Document:

exv10w70

 

EXHIBIT 10.70

CYBERONICS, INC.

2005 STOCK PLAN

STOCK OPTION AGREEMENT

     Unless otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Option Agreement.

I.
NOTICE OF GRANT

     You have been granted an option to purchase Common Stock of the Company, subject to the
terms and conditions of the Plan and this Option Agreement, as follows:

	 	 	 
	Date of Grant:
	 	 
	 
	 	 
	Exercise Price per Share:

	 	$ 
	 
	 	 
	Total Number of Shares Granted:
	 	 
	 
	 	 
	Type of Option:

	 	Nonstatutory Stock Option
	 
	 	 
	Expiration Date:

	 	10th Anniversary of Date of Grant 
	 
	 	 
	Vesting Schedule:

	 	1/60th of the Shares subject to the Option shall
vest each month after the Date of Grant, subject
to the Optionee continuing to be a Service
Provider on such dates, until the Option is fully
vested.
	 
	 	 
	Termination Period:

	 	To the extent vested, this Option may
be
exercised for 90 days after Optionee ceases to
be a Service Provider and shall then terminate.
Upon the death or Disability of the Optionee
while a Service Provider, this Option may
be
exercised one year after Optionee ceases to be a
Service Provider and shall then terminate.
However, in no event may this Option
be
exercised after the Expiration Date as provided
above.

 

 

II. AGREEMENT

     1. Grant
of Option. The Plan’s Administrator hereby grants to the Optionee named in the
Notice of Grant attached as Part I of this Agreement (the “Optionee”) an option (the “Option”) to
purchase the number of Shares, as set forth in the Notice of Grant, at the exercise price per share
set forth in the Notice of Grant (the “Exercise Price”), subject to the terms and conditions of the
Plan, which is incorporated herein by reference. Subject to Section 15(c) of the Plan, in the event
of a conflict between the terms and conditions of the Plan and the terms and conditions of this
Option Agreement, the terms and conditions of the Plan shall prevail.

     If designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this Option is
intended to qualify as an Incentive Stock Option under Section 422 of the Code. However, if
this Option is intended to be an Incentive Stock Option, to the extent that it exceeds the
$100,000 rule of Code Section 422(d) it shall be treated as a Nonstatutory Stock Option (“NSO”).

     2. Exercise of Option.

          (a) Right to Exercise. This Option is exercisable during its term in accordance with
the Vesting Schedule set out in the Notice of Grant and the applicable provisions of the Plan and
this Option Agreement.

          (b) Method of Exercise. This Option is exercisable by delivery of an exercise notice,
in the form attached as Exhibit A (the “Exercise Notice”), which shall state the election to
exercise the Option, the number of Shares in respect of which the Option is being exercised (the
“Exercised Shares”), and such other representations and agreements as may be required by the
Company pursuant to the provisions of the Plan. The Exercise Notice shall be completed by the
Optionee and delivered to the Director of Corporate Compliance or to the Secretary of the Company.
The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all
Exercised Shares. This Option shall be deemed to be exercised upon receipt by the Company of such
fully executed Exercise Notice accompanied by such aggregate Exercise Price.

     No Shares shall be issued pursuant to the exercise of this Option unless such issuance and
exercise complies with Applicable Laws. Assuming such compliance, for income tax purposes the
Exercised Shares shall be considered transferred to the Optionee on the date the Option is
exercised with respect to such Exercised Shares.

     3. Method of Payment. Payment of the aggregate Exercise Price shall be by
any of the following, or a combination thereof, at the election of the Optionee:

          (a) cash; or

          (b) check; or

          (c) consideration received by the Company under a cashless exercise program implemented by the
Company in connection with the Plan; or

          (d) surrender of other Shares which (i) in the case of Shares acquired upon exercise of an
option, have been owned by the Optionee for more than six (6) months on the date of

-2-

 

surrender, and (ii) have a Fair Market Value on the date of
surrender equal to the aggregate Exercise Price of the Exercised Shares; or

     4. Nontransferability of Option. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may be exercised during
the lifetime of Optionee only by the Optionee. The terms of the Plan and this Option Agreement
shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

     5. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant and may be exercised during such term only in accordance with the Plan
and the terms of this Option Agreement.

