<PAGE>

                                                                     EXHIBIT 4.3

                                CYBERONICS, INC.

                        1991 EMPLOYEE STOCK PURCHASE PLAN
                               (SECOND AMENDMENT)

     The following constitute the provisions of the 1991 Employee Stock Purchase
Plan of Cyberonics, Inc., as amended November 29, 2001.

1. Purpose. The purpose of the Plan is to provide employees of the Company and
its Designated Subsidiaries with an opportunity to purchase Common Stock of the
Company through accumulated payroll deductions. It is the intention of the
Company to have the Plan qualify as an "Employee Stock Purchase Plan" under
Section 423 of the Internal Revenue Code of 1986, as amended. The provisions of
the Plan, accordingly, shall be construed so as to extend and limit
participation in a manner consistent with the requirements of that section of
the Code.

2. Definitions.

         (a) "Board" shall mean the Board of Directors of the Company.

         (b) "Code" shall mean the Internal Revenue Code of 1986, as amended.

         (c) "Common Stock" shall mean the Common Stock of the Company.

         (d) "Company" shall mean Cyberonics, Inc., a Delaware corporation.

         (e) "Compensation" shall mean all base straight time gross earnings,
overtime, shift premium and commissions, but shall exclude incentive
compensation, incentive payments, bonuses and other compensation.

         (f) "Designated Subsidiaries" shall mean the Subsidiaries which have
been designated by the Board from time in its sole discretion as eligible to
participate in the Plan.

         (g) "Employee" shall mean any individual who is an employee of the
Company or a Designated Subsidiary for purposes of tax withholding under the
Code whose customary employment with the Company or any Designated Subsidiary is
for at least twenty (20) hours per week and for more than five (5) months in any
calendar year. For purposes of the Plan, the employment relationship shall be
treated as continuing intact while the individual is on sick leave or other
leave of absence approved by the Company or a Designated Subsidiary. Where the
period of leave exceeds 90 days and the individual's right to reemployment is
not guaranteed either by statute or by contract, the employment relationship
will be deemed to have terminated on the 91st day of such leave.

         (h) "Enrollment Date" shall mean the first day of each Offering Period.

         (i) "Exercise Date" shall mean the last day of each Offering Period.

         (j) "Fair Market Value" shall mean, as of any date, the value of Common
Stock determined as follows:

                      (1)If the Common Stock is listed on any established stock
                  exchange or a national market system, including without
                  limitation the National Market System of the National
                  Association of Securities Dealers, Inc. Automated Quotation
                  ("NASDAQ") System, its Fair Market Value shall be the closing
                  sale price for the Common Stock (or the mean of the closing
                  bid and asked prices, if no sales were reported), as quoted on
                  such exchange (or the exchange with the greatest volume of
                  trading in Common Stock) or system on the date of such
                  determination, as reported in the Wall Street Journal or such
                  other source as the Board deems reliable, or

                      (2)If the Common stock is quoted on the NASDAQ system (but
                  not on the National Market System thereof) or is regularly
                  quoted by a recognized securities dealer but selling prices
                  are not
<PAGE>

                  reported, its Fair Market Value shall be the mean of the
                  closing bid and asked prices for the Common Stock on the date
                  of such determination, as reported in the Wall Street Journal
                  or such other sources as the Board deems reliable, or

                      (3)In the absence of an established market for the Common
                  Stock, the Fair Market Value thereof shall be determined in
                  good faith by the Board.

         (k) "Offering Period" shall mean a period of approximately six (6)
months, commencing (i) on the first Trading Day on or after December 1 and
terminating on the last Trading Day in the period ending the following May 30 or
(ii) on or after June 1 and terminating on the last Trading Day in the period
ending the following November 30, during which an option granted pursuant to the
Plan may be exercised.

         (l) "Plan" shall mean this Employee Stock Purchase Plan.

         (m) "Purchase Price" shall mean an amount equal to 85% of the Fair
Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.

         (n) "Reserves" shall mean the number of shares of Common Stock covered
by each option under the Plan which has not yet been exercised and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but not yet placed under option.

