Cummins Quits Cyberonics

The CFO is also stepping down.
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Cyberonics

(CYBX)

said two top executives, including longtime CEO Robert "Skip" Cummins, have resigned from the company following a probe into past option grants.

Investors were cheering the shakeup, and shares of Cyberonics, the maker of a device for treating depression, jumped 12% to $24.18.

Cummins became a director of Cyberonics in June 1988, according to the company's Web site. He was named president and CEO in September 1995, and he became chairman six years later.

Leaving along with Cummins is Chief Financial Officer Pamela Westbrook. Reese Terry Jr., the company's co-founder, former CEO and a current director, has been named interim chief executive. George Parker III was appointed interim chief operating officer, and John Riccardi has been named interim CFO, effective immediately.

The company is working with an executive search firm to find a permanent CEO and financial chief. In the meantime, Westbrook has agreed to serve as a consultant to the company.

Cyberonics also said an audit committee of its board found that certain option awards granted between 1999 and 2003 carried the wrong dates. As a result, the company will record additional stock-based compensation expenses totaling around $10 million.

The fiscal-year financial statements covering 2000 through 2005 will be restated, along with the quarters that ended in July and October 2005 and the quarter ended January 2006.