<PAGE>

                                                                   Exhibit 10.16
                                                                   -------------

                             AMENDED AND RESTATED
                        CONTROL DELIVERY SYSTEMS, INC.
                             EMPLOYMENT AGREEMENT


     AGREEMENT dated as of February 28, 2002 between Paul Ashton ("Executive")
and Control Delivery Systems, Inc. (the "Company").

     Executive is a key executive of the Company and a vital part of its
management. In consideration of Executive's continued employment with the
Company, the parties agree as follows:

     1.    Term; Window Period.  The term during which this Agreement (the
           -------------------
"Agreement") will be in effect (the "Employment Period") will begin on June 18,
2001 (the "Effective Date") and, except as provided below, will terminate on the
third anniversary of the Effective Date.  The Employment Period may be extended
by mutual agreement of the parties for successive one year periods.  If a Change
of Control (as defined in Exhibit A) occurs during the Employment Period,
including any extensions to the original Employment Period, the Agreement will
remain in effect until all obligations hereunder have been discharged.  The
period starting on the date of such a Change of Control and ending on the second
anniversary of the Change of Control will be a "Window Period" during which
special provisions of this Agreement will apply.

     2.    Positions and Duties.  Subject to the provisions of the Agreement,
           --------------------
during the Employment Period:

     2.1   Executive will hold the title of and serve as Chief Executive Officer
and President of the Company and will have responsibility for performing all
duties typically undertaken by such offices.  The Executive is presently a
member of the Board of Directors of the Company (the "Board"), will not be
removed from this position by the Board except for Cause (as defined below) and
will be recommended to the stockholders of the Company for reelection to the
Board.  The Executive will report to the Board.

     2.2   Executive will be a full-time employee of the Company and, except for
reasonable work-related travel, will perform his duties at the Company's
headquarters location.

     2.3   Executive will perform all such duties and services appropriate to
his position, and such additional duties as the Executive and the Board may from
time-to-time agree. Executive will devote his entire business time and attention
and his best efforts to such duties and services. However, Executive may serve
on boards of directors of other businesses and attend to personal investments
and community and charitable service, provided that such activities are not
competitive with the business of the Company and do not interfere with the
performance of Executive's duties to the Company.
<PAGE>

     3.    Compensation and Benefits.  During the Employment Period, the Company
           -------------------------
will provide compensation and benefits to Executive as follows:

     3.1   Base Salary.  Executive's  base salary as of the Effective Date will
           -----------
be $250,000 per year (the "Base Salary"), payable in accordance with the
applicable payroll practices of the Company.  The Company will review
Executive's Base Salary annually and Executive will receive such increase in
Base Salary, if any, as the Board determines from time to time in its sole
discretion.  In the event that Executive's Base Salary is increased, the Base
Salary as so increased will be referred to as "Base Salary."  Executive's Base
Salary will not be decreased during the Employment Period without Executive's
prior written agreement.

     3.2   Bonus.  Executive will be eligible for an annual bonus which will be
           -----
determined by the Board in its sole discretion.  Executive's bonus for any year
beginning or ending during a Window Period will not be less than the greater of
(x) 100 percent of his bonus for the completed year immediately preceding the
Change of Control, and (y) 100 percent of his bonus for the immediately
preceding employment year.  In the event of a termination of the Executive's
employment to which the provisions of Section 4.4 apply, then the provisions of
Section 4.4(b) or (c), as applicable, shall govern the payment of Executive's
bonus for the year in which such termination is effective.

     3.3   Other Benefits.  Executive will be entitled to participate in the
           --------------
following plans, policies and arrangements (or in any successor or supplemental
plans, policies or arrangements), if and to the extent maintained by the
Company, in each case at a level appropriate to Executive's position as
determined by the Board and in each case in accordance with the terms of the
pertinent plan, policy or arrangement:

           (i)    the Company's 2001 Incentive Plan;

           (ii)   the Company's group medical plan;

           (iii)  life insurance arrangements or disability plan arrangements
     provided to executive-level employees of the Company;

           (iv)   all the Company's equity plans in which executives of the
     Company participate;

           (v)    the Company's normal expense reimbursement policies; and

           (vi)   ordinary vacation arrangements provided to executive-level
     employees of the Company, including at least four weeks paid vacation in
     addition to Company holidays per year.