         (o) "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting share are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.

         (p) "Trading Day" shall mean a day on which national stock exchanges
and the National Association of Securities Dealers Automated Quotation (NASDAQ)
System are open for trading.

3. Eligibility.

                (a) Any Employee who, on a given Enrollment Date, shall be
         employed by the Company or a Designated Subsidiary and shall have been
         an Employee for the 90-day period preceding such Enrollment Date shall
         be eligible to participate in the Plan for such Offering Period.

                (b) Any provisions of the Plan to the contrary notwithstanding,
         no Employee shall be granted an option under the Plan (i) to the
         extent, immediately after the grant, such Employee (or any other person
         whose stock would be attributed to such Employee pursuant to Section
         424(d) of the Code) would own capital stock of the Company and/or hold
         outstanding options to purchase such stock possessing five percent (5%)
         or more of the total combined voting power or value of all classes of
         the capital stock of the Company or of any Subsidiary, or (ii) to the
         extent his or her rights to purchase stock under all employee stock
         purchase plans of the Company and its Subsidiaries accrue at a rate
         which exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock
         (determined at the Fair Market Value of the shares at the time such
         option is granted) for each calendar year in which such option is
         outstanding at any time.

4. Offering Periods.The Plan shall be implemented by consecutive Offering
Periods with a new Offering Period commencing on the first Trading Day on or
after June 1 and December 1 each year, or on such other date as the Board shall
determine, and continuing thereafter until terminated in accordance with Section
19 hereof. The Board shall have the power to change the duration of Offering
Periods (including the commencement dates thereof) with respect to future
offerings without shareholder approval if such change is announced at least
fifteen (15) days prior to the scheduled beginning of the first Offering Period
to be affected thereafter.

5. Participation.

                (a) An eligible Employee may become a participant in the Plan by
         completing a subscription agreement authorizing payroll deductions in
         the form of Exhibit A to this Plan and filing it with the Company's or
         Designated Subsidiary's payroll office at least five (5) business days
         prior to the applicable Enrollment Date,

                                       2
<PAGE>

         unless a later time for filing the subscription agreement is set by the
         Board for all eligible Employees with respect to a given Offering
         Period.

                (b) Payroll deductions for a participant shall commence on the
         first payroll following the Enrollment Date and shall end on the last
         payroll in the Offering Period to which such authorization is
         applicable, unless sooner terminated by the participant as provided in
         Section 10 hereof.

6. Payroll Deductions

                (a) At the time a participant files his or her subscription
         agreement, he or she shall elect to have payroll deductions made on
         each pay day during the Offering Period in an amount, expressed in
         whole percentages, of the Compensation which he or she receives on each
         pay day during the Offering Period not exceeding fifteen percent (15%),
         and the aggregate of such payroll deductions during the Offering Period
         shall not exceed fifteen percent (15%) of the participant's
         Compensation during said Offering Period.

                (b) All payroll deductions made for a participant shall be
         credited to his or her account under the Plan. A participant may not
         make any additional payments in such account.

                (c) A participant may discontinue his or her participation in
         the Plan as provided in Section 10 hereof, or may increase (but not
         above 15% of Compensation) or decrease the rate of his or her payroll
         deductions during the Offering Period by completing or filing with the
         Company or Designated Subsidiary a new subscription agreement
         authorizing a change in payroll deduction rate. The Board may, in its
         discretion, limit the number of participation rate changes during any
         Offering Period. The change in rate shall be effective with the first
         full payroll period following five (5) business days after the
         Company's or Designated Subsidiary's receipt of the new subscription
         agreement unless the Company or Designated Subsidiary elects to process
         a given change in participation more quickly. A participant's
         subscription agreement shall remain in effect for successive Offering
         Periods unless terminated as provided in Section 10 hereof.