     6. Tax Consequences. Some of the federal tax consequences relating to this Option, as
of the date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND
THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT
A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

          (a) Exercising the Option.

               (i) Nonstatutory Stock Option. The Optionee may incur federal and other tax
liabilities upon exercise of a NSO. The Optionee will be treated as having received compensation
income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Exercised Shares on the date of exercise over their aggregate Exercise Price. If the
Optionee is an Employee or a former Employee, the Company will be required to withhold from his or
her compensation or collect from Optionee and pay to the applicable taxing authorities an amount in
cash equal to a percentage of this compensation income at the time of exercise, and may refuse to
honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at
the time of exercise.

               (ii) Incentive
Stock Option. If this Option qualifies as an ISO at the time of
exercise, the Optionee will have no federal tax liabilities upon its exercise, although the excess,
if any, of the Fair Market Value of the Exercised Shares on the date of exercise over their
aggregate Exercise Price will be treated as an adjustment to alternative minimum taxable income for
federal tax purposes and may subject the Optionee to alternative minimum tax in the year of
exercise. In the event that the Optionee ceases to be an Employee but remains a Service
Provider, any Incentive Stock Option of the Optionee that remains unexercised shall
cease to qualify as an Incentive Stock Option and will be treated for tax purposes as a
Nonstatutory Stock Option on the date three months and one day following such change of status.

          (b) Disposition of Shares.

               (i) NSO. If the Optionee holds NSO Shares for at least one year, any
gain realized on disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes.

               (ii) ISO.
If the Optionee holds ISO Shares for at least one year after
exercise and two years after the grant date, any gain realized on disposition of the Shares will be

-3-

 

treated as long-term capital gain for federal income tax purposes. If the Optionee disposes of ISO
Shares within one year after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income rates) to the extent
of the excess, if any, of the lesser of (A) the difference between the Fair Market Value of the
Shares acquired on the date of exercise and the aggregate Exercise Price, or (B) the difference
between the sale price of such Shares and the aggregate Exercise Price. Any additional gain will be
taxed as capital gain, short-term or long-term depending on the period that the ISO Shares were
held.

          (c) Notice
of Disqualifying Disposition of ISO Shares. If the Optionee
sells or otherwise disposes of any of the Shares acquired pursuant to an ISO on or before the later
of (i) two years after the grant date, or (ii) one year-after the exercise date, the Optionee shall
immediately notify the Company in writing of such disposition. The Optionee agrees that he or she
may be subject to tax withholding by the Company on the compensation income recognized from such
early disposition of ISO Shares by payment in cash or out of the current earnings paid to the
Optionee.

     7. Entire Agreement; Governing Law. The Plan is incorporated herein by reference. The
Plan and this Option Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof, and may not be modified adversely
to the Optionee’s interest except by means of a writing signed by the Company and Optionee. This
Agreement is governed by the internal substantive laws, but not the choice of law rules, of Texas.

     8. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE
PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN
OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE
VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE’S RIGHT OR THE
COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.

     By your signature and the signature of the Company’s representative below, you and
the Company agree that this Option is granted under and governed by the terms and conditions of the
Plan and this Option Agreement. Optionee has reviewed the Plan and this Option Agreement in their
entirety, has had an opportunity to obtain
the advice of counsel prior to executing this Option Agreement and fully understands all
provisions of the Plan and Option Agreement. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon any questions
relating to the Plan and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.

-4-

 

	 	 	 	 	 
	OPTIONEE:	 	CYBERONICS, INC.
	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 	 	 
	 	 	Pamela B. Westbrook
	Social Security Number
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 
	 

	 	Title:
	 	Vice President, Finance &
Administration
and Chief Financial
Officer
	 
	 	 	 
	 
	 	 	 	 
	 	 	 
	Residence Address

	 	Date:	 	 
	 	 	 

-5-

 

EXHIBIT A

2005 STOCK PLAN

EXERCISE NOTICE

Cyberonics, Inc.

