**Exhibit 10.44****CYBERONICS, INC.****INDEMNIFICATION AGREEMENT**     **This Indemnification Agreement (“Agreement”)**is made as of this 28th day of June, 1999, byand between **Cyberonics, Inc.,**a Delaware corporation (the“**Company**”), and **Alan J. Olsen(“Indemnitee”)**.     **WHEREAS,**the Company and Indemnitee recognize the increasing difficulty in obtainingdirectors’ and officers’ liability insurance, the significant increases in the cost of suchinsurance and the general reductions in the coverage of such insurance;     **WHEREAS,**the Company and Indemnitee further recognize the substantial increase incorporate litigation in general, subjecting officers and directors to expensive litigationrisks at the same time as the availability and coverage of liability insurance has beenseverely limited;     **WHEREAS,**Indemnitee does not regard the current protection available as adequate under thepresent circumstances, and Indemnitee and other officers and directors of the Company may notbe willing to continue to serve as officers and directors without additional protection; and     **WHEREAS,**the Company desires to attract and retain the services of highly qualifiedindividuals, such as Indemnitee, to serve as officers and directors of the Company and toindemnify its officers and directors so as to provide them with the maximum protectionpermitted by law.     **NOW, THEREFORE,**the Company and Indemnitee hereby agree as follows:     1. **Indemnification.**          (a) Third Party Proceedings. The Company shall indemnify Indemnitee if Indemnitee isor was a party or is threatened to be made a party to any threatened, pending or completed actionor proceeding, whether civil, criminal, administrative or investigative (other than an action by orin the right of the Company) by reason of the fact that Indemnitee is or was a director, officer,employee or agent of the Company, or any subsidiary of the Company, by reason of any action orinaction on the part of Indemnitee while an officer or director or by reason of the fact thatIndemnitee is or was serving at the request of the Company as a director, officer, employee oragent of another corporation, partnership, joint venture, trust or other enterprise, againstexpenses (including attorneys’ fees), judgments, fines and amounts paid in settlement (if suchsettlement is approved in advance by the Company, which approval shall not be unreasonablywithheld) actually and reasonably incurred by Indemnitee in connection with such action orproceeding if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to bein or not opposed to the best interests of the Company, and, with respect to any criminal action orproceeding, had no reasonable cause to believe Indemnitee’s
 

 
conduct was unlawful. The termination of any action or proceeding by judgment, order,settlement, conviction, or upon a plea of nolocontendere or its equivalent, shall not, of itself,create a presumption that (i) Indemnitee did not act in good faith and in a manner whichIndemnitee reasonably believed to be in or not opposed to the best interests of the Company, or(ii) with respect to any criminal action or proceeding, Indemnitee had reasonable cause to believethat Indemnitee’s conduct was unlawful.          (b) Proceedings By or in the Right of the Company. The Company shall indemnifyIndemnitee if Indemnitee was or is a party or is threatened to be made a party to any threatened,pending or completed action or proceeding by or in the right of the Company or any subsidiary ofthe Company to procure a judgment in its favor by reason of the fact that Indemnitee is or was adirector, officer, employee or agent of the Company, or any subsidiary of the Company, by reason ofany action or inaction on the part of Indemnitee while an officer or director or by reason of thefact that Indemnitee is or was serving at the request of the Company as a director, officer,employee or agent of another corporation, partnership, joint venture, trust or other enterprise,against expenses (including attorneys’ fees) and, to the fullest extent permitted by law, amountspaid in settlement, in each case to the extent actually and reasonably incurred by Indemnitee inconnection with the defense or settlement of such action or proceeding if Indemnitee acted in goodfaith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interestsof the Company and its stockholders, except that no indemnification shall be made in respect of anyclaim, issue or matter as to which Indemnitee shall have been finally adjudicated by court order orjudgment to be liable to the Company in the performance of Indemnitee’s duty to the Company and itsstockholders unless and only to the extent that the court in which such action or proceeding is orwas pending shall determine upon application that, in view of all the circumstances of the case,Indemnitee is fairly and reasonably entitled to indemnity for expenses and then only to the extentthat the court shall determine.     2. **Expenses; Indemnification Procedure**.          (a) Advancement of Expenses. The Company shall advance all expenses incurred byIndemnitee in connection with the investigation, defense, settlement or appeal of any civil orcriminal action or proceeding referenced in Section l(a) or (b) hereof (but not amounts actuallypaid in settlement of any such action or proceeding). Indemnitee hereby undertakes to repay suchamounts advanced only if, and to the extent that, it shall ultimately be determined that Indemniteeis not entitled to be indemnified by the Company as authorized hereby. The advances to be madehereunder shall be paid by the Company to Indemnitee within twenty (20) days following delivery ofa written request therefor by Indemnitee to the Company.          (b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition precedent tohis right to be indemnified under this Agreement, give the Company notice in writing as soon aspracticable of any claim made against Indemnitee for which indemnification will be sought underthis Agreement, Notice to the Company shall be directed to the Chief Executive Officer of theCompany at the address shown on the signature page of this Agreement (or such other address as theCompany shall designate in writing to Indemnitee). Notice shall be deemed received three businessdays after the