                (d) Notwithstanding the foregoing, to the extent necessary to
         comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a
         participant's payroll deductions may be decreased to 0% at such time
         during any Offering Period which is scheduled to end during the current
         calendar year (the "Current Offering Period") that the aggregate of all
         payroll deductions which were previously used to purchase stock under
         the Plan in a prior Offering Period which ended during that calendar
         year plus all payroll deductions accumulated with respect to the
         Current Offering Period equal $21,250. Payroll deductions shall
         recommence at the rate provided in such participant's subscription
         agreement at the beginning of the first Offering Period which is
         scheduled to end in the following calendar year, unless terminated by
         the participant as provided in Section 10 hereof.

                (e) At the time the option is exercised, in whole or in part, or
         at the time some or all of the Company's Common Stock issued under the
         Plan is disposed of, the participant must make adequate provision for
         the Company's or Designated Subsidiary's federal, state, or other tax
         withholding obligations, if any, which arise upon the exercise of the
         option or the disposition of the Common Stock. At any time, the Company
         or Designated Subsidiary may, but will not be obligated to, withhold
         from the participant's compensation the amount necessary for the
         Company or Designated Subsidiary to meet applicable withholding
         obligations, including any withholding required to make available to
         the Company or Designated Subsidiary any tax deductions or benefits
         attributable to a sale or early disposition of Common Stock by the
         Employee.

7. Grant of Option. On the Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
option to purchase on the Exercise Date of such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Offering Period more than a
number of Shares determined by dividing $12,500 by the Fair Market Value of a
share of the Company's Common Stock on the Enrollment Date, and provided further
that such purchase shall be subject to the limitations set forth in Sections
3(b) and 12 hereof. Exercise of the option shall occur as provided in Section 12
hereof, and shall expire on the last day of the Offering Period.

                                       3
<PAGE>

8. Exercise of Option. Unless a participant withdraws from the Plan as provided
in Section 10 hereof, his or her option for the purchase of shares will be
exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares will be purchased; any payroll deductions
accumulated payroll deductions in a participant's account which are not
sufficient to purchase a full share shall be retained in the participant as
provided in Section 10 hereof. Any other monies left over in a participant's
account after the Exercise Date shall be returned to the participant. During a
participant's lifetime, a participant's option to purchase shares hereunder is
exercisable only by him or her.

9. Deliver. As promptly as practicable after each Exercise Date on which a
purchase of shares occurs, the Company shall arrange the delivery to each
participant, as appropriate, of a certificate representing the shares purchased
upon exercise of his or her option.

10. Withdrawal: Termination of Employment.

                (a) A participant may withdraw all but not less than all the
         payroll deductions credited to his or her account and not yet used to
         exercise his or her option under the Plan at any time by giving written
         notice to the Company in the form of Exhibit B to this Plan. All of the
         participant's payroll deductions credited to his or her account will be
         paid to such participant promptly after receipt of notice of withdrawal
         and such participant's option for the Offering Period will be
         automatically terminated, and no further payroll deductions for the
         purchase of shares will be made during the Offering Period. If a
         participant withdraws from an Offering Period, payroll deductions will
         not resume at the beginning of the succeeding Offering Period unless
         the participant delivers to the Company a new subscription agreement.

                (b) Upon a participant's ceasing to be an Employee (as defined
         in Section 2(g) hereof), for any reason, including by virtue of him or
         her having failed to remain an Employee of the Company or a Designated
         Subsidiary for at least twenty (20) hours per week during an Offering
         Period in which the Employee is a participant, he or she will be deemed
         to have elected to withdraw from the Plan and the payroll deductions
         credited to such participant's account during the Offering Period but
         not yet used to exercise the option will be returned to such
         participant or, in the case of his or her death, to the person or
         persons entitled thereto under Section 14 hereof, and such
         participant's option will be automatically terminated.

                (c) A participant's withdrawal from an Offering Period will not
         have any effect upon his or her eligibility to participate in any
         similar plan which may hereafter be adopted by the Company or in
         succeeding Offering Periods which commence after the termination of the
         Offering Period from which the participant withdraws.

