Document:

EX-10.3

STOCK OPTION AGREEMENT AMENDMENT

AND

BONUS AGREEMENT

THIS STOCK OPTION AGREEMENT AMENDMENT AND BONUS AGREEMENT (the “Agreement”) is made this 28th
day of December, 2006 between Cyberonics, Inc. (the “Company”) and Richard Rudolph, M.D. (the
“Optionee”).

WHEREAS, the Company previously granted to the Optionee the options identified on attached
Schedule A (the “Options”) to purchase shares of the Company’s common stock under the Company’s
Stock Incentive Plan(s), as amended and restated, and as identified as such on Schedule A (the
“Plan(s)”).

WHEREAS, the Company and the Optionee entered into a formal Stock Option Agreement (the
“Option Agreement”) evidencing each such Option.

WHEREAS, in order to avoid adverse tax consequences under section 409A of the Internal Revenue
Code, the Optionee desires to amend each of the Options to increase the exercise price per share to
be in effect for the unexercised portion of that Option which is subject to section 409A and
identified as such on Schedule A (the “Covered Portion”) to the higher exercise price per share
indicated for that portion of such Option on Schedule A.

WHEREAS, in order to compensate the Optionee for the increased exercise prices to be in effect
for the Covered Portions of the Options, the Company is willing to pay the Optionee a special cash
bonus in a dollar amount equal to the aggregate increase to the exercise prices for the Covered
Portions of the Options listed on Schedule A, with the actual dollar of that bonus indicated as the
Total Bonus on Schedule A and payable as provided herein.

NOW THEREFORE, the parties hereby agree as follows:

1. Increased Exercise Price. The exercise price per share set forth in the Option
Agreement for each of the Options listed on Schedule A is hereby increased, with respect to the
shares subject to the Covered Portion of that Option, to the higher exercise price per share set
forth for that Option on Schedule A.

2. Bonus. The Optionee shall become entitled to receive a cash bonus from the Company
in the gross dollar amount indicated as his or her Total Bonus on attached Schedule A (the “Bonus”)
effective on the date of vesting, with payment as follows:

(i) the bonus payable with respect to shares that vest prior to January 1, 2008
will be paid on or about January 15, 2008, and

(ii) the bonus payable with respect to shares that vest on or after January 1, 2008
will be payable only if such shares vest and will be paid quarterly for the shares that
vested during the preceding fiscal quarter. Such payment will be made within 14 days
following the close of each fiscal quarter or, in the event of an acceleration of
vesting pursuant to the terms of any other agreement governing the vesting of the
options under the Option Agreements, within 14 days following the event.

Payment of the Bonus shall be subject to the Company’s collection of all applicable federal,
state and local income and employment withholding taxes, and the Optionee shall be paid only the
net amount of such bonus remaining after such taxes have been collected.

3. Entire Agreement. This Agreement, together with the Option Agreements (to the
extent not expressly amended in a separate amendment or amended hereby) and the Plan(s), represents
the entire agreement of the parties with respect to the subject matter hereof and the Bonus and
supersedes any and all previous contracts, arrangements or understandings between the parties with
respect to such Options and the Bonus. This Agreement may be amended at any time only by means of a
writing signed by the Optionee and an authorized officer of the Company.

4. Continuation of Option Agreements. Except for the foregoing increases to the
exercise prices per share for the Covered Portions of the Options, no other terms or provisions of
the Option Agreements for such Options or the applicable Plan(s) have been modified as a result of
this Agreement, and those terms and provisions shall continue in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year indicated
above.

CYBERONICS, INC.

	 	 	 
	By: /s/ John A. Riccardi

	 	

	 
	 	 
	 

	 
	 	 
	TITLE: Chief Financial Officer

	 
	 	 
	 

	 
	 	 
	OPTIONEE

	 	

	 
	 	 
	By:

	 	/s/ Richard L. Rudolph, M.D.
	
 
	 	 
	 
	 	 

1

SCHEDULE A

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Number of	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Unexercised	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Exercise	 	Option Shares	 	Applicable	 	Increased	 	Aggregate	 	Potential
	 	 	 	 	 	 	Price Per	 	Which Vest After	 	Measurement	 	Exercise Price	 	Increase in	 	Retention
	Name	 	Plan	 	Grant Date	 	Share	 	12/31/2004	 	Date	 	Per Share	 	Exercise Price	 	Bonus
	Rudolph, Richard

	 	1997 Plan
	 	06/15/2004
	 	$	19.58	 	 	 	9,000	 	 	06/17/2004
	 	$	15.23	 	 	$	137,070.00	 	 	$	137,070.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