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date postmarked if sent by domestic certified or registered mail, properly addressed; otherwisenotice shall be deemed received when such notice shall actually be received by the Company. Inaddition, Indemnitee shall give the Company such information and cooperation as it may reasonablyrequire and as shall be within Indemnitee’s power.          (c) Procedure. Any indemnification and advances provided for in Section 1 and thisSection 2 shall be made no later than forty-five (45) days after receipt of the written request ofIndemnitee. If a claim under this Agreement, under any statute, or under any provision of theCompany’s Certificate of Incorporation or By-laws providing for indemnification, is not paid infull by the Company within forty-five (45) days after a written request for payment thereof hasfirst been received by the Company, Indemnitee may, but need not, at any time thereafter bring anaction against the Company to recover the unpaid amount of the claim and, subject to Section 12 ofthis Agreement, Indemnitee shall also be entitled to be paid for the expenses (including attorneys’fees) of bringing such action. It shall be a defense to any such action (other than an actionbrought to enforce a claim for expenses incurred in connection with any action or proceeding inadvance of its final disposition) that Indemnitee has not met the standards of conduct which makeit permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed,but the burden of proving such defense shall be on the Company and Indemnitee shall be entitled toreceive interim payments of expenses pursuant to Subsection 2(a) unless and until such defense maybe finally adjudicated by court order or judgment from which no further right of appeal exists. Itis the parties’ intention that if the Company contests Indemnitee’s right to indemnification, thequestion of Indemnitee’s right to indemnification shall be for the court to decide, and neither thefailure of the Company (including its Board of Directors, any committee or subgroup of the Board ofDirectors, independent legal counsel, or its stockholders) to have made a determination thatindemnification of Indemnitee is proper in the circumstances because Indemnitee has met theapplicable standard of conduct required by applicable law, nor an actual determination by theCompany (including its Board of Directors, any committee or subgroup of the Board of Directors,independent legal counsel, or its stockholders) that Indemnitee has not met such applicablestandard of conduct, shall create a presumption that Indemnitee has or has not met the applicablestandard of conduct.          (d) Notice to Insurers. If, at the time of the receipt of a notice of a claim pursuantto Section 3(b) hereof, the Company has director and officer liability insurance in effect, theCompany shall give prompt notice of the commencement of such proceeding to the insurers inaccordance with the procedures set forth in the respective policies. The Company shall thereaftertake all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee,all amounts payable as a result of such proceeding in accordance with the terms of such policies.          (e) Selection of Counsel. In the event the Company shall be obligated under Section2(a) hereof to pay the expenses of any proceeding against Indemnitee, the Company, if appropriate,shall be entitled to assume the defense of such proceeding, with counsel approved by Indemnitee,which approval shall not be unreasonably withheld, upon the delivery to Indemnitee of writtennotice of its election so to do. After delivery of such notice, approval of such counsel by
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Indemnitee and the retention of such counsel by the Company, the Company will not be liable toIndemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee withrespect to the same proceeding, provided that (i) Indemnitee shall have the right to employ hiscounsel in any such proceeding at Indemnitee’s expense; and (ii) if (A) the employment of counselby Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have reasonablyconcluded that there may be a conflict of interest between the Company and Indemnitee in theconduct of any such defense, or (C) the Company shall not, in fact, have employed counsel to assumethe defense of such proceeding, then the fees and expenses of Indemnitee’s counsel shall be at theexpense of the Company.     3. **Additional Indemnification Rights; Nonexclusivity**.          (a) Scope. Notwithstanding any other provision of this Agreement, the Companyhereby agrees to indemnify the Indemnitee to the fullest extent permitted by law, notwithstandingthat such indemnification is not specifically authorized by the other provisions of this Agreement,the Company’s Certificate of Incorporation, the Company’s By-laws or by statute. In the event ofany change, after the date of this Agreement, in any applicable law, statute or rule which expandsthe right of a Delaware corporation to indemnify a member of its Board of Directors, an officer orother corporate agent, such changes shall be ipso facto, within the purview of Indemnitee’s rightsand Company’s obligations, under this Agreement. In the event of any change in any applicable law,statute or rule which narrows the right of a Delaware corporation to indemnify a member of itsBoard of Directors, an officer or other corporate agent, such changes, to the extent not otherwiserequired by such law, statute or rule to be applied to this Agreement shall have no effect on thisAgreement or the parties’ rights arid obligations hereunder.          (b) Nonexclusivity. The indemnification provided by this Agreement shall not be deemedexclusive of any rights to which Indemnitee may be entitled under the Company’s Certificate ofIncorporation, its By-laws, any agreement, any vote of stockholders or disinterested Directors, theDelaware Corporation Law or otherwise, both as to action in Indemnitee’s official capacity and asto action in another capacity while holding such office. The indemnification provided under thisAgreement shall continue as to Indemnitee for any action taken or not taken while serving in anindemnified capacity even though he may have ceased to serve in such capacity at the time of anyaction, suit or other covered proceeding.     4. **Partial Indemnification**. If Indemnitee is entitled under any provision of thisAgreement to indemnification by the Company for some or a portion of the expenses, judgments, finesor penalties actually or reasonably incurred by him in the investigation, defense, appeal orsettlement of any civil or criminal action or proceeding, but not, however, for the total amountthereof, the Company shall nevertheless indemnify Indemnitee for the portion of such expenses,judgments, fines or penalties to which Indemnitee is entitled.