11. Interest. No interest shall accrue or be payable on the payroll deductions
of a participant in the Plan.

12. Stock.

                (a) The maximum number of shares of the Company's Common Stock
         which shall be made available for sale under the Plan shall be 950,000
         shares, subject to adjustment upon changes in capitalization of the
         Company as provided in Section 18 hereof. If on a given Exercise Date
         the Number of shares with respect to which options are to be exercised
         exceeds the number of shares then available under the Plan, the Company
         shall make a pro rata allocation of the shares remaining available for
         purchase in as uniform a manner as shall be practicable and as it shall
         determine to be equitable.

                (b) The participant will have no interest or voting right in
         shares covered by his option until such option has been exercised.

                (c) Shares to be delivered to a participant under the Plan will
         be registered in the name of the participant or in the name of the
         participant and his or her spouse.

13. Administration.

                                       4
<PAGE>

                (a) Administrative Body. The Plan shall be administered by the
         Board or a committee of members of the Board appointed by the Board.
         The Board or its committee shall have full and exclusive discretionary
         authority to construe, interpret and apply the terms of the Plan, to
         determine eligibility and to adjudicate all disputed claims filed under
         the Plan. Every finding, decision and determination made by the Board
         or its committee shall, to the full extent permitted by law, be final
         and binding upon all parties. Members of the Board who are eligible
         Employees are permitted to participate in the Plan, provided that:

                      (1) Members of the Board who are eligible to participate
                  in the Plan may not vote on any matter affecting the
                  administration of the Plan or the grant of any option pursuant
                  to the Plan.

                      (2) If a Committee is established to administer the Plan,
                  no member of the Board who is eligible to participate in the
                  Plan may be a member of the Committee.

                (b) Rule 16b-3 Limitations. Not withstanding the provisions of
         Subsection (a) of this Section 13, in the event that Rule 16b-3
         promulgated under the Securities Exchange Act of 1934, as amended (the
         "Exchange Act"), or any successor provision ("Rule 16b-3") provides
         specific requirements for the administrators of plans of this type, the
         Plan shall be only administered by such a body and in such a manner as
         shall comply with the applicable requirements of Rule 16b-3.

14. Designation of Beneficiary.

                (a) A participant may file a written designation of a
         beneficiary who is to receive any shares and cash, if any, from the
         participant's account under the Plan in the event of such participant's
         death subsequent to an Exercise Date on which the option is exercised
         but prior to delivery to such participant of such shares and cash. In
         addition, a participant may file a written designation of a beneficiary
         who is to receive any cash from the participant's account under the
         Plan in the event of such participant's death prior to exercise of the
         option. If a participant is married and the designated beneficiary is
         not the spouse, spousal consent shall be required for such designation
         to be effective.

                (b) Such designation of beneficiary may be changed by the
         participant at any time by written notice. In the event of the death of
         a participant and in the absence of a beneficiary validly designated
         under the Plan who is living at the time of such participant's death,
         the Company shall deliver such shares and/or cash to the executor or
         administrator of the estate of the participant, or if no such executor
         or administrator has been appointed (to the knowledge of the Company),
         the Company, in its discretion, may deliver such shares and/or cash to
         the spouse or to any one or more dependents or relatives of the
         participant, or if no spouse, dependent or relative is know to the
         Company, then to such other person as the Company may designate.

15. Transferability. Neither payroll deductions credited to a participant's
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and distribution
or as provided in Section 14 hereof) by the participant. Any such attempt at
assignment transfer, pledge or other disposition shall be without effect, except
that the Company may treat such act as an election to withdraw funds from an
Offering Period in accordance with Section 10 hereof.

16. Use of Funds. All payroll deductions received or held by the Company under
the Plan may be used by the Company for any corporate purpose, and the Company
shall not be obligated to segregate such payroll deductions.

17. Reports. Individual accounts will be maintained for each participant in the
Plan. Statements of account will be given to participating Employees at least
annually, which statements will set forth the amounts of payroll deductions, the
Purchase Price, the number of Shares purchased and the remaining cash balance,
if any.