2Exhibit 10.02 Restricted Stock Agreement - Bilney

     

    Exhibit
      10.02

    Jody
      Bilney

    

      RESTRICTED
        STOCK
        AGREEMENT

       

                 
        THIS RESTRICTED STOCK AGREEMENT (the “Agreement”) is made and
        entered into by and between OSI RESTAURANT PARTNERS, INC., a Delaware
        corporation (the “Company”), and JODY BILNEY, whose address is 110 Kite Hill
        Lane, Mill Valley, CA 94941 (“Grantee”), effective on the date of commencement
        of Grantee’s employment with the Company, under the following
        circumstances:

       

      WHEREAS,
        Grantee is employed by Outback Steakhouse
        of Florida, Inc. (the “Concept”), an affiliate the Company, in the position of
        Chief Marketing Officer and, as a matter of separate inducement and agreement
        in
        connection with Grantee's employment, and not in lieu of any salary or other
        compensation for Grantee’s services, the Company desires to enter into this
        Agreement with Grantee; and

       

      WHEREAS,
        the Company considers it to be in its best
        interests to provide Grantee an inducement to acquire an ownership interest
        in
        the Company and thereby an additional incentive to advance the interests
        of the
        Company and the Concept.  

       

      NOW,
        THEREFORE, intending to be legally bound, in
        consideration of the mutual covenants contained herein, and other good and
        valuable consideration, the receipt and sufficiency of which are hereby
        acknowledged, the parties agree as follows:

       

                 
        Section 1. Grant. 

       

                 
On
        the effective date hereof the Company hereby grants to the Grantee Fifty
        Thousand (50,000) shares of the Company’s Common Stock, $0.01 par value (the
“Restricted Stock”).

       

                 
        The Restricted Stock has been granted pursuant to and is subject to the
        following provisions of this Agreement:

       

                 
        Section 2. Vesting.  The Restricted Stock will vest on October 1,
        2011 (“Final Vesting Date”).

                                                                                                           
        

                 
        Section 3. Purchase Price and Terms. The purchase price for the
        Restricted Stock is Zero and 01/100 Dollars ($0.01). Payment shall be made
        by
        the Grantee upon execution of this Agreement. The Restricted Stock will be
        issued in uncertificated form. The Restricted Stock will be recorded in the
        name
        of the Grantee in the books and records of the Company’s transfer agent. Upon
        vesting and Grantee’s compliance with Section 8 hereof, the
        Company shall cause certificates for the Restricted Stock to be issued to
        Grantee.

       

                 
        Section 4. Transferability. The Restricted Stock cannot be transferred or
        encumbered in any manner prior to vesting except by will or the laws of descent
        and distribution. The transferee of any Restricted Stock will be subject
        to all
        restrictions, terms, and conditions applicable to the Restricted Stock.

       

                 
        Section 5. Termination of Employment. If the Grantee does not remain
        employed by the Employer in the position of Chief Marketing Officer or higher
        through the Final Vesting Date, all shares of Restricted Stock will be
        forfeited; provided however, notwithstanding anything in this Section
        5 or in Section 2 to the contrary, in the event that
        the Grantee’s employment with the Concept is terminated prior to the Final
        Vesting Date but subsequent to October 1, 2009, other than for “cause”, as such
        term is defined in the Grantee’s Employment Agreement with the Concept, then
        fifty percent 50% of the Restricted Stock shall vest on the date of such
        termination other than for cause, and shall not be forfeited.

       

                 
        Section 6.  Shareholder Rights and Restrictions. Except with regard
        to the disposition or encumbrance of Restricted Stock, the Grantee will
        generally have all rights of a shareholder with respect to the Restricted
        Stock
        from the date of grant, including, without limitation, the right to receive
        dividends with respect to such Restricted Stock and the right to vote such
        Restricted Stock, subject to any restrictions in this Agreement.

       

      
        
           1

        

        
          
            

          

        

        Jody
          Bilney 

      

       

                 
        Section 7.  Dividends. All dividends payable on the Restricted Stock
        (whether or not vested) will be payable in cash.

       

                 
        Section 8.  Taxes. The Grantee hereby agrees to pay to the Company
        any federal, state, or local taxes of any kind required by law to be withheld
        and remitted by the Company with respect to the Restricted Stock. The Grantee
        may satisfy such tax obligation, in whole or in part, by (i) electing to
        have
        the Company withhold a portion of the Restricted Stock otherwise to be delivered
        upon vesting of the Restricted Stock with a Fair Market Value equal to the
        amount of such taxes, or (ii) delivering to the Company other shares of common
        stock of the Company with a Fair Market Value equal to the amount of such
        taxes.
        The election, if any, must be made on or before the date that the amount
        of tax
        to be withheld is determined. If the Grantee does not make such payment to
        the
        Company, the Company shall have the right to withhold from any payment of
        any
        kind otherwise due to the Grantee from the Company, any federal, state or
        local
        taxes of any kind required by law to be withheld with respect to the award
        or
        vesting of the Restricted Stock.