     4.    Termination of Employment; Severance Benefits.
           ---------------------------------------------

     4.1   Terminability of Employment.  Either the Company or Executive may at
           ---------------------------
any time terminate Executive's employment with the Company after giving 30 days'
written notice to the

                                      -2-
<PAGE>

other party. However, if Executive's employment terminates during the Employment
Period, the parties will be required to discharge the applicable obligations
described in this Section 4 and elsewhere in this Agreement. If Executive's
employment terminates at any time other than during the Employment Period,
Executive will have no rights under the Agreement.

     4.2   Termination upon Death or Disability.  If Executive ceases to be an
           ------------------------------------
employee of the Company as a result of death or total and permanent disability,
the Company will have no further obligation or liability to Executive hereunder
other than for Base Salary earned and unpaid at the date of termination and
compensation for accrued vacation, and the Employment Period will end when those
amounts are paid.  However, nothing in this Agreement is intended to interfere
with the rights of Executive and his family or beneficiaries under other
applicable plans, policies or arrangements of the Company.

     4.3   Termination by the Company for Cause or by Executive Without Good
           -----------------------------------------------------------------
Reason.  If the Company terminates Executive's employment for Cause (as defined
------
in this Section 4.3) or if  Executive terminates his employment other than for
Good Reason (as defined in Section 4.4), the Company will have no further
obligation or liability to Executive hereunder other than for Base Salary earned
and unpaid at the date of termination and compensation for accrued vacation, and
the Employment Period will end when those amounts are paid.

     "Cause" means only (a) willful malfeasance or gross negligence in the
performance by Executive of his or her duties, resulting in material harm to the
Company, (b) fraud or dishonesty by Executive with respect to the Company, or
(c) Executive's conviction of any felony involving deception, fraud or moral
turpitude.  The Company may treat a termination of Executive's employment as
termination for Cause only after (i) giving Executive written notice of the
intention to terminate for Cause and of his or her right to a hearing by the
Board, (ii) at least 30 days after giving the notice, conducting a hearing by
the Board at which Executive may be represented by counsel, and (iii) giving
Executive 30 days' written notice of the results of the hearing, which shall
require a vote of a majority of the Directors then in office other than
Executive.  For purposes of this definition of Cause, no act or omission shall
be considered to have been "willful" unless it was not in good faith and
Executive had knowledge at the time that the act or omission was not in the best
interest of the Company.  Any act or failure to act based on authority given
pursuant to a resolution duly adopted by the Board or based on the advice of
counsel of the Company shall be conclusively presumed to be done, or omitted to
be done, by Executive in good faith and in the best interest of the Company.
Cause shall not include willful failure due to incapacity resulting from
physical or mental illness or any actual or anticipated failure after Notice of
Termination for Good Reason.

     4.4   By the Company Without Cause or By Executive for Good Reason.
           ------------------------------------------------------------

           (a)  Entitlement to Severance Benefits.  If, during the Employment
                ---------------------------------
     Period, the Company terminates Executive's employment without Cause, or if
     Executive terminates his employment for Good Reason, the Company will,
     subject to Section 5 below, provide severance benefits to Executive as set
     forth below in this Section 4.4.

                                      -3-
<PAGE>

           "Good Reason" means (i) failure by the Company to maintain Executive
     in the positions described in Section 2 or assignment to Executive of
     duties materially inconsistent with such positions, (ii) the diminution in
     any material respect of Executive's positions or authority, excluding for
     this purpose an isolated, insubstantial and inadvertent action not taken in
     bad faith and which is remedied by the Company promptly after receipt of
     notice thereof given by Executive, (iii) failure by the Company to provide
     Executive with the compensation and benefits described in Section 3, or
     (iv) relocation of Executive's principal place of work to a location more
     than 30 miles from its current location without Executive's consent. For
     purposes of this definition of Good Reason, "Company" means Control
     Delivery Systems and any successor of Control Delivery Systems, provided if
     any such successor has a parent, then Company shall mean the ultimate
     parent corporation.

