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| THIS RESTRICTED STOCK      AGREEMENT (this “Agreement”) is made effective as of [DATE] (the “Grant      Date”), between CYBERONICS, INC., a      Delaware corporation (the “Company”), and [NAME] (the      “Executive”). |
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|                                                                                                                                                                                                                                                                      | 1. | Award.  Pursuant      to the CYBERONICS, INC.      NEW EMPLOYEE EQUITY INCENTIVE PLAN (the “Plan”), as of      the Grant Date [NUMBER] shares (the      “Restricted Shares”) of the Company’s common stock shall be issued as      hereinafter provided in the Executive’s name subject to certain      restrictions thereon.  The Executive hereby acknowledges receipt      of a copy of the Plan and the Prospectus relating thereto pursuant to the      Securities Act of 1933, and agrees that this award of Restricted Shares      shall be subject to all of the terms and provisions of the Plan, including      future amendments thereto, if any, pursuant to the terms      thereof.  All dividends and other distributions on a Restricted      Share shall be subject to the same Forfeiture Restrictions (as hereinafter      defined) as are applicable to such Restricted Share. |
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|                                                                                                                                                                                                                                                                      | 2. | Restricted      Shares.  The Executive hereby accepts the Restricted      Shares when issued and agrees with respect thereto as    follows: |
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|                                                                                                                                                                                                                                                                      |   | (a) | Forfeiture      Restrictions.  The Restricted Shares may not be sold,      assigned, pledged, exchanged, hypothecated or otherwise transferred,      encumbered or disposed of to the extent then subject to the Forfeiture      Restrictions, and in the event of termination of the Executive’s service      relationship with the Company (as provided in Section 5) for any reason      other than as provided in Section 2(b), the Executive shall, for no      consideration, forfeit to the Company all Restricted Shares then subject      to the Forfeiture Restrictions.  The prohibition against      transfer and the Executive’s obligation to forfeit and surrender the      Restricted Shares to the Company upon the Executive’s termination of      service are herein referred to as the “Forfeiture      Restrictions.”  The Forfeiture Restrictions shall be binding      upon and enforceable against any transferee of Restricted      Shares. |
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|                                                                                                                                                                                                                                                                      |   | (b) | Vesting/Lapse      of Forfeiture Restrictions.  Until the Restricted Shares      are fully vested or forfeited, on each anniversary of the Grant Date, so      long as the Executive continues in a service relationship with the Company      (as provided in Section 5) on such anniversary date and subject to the      satisfaction of the tax liability under Section 3, 25% of the 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 nearest whole share, with any      remaining shares vesting on the final      installment.  Notwithstanding the foregoing vesting schedule,      the Forfeiture Restrictions shall lapse in full as to all of the      Restricted Shares on the earlier of (i) a Change of Control (as defined in      the Plan) or (ii) the termination of the Executive’s service relationship      with the Company due to the Executive’s death.  |
|                                                                                                                                                                                                                                                                      |   | (c) | Certificates.  A      certificate evidencing the Restricted Shares shall be issued by the      Company in the Executive’s name, pursuant to which the Executive shall      have all of the rights of a shareholder of the Company with respect to the      Restricted Shares, including, without limitation, voting rights and the      right to receive dividends (provided, however, that dividends paid in      shares of the Company’s stock shall be subject to the Forfeiture      Restrictions).  The Executive may not sell, transfer, pledge,      exchange, hypothecate or otherwise dispose of the stock until the      Forfeiture Restrictions with respect to such shares have expired, and a      breach of the terms of this Agreement shall cause a forfeiture of all then      remaining Restricted Shares.  The certificate shall contain an      appropriate endorsement reflecting the Forfeiture      Restrictions.  The certificate shall be delivered upon issuance      to the Secretary of the Company or to such other depository as may be      designated by the Committee as a depository for safekeeping until the      forfeiture of such Restricted Shares occurs or the Forfeiture Restrictions      lapse pursuant to the terms of the Plan and this award.  On the      date of this Agreement, the Executive shall, 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 forfeiture of the Restricted Shares, the Company      shall cause a new certificate or certificates to be issued without legend      (except for any legend required pursuant to applicable securities laws or      any other agreement to which the Executive is a party) in the name of the      Executive in exchange for the certificate evidencing the Restricted      Shares. |
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|                                                                                                                                                                                                                                                                      |   | (d) | Corporate      Acts.  The existence of the Restricted Shares shall not      affect in any way the right or power of the Board of Directors of the      Company or the shareholders of the Company to make or authorize any      adjustment, recapitalization, reorganization or other change in the      Company’s capital structure or its business, any merger or consolidation      of the Company, any issue of debt or equity securities, the dissolution or      liquidation of the Company or any sale, lease, exchange or other      disposition of all or any part of its assets or business or any other      corporate act or proceeding.  The prohibitions of Section 2(a)      hereof shall not apply to the transfer of Restricted Shares pursuant to a      plan of reorganization of the Company, but the stock, securities or other      property received in exchange therefor shall also become subject to the      Forfeiture Restrictions and provisions governing the lapsing of such      Forfeiture Restrictions applicable to the original Restricted Shares for      all purposes of this Agreement and the certificates representing such      stock, securities or other property shall be legended to show such      restrictions. |
