Exhibit 10.72**EMPLOYEE RESTRICTED STOCK AGREEMENT**     **THIS RESTRICTED STOCK AGREEMENT**(this “Agreement”) is made effective as of XXXX 1, 200X (the“Grant Date”), between **CYBERONICS, INC.,**a Delaware corporation (the “Company”),and                                         (the “Employee”).     1. **Award****.**Pursuant to the **CYBERONICS, INC. 2005 STOCK PLAN**(the“Plan”), as of the Grant Date [                    ] shares (the “Restricted Shares”) of the Company’scommon stock shall be issued as hereinafter provided in the Employee’s name subject to certainrestrictions thereon. The Employee hereby acknowledges receipt of a copy of the Plan and theProspectus relating thereto pursuant to the Securities Act of 1933, and agrees that this award ofRestricted Shares shall be subject to all of the terms and provisions of the Plan, including futureamendments thereto, if any, pursuant to the terms thereof. All dividends and other distributions ona Restricted Share shall be subject to the same Forfeiture Restrictions (as hereinafter defined) asare applicable to such Restricted Share.     2. **Restricted Shares****.**The Employee hereby accepts the Restricted Shares whenissued and agrees with respect thereto as follows:     (a) **Forfeiture Restrictions****.**The Restricted Shares may not be sold, assigned,pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of to the extentthen subject to the Forfeiture Restrictions, and in the event of termination of the Employee’sservice relationship with the Company (as provided in Section 5) for any reason other than asprovided in Section 2(b), the Employee shall, for no consideration, forfeit to the Company allRestricted Shares then subject to the Forfeiture Restrictions. The prohibition against transfer andthe Employee’s obligation to forfeit and surrender the Restricted Shares to the Company upon theEmployee’s termination of service are herein referred to as the “Forfeiture Restrictions.” TheForfeiture Restrictions shall be binding upon and enforceable against any transferee of RestrictedShares.     (b) **Vesting/Lapse of Forfeiture Restrictions****.**Until the Restricted Shares are fullyvested or forfeited, on each anniversary of the Grant Date, so long as the Employee continues in aservice relationship with the Company (as provided in Section 5) on such anniversary date, 20% ofthe Restricted Shares shall vest and the Forfeiture Restrictions shall lapse on such vested shares.The number of shares that vest as of each anniversary date will be rounded down to the nearestwhole share, with any remaining shares vesting on the final installment. Notwithstanding theforegoing vesting schedule, the Forfeiture Restrictions shall lapse in full as to all of theRestricted Shares on the earlier of (i) a Change of Control (as defined in the Plan) or (ii) thetermination of the Employee’s service relationship with the Company due to the Employee’s death.     (c)**Certificates****.** A certificate evidencing the Restricted Shares shall be issuedby the Company in the Employee’s name, pursuant to which the Employee shall have all of the rightsof a shareholder of the Company with respect to the Restricted Shares, including, withoutlimitation, voting rights and the right to receive dividends (provided, however, that dividendspaid in shares of the Company’s stock shall be subject
 

