This Employment Agreement (the “Agreement”), entered into effective as of June 15, 2006 (the “Effective
Date”), by and between Cyberonics, Inc. (the “Company”) and Michael A. Cheney (“Employee”)
WHEREAS, the Company desires to secure the experience, abilities and service of Employee by employing
Employee upon the terms and conditions specified herein; and
WHEREAS, Employee is willing to enter into this Agreement upon the terms and conditions specified herein;
NOW, THEREFORE, in consideration of the premises, terms and provisions set forth herein, the mutual
benefits to be gained by the performance thereof and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Employment . The Company hereby employs Employee, and Employee hereby accepts such
employment, all upon the terms and conditions set forth herein.
SECTION 2. Term . Subject to the terms and conditions of this Agreement, unless sooner terminated
pursuant to Section 5 of this Agreement, Employee shall be employed by the Company commencing on the
Effective Date and terminating on June 1, 2009 (the “Term”). Termination of this Agreement shall not alter or
impair any rights of Employee (or his beneficiaries or heirs) with respect to payments, benefits or other rights
provided by the terms of this Agreement, arising before or after the end of the Term.
SECTION 3. Duties. Responsibilities and Location .
A. Capacity . Employee shall serve as the Vice President, Marketing of the Company and shall report to
the Chief Executive Officer of the Company.
B. Full-Time Duties . Employee shall devote his full business time, attention and energies to the business
of the Company. Notwithstanding anything herein to the contrary, Employee shall be allowed to (i) manage
Employee’s personal investments and affairs and, (ii) with the written consent of the C