Share Rights Agreement



 






Exhibit 4.3




AMENDMENT NO. 2 TO

SECOND AMENDED AND RESTATED

PREFERRED SHARE RIGHTS AGREEMENT




     This Amendment No. 2 (this “Amendment”) to the Second Amended and Restated
Preferred Shares Rights Agreement (the “Rights Agreement”) is made effective as
of October 31, 2001. This Amendment is an amendment to the Rights Agreement
dated August 21, 2000 between Cyberonics, Inc., a Delaware corporation (the
“Company”), and Fleet National Bank N.A. (formerly known as BankBoston, N.A.,
formerly known as The First National Bank of Boston and referred to herein as
the “Rights Agent”).



RECITALS




     WHEREAS, pursuant to and in compliance with Section 27 of Amendment No. 1
to the Rights Agreement, the Company and the Rights Agent desire to amend the
Rights Agreement as set forth herein; and



     WHEREAS, pursuant to and in compliance with Section 21 of the Rights
Agreement, the Company and the Rights Agent desire that Fleet National Bank
N.A. resign as the Rights Agent and Equiserve Trust Company, N.A. (“Equiserve”)
be appointed as the successor Rights Agent; and



     WHEREAS, in connection with the appointment of Equiserve as successor
Rights Agent, Equiserve has requested that the Company amend Section 21 of the
Rights Agreement.



     NOW THEREFORE, the parties hereto agree as follows:



     Section 1. Amendments. From and after the effective date of this
Amendment, the Rights Agreement shall be amended as follows:



     (a) Equiserve is appointed as the successor Rights Agent to Fleet National
Bank N.A. and any and all references in the Rights Agreement to the Rights
Agent shall mean Equiserve Trust Company, N.A.



     (b) Section 21 is hereby amended and restated in its entirety to
read as follows:



     21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement upon 30 days’
notice in writing mailed to the Company and to each transfer agent of the
Common Shares or Preferred shares by registered or certified mail and to the
holders of the Right Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days’ notice in writing
mailed to the Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Common Shares or Preferred Shares by registered
or certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a



 









 







period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit such holder’s Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation or trust company organized and doing business under the
laws of the United States, in good standing, which is authorized under such
laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has
individually or combined with an affiliate at the time of its appointment as
Rights Agent a combined capital and surplus of at least $100 million dollars.
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for that purpose. Not later than the
effective date of any such appointment the Company shall file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the Common
Shares or Preferred Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.



     Section 2. Remainder of Agreement Not Affected. Except as set forth in
Section 1 hereof, the terms and provisions of the Rights Agreement shall remain
in full force and effect and are hereby ratified and confirmed.



     Section 3. Authority. Each party represents that such party has full
power and authority to enter into this Amendment, and that this Amendment
constitutes a legal, valid and binding obligation of such party, enforceable
against such party in accordance with its terms.



     Section 4. Definitions, References.



     (a) Unless otherwise specifically defined herein, each term used herein
which is defined in the Rights Agreement shall have the meaning assigned to
such term in the Rights Agreement.



     (b) On and after the effective date of this Amendment (i) all references
in the Rights Agreement, including Exhibits B and C, to the Rights Agreement
shall be deemed to refer to the Rights Agreement as amended by this Amendment,
and all prior amendments, and (ii) all references to “hereof,” “hereunder,”
“herein,” “hereby” and other similar references contained in the Rights
Agreement as well as each reference to “this Agreement” and each other similar
reference contained in the Rights Agreement shall refer to the Rights
Agreement, as amended.



     Section 5. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.



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      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.

	 	 	 	 	 
	 	CYBERONICS, INC.

 	 
	 	By:  	/s/ Robert P. Cummins
 	 
	 	 	Robert P. Cummins 	 
	 	 	Chief Executive Officer and President 	 
	 
	 	FLEET NATIONAL BANK N.A.

 	 
	 	By:  	/s/ Carol Mulvey-Eori
 	 
	 	 	Carol Mulvey-Eori 	 
	 	 	Managing Director, Client Administration 	 
	 
	 	EQUISERVE TRUST COMPANY, N.A.

 	 
	 	By:  	/s/ Carol Mulvey-Eori
 	 
	 	 	 	 
	 	 	Managing Director, Client Administration 	 
	 





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