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                                                                 EXHIBIT 10.13



                              EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this "Agreement") is made this 28th day of Feb, 1997
("Effective Date"), by and between INTUITIVE SURGICAL DEVICES, INC., a Delaware
corporation (the "Company") and LONNIE SMITH ("Executive").

                                    RECITALS

A. The Company desires assurance of the association and services of Executive in
order to retain Executive's experience, skills, abilities, background and
knowledge, and is willing to engage Executive's services on the terms and
conditions set forth in this Agreement.

B. Executive desires to be in the employ of the Company, and is willing to
accept such employment on the terms and conditions set forth in this Agreement.

C. In consideration of the foregoing promises and the mutual covenants and
agreements contained herein, and for other good and valuable consideration the
adequacy of which is hereby acknowledged, the parties hereby agree as follows:

                                    AGREEMENT

1.   EMPLOYMENT.

          (a) The Company hereby agrees to employ Executive and Executive hereby
          agrees to accept employment by the Company, upon the terms and
          conditions set forth in this Agreement.

          (b) The Company and Executive each agree and acknowledge that
          Executive is employed by the Company as an "at-will" employee and that
          either Executive or the Company has the right at any time to terminate
          Executive's employment with the Company, with or without cause or
          advance notice, for any reason or for no reason. The Company and
          Executive wish to set forth the compensation and benefits which
          Executive shall be entitled to receive in the event that Executive's
          employment with the Company terminates under the circumstances
          described herein.

2.   POSITION AND DUTIES.

          (a) Executive shall be the Chief Executive Officer of the Company,
          reporting directly to the Board of Directors, and shall serve in such
          other capacity or capacities as the Board of Directors of the Company
          may from time to time prescribe.


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          (b) Executive shall serve as a director of the Company during his
          employment by the Company, and shall serve in such capacity for such
          compensation, if any, as is provided to other employee directors.

          (c) Executive shall do and perform all services, acts or things
          necessary or advisable to manage and conduct the business of the
          Company, provided however, that at all times during his employment
          Executive shall be subject to the direction and policies from time to
          time established by the Board of Directors of the Company. Executive's
          duties shall include, but not be limited to providing strong
          leadership for the Company's operations, and playing a major role in
          the development of new products, technology, external collaborations
          and corporate alliances. The Company particularly expects Executive to
          serve as a role model for staff development and scientific excellence.

          (d) Executive shall devote his full time and attention during normal
          business hours to the business affairs of the Company except for
          reasonable vacations and except for illness or incapacity, but nothing
          in this Agreement shall preclude Executive from devoting reasonable
          time required for serving as a director or a member of a committee of
          any organization involving no conflict of interest with the interest
          of the Company, from engaging in charitable and community activities,
          and from managing his personal affairs, provided that such activities
          do not materially interfere with the regular performance of his duties
          and responsibilities under this Agreement.

3.   COMPENSATION AND BENEFITS.

          (a) SALARY AND BENEFITS. During the period of Executive's employment
          hereunder, the Company shall pay to Executive an annual salary in an
          amount of three hundred thousand dollars ($300,000), less standard
          deductions and withholdings, payable in installments in accordance
          with Company policy. Executive also shall be entitled to all rights
          and benefits for which he meets applicable eligibility conditions
          under such group insurance and other Company benefit programs,
          including sick and vacation leave and the 1996 Equity Incentive Plan,
          (Exhibit D) which may be in force from time to time and provided to
          Executive or for the Company's employees generally. The Company
          reserves the right to modify Executive's compensation and benefits
          from time to time as it deems necessary.

          (b) BONUS. To the extent determined by the Compensation Committee of
          the Board, Executive shall be eligible to participate in such
          management bonus programs as may be adopted by the Company from time
          to time, if any.

          (c) STOCK OPTIONS. The Company intends and agrees that Executive will
          be granted an option to purchase capital stock of the Company. Upon
          the commencement of Executive's employment, the Company agrees to
          grant Executive an option to purchase seven hundred thousand (700,000)
          shares of the Company's common stock under the Company's 1996 Equity
          Incentive Plan. The exercise price per share of the option shall be
          equal to one hundred percent (100%) of the fair market value of the
          Company's common stock as determined under


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          the 1996 Equity Incentive Plan on the date of grant. The option shall
          vest as to one sixtieth (1/60th) of the shares subject to the option
          for each full month of completed service, beginning on the date of the
          grant. If the Company enters into an Acquisition, then the option
          shall vest as to all the shares subject to the option immediately
          prior to the closing of such Acquisition. For purposes of this
          Agreement, "Acquisition" shall mean any consolidation or merger of the
          Corporation with or into any other corporation or other entity or
          person, or any other corporate reorganization in which the
          shareholders of the Corporation prior to such consolidation, merger or
          reorganization or any transaction or series of related transactions
          shall own less than fifty percent (50%) of the voting stock of the
          continuing or surviving entity of such consolidation, merger or
          reorganization, or any transaction of series of related transactions
          in which in excess of fifty percent (50%) of the Corporation's voting
          power is transferred. The Company intends and agrees that Executive
          will be allowed to purchase five hundred thousand dollars ($500,000)
          worth of the Series C Preferred Stock of the Company, at the same
          price and on the same terms and conditions as the institutional
          investors, when the Company closes the sale of its Series C Preferred
          Stock. Notwithstanding the foregoing, Executive acknowledges and
          agrees that there are no further commitments or obligations on the
          part of the Company to grant to Executive any additional options.

          (d) EXPENSES. Executive shall be entitled to receive reimbursement of
          all actual and reasonable expenses incurred by Executive in performing
          Company services, including expenses related to travel and expenses
          while away from home on business. Such expenses shall be accounted for
          under the policies and procedures established by the Company.

