Exhibit 10.3

AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT TO EMPLOYMENT AGREEMENT (the “Amendment”), made and entered into
effective as of this ______ day of _________________, 2008 (the “Effective
Date”), is by and between Cyberonics, Inc., a Delaware corporation (the
“Company”), and _______________________ (the “Employee”).

WHEREAS, Employee is a key employee of the Company; and

WHEREAS, the Company and Employee previously entered into an Employment
Agreement (the “Agreement”) in order to secure the experience, abilities and
service of Employee;

WHEREAS, the Agreement remains in full force and effect as of this date;

WHEREAS, the Company and Employee desire to amend the terms and conditions of
the Agreement so as to bring those terms and conditions into documentary
compliance with the final Treasury Regulations under Section 409A of the
Internal Revenue Code of 1986, as amended and to continue the Executive’s
employment with the Company upon those amended terms and conditions

THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and Employee agree to modify the
Agreement as follows:

1.           Section 4.B. is hereby amended and restated in its entirety to read
as follows:
 
“B.  Annual Incentive Bonus.  For each fiscal year during the Term, Employee
shall be eligible to participate in the Annual Executive Bonus Program, with a
target bonus amount of 50% of Employee’s annual Base Salary for such year.  A
bonus, if earned, shall be payable as soon as reasonably practical following the
completion of the applicable fiscal year, but in no event prior to the first day
of the fiscal year following such fiscal year and no later than the 15th day of
the third month of such subsequent fiscal year. Bonuses for Employee shall be
based on the achievement of such Company, departmental and/or individual
performance goals that may be established for the applicable bonus year by the
Compensation Committee.”
 

 
 

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2.           Section 4.C. is hereby amended and restated in its entirety to read
as follows:
 
“C.  Annual Overachievement Bonus.  During the Term, Employee shall be eligible
to overachieve the target bonus amount of the Annual Executive Bonus Program as
determined by the Compensation Committee.  Overachievement bonuses shall be
based on the Company’s overachievement of such Company, departmental and/or
individual performance goals that may be established for the applicable bonus
year by the Compensation Committee.  A bonus, if earned, shall be payable as
soon as reasonably practical following the completion of the applicable fiscal
year, but in no event prior to the first day of the fiscal year following such
fiscal year and no later than the 15th day of the third month of such subsequent
fiscal year.”
 
3.           Section 4.F. is hereby amended and restated in its entirety to read
as follows:
 
“F.  Reimbursements.  Employee shall be entitled to receive reimbursement by the
Company in accordance with its business reimbursement policy in effect from time
to time for all reasonable, out-of-pocket business expenses incurred by him in
performing his duties under this Agreement upon the submission by Employee of
such accounts and records as may be reasonably required under the Company’s
business reimbursement policy.  Employee must submit to the Company such
accounts and records of each such expense within [60] days after the later of
(i) Employee’s incurrence of such expense or (ii) Employee’s receipt of the
invoice for such expense.  If such expense qualifies for reimbursement, then the
Company shall reimburse Employee the expense within [30] days thereafter.  In no
event will such expense be reimbursed after the close of the calendar year
following the calendar year in which that expense is incurred.  The amount of
reimbursements (or in-kind benefits) to which Employee may become entitled in
any one calendar year shall not affect the amount of expenses eligible for
reimbursement hereunder in any other calendar year.  Employee’s right to
reimbursement cannot be liquidated or exchanged for any other benefit or
payment.”
 
4.           Section 6.B. is hereby amended and restated in its entirety to read
as follows:
 
“B.           Upon termination of Employee’s employment pursuant to Section
5.C., the Company shall be obligated to pay or provide, and Employee’s estate or
beneficiary shall be entitled to receive:
 
1.           all of the amounts and benefits described in Section 6.A. which
shall be paid within ten (10) business days of the date of termination;
 

 
 

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2.           a lump sum payment equal to 1.5 times the Employee’s Base Salary at
the time of termination.  Subject to Section 20, such amount shall be paid in a
lump sum within ten (10) business days following Employee’s Separation from
Service; and
 
3.           with respect to each outstanding Option (other than
performance-based restricted shares (“Performance-Vested Share(s)”)) on
Employee’s termination date, Employee will vest with respect to the number of
shares that would become vested under such Options during the 12-month period
following Employee’s termination date if Employee’s employment had continued
during such period.  Such option will remain exercisable for such period of time
as specified in the agreement evidencing the Option; and
 
4.           with respect to each outstanding Option that is a
Performance-Vested Share on Employee’s termination date, the restrictions shall
lapse on that number of Performance-Vested Shares for which the stated
performance-based vesting criteria has been attained during the 6-month period
following Employee’s termination date if Employee’s employment had continued
during such period.
 
For purposes of this Agreement, Employee's "Separation from Service" shall mean
a separation from service as determined in accordance with Code Section 409A and
the applicable Treasury regulations issued thereunder."
 
5.           A new Section 20 is hereby added to the Agreement to read as
follows:
 

 
“SECTION 20.
Section 409A.
 

 
A.           This Agreement is intended to comply with the requirements of
Section 409A of the Code.  Accordingly, all provisions herein shall be construed
and interpreted to comply with Code Section 409A and if necessary, any such
provision shall be deemed amended to comply with Code Section 409A and the
regulations thereunder.
 
 
B.           Notwithstanding any provision to the contrary in this Agreement, no
payments or benefits to which Employee becomes entitled under this Agreement in
connection with the termination of Employee’s employment with the Company shall
be made or paid to Employee prior to the earlier of (i) the first day of the
seventh (7th) month following the date of Employee’s Separation from Service due
to such termination of employment or (ii) the date of Employee’s death, if
Employee is deemed, pursuant to the procedures established by the Board in
accordance with the applicable standards of Code Section 409A and the Treasury
Regulations thereunder and applied on a consistent basis for all for all
non-qualified deferred compensation plans subject to Code Section 409A, to be a
“specified  employee” at the time of such Separation from Service  and such
delayed commencement is otherwise required in order to avoid a prohibited
distribution under Code Section 409A(a)(2).  Upon the expiration of the
applicable Code Section 409A(a)(2) deferral period, all payments deferred
pursuant to this Section 20.B. shall be paid in a lump sum to Employee, and any
remaining payments due under this Agreement shall be paid in accordance with the
normal payment dates specified for them herein.  The specified employees subject
to such a delayed commencement date shall be identified on December 31 of each
calendar year.  If Employee is so identified on any such December 31, he shall
have specified employee status for the twelve (12)-month period beginning on
April 1 of the following calendar year.”
 

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6.           Employee acknowledges that Employee has had the right to consult
with counsel and is fully aware of his rights and obligations under Agreement
and this Amendment.

7.           Except as expressly modified by this Amendment, the provisions of
the Agreement remain unchanged and in full force and effect.

IN WITNESS WHEREOF, Company and Employee have caused this Amendment to be
executed by their duly authorized representative as of the date and year set
forth above.

Cyberonics, Inc.
Employee
 
   
By:___________________________________
By:__________________________________
       
Date:_________________________________
Date:_________________________________