Exhibit 10.58**EMPLOYMENT AGREEMENT**     This Employment Agreement (the “Agreement”), entered into effective as of June15, 2006 (the “Effective Date”), by and between Cyberonics, Inc. (the “Company”)and Pamela B. Westbrook (“Employee”).**WITNESSETH:**     WHEREAS, the Company desires to secure the experience, abilities and serviceof Employee by employing Employee upon the terms and conditions specified herein;and     WHEREAS, Employee is willing to enter into this Agreement upon the terms andconditions specified herein;     NOW, THEREFORE, in consideration of the premises, terms and provisions setforth herein, the mutual benefits to be gained by the performance thereof and othergood and valuable consideration, the receipt and sufficiency of which are herebyacknowledged, the parties hereto agree as follows:     SECTION1. Employment. The Company hereby employs Employee, andEmployee hereby accepts such employment, all upon the terms and conditions setforth herein.     SECTION 2. Term. Subject to the terms and conditions of thisAgreement, unless sooner terminated pursuant to Section 5 of this Agreement,Employee shall be employed by the Company commencing on the Effective Date andterminating on June 1, 2009 (the “Term”). Termination of this Agreement shall notalter or impair any rights of Employee (or his beneficiaries or heirs) with respectto payments, benefits or other rights provided by the terms of this Agreement,arising before or after the end of the Term.     SECTION3. Duties, Responsibilities and Location.     A. Capacity. Employee shall serve as the Vice President,Finance andAdministration and Chief Financial Officer of the Company and shallreport to theChief Executive Officer of the Company.     B. Full-Time Duties. Employee shall devote his fullbusiness time,attention and energies to the business of the Company.Notwithstanding anythingherein to the contrary, Employee shall be allowed to (i) manageEmployee’spersonal investments and affairs and, (ii) with the written consentof the ChiefExecutive Officer of the Company, serve on boards or committees ofcivic orcharitable organizations or trade associations, provided that suchactivities do notmaterially interfere with his performance of the duties andresponsibilities of hisposition specified in Section 3.A.     C. Offices. Employee’s primary place of work shall beat the principle executive offices of the Company located in thegreater Houston, Texas
 

 
metropolitan area, but Employee shall be required to travel on a basis consistentwith his position.     SECTION 4. Compensation.     A. Base Salary. During the Term, Employee shall receive an annualsalary of $300,000 (the “Base Salary”) payable in accordance with theCompany’sgeneral payroll practices. Employee’s Base Salary shall be reviewed prior to thebeginning of each fiscal year of the Company for increase in the discretion of theCompensation Committee of the Board of Directors (“CompensationCommittee”); provided, however, that the Base Salary, as it may be increased atany time, may not thereafter be decreased.     B.Annual Incentive Bonus. During the Term, Employee shall beeligible to participate in the Annual CEO Direct Reports Bonus Plan, with a targetbonus of 50% of Employee’s annual Base Salary. A bonus, if earned, shall bepayable as soon as reasonably practical following the completion of the applicablefiscal year. Bonuses for Employee shall be based on the achievement of suchCompany, departmental and/or individual performance goals that may beestablished for the applicable bonus year by the Compensation Committee.     C. Annual Overachievement Bonus. During the Term, Employee shallbe eligible to participate in the Annual CEO Direct Reports OverachievementBonus Plan as determined by the Compensation Committee. OverachievementBonuses shall be based on the Company’s overachievement of such Company,departmental and/or individual performance goals that may be established for theapplicable bonus year by the Compensation Committee.     D. Equity Compensation. Employee will be eligible for grants of Company stockoptions (the “Options”) and other equity awards in the discretion of the CompensationCommittee.     E. General Benefits. Upon satisfying applicableeligibilityrequirements, if any, Employee will be eligible to participate in the Company’squalified 401(k) plan, group health, group life insurance, accidental death anddismemberment, travel accident, long-term disability and short-term disabilityplans and other welfare and similar plans and vacation policies under termsgenerally applicable to other similarly situated employees of the Company andshall be eligible to receive all perquisites and other benefits provided or madeavailable by the Company to other similarly situated executives of the Company.     F. Reimbursements. Employee shall be entitled to receive promptreimbursement by the Company in accordance with its business reimbursementpolicy in effect from time to time for all reasonable, out-of-pocket businessexpenses incurred by him in performing his duties under this Agreement upon thesubmission by Employee of such accounts and records as may be reasonablyrequired under the Company’s business reimbursement policy.