18. Adjustments Upon Changes in Capitalization.

                (a) Changes in Capitalization. Subject to any required action by
         the shareholders of the Company, the Reserves as well as the price per
         share of Common Stock covered by each option under the Plan which has

                                       5
<PAGE>

         not yet been exercised shall be proportionately adjusted for any
         increase or decrease in the number of issued shares of Common Stock
         resulting from a stock split, reverse stock split, stock dividend,
         combination or reclassification of the Common Stock, or any other
         increase or decrease in the number of shares of Common Stock effected
         without receipt of consideration by the Company; provided, however,
         that conversion of any convertible securities of the Company shall not
         be deemed to have been "effected without receipt of consideration".
         Such adjustment shall be made by the Board, whose determination in that
         respect shall be final, binding and conclusive. Except as expressly
         provided herein, no issuance by the Company of shares of stock of any
         class, or securities convertible into shares of stock of any class,
         shall affect, and no adjustment by reason thereof shall be made with
         respect to, the number or price of shares of Common Stock subject to an
         option.

                (b) Dissolution or Liquidation. In the event of the proposed
         dissolution or liquidation of the Company, the Offering Period will
         terminate immediately prior to the consummation of such proposed
         action, unless otherwise provided by the Board.

                (c) Merger or Asset Sale. In the event of a proposed sale of all
         or substantially all of the assets of the Company, or the merger of the
         Company with or into another corporation, each option under the Plan
         shall be assumed or an equivalent option shall be substituted by such
         successor corporation or a parent or subsidiary of such successor
         corporation, unless the Board determines, in the exercise of its sole
         discretion and in lieu of such assumption or substitution, to shorten
         the Offering Period then in progress by setting a new Exercise Date
         (the "New Exercise Date") or to cancel each outstanding right to
         purchase and refund all sums collected from participants during the
         Offering Period the in progress. If the Board shortens the Offering
         Period then in progress in lieu of assumption or substitution in the
         event of a merger or sale of assets, the Board shall notify each
         participant in writing, at least ten (10) business days prior to the
         New Exercise Date, that the Exercise Date for his option has been
         changed to the New Exercise Date and that his option will be exercised
         automatically on the New Exercise Date, unless prior to such date he
         has withdrawn from the Offering Period as provided in Section 10
         hereof. For purposes of this paragraph, an option granted under the
         Plan shall be deemed to be assumed if, following the sale of assets or
         merger, the option confers the right to purchase, for each share of
         option stock subject to the option immediately prior to the sale of
         assets or merger, the consideration (whether stock, cash or other
         securities or property) received in the sale of assets or merger by
         holders of Common Stock for each share of Common Stock held on the
         effective date of the transaction (and if such holders were offered a
         choice of consideration, the type of consideration chosen by the
         holders of a majority of the outstanding shares of Common Stock);
         provided, however, that if such consideration received in the sale of
         assets or merger was not solely common stock of the successor
         corporation or its parent (as defined in Section 424(e) of the Code),
         the Board may, with the consent of the successor corporation and the
         participant, provide for the consideration to be received upon exercise
         of the option to be solely common stock of the successor corporation or
         its parent equal in the fair market value to the per share
         consideration received by holders of Common Stock and the sale of
         assets or merger.

                  The Board may, if it so determines in the exercise of its sole
         discretion, also make provision for adjusting the Reserves, as well as
         the price per share of Common Stock covered by each outstanding option,
         in the event the Company effects one or more reorganization,
         recapitalizations, rights offerings or other increases or reductions of
         shares of its outstanding Common Stock, and in the event of the Company
         being consolidated with or merged into any other corporation.

19. Amendment or Termination.

                (a) The Board of Directors of the Company may at any time and
         for any reason terminate or amend the Plan. Except as provided in
         Section 18 hereof, no such termination can affect options previously
         granted, provided that an Offering Period may be terminated by the
         Board of Directors on any Exercise Date if the Board determines that
         the termination of the Plan is in the best interests of the Company and
         its shareholders. Except as provided in Section 18 hereof, no amendment
         may make any change in any option theretofore granted which adversely
         affects the rights of any participant. To the extent necessary to
         comply with Section 423 of the Code (or any successor rule or provision
         or any other applicable law or regulation), the Company shall obtain
         shareholder approval in such a manner and to such a degree as required.

