specifically any claims under
     the Minnesota Human Rights Act, the Americans With Disabilities Act, Title
     VII of the Civil Rights Act of 1964, and the Age Discrimination in
     Employment Act. This release does not extinguish any claims which arise
     against any Releasee after you sign this agreement and does not extinguish
     any statutory or contractual indemnification rights you may have. You
     certify that you (a) have not filed any claims, complaints or other actions
     against any Releasee; and (b) are hereby waiving any right to recover from
     any Releasee under any lawsuit or charge filed by you or any federal, state
     or local agency on your behalf based upon any event occurring up to the
     date on which you sign this agreement. You are advised by Urologix, Inc. to
     review your rights and responsibilities under this agreement with your own
     lawyer.

     You have 21 days to review and consider this offer. If you sign this
     agreement before 21 days have elapsed from the date on which you first
     receive it, then you will be voluntarily waiving your right to the full
     21-day review period. You have the right to rescind this agreement within
     seven calendar days of your signing this agreement to reinstate federal
     claims under the Age Discrimination in Employment Act and you have the
     right to rescind this agreement within 15 calendar days of the date upon
     which you sign this agreement with regard to the release of claims arising
     under the Minnesota Human Rights Act. You understand that if you desire to
     rescind this agreement, you must put the rescission in writing and deliver
     it to Todd Paulson, Urologix, Inc., 14405 Twenty-First Avenue North,
     Minneapolis, MN 55447 by hand or by mail within the required period. If you
     deliver the rescission by mail, it must be postmarked within the required
     period, properly addressed to Todd Paulson and sent by certified mail,
     return receipt requested. If you effectively exercise this rescission
     right, this agreement will be rendered null and void, and neither you nor
     Urologix, Inc. will have any further obligation to the other under this
     agreement. For this reason, you will not be entitled to start to receive
     the payments described in paragraph 1 on page 1 until the fifteen (15) day
     rescission period has expired and Urologix, Inc. has received Exhibit A,
     signed and dated by you, confirming that you have not exercised your right
     to rescind.

2.   You certify that you have returned all of Urologix' property in your
     possession.

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3.   You agree that you will not directly or indirectly make any derogatory
     comments to any person or entity about Urologix, its past and present
     affiliates, officers, directors, agents, shareholders, and employees, or in
     any way interfere with or attempt to damage any of Urologix' business or
     employment relationships.

4.   You agree that, with respect to paragraph 2 of this Agreement, for each
     month in which you wish to continue your health insurance coverage after
     the Severance Period or earlier termination of Urologix' obligation as
     provided for in paragraph 1, you will send payment of the entire monthly
     premium amount to Todd Paulson, Urologix, Inc., 14405 Twenty-First Avenue
     North, Minneapolis, MN 55447, and ensure that such payment is received by
     the first day of the month.

This agreement and offer of benefits to you shall not in any way be construed as
an admission of liability by Urologix or as an admission that Urologix has acted
wrongfully with respect to you. Urologix specifically denies and disclaims any
such liability or wrongful acts.

In the event that any provision of this agreement is found to be illegal or
unenforceable, such provision will be severed or modified to the extent
necessary to make it enforceable, and as so severed or modified, the remainder
of this agreement shall remain in full force and effect. This Agreement shall be
binding upon the successors and assigns of Urologix whether pursuant to merger,
exchange or sale of all or substantially all of the assets of Urologix and such
successor shall assume Urologix' obligations hereunder.

This agreement sets forth our entire agreement and fully supersedes any prior
agreements, contracts or understandings between you and Urologix, except your
obligations under that certain Agreement Regarding Employment, Inventions,
Confidential Information and Non-Competition and your rights under that certain
Indemnification Agreement dated December 14, 1998 which shall continue as
provided therein. By signing this agreement, you agree that you have entered
into it voluntarily, without coercion, duress, or reliance on any
representations by any Urologix employee, agent or lawyer.

If this letter accurately reflects our understanding and agreement, please sign
the original and copy and return the original to me. The copy is for your file.

Sincerely,

UROLOGIX, INC.

/s/ Fred B. Parks
--------------------------
By: Fred B. Parks
Its: Chairman of the Board

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I have read and understand and agree to the terms and conditions set forth above
and have signed this agreement dated May 23, 2003 freely, voluntarily and with
full knowledge and understanding of its meaning.

/s/ Michael M. Selzer, Jr.
--------------------------
Michael M. Selzer, Jr.
Dated: May 23, 2003

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                                    EXHIBIT A
                                       TO
                                RELEASE AGREEMENT

                                 May      , 2003
                                     -----

Mr. Todd Paulson
Urologix, Inc.
14405 Twenty-First Avenue North
Minneapolis, MN 55447

Dear Mr. Paulson:

This letter, dated more than 15 days after I signed the agreement between
Urologix, Inc. and me dated May 23, 2003, is to certify that I have taken no
steps to exercise my 15-day right of rescission, as described on page two of the
agreement.

Very truly yours,

Michael M. Selzer, Jr.

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