          (e) RELOCATION EXPENSES. In connection with Executive's relocation,
          Executive shall be entitled to receive reimbursement of the closing
          costs associated with selling Executive's principal residence, the
          cost of moving Executive's furnishings and family, and expenses for
          temporary local housing. Such reimbursement shall not exceed one
          hundred thousand ($100,000) dollars.

4.        TERMINATION BY THE COMPANY. Executive's employment with the Company
may be terminated by the Company in the following circumstances.

          (a) DEATH. Upon Executive's death, the termination date shall be the
          last day of the month in which Executive's death occurs.

          (b) DISABILITY. If Executive becomes incapacitated due to physical or
          mental illness, injury, or if Executive is absent from his full-time
          duties for twelve (12) consecutive weeks on account of physical or
          mental illness, the Company shall continue to pay to Executive an
          amount which, when combined with disability or income-continuance
          benefits pursuant to a Company plan or provided under state law and
          received by Executive, shall equal but not exceed Executive's base
          salary, less standard deductions and withholdings. However, Executive
          must submit claims for any and all such disability benefits to which
          he may be entitled. For any waiting period during which Executive
          receives no benefits under any disability plan, the Company shall pay
          his entire base salary, less standard deductions and withholdings. The

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          Company shall continue to integrate such salary payments with benefits
          until such time as Executive returns to work or Executive's employment
          is terminated but in no event for longer than twelve (12) weeks.

          (c) FOR CAUSE. If the Company terminates Executive's employment for
          Cause, Executive shall not be entitled to receive any payments or
          benefits under the provisions of this Agreement, except as otherwise
          specifically set forth herein, and the Company shall cease paying
          compensation or providing benefits to Executive as of Executive's
          termination date. For purposes of this Agreement, Cause shall mean
          misconduct, including: (i) conviction of any felony or any crime
          involving moral turpitude or dishonesty; (ii) participation in a fraud
          or act of dishonesty against the Company; (iii) wilful breach of the
          Company's policies; (iv) intentional damage to the Company's property;
          or (v) material breach of this Agreement or Executive's Proprietary
          Information and Inventions Agreement attached hereto as Exhibit B.
          Physical or mental disability shall not constitute Cause.

          (d) WITHOUT CAUSE. The Company shall have the right to terminate
          Executive's employment at any time, without Cause, effective on the
          date determined by the Company. If the Company terminates Executive's
          employment without Cause, then Executive shall be paid the following:

               (i) SEVERANCE PAYMENTS. The Company shall continue to pay
               Executive his base salary in effect at the time of such
               termination for twelve months following the date of termination
               ("Severance Payments"). The Severance Payments shall be made on
               the Company's normal payroll dates and will be subject to
               standard deductions and withholdings. Notwithstanding the
               foregoing, pursuant to Sections 6(b) and 10 of this Agreement
               (relating to a termination of benefits in the event Executive
               competes with the Company or solicits on behalf of another person
               or entity), the Severance Payments shall cease as of the date
               Executive enters into an activity in competition with the Company
               or solicits the Company's employees, consultants or independent
               contractors, as determined solely by the Company, and Executive
               shall have no further rights to such benefits.

               (ii) HEALTH INSURANCE. To the extent permitted by law and by the
               Company's group health insurance plans, Executive will be
               eligible, after the date of termination, to continue his health
               insurance benefits under the federal COBRA law, at his own
               expense for up to eighteen (18) months and, later, to convert to
               an individual policy if he wishes. Executive will be provided
               with a separate notice of his COBRA rights. If Executive elects
               COBRA continuation, the Company agrees to pay Executive's health
               insurance continuation premiums for twelve (12) months following
               the termination date ("Benefit Period"). The Company's obligation
               to make such payments shall cease immediately if, during the
               Benefit Period, (A) Executive becomes eligible for other health
               insurance benefits at the expense of a new employer; or (B) in
               accordance with Section 6(b) of this Agreement, Executive
               competes with the Company or solicits on behalf of another person
               or entity. Executive agrees to notify a duly authorized officer
               of the Company, in writing, at least ten (10) business days prior
               to his


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               acceptance of any employment which provides health insurance
               benefits, or his engagement in prohibited activity defined in
               Section 6(b).

               (iii) STOCK OPTIONS. Vesting under Executive's stock option will
               cease immediately. Executive's rights with respect to vested
               shares will be as set forth in the stock option.

5.   TERMINATION BY EXECUTIVE. Executive may terminate his employment with the
Company (1) for Good Reason within sixty (60) consecutive days following the
occurrence of an event or events constituting such Good Reasons; or (2) for the
convenience of Executive.

          (a) GOOD REASON. If Executive voluntarily terminates his employment
          with Good Reason, Executive shall receive the Severance Payments and
          other benefits set forth in Section 4(d) above. For the purposes of
          this Agreement, Good Reason means (i) substantial reduction of
          Executive's rate of compensation as in effect immediately prior to the
          Effective Date of this Agreement; (ii) failure to provide a package of
          welfare benefit plans which, taken as a whole, provide substantially
          similar benefits to those in which the Executive is entitled to
          participate (except that employee contributions may be raised to the
          extent of any cost increases imposed by third parties) or any action
          by the Company which would adversely affect Executive's participation
          or substantially reduce Executive's benefits under any of such plans;
          (iii) change in Executive's responsibilities, authority, title or
          office resulting in diminution of position, excluding for this purpose
          an isolated, insubstantial and inadvertent action not taken in bad
          faith which is remedied by the Company promptly after notice thereof
          is given by Executive; (iv) request that Executive relocate his
          current residence, unless Executive accepts such relocation request;
          (v) material reduction in Executive's duties; (vi) failure or refusal
          of a successor to the Company to assume the Company's obligations
          under this Agreement; or (vii) material breach by the Company or any
          successor to the Company of any of the material provisions of this
          Agreement.

