UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of
Report (Date of earliest event reported): December 29, 2008 (December 19, 2008)
Cyberonics,
Inc.
(Exact
name of registrant as specified in its charter)
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DELAWARE
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000-19806
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76-0236465
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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100
Cyberonics Blvd., Houston, Texas 77058
(Address
of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code: 281-228-7200
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Item
5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
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(e)
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Compensatory
Arrangements of Certain Officers.
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On
December 19, 2008, Cyberonics, Inc. (the “Company”) entered into amendments to
certain compensation-related agreements with the Company’s named executive
officers. The amendments primarily make several technical changes to
comply with the requirements of Section 409A of the Internal Revenue Code
(“Section 409A”).
Amendment
of Mr. Moore’s Employment Agreement
In
addition to amendments related to Section 409A, the amendment of the employment
agreement with the Company’s President and Chief Executive Officer (CEO), Daniel
J. Moore, (1) clarifies that continued medical and dental benefits will be
provided on a tax-free basis to the maximum extent permissible under applicable
law; and (2) modifies the release agreement attached to the employment agreement
to incorporate the review and revocation periods required under the Age
Discrimination in Employment Act.
A copy of
the amendment is included as Exhibit 10.1 to this report and incorporated by
reference into this Item 5.02.
Amendment
of the Employment Agreements of Messrs. Browne, Parker, Reinstein, Simpson, and
Wise
As
described in the Company’s Schedule 14A filed August 7, 2008 (the “Proxy”), the
Company’s employment agreements with its executive officers other than Mr. Moore
provide that an executive officer who is terminated without cause has a right to
elect one of the following two alternative benefits:
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·
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a
lump sum payment equal to 150% of the sum of (1) the executive officer’s
base salary plus (2) the executive officer’s most recent bonus earned (the
“Cash Benefit”); or
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·
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a
lump sum payment equal to 150% of the executive officer’s base salary,
along with accelerated vesting of the portion of all unvested equity
awards that would have vested during the 12-month period following the
date of termination, to the extent vesting is based solely on a period of
service (the “Cash and Equity
Benefit”).
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Among the
amendments required to comply with Section 409A, each named executive officer
other than Mr. Moore was required to elect one of the two alternative benefits
by selecting between two forms of the amendment to their employment agreements.
George E. Parker, III, Vice President, Human Resources, Randal L. Simpson, Vice
President, Operations and Research & Development, and David S. Wise, Vice
President and General Counsel, elected the Cash Benefit. Gregory H.
Browne, Vice President, Finance and Chief Financial Officer, and James A.
Reinstein, Vice President, Sales and Marketing and General Manager,
International, elected the Cash and Equity Benefit.
Also as
described in the Proxy, certain executive officers have been awarded restricted
stock subject to certain performance-based forfeiture conditions pertaining to
the Company’s financial performance and performance of the Company’s stock price
over an extended period of time. In addition to the amendments
required to comply with Section 409A, the employment agreement amendment
incorporating the Cash and Equity Benefit, together with amendments to
corresponding restricted stock agreements, as described below, allow the
executive officers to retain any performance-based restricted stock that vests
during the six-month period following the date of the officer’s termination
without cause (the “Performance Share Benefit”). The Company and the
Compensation Committee of the Company’s Board of Directors believe that, given
the nature of the performance-based forfeiture restrictions, the officer likely
will have made a substantial contribution to the lapse of the forfeiture
restrictions and that the provision of this benefit is fair and
equitable.
The form
of Amendment of Employment Agreement for each of Messrs. Parker, Simpson, and
Wise is included as Exhibit 10.2 to this report and incorporated by reference
into this Item 5.02.
The form
of Amendment of Employment Agreement for Messrs. Browne and Reinstein is
included as Exhibit 10.3 to this report and incorporated by reference into this
Item 5.02.
Amendment
of the Change in Control Agreements of Messrs. Browne, Parker, Reinstein,
Simpson, and
Wise
Also as
described in the Proxy, the Company has entered into severance agreements that
provide a severance benefit to each executive officer, other than the CEO, if,
following a change in control, the executive officer (1) is terminated by the
Company without cause or (2) terminates employment for a good
reason. The amendments to the Company’s severance agreements with
Messrs. Browne, Parker, Reinstein, Simpson, and Wise are intended to comply with
the requirements of Section 409A, including elimination of a severance benefit
in the event of the executive officer’s termination prior to, but in
anticipation of, a change in control.
The form
of Amendment of Severance Agreement is included as Exhibit 10.4 to this report
and incorporated by reference into this Item 5.02.
Amendment
of Restricted Stock Agreements for Messrs. Browne and Reinstein
Three of
the Company’s restricted stock agreements with each of Messrs. Browne and
Reinstein were amended to facilitate provision of the Performance Share
Benefit. The amendment extends the period for vesting of the
underlying performance-based restricted stock for a period of six months after
the date of the officer’s termination without cause, as defined in the
employment agreement.
The form
of Amendment of Restricted Stock Agreement is included as Exhibit 10.5 to this
report and incorporated by reference into this Item 5.02.
Item 9.01 Financial Statements
and Exhibits.
The
following exhibits are filed herewith:
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Exhibit
No.
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Description
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10.1
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Second
Amendment of Employment Agreement dated December 19, 2008 between
Cyberonics, Inc. and Daniel J. Moore
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10.2
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Form
of Amendment of Employment Agreement (Messrs. Parker, Simpson, and
Wise)
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10.3
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Form
of Amendment of Employment Agreement (Messrs. Browne and
Reinstein)
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10.4
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Form
of Amendment of Severance Agreement (Messrs. Browne, Parker, Reinstein,
Simpson, and Wise)
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10.5
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Form
of Amendment of Restricted Stock Agreement (Messrs. Browne and
Reinstein)
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Cyberonics,
Inc.
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By: /s/ David S. Wise
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Name:
David S. Wise
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Title:
Secretary
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December
29, 2008
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