EMPLOYEE RESTRICTED STOCK AGREEMENT
Exhibit 10.51
THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made effective as of
July 22, 2005 (the “Grant Date”), between CYBERONICS, INC., a Delaware corporation (the
“Company”), and Xxxxxxx Xxxxxxx (the “Employee”).
1. Award. Pursuant to the CYBERONICS, INC. 2005 STOCK PLAN (the
“Plan”), as of the Grant Date 11,933 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. The Forfeiture
Restrictions
shall lapse in full as to all of the Restricted Shares on the earlier of (i)
the first
anniversary of the Grant Date (ii) a Change of Control (as defined in the
Plan) or (iii) 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
violation of the Forfeiture Restrictions or, in the opinion of counsel satisfactory
to the Company,
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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.
[This space is intentionally left blank.]
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9. 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: | /s/ Xxxxxx X. Xxxxxxxxx | |||||
| Name: | Xxxxxx X. Xxxxxxxxx | |||||
| Title: | Vice President, Finance and Administration, Chief Financial Officer |
|||||
| EMPLOYEE | ||||||
| /s/ Xxxxxxx Xxxxxxx | ||||||
| Xxxxxxx Xxxxxxx | ||||||
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