          (b) CONVENIENCE. If Executive voluntarily resigns his employment
          without Good Reason as defined below, the Company shall pay Executive
          his base salary, less standard deductions and withholdings, through
          the date of termination at the rate in effect at the time of the
          notice of termination. Thereafter, the Company shall have no further
          obligations to Executive under this Agreement.

6.   LIMITATIONS AND CONDITIONS ON BENEFITS; AMENDMENT OF AGREEMENT

          (a) REDUCTION IN PAYMENTS AND BENEFITS. The benefits provided under
          this Agreement are in lieu of any other benefit provided under any
          group severance plan of the Company in effect at the time of
          termination.

          (b) EARLY CESSATION OF PAYMENTS AND OTHER BENEFITS. In the event that
          Executive, at any time during his employment with the Company, or
          while receiving Severance Payments, (i) performs work for any business
          entity, or engages in any other work activity


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          which is in competition, or is preparing to compete, with the Company;
          or (ii) either directly or through others, solicits or attempts to
          solicit any employee, consultant, or independent contractor of the
          Company to terminate his or her relationship with the Company in order
          to become an employee, consultant or independent contractor to or for
          any other person or entity, then, except as otherwise specifically
          provided herein, the Company's obligations to pay Executive any
          amounts, including but not limited to Severance Payments, health
          insurance premiums, or provide any benefits under the terms of this
          Agreement shall all cease immediately. For purposes of this Agreement,
          the holding of less than one percent (1%) of the outstanding voting
          securities of any firm or business organization in competition with
          the Company shall not constitute activities or services precluded by
          this Agreement. Executive agrees to notify the Company, in writing, at
          least ten (10) business days prior to (i) engaging in any work for any
          business purpose other than work for the Company; or (ii) soliciting
          or attempting to solicit any employee, consultant, or independent
          contractor of the Company to terminate his other relationship with the
          Company on behalf of another person or entity. The Company shall not
          seek to recover any amounts paid or benefits provided to Executive
          prior to his engagement in such competitive or solicitation
          activities.

          (c) RELEASE AND WAIVER OF CLAIMS. Prior to the receipt of any
          Severance Payments and other benefits provided under this Agreement
          following termination of Executive's Employment, and prior to the
          beginning of the Consulting Period, Executive shall, as of the date of
          termination, execute a Release and Waiver of Claims in the form
          attached hereto as Exhibit A ("Release"). In the event Executive does
          not execute the Release within the specified period set forth in the
          Release, no further amounts shall be payable and no further benefits
          shall be provided under this Agreement, and this Agreement shall be
          null and void.

          (d)  CERTAIN REDUCTIONS IN PAYMENTS OR BENEFITS.

               (i) In the event that any payments or other benefits received or
               to be received by Executive pursuant to this Agreement
               ("Payments") would (A) constitute a "parachute payment" within
               the meaning of Section 280G of the Internal Revenue Code of 1986,
               as amended (the "Code"), and (B) but for this subsection (d), be
               subject to the excise tax imposed by Section 4999 of the Code
               (the "Excise Tax"), then, in accordance with this subsection
               6(d), such Payments shall be reduced to the maximum amount that
               would result in no portion of the Payments being subject to the
               Excise Tax. For such purpose, the maximum amount of Payments that
               may be paid without incurring the Excise Tax shall be determined
               by Ernst & Young, LLP or any other nationally recognized
               accounting firm which is the Company's outside auditor at the
               time of such determination (the "Accounting Firm") and shall be
               the largest amount for which there is substantial authority
               (within the meaning of Section 6662(d)(2)(B) of the Code) for no
               portion of the Payments being treated as subject to the Excise
               Tax. Any such determination shall be conclusive and binding on
               Executive and the Company. For purposes of making the
               calculations required by this subsection 6(d)(i), the Accounting
               Firm may make reasonable assumptions and approximations
               concerning applicable taxes and may rely on reasonable, good
               faith interpretations concerning the application of Sections 280G
               and 4999 of the Code. All fees and expenses of the Accounting
               Firm shall be borne solely by the


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               Company. If the Internal Revenue Service (the "IRS") determines
               that a Payment is subject to the Excise Tax, then subsection
               6(d)(ii) hereof shall apply.

               (ii) If, notwithstanding any reduction described in subsection
               6(d)(i) hereof (or in the absence of any such reduction), the IRS
               determines that Executive is liable for the Excise Tax as a
               result of the receipt of Payments, then Executive shall be
               obligated to pay back to the Company, within 30 days after final
               IRS determination, an amount of the Payments sufficient that none
               of the Payments retained by Executive constitute a "parachute
               payment" within the meaning of Code Section 280G that is subject
               to the Excise Tax.

          (e) CERTAIN DEFERRAL OF PAYMENTS. Notwithstanding the other provisions
          of this Agreement, to the extent that any amounts payable hereunder
          would not be deductible by the Company for federal income tax purposes
          on account of the limitations of Section 162(m) of the Code, the
          Company may defer payment of such amounts to the earliest one or more
          subsequent calendar years in which the payment of such amounts would
          be deductible by the Company.

          (f) AMENDMENT OR TERMINATION OF THIS AGREEMENT. This Agreement may be
          changed or terminated only upon the mutual written consent of the
          Company and Executive. The written consent of the Company to a change
          or termination of this Agreement must be signed by an appropriate
          officer of the Company other than Executive, which may be the
          Company's Chief Financial Officer, Vice President of Human Resources
          or other officer authorized by the Compensation Committee of the
          Board, after such change or termination has been approved by the
          Compensation Committee of the Board.

