EXHIBIT 10.3

Consulting Agreement

THIS AGREEMENT (“Agreement”) is made as of the 19th day of November, 2006
(“Effective Date”), by and between Cyberonics, Inc. (“Company”), a Delaware
corporation, with a principal place of business at 100 Cyberonics Blvd.,
Houston, Texas 77058, and Pamela B. Westbrook (“Consultant”), an individual
whose address is 26 Schubach Drive, Sugar Land, Texas 77479.

1. Services. Consultant shall advise the Company with respect to financial
matters (the “Services”), including the preparation and filing of the Company’s
Annual Report on Form 10-K for the period ending April 28, 2006, Quarterly
Reports on Form 10-Q for the periods ending July 28, 2006 and September 29, 2006
(the “Delinquent Public Filings”) and such other matters as may be directed by
the Company’s Chief Financial Officer, to whom Consultant shall report during
the term of this Agreement.

2. Compensation.

(a) Fees. The Company shall compensate Consultant at the rate of $1,200 per day
for Services rendered during the term of this Agreement.

(b) Reimbursed Expenses. The Company shall reimburse Consultant for reasonable
and necessary expenses, including travel expenses, incurred in the actual
performance of the Services, provided that such expenses are authorized in
writing in advance of the expenditure and evidenced by legible copies of
receipts.

(c) Terms of Payment. All fees and reimbursable expenses will be paid monthly in
arrears in the form of a Company check made payable to Consultant within thirty
(30) calendar days following receipt of Consultant’s invoice, subject to
Consultant’s provision of a properly completed IRS Form W-9.

3. Term and Termination. This Agreement shall be effective as of the Effective
Date and shall continue in full force and effect through the date on which the
Delinquent Public Filings are current, unless sooner terminated as provided
herein. This Agreement may be terminated at any time by either party effective
upon written notice.

4. Confidential Information. Consultant acknowledges that in connection with
this Agreement and the Services provided by Consultant, Consultant may acquire
and make use of certain confidential information of the Company, including, but
is not limited to, management reports, financial statements, internal memoranda,
reports, patient information, strategic business plans, pre-clinical and
clinical data, clinical strategy, regulatory strategy, and other materials or
records of a proprietary nature (“Confidential Information”). In order to
protect the Confidential Information, Consultant agrees not to use such
Confidential Information except in connection with the provision of the Services
and not to divulge the Confidential Information to any third party, unless
Company consents in writing to such use or divulgence or disclosure is required
by law. Consultant shall comply with the applicable federal and state laws and
regulations governing the confidentiality of all patient medical records and
peer review information, including the Privacy Regulations under the Health
Insurance Portability and Accountability Act (“HIPAA”). In the event Consultant
receives a request or demand from a third party for the disclosure of
Confidential Information, Consultant shall promptly (within three (3) business
days after receipt of such request or demand) provide written notice to the
Company of such request or demand, including a copy of any written document of
such request or demand. On termination of this Agreement, Consultant shall not
take or retain, without prior written authorization from Company, any patient
records or information or Confidential Information of any kind; provided that,
for the sake of clarity, this obligation does not apply to any personal
documents, records, or property of Ms. Westbrook or any documents that are
attorney/client privileged between Ms. Westbrook and her personal counsel or
constitute work product of Ms. Westbrook or her personal counsel.. The foregoing
restrictions on use and disclosure of Confidential Information will not apply to
the extent of information: (i) known to Consultant prior to receipt from
Company, (ii) of public knowledge without breach of Consultant’s obligations
under this Agreement, (iii) rightfully acquired by Consultant from a third party
without restriction on disclosure or use, (iv) disclosed by Company to a third
party without restriction on disclosure or use, or (v) as to which and to the
extent to which Consultant has received express written consent from an
authorized officer of Company to disclose or use. Without limiting other
possible remedies for the breach of this covenant, the parties agree that
injunctive or other equitable relief shall be available to enforce this
covenant, such relief to be without the necessity of posting a bond, cash or
otherwise.

5. Representations and Warranties of Consultant.

(a) Compliance with Company Policies and Standards. Consultant shall comply with
all applicable bylaws, rules, and regulations of the Company, and the policies
and procedures of the Company, as are in effect from time-to-time. Consultant
shall work cooperatively with the personnel of the Company.

(b) No Other Restrictive Arrangement. Consultant is not subject to, or a party
to, any employment agreement, non-competition covenant, non-disclosure
agreement, or other agreement, covenant, understanding, or restriction that
would prohibit Consultant from executing this Agreement and performing fully the
duties and responsibilities hereunder.

6. Incurring Financial Obligation; Expenses. Consultant may not incur any
financial obligation on behalf of the Company without the prior written approval
of the Company.

7. Post-Termination Obligations. On termination, the Company’s sole obligation
to Consultant will be to pay any then-outstanding unpaid fee for Services
actually performed hereunder and to reimburse Consultant for then-outstanding
reimbursable expenses, subject to the provisions of Section 2(b). Consultant
hereby expressly agrees that termination of this Agreement prior to the end of
the term specified in Section 3 or any extension thereof will not void,
invalidate, or otherwise affect Consultant’s obligations under Section 4
(Confidential Information). Consultant expressly agrees that the provisions of
Section 4 will survive termination of this Agreement.

8. Non-Assignment. This Agreement is personal to Consultant and cannot be
assigned by Consultant or otherwise transferred to any other person or party
without the Company’s prior written consent. Any assignment without such consent
will be cause for immediate termination of this Agreement by the Company. Any
other attempts to transfer will be void. Consultant further agrees not to
subcontract services under this Agreement, in whole or in part. Consultant’s
obligations under this Agreement are binding on Consultant’s heirs, legal
representatives, administrators, and executors.

9. Independent Contractor. Consultant’s relationship with the Company hereunder
shall be that of an independent contractor. It is expressly acknowledged and
stipulated by Consultant and the Company that Consultant shall not, for any
purpose whatsoever, be considered an employee, representative, or agent of the
Company. Nothing in this Agreement is intended or shall be construed to create
an employer/employee relationship, a joint venture relationship, or a lease or
landlord/tenant relationship, or to allow the Company to exercise control or
direction over the manner or method in which Consultant performs the Services.
Consultant understands and agrees that: (a) Consultant will not be treated as an
employee of the Company for federal tax purposes; (b) the Company will not
withhold on behalf of Consultant pursuant to this Agreement any sums for income
tax, unemployment insurance, social security, or any other withholding pursuant
to any law, or make available to Consultant any of the benefits afforded to
employees of the Company; and (c) all of such payments, withholdings, and
benefits, if any, are the sole responsibility of Consultant. Consultant shall
not enter into any Agreements or incur any obligations on the Company’s behalf
or purport to commit the Company in any other manner, without its prior written
consent.

10. Entire Agreement. This Agreement is made contemporaneous with a Resignation
Agreement of even date between the parties (the “Resignation Agreement”).
Excluding the Resignation Agreement, this Agreement constitutes the entire
agreement and understanding between the parties in respect of the subject matter
hereof, and supersedes all prior agreements, understandings and communications
between them, whether oral or written, pertaining to that subject matter. No
modification of or addition to this Agreement will be effective unless made in
writing signed by Consultant and a duly authorized officer of the Company.

11. Governing Law. This Agreement shall be construed and governed according to
the laws of the State of Texas, without giving effect to its conflict of laws
provisions.

     
 
   
 
   
Cyberonics, Inc.
  Consultant:
 
   
By: _/S/_David S. Wise     
  _/S/_Pamela B. Westbrook     
 
   
 
   
David S. Wise, Vice President
  Pamela B. Westbrook