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     5. **Mutual Acknowledgment**. Both the Company and Indemnitee acknowledge that in certaininstances, Federal law or applicable public policy may prohibit the Company from indemnifying itsdirectors and officers under this Agreement or otherwise. Indemnitee understands and acknowledgesthat the Company has undertaken or may be required in the future to undertake with the Securitiesand Exchange Commission to submit the question of indemnification to a court in certaincircumstances for a determination of the Company’s right under public policy to indemnifyIndemnitee.     6. **Officer and Director Liability Insurance**. The Company shall, from time to time,make the good faith determination whether or not it is practicable for the Company to obtain andmaintain a policy or policies of insurance with reputable insurance companies providing theofficers and directors of the Company with coverage for losses from wrongful acts, or to ensure theCompany’s performance of its indemnification obligations under this Agreement. Among otherconsiderations, the Company will weigh the costs of obtaining such insurance coverage against theprotection afforded by such coverage. In all policies of director and officer liability insurance,Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rightsand benefits as are accorded to the most favorably insured of the Company’s directors, ifIndemnitee is a director; or of the Company’s officers, if Indemnitee is not a director of theCompany but is an officer; or of the Company’s key employees, if Indemnitee is not an officer ordirector but is a key employee. Notwithstanding the foregoing, the Company shall have noobligation to obtain or maintain such insurance if the Company determines in good faith that suchinsurance is not reasonably available, if the premium costs for such insurance are disproportionateto the amount of coverage provided, if the coverage provided by such insurance is limited byexclusions so as to provide an insufficient benefit, or if Indemnitee is covered by similarinsurance maintained by a subsidiary or parent of the Company.     7. **Severability**. Nothing in this Agreement is intended to require or shall beconstrued as requiring the Company to do or fail to do any act in violation of applicable law. TheCompany’s inability, pursuant to court order, to perform its obligations under this Agreement shallnot constitute a breach of this Agreement. The provisions of this Agreement shall be severable asprovided in this Section 7. If this Agreement or any portion hereof shall be invalidated on anyground by any court of competent jurisdiction, then the Company shall nevertheless indemnifyIndemnitee to the full extent permitted by any applicable portion of this Agreement that shall nothave been invalidated, and the balance of this Agreement not so invalidated shall be enforceable inaccordance with its terms.     8. **Exceptions**. Any other provision herein to the contrary notwithstanding, theCompany shall not be obligated pursuant to the terms of this Agreement:          (a) Excluded Acts. To indemnify Indemnitee for any acts or omissions or transactionsfrom which a director may not be relieved of liability under the applicable law.          (b) Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemniteewith respect to proceedings or claims initiated or brought voluntarily by Indemnitee and not by wayof defense, except with respect to proceedings brought to establish or enforce a right to
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indemnification under this Agreement or any other statute or law or otherwise as required underSection 145 of the Delaware General Corporation Law, but such indemnification or advancement ofexpenses may be provided by the Company in specific cases if the Board of Directors has approvedthe initiation or bringing of such suit; or          (c) Lack of Good Faith. To indemnify Indemnitee for any expenses incurred by theIndemnitee with respect to any proceeding instituted by Indemnitee to enforce or interpret thisAgreement, if a court of competent jurisdiction determines that each of the material assertionsmade by the Indemnitee in such proceeding was not made in good faith or was frivolous; or          (d) Insured Claims. To indemnify Indemnitee for expenses or liabilities of any typewhatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, andamounts paid in settlement) which have been paid directly to Indemnitee by an insurance carrierunder a policy of officers’ and directors’ liabilityinsurance maintained by the Company.          (e) Claims Under Section 16(b). To indemnify Indemnitee for expenses and the paymentof profits arising from the purchase and sale by Indemnitee of securities in violation of Section16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute.     9. **Construction of Certain Phrases****.**          (a) For purposes of this Agreement, references to the “Company” shall include, inaddition to the resulting corporation, any constituent corporation (including any constituent of aconstituent) absorbed in a consolidation or merger which, if its separate existence had continued,would have had power and authority to indemnify its directors, officers, and employees or agents,so that if Indemnitee is or was a director, officer, employee or agent of such constituentcorporation, or is or was serving at the request of such constituent corporation as a director,officer, employee or agent of another corporation, partnership, joint venture, trust or otherenterprise, Indemnitee shall stand in the same position under the provisions of this Agreement withrespect to the resulting or surviving corporation as Indemnitee would have with respect to suchconstituent corporation if its separate existence had continued.          (b) For purposes of this Agreement, references to “other enterprises” shall include employeebenefit plans; references to “fines” shall include any excise taxes assessed on Indemnitee withrespect to an employee benefit plan; and references to “serving at the request of the Company”shall include any service as a director, officer, employee or agent of the Company which imposesduties on, or involves services by, such director, officer, employee or agent with respect to anemployee benefit plan, its participants, or beneficiaries; and if Indemnitee acted in good faithand in a manner Indemnitee reasonably believed to be in the interest of the participants andbeneficiaries of an employee benefit plan, Indemnitee shall be deemed to have acted in a manner“not opposed to the best interests of the Company” as referred to in this Agreement.
