On June 18, 2009, Cyberonics, Inc. (the "Company") entered into new employment agreements with each of its executive officers, other than its Chief Executive Officer ("CEO"). The agreements are effective as of June 1, 2009, concurrent with the expiration of the employment agreements of some of the executive officers, and will expire on May 2, 2011, the date of expiration of the CEO's pre-existing employment agreement, a copy of which has been filed with the Securities and Exchange Commission (the "SEC").

The form of agreement used for each of the new employment agreements is included as Exhibit 10.1 to this report and incorporated by reference into this Item 5.02.

In the event that the Company terminates the executive officer without "Cause," as defined in the agreement, or the executive officer terminates employment for a "Good Reason," as defined in the agreement, then the executive officer is entitled to the following benefits (the "Severance Benefits"):

· a payment equal to 1.5 times the sum of the executive officer's annual base salary and average bonus amount paid to the executive officer for the past two fiscal years;

· accelerated vesting of time-based-vesting equity awards that would have vested in the 12 months succeeding the termination date had the executive officer remained employed during that period;

· accelerated vesting of performance-based-vesting restricted stock as determined by the Compensation Committee in its sole discretion to represent the extent of progress, if any, toward attainment of the performance criteria as of the date of the executive officer's termination;

· reimbursement for the costs to obtain coverage under the Company's group health plan pursuant to the Consolidated Omnibus Reconciliation Act for the executive officer and his eligible dependents for a period of 12 months measured from the termination date; and

· waiver of the requirement, if any, to repay relocation benefits as otherwise required by the Company's relocation policy.

In the event that, within one year following a "Change of Control," as defined in the agreement, either the Company terminates the executive officer's employment without Cause, or the executive officer terminates employment for a Good Reason, then the executive officer is entitled to receive the Severance Benefits, except that in lieu of the payment equal to 1.5 times the sum of the executive officer's annual base salary and average bonus amount for the past two fiscal years, the payment equals two times the sum of the executive officer's annual base salary plus target bonus amount in effect on the date of termination.

The employment agreements replace the executive officers' pre-existing Employment Agreements, to the extent not already expired, and Severance Agreements, copies of which are on file with the SEC. The Severance Agreements provided for a severance payment equal to three times the sum of the executive officer's annual base salary plus target bonus amount, as well as a gross-up payment for any excise tax imposed thereon under Section 4999 of the Internal Revenue Code.

The annual base salary as reflected in the employment agreement for each Named Executive Officer is set forth in the table below.

                  Named Executive Officer    Annual Base Salary
                                            (as of June 1, 2009)
                  Gregory H. Browne               $278,250
                  James A. Reinstein              $300,150
                  Randal L. Simpson               $240,000
                  David S. Wise                   $255,000

The following exhibit is filed herewith:

10.1† Form of Employment Agreement effective June 1, 2009 (as to Messrs.