                                       6
<PAGE>

                (b) Without shareholder consent and without regard to whether
         any participant rights may be considered to have been "adversely
         affected," the Board (or its committee) shall be entitled to change the
         Offering Periods, limit the frequency and/or number of changes in the
         amount withheld during an Offering Period, establish the exchange ratio
         applicable to amounts withheld in a currency other than U.S. dollars,
         permit payroll withholding in excess of the amount designated by a
         participant in order to adjust for delays or mistakes in the Company's
         processing of properly completed withhold elections, establish
         reasonable waiting and adjustment periods and/or accounting and
         crediting procedures to ensure that amounts applied toward the purchase
         of Common Stock for each participant properly correspond with amounts
         withheld from the participant's Compensation, and establish such other
         limitations or procedures as the Board (or its committee) determines in
         its sole discretion advisable which are consistent with the Plan.

20. Notices. All notices or other communications by a participant to the Company
under or in connection with the Plan shall be deemed to have been duly given
when received in the form specified by the Company at the location, or by the
person, designated by the Company for the receipt thereof.

21. Conditions Upon Issuance of Shares. Shares shall not be issued with respect
to an option unless the exercise of such option and the issuance and delivery of
such shares pursuant thereto shall comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the Securities Act of 1933,
as amended, the Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.

         As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.

22. Term of Plan. The Plan shall become effective upon the earlier to occur of
its adoption by the Board of Directors or its approval by the shareholders of
the Company. It shall continue in effect for a term of ten (10) years from the
later of (i) the effective date or (ii) the date of any amendment, unless sooner
terminated under Section 19 hereof.

23. Additional Restrictions of Rule 16b-3. The terms and conditions of options
granted hereunder to, and the purchase of shares by, persons subject to Section
16 of the Exchange Act shall comply with the applicable provisions of Rule
16b-3. This Plan shall be deemed to contain, and such options shall contain, and
the shares issued upon exercise thereof shall be subject to, such additional
conditions and restrictions as may be required by rule 16b-3 to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions.


Adopted by the:

Board of Directors: December 10, 1991
Stockholders: January 7, 1992


First Amendment adopted by the:

Board of Directors: April 8, 1998
Stockholders: May 28, 1998


Second Amendment adopted by the:

Board of Directors: September 4, 2001
Stockholders: November 29, 2001

                                       7
<PAGE>

                                    EXHIBIT A

                                CYBERONICS, INC.
                        1991 EMPLOYEE STOCK PURCHASE PLAN
                             SUBSCRIPTION AGREEMENT


______ Original Application                    Enrollment Date: ____________
______ Change in Payroll Deduction Rate
______ Change of Beneficiary(ies)

1.   _______________ hereby elects to participate in the Cyberonics, Inc. 1991
          Employee Stock Purchase Plan (the "Employee Stock Purchase Plan") and
          subscribes to purchase shares of the Company's Common Stock in
          accordance with this Subscription Agreement and the Employee Stock
          Purchase Plan.

2.   I hereby authorize payroll deductions from each paycheck in the amount of
          ____% of my Compensation on each payday (not to exceed 15%) during the
          Offering Period in accordance with the Employee Stock Purchase Plan.
          (Please note that no fractional percentages are permitted.)

3.   I understand that said payroll deductions shall be accumulated for the
          purchase of shares of Common Stock at the applicable Purchase Price
          determined in accordance with the Employee Stock Purchase Plan. I
          understand that if I do not withdraw from an Offering Period, any
          accumulated payroll deductions will be used to automatically exercise
          my option.

4.   I have received a copy of the complete "Cyberonics, Inc. 1991 Employee
          Stock Purchase Plan." I understand that my participation in the
          Employee Stock Purchase Plan is in all respects subject to the terms
          of the Plan. I understand that the grant of the option by the Company
          under this Subscription Agreement is subject to obtaining shareholder
          approval of the Employee Stock Purchase Plan.

