THIS AGREEMENT (the "Agreement"), made and entered into effective as of June 1, 2003 (the "Effective
Date"), is by and between CYBERONICS, INC., a Delaware corporation (the "Company"), and W. STEVEN
JENNINGS (the "Employee").
WHEREAS, Employee is a key employee of the Company; and
WHEREAS, the Company recognizes that the possibility of a Change of Control (as defined below) of the
Company is unsettling and may result in the departure of key employees to the detriment of the Company and its
WHEREAS, the Board of Directors of the Company (the "Board") has authorized this Agreement and certain
similar agreements in order to retain key employees to ensure the continuity of its management;
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Employee agree as follows:
1. TERM. This Agreement shall commence on the Effective Date and shall continue until April 30, 2004;
provided, however, that commencing on April 30, 2004 and on each April 30th thereafter, the Term of this
Agreement shall automatically be extended for one additional year, unless at least six months prior to such April
30 date the Board shall give written notice to Employee that the Term of this Agreement shall cease to be so
extended; provided further, however, that if a Change of Control shall occur during the Term, the Term shall
automatically continue in effect for a period of not less than one year from the date of such Change of Control.
Notwithstanding the foregoing, except as provided in Section 3, this Agreement shall automatically terminate on
Employee's termination of employment; provided, however, termination of this Agreement shall not alter or impair
any rights of Employee arising hereunder on or prior to such termination.
2. CHANGE OF CONTROL. For purposes of this Agreement, a Change of Control of the Company shall
(i) the acquisition by any "person," as such term is u