           (b)   Normal Severance Benefits. Except as provided in paragraph (c),
                 -------------------------
     the Company will provide severance benefits as follows:

           (i)   The Company will pay to Executive within 30 days of the
     termination a lump-sum cash amount equal to the sum of (x) an amount equal
     to six months' Base Salary in effect at the time of his termination (or, if
     his Base Salary has been reduced within 60 days of the termination, his
     Base Salary in effect prior to the reduction) plus (y) a pro-rated portion
     of the maximum bonus that would otherwise be payable in the year of
     termination, if any.

                 (A)  For purposes of this Section 4.4(b), the maximum bonus
           payable in any year will be calculated assuming all bonus targets or
           formulas for determining the bonus in such year had been met if
           Executive and Board had, prior to the termination of Executive's
           employment, agreed on such targets or formulas.

                 (B)  If no such targets or formulas have been set as of such
           termination date, then the maximum bonus shall be deemed to be the
           actual bonus paid to Executive during the preceding fiscal year.

           (ii)  The Company will continue for a period of six months from the
     date of termination to provide Executive with the benefits set forth in
     paragraphs (ii) and (iii) of Section 3.3 above.  To the extent that the
     Company is unable to provide such benefits to Executive under its existing
     plans and arrangements, it will pay Executive cash amounts equal to the
     cost the Company would have incurred to provide those benefits.

           (iii) Stock options held by Executive that are exercisable as of the
     date of termination will remain exercisable for a period of six months from
     the date of termination (or three months in the case of incentive stock
     options).

           (c)   Severance Benefits Following a Change of Control.  If the
                 ------------------------------------------------
     termination occurs during a Window Period, the Company will, instead of the
     benefits prescribed in paragraph (b), provide severance benefits to
     Executive as follows:

                                      -4-
<PAGE>

           (i)   The Company will pay to Executive within 30 days of the
     termination a lump-sum cash amount equal to 200% of the sum of (x)
     Executive's annual Base Salary in effect immediately prior to the
     termination (or, if his Base Salary has been reduced within 60 days of the
     termination or at any time after the Change of Control, his Base Salary in
     effect prior to the reduction), plus (y) the greater of (1) 100 percent of
     his bonus for the completed year immediately preceding the Change of
     Control, and (2) 100 percent of his bonus for the immediately preceding
     employment year.

           (ii)  The Company will also pay to Executive within 30 days of the
     termination a pro-rata portion of his maximum bonus for the year of
     termination.

                 (A)  For purposes of this Section 4.4(c), the maximum bonus
           payable in such year will be calculated assuming all bonus targets or
           formulas for determining the bonus in such year had been met if
           Executive and Board had, prior to the termination of Executive's
           employment, agreed on such targets or formulas.

                 (B)  If no such targets or formulas have been set as of such
           termination date, then the maximum bonus shall be deemed to be the
           greater of (x) 100 percent of his bonus for the completed year
           immediately preceding the Change of Control, and (y) 100 percent of
           his bonus for the immediately preceding employment year.

           (iii) The Company will continue for a period of two years from the
     date of termination to provide Executive with the benefits set forth in
     paragraphs (ii) and (iii) of Section 3.3 above.  To the extent the Company
     is unable to provide such benefits to Executive under its existing plans
     and arrangements, it will either arrange to provide Executive with
     substantially similar benefits upon comparable terms or pay Executive cash
     amounts equal to Executive's cost of obtaining such benefits.

           (iv)  All options to purchase Company stock held by Executive will
     automatically and immediately vest and become exercisable upon such
     termination and remain exercisable for a period of one year following such
     termination, and all restricted stock held by Executive under restricted
     stock plans and arrangements of the Company will become vested upon such
     termination.

     5.    Taxes on Severance Benefits.
           ---------------------------

     5.1   Withholding.  All payments required to be made by the Company
           -----------
hereunder to Executive or his dependents, beneficiaries, or estate will be
subject to the withholding of such amounts relating to tax and/or other payroll
deductions as may be required by law.

     5.2   Section 4999 Excise Taxes.  In the event that it is determined that
           -------------------------
any payment or benefit provided by the Company to or for the benefit of
Executive, either under this Agreement or otherwise, will be subject to the
excise tax imposed by Section 4999 of the Internal Revenue

                                      -5-
<PAGE>

Code or any successor provision(s) ("Section 4999"), the Company will, prior to
the date on which any amount of the excise tax must be paid or withheld, make an
additional lump-sum payment (the "Gross-up Payment") to Executive in an amount
sufficient, after giving effect to all federal, state and other taxes and
charges (including interest and penalties, if any) with respect to the gross-up
payment, to make Executive whole for all taxes (including withholding taxes) and
any associated interest and penalties, imposed under or as a result of Section
4999.