1651 1 Space Center Blvd. #600

Houston, TX 77062

Attention: Chief Financial Officer

     1. Exercise of Option. Effective as of today,                                         ,___the undersigned
(“Purchaser”) hereby elects to purchase                     shares (the “Shares”) of the Common Stock of Cyberonics,
Inc. (the “Company”) under and pursuant to the 2005 Stock Plan (the “Plan”) and the Stock Option
Agreement dated (the “Option Agreement”). The purchase price for the Shares shall be $                    , as required by the Option Agreement.

     2. Delivery of Payment. Purchaser herewith delivers to the Company the full purchase
price for the Shares.

     3. Representations of Purchaser. Purchaser acknowledges that Purchaser has
received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound
by their terms and conditions.

     4. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer agent of the
Company) of the Shares, no right to vote or receive dividends or any other rights as a shareholder
shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The
Shares so acquired shall be issued to the Optionee as soon as practicable after exercise of the
Option. No adjustment will be made for a dividend or other right for which the record date is prior
to the date of issuance, except as provided in Section 13 of the Plan.

     5. Tax Consultation. Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents
that Purchaser has consulted with any tax consultants Purchaser deems advisable in connection with
the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any
tax advice.

     6. Entire Agreement: Governing Law. The Plan and Option Agreement are incorporated
herein by reference. This Agreement, the Plan and the Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede in their entirety
all prior undertakings and agreements of
the Company and Purchaser with respect to the subject matter hereof, and may not be modified
adversely to the Purchaser’s interest except by means of a writing

A-1

 

signed by the Company and
Purchaser. This agreement is governed by the internal substantive laws, but not the choice of law
rules, of Texas.

	 	 	 
	Submitted by:

	 	Accepted by:
	 
	 	 
	PURCHASER:

	 	CYBERONICS, INC.
	 
	 	 
	 

	 	 
	 

	 	By:
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Its:
	 

	 	 
	 
	 	 
	 

	 	 
	Social Security Number
	 	 

	 	 	 	 	 
	Address:

	 	Address:	 	 
	 
	 	 	 	 
	 	 	Cyberonics, Inc.
	 	 	100 Cyberonics Blvd.
	 	 	Houston, TX 77058
	 
	 	 	 	 
	 	 	Date Received:
	 

	 	 	 	 

A-2

 

SCHEDULE

2005 Stock Option Plan Form (Restricted Grants; 5 Year Vesting)

	 	 	 	 	 	 	 	 	 	 	 
	Name	 	Grant Date	 	Grant Amount	 	Exercise Price
	Michael Allen Cheney

	 	June 1, 2005
	 	 	5,000	 	 	$	0.000000	 
	W. Steven Jennings

	 	June 1, 2005
	 	 	5,000	 	 	$	0.000000	 
	Shawn P. Lunney

	 	June 1, 2005
	 	 	10,000	 	 	$	0.000000	 
	George E. Parker

	 	June 1, 2005
	 	 	5,000	 	 	$	0.000000	 
	Richard L. Rudolph

	 	June 1, 2005
	 	 	12,500	 	 	$	0.000000	 
	Randal L. Simpson

	 	June 1, 2005
	 	 	10,000	 	 	$	0.000000	 
	Reese S. Terry

	 	June 1, 2005
	 	 	5,000	 	 	$	0.000000	 
	David S. Wise

	 	June 1, 2005
	 	 	10,000	 	 	$	0.000000exv10w72

 

Exhibit 10.72

EMPLOYEE RESTRICTED STOCK AGREEMENT

     THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made effective as of XXXX 1, 200X (the
“Grant Date”), between CYBERONICS, INC., a Delaware corporation (the “Company”),
and
                                         (the “Employee”).

