Exhibit 10.5
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For Internal Use: |
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Grant Control #: |
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EXECUTIVE RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK
AGREEMENT (this “Agreement”) is made effective as
of June 18, 2007 (the “Grant Date”), between
CYBERONICS, INC. , a Delaware corporation (the
“Company”), and
(the “Executive”).
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 Executive’s name subject to certain
restrictions thereon. The Executive 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 Executive 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 Executive’s service relationship with the Company (as
provided in Section 5) for any reason other than as provided
in Section 2(b), the Executive shall, for no consideration,
forfeit to the Company all Restricted Shares then subject to the
Forfeiture Restrictions. The prohibition against transfer and the
Executive’s obligation to forfeit and surrender the
Restricted Shares to the Company upon the Executive’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, on each anniversary of the Grant Date, so long as the
Executive continues in a service relationship with the Company (as
provided in Section 5) on such anniversary date and subject to
the satisfaction of the tax liability under Section 3, 25% of
the Restricted Shares shall vest and the Forfeiture Restrictions
shall lapse on such vested shares. 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
Executive’s service relationship with the Company due to the
Executive’s death.
(c) Certificates . A
certificate evidencing the Restricted Shares shall be issued by the
Company in the Executive’s name, pursuant to which the
Executive 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 Executive 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 refl
