EXHIBIT
10.55
 
   RELEASE
AGREEMENT
 
 This
Release Agreement (the “Agreement”), made and entered into this 4th day of May,
2007 by and between Cyberonics,
Inc., a Delaware corporation, having its principle place of business at
100 Cyberonics Blvd., Houston TX  77058 (the "Company") and John Riccardi, an individual
residing in League City, Texas (the "Individual").
 
 WHEREAS,
Individual was previously employed by Company; and
 
 WHEREAS,
such employment was terminated as of May 11, 2007; and
 
 WHEREAS,
Company is willing to provide Individual with certain consideration to which
Individual is not otherwise entitled in exchange for a release from
Individual;
 
 NOW,
THEREFORE, in consideration of a payment to Individual of an amount determined
by Company to be equal to that which would have been earned by Individual under
the Fourth Quarter 2007 Bonus Program had Individual been employed as of the
date that Program payments are made, less applicable deductions, as well as
forgiveness of any obligation for Individual to repay monies paid by Company to
or on behalf of Individual under the previously signed Relocation Agreement (the
“Relocation Agreement”), the parties agree as follows:
 
 1.           Termination of
Employment.  Individual and Company acknowledge that
Individual's employment by Company was terminated as of May 11,
2007.
 
 2.           Release. Individual,
individually and on behalf of Individual’s heirs, executors, administrators,
successors and assigns, hereby fully and finally RELEASES, ACQUITS and FOREVER
DISCHARGES the Company and its officers, directors, shareholders, subsidiaries
and other affiliates, predecessors and successors in interest, agents and
representatives, employees and insurers from all claims, demands, liability and
causes of action of whatsoever nature, whether in contract or tort, whether
pursuant to statute or common law including, but not limited to, the Title VII
Discrimination in Employment Act and the Americans With Disabilities Act, all as
amended, and any other applicable federal or state statutes arising out of or
pertaining to Individual’s employment with the Company and any of its
predecessors or affiliates.
 
 Company
hereby fully and finally RELEASES, ACQUITS and FOREVER DISCHARGES Individual
from all claims, demands, liability and causes of action of whatsoever nature,
whether in contract or tort, arising out of or pertaining to the repayment of
monies paid by Company to or on behalf of Individual under the Relocation
Agreement.
 
 3.           Covenants Not to
Sue.  Individual agrees and covenants not to sue or prosecute
any claim that might now or ever be asserted arising out of or pertaining to
Individual’s employment with the Company and any of its predecessors or
affiliates.
  4.           Indemnification.
Individual, individually and on behalf of Individual’s heirs, executors,
administrators, successors and assigns, hereby INDEMNIFIES and HOLDS HARMLESS
the Company, and its officers, directors, agents, employees, representatives and
insurers to save and indemnify it/them (1) for and from Individual's breach of
this Agreement’s Release, Covenant Not to Sue or Confidential Information
provisions (2) for and from any further claims, liability, costs or expenses
arising out of or pertaining to Individual’s employment.
 
 
 5.           Confidential
Information.  Individual reaffirms the obligations under that
certain Confidentiality Agreement executed at or immediately prior to the
beginning of his/her employment with the Company and acknowledges that those
obligations survive the termination of such employment.  The parties
agree to keep completely confidential the existence of the Agreement, as well as
all of the terms or amounts set forth in the Agreement, and neither party will
hereafter disclose any terms or information concerning the Agreement to any
other person, other than accountants, tax advisors, or attorneys, except as may
be required by law.  The parties further agree that in the event the
party makes a disclosure as permitted by the Agreement to an accountant, tax
advisor, or attorney, such party will advise such persons of the existence of
this confidentiality clause and of their obligation to abide by it. Further,
Individual agrees to refrain from making disparaging comments of any kind
regarding the Company or its employees to any third party including, but not
limited to, any employee, representative, customer or business affiliate of the
Company (“Third Party”) and will refrain from contacting any Third Party to the
extent that said contact is or could be disruptive to the Company.
 
 6.           Conditions.  Payment
of the consideration outlined above shall at all times be conditioned
upon:  (a) Individual returning to the Company the Company-owned
property identified on the Inventory List attached hereto as Attachment A; and
(b) Individual executing and returning this Agreement to the
Company.
 
 7.           Compliance
Questionnaire.  Individual acknowledges receipt of Company’s
Exit Questionnaire and will undertake to promptly complete and return the
questionnaire to the Company.
 
 8.           Miscellaneous.
Individual understands that Individual has the right to, and has been advised
to, consult with an attorney prior to signing.  Individual further
understands that Individual has a reasonable period of time to consider this
Agreement prior to signing it; provided, however, that this Agreement will be
deemed to be rejected if Individual does not return the executed Agreement
within fourteen (14) days of its receipt.  This Agreement shall not
become effective or enforceable until it has been executed by both
parties.
 
 9.           Complete
Agreement.  The parties agrees that this Agreement contains the
full and final expression of their agreement with respect to the matters
contained herein and acknowledges that no other promises have been made that are
not set forth in this Agreement.
 
