Exhibit 10.51**EMPLOYEE RESTRICTED STOCK AGREEMENT**     **THIS RESTRICTED STOCK AGREEMENT** (this “Agreement”) is made effective as ofJuly 22, 2005 (the “Grant Date”), between **CYBERONICS, INC.,**a Delaware corporation (the“Company”), and Richard Rudolph (the “Employee”).     **1.****Award.** Pursuant to the **CYBERONICS, INC. 2005 STOCK PLAN**(the“Plan”), as of the Grant Date 11,933 shares (the “Restricted Shares”) of the Company’scommon stock shall be issued as hereinafter provided in the Employee’s name subject tocertain restrictions thereon. The Employee hereby acknowledges receipt of a copy of thePlan and the Prospectus relating thereto pursuant to the Securities Act of 1933, andagrees that this award of Restricted Shares shall be subject to all of the terms andprovisions of the Plan, including future amendments thereto, if any, pursuant to theterms thereof. All dividends and other distributions on a Restricted Share shall besubject to the same Forfeiture Restrictions (as hereinafter defined) as are applicableto such Restricted Share.     **2. ****Restricted Shares.** The Employee hereby accepts the Restricted Shareswhen issued and agrees with respect thereto as follows:     **(a)****Forfeiture Restrictions.** The Restricted Shares may not besold,assigned, pledged, exchanged, hypothecated or otherwise transferred,encumbered ordisposed of to the extent then subject to the Forfeiture Restrictions, and inthe event oftermination of the Employee’s service relationship with the Company (asprovided inSection 5) for any reason other than as provided in Section 2(b), the Employeeshall, forno consideration, forfeit to the Company all Restricted Shares then subject totheForfeiture Restrictions. The prohibition against transfer and the Employee’sobligation toforfeit and surrender the Restricted Shares to the Company upon the Employee’stermination of service are herein referred to as the “ForfeitureRestrictions.” TheForfeiture Restrictions shall be binding upon and enforceable against anytransferee ofRestricted Shares.     **(b)****Vesting/Lapse of Forfeiture Restrictions.** The ForfeitureRestrictionsshall lapse in full as to all of the Restricted Shares on the earlier of (i)the firstanniversary of the Grant Date (ii) a Change of Control (as defined in thePlan) or (iii) thetermination of the Employee’s service relationship with the Company due to theEmployee’s death.     **(c)****Certificates.** A certificate evidencing the Restricted Sharesshall beissued by the Company in the Employee’s name, pursuant to which the Employeeshallhave all of the rights of a shareholder of the Company with respect to theRestrictedShares, including, without limitation, voting rights and the right to receivedividends(provided, however, that dividends paid in shares of the Company’s stock shallbe subjectto the Forfeiture Restrictions). The Employee may not sell, transfer, pledge,exchange,hypothecate or otherwise dispose of the stock until the ForfeitureRestrictions withrespect to such shares have expired, and a breach of the terms of thisAgreement shall

 
cause a forfeiture of all then remaining Restricted Shares. The certificateshall contain an appropriate endorsement reflecting the Forfeiture Restrictions.The certificate shall be delivered upon issuance to the Secretary of the Companyor to such other depository as may be designated by the Committee as a depositoryfor safekeeping until the forfeiture of such Restricted Shares occurs or theForfeiture Restrictions lapse pursuant to the terms of the Plan and this award. Onthe date of this Agreement, the Employee shall, if required by the Committee,deliver to the Company a stock power, endorsed in blank, relating to theRestricted Shares. Upon the lapse of the Forfeiture Restrictions withoutforfeiture of the Restricted Shares, the Company shall cause a new certificate orcertificates to be issued without legend (except for any legend required pursuantto applicable securities laws or any other agreement to which the Employee is aparty) in the name of the Employee in exchange for the certificate evidencing theRestricted Shares.     **(d)****Corporate Acts.** The existence of the Restricted Shares shall notaffect in any way the right or power of the Board of Directors of the Company orthe shareholders of the Company to make or authorize any adjustment,recapitalization, reorganization or other change in the Company’s capitalstructure or its business, any merger or consolidation of the Company, any issueof debt or equity securities, the dissolution or liquidation of the Company or anysale, lease, exchange or other disposition of all or any part of its assets orbusiness or any other corporate act or proceeding. The prohibitions of Section2(a) hereof shall not apply to the transfer of Restricted Shares pursuant to aplan of reorganization of the Company, but the stock, securities or other propertyreceived in exchange therefor shall also become subject to the ForfeitureRestrictions and provisions governing the lapsing of such Forfeiture Restrictionsapplicable to the original Restricted Shares for all purposes of this Agreementand the certificates representing such stock, securities or other property shallbe legended to show such restrictions.     **3. ****Withholding of Tax.** To the extent that the receipt of the RestrictedShares or thelapse of any Forfeiture Restrictions results in compensation income to the Employeefor federalor state income tax purposes, the Employee is responsible for taxes due fromEmployee on suchcompensation income. In the event that the Employee fails to reimburse the Companyforamounts the Company is required to pay as withholding taxes on behalf of theEmployee, theCompany has the right to withhold from amounts otherwise due to the Employee, andtheEmployee hereby authorizes such withholding, an amount equal to the withholdingtaxes paid bythe Company by reason of compensation income to the Employee resulting under thisAgreement.     **4. ****Status of Stock.** The Employee agrees that the Restricted Shares issuedunderthis Agreement will not be sold or otherwise disposed of in any manner which wouldconstitute aviolation of any applicable federal or state securities laws. The Employee alsoagrees that (i) thecertificates representing the Restricted Shares may bear such legend or legends asthe Committeedeems appropriate in order to reflect the Forfeiture Restrictions and to assurecompliance withapplicable securities laws, (ii) the Company may refuse to register the transfer ofthe RestrictedShares on the stock transfer records of the Company if such proposed transfer wouldconstitute aviolation of the Forfeiture Restrictions or, in the opinion of counsel satisfactoryto the Company,
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of any applicable securities law, and (iii) the Company may give relatedinstructions to its transfer agent, if any, to stop registration of the transfer of theRestricted Shares.     **5. ****ServiceRelationship.** 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 theadoption ofthe Plan, nor the award of the Restricted Shares thereunder pursuant to this Agreement,shallconfer upon 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 orcommunicationsshall be effectively delivered if hand delivered to the Employee at his principal placeof employment or if sent by registered or certified mail to the Employee at the last addressthe Employee has filed with the Company. In the case of the Company, such notices orcommunications shall be effectively delivered if sent by registered or certified mail tothe Company at its principal executive offices.     **7.****Amendment.** This Agreement may not be modified in any respect by anyverbal statement, representation or agreement made by the Employee or by any employee,officer, or representative of the Company or by any written agreement unless signed bythe Employee and by an officer of the Company who is expressly authorized by the Companyto execute such document.     **8. ****Binding Effect.** This Agreement shall be binding upon and inure to thebenefit of any successors to the Company and all persons lawfully claiming under theEmployee.[This space is intentionally left blank.]
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     **9. ****Controlling Law.** This Agreement shall be governed by, andconstrued in accordance with, the laws of the State of Texas.     **IN WITNESS WHEREOF,**the Company has caused this Agreement to be duly executed by anofficer thereunto duly authorized, and the Employee has executed this Agreement, alleffective as of the Grant Date.         **CYBERONICS, INC.**           By: /s/ Pamela B. Westbrook           Name: Pamela B. Westbrook    Title: Vice President, Finance and Administration, Chief Financial Officer           **EMPLOYEE**           /s/ Richard Rudolph         Richard Rudolph  
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