7.   CONFIDENTIAL INFORMATION; EXECUTIVE'S DUTIES UPON TERMINATION. Executive
recognizes that his employment with the Company will involve contact with
information of substantial value to the Company, which is not old and generally
known in the trade, and which gives the Company an advantage over its
competitors who do not know or use it, including but not limited to, techniques,
designs, drawings, processes, inventions, developments, equipments, prototypes,
sales and customer information, and business and financial information relating
to the business, products, practices and techniques of the Company, (hereinafter
referred to as "Confidential Information"). Executive will at all times regard
and preserve as confidential such Confidential Information obtained by Executive
from whatever source and will not, either during his employment with the Company
or thereafter, publish or disclose any part of such Confidential Information in
any manner at any time, or use the same except on behalf of the Company, without
the prior written consent of the Company. As a condition of this Agreement,
Executive will sign and return a copy of the Company's "Proprietary Information
and Inventions Agreement," attached as Exhibit B.

8.   NONEXCLUSIVITY. Nothing in the Agreement shall prevent or limit Executive's
continuing or future participation in any benefit, bonus, incentive or other
plans, programs, policies or practices provided by the Company and for which
Executive may otherwise qualify, nor shall anything herein limit or otherwise
affect such rights as Executive may have under any


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stock option or other agreements with the Company; provided, however, that any
benefits provided hereunder shall be in lieu of any other severance payments to
which Executive may otherwise be entitled, including without limitation, under
any employment contract or severance plan. Except as otherwise expressly
provided herein, amounts which are vested benefits or which Executive is
otherwise entitled to receive under any plan, policy, practice or program of the
Company at or subsequent to the date of termination shall be payable in
accordance with such plan, policy, practice or program.

9.   CONFIDENTIALITY. The parties mutually agree not to disclose publicly the
terms of this Agreement except to the extent that disclosure is mandated by
applicable law.

10.  NONSOLICITATION. Executive agrees that for two (2) years after his
employment with the Company is terminated he will not, either directly or
through others, solicit or attempt to solicit any employee, consultant, or
independent contractor of the Company to terminate his or her relationship with
the Company in order to become an employee, consultant or independent contractor
to or for any other person or entity.

11.  NOTICES. Any notices called for under this Agreement shall be given as
follows or to such other addresses as either party may furnish the other from
time to time:

          IF TO EXECUTIVE:        Lonnie Smith
                                  76 Crosstie Lane
                                  Batesville, Indiana 47006

          IF TO THE COMPANY:      Intuitive Surgical Devices, Inc.
                                  Frederic H. Moll
                                  Director
                                  900 Hansen Way
                                  Palo Alto, CA 94304

12.  CONFIDENTIAL ARBITRATION. To ensure rapid and economical resolution of any
and all disputes which may arise under this Agreement, the Company and Executive
each agree that any and all disputes or controversies, whether of law or fact of
any nature whatsoever (including, but not limited to, all state and federal
statutory and common law discrimination claims), with the sole exception of
those disputes which may arise from Executive's Proprietary Information
Agreement, arising from or regarding the interpretation, performance,
enforcement or breach of this Agreement, or any other disputes or claims arising
from or related to Executive's employment or the termination of his employment,
shall be resolved by final and binding confidential arbitration under the
procedures set forth in Exhibit C to this Agreement and the then existing
Judicial Arbitration and Mediation Services Rules of Practice and Procedure
(except insofar as they are inconsistent with the procedures set forth in
Exhibit C).

13.  SEVERABILITY. If a court of competent jurisdiction determines that any term
or provision of this Agreement is invalid or unenforceable, in whole or in part,
then the remaining


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terms and provisions hereof shall be unimpaired. Such court will have the
authority to modify or replace the invalid or unenforceable term or provision
with a valid and enforceable term or provision that most accurately represents
the parties' intention with respect to the invalid or unenforceable term or
provision.

14.  WAIVER. If either party should waive any breach of any provisions of this
Agreement, he or it shall not thereby be deemed to have waived any preceding or
succeeding breach of the same or any other provision of this Agreement.

15.  ENTIRE AGREEMENT. This Agreement, including Exhibits A, B and C,
constitutes the complete, final and exclusive embodiment of the entire agreement
between Executive and the Company with regard to the subject matter hereof and
supersedes any and all prior agreements relating to such subject matter. This
Agreement is entered into without reliance on any promise or representation,
written or oral, other than those expressly contained herein. It may not be
modified except in a writing signed by Executive and a duly authorized officer
of the Company. Each party has carefully read this Agreement, has been afforded
the opportunity to be advised of its meaning and consequences by his or its
respective attorneys, and signed the same of his or its own free will.

16.  SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and inure to the
benefit of and be enforceable by Executive and the Company, and their respective
successors, assigns, heirs, executors and administrators, except that Executive
may not assign any of his duties hereunder and he may not assign any of his
rights hereunder without the written consent of the Company, which consent shall
not be withheld unreasonably.

17.  ATTORNEY FEES. If either party hereto brings any action to enforce his or
its rights hereunder, each party in any such action shall be responsible for his
or its costs and attorneys fees incurred in connection with such action.

18.  COUNTERPARTS. This Agreement may be executed in two counterparts, each of
which shall be deemed an original, all of which together shall constitute one
and the same instrument.


<PAGE>   10

19.  HEADINGS. The headings of the Sections hereof are inserted for convenience
only and shall not be deemed to constitute a part hereof nor to affect the
meaning thereof.

IN WITNESS WHEREOF, the parties have duly authorized and caused this Agreement
to be executed as follows:

LONNIE SMITH,                         INTUITIVE SURGICAL DEVICES, INC.,
an individual                         a corporation

/s/  Lonnie Smith                     By: /s/ A. Grant Heidrich
---------------------------              -----------------------------------
Lonnie Smith                          Title:  Director

Date: 2/28, 1997                      Date: 10/2, 1996





<PAGE>   11

                                    EXHIBIT A

                          RELEASE AND WAIVER OF CLAIMS

In exchange for the Severance Payments and other benefits to which I would not
otherwise be entitled, I hereby furnish Intuitive Surgical Devices, Inc. (the
"Company") with the following release and waiver.

