Exhibit 10.6
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For Internal Use: |
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Grant Control #: |
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DIRECTOR RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK
AGREEMENT (this “Agreement”) is made effective as
of XXXX 1, 200X (the “Grant Date”), between
CYBERONICS, INC. , a Delaware corporation (the
“Company”), and
(“Director”), a member of the Board of Directors.
1. Award .
Pursuant to the CYBERONICS, INC. 1997 STOCK PLAN, as amended
(the “Plan”), as of the Grant Date [
] shares (the “Restricted Shares”) of the
Company’s common stock shall be issued as hereinafter
provided in the Director’s name subject to certain
restrictions thereon. The Director 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 Director 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 Director’s service relationship with the Company (as
provided in Section 5) for any reason other than as provided
in Section 2(b), the Director shall, for no consideration,
forfeit to the Company all Restricted Shares then subject to the
Forfeiture Restrictions. The prohibition against transfer and the
Director’s obligation to forfeit and surrender the Restricted
Shares to the Company upon the Director’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 . Until the Restricted Shares are fully vested
or forfeited, so long as the Director continues in a service
relationship with the Company (as provided in Section 5), 25%
of the Restricted Shares shall vest on July 18, 2007 and
thereafter, subject to the satisfaction of the tax liability under
Section 3, 25% of the Restricted Shares shall vest on each
anniversary of the Grant Date. The number of shares that vest as of
each anniversary date will be rounded down to the nearest whole
share, with any remaining shares vesting on the final installment.
Notwithstanding the foregoing vesting schedule, the Forfeiture
Restrictions shall lapse in full as to all of the Restricted Shares
on the earlier of (i) a Change of Control (as defined in the
Plan) or (ii) the termination of the Director’s service
relationship with the Company due to the Director’s
death.
(c) Certificates . A
certificate evidencing the Restricted Shares shall be issued by the
Company in the Director’s name, pursuant to which the
Director 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 Director 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
Forfeit
