<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON , 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CYBERONICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C>
DELAWARE 76-0236465
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
16511 SPACE CENTER BLVD., SUITE 600
HOUSTON, TEXAS 77058
(ADDRESS, INCLUDING ZIP CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
AMENDED 1996 STOCK OPTION PLAN
(FULL TITLE OF THE PLAN)
PAMELA B. WESTBROOK
CYBERONICS, INC.
16511 SPACE CENTER BLVD., SUITE 600
HOUSTON, TEXAS 77058
(281) 332-1375
(NAME, ADDRESS, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
KENNETH M. SIEGEL, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94306
(650) 493-9300
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================================
AMOUNT PROPOSED PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO TO BE MAXIMUM OFFERING AGGREGATE OFFERING REGISTRATION
BE REGISTERED REGISTERED PRICE PER SHARE PRICE FEE
- ----------------------- ---------- ---------------- ------------------ -------------
<S> <C> <C> <C> <C>
Common Stock issuable under 1996 750,000(1) $5.7813(2) $4,335,975(2) $1,205.40
Stock Option Plan, par value $0.01
==================================================================================================================================
</TABLE>
(1) THE SHARES TO BE REGISTERED UNDER THIS REGISTRATION STATEMENT REPRESENT
ADDITIONAL SHARES AUTHORIZED TO BE ISSUED UNDER THE 1996 STOCK OPTION
PLAN. AN AGGREGATE OF 2,000,000 SHARES WERE PREVIOUSLY REGISTERED ON
REGISTRANT'S REGISTRATION STATEMENTS ON FORM S-8 (SEC FILE NO. 333-19785
AND SEC FILE NO. 333-33725) FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ON JANUARY 15, 1997, AND AUGUST 15, 1997, RESPECTIVELY.
(2) ESTIMATED PURSUANT TO RULE 457(C) UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") SOLELY FOR THE PURPOSE OF CALCULATING THE TOTAL
REGISTRATION FEE. BECAUSE THE PRICE AT WHICH OPTIONS TO BE GRANTED IN
THE FUTURE MAY BE EXERCISED IS NOT CURRENTLY DETERMINED, COMPUTATION IS
BASED PURSUANT TO RULE 457(C) WHEREBY THE PER SHARE PRICE IS THE AVERAGE
BETWEEN THE ASK AND BID PRICE REPORTED IN THE NASDAQ NATIONAL MARKET ON
OCTOBER 28, 1998, WHICH AVERAGE WAS $5.7813.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
EXPLANATORY NOTE
This Registration Statement on Form S-8 is being filed for the purpose
of registering an additional 750,000 shares of the Registrant's Common Stock,
par value $0.01 per share, (the "Common Stock") to be issued pursuant to the
Registrant's Amended 1996 Stock Option Plan (the "Plan"). The Registration
Statements on Form S-8 previously filed with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Act of 1933, as amended
(the "Securities Act") relating to the Plan (SEC File No. 333-19785, SEC File
No. 333-33725) are incorporated herein by reference.
ITEM 3. Incorporation of Documents by Reference.
There are hereby incorporated by reference into this Registration
Statement the following documents and information heretofore filed with the
Commission:
1. The Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1998 filed pursuant to Section 13(a) of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act").
2. The description of Registrant's Common Stock to be offered
hereby contained in the Company's Registration Statement on Form 8-A, as
declared effective by the Commission on February 10, 1993, filed pursuant to
Section 12 of the Exchange Act and, any amendment or report filed for the
purpose of updating such description.
All documents, reports and definitive proxy or information statements
subsequently filed by Registrant pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act, prior to the filing of a post-effective amendment that
indicates that all securities offered have been sold or that deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be part hereof from the date of
filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
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<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a
court to award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended. The Company has included in the Certificate of Incorporation a
provision that to the fullest extent permitted by Delaware law, the Company's
directors will not be liable for monetary damages for breach of the directors'
fiduciary duty of care to the Company and its stockholders. In addition, the
Company's Bylaws provide that the Company is required to indemnify its officers
and directors to the fullest extent permitted by Delaware law, including those
circumstances in which indemnification would otherwise be discretionary, and
that the Company is required to advance expenses to its officers and directors
as incurred. Further, the Company has entered into indemnification agreements
with its officers and directors, providing such individuals indemnification to
the maximum extent permitted by the Delaware General Corporation Law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number Document
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<S> <C>
4.1 Cyberonics, Inc. Amended 1996 Stock Option Plan.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, as to legality of securities being registered.
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
23.2 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-5).
</TABLE>
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration Statement to
include any material information with
II-3
<PAGE> 4
respect to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the items described in Item 6 of Part II of this
Registration Statement, or otherwise, the Registrant has been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
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<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Cyberonics, Inc., certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, State of Texas,
on this 27th day of October, 1998.
CYBERONICS, INC.
By: /s/ ROBERT P. CUMMINS
-------------------------------
Robert P. Cummins
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each such person whose
signature appears below constitutes and appoints, jointly and severally, Reese
S. Terry, Jr. and Pamela B. Westbrook, his or her attorneys-in-fact, each with
the power of substitution, for him or her in any and all capacities, to sign any
amendments to this Registration Statement on Form S-8 (including post-effective
amendments), and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
or her substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement on Form S-8 has been signed by the following persons
in the capacities and on the dates indicated.
