8-K 1 form8_k.htm FORM 8-K (2ND QUARTER RESULTS AND EXECUTIVE BONUS PLAN form8_k.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  November 18, 2009 (November 16, 2009)
CYBX Logo
Cyberonics, Inc.
(Exact name of registrant as specified in its charter)


DELAWARE
000-19806
76-0236465
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)


100 Cyberonics Blvd., Houston, Texas 77058
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: 281-228-7200


(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 
 

Item 2.02 Results of Operations and Financial Condition.

On November 16, 2009, Cyberonics, Inc. (the “Company”) issued a press release announcing that the Company expects to record in its fiscal quarter ended October 23, 2009 a non-cash GAAP tax benefit of approximately $40 million resulting from the reversal of its tax valuation allowance related to net operating losses.  A copy of the Company’s press release is furnished as Exhibit 99.1 on this Current Report on Form 8-K.

On November 18, 2009, the Company issued a press release announcing financial results for the fiscal quarter ended October 23, 2009.  The Company will conduct a conference call on November 19, 2009 at 9:00 a.m. E.S.T., during which further details will be provided regarding fiscal 2010 second quarter results.  Additionally, a related slide presentation will be available on the Company’s website at www.cyberonics.com that same day no later than 8:00 a.m. E.S.T.  A copy of the Company’s press release is furnished as Exhibit 99.2 on this Current Report on Form 8-K.

The information in this Item 2.02 of this report is being furnished, not filed, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and pursuant to General Instruction B.2. of Form 8-K will not be incorporated by reference into any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Fiscal 2010 Executive Bonus Program

On November 16, 2009, the Compensation Committee (the “Committee”) of the Board of Directors of the Company amended the terms of the Fiscal 2010 Executive Bonus Program, pursuant to which it will consider the award of annual bonuses to the Company’s executive officers at the end of fiscal 2010.  All bonuses will be paid, if at all, from a bonus pool consisting of the sum of the target bonus amounts for all executive officers, subject to the achievement of certain company and individual performance objectives, as explained below.  Pursuant to the terms of their employment agreements, the target annual bonus amount for the Company’s Chief Executive Officer (“CEO”) is 75% of his annual base salary, and the target annual bonus amount for each executive officer other than the CEO is 50% of such executive officer’s annual base salary.  Copies of the employment agreements for each named executive officer are on file with the Securities and Exchange Commission.

The pool from which bonuses may be paid will be funded according to (1) the Company’s achievement of (a) an annual revenue plan target (which accounts for 25% of the target annual bonus amount); (b) an annual earnings from operations plan target (which accounts for 25% of the target annual bonus amount); (c) an annual gross profit margin plan target (which accounts for 8.33% of the target annual bonus amount); (d) an annual cash flow plan target (which accounts for 8.33% of the target annual bonus amount); and (e) an annual global epilepsy unit growth plan target (which accounts for 8.34% of the target annual bonus amount); and (2) the executive officers’ achievement of individual performance objectives (which account for 25% of the target annual bonus amount).  With respect to the company performance objectives, the amount of each target bonus applied to the bonus pool is determined according to the following table:

Percent Achievement of Plan
  
Percent of Target Amount Funded
     
< 90%
  
Subject to Committee discretion
90%
  
50%
95%
  
75%
100%
  
100%
105%
  
110%
110%
  
120%
115%
  
130%
120%
  
140%
125%
  
150%
> 125%
  
Subject to Committee discretion
 
 
Thus, for example, if Company revenues are 90% of the revenue plan target, the percentage of each executive officer’s target annual bonus to be accrued for bonus consideration is shown in the table above as 50%.  Since the revenue plan target is 25% of the total annual bonus, the portion of each executive officer’s target annual bonus added to the bonus pool for this performance objective would be 12.5% (50% x 25%).  The “Percent of Target Amount Funded” for a “Percent Achievement of Plan” that falls between those percentages indicated in the table above shall be determined by linear interpolation.

The Committee shall determine the individual performance objectives of the CEO, and the CEO shall determine the individual performance objectives of the other executive officers.  The Company shall accrue quarterly 25% of each executive officer’s target bonus amount for the portion of each officer’s bonus based on individual performance objectives.

The bonus actually awarded to an individual executive officer may range from 0% to 200% of the executive officer’s target annual bonus amount, as determined by the Committee, depending on the Company’s achievement of the company performance objectives and the executive officer’s accomplishment of individual performance objectives. The sum of bonuses actually paid to all executive officers may be less than, but ordinarily should not exceed, the amount in the bonus pool, unless the Committee, in its discretion, determines otherwise.  The CEO will recommend to the Committee at the end of the fiscal year the amount of the annual bonus, if any, for each executive officer.  The Committee retains full discretion to modify the bonus program and determine bonus pool funding and award of executive officer bonuses as it deems appropriate.

Item 9.01 Financial Statements and Exhibits.

The following exhibits are furnished herewith:

 
Exhibit No.
Description
     
 
99.1
Press Release of Cyberonics, Inc. dated November 16, 2009
     
 
99.2
Press Release of Cyberonics, Inc. dated November 18, 2009

 
 
 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
Cyberonics, Inc.
   
   
 
By:  /s/ David S. Wise                
 
Name:  David S. Wise
 
Title:    Secretary
November 18, 2009