Exhibit
10.4
AMENDMENT TO SEVERANCE
AGREEMENT
THIS AMENDMENT TO SEVERANCE 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
a Severance Agreement (the “Agreement”) seeking to
retain Employee despite the possibility of a Change of Control (as
defined in the Agreement) and the fact that this possibility is
unsettling and may result in the departure of key employees to the
detriment of the Company and its stockholders;
WHEREAS, the Agreement remains in full force and effect
as of this date; and
WHEREAS, the Company and Employee desire to amend the
terms and conditions of the Agreement so as to bring the Agreement
into documentary compliance with the final Treasury Regulations
under Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”);
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. The
first paragraph of Section 3 shall be amended to delete the
following language:
“Anything
in this Agreement to the contrary notwithstanding, if
Employee’s employment with the Company is terminated during
the Term and prior to the date on which a Change of Control occurs,
and it is reasonably demonstrated that such termination (i) was at
the request of a third party who has taken steps reasonably
calculated to effect the Change of Control, or (ii) otherwise arose
in connection with or anticipation of the Change of Control, then
for all purposes of this Agreement the Change of Control shall be
deemed to have occurred on the date immediately prior to the date
of Employee’s termination and Employee shall be deemed
terminated by the Company during the Protected Period other than
for Cause.”
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Section 3(v)
shall be amended to replace the provision in its entirety with the
following:
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“(v)
Date of Termination. “Date of Termination” shall
mean (A) if Employee is terminated for Disability, 30 days after
Notice of Termination is given, provided that
Employee shall
not have returned to the performance of Employee’s duties on
a full-time basis during such 30-day period, (B) if
Employee’s employment is terminated pursuant to subparagraph
(iii) above, the date which is thirty (30) days from the date of
the Notice of Termination, and (C) if Employee’s employment
is terminated for any other reason on or after a Change of Control,
the date of such termination.”
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Section 4(i)
shall be amended to replace the provision in its entirety with the
following:
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“(i) If,
during the Protected Period, Employee fails to perform
Employee’s normal duties as a result of incapacity due to
physical or mental illness, Employee shall continue during the
period of such disability (prior to termination of employment) to
receive Employee’s full Base Salary and any awards, deferred
and nondeferred, payable during such period under the Bonus Plan,
less any amounts paid to Employee during such period of disability
pursuant to the Company’s short term disability or sick-leave
program(s) until Employee’s employment is terminated or such
disability ends. This Section 4(i) shall not reduce or
impair Employee’s rights to terminate employment for a Good
Reason as otherwise provided herein.”
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Section 4(ii)
shall be amended to replace the provision in its entirety with the
following:
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"(ii) If,
during the Protected Period, Employee's employment shall be
terminated (x) by the Company for Cause or Disability, (y) by
Employee's death, or (z) by Employee other than for a Good Reason,
the Company shall pay Employee's earned but unpaid Base Salary
through the Date of Termination and the Company shall have no
further obligations to Employee under this Agreement."
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Section 4(iii)
shall be amended to replace the provision in its entirety with the
following:
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“(iii)
If, during the Protected Period, (1) the Company shall terminate
Employee other than for Cause or Disability or (2) Employee shall
terminate Employee’s employment for a Good Reason, then,
Company shall pay to Employee an amount equal to (A) three times
the sum of Employee’s Base Salary and Bonus Amount at the
time of termination; plus (B)
