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EXHIBIT 10.6
CYBERONICS, INC.
1998 STOCK OPTION PLAN
NOTICE OF STOCK OPTION GRANT
( Standard Vesting)
NAME:
Randal L. Simpson
You
have been granted an option (the “ Option
“) to purchase Common Stock of Cyberonics, Inc. (the
“ Company ”) as follows:
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Date
of Grant:
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October
22, 2007
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Exercise
Price:
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$23.00
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Number
of Shares Subject to Option:
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334
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Type
of Option:
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Nonstatutory
Stock Option
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Vesting
Start Date:
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February
1, 2000
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Expiration
Date:
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February
1, 2010
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Exercise
Schedule:
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The
Option shall be exercisable at any time prior to the
Expiration Date or earlier termination as to shares which are
vested in accordance with the Vesting Schedule
below.
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Termination
Period:
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Option
may be exercised for up to 90 days after termination of
employment or consulting relationship except as set out in
Sections 7 and 8 of the Stock Option Agreement (but in no
event later than the Expiration Date).
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Vesting
Schedule:
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1/60th
of the Shares subject to the Option shall vest each month
after the Vesting Commencement Date until the Option is fully
vested, subject to the Optionee continuing to be a Service
Provider on such dates.
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OPTIONEE
ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THE OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR
EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF
BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND
AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE
COMPANY’S STOCK
OPTION
PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER
UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF
EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL IT
INTERFERE IN ANY WAY WITH OPTIONEE’S OR THE
COMPANY’S RIGHT TO TERMINATE OPTIONEE’S EMPLOYMENT
OR CONSULTANCY RELATIONSHIP 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 Company’s 1998 Stock Option Plan and
the Stock Option Agreement, all of which are attached and made
a part of this document.
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OPTIONEE:
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CYBERONICS,
INC.
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/s/
Randal L. Simpson
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By: |
/s/
GEORGE E. PARKER III
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George
E. Parker, III
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Vice
President, Human Resources
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Date:_____________________________________________________________
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Date: |
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Address:
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Cyberonics, Inc.
STOCK
OPTION AGREEMENT
1.
Grant of Option . Cyberonics, Inc., a
Delaware corporation (the “
Company ”), hereby grants to
the Optionee named in the Notice of Grant (the “
Optionee ”), an option (the
“Option”) to purchase a total number of shares of
Common Stock (the “ Shares
”) 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, definitions and provisions of the Company’s
1998 Stock Option Plan (the “
Plan ”) which is incorporated
herein by reference. Unless otherwise defined
herein, the terms defined in the Plan shall have the same
defined meanings in this Option.
This
Option is a Nonstatutory Stock Option, and is not intended to
qualify as an Incentive Stock Option as defined in Section 422
of the Code.
2.
Adjustments for Stock Splits, Recapitalization
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(a) The
Exercise Price and number of Shares subject to this Option (as
set forth on the Notice of Grant) shall be subject to
adjustment as follows: If the Company at any time (i)
subdivides (by any stock split, stock dividend or otherwise)
the Common Stock into a greater number of shares, the Exercise
Price in effect immediately prior to such subdivision will be
proportionately reduced and the number of Shares issuable
shall be proportionately increased, and (ii) if the Company at
any time combines (by reverse stock split or otherwise) the
Common Stock into a smaller number of shares, the Exercise
Price in effect immediately prior to such combination will be
proportionately increased and the number of Shares issuable
shall be proportionately decreased.
(b) If
at any time while this Option is outstanding there shall be
any reclassification or conversion of the Common Stock into
another class of securities (other than a sub-division or
combination or shares provided for in the preceding
paragraph), the Optionee shall thereafter be entitled to
receive, during the term hereof and upon payment of the
Exercise Price, the number of shares of stock to which a
holder of the Common Stock would have been entitled upon such
reclassification or conversion had the Optionee exercised this
Option immediately prior to such reclassification or
conversion.
3.
Exercise of Option . This Option shall be
exercisable during its term in accordance with the Exercise
Schedule set out in the Notice of Grant and with the
provisions of Section 10 of the Plan as follows:
(a)
Right to Exercise .
(i) This
Option may not be exercised for a fraction of a
share.
(ii) In
the event of Optionee’s death, disability or other
termination of employment, the exercisability of the Option is
governed by Sections 6, 7 and 8 below.
(iii) In
no event may this Option be exercised after the Expiration
Date of this Option as set forth in the Notice of
Grant.
(b)
Method of Exercise . This Option shall be
exercisable by execution and delivery of the Exercise Notice
and Stock Purchase Agreement (the “Exercise
Notice”) in the form attached as Exhibit
A. Such written notice shall be signed by the
Optionee and shall be delivered in person or by certified mail
to the Secretary of the Company. The written notice
shall be accompanied by payment of the Exercise
Price. This Option shall be deemed to be exercised
upon receipt by the Company of such written notice accompanied
by the Exercise Price.
4.
Method of Payment . Payment of the Exercise
Price shall be by:
(i) cash;
or
(ii) check;
or
(iii) delivery
of a properly executed Exercise Notice together with such
other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option
and immediate sale of the Shares through a broker which
provides for delivery to the Company from the sale or loan
proceeds of the Exercise Price; or
(iv) any
combination of the foregoing methods of payment.
5.
Restrictions on Exercise . This Option may
not be exercised if the issuance of such Shares upon such
exercise or the method of payment of consideration for such
shares would constitute a violation of any applicable federal
or state securities or other law or regulation, including the
requirements of any stock exchange upon which the Shares may
then be listed and including any rule under Part 207 of Title
12 of the Code of Federal Regulations (“Regulation
G”) as promulgated by the Federal Reserve
Board. As a condition to the exercise of this
Option, the Company may require Optionee to make any
representation and warranty to the Company as may be required
by any applicable law or regulation.
6.
Termination of Relationship . In the event
of termination of Optionee’s consulting relationship or
Continuous Status as an Employee, Optionee may, to the extent
otherwise so entitled at the date of such termination (the
“ Termination Date ”),
exercise this Option during the Termination Period set out in
the Notice of Grant. To the extent that Optionee
was not entitled to exercise this Option at the date of such
termination, or if Optionee does not exercise this Option
within the time specified herein, the Option shall
terminate.
7.
Disability of Optionee .
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