     1. Award. Pursuant to the CYBERONICS, INC. 2005 STOCK PLAN (the
“Plan”), as of the Grant Date [                    ] shares (the “Restricted Shares”) of the Company’s
common stock shall be issued as hereinafter provided in the Employee’s name subject to certain
restrictions thereon. The Employee hereby acknowledges receipt of a copy of the Plan and the
Prospectus relating thereto pursuant to the Securities Act of 1933, and agrees that this award of
Restricted Shares shall be subject to all of the terms and provisions of the Plan, including future
amendments thereto, if any, pursuant to the terms thereof. All dividends and other distributions on
a Restricted Share shall be subject to the same Forfeiture Restrictions (as hereinafter defined) as
are applicable to such Restricted Share.

     2. Restricted Shares. The Employee hereby accepts the Restricted Shares when
issued and agrees with respect thereto as follows:

     (a) Forfeiture Restrictions. The Restricted Shares may not be sold, assigned,
pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of to the extent
then subject to the Forfeiture Restrictions, and in the event of termination of the Employee’s
service relationship with the Company (as provided in Section 5) for any reason other than as
provided in Section 2(b), the Employee shall, for no consideration, forfeit to the Company all
Restricted Shares then subject to the Forfeiture Restrictions. The prohibition against transfer and
the Employee’s obligation to forfeit and surrender the Restricted Shares to the Company upon the
Employee’s termination of service are herein referred to as the “Forfeiture Restrictions.” The
Forfeiture Restrictions shall be binding upon and enforceable against any transferee of Restricted
Shares.

     (b) Vesting/Lapse of Forfeiture Restrictions. Until the Restricted Shares are fully
vested or forfeited, on each anniversary of the Grant Date, so long as the Employee continues in a
service relationship with the Company (as provided in Section 5) on such anniversary date, 20% of
the Restricted Shares shall vest and the Forfeiture Restrictions shall lapse on such vested shares.
The number of shares that vest as of each anniversary date will be rounded down to the nearest
whole share, with any remaining shares vesting on the final installment. Notwithstanding the
foregoing vesting schedule, the Forfeiture Restrictions shall lapse in full as to all of the
Restricted Shares on the earlier of (i) a Change of Control (as defined in the Plan) or (ii) the
termination of the Employee’s service relationship with the Company due to the Employee’s death.

     (c)
Certificates. A certificate evidencing the Restricted Shares shall be issued
by the Company in the Employee’s name, pursuant to which the Employee shall have all of the rights
of a shareholder of the Company with respect to the Restricted Shares, including, without
limitation, voting rights and the right to receive dividends (provided, however, that dividends
paid in shares of the Company’s stock shall be subject

 

 

to the Forfeiture Restrictions). The Employee may not sell, transfer, pledge, exchange, hypothecate
or otherwise dispose of the stock until the Forfeiture Restrictions with respect to such shares
have expired, and a breach of the terms of this Agreement shall cause a forfeiture of all then
remaining Restricted Shares. The certificate shall contain an appropriate endorsement reflecting
the Forfeiture Restrictions. The certificate shall be delivered upon issuance to the Secretary of
the Company or to such other depository as may be designated by the Committee as a depository for
safekeeping until the forfeiture of such Restricted Shares occurs or the Forfeiture Restrictions
lapse pursuant to the terms of the Plan and this award. On the date of this Agreement, the Employee
shall, if required by the Committee, deliver to the Company a stock power, endorsed in blank,
relating to the Restricted Shares. Upon the lapse of the Forfeiture Restrictions without forfeiture
of the Restricted Shares, the Company shall cause a new certificate or certificates to be issued
without legend (except for any legend required pursuant to applicable securities laws or any other
agreement to which the Employee is a party) in the name of the Employee in exchange for the
certificate evidencing the Restricted Shares.

     (d) Corporate Acts. The existence of the Restricted Shares shall not affect in any way the
right or power of the Board of Directors of the Company or the shareholders of the Company to make
or authorize any adjustment, recapitalization, reorganization or other change in the Company’s
capital structure or its business, any merger or consolidation of the Company, any issue of debt or
equity securities, the dissolution or liquidation of the Company or any sale, lease, exchange or
other disposition of all or any part of its assets or business or any other corporate act or
proceeding. The prohibitions of Section 2(a) hereof shall not apply to the transfer of Restricted
Shares pursuant to a plan of reorganization of the Company, but the stock, securities or other
property received in exchange therefor shall also become subject to the Forfeiture Restrictions and
provisions governing the lapsing of such Forfeiture Restrictions applicable to the original
Restricted Shares for all purposes of this Agreement and the certificates representing such stock,
securities or other property shall be legended to show such restrictions.