     5.3   Selection of Accounting Firm.  Determinations under this Section 5
           ----------------------------
will be made by PricewaterhouseCoopers, LLP or if PricewaterhouseCoopers, LLP is
unable or unwilling to serve or if the Company and Executive otherwise
determine, by another firm mutually agreed to by the Company and Executive (the
"Firm").  The determinations of the Firm will be binding upon the Company and
Executive except as the determinations are established in resolution (including
by settlement) of a controversy with the Internal Revenue Service to have been
incorrect.  All fees and expenses of the Firm will be paid by the Company.

     5.4   IRS Claims.  If the Internal Revenue Service asserts a claim that, if
           ----------
successful, would require the Company to make a Gross-up Payment or an
additional Gross-up Payment, the Company and Executive will cooperate fully in
resolving the controversy with the Internal Revenue Service.  The Company will
make or advance such Gross-up Payments as are necessary to prevent Executive
from having to bear the cost of payments made to the Internal Revenue Service in
the course of, or as a result of, the controversy.  The Firm will determine the
amount of such Gross-up Payments or advances and will determine after final
resolution of the controversy whether any advances must be returned by Executive
to the Company.  The Company will bear all expenses of the controversy and will
gross Executive up for any additional taxes that may be imposed upon Executive
as a result of its payment of such expenses.

     6.    Withholding.  All payments required to be made by the Company to
           -----------
Executive under this Agreement will be subject to the withholding of such
amounts, if any, relating to tax and other payroll deductions as may be required
by law.

     7.    Fees and Expenses.  In the event of Executive's termination of
           -----------------
employment during a Window Period, the Company will pay any and all fees and
expenses (including legal fees and other costs of arbitration or litigation)
that may be incurred by Executive in enforcing his rights under this Agreement.
If the termination of employment does not occur during a Window Period, the
Company will pay that amount of such fees and expenses that bears the same ratio
to the total fees and expenses as the dollar amount of payments and benefits
determined to be payable to Executive bears to the total dollar amount of
payments and benefits in dispute.

     8.    No Duty to Mitigate.  Benefits payable under this Agreement as a
           -------------------
result of termination of Executive's employment will be considered severance pay
in consideration of his past service and his continued service from the
Effective Date, and his entitlement thereto will neither be governed by any duty
to mitigate his damages by seeking further employment nor offset by any
compensation that he may receive from other employment.

                                      -6-
<PAGE>

     9.    Confidentiality, Non-Competition and Exclusivity. Executive agrees to
           ------------------------------------------------
maintain the confidentiality of the Company's (and its related entities and
projects) books, records, financial information, technical information, business
plans and/or strategies, and other confidential matters unless required to make
disclosure in the performance of his duties for the Company or as a result of a
legal proceeding or other legally mandated cause.  Executive further agrees to
abide by all of the terms of the Confidentiality and Inventions Agreement dated
as of the date hereof.  In the event of termination without Good Reason by
Executive other than such a termination occurring during a Window Period,
Executive agrees not to compete, directly or indirectly, with the Company,
whether as an employee, consultant, agent, partner, owner, investor or otherwise
for one year following termination of Executive's employment (the "Restriction
Period").  Specifically, but without limiting the foregoing, Executive agrees
not to engage in any manner in any activity that is directly or indirectly
competitive or potentially competitive with the business of the Company as
conducted or under consideration at any time during Executive's employment.
Executive further agrees during the Restriction Period not to accept employment
or a consulting position with any person who is, or at any time within one year
prior to termination of Executive's employment was, a customer of the Company.
For purposes of this provision, the business of the Company shall include all
Products, as defined below, offered by the Company in any manner or under
development, and Executive's undertaking shall encompass all items, products and
services that may be used in substitution for Products.  The foregoing
restrictions shall not prevent Executive from owning 5% or less of the equity
securities of any publicly traded company.

     The parties recognize and agree that should the Company be required to
pursue a claim against Executive under this Section 9, the Company will likely
be required to seek injunctive relief as well as damages at law.  Accordingly,
Section 11, Arbitration, will not apply to any action by the Company against
            -----------
Executive for violation of this Section 9.

