Exhibit 10.2

 

 

March 24, 2005

 

John P. Donoghue, Ph.D.

109 Hazard Avenue

Providence, RI 02906

 

Dear John:

 

This letter will confirm our agreements about your transition from a consulting
relationship to employment with the Cyberkinetics Neurotechnology Systems, Inc.
(the “Company”).  We refer to the Consulting Agreement dated July, 2002 (the
“Consulting Agreement”), which is amended by this letter.

 

(a)                                  End of Consulting Period:  The Consulting
Period (as defined in the Consulting Agreement) is deemed to have ended at the
close of business on December 31, 2004.

 

(b)                                 Employment:  Effective January 1, 2005 (the
“Effective Date”), the Company offers you, and you accept, employment with the
Company as Chief Scientific Officer reporting to the Chief Executive Officer. 
From the Effective Date through August 31, 2005 (the “Initial Period”), you will
devote 50% of your working time (an average of two and one-half days per week)
to this employment (“Time Commitment”) and you will remain available for key
presentations in connection with investor relations and other forms of business
development by the Company.  Your Time Commitment after the Initial Period may
be changed, as you and we agree; however, the Company will offer you the
opportunity to devote at least one day per week to this employment until April
30, 2008, absent Serious Cause.  After April 30, 2008, your employment will be
on an “at-will” basis, meaning that you will not be obligated to remain employed
at the Company for any specific period of time, and that likewise the Company
will not be obligated to employ you for any specific period.  “Serious Cause”
means either: (i) your willful and continued failure to perform substantially
your obligations under this letter (other than any such failure resulting from
incapacity due to physical or mental illness) or the Consulting Agreement as
amended by this letter; or (ii) your willful engaging in illegal conduct or
gross misconduct that is materially and demonstrably injurious to the Company.

 

(c)                                  Compensation:  You will be paid salary in
accordance with the Company’s regular payroll practices, during the Initial
Period at the annual rate of $253,041 based on the initial Time Commitment
described above, and after the Initial Period a pro rated annual rate based on
the Time Commitment we then agree (for example, an annual rate of $60,000 for a
Time Commitment of an average of one day per week).  You will also be eligible
for the benefits that the Company generally provides to its employees in
accordance with Company policy and the applicable plans in effect from time to
time.  The Company retains the right to change, add or cease any particular
benefit.

 

(d)                                 Confidentiality Obligations; IP Ownership;
Restricted Activities:  As provided in Section 8 of the Consulting Agreement,
Sections 5, 6 and 7 of the Consulting Agreement survive the termination of the
Consulting Period.  Further, you and we agree that all references in these
sections of the Consulting Agreement to you as “Consultant” shall include you as
an employee of the Company from and after the Effective Date, and to the
“Services”

 

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you perform under the Consulting Agreement shall include services you perform as
an employee of the Company from and after the Effective Date.  As so amended,
these sections of the Consulting Agreement will remain in full force and effect.

 

You acknowledge and, for consideration provided under this letter, reaffirm your
obligation under Section 5 of the Consulting Agreement to keep confidential, and
not utilize on behalf of any third-party, all non-public information concerning
the Company, which you acquire during the course of employment or previously
acquired through your involvement with the Company.  You acknowledge and, for
consideration provided under this letter, reaffirm your obligation under Section
6 of the Consulting Agreement to disclose and assign to the Company all
Inventions you make during the course of employment or previously made during
your involvement with the Company.  You acknowledge and, for consideration
provided under this letter, reaffirm your obligation under Section 7 to refrain
from certain prohibited activities during the Consulting Period, during your
employment with the Company and for twelve (12) months after your employment
with the Company terminates for any reason.

 

(e)                                  General Provisions:

 

i.                  We specifically confirm the provisions of Paragraph 6 of the
Consulting Agreement relating to Inventions.  That paragraph recognizes your
obligation under the Brown University Patent and Invention Policy and requires
that you avoid activities at Brown University that would conflict with your
obligation under the Consulting Agreement to assign Consultant Inventions to the
Company.  As you know, under Section F(1) of that Policy, Brown University
normally will claim an equity interest in inventions that (A) involve the use of
funds, space, or facilities of Brown University or (B) are connected with the
regular duties or other assigned work of University Personnel.  Brown University
will also claim an equity interest in certain University-sponsored research, as
set forth in Section F(2) of the Policy.  Section G of the Policy sets forth an
expectation that you will exercise judgment in good faith in determining whether
Brown University may have an equity interest in any of your inventions.  You
represent and warrant to the Company that, in good faith, you have determined
that the Services you performed under the Consulting Agreement and will perform
under this letter, and any resulting Inventions, did not and will not fall under
the provisions of the Policy.

 

ii.               You represent and warrant that you are under no contractual or
other obligation or restriction that is inconsistent with your execution of this
letter or the performance of services as an employee of the Company.  During
your employment with the Company, you will not enter into any agreement, either
written or oral, in conflict with your obligations under this letter.  You will
arrange to perform services as an employee of the Company in such manner and at
such times that will not conflict with your responsibilities under any other
agreement, arrangement or understanding or pursuant to any other employment
relationship you have at any time with any third party.  You agree not to use
any trade secrets or other confidential information of any other person, firm,
corporation, institution or other entity in connection with any of the services
your perform as an employee of the Company.

 

 

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iii.            You represent that you have not been debarred, and to the best
of your knowledge, are not under consideration to be debarred, by the U.S. Food
and Drug Administration from working in or providing consulting services to any
pharmaceutical or biotechnology company under the Generic Drug Enforcement Act
of 1992.

 

iv.           When your employment with the Company terminates (for any reason),
you must return all Company property in your possession, including but not
limited to electronic and paper documents, keys, building access cards, laptop
computers, dial-in access cards, etc.

 

v.              This letter, together with the Consulting Agreement (as amended
by this letter), will constitute our entire understanding as to your employment
by the Company and will override any prior agreements or understandings, whether
in writing or oral.  This letter will be governed by the laws of the
Commonwealth of Massachusetts.

 

After reviewing this letter and attachments, please sign below in acceptance of
this agreement.

 

Sincerely,

CYBERKINETICS NEUROTECHNOLOGY SYSTEMS, INC.

 

/s/ Timothy R. Surgenor

 

Timothy R. Surgenor

Chief Executive Officer

 

ACCEPTED AND AGREED:

 

 

 

/s/ John P. Donoghue

 

John P. Donoghue

 

 

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