Director steps down and SEC continues inquiry -- firm filed first complaint on June 17; stock trades at around $38.
Colchester, Conn. (PRWEB) August 16, 2005 -- Scott+Scott, LLC filed the
initial securities class action on June 17, 2005, in the United States District
Court for the Southern District of Texas on behalf of the purchasers of
Cyberonics, Inc. securities during the Class Period between June 15, 2004, and
October 1, 2004, inclusive (the "Class")(Case no. U.S. District Court for the
Southern District of Texas 05-CV-02121). Any concerned purchaser who purchased
Cyberonics at anytime may contact the firm as class periods due tend to
If you would like information about Scott+Scott's complaint or would like to discuss this action with an attorney, please contact attorney Neil Rothstein (800/332-2259, ext 22 or by cell at 619/251-0887). You may also contact Scott+Scott attorney Amy K. Saba (800/332-2259, ext 26). All Cyberonics securities purchasers may contact the firm as news unfolds. Please visit the Scott+Scott website at http://www.scott-scott.com. Please return or request information as early as possible.
On July 29, 2005, "key director" Ronald Matricaria, who had been chairman of Cyberonics board's Compensation Committee and a member of its Strategic Advisory Committee, resigned effective July 23. Reuters has reported that through a July 24 e-mail, Matricaria could not "support the direction of the governance practices of the Cyberonics board, in particular its practices regarding CEO compensation and succession."
Then, on August 9, 2005, Cyberonics announced a compensation contract for Chairman, CEO and defendant Robert P. Cummins that included:
$600,000 annually base that can be adjusted;an annual bonus; a grant of 75,000 restricted shares vesting at a rate of 15,000 a year for five years; and on the first anniversary of the execution date of the employment agreement, a grant of 75,000 shares of restricted stock vesting at the end of each of four years at 18,750 per year;and finally, on the second anniversary, he will get another 75,000 shares of restricted stock vesting at a rate of 25,000 shares at the end of each of three years.
Under these circumstances, at the end of his third year of employment, Mr. Cummins will have the ability to trade 58,750 shares of restricted stock. At the opening today, such stock would be worth about $2,163,633.58 plus his yearly salary and bonus placing him over $3 million per that year alone. If this defendant is terminated "under certain circumstances," he will receive a sum twice his base salary, an annual bonus equal to 100 percent his base salary plus acceleration of his stock rights. Also, in recognition of his "contributions" to the Company, this defendant will receive 25,000 restricted shares on the date of agreement of the contract.
Shares of Cyberonics traded as high as $47.77 in June and now the stock stands at around $38. Cyberonics engages in the design, development, and commercialization of medical devices, which claim to provide therapy, Vagus Nerve Stimulation (VNS), for the treatment of epilepsy and other debilitating neurological and psychiatric disorders. You can read more about the Scott+Scott case by going to: http://biz.yahoo.com/prnews/050617/nef018.html?.v=9.
Scott+Scott, LLC is currently working on cases against Red Robin Gourmet Burgers, American Italian Pasta Gourmet, Guidant Corp Securities, Guidant Corp Injury, RenaissanceRe Ltd, Investors Financial Services Corp., Harley-Davidson Employee Litigation, Host American Corp., Patterson Companies among others.
The Guidant Corp. action, which Scott+Scott filed on June 24, 2005, charges the heart device manufacturer with securities fraud. The Minneapolis/St. Paul Business Journal reported that Johnson & Johnson said it would proceed with its proposed $25.4 billion acquisition of Guidant, but it backed off the expected closing date which was expected to be at the end of September. Johnson & Johnson said its reviews of the acquisition should be completed by the end of the third quarter, but did not say when it expects the deal to close. For more information on the case against Guidant, go to: http://biz.yahoo.com/prnews/050808/nem020.html?.v=21.
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Source : http://www.prweb.com/releases/2005/8/prweb273426.htm