 
to the Forfeiture Restrictions). The Employee may not sell, transfer, pledge, exchange, hypothecateor otherwise dispose of the stock until the Forfeiture Restrictions with respect to such shareshave expired, and a breach of the terms of this Agreement shall cause a forfeiture of all thenremaining Restricted Shares. The certificate shall contain an appropriate endorsement reflectingthe Forfeiture Restrictions. The certificate shall be delivered upon issuance to the Secretary ofthe Company or to such other depository as may be designated by the Committee as a depository forsafekeeping until the forfeiture of such Restricted Shares occurs or the Forfeiture Restrictionslapse pursuant to the terms of the Plan and this award. On the date of this Agreement, the Employeeshall, if required by the Committee, deliver to the Company a stock power, endorsed in blank,relating to the Restricted Shares. Upon the lapse of the Forfeiture Restrictions without forfeitureof the Restricted Shares, the Company shall cause a new certificate or certificates to be issuedwithout legend (except for any legend required pursuant to applicable securities laws or any otheragreement to which the Employee is a party) in the name of the Employee in exchange for thecertificate evidencing the Restricted Shares.     (d) **Corporate Acts****.**The existence of the Restricted Shares shall not affect in any way theright or power of the Board of Directors of the Company or the shareholders of the Company to makeor authorize any adjustment, recapitalization, reorganization or other change in the Company’scapital structure or its business, any merger or consolidation of the Company, any issue of debt orequity securities, the dissolution or liquidation of the Company or any sale, lease, exchange orother disposition of all or any part of its assets or business or any other corporate act orproceeding. The prohibitions of Section 2(a) hereof shall not apply to the transfer of RestrictedShares pursuant to a plan of reorganization of the Company, but the stock, securities or otherproperty received in exchange therefor shall also become subject to the Forfeiture Restrictions andprovisions governing the lapsing of such Forfeiture Restrictions applicable to the originalRestricted Shares for all purposes of this Agreement and the certificates representing such stock,securities or other property shall be legended to show such restrictions.     3. **Withholding of Tax****.**To the extent that the receipt of the Restricted Shares orthe lapse of any Forfeiture Restrictions results in compensation income to the Employee for federalor state income tax purposes, the Employee is responsible for taxes due from Employee on suchcompensation income. In the event that the Employee fails to reimburse the Company for amounts theCompany is required to pay as withholding taxes on behalf of the Employee, the Company has theright to withhold from amounts otherwise due to the Employee, and the Employee hereby authorizessuch withholding, an amount equal to the withholding taxes paid by the Company by reason ofcompensation income to the Employee resulting under this Agreement.     4. **Status of Stock****.**The Employee agrees that the Restricted Shares issued underthis Agreement will not be sold or otherwise disposed of in any manner which would constitute aviolation of any applicable federal or state securities laws. The Employee also agrees that (i) thecertificates representing the Restricted Shares may bear such legend or legends as the Committeedeems appropriate in order to reflect the Forfeiture Restrictions and to assure compliance withapplicable securities laws, (ii) the Company may refuse to register the transfer of the RestrictedShares on the stock transfer records of the Company if such proposed transfer would constitute a
-2-

 
violation of the Forfeiture Restrictions or, in the opinion of counsel satisfactory to the Company,of any applicable securities law, and (iii) the Company may give related instructions to itstransfer agent, if any, to stop registration of the transfer of the Restricted Shares.     5. **Service Relationship****.**For purposes of this Agreement, the Employee shall beconsidered to be in service to the Company as long as the Employee remains an Employee, aConsultant or a Employee (as those terms are defined in the Plan). Nothing in the adoption of thePlan, nor the award of the Restricted Shares thereunder pursuant to this Agreement, shall conferupon the Employee the right to continued service by or with the Company.     6. **Notices****.**Any notices or other communications provided for in this Agreementshall be sufficient if in writing. In the case of the Employee, such notices or communicationsshall be effectively delivered if hand delivered to the Employee at his principal place ofemployment or if sent by registered or certified mail to the Employee at the last address theEmployee has filed with the Company. In the case of the Company, such notices or communicationsshall be effectively delivered if sent by registered or certified mail to the Company at itsprincipal executive offices.     7. **Amendment****.**This Agreement may not be modified in any respect by any verbalstatement, representation or agreement made by the Employee or by any employee, officer, orrepresentative of the Company or by any written agreement unless signed by the Employee and by anofficer of the Company who is expressly authorized by the Company to execute such document.     8. **Binding Effect****.**This Agreement shall be binding upon and inure to the benefit ofany successors to the Company and all persons lawfully claiming under the Employee.     1. **Controlling Law.** This Agreement shall be governed by, and construed in accordance with,the laws of the State of Texas.     **IN WITNESS WHEREOF,**the Company has caused this Agreement to be duly executed by an officerthereunto duly authorized, and the Employee has executed this Agreement, all effective as of theGrant Date.                **CYBERONICS, INC.**           By:             Name:             Title:                    **EMPLOYEE**              
-3-

 
**SCHEDULE****2005 Stock Option Plan Form (Restricted Grants; 5 Year Vesting)**             **Name** **Grant Date** **Grant Amount** **Exercise Price**Michael Allen Cheney June 1, 2005  5,000  $0.000000 W. Steven Jennings June 1, 2005  5,000  $0.000000 Shawn P. Lunney June 1, 2005  10,000  $0.000000 George E. Parker June 1, 2005  5,000  $0.000000 Richard L. Rudolph June 1, 2005  12,500  $0.000000 Randal L. Simpson June 1, 2005  10,000  $0.000000 Reese S. Terry June 1, 2005  5,000  $0.000000 David S. Wise June 1, 2005  10,000  $0.000000