     For purposes of this Section 9, Products shall mean all products
researched, developed, planned, tested, manufactured, sold, licensed, leased or
otherwise distributed or put into use by the Company, together with all services
provided or planned by the Company, during the term of Executive's employment.

     10.   Indemnification.  To the extent permitted by law, the Company will
           ---------------
defend, indemnify and hold Executive harmless from and against any and all
losses, liabilities, damages, expenses (including attorneys' fees and costs),
actions, causes of action or proceedings arising directly or indirectly from
Executive's performance of this Agreement or services as an employee of the
Company.  Executive may retain his own counsel to defend himself in such
actions, and the Company will pay for the reasonable costs and expense of such
counsel.  This indemnification is in addition to any right of indemnification to
which Executive may be entitled under the Company's Articles of Incorporation
and By-laws, any separate indemnification agreements between the Company and
Executive, and any insurance policies that may be maintained by the Company.

     11.   Arbitration.  Except as otherwise provided in Section 9, any dispute
           -----------
or controversy between the parties involving the construction or application of
any terms, covenants

                                      -7-
<PAGE>

or conditions of this Agreement, or any claim arising out of or relating to this
Agreement, or any claim arising out of or relating to Executive's employment by
the Company that is not resolved within ten days by the parties will be settled
by arbitration in Boston, Massachusetts, in accordance with the rules of the
American Arbitration Association then in effect, and judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. The Company and Executive agree that the arbitrator(s) will have no
authority to award punitive or exemplary damages or so-called consequential or
remote damages such as damages for emotional distress. Any decision of the
arbitrator(s) will be final and binding upon the parties. Either party may
request that the arbitrator(s) submit written findings of fact and conclusions
of law. The parties agree and understand that they hereby waive their rights to
a jury trial of any dispute or controversy relating to the matters specified
above in this Section 11.

     12.   Rights of Survivors  If Executive dies after becoming entitled to
           -------------------
benefits under Section 4 following termination of employment but before all such
benefits have been provided, (a) all unpaid cash amounts will be paid to the
beneficiary that has been designated by Executive in writing (the
"beneficiary"), or if none, to Executive's estate, (b) all applicable insurance
coverage will be provided to Executive's family as though Executive had
continued to live, and (c) any stock options that become exercisable under
Section 4.4(b)(iii) or Section 4.4(c)(iv) will be exercisable by the
beneficiary, or if none, the estate.

     13.   Successors.  This Agreement will inure to and be binding upon the
           ----------
Company's successors.  The Company will require any successor to all or
substantially all of the business and/or assets of the Company by sale, merger
or consolidation (where the Company is not the surviving corporation), lease or
otherwise, by agreement in form and substance satisfactory to Executive, to
assume this Agreement expressly.  This Agreement is not otherwise assignable by
the Company or the Executive.

     14.   Subsidiaries.  For purposes of this Agreement, employment by a
           ------------
corporation or other entity that is controlled directly or indirectly by the
Company will be deemed to be employment by the Company.  Thus, references in the
Agreement to "Company" include such corporations or other entities where
appropriate in the context.

     15.   Amendment or Modification; Waiver.  This Agreement may not be amended
           ---------------------------------
unless agreed to in writing by Executive and the Company.  No waiver by either
party of any breach of this Agreement will be deemed a waiver of a subsequent
breach.

     16.   Severability.  In the event that any provision of this Agreement is
           ------------
determined to be invalid or unenforceable, the remaining provisions shall remain
in full force and effect to the fullest extent permitted by law.

     17.   Controlling Law.  This Agreement will be controlled and interpreted
           ---------------
pursuant to Massachusetts law, other than its choice of law principles.

     18.   Entire Agreement. This Agreement (including without limitation the
           ----------------
Exhibits hereto) constitutes the entire agreement and supersedes all prior
agreements and undertakings,

                                      -8-
<PAGE>

both written and oral, between Executive and the Company with respect to the
subject matter hereof; provided that Executive and the Company have entered into
a Confidentiality and Inventions Agreement, dated the date hereof, which shall
survive execution of this Agreement.