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     10. **Counterparts**. This Agreement may be executed in one or more counterparts, each ofwhich shall constitute an original.     11. **Successors and Assigns**. This Agreement shall be binding upon the Company and itssuccessors and assigns, and shall inure to the benefit of Indemnitee and Indemnitee’s estate,heirs, legal representatives and assigns.     12. **Attorneys’ Fees**. In the event that any action is instituted by Indemnitee underthis Agreement to enforce or interpret any of the terms hereof, Indemnitee shall be entitled to bepaid all costs and expenses, including reasonable attorneys’ fees, incurred by Indemnitee withrespect to such action, unless as a part of such action, the court of competent jurisdictiondetermines that each of the material assertions made by Indemnitee as a basis for such action werenot made in good faith or were frivolous. In the event of an action instituted by or in the name ofthe Company under this Agreement or to enforce or interpret any of the terms of this Agreement,Indemnitee shall be entitled to be paid all costs and expenses, including reasonable attorneys’fees, incurred by Indemnitee in defense of such action (including with respect to Indemnitee’scounterclaims and cross-claims made in such action), unless as a part of such action the courtdetermines that each of Indemnitee’s material defenses to such action were made in bad faith orwere frivolous.     13. **Notice**. All notices, requests, demands and other communications under thisAgreement shall be in writing and shall be deemed duly given (i) if delivered by hand andacknowledged in writing as received by the addressee, on the date of such receipt, or (ii) ifmailed by domestic certified or registered mail with postage prepaid, on the third business dayafter the date postmarked. Addresses for notice to either party are as shown on the signature pageof this Agreement, or as subsequently modified by written notice.     14. **Consent to Jurisdiction**. The Company and Indemnitee each hereby irrevocablyconsent to the jurisdiction of the courts of the State of Delaware for all purposes in connectionwith any action or proceeding which arises out of or relates to this Agreement and agree that anyaction instituted under this Agreement shall be brought only in the state courts of the State ofDelaware.     15. **Choice of Law**. This Agreement shall be governed by and its provisions construed inaccordance with the laws of the State of Delaware, as applied to contracts between Delawareresidents entered into and to be performed entirely within Delaware.     16. **Subrogation**. In the event of payment under this Agreement, the Company shall besubrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shallexecute all documents required and shall do all acts that may be necessary to secure such rightsand to enable to corporation effectively to bring suit to enforce such rights.     17. **Continuation of Indemnification**. All agreements and obligations of the Companycontained herein shall continue during the period that Indemnitee is a director, officer or agentof the
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Company and shall continue thereafter so long as Indemnitee shall be subject to any possible claimor threatened, pending or completed action, suit or proceeding, whether civil, criminal,arbitrational, administrative or investigative, by reason of the fact that Indemnitee was servingin the capacity referred to herein.     18. **Amendment and Termination****.**Subject to Section 17, no amendment, modification,termination or cancellation of this Agreement shall be effective unless in writing signed by bothparties hereto.
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**IN WITNESS WHEREOF,**the parties hereto have executed this Agreement as of the date firstabove written.         **CYBERONICS, INC.**           By: /s/ Robert P. Cummins    Title:  CEO           Address: 16511 Space Center Blvd., Suite 600Houston, TX 77058  AGREED TO AND ACCEPTED:INDEMNITEE:   /s/ Alan J. Olsen 7/30/99 Alan J. Olsen      Address: 2500 Aqua Vista Blvd.  Ft. Lauderdale, FL 33301
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