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|                                                                                                                                                                                                                                                                      | 3. | Withholding      of Tax.  To the extent that the receipt of the Restricted      Shares or the lapse of any Forfeiture Restrictions results in compensation      income to the Executive for federal or state income tax purposes, the      Executive is responsible for taxes due from Executive on such compensation      income. Executive agrees to remit estimated taxes to the Company prior to      and as a condition of the receipt of the Restricted Shares or the lapse of      any Forfeiture Rights becoming effective.  In the event that the      estimated taxes are insufficient to satisfy the taxes actually due from      Executive, Executive agrees to (1) remit funds to satisfy such taxes; or      (2) specifically authorize the Company in writing to withhold from amounts      otherwise due to the Executive.  To the maximum extent permitted      by applicable law, Executive hereby authorizes such      withholding. |
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|                                                                                                                                                                                                                                                                      |  4. | Status of      Stock.  The Executive agrees that the Restricted      Shares issued under this Agreement will not be sold or otherwise disposed      of in any manner which would constitute a violation of any applicable      federal or state securities laws.  The Executive also agrees      that (i)  the certificates representing the Restricted Shares      may bear such legend or legends as the Committee deems appropriate in      order to reflect the Forfeiture Restrictions and to assure compliance with      applicable securities laws, (ii) the Company may refuse to register the      transfer of the Restricted Shares on the stock transfer records of the      Company if such proposed transfer would constitute a 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 its transfer agent, if any, to stop registration      of the transfer of the Restricted Shares. |
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|                                                                                                                                                                                                                                                                      | 5. | Service      Relationship.  For purposes of this Agreement, the      Executive shall be considered to be in service to the Company as long as      the Executive remains an Employee, an Officer, a Consultant or a Director      (as those terms are defined in the Plan).  Nothing in the      adoption of the Plan, nor the award of the Restricted Shares thereunder      pursuant to this Agreement, shall confer upon the Executive the right to      continued service by or with the Company. |
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|                                                                                                                                                                                                                                                                      | 6. | Notices.  Any      notices or other communications provided for in this Agreement shall be      sufficient if in writing.  In the case of the Executive, such      notices or communications shall be effectively delivered if hand delivered      to the Executive at his principal place of employment or if sent by      overnight courier, with confirmation, to the Executive at the last address      the Executive has filed with the Company.  In the case of the      Company, such notices or communications shall be effectively delivered if      sent by overnight courier, with confirmation, to the Company at its      principal executive offices. |
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|                                                                                                                                                                                                                                                                      | 7. | Amendment.  This      Agreement may not be modified in any respect by any verbal statement,      representation or agreement made by the Executive or by any employee,      officer, director, or representative of the Company or by any written      agreement unless signed by the Executive and by an officer of the Company      who is expressly authorized by the Company to execute such      document. |
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|                                                                                                                                                                                                                                                                      | 8. | Binding      Effect.  This Agreement shall be binding upon and inure      to the benefit of any successors to the Company and all persons lawfully      claiming under the Executive. |
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|                                                                                                                                                                                                                                                                      | 9. | Controlling      Law.  This Agreement shall be governed by, and construed      in accordance with, the laws of the State of Texas. |
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| IN WITNESS WHEREOF, the      Company has caused this Agreement to be duly executed by an officer      thereunto duly authorized, and the Executive has executed this Agreement,      all effective as of the Grant Date.                                                  |

|   |   | CYBERONICS,      INC. |
|--------|--------|-----------------------|
|   |   |                  |   |
|   |   | By:                   |   |
|   |   | Name:                 | George      E. Parker III |
|   |   | Title:                | Vice      President, Human Resources |
|   |   |                  |   |
|   |   |                  |   |
|   |   | EXECUTIVE             |
|   |   |                  |   |
|   |   |                  |   |
|   |   | [NAME]                |   |
|   |   |                  |   |

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| EXHIBIT TO FORM OF EXECUTIVE RESTRICTED STOCK      AGREEMENT |
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| Date                                                         | Name | Number of Shares |
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| July      9, 2007                                            | Gregory      H. Browne | 7,500 |
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| August      1, 2007                                          | James      A. Reinstein | 12,500 |