     19.   Notices.  Any notices required or permitted to be sent under this
           -------
Agreement are to be delivered by hand or mailed by registered or certified mail,
return receipt requested, and addressed as follows:

If to the Company:

               Control Delivery Systems, Inc.
               313 Pleasant Street
               Watertown, MA 02472

If to Executive:

               Paul Ashton
               19 Brimmer Street
               Boston, MA 02108

Either party may change its address for receiving notices by giving notice to
the other party.

20. Release. Notwithstanding anything to the contrary contained in this
    -------
Agreement, in order for Executive to be eligible for the severance benefits to
be provided in accordance with this Agreement, Executive must sign (and not
revoke within seven days of signing) a release of claims in the form attached
hereto and marked Exhibit B.
                  ---------



           [The remainder of this page is intentionally left blank.]

                                      -9-
<PAGE>

     In witness whereof, the parties hereto have executed this Agreement as of
the date first set forth above.


                              By:   /s/ Paul Ashton
                                 --------------------------------------------
                                 Name: Paul Ashton


                              CONTROL DELIVERY SYSTEMS, INC.

                              By:   /s/ Michael Soja
                                 --------------------------------------------
                                 Name: Michael Soja
                                 Title: Chief Financial Officer

                                      -10-
<PAGE>

                                   Exhibit A
                                   ---------

     "Change of Control" means the occurrence of any of the following events:

          (a)  The acquisition by any Person or group of the ultimate beneficial
     ownership (within the meaning of Rule 13d-3 promulgated under the
     Securities Exchange Act of 1934, as amended (the "Exchange Act")) of more
     than 50% of the then outstanding securities of the Company entitled to vote
     generally in the election of directors; excluding, however, the following:
     (i) any acquisition directly from the Company (other than any acquisition
     by virtue of the exercise of an exercise, conversion or exchange privilege
     unless the security being so exercised, converted or exchanged was itself
     acquired directly from the Company); (ii) any acquisition by the Company;
     (iii) any acquisition by an employee benefit plan (or related trust)
     sponsored or maintained by the Company or by any corporation controlled by
     the Company; (iv) any acquisition by the Executive, by an Executive Related
     Party (as defined in Exhibit A) or by a group of which the Executive is a
     member; or (v) any acquisition by any corporation pursuant to a transaction
     which complies with clauses (i), (ii) and (iii) of subsection (c) of this
     Exhibit A; or

          (b)  Individuals who, as of the date hereof, constitute the Board (the
     "Incumbent Board") cease for any reason to constitute at least a majority
     of the Board; provided, however, that any individual becoming a director
     subsequent to the date hereof whose election, or nomination for election,
     by the Company's shareholders, was approved by a vote of at least a
     majority of the directors then comprising the Incumbent Board shall be
     considered as though such individual were a member of the Incumbent Board,
     but excluding, for this purpose, any such individual whose initial
     assumption of office occurs as a result of an actual or threatened election
     contest with respect to the election or removal of directors or other
     actual or threatened solicitation of proxies or consents by or on behalf of
     a Person other than the Board; or

          (v)  A reorganization, recapitalization, merger or consolidation (a
     "Corporate Transaction") of the Company, unless (i) securities representing
     more than 50% of the then outstanding securities entitled to vote generally
     in the election of directors of the Company or the corporation resulting
     from or surviving such Corporate Transaction (or the ultimate parent of the
     Company or such corporation after such Corporate Transaction) are
     beneficially owned subsequent to such Corporate Transaction by the Person
     or Persons who were the beneficial owners of the outstanding securities of
     the Company entitled to vote generally in the election of directors
     immediately prior to such Corporate Transaction, in substantially the same
     proportions as their ownership immediately prior to such Corporate
     Transaction; (ii) no Person (excluding any corporation resulting from such
     Corporate Transaction or any employee benefit plan (or related trust) of
     the Company or such corporation resulting from such Corporate Transaction)
     ultimately beneficially owns, directly or indirectly, more than 50% of the
     then outstanding securities entitled to vote generally in the election of
     directors of the Company or the corporation resulting from or surviving
     such Corporate Transaction (or the ultimate parent of the
<PAGE>

     Company or such corporation after such Corporate Transaction) except to the
     extent that such ownership existed prior to the Corporate Transaction; and
     (iii) at least a majority of the members of the board of directors of the
     corporation resulting from such Corporate Transaction were members of the
     Incumbent Board at the time of the execution of the initial agreement, or
     of the action of the Board, providing for such Corporate Transaction; or

          (c)   The sale, transfer or other disposition of all or substantially
     all of the assets of the Company; or

          (vi)  Approval by the shareholders of the Company of a complete
     liquidation or dissolution of the Company.