I hereby release, and forever discharge the Company, its officers, directors,
agents, employees, stockholders, attorneys, successors, assigns and affiliates,
of and from any and all claims, liabilities, demands, causes of action, costs,
expenses, attorneys fees, damages, indemnities and obligations of every kind and
nature, in law, equity, or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed, arising at any time prior to and
including my employment termination date with respect to any claims relating to
my employment and the termination of my employment, including but not limited
to, claims pursuant to any federal, state or local law relating to employment,
including, but not limited to, discrimination claims, claims under the
California Fair Employment and Housing Act, and the Federal Age Discrimination
in Employment Act of 1967, as amended ("ADEA"), or claims for wrongful
termination, breach of the covenant of good faith, contract claims, tort claims,
and wage or benefit claims, including but not limited to, claims for salary,
bonuses, commissions, stock, stock options, vacation pay, fringe benefits,
severance pay or any form of compensation.

I also acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR." I hereby expressly waive and
relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to any claims I may have against the
Company.

I acknowledge that, among other rights, I am waiving and releasing any rights I
may have under ADEA, that this waiver and release is knowing and voluntary, and
that the consideration given for this waiver and release is in addition to
anything of value to which I was already entitled as an employee of the Company.
I further acknowledge that I have been advised, as required by the Older Workers
Benefit Protection Act, that: (a) the waiver and release granted herein does not
relate to claims which may arise after this agreement is executed; (b) I have
the right to consult with an attorney prior to executing this agreement
(although I may choose voluntarily not to do so); (c) I have twenty-one (21)
days from the date I receive this agreement, in which to consider this agreement
(although I may choose voluntarily to execute this agreement earlier); (d) I
have seven (7) days following the execution of this agreement to revoke my
consent to the agreement; and (e) this agreement shall not be effective until
the seven (7) day revocation period has expired.

Date:                               By:





<PAGE>   12

                                    EXHIBIT B

                PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT




<PAGE>   13

                        INTUITIVE SURGICAL DEVICES, INC.

                         EMPLOYEE PROPRIETY INFORMATION
                            AND INVENTIONS AGREEMENT

In consideration of my employment or continued employment by INTUITIVE SURGICAL
DEVICES, INC. (the "COMPANY"), and the compensation now and hereafter paid to
me, I hereby agree as follows:

1.  NONDISCLOSURE

1.1 RECOGNITION OF COMPANY'S RIGHTS; NONDISCLOSURE. At all times during my
employment and thereafter, I will hold in strictest confidence and will not
disclose, use, lecture upon or publish any of the Company's Proprietary
Information (defined below), except as such disclosure, use or publication may
be required in connection with my work for the Company, or unless an officer of
the Company expressly authorizes such in writing. I will obtain Company's
written approval before publishing or submitting for publication any material
(written, verbal, or otherwise) that relates to my work at Company and/or
incorporates any Proprietary Information. I hereby assign to the Company any
rights I may have or acquire in such Proprietary Information and recognize that
all Proprietary Information shall be the sole property of the Company and its
assigns.

1.2 PROPRIETARY INFORMATION. The term "PROPRIETARY INFORMATION" shall mean any
and all confidential and/or proprietary knowledge, data or information of the
Company. By way of illustration but not limitation, "PROPRIETARY INFORMATION"
includes (a) information relating to products, processes, know-how, designs,
drawings, clinical data, test data, formulas, methods, samples, media and/or
cell lines, developmental or experimental work, improvements, discoveries, plans
for research, new products, manufacturing, marketing and selling, business
plans, budgets and unpublished financial statements, licenses, prices and costs,
suppliers and customers, and information regarding the skills and compensation
of other employees of the Company (hereinafter collectively referred to as
"INVENTIONS"); (b) information regarding plans for research, development, new
products, marketing and selling, business plans, budgets and unpublished
financial statements, licenses, prices and costs, suppliers and customers; and
(c) information regarding the skills and compensation of other employees of the
Company. Notwithstanding the foregoing, it is understood that, at all such
times, I am free to use information which is generally known in the trade or
industry, which is not gained as a result of a breach of this Agreement, and my
own, skill, knowledge, know-how and experience to whatever extent and in
whichever way I wish.

1.3 THIRD PARTY INFORMATION. I understand, in addition, that the Company has
received and in the future will receive from third parties confidential or
proprietary information ("THIRD PARTY INFORMATION") subject to a duty on the
Company's part to maintain the confidentiality of such information and to use it
only for certain limited purposes. During the term of my employment and
thereafter, I will hold Third Party Information in the strictest confidence and
will not disclose to anyone (other than Company personnel who need to know such
information in connection with their work for the Company) or use, except in
connection with my work for the Company, Third Party Information unless
expressly authorized by an officer of the Company in writing.

1.4 NO IMPROPER USE OF INFORMATION OF PRIOR EMPLOYERS AND OTHERS. During my
employment by the Company I will not improperly use or disclose any confidential
information or trade secrets, if any, of any former employer or any other person
to whom I have an obligation of confidentiality, and I will not bring onto the
premises of the Company any unpublished documents or any property belonging to
any former employer or any other person to whom I have an obligation of
confidentiality unless consented to in writing by that former employer or
person. I will use in the performance of my duties only information which is
generally known and used by persons with training and experience comparable to
my own, which is common knowledge in the industry or otherwise legally in the
public domain, or which is otherwise provided or developed by the Company.