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SIGNATURE TITLE DATE
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<S> <C> <C>
/s/ REESE S. TERRY, JR. Chairman of the Board and Executive Vice President October 27, 1998
- -------------------------------
Reese S. Terry, Jr.
President, Chief Executive Officer and Director October 27, 1998
/s/ ROBERT P. CUMMINS (Principal Executive Officer)
- -------------------------------
Robert P. Cummins
Vice President, Finance and Administration and Chief October 27, 1998
Financial Officer (Principal Financial and Accounting
/s/ PAMELA B. WESTBROOK Officer)
- -------------------------------
Pamela B. Westbrook
October 27, 1998
/s/ STANLEY H. APPEL Director
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Stanley H. Appel
October 27, 1998
/s/ TONY COELHO Director
- -------------------------------
Tony Coelho
October 27, 1998
/s/ THOMAS A. DUERDEN Director
- -------------------------------
Thomas A. Duerden
October 27, 1998
/s/ MICHAEL J. STRAUSS Director
- -------------------------------
Michael J. Strauss
</TABLE>
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<PAGE> 6
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------
EXHIBITS
-----------------------------------
Registration Statement on Form S-8
Cyberonics, Inc.
November 3, 1998
<PAGE> 7
INDEX TO EXHIBITS
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<CAPTION>
EXHIBIT
NUMBER EXHIBIT
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<S> <C>
4.1 Cyberonics, Inc. Amended 1996 Stock Option Plan.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, as to the legality of securities being registered.
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
23.2 Consent of Counsel (included in Exhibit 5.1).
24.1 Power of Attorney (see page II-5)
</TABLE>
<PAGE> 1
EXHIBIT 4.1
CYBERONICS, INC.
AMENDED
1996 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Amended Stock Option Plan
are:
- to attract and retain the best available personnel for positions
of substantial responsibility,
- to provide incentives to Employees and Consultants, and
- to promote the success of the Company's business.
Options granted under the Plan will be Nonstatutory Stock Options.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options are, or will be, granted under
the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the
Board in accordance with Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means Cyberonics, Inc., a Delaware corporation.
(h) "Consultant" means any person, including an advisor, engaged
by the Company or a Parent or Subsidiary to render services to such entity.
(i) "Director" means a member of the Board.
(j) "Disability" means total and permanent disability as defined
in Section 22(e)(3) of the Code.
(k) "Employee" means any person, excluding Officers, employed by
the Company or any Parent or Subsidiary of the Company. A Service Provider shall
not cease to be an Employee in the case of (i) any leave of absence approved by
the Company or (ii) transfers between locations of the
<PAGE> 2
Company or between the Company, its Parent, any Subsidiary, or any successor.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(m) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(n) "Notice of Grant" means a written or electronic notice
evidencing certain terms and conditions of an individual Option grant. The
Notice of Grant is part of the Option Agreement.
(o) "Officer" means a person who is an executive officer of the
Company within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(p) "Option" means a nonstatutory stock option granted pursuant
to the Plan, that is not intended to qualify as an incentive stock option within
the meaning of Section 422 of the Code and the regulations promulgated
thereunder.
(q) "Option Agreement" means an agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option grant.
The Option Agreement is subject to the terms and conditions of the Plan.
(r) "Option Exchange Program" means a program whereby outstanding
options are surrendered in exchange for options with a lower exercise price.
(s) "Optioned Stock" means the Common Stock subject to an Option.
(t) "Optionee" means the holder of an outstanding Option granted
under the Plan.
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<PAGE> 3
(u) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(v) "Plan" means this Amended 1996 Stock Option Plan.
(w) "Service Provider" means an Employee or Consultant, and
specifically excludes Directors and Officers of the Company.
(x) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.
(y) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 2,750,000 Shares. The Shares may be authorized, but unissued,
or reacquired Common Stock. If an Option expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated).
4. Administration of the Plan.
(a) The Plan shall be administered by (A) the Board or (B) a
Committee, which committee shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:
(i) to determine the Fair Market Value of the Common
Stock;
(ii) to select the Service Providers to whom Options may
be granted hereunder;
(iii) to determine whether and to what extent Options are
granted hereunder;
(iv) to determine the number of shares of Common Stock to
be covered by each Option granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation
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<PAGE> 4
regarding any Option or the shares of Common Stock relating thereto, based in
each case on such factors as the Administrator, in its sole discretion, shall
determine;
(vii) to reduce the exercise price of any Option to the
then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option shall have declined since the date the Option was
granted;
(viii) to institute an Option Exchange Program;
(ix) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;
(x) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
(xi) to modify or amend each Option (subject to Section
15(b) of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is otherwise
provided for in the Plan;
(xii) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option or previously
granted by the Administrator;
(xiii) to determine the terms and restrictions applicable
to Options;
(xiv) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that number of Shares
having a Fair Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined. All elections by an
Optionee to have Shares withheld for this purpose shall be made in such form and
under such conditions as the Administrator may deem necessary or advisable; and
(xv) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options.