     3. Withholding of Tax. To the extent that the receipt of the Restricted Shares or
the lapse of any Forfeiture Restrictions results in compensation income to the Employee for federal
or state income tax purposes, the Employee is responsible for taxes due from Employee on such
compensation income. In the event that the Employee fails to reimburse the Company for amounts the
Company is required to pay as withholding taxes on behalf of the Employee, the Company has the
right to withhold from amounts otherwise due to the Employee, and the Employee hereby authorizes
such withholding, an amount equal to the withholding taxes paid by the Company by reason of
compensation income to the Employee resulting under this Agreement.

     4. Status of Stock. The Employee agrees that the Restricted Shares issued under
this Agreement will not be sold or otherwise disposed of in any manner which would constitute a
violation of any applicable federal or state securities laws. The Employee also agrees that (i) the
certificates representing the Restricted Shares may bear such legend or legends as the Committee
deems appropriate in order to reflect the Forfeiture Restrictions and to assure compliance with
applicable securities laws, (ii) the Company may refuse to register the transfer of the Restricted
Shares on the stock transfer records of the Company if such proposed transfer would constitute a

-2-

 

violation of the Forfeiture Restrictions or, in the opinion of counsel satisfactory to the Company,
of any applicable securities law, and (iii) the Company may give related instructions to its
transfer agent, if any, to stop registration of the transfer of the Restricted Shares.

     5. Service Relationship . For purposes of this Agreement, the Employee shall be
considered to be in service to the Company as long as the Employee remains an Employee, a
Consultant or a Employee (as those terms are defined in the Plan). Nothing in the adoption of the
Plan, nor the award of the Restricted Shares thereunder pursuant to this Agreement, shall confer
upon the Employee the right to continued service by or with the Company.

     6. Notices . Any notices or other communications provided for in this Agreement
shall be sufficient if in writing. In the case of the Employee, such notices or communications
shall be effectively delivered if hand delivered to the Employee at his principal place of
employment or if sent by registered or certified mail to the Employee at the last address the
Employee has filed with the Company. In the case of the Company, such notices or communications
shall be effectively delivered if sent by registered or certified mail to the Company at its
principal executive offices.

     7. Amendment. This Agreement may not be modified in any respect by any verbal
statement, representation or agreement made by the Employee or by any employee, officer, or
representative of the Company or by any written agreement unless signed by the Employee and by an
officer of the Company who is expressly authorized by the Company to execute such document.

     8. Binding Effect .This Agreement shall be binding upon and inure to the benefit of
any successors to the Company and all persons lawfully claiming under the Employee.

     1. Controlling Law. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Texas.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer
thereunto duly authorized, and the Employee has executed this Agreement, all effective as of the
Grant Date.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	CYBERONICS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	EMPLOYEE	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

-3-

 

SCHEDULE

2005 Stock Option Plan Form (Restricted Grants; 5 Year Vesting)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Name	 	Grant Date	 	Grant Amount	 	Exercise Price
	Michael Allen Cheney
	 	June 1, 2005	 	 	5,000	 	 	$	0.000000	 
	W. Steven Jennings
	 	June 1, 2005	 	 	5,000	 	 	$	0.000000	 
	Shawn P. Lunney
	 	June 1, 2005	 	 	10,000	 	 	$	0.000000	 
	George E. Parker
	 	June 1, 2005	 	 	5,000	 	 	$	0.000000	 
	Richard L. Rudolph
	 	June 1, 2005	 	 	12,500	 	 	$	0.000000	 
	Randal L. Simpson
	 	June 1, 2005	 	 	10,000	 	 	$	0.000000	 
	Reese S. Terry
	 	June 1, 2005	 	 	5,000	 	 	$	0.000000	 
	David S. Wise
	 	June 1, 2005	 	 	10,000	 	 	$	0.000000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}]]