2.  ASSIGNMENT OF INVENTIONS.

2.1 PROPRIETARY RIGHTS. The term "PROPRIETARY RIGHTS" shall mean all trade
secret, patent, copyright, mask work and other intellectual property rights
throughout the world.

2.2 PRIOR INVENTIONS. Inventions, if any, patented or unpatented, which I made
prior to the commencement of my employment with the Company are excluded from
the scope of this Agreement. To preclude any possible uncertainty, I have set
forth on EXHIBIT B (Previous Inventions) attached hereto a complete list of all
Inventions that I have, alone or jointly with others, conceived, developed or
reduced to practice or caused to be conceived, developed or reduced to practice
prior to the commencement of my employment with the Company, that I consider to
be my property or the property of third parties and that I wish to have excluded
from the scope of this Agreement (collectively referred to as "PRIOR
INVENTIONS"). If disclosure of any such Prior Invention would cause me to
violate any prior confidentiality agreement, I understand that I am not to list
such Prior Inventions in EXHIBIT B but am only to disclose a cursory name for
each such invention, a listing of the party(ies) to whom it belongs and the fact
that full disclosure as to such inventions has not been made for that reason. A
space is provided on EXHIBIT B for such purpose. If no such disclosure is
attached, I represent that there are no Prior Inventions. If, in the course of
my employment with the Company, I incorporate a Prior Invention into a Company
product, process or machine, the Company is hereby granted and shall have a
nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with
rights to sublicense through multiple tiers of sublicensees) to make, have made,
modify, use and sell such Prior Invention. Notwithstanding the foregoing, I
agree that I will not incorporate, or permit to be incorporated, Prior
Inventions in any Company Inventions without the Company's prior written
consent.

2.3 ASSIGNMENT OF INVENTIONS. Subject to Sections 2.4, and 2.6, I hereby assign
and agree to assign in the future (when any such Inventions or Proprietary
Rights are first reduced to practice or first fixed in a tangible medium, as
applicable) to the Company all my right, title and interest in and to any and
all Inventions (and all Proprietary Rights with respect thereto) whether or not
patentable or registrable under copyright or similar statutes, made or conceived
or reduced to practice or learned by me, either alone or jointly with others,
during the period of my employment with the Company. Inventions assigned to the
Company, or to a third party as directed by the Company pursuant to this Section
2, are hereinafter referred to as "COMPANY INVENTIONS."


<PAGE>   14

2.4 NONASSIGNABLE INVENTIONS. This Agreement does not apply to an Invention
which qualifies fully as a nonassignable Invention under Section 2870 of the
California Labor Code (hereinafter "SECTION 2870"). I have reviewed the
notification on EXHIBIT A (Limited Exclusion Notification) and agree that my
signature acknowledges receipt of the notification.

2.5 OBLIGATION TO KEEP COMPANY INFORMED. During the period of my employment and
for six (6) months after termination of my employment with the Company, I will
promptly disclose to the Company fully and in writing all Inventions authored,
conceived or reduced to practice by me, either alone or jointly with others. In
addition, I will promptly disclose to the Company all patent applications filed
by me or on my behalf within a year after termination of employment. At the time
of each such disclosure, I will advise the Company in writing of any Inventions
that I believe fully qualify for protection under Section 2870; and I will at
that time provide to the Company in writing all evidence necessary to
substantiate that belief. The Company will keep in confidence and will not use
for any purpose or disclose to third parties without my consent any confidential
information disclosed in writing to the Company pursuant to this Agreement
relating to Inventions that qualify fully for protection under the provisions of
Section 2870. I will preserve the confidentiality of any Invention that does not
fully qualify for protection under Section 2870.

2.6 GOVERNMENT OR THIRD PARTY. I also agree to assign all my right, title and
interest in and to any particular Invention to a third party, including without
limitation the United States, as directed by the Company.

2.7 WORKS FOR HIRE. I acknowledge that all original works of authorship which
are made by me (solely or jointly with others) within the scope of my employment
and which are protectable by copyright are "works made for hire," pursuant to
United States Copyright Act (17 U.S.C., Section 101).

2.8 ENFORCEMENT OF PROPRIETARY RIGHTS. During and after my employment with the
Company, I will assist the Company in every proper way to obtain, and from time
to time enforce, United States and foreign Proprietary Rights relating to
Company Inventions in any and all countries. To that end I will execute, verify
and deliver such documents and perform such other acts (including appearances as
a witness) as the Company may reasonably request for use in applying for,
obtaining, perfecting, evidencing, sustaining and enforcing such Proprietary
Rights and the assignment thereof. In addition, I will execute, verify and
deliver assignments of such Proprietary Rights to the Company or its designee.
My obligation to assist the Company with respect to Proprietary Rights relating
to such Company Inventions in any and all countries shall continue beyond the
termination of my employment, but the Company shall compensate me at a
reasonable rate after my termination for the time actually spent by me at the
Company's request on such assistance.

In the event the Company is unable for any reason, after reasonable effort, to
secure my signature on any document needed in connection with the actions
specified


<PAGE>   15

in the preceding paragraph. I hereby irrevocably designate and appoint the
Company and its duly authorized officers and agents as my agent and attorney in
fact, which appointment is coupled with an interest, to act for and in my behalf
to execute, verify and file any such documents and to do all other lawfully
permitted acts to further the purposes of the preceding paragraph with the same
legal force and effect as if executed by me. I hereby waive and quitclaim to the
Company any and all claims, of any nature whatsoever, which I now or may
hereafter have for infringement of any Proprietary Rights assigned hereunder to
the Company.

3. RECORDS. I agree to keep and maintain adequate and current records (in the
form of notes, sketches, drawings and in any other form that may be required by
the Company) of all Proprietary Information developed by me and all Inventions
made by me during the period of my employment at the Company, which records
shall be available to and remain the sole property of the Company at all times.