 [SIGNATURES
APPEAR ON FOLLOWING PAGE]
 
 IN
WITNESS WHEREOF, the undersigned have executed this Release Agreement
voluntarily and of their own free will as of the date first written
above.
 
 
 /s/ John
Riccardi________________
 John
Riccardi
 
 Date:  May 4,
2007_______________
 
 
 
 
 /s/ George E. Parker,
III_____________
 Cyberonics,
Inc.
 By:
George E. Parker, III
 Title:  Interim
COO
 
 Date:  May 4,
2007_________________
 
 
 
 
  
 ATTACHMENT
A
 
 
 See
Attached Inventory List.
  Name:
                John
      RiccardiPosition:
                Chief
      Financial OfficerLast
      Day:
                5/11/2007
 Received
                                      To
      Be Returned
                                      Property
      Name
                                      Property
      Description
                                      Value
                                      Property
      For
                                      Employee
      Comments
                                      Other
      Notes/CommentsCUSTOMER
      SUPPORT
                                      
                                      
                                      Handheld
      Computer
                                      Live
      Product
                                      $440
                                      Field
      EE'sHHD
      Computer Bag
                                      Demo
      Product
                                      $15
                                      Field
      EE'sProgramming
      Wand
                                      Live
      Product
                                      $260
                                      Field
      EE'sDemo/Practice
      Lead
                                      Demo/Training
      Product
                                      $400
                                      Field
      EE'sPractice
      Block
                                      Training
      Product
                                      $45
                                      Field
      EE'sDemo
      102/102R Generator
                                      Demo
      Product
                                      $750
                                      Field
      EE's102
      Generator
                                      Trunk
      Stock/Live Product
                                      $750
                                      Varies102R
      Generator
                                      Trunk
      Stock/Live Product
                                      $700
                                      Varies302-20
      Lead
                                      Trunk
      Stock/Live Product
                                      $700
                                      Varies302-30
      Lead
                                      Trunk
      Stock/Live Product
                                      $450
                                      Varies402
      Tunneling Tool
                                      Trunk
      Stock/Live Product
                                      $60
                                      Varies502
      Accessory Kit
                                      Trunk
      Stock/Live Product
                                      $100
                                      VariesPatient
      Kit
                                      Trunk
      Stock/Live Product
                                      $30
                                      VariesHR
                                      
                                      x
                                      Access
      Card
                                      
                                      $0
                                      Variesx
                                      Company
      ID Badge
                                      Picture
      Badge
                                      $0
                                      Variesx
                                      Corporate
      AMEX Card
                                      
                                      $0
                                      Varies
 
 
 
 
 
 Received
                                          To
      Be Returned
                                          Property
      Name
                                          Property
      Description
                                          Value
                                          Property
      For
                                          Employee
      Comments
                                          Other
      Notes/ CommentsINFORMATION
      TECHNOLOGY
                                          
                                          
                                          Auto
      / Air Adapter
                                          
                                          $60
                                          VariesBlackberry
      Car Charger
                                          
                                          $5
                                          VariesBlackberry
      Combo
                                          
                                          $300
                                          VariesBlackberry
      Travel Charger
                                          
                                          $30
                                          VariesBlue
      Tooth Headset
                                          
                                          $70
                                          VariesCall
      Recorder
                                          
                                          $30
                                          CM
      and IT Telecom'sCell
      Phone
                                          
                                          $80
                                          VariesCRT
      Monitor
                                          
                                          $200
                                          VariesX
                                          Dell
      Notebook Computer
                                          
                                          $2,500
                                          All
      Field EE'sDell
      Optiplex Desktop Computer
                                          
                                          $1,650
                                          CM
      and IT Telecom'sDocking
      Station
                                          
                                          $150
                                          VariesKeyboard
      and Mouse
                                          
                                          $20
                                          VariesLCD
      Monitor
                                          
                                          $300
                                          VariesMonitor
      Stand
                                          
                                          $50
                                          VariesMulti-Function
      Printer
                                          
                                          $250
                                          VariesMulti-Function
      Printer - Other Model
                                          
                                          $450
                                          Some
      RAM's, CEPanasonic
      2 Line Analog Phone
                                          
                                          $40
                                          VariesPC
      Cards
                                          
                                          $175
                                          VariesPlantronics
      Headset
                                          
                                          $250
                                          Varies/
      WirelessPortable
      Projector
                                          
                                          $1,500
                                          RMWireless
      Router
                                          
                                          $60
                                          Varies





Received
                                          To
      Be Returned
                                          Property
      Name
                                          Property
      Description
                                          Value
                                          Property
      For
                                          Employee
      Comments
                                          Other
      Notes/CommentsSLS
      & MKTG
                                          
                                          
                                          Depression
      Portfolio
                                          
                                          $200
                                          TC,
      RM, GBUDEpilepsy
      Portfolio
                                          
                                          $200
                                          TC,
      RM, GBUDIn-Service
      Bags
                                          Has
      wheels & VNS Logo
                                          $75
                                          TC,
      RMSurgical/Hospital
      Portfolio
                                          
                                          $200
                                          TC,
      RM