5. Eligibility. Options may be granted to Service Providers and
Officers; provided, however that the number of Shares subject to Options
granted to Officers pursuant to this Plan shall not exceed 10% of the total
number of Shares reserved for issuance under this Plan. For purposes of
determining compliance with the foregoing 10% limitation, the following
provisions shall apply:
(a) Options granted to a person at a time when such person was
not an Officer shall not be counted toward the 10% limit upon promotion to
Officer status, and
(b) If an Option granted to an Officer expires or becomes
unexercisable with having been exercised in full, or is surrendered pursuant to
an Option Exchange Program, the unpurchased shares which were subject thereto
shall no longer be counted toward the 10% limit.
6. Limitation. Neither the Plan nor any Option shall confer upon an
Optionee any right with respect to continuing the Optionee's relationship as a
Service Provider with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such relationship at any
time, with or without cause.
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<PAGE> 5
7. Term of Plan. The Plan shall become effective upon its adoption by
the Board. It shall continue in effect until October 31, 2006, unless sooner
terminated under Section 14 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Option
Agreement.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be determined by the
Administrator.
(b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised.
(c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. Such consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other shares which (A) in the case of shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
months on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the shares as to which said
option shall be exercised;
(v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;
(vi) a reduction in the amount of any Company liability to
the Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;
(vii) such other consideration and method of payment for
the issuance of Shares to the extent permitted by Applicable Laws; or
(viii) any combination of the foregoing methods of
payment.
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as
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<PAGE> 6
determined by the Administrator and set forth in the Option Agreement. An Option
may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 12 of the Plan.
Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.
(b) Termination of Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability, the Optionee may exercise his or her Option, but only within such
period of time as is specified in the Option Agreement, and only to the extent
that the Option is vested on the date of termination (but in no event later than
the expiration of the term of such Option as set forth in the Option Agreement).
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for three (3) months following the Optionee's termination.
If, on the date of termination, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise his or
her Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option
Agreement, to the extent the Option is vested on the date of termination (but in
no event later than the expiration of the term of such Option as set forth in
the Option Agreement). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is specified
in the Option Agreement (but in no event later than the expiration of the term
of such Option as set forth in the Notice of Grant), by the Optionee's estate or
by a person who acquires the right to exercise the Option by bequest or
inheritance, but only to the extent
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<PAGE> 7
that the Option is vested on the date of death. In the absence of a specified
time in the Option Agreement, the Option shall remain exercisable for twelve
(12) months following the Optionee's termination. If, at the time of death, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall immediately revert to the Plan. The Option
may be exercised by the executor or administrator of the Optionee's estate or,
if none, by the person(s) entitled to exercise the Option under the Optionee's
will or the laws of descent or distribution. If the Option is not so exercised
within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.
11. Non-Transferability of Options . Unless determined otherwise by the
Administrator, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option
transferable, such Option shall contain such additional terms and conditions as
the Administrator deems appropriate.
12. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.
(a) Changes in Capitalization. Subject to any required action by
the Stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner
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contemplated. To the extent it has not been previously exercised, an Option will
terminate immediately prior to the consummation of such proposed action.
(c) Change of Control. In the event of a Change of Control (as
defined below), Options under this Plan shall become fully vested and
exercisable as to all Optioned Stock, including Shares as to which an Option
would not otherwise be vested or exercisable, effective as of immediately prior
to closing of the transaction constituting the Change of Control. For purposes
of this Plan, "CHANGE OF CONTROL" shall mean a corporate reorganization of the
Company which results in the then current Stockholders of the Company owning
less than 50% of the equity securities of the surviving company, or the sale of
all or substantially all of the assets of the Company.
13. Date of Grant. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.
(b) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to options granted under the
Plan prior to the date of such termination.
15. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
(b) Inability to Obtain Authority. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
16. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
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Exhibit 5.1
[WILSON SONSINI GOODRICH & ROSATI LETTERHEAD]
November 3, 1998
Cyberonics, Inc.
16511 Space Center Blvd., Suite 600
Houston, TX 77058
RE: Registration Statement on Form S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by
you with the Securities and Exchange Commission on or about November 3, 1998
(the "Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of an aggregate of an additional 750,000
shares of your Common Stock (the "Shares") reserved for issuance under the
Amended 1996 Stock Option Plan (the "1996 Plan"). As your counsel, we have
examined the proceedings taken and are familiar with the proceedings proposed to
be taken by you in connection with the issuance and sale of the Shares pursuant
to the 1996 Plan.
It is our opinion that, when issued and sold in the manner described in
the 1996 Plan, and pursuant to the agreements which accompany each grant under
the 1996 Plan, the Shares will be legally and validly issued, fully-paid and
non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of our name wherever appearing in the
Registration Statement and any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/S/ WILSON SONSINI GOODRICH & ROSATI
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-8 pertaining to the 1996
Stock Option Plan of Cyberonics, Inc. of our report dated August 13, 1998,
included in Cyberonics, Inc.'s Form 10-K for the year ended June 30, 1998 and to
all references to our Firm included in this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Houston, Texas
October 27, 1998