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     SECTION 5. Termination of Employment. Notwithstanding the provisions of Section *2,*Employee’s employment hereunder may terminate under any of the following conditions:     A, Death. Employee’s employment under this Agreement shall terminateautomatically upon his death.     B. Disability. Employee’s employment under this Agreement may beterminated due to his Disability. “Disability” shall mean Employee’s inability tosubstantially perform his duties hereunder for any period of at least 180consecutive days due to a physical or mental incapacity. The date of terminationdue to Disability shall be the date Employee elects to terminate his employmentservice due to such Disability or, if earlier, the date the Board determines thatEmployee has met the definition of Disability and given written notice of suchtermination to Employee.     C. Termination by Company Without Cause. The Company may terminateEmployee’s employment hereunder without Cause (as hereinafter defined) on 30 days’prior written notice to Employee.     D. Termination by Company for Cause. Employee’s employmenthereunder may be terminated for Cause by the Company. For purposes of thisAgreement, “Cause” shall mean (i) the willful and continued failure by Employeeto substantially perform Employee’s duties with the Company (other than anysuch failure resulting from Employee’s incapacity due to physical or mentalillness), (ii) an act or acts of dishonesty taken by Employee and intended toresultin personal enrichment of Employee at the expense of the Company, (iii) willfulviolation by Employee of Employee’s material obligations under this Agreement,(iv) willful violation by Employee of a material policy of the Company,includingits policies regarding professional and ethical conduct, (v)Employee’scommission of one or more acts that constitute a felony, (vi) Employee ispubliclycensured by the Securities Exchange Commission, or (vii) Employee commits oneor more acts of fraud as regards the Company. For purposes of clause (i) ofthisdefinition, no act, or failure to act, on Employee’s part shall be deemed“willful”unless done, or omitted to be done, by Employee not in good faith and withoutreasonable belief that Employee’s act, or failure to act, was in the bestinterest ofthe Company. The determination of whether Cause exists must be made by aresolution duly adopted by the affirmative vote of not less than a majority oftheentire membership of the Board of Directors of the Company.     E. Termination by Employee. Employee may terminate hisemployment hereunder at any time on 30 days’ prior written notice to the Board.
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     SECTION 6. Payments Upon Termination.     A. Upon termination of Employee’s employment for any reason prior to the expirationof the Term, the Company shall be obligated to pay, and Employee shall be entitled toreceive:     1. all accrued and unpaid Base Salary to the date of termination;     2. any earned, but unpaid, bonuses for the bonus year ending priorto the date of termination;     3. all incurred but unreimbursed business expenses for whichEmployee is entitled to reimbursement; and     4. any benefits to which he is entitled under the terms of anyapplicable employee benefit plan or program, or applicable law.     B. Upon termination of Employee’s employment pursuant to Section 5.C., the Companyshall be obligated to pay or provide, and Employee’s estate or beneficiary shall beentitled to receive:     1. all of the amounts and benefits described in Section 6.A.; and     2. either (a) a lump sum payment equal to 1.5 times the sum of (i)Employee’s Base Salary, plus (ii) the most recent annual bonus earned byEmployee or (b) a lump sum payment equal to 1.5 times Employee’s BaseSalary and, solely for purposes of determining Employee’s vesting underany Options, the number of shares that would become vested under suchOptions during the 12-month period following Employee’s terminationdate if Employee’s employment had continued during such period shallbecome vested on his termination of employment date, whichever of (a) or(b) is elected by Employee in writing to the Company within five days ofhis termination date.     C. In the event of any termination of employment under Section 5,Employee shall be under no obligation to seek other employment, and there shallbe no offset against amounts due Employee under this Agreement on account ofany remuneration attributable to any subsequent employment or self-employmentthat he may obtain.     D. The Company and Employee have previously or contemporaneouslywith this Agreement entered into a Severance Agreement which provides certainpayments and benefits to Employee upon a qualified termination of employmentin connection with a change of control of the Company. Notwithstandinganything in this Agreement to the contrary, to the extent Employee is entitled toreceive any severance payment or benefits under the Severance Agreement any