5.   Shares purchased for me under the Employee Stock Purchase Plan should be
          issued in the name(s) of (Employee or Employee and Spouse Only):
     _________________________________.

6.   I understand that if I dispose of any shares received by me pursuant to the
          Plan within 2 years after the Enrollment Date (the first day of the
          Offering Period during which I purchased such shares), I will be
          treated for federal income tax purposes as having received ordinary
          income at the time of such disposition in an amount equal to the
          excess of the fair market value of the shares at the time such shares
          were delivered to me over the price which I paid for the shares.

     I HEREBY AGREE TO NOTIFY THE COMPANY IN WRITING WITHIN 30 DAYS AFTER THE
          DATE OF ANY DISPOSITION OF MY SHARES AND I WILL MAKE ADEQUATE
          PROVISION FOR FEDERAL, STATE OR OTHER TAX WITHHOLDING OBLIGATIONS, IF
          ANY, WHICH ARISE UPON THE DISPOSITION OF THE COMMON STOCK. The Company
          may, but will not be obligated to, withhold from my compensation the
          amount necessary to meet any applicable withholding obligation
          including any withholding necessary to make available to the Company
          any tax deductions or benefits attributable to make available to the
          Company any tax deductions or benefits attributable to sale or early
          disposition of Common Stock by me. If I dispose of such shares at any
          time after the expiration of the 2-year holding period, I understand
          that I will be treated for federal income tax purposes as having
          received income only at the time of such disposition, and that such
          income will be taxed as ordinary income only to the extent of an
          amount equal to the lesser of (1) the excess of the fair market value
          of the shares at the time of such disposition over the purchase price
          which I paid for the shares, or (2) 15% of the fair market value of
          the shares on the first day of the Offering Period. The remainder of
          the gain, if any, recognized on such disposition will be taxed as
          capital gain.

7.   I hereby agree to be bound by the terms of the Employee Stock Purchase
          Plan. The effectiveness of this Subscription Agreement is dependent
          upon my eligibility to participate in the Employee Stock Purchase
          Plan.

                                      A-1
<PAGE>

8.   In the event of my death, I hereby designate the following as my
          beneficiary(ies) to receive all payments and shares due me under the
          Employee Stock Purchase Plan.

NAME: (Please print)
                    ------------------------------------------------
                    (First)            (Middle)            (Last)

--------------------                   ----------------------
Relationship

                                       ----------------------
                                       (Address)



NAME: (Please print)
                    ------------------------------------------------
                    (First)            (Middle)            (Last)

--------------------                   ----------------------
Relationship

                                       ----------------------
                                       (Address)


Employee's Social
Security Number
                                       ----------------------


Employee's Address:
                                       ----------------------


                                       ----------------------


                                       ----------------------


I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.


Dated:
      -------------             ---------------------------
                                Signature of Employee




                                ---------------------------
                                Spouse's Signature (If beneficiary other
                                than spouse)

                                      A-2
<PAGE>

                                    EXHIBIT B

                                CYBERONICS, INC.
                        1991 EMPLOYEE STOCK PURCHASE PLAN
                              NOTICE OF WITHDRAWAL

     The undersigned participant in the Offering Period of the Cyberonics, Inc.
1991 Employee Stock Purchase Plan which began on _______________, 2001 (the
"Enrollment Date") hereby notifies the Company that he or she hereby withdraws
from the Offering Period. He or she hereby directs the Company to pay to the
undersigned as promptly as practicable all the payroll deductions credited to
his or her account with respect to such Offering Period. The undersigned
understands and agrees that his or her option for such Offering Period will be
automatically terminated. The undersigned understands further that no further
payroll deductions will be made for the purchase of shares in the current
Offering Period and the undersigned shall be eligible to participate in
succeeding Offering Periods only by delivering to the Company a new Subscription
Agreement.

                                           Name and Address of Participant


                                           ----------------------


                                           ----------------------


                                           ----------------------



                                           Signature


                                           ----------------------

                                           Date:
                                                -----------------

                                      B-1