Employment Agreement by and between the Registrant and Timothy R. Surgenor

Exhibit 10.1

EMPLOYMENT AGREEMENT

                Agreement, made this 3rd day of November, 2004, by and between Cyberkinetics, Inc., a Delaware corporation (the "Company") and Timothy R. Surgenor (the "Executive").

                Whereas, the parties wish to set forth their understanding and agreement regarding the employment of the Executive by the Company.

                Whereas, the Executive is currently President and Chief Executive Officer of the Company and the Company desires to continue to benefit from the Executive's knowledge, experience, and abilities, and to ensure the Executive's present and continued employment and service to the Company as President and Chief Executive Officer and to compensate him therefor.

                Now therefore, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:

Section 1.       Employment Services.

                During the Employment Period (as defined herein), the Executive will serve as the Company's President and Chief Executive Officer, and will have such duties and responsibilities as would normally attach to those positions, including such duties and responsibilities as are customary among persons employed in similar capacities for similar companies, subject to the authority of the Board of Directors of the Company (the "Board"). The Executive will faithfully and diligently carry out his duties and responsibilities and comply with all of the reasonable and lawful directives of the Board, to which the Executive will report. The Executive will, if so elected, serve as a director of the Company and an officer or director of any subsidiary or affiliate of the Company without compensation in addition to that provided in this Agreement. For purposes of this Agreement, an "affiliate" of the Company means any corporation, limited partnership, limited liability company or other entity engaged in the same business as the Company, or a related business, and which is controlled by or is under common control with the Company.

Section 2.       Term.

                The Company shall employ the Executive, and the Executive accepts such employment, continuing from the date first above written and ending at such time as this Agreement has terminated under the provisions of Section 5 hereof (the "Employment Period").

Section 3.       Performance.

                During the Employment Period, the Executive shall devote his best efforts and all of his business time and attention (except for vacation periods and reasonable periods

of illness or other incapacity) to the business of the Company and its affiliates and will not engage in consulting work or in any other trade or business for his own account or for or on behalf of any other person, firm or corporation without the written consent of the Board of Directors in each case, which shall not be granted if any such activity, in the opinion of the Board of Directors, competes, conflicts or interferes with the performance of his duties hereunder in any material way.

Section 4.       Compensation and Benefits.

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Section 5.       Termination.

                The Executive's employment hereunder shall terminate under the following circumstances:

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                If the Executive's employment is terminated by the Company pursuant to this Section 5(c), then (i) the Company shall have no further obligations hereunder accruing from and after the effective date of termination and shall have all other rights and remedies available under this or any other agreement and at law or in equity; and (ii) any unvested options granted hereunder shall immediately expire. Notwithstanding the foregoing, the Company shall pay to the Executive on the effective termination date any and all amounts then owed to the Executive, including all accrued salary, vacation pay, other benefits and any applicable portion of the Annual Performance Bonus.

Section 6.       Confidential Information

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Section 7.       Noncompetition and Nonsolicitation

                (a)       During the term of this Agreement and for a period of twelve (12) months following termination of the Executive's employment, however caused, the Executive shall not, without prior written consent of the Company:

                (b)       For purposes of this Section 7, a business will be deemed to be competitive with the Company if it is engaged in a business substantially similar, in whole or in part, to the business conducted or planned to be conducted by the Company during the term of this Agreement.

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Section 8.       Ownership of Ideas, Copyrights and Patents.

                (a)       The Executive agrees that all ideas, discoveries, creations, manuscripts and properties, innovations, improvements, know-how, inventions, designs, developments, apparatus, techniques, methods, processes and formulae (all of the foregoing being hereinafter referred to as "the inventions") which may be used in the business of the Company, whether patentable, copyrightable or not, which the Executive may conceive or develop during his employment with the Company, alone or in conjunction with another or others, whether during or out of regular business hours, and whether at the request or upon the suggestion of the Company or otherwise, shall be the sole and exclusive property of the Company, and that the Executive shall not publish any of the inventions without the prior written consent of the Company. The Executive hereby assigns to the Company all of his right, title and interest in and to all of the foregoing.