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severance payment or benefits to which Employee is otherwise entitled to receiveunder this Agreement shall be reduced or offset by the severance payment or benefitpayable under the Severance Agreement in such manner as is appropriate, asdetermined in good faith by the Board, to prevent a duplication of such payment andbenefits.     SECTION 7. Indemnification. The Company agrees to indemnify Employee to the fullest extentpermitted by applicable law with respect to any acts or non-acts he may have committed during theperiod which he was an officer, director and/or employee of the Company or any subsidiary oraffiliate thereof, or of any other entity of which he served as an officer, director or employeeat the request of the Company.     SECTION 8. Covenants of Employee. Employee covenants as follows:     A. Confidentiality. During and after his employment with the Companyand its affiliates, Employee will hold in confidence all confidential informationand will not disclose it to any person other than in connection with the performanceof his duties and obligations hereunder, except with the specific prior writtenconsent of the Board of Directors or the Chief Executive Officer; provided, however,that the parties agree that this Agreement does not prohibit the disclosure ofconfidential information where applicable law requires, including, but not limitedto, in response of subpoenas and/or orders of a governmental agency or court ofcompetent jurisdiction. In the event that Employee is requested or becomes legallycompelled under the terms of a subpoena or order issued by a court of competentjurisdiction or by a governmental body to make any disclosure of confidentialinformation, Employee agrees that he will (i) immediately provide the Company withwritten notice of the existence, terms and circumstances, surrounding suchrequest(s) so that the Company may seek an appropriate protective order or otherappropriate remedy, (ii) cooperate with the Company in its efforts to decline,resist or narrow such requests and (iii) if disclosure of such confidentialinformation is required in the opinion of counsel, exercise reasonable efforts toobtain an order or other reliable assurance that confidential treatment will beaccorded to such disclosed information. “Confidential information.” means any andall intellectual property of the Company (or any of its affiliates), including butnot limited to: (a) trade secrets concerning the business and affairs of the Company(or any of its affiliates), product specifications, data, know-how, formulae,compositions, processes, designs, sketches, photographs, graphs, drawings, samples,inventions and ideas, past, current, and planned research and development, currentand planned manufacturing or distribution methods and processes, customer lists,current and anticipated customer requirements, price lists, market studies, businessplans, computer software and programs (including object code and source code),computer software and database technologies, systems, structures, and architectures(and related formulae, compositions, processes, improvements, devices, know-how,inventions, discoveries, concepts, ideas, designs, methods and information), and anyother information, however documented, that is a trade secret under federal, stateor other applicable law; and (b) information concerning
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the business and affairs of the Company (or any of its affiliates) (whichincludes historical financial statements, financial projections and budgets,historical and projected sales, capital spending budgets and plans, the namesand backgrounds of key personnel, personnel training and techniques andmaterials), however documented; and notes, analysis, compilations, studies,summaries, and other material prepared by or for the Company (or any of itsaffiliates) containing or based, in whole or in part, on any informationincluded in the foregoing.     B. Trade Secrets. Any trade secrets of the Company will be entitled to allof the protections and benefits under the federal and state trade secret andintellectual property laws and any other applicable law. If any information thatthe Company deems to be a trade secret is found by a court of competentjurisdiction not to be a trade secret for purposes of this Agreement, suchinformation will, nevertheless, be considered confidential information forpurposes of this Agreement, so long as it otherwise meets the definition ofconfidential information, Employee hereby waives any requirement that the Companysubmit proof of the economic value of any trade secret or post a bond or othersecurity.     C. Proprietary Items. Employee will not remove from the Company’spremises (except to the extent such removal is for purposes of the performanceof Employee’s duties at home or while traveling, or except as otherwisespecifically authorized by the Company) any document, record, notebook, plan,model, component, device, or computer software or code, whether embodied in adisk or in any other form belonging to the Company or used in the Company’sbusiness (collectively, the “Proprietary Items”). All of the Proprietary Items,whether or not developed by Employee, are the exclusive property of the Company.Upon termination of his employment, or upon the request of the Company duringthe Term, Employee will return to the Company all of the Proprietary Items andconfidential information in Employee’s possession or subject to Employee’scontrol, and Employee shall not retain any copies, abstracts, sketches, or otherphysical embodiment, including electronic or otherwise, of any of theProprietary Items or confidential information.     D. Non-Competition and Non-interference. During the period of hisemployment with the Company or its affiliates and for the one-year period afterthe termination of his employment with the Company and its affiliates, Employeewill not, directly or indirectly:     1. without the express prior written consent of the Board ofDirectors, own an interest in, manage, operate, join, control, lend moneyor render financial or other assistance to or participate in or beconnected with, as an officer, employee, partner, stockholder, consultantor otherwise, any person that competes with the Company in the field ofneurostimulation in a matter covered by a patent assigned to or held bythe Company; provided, however, that following Employee’s termination ofemployment with the Company the foregoing restriction shall apply only
