AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit
10.2
AMENDMENT
TO EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT
AGREEMENT (the “Amendment”), made and entered into effective as of this
______ day of _________________, 2008 (the “Effective Date”), is by and between
Cyberonics, Inc., a
Delaware corporation (the “Company”), and _______________________ (the
“Employee”).
WHEREAS, Employee is a key
employee of the Company; and
WHEREAS, the Company and
Employee previously entered into an Employment Agreement (the “Agreement”) in
order to secure the experience, abilities and service of Employee;
WHEREAS, the Agreement remains
in full force and effect as of this date;
WHEREAS, the Company and
Employee desire to amend the terms and conditions of the Agreement so as to
bring those terms and conditions into documentary compliance with the final
Treasury Regulations under Section 409A of the Internal Revenue Code of 1986, as
amended and to continue the Executive’s employment with the Company upon those
amended terms and conditions
THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Employee agree to modify the Agreement as
follows:
1. Section
4.B. is hereby amended and restated in its entirety to read as
follows:
“B. Annual Incentive
Bonus. For each fiscal year during the Term, Employee shall be
eligible to participate in the Annual Executive Bonus Program, with a target
bonus amount of 50% of Employee’s annual Base Salary for such year. A
bonus, if earned, shall be payable as soon as reasonably practical following the
completion of the applicable fiscal year, but in no event prior to the first day of the fiscal year following such
fiscal year and no later than the 15th day of the third month of such
subsequent fiscal year. Bonuses for Employee shall be based on the achievement
of such Company, departmental and/or individual performance goals that may be
established for the applicable bonus year by the Compensation
Committee.”
2. Section
4.C. is hereby amended and restated in its entirety to read as
follows:
“C. Annual Overachievement
Bonus. During the Term, Employee shall be eligible to
overachieve the target bonus amount of the Annual Executive Bonus Program as
determined by the Compensation Committee. Overachievement bonuses
shall be based on the Company’s overachievement of such Company, departmental
and/or individual performance goals that may be established for the applicable
bonus year by the Compensation Committee. A bonus, if earned, shall
be payable as soon as reasonably practical following the completion of the
applicable fiscal year, but in no event prior to
the first day of the fiscal year following such fiscal year and no later than the 15th day
of the third month of such subsequent fiscal year.”
3. Section
4.F. is hereby amended and restated in its entirety to read as
follows:
“F. Reimbursements. Employee
shall be entitled to receive reimbursement by the Company in accordance with its
business reimbursement policy in effect from time to time for all reasonable,
out-of-pocket business expenses incurred by him in performing his duties under
this Agreement upon the submission by Employee of such accounts and records as
may be reasonably required under the Company’s business reimbursement
policy. Employee must submit to the Company such accounts and records
of each such expense within 30 days after the later of (i) Employee’s incurrence
of such expense or (ii) Employee’s receipt of the invoice for such
expense. If such expense qualifies for reimbursement, then the
Company shall reimburse Employee the expense within [30] days
thereafter. In no event will such expense be reimbursed after the
close of the calendar year following the calendar year in which that expense is
incurred. The amount of reimbursements (or in-kind benefits) to which
Employee may become entitled in any one calendar year shall not affect the
amount of expenses eligible for reimbursement hereunder in any other calendar
year. Employee’s right to reimbursement cannot be liquidated or
exchanged for any other benefit or payment.”
4. Section
6.B. is hereby amended and restated in its entirety to read as
follows:
“B. Upon
termination of Employee’s employment pursuant to Section 5.C., the Company shall
be obligated to pay or provide, and Employee’s estate or beneficiary shall be
entitled to receive:
1. all
of the amounts and benefits described in Section 6.A. which shall be paid within
ten (10) business days of the date of termination; and
2. a
lump sum payment equal to 1.5 times the sum of (i) Employee’s Base Salary at the
time of termination, plus (ii) the most recent annual bonus earned by
Employee. Subject to Section 20, such amount shall be paid in a lump
sum within ten (10) business
days following Employee’s Separation from Service. For purposes of this Agreement, Employee's "Separation
from Service" shall mean a separation from service as determined in accordance
with Code Section 409A and the applicable standards of the Treasury regulations
issued thereunder.”
5. A
new Section 20 is hereby added to the Agreement to read as follows:
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“SECTION
20.
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Section
409A.
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A. This
Agreement is intended to comply with the requirements of Section 409A of the
Code. Accordingly, all provisions herein shall be construed and
interpreted to comply with Code Section 409A and if necessary, any such
provision shall be deemed amended to comply with Code Section 409A and the
regulations thereunder.
B. Notwithstanding
any provision to the contrary in this Agreement, no payments or benefits to
which Employee becomes entitled under this Agreement in connection with the
termination of Employee’s employment with the Company shall be made or paid to
Employee prior to the earlier of (i) the first day of the seventh (7th) month
following the date of Employee’s Separation from Service due to such termination
of employment or (ii) the date of Employee’s death, if Employee is deemed,
pursuant to the procedures established by the Board in accordance with the
applicable standards of Code Section 409A and the Treasury Regulations
thereunder and applied on a consistent basis for all for all non-qualified
deferred compensation plans subject to Code Section 409A, to be a
“specified employee” at the time of such Separation from
Service and such delayed commencement is otherwise required in order
to avoid a prohibited distribution under Code Section
409A(a)(2). Upon the expiration of the applicable Code Section
409A(a)(2) deferral period, all payments deferred pursuant to this Section 20.B.
shall be paid in a lump sum to Employee, and any remaining payments due under
this Agreement shall be paid in accordance with the normal payment dates
specified for them herein. The specified employees subject to such a
delayed commencement date shall be identified on December 31 of each calendar
year. If Employee is so identified on any such December 31, he shall
have specified employee status for the twelve (12)-month period beginning on
April 1 of the following calendar year.”
6. Employee
acknowledges that Employee has had the right to consult with counsel and is
fully aware of his rights and obligations under Agreement and this
Amendment.
7. Except
as expressly modified by this Amendment, the provisions of the Agreement remain
unchanged and in full force and effect.
IN
WITNESS WHEREOF, Company and Employee have caused this Amendment to be executed
by their duly authorized representative as of the date and year set forth
above.
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Cyberonics,
Inc.
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Employee
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By:___________________________________
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By:__________________________________
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Date:_________________________________
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Date:_________________________________
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