       

                 
        Section 9.  Securities Law Compliance.

       

                 
        (a)        The Grantee agrees that the
        Company may impose such restrictions on the Restricted Stock as are deemed
        advisable by the Company, including, without limitation, restrictions relating
        to listing or trading requirements. The Grantee further agrees that certificates
        representing the Restricted Stock may bear such legends and statements as
        the
        Company shall deem appropriate or advisable to assure, among other things,
        compliance with applicable securities laws, rules, and regulations.

       

                 
        (b)        The Grantee agrees that any
        Restricted Stock which the Grantee may acquire by virtue of this Agreement
        may
        not be transferred, sold, assigned, pledged, hypothecated or otherwise disposed
        of by the Grantee unless (i) a registration statement or post-effective
        amendment to a registration statement under the Securities Act of 1933, as
        amended, with respect to such Restricted Stock has become effective so as
        to
        permit the sale or other disposition of such Restricted Stock by the Grantee,
        or
        (ii) there is presented to the Company an opinion of counsel satisfactory
        to the
        Company to the effect that the sale or other proposed disposition of such
        Restricted Stock by the Grantee may lawfully be made otherwise than pursuant
        to
        an effective registration statement or post-effective amendment to a
        registration statement relating to such Restricted Stock under the Securities
        Act of 1933, as amended.

       

                 
        Section 10.  Rights of the Grantee. The granting of the Restricted
        Stock shall in and of itself not confer any right of the Grantee to continue
        in
        the employ of the Company, any subsidiary or affiliate and shall not interfere
        in any way with the right of the Company, any subsidiary or affiliate to
        terminate the Grantee's employment at any time, subject to the terms of any
        employment agreement between the Company and the Grantee.

       

                 
        Section 11.  Governing Law. This Agreement shall be governed by and
        construed in accordance with the laws of the State of Florida, except to
        the
        extent otherwise governed by Federal law.

       

                 
        Section 12  Right to Withhold Amounts Owed to the Company. The
        Company shall have the right to condition the vesting of any shares of
        Restricted Stock on the Grantee’s payment of all amounts then due and owing to
        the Company or any subsidiary or affiliate.

                 
        

      IN
        WITNESS WHEREOF, the parties have subscribed their names
        hereto.

       

                                                                                         
        “COMPANY”

       

      Attest:                                                                          OSI
        RESTAURANT PARTNERS, INC., 

                                                                                         
        a Delaware corporation

       

      By:
/s/
        Joseph J.
        Kadow________                               By: 
/s/ A. William Allen, III______________

      JOSEPH
        J. KADOW,
        Secretary                                                        
A. WILLIAM ALLEN, III, Chief Executive Officer

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          
Jody
          Bilney 

      

       

      DATE
        OF GRANT: October 1, 2006.

       

       

      ACCEPTANCE
        OF AGREEMENT

       

                 
        The Grantee hereby:

       

                 
        (a)        Acknowledges that she has received
        a copy of the Company’s most recent Annual Report and other communications
        routinely distributed to the Company’s shareholders;

       

                 
        (b)        Accepts this Agreement and the
        Restricted Stock granted to her under this Agreement subject to all provisions
        of this Agreement;

       

                 
        (c)        Represents and warrants to the
        Company that she is acquiring the Restricted Stock for her own account, for
        investment, and not with a view to or any present intention of selling or
        distributing the Restricted Stock either now or at any specific or determinable
        future time or period or upon the occurrence or nonoccurrence of any
        predetermined or reasonably foreseeable event; and

       

                 
        (d)        Agrees that no transfer of the
        Restricted Stock will be made unless the Restricted Stock has been duly
        registered under all applicable Federal and state securities laws pursuant
        to a
        then effective registration which contemplates the proposed transfer or unless
        the Company has received the written opinion of, or satisfactory to, its
        legal
        counsel that the proposed transfer is exempt from such registration.

       

                                                                                             
            Grantee’s Signature:

       

                                                                                                 
        /s/ Jody Bilney  9-7-06______

                                                                      
                                  
JODY BILNEY

       

       

       

    

     

     

     

     

     

     

     

     

     

     

     

     

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