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to those areas where the Company is actually doing business on the date of suchtermination of employment; provided, further, that Employee may purchase or otherwiseacquire for passive investment up to 3% of any class of securities of any such enterpriseif such securities are listed on any national or regional securities exchange or have beenregistered under Section 12(g) of the Securities Exchange Act of 1934;     2*.*whether for Employee’s own account or for the account of anyother person, (except for the account of the Company and its affiliates),solicit Business from any person known by Employee to be a customer ofthe Company or its affiliates, whether or not Employee had personalcontact with such person during Employee’s employment with theCompany and its affiliates;     3. whether for Employee’s own account or the account of any otherperson, (i) solicit, employ, or otherwise engage as an employee,independent contractor, or otherwise, any person who is an employee ofthe Company or an affiliate, or in any manner induce, or attempt to induce,any employee of the Company or its affiliate to terminate his employmentwith the Company or its affiliate; or (ii) interfere with the Company’s orits affiliate’s relationship with any person who at any time during theTerm, was an employee, contractor, supplier, or customer of the Companyor its affiliate; or     4. at any time after the termination of his employment, disparagethe Company or its affiliates or any shareholders, directors, officers,employees, or agents of the Company or any of its affiliates, so long as theCompany does not disparage Employee.     E. Acknowledgements. The Company acknowledges that it is providing Employee withconfidential information in order for Employee to perform his duties under this Agreement Employeeacknowledges that (a) the services to be performed by him under this Agreement are of a special,unique, unusual, extraordinary, and intellectual character, and (b) the provisions of this Section8 are reasonable and necessary to protect the confidential information, goodwill and otherbusiness interests of the Company.. If any covenant in this Section 8 is held to be unreasonable,arbitrary, or against public policy, such covenant will be considered to be divisible with respectto scope, time, and geographic area, and such lesser scope, time, or geographic area, or all ofthem, as a court of competent jurisdiction may determine to be reasonable, not arbitrary, and notagainst public policy, will be effective, binding, and enforceable against Employee. Employeehereby agrees that this covenant is a material and substantial part of this Agreement and that:(i) the geographic limitations are reasonable; (ii) the term of the covenant is reasonable; and(iii) the covenant is not made for the purpose of limiting competition per se and is reasonablyrelated to a protectable business interest of the Company, The period of time applicable to anycovenant in this Section 8 will be extended by the duration of any violation
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byEmployee of such covenant. The provisions of this Section 8 shall survive thetermination of the Term of this Agreement.     SECTION 9. Injunctive Relief and Additional Remedy. Employee acknowledges that theinjury that would be suffered by the Company as a result of a breach of the provisions of Section8 of this Agreement would be irreparable and that an award of monetary damages to the Company forsuch a breach would be an inadequate remedy. Consequently, the Company will have the right, inaddition to any other rights it may have, to obtain a temporary restraining order and/orinjunctive relief to restrain any breach or threatened breach or otherwise to specifically enforceany provision of this Agreement. Employee waives any requirement for the Company’s securing orposting of any bond in conjunction with any such remedies. Employee further agrees to and herebydoes submit to in personam jurisdiction before each and every court for that purpose. Withoutlimiting the Company’s rights under this Section or any other remedies of the Company, if Employeebreaches any of the provisions of Section 8 and such breach is proven in a court of competentjurisdiction, the Company will have the right to cease making any payments or providing otherbenefits otherwise due Employee under this Agreement.     SECTION 10. Amendment; Waiver. The terms and provisions of this Agreement may bemodified or amended only by a written instrument executed by each of the parties hereto, andcompliance with the terms and provisions hereof may be waived only by a written instrument executedby each party entitled to the benefits thereof. No failure or delay on the part of any party inexercising any right, power or privilege granted hereunder shall constitute a waiver thereof, norshall any single or partial exercise of any such right, power or privilege preclude any other orfurther exercise thereof or the exercise of any other right, power or privilege granted hereunder.     SECTION 11. Entire Agreement. Except as contemplated herein, this Agreement constitutesthe entire agreement between the parties with respect to the subject matter hereof and supersedesany and all prior or contemporaneous written or oral agreements, arrangements or understandingsbetween the Company and Employee.     SECTION 12. Notices. All notices or communications hereunder shall be in writing,addressed as follows or to any address subsequently provided to the other party:To the Company:Cyberonics, Inc.