4. ADDITIONAL ACTIVITIES. I agree that during the period of my employment by the
Company I will not, without the Company's express written consent, engage in any
employment or business activity which is competitive with, or would otherwise
conflict with, my employment by the Company.

5. NON-SOLICITATION. I agree that, during the term of my employment with the
Company, and for a period of one (1) year following the date of my termination
of employment with the Company, I will not form a business relationship with,
offer to employ, or arrange employment of, anyone who is at that time employed
by the Company or has been employed by the Company for any period of time during
the previous six (6) months, nor shall I induce any employee of the Company to
leave the employ of the Company.

6. NO CONFLICTING OBLIGATION. I represent that my performance of all the terms
of this Agreement and as an employee of the Company does not and will not breach
any agreement to keep in confidence information acquired by me in confidence or
in trust prior to my employment by the Company. I have not entered into, and I
agree I will not enter into, any agreement either written or oral in conflict
herewith.

7. RETURN OF COMPANY DOCUMENTS. When I leave the employ of the Company, I will
deliver to the Company any and all drawings, notes, memoranda, specifications,
devices, formulas, and documents, together with all copies thereof, and any
other material containing or disclosing any Company Inventions, Third Party
Information or Proprietary Information of the Company. I further agree that any
property situated on the Company's premises and owned by the Company, including
disks and other storage media, filing cabinets or other work areas, is subject
to inspection by Company personnel at any time with or without notice. Prior to
leaving, I will cooperate with the Company in completing and signing the
Company's termination statement.

8. LEGAL AND EQUITABLE REMEDIES. Because my services are personal and unique and
because I may have access to and become acquainted with the Proprietary
Information of the Company, the Company shall have the right to enforce this
Agreement and any of its provisions by injunction, specific performance or other
equitable relief, without bond and without prejudice to any other rights and
remedies that the Company may have for a breach of this Agreement.

9. NOTICES. Any notices required or permitted hereunder shall be given to the
appropriate party at the address specified below or at such other address as the
party shall specify in writing. Such notice shall be deemed given upon personal
delivery to the appropriate address or if sent by certified or registered mail,
three (3) days after the date of mailing.

10. NOTIFICATION OF NEW EMPLOYER. In the event that I leave the employ of the
Company, I hereby consent to the notification of my new employer of my rights
and obligations under this Agreement.

11. GENERAL PROVISIONS.

11.1 GOVERNING LAW; CONSENT TO PERSONAL JURISDICTION. This Agreement will be
governed by and construed according to the laws of the State of California, as
such laws are applied to agreements entered into and to be performed entirely
within California between California residents. I hereby expressly consent to
the personal jurisdiction of the state and federal courts located in Santa Clara
County, California for any lawsuit filed there against me by Company arising
from or related to this Agreement.

11.2 SEVERABILITY. In case any one or more of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
the other provisions of this Agreement, and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein. If moreover, any one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to duration,
geographical scope, activity or subject, it shall be construed by limiting and

<PAGE>   16

reducing it, so as to be enforceable to the extent compatible with the
applicable law as it shall then appear.

11.3 SUCCESSORS AND ASSIGNS. This Agreement will be binding upon my heirs,
executors, administrators and other legal representatives and will be for the
benefit of the Company, its successors, and its assigns.

11.4 SURVIVAL. The provisions of this Agreement shall survive the termination of
my employment and the assignment of this Agreement by the Company to any
successor in interest or other assignee.

11.5 AT-WILL EMPLOYMENT. I agree and understand that nothing in this Agreement
shall confer any right with respect to continuation of employment by the
Company, nor shall it interfere in any way with my right or the Company's right
to terminate my employment at any time, for any reason, with or without cause,
and with or without notice.

11.6 WAIVER. No waiver by the Company of any breach of this Agreement shall be a
waiver of any preceding or succeeding breach. No waiver by the Company of any
right under this Agreement shall be construed as a waiver of any other right.
The Company shall not be required to give notice to enforce strict adherence to
all terms of this Agreement.

11.7 ENTIRE AGREEMENT. The obligations pursuant to Sections 1 and 2 of this
Agreement shall apply to any time during which I was previously employed, or am
in the future employed, by the Company as a consultant if no other agreement
governs nondisclosure and assignment of inventions during such period. This
Agreement is the final, complete and exclusive agreement of the parties with
respect to the subject matter hereof and supersedes and merges all prior
discussions between us. No modification of or amendment to this Agreement, nor
any waiver of any rights under this Agreement, will be effective unless in
writing and signed by the party to be charged. Any subsequent change or changes
in my duties, salary or compensation will not affect the validity or scope of
this Agreement.

This Agreement shall be effective as of the first day of my employment with the
Company, namely: 4/1/97.


<PAGE>   17


I HAVE READ THIS AGREEMENT CAREFULLY AND ACCEPTED AND AGREED TO: UNDERSTAND ITS
TERMS. I HAVE COMPLETELY FILLED OUT EXHIBIT B TO THIS AGREEMENT.


                                                INTUITIVE SURGICAL DEVICES, INC.

Dated: 2/28/97                                  By:


/s/ Lonnie M. Smith
----------------------------------              Title:
Signature

Lonnie M. Smith
----------------------------------              Address:  900 Hansen Way
(Printed Name)                                            Palo Alto, CA 94304

76 Crosstie Lane

(Address)

Batesville, In 47006



<PAGE>   18

                                    EXHIBIT A

                         LIMITED EXCLUSION NOTIFICATION

THIS IS TO NOTIFY you in accordance with Section 2872 of the California Labor
Code that the foregoing Agreement between you and the Company does not require
you to assign or offer to assign to the Company any invention that you developed
entirely on your own time without using the Company's equipment, supplies,
facilities or trade secret information except for those inventions that either:

     (1) Relate at the time of conception or reduction to practice of the
     invention to the Company's business, or actual or demonstrably anticipated
     research or development of the Company;

     (2)  Result from any work performed by you for the Company.