                (b)       The Executive further represents and agrees that he will use his best efforts to prevent any inventions from violating or infringing upon any other right, patent, copyright, trademark or right of privacy, or constituting libel or slander against, or violating any other right of, any person, firm or corporation.

                (c)       The Executive agrees that he will fully cooperate with the Company, its attorneys and agents, at any time during or after his employment, in the preparation and filing of all papers and other documents as may be required to perfect the Company's rights in and to any of such inventions, including, but not limited to, joining in any proceeding to obtain letters patent, copyrights, trademarks or other legal rights in the United States and in any and all other countries on such inventions, provided that the Company will bear the expense of such proceedings, and that any patent or other legal so issued to the Executive personally, shall be assigned by the Executive to the Company.

Section 9.       Disclosure of Covenants and Return of Records.

                (a)       The Executive agrees that he will provide, and that the Company may in its discretion similarly provide, a copy of the covenants contained in Sections 6, 7, and 8 of this Agreement to any business or enterprise which the Executive may directly or indirectly own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing, control or control of, or with which the Executive may be connected as an officer, director, employee, partner, principal agent, representative, consultant or otherwise.

                (b)       Upon termination of the Executive's employment with the Company, the Executive shall deliver to the Company any property of the Company which may be in the Executive's possession, including, without limitation, products, materials, memoranda, notes, records, reports, or other documents or photocopies of the same.

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Section 10.     Conflicting Agreements.

                The Executive hereby warrants and covenants that his employment by the Company will not result in a breach of the terms, conditions or provisions of any agreement to which the Executive is subject, and that he has not made and will not make any agreements in conflict with this Agreement.

Section 11.      Successors and Assigns.

                This Agreement is intended to bind and inure to the benefit of and be enforceable by the Executive and the Company, except that the Executive may not assign any of his rights or obligations under this Agreement and the Company may not assign any of its rights or obligations under this Agreement without the prior written consent of the other party.

Section 12.      Severability.

                Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect such provision in any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

Section 13.      Notice.

                Any notice provided for in this Agreement must be in writing and must be either personally delivered, mailed by first class mail (postage prepaid and return receipt requested), sent by facsimile transmission or sent by reputable overnight courier service, to the recipient at the address indicated below:

or to such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Agreement will be deemed to have been given when so delivered or sent or if mailed, five days after so mailed.

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Section 14.      Amendments and Waivers.

                Any provision of this Agreement may be amended or waived only with the prior written consent of the Executive and a majority of the Compensation Committee of the Board of Directors of the Company. Notwithstanding the foregoing, the failure of either party to require the performance of any term or obligation of this Agreement, or the waiver by either party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

Section 15.      Entire Agreement.

                This Agreement embodies the complete agreement and understanding between the parties and supersedes and preempts any prior understandings, agreements or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way, including, without limitation, that certain letter agreement between the parties dated, October 4, 2002. Notwithstanding the foregoing, that certain Option Certificate No. 2002 ISO – 031, dated January 24, 2003 shall remain in full force and effect, as amended by Section Section 4(e) hereof.

Section 16.      Governing Law.

                All questions concerning the construction, validity and interpretation of this agreement will be governed by the internal law, and not the law of conflicts, of the Commonwealth of Massachusetts.

Section 17.      Remedies.

                Each of the parties to this Agreement will be entitled to enforce his or its rights under this Agreement specifically, to recover damages (including, without limitation, reasonable fees and expenses of counsel) by reason of any breach of any provision of this Agreement and to exercise all other rights existing in his or its favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach or threatened breach of the provisions of this Agreement and that any party may in his or its sole discretion apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive relief in order to enforce or prevent any violations of the provisions of this Agreement.

Section 18.      Captions.

                The captions set forth in this Agreement are for convenience only, and shall not be considered as part of this Agreement or as in any way limiting or amplifying the terms and provisions hereof.

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                In witness whereof, the parties have signed, sealed and delivered this Agreement as of the date first above written.

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SCHEDULE 1
TO
EMPLOYMENT AGREEMENT

ANNUAL PERFORMANCE BONUS CRITERIA