     For purposes of this definition, securities entitled to vote generally in
the election of directors that are issuable upon exercise of an exercise,
conversion or exchange privilege shall be deemed to be outstanding.  In
addition, for purposes of this definition the following terms have the meanings
set forth below:

     A Person will be deemed to be the "owner" of any securities of which such
Person would be the "beneficial owner," as such term is defined in Rule 13d-3
promulgated by the Securities and Exchange Commission under the Exchange Act.

     "Person" has the meaning used in Section 13(d) of the Exchange Act, except
that "Person" does not include (i) the Executive, an Executive Related Party, or
any group of which the Executive or Executive Related Party is a member, or (ii)
the Company or a wholly owned subsidiary of the Company or an employee benefit
plan (or related trust) of the Company or of a wholly owned subsidiary.

     An "Executive Related Party" means any affiliate or associate of the
Executive other than the Company or a subsidiary of the Company.  The terms
"affiliate" and "associate" have the meanings given in Rule 12b-2 under the
Exchange Act; the term "registrant" in the definition of "associate" means, in
this case, the Company.

                                     -ii-
<PAGE>

                                   EXHIBIT B
                                   ---------

                               RELEASE OF CLAIMS


     FOR AND IN CONSIDERATION OF the benefits to be provided me in connection
with the termination of my employment, as set forth in the Amended and Restated
Employment Agreement between me and Control Delivery Systems, Inc. (the
"Company") dated as of February, 2002 (the "Agreement"), which benefits are
subject to my signing of this Release of Claims and to which I am not otherwise
entitled, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, I, on my own behalf and on behalf
of my heirs, executives, administrators, beneficiaries, representatives and
assigns, and all others connected with me, hereby release and forever discharge
the Company, its subsidiaries and other affiliates and all of their respective
past, present and future officers, directors, trustees, shareholders, employees,
agents, general and limited partners, members, managers, joint venturers,
representatives, successors and assigns, and all others connected with any of
them, both individually and in their official capacities, from any and all
causes of action, rights and claims of any type or description, known or
unknown, which I have had in the past, now have, or might now have, through the
date of my signing of this Release of Claims, in any way resulting from, arising
out of or connected with my employment by the Company or any of its subsidiaries
or other affiliates or the termination of that employment or pursuant to any
federal, state or local law, regulation or other requirement (including without
limitation Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act, the Americans with Disabilities Act, and the fair employment
practices laws of the state or states in which I have been employed by the
Company or any of the subsidiaries or other affiliates, each as amended from
time to time).

     Excluded from the scope of this Release of Claims is (i) any claim arising
under the terms of the Agreement and (ii) any right of indemnification or
contribution that I have pursuant to the Articles of Incorporation or By-Laws of
the Company or any of its subsidiaries or other affiliates.

     In signing this Release of Claims, I acknowledge my understanding that I
may not sign it prior to the termination of my employment, but that I may
consider the terms of this Release of Claims for up to twenty-one (21) days (or
such longer period as the Company may specify) from the later of the date my
employment with the Company terminates or the date I receive this Release of
Claims.  I also acknowledge that I am advised by the Company and its Affiliates
to seek the advice of an attorney prior to signing this Release of Claims; that
I have had sufficient time to consider this Release of Claims and to consult
with an attorney, if I wished to do so, or to consult with any other person of
my choosing before signing; and that I am signing this Release of Claims
voluntarily and with a full understanding of its terms.

     I further acknowledge that, in signing this Release of Claims, I have not
relied on any promises or representations, express or implied, that are not set
forth expressly in the Agreement.  I understand that I may revoke this Release
of Claims at any time within seven (7) days of the date of my signing by written
notice to the General Counsel of the Company and that this

                                     -iii-
<PAGE>

Release of Claims will take effect only upon the expiration of such seven-day
revocation period and only if I have not timely revoked it.

Intending to be legally bound, I have signed this Release of Claims under seal
as of the date written below.



Signature: _____________________________________________

Name (please print):  __________________________________

Date Signed: ___________________________________________

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