     To the extent a provision in the foregoing Agreement purports to require
     you to assign an invention otherwise excluded from the preceding paragraph,
     the provision is against the public policy of this state and is
     unenforceable.

This limited exclusion does not apply to any patent or invention covered by a
contract between the Company and the United States or any of its agencies
requiring full title to such patent or invention to be in the United States.

I ACKNOWLEDGE RECEIPT of a copy of this notification.

                              By: /s/ Lonnie Smith
                                  -------------------------
                                  Lonnie Smith

                                  Date: 2/28/97

     WITNESSED BY:

     (Printed Name of Representative)


     Dated:


                                      A-1.

<PAGE>   19

                                    EXHIBIT B

TO:        Intuitive Surgical Devices, Inc.

FROM:      Lonnie Smith  (/s/ Lonnie Smith)

                               signature

DATE:     2/28/97

SUBJECT:   Previous Inventions

1. Except as listed in Section 2 below, the following is a complete list of all
inventions or improvements relevant to the subject matter of my employment by
[Company] (the "COMPANY") that have been made or conceived or first reduced to
practice by me alone or jointly with others prior to my engagement by the
Company:


     [x] No inventions or improvements.


     [ ]   See below:


[ ]  Additional sheets attached.

2. Due to a prior confidentiality agreement, I cannot complete the disclosure
under Section 1 above with respect to inventions or improvements generally
listed below, the proprietary rights and duty of confidentiality with respect to
which I owe to the following party(ies):

INVENTION OR IMPROVEMENT                PARTY(IES)       RELATIONSHIP

1.  ---------------------------   --------------------  -----------------------

2.  ---------------------------   --------------------  -----------------------

3.  ---------------------------   --------------------  -----------------------


[ ]  Additional sheets attached.


                                      B-1.

<PAGE>   20

                                    EXHIBIT C

                              ARBITRATION PROCEDURE

1. The parties agree that any dispute that arises in connection with this
Agreement or the termination of this Agreement shall be resolved by binding
arbitration in the manner described below.

2. A party intending to seek resolution of any dispute under the Agreement by
arbitration shall provide a written demand for arbitration to the other party,
which demand shall contain a brief statement of the issues to be resolved.

3. The arbitration shall be conducted in San Jose, California by a mutually
acceptable retired judge from the panel of Judicial Arbitration and Mediation
Services, Inc. ("JAMS"). At the request of either party, arbitration proceedings
will be conducted in the utmost secrecy and, in such case, all documents,
testimony and records shall be received, heard and maintained by the arbitrator
in secrecy under seal, available for inspection only by the parties to the
arbitration, their respective attorneys, and their respective expert consultants
or witnesses who shall agree, in advance and in writing, to receive all such
information confidentially and to maintain such information in secrecy, and make
no use of such information except for the purposes of the arbitration, unless
compelled by legal process.

4. The arbitrator is required to disclose any circumstances that might preclude
the arbitrator from rendering an objective and impartial determination. In the
event the parties cannot mutually agree upon the selection of a JAMS arbitrator,
the President and Vice-President of JAMS shall designate the arbitrator.

The party demanding arbitration shall promptly request that JAMS conduct a
scheduling conference within fifteen (15) days of the date of that party's
written demand for arbitration or on the first available date thereafter on the
arbitrator's calendar. The arbitration hearing shall be held within thirty (30)
days after the scheduling conference or on the first available date thereafter
on the arbitrator's calendar. Nothing in this paragraph shall prevent a party
from at any time seeking temporary equitable relief, from JAMS or any court of
competent jurisdiction, to prevent irreparable harm pending the resolution of
the arbitration.

5. Discovery shall be conducted as follows: (a) prior to the arbitration any
party may make a written demand for lists of the witnesses to be called and the
documents to be introduced at the hearing; (b) the lists must be served within
fifteen days of the date of receipt of the demand, or one day prior to the
arbitration, whichever is earlier; and (c) each party may take no more than two
depositions (pursuant to the procedures set forth in the California Code of
Civil Procedure) with a maximum of five hours of examination time per
deposition, and no other form of pre-arbitration discovery shall be permitted.


<PAGE>   21

6. It is the intent of the parties that the Federal Arbitration Act ("FAA")
shall apply to the enforcement of this provision unless it is held inapplicable
by a court with jurisdiction over the dispute, in which event the California
Arbitration Act ("CAA") shall apply.

7. The arbitrator shall apply California law, including the California Evidence
Code, and shall be able to decree any and all relief of an equitable nature,
including but not limited to such relief as a temporary restraining order, a
preliminary injunction, a permanent injunction, or replevin of Company property.
The arbitrator shall also be able to award actual, general or consequential
damages, but shall not award any other form of damage (e.g., punitive damages).

8. Each party shall pay its pro rata share of the arbitrator's fees and
expenses, in addition to other expenses of the arbitration approved by the
arbitrator, pending the resolution of the arbitration. The arbitrator shall have
authority to award the payment of such fees and expenses to the prevailing
party, as appropriate in the discretion of the arbitrator. Each party shall pay
its own attorneys fees, witness fees and other expenses incurred for its own
benefit.

9. The arbitrator shall render a written award setting forth the reasons for his
or her decision. The decree or judgment of an award rendered by the arbitrator
may be entered and enforced in any court having jurisdiction over the parties.
The award of the arbitrator shall be final and binding upon the parties without
appeal or review except as permitted by the FAA, or if the FAA is not
applicable, as permitted by the CAA.