RELEASE AGREEMENT

This Release Agreement (the “Agreement”), made and entered into this 1st day of June, 2009 by and between Cyberonics, Inc. , a Delaware corporation, having its principle place of business at 100 Cyberonics Blvd., Houston TX  77058 (the "Company") and George E. Parker, III (the "Individual").

WHEREAS, Individual was previously employed by Company; and

WHEREAS, such employment ended as of the close of business June 1, 2009; 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) a lump sum payment of $360,000.00; and (b) the payment by Company of the monthly premiums due for the continuation of medical, dental and vision benefits under the Company’s plans through the earlier of (i) March 1, 2010, or (ii) the date upon which Individual is employed by an alternate employer, the parties agree as follows:

1. Termination of Employment .  Individual and Company acknowledge that Individual's employment by Company was terminated as of the close of business June 1, 2009.

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, the Americans With Disabilities Act and the Age Discrimination in Employment 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 and that certain Employment Agreement dated July 14, 2003 between Individual and Company, as amended (the “Employment 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